1926-02-18

CUSTOMS INQUIRY


[Stage Direction]
Mr. PAUL MERCIER (St. Henri) presented the first report of the special committee appointed to investigate the administration of the Department of Customs and Excise as follows:
Your committee recommend that leave be granted them to employ counsel for the purpose of assisting in the investigation of the matters referred to them.
He said:	With the consent of the House,
I beg to move:
That the first report of the special committee appointed to investigate the administration of the Department of Customs and Excise be concurred in.
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: criminal, naturallly falls into two phases. There are on the one side those seeking to bring home guilt, wrongdoing, irregularity or whatever it may be, while there are on the other side those who endeavour t<5 remove inferences of guilt, that is to say, dn a word, to defend the case. That is the way all trials are conducted. Experience has shown that these divisions inevitaJbly occur; and if counsel are to be employed for the committee, if the committee feels that it cannot undertake the labour-and I can quite understand that there would 'be very much labour entailed in the study of documents, the systematizing of evidence and exhibits, and all that-then surely it would have been in the interests of justice and of tlhe arrival at the truth if the committee had followed the regular course and had one counsel prosecuting the investigation, analogous to prosecution anywhere, and another counsel representing the other side.
I do not think anything in the world can be gained by appointing a common counsel for the committee. It seems to me that the experience of last session, when what was alleged to be counsel for the committee was appointed in the Petersen investigation, should have been a warning to the House not to follow that process on a subsequent occasion. I should very much have preferred had the committee come before us with a request for counsel, the intention being that the regular course should be followed and that counsel on either side be appointed. I do not think that members of the committee are entitled to counsel at all, whether it be those representing us in this end of the chamber, those representing the government, or those representing the Progressive party; members of the committee are no more entitled to counsel than is a judge entitled to legal advice as to what he ought to do. It is the public that is entitled to counsel; the public is interested not only in the bringing out of the facts but in seeing as well that no injustice is done in the elucidation of those facts. The government is justified in employing counsel in the public interests and not, in the interests of the committee nor as specially representative of any members of the committee. I am sorry that this view has not prevailed in the committee, and I apprehend that if what has been stated to me as the decision of the committee in the matter of counsel be followed, and if this motion passes, 
the investigation will turn out to be unsatisfactory. Certainly the relation of counsel to the investigation will be unsatisfactory and the public interest will not be served.


Mr. GARLAND (Bow River):: Is it not true that the members of the committee have concurred in the terms agreed upon?


Arthur Meighen: I understand that they have agreed, but the agreement has come only after the other plan along the lines I have urged was overborne.


Mr. FORKE:: I hardly understand some of the remarks of the leader of the opposition (Mr. Meighen). The right hon. gentleman speaks about prosecution and defence, but I understood that this was to be a committee of investigation to get at the facts of the case and that there was no suggestion of either prosecution or defence. I think the leader of the opposition has the wrong view.


Mr. EULER:: I listened with a good deal of interest and, at first, with sympathy to what the leader of the opposition said. What struck me as of great force was that the people should be represented, and- it has just occurred to me that the members of the committee really represent the people and for that reason are entitled to counsel. Is not that a fair way of looking at the question?


Arthur Meighen: I thought I had made myself clear. Certainly as members of parliament they represent the people; but a judge, too, represents the people in the exercise of his jurisdiction. Every investigation before a court, whether it be a civil or a criminal case, is an inquiry into facts, just as this investigation is; and every inquiry as to facts is best conducted when one end takes the prosecution and the other the defence. Experience has shown that this is the best course to pursue. Every inquiry, as I have pointed out, falls into these two divisions and it cannot be otherwise; that has been the history of jurisprudence in all countries. Now why should this be different from any other investigation? I am not urging counsel at all, although I know they are good counsel. But if the committee feels that there should be counsel then there is no reason for departing in this investigation from what time has proven to be the right method in all investigations as to facts, whether the facts appertain to a criminal or to a civil dispute.
FEBRUARY 18, 1926	H03
Customs Inquiry Committee


Mr. MACLEAN (York):: How many counsel are to be employed and for whom are they to act?


An hon. MEMBER:: One.


William Findlay Maclean: Is there to be any counsel representing the other side?


Mr. WOODSWORTH:: Does not the position taken by the leader of the opposition imply that the committee must of necessity divide itself into two parts, one portion of the committee being inclined to assume the role of prosecutors and the other that of defenders? I take it that the committee and the House ought not so to divide. I understand that at least one member of the committee does not occupy any such position and if that gentleman is to be a sort of judge in the matter, then I would say that whether we have counsel representing either prosecution or defence, we should decidedly have counsel to represent as far as possible the interests of the people irrespective of party.


Mr. RYCKMAN:: May I ask the hon. gentleman a question? Does a judge in a civil or in a criminal trial divide himself into two parts? Well, the committee is the judge.


James Shaver Woodsworth: Decidedly he does
not. That is the very reason why the committee should not so divide itself.


Edmond Baird Ryckman: But there are counsel on each side in any proceeding before a judge, civil or criminal.


James Shaver Woodsworth: I do not want to trespass, Mr. Speaker, but I would suggest the trouble is we are turning a parliamentary committee into a court.


Edmond Baird Ryckman: That is what it is.


Mr. CAHAN:: That is almost inevitable.


Mr. KENNEDY (Peace River):: Mr. Speaker, I regret I was not in my seat when this discussion began. Since the committee has been sitting I have reached the conclusion that we ought to have counsel representing the Conservative party, the Liberal party and myself respectively.


William Findlay Maclean: Now it is coming out. We ought to have three counsel.


Donald MacBeth Kennedy: We met
yesterday in camera, but I was overridden. The recommendation now made I moved in
the committee this morning in deference to the unanimous opinion of the other members. Of cotirse. if the House is opposed to the recommendation, well and good; but this recommendation expresses the opinion of the committee that, so far as the committee itself is concerned, we ought to have counsel possibly more than one.


Mr. R. B. HANSON (York-Sunibury):: 
Richard Burpee Hanson: In the light of what the bon, minister has said, may I ask why it is that the services of Mr. Geoffrion are being continued? The minister says the department has no defence to make.


Mr. BOIVIN:: The services of Mr. Geoffrion are being continued in the interests of the Department of Customs because so far no other counsel has been appointed, and not until we are thoroughly convinced that it is the intention of the new counsel to probe the administration of the department very thoroughly, noit only during the past year but during the past eight, ten, twelve or perhaps twenty yeans, will we dispense with the services of the counsel already retained.
Mr. JEAN J. DENIS (Joliette):	Mr. Speaker, the Minister of Customs (Mr. Boivin) has just said that the committee this morning unanimously decided that counsel should be retained to assist them. This places me in a better position than I would be in if members of the committee who sit on this side of the House had themselves recommended this course. Now, I may be wrong, but I do not see the necessity for counsel. The hon. member for \ ancouver Centre has brought charges against the Department of Customs and Excise, and it is up to him to prove those charges; it is not the duty of the committee to find witnesses for him. The committee is acting as judge of the evidence to be adduced before it. If the hon. member few- Vancouver Centre has no evidence to bring forward, so much the worse for him; but the committee has nothing to do with that. The Minister of Customs drafted the order of reference in such wide and ample terms as to give the hon. member every facility to substantiate his charges. The duty of the committee is to hear the evidence and report upon it to the House, and having done so its powers are exhausted. In the last resort, it is for this House to determine whether or not that report shall be accepted or rejected, or to send it back to the committee with certain instructions. That is the procedure. I repeat, Sir, that I cannot see the necessity of retaining counsel to act on behalf of the committee.
Hon. HUGH GUTHRIE (South Wellington) ; Mr. Speaker, it is quite true, as the hon. Minister of Customs has stated, that the motion to appoint the Customs committee was made by the government. But it is equally true, and within the knowledge of everyone in the House, that certain charges were made by the hon. member for Vancouver Centre of maladministration in the Department of Customs-


Georges Henri Boivin: I said that.


Mr. GUTHRIE:: -and it was in respect
of those charges, some of them very definite and very positive, that this committee of investigation was appointed. Personally I would have no objection Whatever to the employment of counsel by the Department of Customs; I think under all the circumstances that is their right. But there is another side to the case-the public. Now, the public are concerned. My hon. friend from Joliette (Mr. Denis) stated that the member for Vanoouver Centre had made certain definite charges. He certainly has made some very broad charges. My hon. friend from Joliette lays the burden on the shoulders of the hon. member of proving those charges. Surely, then, he should have something to say in regard to the prosecution of those charges before the committee. I think we are all well aware that three members of the committee represent the government side of the House-*


Some hon. MEMBERS:: Four.


Hugh Guthrie: -four members of the committee represent the opposition side, and one member represents the Progressive side. My information is only gained in the corridors, but I understand it was insisted that every one of those political parties should have counsel-for what purpose I hardly know. The idea to me was absurd, and I so expressed myself when I heard it. One party of members representing the government to have counsel, another party of members representing the opposition to have counsel, and the third and single member representing the Progressive party to have counsel! Surely that is not in the interests of justice, of fair play or of anything else. My hon. friend from Joliette, said he would be prepared to accept the proposition that no counsel be employed'. Were it not for the tremendous amount of work that is to be performed, I think his suggestion would be a good one, and that the committee might deal with the matter themselves without counsel. But in this case there is so much involved and there are so many ramifications to be dealt with that I doubt if any nine men could do justice to the case without the reasonable assistance of counsel. If there is to be counsel for the committee one should suffice, but I think my hon. friend from Vancouver Centre should be the one to name that counsel. The government, or the Minister of Customs at the present time, has employed counsel, which I think is proper.


Arthur Meighen: Hear, hear.


Hugh Guthrie: Surely then he will allow
those who have laid the charges, who have

Transportation of Coal
been the real instigators of the investigation to appoint counsel on their behalf, in order that all sides of the case may 'be fairly laid before the committee.


Georges Henri Boivin: I would like to ask the
hon. member a question. Does he not consider it sufficient for the hon. member for Vancouver Centre (Mr. Stevens) to be at the same time the accuser and the judge, without giving him all the powers of the House of Commons?


Hugh Guthrie: Oh no.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Mr. T. L. CHURCH (Toronto Northwest):: I would like to call the attention of the government to the acute unemployment situation in the larger centres of population this spring, and to learn if the government will consider by Monday adopting the proposal of the conference on unemployment by which this government was to contribute its share of one-third to help the provinces and municipalities and thus to relieve the whole unemployment situation.


Hon. ERNEST LAPOINTE (Leader of the House):: The government has already announced that it is prepared to do so. That is our understanding with the municipalities and the provinces.



HUDSON BAY RAILWAY

[Stage Direction]
On the Orders of the Day:
Mr. FRED DAVIS (East Calgary):: I
desire to ask the government if a promise has been made to a special group, or the leader of a special group in the House, that a bill to provide for the construction of the Hudson Bay railway will not be introduced, but that to guard against the defeat of the project by the Senate a substantial amount will be included in the estimates for the work.


Ernest Lapointe: 1 would say to my hon. friend to
wait and see. The government has announced in the Speech from the Throne that it is going to see that the Hudson Bay railway is constructed.


Arthur Meighen: The hon. member asked
if the government of the day had given a promise.


Ernest Lapointe: Nothing except what is in the Speech from the Throne.



FLOOD CONDITIONS AT STUARTBURN, MANITOBA

[Stage Direction]
On the Orders of the Day:
Mr. A. L. BEAUBIEN (Provencher):: I
desire to refer to a despatch from Winnipeg appearing in the Montreal Witness of February 17:
Claiming they are faced with starvation and without means of preparing their land for seeds, through lack of funds, residents of the Stuarthurn district of Manitoba have forwarded a petition to the provincial government, appealing for assistance. Disastrous floods, caused by the overflow of the Roseau river last spring, ruined the crops of the district.
I desire to ask the Minister of Immigration (Mr. Stewart, West Edmonton) a question, and the reason I ask the Minister of Immigration is that all the people residing along that river have been brought here under our immigration system. Has the minister anything to say, and if so, what action does the government intend to take?


Hon. CHARLES STEWART (West Edmonton, Minister of Immigration):: I have
not heard anything of the complaint my hon. friend has brought to the attention of the House.



TRANSPORTATION OF COAL


[Stage Direction]
On the Orders of the Day:
Mr. ROBERT K. SMITH (Cumberland): I desire to ask the Minister of the Interior (Mr. Stewart, West Edmonton) whether he intends to use his influence and good offices with the management of the Canadian National Railways in connection with the movement of 15,000 tons of coal from Cape Breton to Montreal. I understand that Sir Henry Thornton was in Ottawa yesterday. Did Sir Henry Thornton interview the minister, and if so, has the minister anything to report to the House in that connection?
Charles A. Stewart: I did not see Sir Henry Thornton yesterday, but a day or two ago I had a letter from Mr. Vaughan, the purchasing agent of the Canadian National Railways, stating that they had instructed the British Empire Steel Corporation that they were prepared to increase the order of
120,000	tons to be mined and banked for future delivery to 135,000 tons, the additional 15,000 tons to be mined at the Princess mine. Just the other day he informed me that they had received word that the mining company were not prepared to increase that order by 15,000 tons; in other words they were not prepared to bank that coal. That was the state-
The Address-Mr. Cahan

meat I received from Mr. Vaughan. I do not recollect, but I think I am safe in saying that the excuse given was that it was going to cost too much money. Since that date I have heard nothing further in the matter, but I did hope the mining company would go ahead, mine that small amount of coal and bank it. I cannot see why it should make any material difference to them in an order of the magnitude of 135,000 tons.



SOLDIER SETTLERS' LAND

[Stage Direction]
On the Orders of the Day:
Mr. J. A. CLARK (Vancouver-Burrard):: I call the attention of the government to a report that fifty families of immigrants are being settled on lands on the Fraser river, British Columbia, lately vacated by soldier settlers who were not able to make their payments. I understand these immigrants are being settled there at valuations less than those originally placed upon the lands. I should like to inquire whether it is a fact that immigrants are being settled on vacated soldier settlers' lands, at valuations below those originally placed on the lands, and if that is the. fact, why those lands are not revalued1 for our own soldiers who formerly occupied them or who now occupy them?


Charles A. Stewart: With
reference to the first question, I will have to get the information from the Soldier Settlement Board. I do not know of that particular locality being set apart for the settlement of British settlers, but I presume the information is correct. With reference to the second question, in regard to the placing of these British settlers on the lands at a lower valuation than that placed upon the lands for the settlement of the soldiers, I have heard that complaint on two or three occasions. I will also make inquiry to find out what are the facts in that connection.



STATUTES OF CANADA


[Stage Direction]
On the Orders of the Day:
Mr. H. C. HOCKEN (Toronto Wrest Centre):: I would like to direct the attention
of the Minister of Justice (Mr. Lapointe) to some remarks recently made with regard to one of the statutes of this country, and ask him if in his opinion it is competent for any judge in trying a case to say that the law he is administering is a barbarous law and unworthy oif any Christian country?


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: Under the rules of the
House:
All references to judges and courts of justice and to personages of high official station of the nature of personal attack and censure have always been considered unparliamentary.
I would also call the attention of the hon. member to paragraph 234 (i) under rule 19, which says that a member must not:
(i) cast reflections upon the conduct of judges of superior courts unless such conduct is based upon a substantive motion.


Horatio Clarence Hocken: Mr. Speaker, I do not
think I am infringing the rules of the House when I ask the hon. Minister of Justice whether he intends to take any cognizance of these statements from the bench. The remarks in question referred to one of the statutes of the Dominion of Canada, and I was asking the Minister of Justice whether it was competent for a judge to refer to them in that way.


Hewitt Bostock: The right course for the hon. gentleman to take, speaking from my experience of over thirty years of parliamentary life, would1 be to move for a return asking for a copy of the judgment, and then it could be debated in the House.


Horatio Clarence Hocken: All right.



GOVERNOR GENERAL'S SPEECH


[Stage Direction]
The House resumed from Wednesday, February 17, consideration of the motion of Mr. J. C. Elliott for an Address to His Excellency the Governor General in reply to his Speech at the opening of the session, and the proposed motion of Mr. Bird: " That this question be now put."
Charles Hazlitt Cahan: Mr. Speaker, as I was about tc
close the remarks I was making on the approach of six o'clock last evening, my hon. friend the Solicitor General (Mr. Cannon) interjected that I should deliver my speech in accordance with the rules of this House. In that respect, Sir, no one 'could have more anxiety to abide by the rules of the House than I, and I am sure that that is the spirit actuating the entire body of hon. members who sit on this side of the House. The hon. gentleman, referring to myself, said:
But do not let him waste public money in the way he is doing this afternoon.
That statement has the same tinge of exaggeration which sometimes characterizes the platform utterances of my hon. friend.
Mr. CANiNON:	Mr. Speaker, I rise to a
question of privilege-

The Address-Mr. Cahan


An hon. MEMBER:: I rise.


Mr. CANNON:: I am rising to raise the
point that when I made the remark referred to by the hon. gentleman, I asked Your Honour to remember his opening remarks as to his intention to Obstruct the business of the House. The hon. gentleman denied having said any such thing. 1 would refer Your Honour to Hansard of yesterday, where at page 1086 the hon. gentleman expressed himself as follows:
But when the hon. gentleman seeks to preclude us from reaching a vote of want of confidence in this House, when he seeks to gag us in the discussion of what we regard as material and vital to the interests of this country, I can tell him that so far as I am concerned he will have to change the rules of the House to prevent my obstructing, in order to prevent the forcing through of any such measure as that.
So I submit that when I said he was wasting the money of this country-


Some hon. MEMBERS:: Order, order.


Lucien Cannon: -I submit I was correct
because he had said that he was going to obstruct.


Some hon. MEMBERS:: Order.


Hewitt Bostock: The expression "obstruction" is not unparliamentary, and when an hon. member says that he will do his utmost to prevent any resolution from passing, he is not using an unparliamentary expression. I have been through debates myself in times gone by and I do not know that speaking against certain legislation, even though speaking for several hours, is against the rules of the House. As I said yesterday, the previous question prevents any amendment, but it does not prevent a member from speaking as long as he wishes on the main motion.


Lucien Cannon: I bow to your ruling, Mr. Speaker-


Some hon. MEMBERS:: Order.


Hewitt Bostock: I ruled yesterday that the hon. gentleman had not acted in an unparliamentary way by stating that he would do his utmost to prevent a certain resolution passing


Lucien Cannon: Obstruct, he said.


Hewitt Bostock: Yes, but that is not unparliamentary.


Charles Hazlitt Cahan: Mr. Speaker, I was referring
yesterday to the possibilities of my action at some future time when certain measures were before this House, in certain contingencies, and I certainly shall abide in such case by the rules of the House and abide by any decision
which Your Honour may make. The hon. Solicitor General proceeded to state:
But do not let him waste public money in the way he is doing this afternoon.
I wish to reiterate again that I defy the hon. gentleman or any other hon. gentleman in this House to show in what way and to what measure we are wasting public money in this House. I wish to state to the hon. gentleman, and he knows it is true, that so far as this House is precluded from dealing with public business, it is due to resolutions introduced by the leader' of the House and accepted by a majority in the House, that we are precluded from proceeding at the present time with the public business of the day. We have had laid on our tables to-day an order paper containing some 56 pages of printed matter, dealing with a great volume of public business, proposing resolutions affecting the vital interests of this country, but under the resolution which the leader of the House has had passed by his majority it is impossible for this House to consider one of them. More than that, I repeat that the leader of the House cannot at the present time state that he has .one single public measure ready to submit to this House. If he has such a measure, and if he is willing that this House shall proceed with the despatch of business. I for one am prepared to ask the leader of the opposition (Mr. Meighen) and those supporting him to assist in rescinding the resolutions of which the hon. gentleman has secured passage, because there is nothing in the rules or the practice, of the House, there is nothing in the dicta or precepts of parliamentary procedure, which prevent the government from proceeding with the despatch of business, proceeding with their public measures, and holding in abeyance for the time being or postponing to a future time in the session the further consideration of the Address.


Ernest Lapointe: Will the hon. gentleman allow me a question? He has asserted this afternoon, as he did yesterday, that I am responsible


Charles Hazlitt Cahan: Oh, no.


Ernest Lapointe: -for this debate going on because of the resolution which I moved that the Address should have precedence over other matters until disposed of. Of course my hon. friend knows that is the usual motion, but my question is to this effect: He says this resolution of the leader of the House was accepted by the majority of the House. Does he not know that it was agreed to 'by the unanimous vote of the House including himself?
The Address-Mr. Cahan


Charles Hazlitt Cahan: In reply I wish to say to
the hon. leader of the government that if he is now willing to rescind that motion


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: -the real dart of which was in a subsequent motion which we opposed, the real crux of which was disclosed when he by a majority secured the passage of a further resolution declaring that upon the adjournment oif this House after the close of the debate on the Address this House would stand adjourned to March 15, and if he is now prepared to amend or to reconsider the position which he then took-a position which we endorsed when we had no knowledge of the further motion which he was about to propose-I can assure him-
Mr. STEiWART (Edmonton):	Does the
hon. gentleman ever read the newspapers?


Charles Hazlitt Cahan: I do, although I do not
accept all that is said in them. But I read the newspapers to this effect

that hon. gentlemen opposite are endeavouring to disseminate in their party press that we who are addressing the House on this motion are thereby obstructing public business-


Some hon. MEMBERS:: Hear, hear.


Charles Hazlitt Cahan: -thereby rendering necessary an expenditure which -under other considerations would not be necessary. And I say that those statements, which are also expressed in the short, riiarp interruption of the hon. Solicitor General as I was about to close my address for the time being at six o'clock last night, are -not in accordance with the facts, and that the verities Should be known.


Mr.   GANNON@: Mr. Speaker-


Some hon. MEMBERS:: Order.


Lucien Cannon: Will t'he hon. gentleman-
Sonne hon. MEMJBERS:	Hear, hear.


Charles Hazlitt Cahan: I am sorry that my very
pleasant remarks act as a pin prick upon the conscience of the hon. gentleman.


Lucien Cannon: Mr. Speaker-


Some hon. MEMBERS:: Sit down.


Charles Hazlitt Cahan: The position in which we
find ourselves to-day-
Some hoon. MEMBERS:	Louder.


Lucien Cannon: Mr. Speaker, if hon.
gentlemen opposite have any sense of fairness-*


Hewitt Bostock: If t'he hon. member for
St. Lawrence-St. George does not wish to be interrupted that is his privilege. The rule is well known. An hon. member addressing the House and -not wishing to be interrupted is within his right in declining to yield the floor.


Charles Hazlitt Cahan: I 'have no objection to
feeing interrupted in the ordinary course of events, but when the hon. gentleman propounds questions for the mere purpose of creating a turmoil and disorder almost unprecedented in this assembly I ignore his interruptions.
On the issue between myself, and those who are of the same opinion as I, and hon. gentlemen opposite, we on this side are unanimously agreed that this government is utterly incapable of carrying on 4 p.m. the public business of the country.
It has demonstrated that clearly by refusing day by day, and week by week, to introduce one public measure -for our consideration. Furthermore if there were any doubt in the mind of any hon. member here, if there were any doubt in the mind of any person in this country as to the utility-and not only the utility but the absolute necessity-of this parliament functioning while the special committee investigating into the administration of the Department of Customs and Excise is conducting its inquiry, I think it ~was disclosed here to-day how absolutely necessary it is. It is absolutely necessary in order that there may be a full investigation into those matter's which resulted-according to the estimate I think, of the right hon. Prime Minister a year ago-in some $50,000,000 of defalcations in the public revenues of Canada. Therefore I say that hon. gentlemen *opposite will not meet wiitlh very substantial support from the public of Canada when they talk about the expense into which we are plunging the country in continuing this debate, and in continuing to consider the -matters which were presented to us by His Excellency the Governor General in his Speech from the Throne.
When parliament w-as convened there was a phrase in the message received from His Excellency the Governor General which was in accordance with (the tradition and practice of -parliament for all time. It was that phrase in which he announced, through his deputy, that he did not see fit to declare the causes of his summoning the present parliament of Canada (until (the Speaker of the House of Commons should -have been chosen according to law. He then indicated to this parliament that upon our choice of a Speaker to

The Address-Mr. Cahan
preside at our assembly, he would, in accordance with ancient practice and tradition, declare the causes of his summoning the present parliament of Canada. Unfortunately His Excellency the Governor General may speak only such words as are committed to him, by the Prime Minister of Canada for expression, and when we met we had the declaration by hon, gentlemen opposite that parliament was convened, for what? Did they declare that parliament had been convened in order that the assembled members might decide whether the government, in the shattered condition in which it was, Still had the confidence of this parliament? The one thing which is absolutely necessary in our governmental institutions is that the Prime Minister shall deal with absolute frankness with His Excellency the Governor General and this parliament in all matters that are placed on the lips of His Excellency. Therefore, that statement, if properly presented, we agreed, might have been a matter upon whidh this House might decide, upon which., if there were any doubt about- the matter in the minds of hon. gentlemen, they might call upon the members of this House to decide. But no such intimation appears in the Speech of His Excellency to parliament. It was not even intimated that parliament was asked to decide upon that question, and if there -were any doubt about the matter, the Prime Minister had no authority whatever to present to this House a .Speech from the Throne until that preliminary question had been decided by the House. That was very clearly stated by the hon. member for West York OSir Henry Drayton) when he referred to May's Parliamentary Practice, twelfth edition, at page 143, and showed that the proper practice, in case the House was convened to enable parliament to decide whether or not the government woluld be sustained, was to 'postpone the' delivery of His Excellency's Speech and to invite the House to decide that question upon the government's record and not upon the entirely new promises set forth in the Speech from the Throne. Hon. gentlemen opposite abandoned the precepts of the constitution and they introduced a new message which is now before us.
I took some pains yesterday to read to the House at great length the official declaration made by the Prime Minister of -the considerations which he had presented to His Excellency when asking for a dissolution of parliament. I also gave from the mouth of the Prime Minister a complete and detailed statement of the issues upon which he appealed to this country. He also stated, in those addresses at Richmond1 Hill and Erindale, that 14011-71
he was prepared to appeal to and to abide by the decision of the people on the issues which he then -presented. But when c(ur hon. friends who now form the remnant of the government became parties to the presentation to this House of an address, under the circumstances under which they presented it, they omitted every single consideration which had been presented by the Prime Minister bo His Excellency as a reason for dissolution. They omitted every ground upon which they had appealed to the people before, and by abrogating, annulling and refusing to follow the proper parliamentary practice, they came in with their bids for political support on grounds that they had never before dared to place before parliament and the people of this country. I told hon. gentlemen the other night some of the' evils which were bound to flow from Such an utter disregard of the precepts and practice of the constitution, and the result is this: They -have themselves introduced anarchy into this House and they cannot complain if, within the rules, members on this side show that it is impossible for this mutilated' government to function.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: Hon. gentlemen opposite may laugh, but this country is not laughing. This country from one end to the other is in a state of the greatest anxiety, in a state of business depression, in a state in which the people are looking forward to ascertain if some stable government can be given them. Old enterprises are being curtailed, new enterprises are not being undertaken. From day to day it has been suggested by hon. members, whether they be from British Columbia, Hamilton, or Sydney, that under industrial conditions which prevail, men, women and children are in destitution and starving to death in this country, and that starvation and destitution will continue so long as this defunct government undertakes, against the will of the people, the functions of government which they are utterly incapable of exercising and which, if they attempt to exercise, they must exercise in so inefficient a manner as to disgust men, women and children throughout the length and breadth of Canada.


Edward Joseph Garland: May I ask the hon. gentleman a question?


Charles Hazlitt Cahan: I am not answering questions this afternoon as I want to finish my remarks before midnight. Hon. gentlemen yesterday persisted in asking me questions; they took up the whole of the time of the



The Address-Mr. Cahan
House, and then they blamed and condemned me for wasting the public moneys of the country. Without the interruptions, I certainly should have concluded my few remarks by at least six o'clock yesterday evening. Now it may be that I shall be unable to finish my address before six o'clock to-morrow morning. In these matters in which there is a conflict between us there apparently can be no decision in this House; no matter if my hon. friends of the Progressive party support the government unanimously in all their iniquities, it -will be impossible for that government to function long. In such a case, I wish to present to them the opinion of their honoured leader the late Sir Wilfrid Laurier who, under similar circumstances on April 9, 1913, said:
As I have said, there are some occasions on which there is a cleavage between the majority and the minority, and then there is an easy remedy, an easy solution. The remedy is not closure; it is not the application of brute force. The remedy is an appeal to the people. The people, after all, are the judge and the jury. The people, after all, are the parties to pass judgment as between the government and the opposition, as between the majority and the minority.
The vociferous remarks of hon. gentlemen opposite about the time of this House being wasted will have no effect upon me, because I understand and I 'believe in my inmost heart and mind, that the people of this country will never be satisfied until they have an opportunity to decide between those on this side of the House and1 the present members of the government on the other side. The people must decide this question unless we call a constitutional convention, which is not impossible in view of the manner in wThich parliamentary rules and practice have been broken down by hon. gentlemen. But saving that alternative, the judge and jury are the electorate of this country and only they can give the final decision on the issues that now divide parliament.


Mr. MacLEAN (Prince):: The people have decided against hon. gentlemen opposite 'but they will not accept that decision.


Charles Hazlitt Cahan: They have decided against the hon. member, and that remark comes with ill grace from one of a body of men who represent a minority in this House and who are fewer in number than those who are criticizing them to-day.


Alfred Edgar MacLean: Hon. gentlemen opposite 'are the only people in the country who do not realize that they are defeated.


Charles Hazlitt Cahan: That shoe belongs to the
other foot entirely my friend.


Mr.   MacLEAJN@Prince: Not at all.


Charles Hazlitt Cahan: Whether there is any doubt about it or not, the fact is obvious that the people of the country are utterly dissatisfied with the present state of affairs. If that state of affairs continues, without stable government and without stable industrial and commercial conditions in Canada, you will find the present dissatisfaction increasing and increasing until it will become a tumultuous volume from the Atlantic to the Pacific.


Alfred Edgar MacLean: That is only
the hon. member's private opinion.


Charles Hazlitt Cahan: I am giving my private
opinion. In dealing now with the subject matter of the Address a little more closely, I do not desire to digress unless I am induced by hon. gentlemen opposite to do so. Let me observe in the first place that the people are looking for a strong, stable and constructive policy, for a solution of the very grave problems to which the Prime Minister referred in his speech and which I quoted yesterday, but which are not referred to in the Speech from the Throne. In the conditions that have prevailed in Canada for some time now, we find that during the past four years we have had a diminishing industrial employment at wages which would permit people to live, and such diminishing employment means in every case diminishing production, diminishing internal domestic trade, which is the most important trade to the country, the trade which most speedily builds the country up industrially and creates-its wealth; we have had diminishing home markets for, our products; diminishing traffic for our railways; diminishing railway revenues, necessitating increased taxation; and diminishing prosperity for all classes of the people. I notice in the latest returns to which I have access that during the three years from 1922 to 1924 inclusive the income tax returns of Canada showed that the assessed incomes available for taxation in the country had decreased in the aggregate by $370,000,000, indicating that the people of the country are not earning the incomes which they previously did. In Canada the ordinary income tax is four to five times as heavy as it now is in the United States. The men who have large capital in Canada are investing it in the United States where it will not be subject to heavy income taxes such as are extorted from the people of Canada. The burden of taxation in Canada, as I said yesterday, is really about one-fourth of the total output of all the productive energies of the entire people, and it is a burden which is as great as, if indeed

The Address-Mr. Cahan
not greater than, the burden which France had to bear after her tremendous efforts throughout the years of the war. The burdens on the backs of the Canadian people are increasing while the number of 'people who are left to bear them is continually decreasing as a result of the exodus of our best brawn and brain-brawn andi brain quite the equal of any, and for work in this country quite Superior to any body of immigrants whom we may bring into Canada under the immigration policy of hon. gentlemen opposite.
Now the obvious remedies for the deplorable conditions existing in Canada are, it seems to me, first, to increase the permanent and remunerative employment available to the people of Canada, and secondly to reduce the burden of debt and of taxation, which now overwhelms us, to a basis somewhat equivalent to that which obtains across the border in the United States. We must encourage an increasing production in agriculture and we must develop our mines, our forests and our fisheries by increasing the demand for the products of these industries in this country and their utilisation here in the production of finished commodities of greater value through the use of the labour and capital of the country. In addition to that, we must safeguard and protect the Canadian manufacturing industries, protect the farmers of the country, and1 protect every producer in Canada against all unfair and injurious competition from abroad in order that all products which may properly be turned out in Canada by Canadian labour shall be produced for our own use. In this way we shall increase the industrial activities of the whole country; in this way, beyond all peradventure, we can create remunerative employment and give that stable living wage to which the leader of the Labour party (Mr. Woodsworth) has referred in one of the resolutions he intends to propose to the House. We can find employment for tens of thousands by producing in Canada the things which at present we import from abroad. Those imports we can readily manufacture here if we are protected against the cheap labour of foreign countries. I declare that we are able to produce $500,000,000 worth of our present imports by Canadian labour, thus giving employment and support to at least a million and a quarter more people, if we put into force the policy that should obtain in this country. In Canada over 60 per cent of our imports are of the same character as the goods we produce right at home, and the products of this country are as good as those we get from abroad. In the United States, on the other hand, 'less than 14011-71J
30 per cent of their imports are of the same character as the products they manufacture in the country. Hon. gentlemen tell me that prosperity depends essentially upon building up an export trade. I grant that prosperity may be assisted by an export trade in the surplus products of this country raised to the highest standard of manufacture and production of which we are capable. The sale abroad of five million bushels of wheat in the form of flour is far more beneficial to this country than the sale of five million bushels of wheat simply, because the grinding of that wheat into flour gives employment at home, and the by-products are essential to promoting the activities of the farm.
Now, I wish to recapitulate to this extent: that 40 per cent at least, probably nearer 50 per cent, of our population depends directly or indirectly upon the prosperity of our manufacturing industries for its livelihood and wellbeing. When hon. gentlemen compare the cost of the sale of domestic articles with the price of similar articles produced on the other side, they must remember that we have business taxes which no longer exist in the United States-we have sales and stamp taxes-to the extent of millions of dollars levied, upon the industry and business of this country,, and this levy ultimately is placed upon the productive energies of our people; but the industry of the United States has been relieved of this burden, and consequently is able to produce much cheaper than we can.
It seems to me that to decrease the burden of taxation we must, for the time being, postpone all extensive expenditures upon capital account which are not now really necessary for the well-being of the country, and we must postpone especially those expenditures which promise no increase in public revenue within a reasonable period of the future. We must, as I stated yesterday, pare down the cost of federal administration and federal services to the lowest possible limit. We must also reduce the annually recurring deficit on the Canadian National Railways. I believe that the source of revenue for a large part of that existing burden will be found in a due increase of the industrial activities of this great country. When I say, "industrial activities," I refer to farm activities, to the growing of wheat, as well as to all the other productive activities which have been hampered by the policy pursued by hon. gentlemen opposite, and still more by the threats which they have pronounced not only in this House but upon public platforms as to what they would do if returned to office. Nothing would more help us in stabilizing and increasing employment for our people than the re-
The Address-Mr. Cahan

duetion of this ever-increasing taxation. Nothing would more speedily raise the standard of living in this country. Nothing would more quickly increase our purchasing power. It would check emigration to the United States; it would bring in suitable immigrants without the expenditure of millions of dollars for that purpose; it would, as I said before, rapidly increase the net revenues of our railways; it would distribute the burden of debt over a larger number of people, and so assist every citizen by decreasing the burden which falls upon him individually; it would decrease the burden of taxation borne by every Canadian family, especially the family which relies upon the manual work of its head.
Now, Mr. Speaker, these matters which are of paramount importance to the people are entirely ignored in the 'Speech from the Throne. It is not because hon. gentlemen opposite are not conscious of them, because those problems have been so impressed upon the Prime Minister that he went officially to His Excellency the Governor General and asked for a dissolution of parliament in order that he might solve them. He presented the same problems to the people. But finding that he is returned in a minority, finding, as he himself has confessed, that it is utterly impossible for him under present conditions to present even a modicum of a solution, he utterly ignores those problems in the Speech from the Throne; in other words, he utterly ignores them in the programme presented to us for our consideration in that speech.
I think, Sir, that the present government lias shown beyond all doubt during the past four years, and by its conduct during and since the federal election, that it is utterly incapable of dealing effectively with these existing conditions for which the whole country demands a remedy. The defeat of the present government in this House and in the country would again give confidence and courage to the great body of employers and employees who are dependent for their living upon the assured and stable prosperity of Canadian industry in all its branches. The defeat of the present government in this House and in the country would create immediately profitable employment for Canadian funds at home which now seek investment in the more stable American securities and industries, The defeat of the present government would encourage and increase the investment of foreign funds in this country in every efficient and well-managed industry, and induce the establishment of a great number of industries which are really necessary to supply the necessities of our ordinary standards of living. In other words, the

summary and unequivocal defeat of this government will, I am sure, inaugurate an era of general prosperity throughout Canada, the like of which we have not known for many years. That being so, so far as the rules of this House permit, so far as parliamentary practice admits, yielding as we must and will when we go astray owing to the freedom of our remarks to the decisions of His Honour the Speaker, I say it is the duty of this House now to establish before the eyes of the whole country the actual facts-that this government is not functioning, that it cannot function, and that the prosperity of Canada remains in the balance until these conditions are changed.


Lucien Cannon: Mr. Speaker, we (have listened to
a speech which has lasted nearly five hours and a half, a speech 'that was delivered, according to my hon. friend's peroration, for the purpose of showing, first, that >he was gagged, and, secondly, that this government could not function. I wonder, Sir, if the hon. gentleman had not been gagged, how. long his speech would have lasted. As to hus second contention, I say that he did not show to the country that this government cannot function, I will in my few brief remarks show him that the will of the Canadian people will prevail in this House, notwithstanding speeches similar to the one we have just listened to.
Gag! The (gag in Canada is an invention of .the Tory party. The gag has as its father the right hon. leader of the opposition (Mr. Meighen). Gag! The gag has as it partisans and supporters in this House the gentlemen opposite who refused a few moments ago to allow an hon. member to put a question to one of their followers and fellow-members. We have no intention of imposing the gag, provided this House of Commons does its business in accordance with its traditional dignity and prestige. We have no intention of gagging anybody, provided the members on the other side of the House realize that we are the government, and that we shall remain the government as long as we have the confidence of the House. The hon. member for St. Lawrence-St. George (Mr. Cahan) in rising yesterday afternoon complained most bitterly that the hon. member for Nelson (Mr. Bird) had prevented him from, moving another amendment to the already numerous amendments which have been brought before this House and defeated. I will remind the House that on one occasion the gag was imposed upon this House, and that was in the year 1913. In that year these gentlemen, who to-day rise in their seats one after another (claiming liberty and

The Address-Mr. Cannon
freedom of speech as reipresentatives of the people, took away, under circumstances which I will briefly relate, the liberty and freedom of speech from the liips of the Right Hon. Sir Wilfrid Laurier, the most eminent statesman who was then sitting in our Canadian parliament. The circumstances were of such a nature that they depict, describe and show to the fullest extent the character and nature of the Tory when he is in power. The right hon. leader of the opposition was then, if I remember rightly, Solicitor General in the government, or a private member, I am not sure whiicth.


Arthur Meighen: A private member.


Lucien Cannon: A private member.
Although he was then but a private member, the nimibleness of his mind under those circumstances immediately indicated that he Should be promoted and become leader of the party, the collective mind of which was so similar to his own. They wanted to stop the debate in this House. They wanted to stop the Liberal party from challenging one of the greatest encroachments on our national economy ever attempted by any party in Canada, and the way they did it was by altering the rules of the House, by bringing in amendments to the existing rules-


Arthur Meighen: May I-


Some hon. MEMBERS:: Order, order.


Lucien Cannon: And the right hon. leader
of the opposition, the father and author of the closure, prevented the Liberal party from even discussing those amendments to the rules, and that party to-day is pretending to represent the 'liberty of the people. The party who to-day pretend to represent the liberty and freedom of the Canadian people may talk in this House for many a day, they may talk for many an hour or many 'a week, but when speeches are delivered sulch as the one which has just been concluded, the people of Canada will answer by a huge outburst of laughter, because they know that there cannot be any sincerity in their attitude to-day. I said that ,tihe first contention of the hon. member for St. Lawrence-St.George was of such a nature that it should not be discussed seriously, and besides-I am coming now to the second point-if the hon. members on the other side were serious, if they wanted that motion of non-confidence to be debated and discussed, there was a well known procedure open to them. It was for any hon. member on the other side to rise and move that the floor be given, not to the hon. member for Nelson, but the hon. member for
St. Lawrence-St.-George. Why was that motion not made? Why did the opposition not dare to challenge the hon. member for Nelson when he rose in his seat? The reason is very simple. A few minutes previously the House had given this government a majority of eleven-


Some hon. MEMBERS:: Ten.


Lucien Cannon: -and the hon. gentlemen on the other side knew they were in a minority. The question now before the House, Mr. Speaker, is a very simple one: Shall the majority in this House rule, or are we going to be obstructed by a mere minority? We on this side, sitting as Liberals do not represent the majority of the House, but when our Progressive fellow members support this government we form a majority, we represent a majority of the Canadian people, and parliament owes it to its dignity and prestige that that majority shall rule in this House. I have spoken of the prestige and dignity of parliament. My hon. friend from St. Law-rence-St. George is a much older man than I am. I owe it to his age, to his experience, and to his seniority at the bar to speak of him with all due deference, but may I be allowed, Mr. Speaker, to ask every open-minded member in this House, be he Conservative, Liberal or Progressive, are the dignity and privileges of parliament maintained and upheld by such a performance as has been given by the hon. member for one of the Montreal constituencies? A gentleman who occupies at the bar a leading position, a gentleman who sat in the Nova Scotia legislature for many years, a gentleman backed by the Montreal Star and heralded as the future leader of the Conservative party, comes to this House, to give us the benefit of his experience as a legislator ostensibly to promote the public welfare and to contribute to the improvement of Canadian conditions. What has been his performance? His performance has been to hold up the business of this House for nearly two sittings. What to declare, what to lay before the minds of the members of this House? Nothing but articles which have been read by thousands of people already in the Montreal Star. I appreciate the very friendly, the very prompt and spontaneous help, may I say, given to his follower by the right hon. leader of the opposition (Mr. Meighen) whenever points of order were raised-


Edmond Baird Ryckman: Rised.


Lucien Cannon: If my hon. friend wishes to interrupt me, will he do it in French?
The Address-Mr. Cannon


Edmond Baird Ryckman: Speak in French then.


Lucien Cannon: The leader of the opposition, I say, came very promptly to his follower's assistance when points of order were raised. Why? Because one of his rivals for the leadership of the party was committing before the House of Commons and the people of Canada the most. certain act of hari-kari ever committed here. I do not wish to detain the House to speak of the hon. member any longer. My concluding remark so far a's he is concerned is that if he wishes to transform the House of Commons and parliament into a clearing house for Lord Atholstan and his election debts, he is making a mistake. We will not stand for it. Let my hon. friend go back to the noble lord who sent him here and tell him that he may boss in the office of the Montreal Star, but he won't do it here. The free representatives of the people in parliament will not stand for it.
One more word. The hon. gentleman stated that we were suffering in Canada from industrial depression, that people were starving, that they could not afford a meal. Judging by the strength and vigour the hon. gentleman showed at his age, he certainly eats well; he must be an exception. Industrial depression, Mr. Speaker? Instead of preaching here in Ottawa that gospel of ruin, desolation and despair, let the hon. gentleman go through the province of Quebec, which he knows, and tell the people the real facts as they exist. Let him go to the region of lake St. John Where over $200,000,000 is being expended for the erection of new industries. Let him go to the city of Montreal, which is spreading every day, whose population has doubled, and see the industrial development everywhere. Let him go to my own city of Quebec and see the new factories 'being built there, and then when he comes 'back to the House, notwithstanding the mandate he may have received from the Montreal Star, at least let. him not talk about industrial depression. .How can the hon. gentleman reconcile his assertions about industrial depression with the trillions which were given to himself and his iriencte in our province to defeat the Liberal 3>arty in the last election? Where did that money come from, Mr. Speaker? Did it fall from the heavens? Where did those funds come from? They came from the same people, from the Atholstans and the McConnells and all those other selfish Mlontreal capitalists who think that they can run Canada from the boards of directors on which they sit. But they are mistaken; we will not (Mr. Cannon.]
stand for it. Every day, Mr. Speaker, I see the Montreal Gazette printing special despatches to its readers saying that this government should not be allowed to continue in office, that we are ruining this country, and yet that same paper in its financial pages prints news absolutely belying what is said in the political sections of that paper. People can foe deceived once; they can foe deceived twice, but let these capitalistic friends of hon. gentleman opposite know once and for all that the people cannot be fooled all the time.
The honour and prestige of this House, Mr. Speaker, urges us to vote as soon as possible on this motion. The honour and prestige of the House urges us to do so because, not only has the majority of the House decided that this government dholdd remain in power, but the interests of the country, well 'understood, demand that we should proceed to 'business and legislate.


Some hon. MEMBERS:: Go on then; go to it.


Lucien Cannon: I was surprised to hear a member of the bar like the hon. member for St. Lawrenee-St. George bring forward the argument that we should go to it 'before the Addlress had 'been voted. I do not know in what houses be bias sat. He has told us that he has 'been in Mtexico. Maybe in Mexico public business is proceeded with 'before the Address is voted, but in British countries, wheTe the constitutional precedents as we 'have them in England are followed, the Address is always voted first, and I challenge any member on the other side, no matter what his standing may be, low or high, to give me one precedent since we have had parliamentary institutions in this country where any bill, except the formal Oaths of Office bill, has ever been introduced 'before the Address was voted. Let us vote the Addlress, and then let us discus? on its merits the legislation of the government; and then it will be for the House to decide whether, standing on the merits of that legislation, the government shall be sustained or not. The west has needs; the east has needs; we have heard representatives from the Maritime provinces tell us thalt conditions in the Maritime provinces toi-d'ay are such as to demand immediate action in order to relieve the conditions, and yet, instead of allowing this government 'to bring down legislation to try and remedy the conditions complained of, hon. gentlemen sitting on the other side cheer speeches lasting for several hours and delivered) for no other purpose but political obstruction.

The Address-Sir Henry Drayton
I say that not only the honour and prestige of the House, and1 the interests of the country, but thirdly, the will of the people at large, demand that this government go ahead and that parliament legislate.


An hon. MEMBER:: Why don't you do
it?


Lucien Cannon: Vote the Address and we
will do it.


Edmond Baird Ryckman: Then you will take a
holiday.


Lucien Cannon: I say that the will of
the people at large as expressed is strongly in favour of this government going ahead. We hear hon. gentlemen opposite telling us of what happened on the 29th of October. Many other things have happened since. When the right hon. gentleman who leads the opposition came down into the province of Quebec, into the constituency of Bagot, clothed as the new champion of anti-imperialism, when laying aside twenty-five years of his political career and throwing to the winds the principles for which he had fought for many a year, when, speaking to the population of the province of Quebec in their own tongiue, he asked them to return one of his supporters in order that he could form a government, what was the reply? The reply was of such a nature ,that in the parish where the right hon. gentleman made his longest speech our majority was increased by over MO. 'What conclusion is to be drawn? The conclusion to be drawn is that the people who voted against my right hon. friend in the province of Quebec in October last, and voted against him also in December last, do not want him. They want this government to remain in power. They want the leaders of the Liberal party, if they can secure a majority in the House, to continue to administer public business.
I will go further.. My right hon. friend will prdbably say that Bagot is an isolated instance, that too great importance should not be attached to the result there. What was the result in Prince Albert? In Prince Albert following the meanest, the smallest campaign ever waged against a public leader in Canada on every hustings in the nine provinces of the Dominion, and in every Tory paper published in our largest cities, after a campaign had been waged in which every effort was made to revile even the private character of our leader, after every effort had been strained, after every ounce of energy had been exhausted, and after every possible cent of electoral funds had been spent to crush him, Mackenzie King went to the people of the west and
asked them whether they were for the mean methods of the Tory opposition or for the larger ideals of the Liberal party; whether the leader of our party, who had given the best of his ability and the best of his energy, to the welfare of his country, should be crushed by racial and by small appeals; and western Canada declared most emphatically that my right hon. friend opposite should remain where he is sitting now. May I say to hon. gentlemen opposite that with the support of hon. members of the Progressive party, with the support of labour, with the support of every independent member, who can judge legislation brought down on its merits and not through the glasses of political partisanship, we wall carry on, and we will give to this country a good government. Notwithstanding the appetite shown by the right hon. leader of the opposition for the privileges and emoluments of office, notwithstanding the eagerness of the new members who used to be in a former parliament and of former ministers in the Tory government, notwithstanding the zeal shown by those who wish to be leaders of the Tory party-notwithstanding all the grand eloquence of these gentlemen-I say that we shall rule by the will of the people. And the will of the people will prevail against the Tory party as it always has done. History has recorded that fact and will record it again.


Sir HENRY DRAYTON (West York):: Mr. Speaker, the House has just had a treat.


Some hon. MEMBERS:: Hear, hear.


Henry Lumley Drayton: I am glad my
hon. friends opposite agree with me. We used to have many of these treats, when the wild, uncuibed exuberant eloquence of my hon. friend held sway-I refer, to the days when the hon. gentleman was in opposition. In those days there was nothing to control the wildest manifestations of the hon. gentleman's exuberant fancy. My hon. friend is now getting back again into the realms of fancy. But he is not discussing practical questions. He is making an appeal

a very good appeal- he is making the only kind of appeal that can ever carry his party-an appeal to passion, but an appeal devoid of argument. The hon. gentleman is the best man in the world to do that. He has done well in that direction.


Mr. FONTAINE:: Very well.


Some hon. MEMBERS:: Hear, hear.


Henry Lumley Drayton: I am always
delighted when my hon. friends opposite agree with me. It would be better, however, if

The Address-Sir Henry Drayton
they agreed oftener. That they do not do so is one of their greatest shortcomings, but they are agreeing now. My hon.
5 p.m. friend did very well with the material at hand. The pity is that he did not have some real material. The hon. member for Hull (Mr. Fontaine) gives me a beautiful laugh just on that point. I should like him to repeat that laugh before I continue. Perhaps the hon. gentleman has exhausted his resources; if so it is really too bad.
The hon. Solicitor .General for one moment was rash enough to get down to something concrete, and he had the boldness to challenge anyone to give him authority for the proposition that this House could do business. He even chided the hon. member for St. Lawrence-St. George (Mr. Cahan) for his re-fernces to this point, and told him that as a lawyer he should have known better. Mr. Speaker, I am not going to trouble very much with my hon. friend's speech, but 1 am just going to show where the hon. gentleman can be checked. I will give an illustration of how very easy it is to check him. I am going to give the hon. gentleman the precedent that he asked for. I find it in May's Parliamentary Practice, twelfth edition, at page 163. The citation I wish to make reads as follows:
In both Lords and Commons, since the commencement of session 1890-91, the answer to the royal Speech has been moved in the form of a single resolution, expressing their thanks to the sovereign for the most gracious Speech addressed to both houses of parliament, and amendments to the Address are moved by way of addition thereto. The transaction of public business-
And this is the point my hon. friend challenged and said was ridiculous to raise-
-is carried on whilst the proceedings on the Address are in progress. Bills are introduced, committees are appointed, and, in session 1884, debate on the Address was postponed from day to day, whilst a motion of censure on the government, regarding events in the Soudan, was under consideration.
The real truth, Mr. Speaker, is that my hon. friend-I am not blaming -him, I am commiserating with him-is mistaken in this as he has been in so many other cases. The law is not what he stated it to be; the law is as stated in May, and there can be no question about it at all


Lucien Cannon: I never contended otherwise. There is a distinction. My hon. friend will draw the distinction between strict law and practice. I am talking about practice.


Henry Lumley Drayton: I would like
to point out to my hon. friend, in the first place, the extreme readiness with which I give him the floor in contradistinction to the manner in which he treated my right hon.

leader a moment ago. In the second instance, the whole of May deals with parliamentary practice. It is not law; it is practice. My hon. friend will find no statute anywhere creating this law. It is simply the rule which has been worked up as a result of very long periods of parliamentary procedure and practice.
There is another thing in regard to which my hon. friend is wrong. He speaks about the closure rule and he dramatically tells the House how that was rushed through. My hon. friend and I both suffer under the same disability that neither of us was in the House at that time; but if my hon. friend takes the trouble to turn tip Hansard, he will find that days and days of debate were given to the subject and that it was only after a very long discussion and then with a large majority that closure was adopted. I do not object at all to closure; it is a proper vehicle for the carrying on of public business. What I object to is an indirect, improper and cowardly application of the practice. Closure itself is necessary. Just so soon as a government comes honestly and properly to the conclusion that public business is being held up, it is its duty to apply closure if it has any faith whatever in its own conclusions. What have we today? This motion of the previous question is closure and it is not closure. It is closure of thought, closure of action, closure so that this House can do nothing useful by way of amendment. But it is an invitation to the House to debate this question just so long as it pleases, with the right to everybody to speak again, not confined by the terms of an amendment, but at inordinate length.
A motion of the kind which is before us to-day was never intended for the purpose of getting action out of this parliament. The only thing it can do is to prevent amendments being made which not only might have been but would have been very inconvenient for some hon. members. It is idle for anyone to pretend that we gain time by a motion of this kind. Everybody who has any knowledge whatever of parliamentary procedure knows that is not true. I do not know how the hon. gentleman was led into moving the motion, because everybody seems to deny the ownership of this new form of strategy. Why, the leader of the House (Mr. Lapointe) is absolutely ashamed of it, and he gives the most indignant denial to the statement that be had anything whatever to do with it. While we have not the whole of the governmental party yet giving their denial, we have an indignant denial from the hon. gentleman himself that he got

The Address-Sir Henry Drayton
any idea of it at all from the government. He does not, however, tell us from whom he got the idea, and we have no knowledge whether there was some other conduit pipe across the aisle than a member of the government itself, or whether this thought, so barren of any result except to prevent anything useful being done in this discussion, was the bright idea, without the slightest suggestion from anybody, of the hon. gentleman himself. If that be so, I sincerely hope that the next time an original idea strikes him he will do a little bit of thinking before he puts it into action.
I have dealt with the question of business. It is this government that are killing business in this country. They say: Pass this Address and let us get down to business. If there be any fairness, yes, if there be any real honesty in that statement, it will be accompanied by a motion to discharge the motion to adjourn. It is idle nonsense to say that we get on with the public business by adjourning, and it is also idle to say that this debate is costing a great deal of money. What does the adjournment do? After all, members of parliament are supposed to earn their indemnities. I wonder how many newspapers that have been ascribing the whole of the cost of parliament to this debate ever stop to think, as they well know when they do think, that for every day of a six weeks' adjournment members of parliament will get just as much money as they will if they stay here and look after the business of the country. I wonder if hon. members realize that. We have to put in a certain number of days. During that adjournment those of us who do not live in Ottawa-and that does not apply to me-are away from home; they have out of pocket costs and disbursements, and one reason why we should not adjourn is that in staying here to carry on the public business, hon. members will still receive their full indemnity but not save the expenditures which would be obviated in the case of an adjournment. The cost of parliament goes on in any case, but because attention is being focused upon the manoeuvres that are going on in the House, it is stated that this debate is costing the large sums that have been mentioned. There never was, and, I trust there never will be again in the history of Canada, a debate under conditions such as those which now prevail-a long adjournment ahead; but it means that we are debating practically without additional cost to this country. We have the regular machinery going; the employees are all here. I understand there is a proposal that in the case of an adjournment certain of those employees are to
have a cut aggregating $300 a day made in their wages. If that be so, instead of working here without additional or further cost we are working at one-third the usual cost, because services of the kind I indicate run to about $900 a day while the House is in session.
I will refer to just one other thing in connection with the speech of the Solicitor General (Mr. Cannon) and I am sorry he has gone out because I would hesitate to do him any injustice. He spoke a great deal about the elections in Bagot and Prince Albert. I do not know why he is so very confident about the present situation when he looks at Bagot, because the fact is that the majority in Bagot was cut in two. Then he works himself up to a superlative degree of enthusiasm when he pictures the Right Hon. Mr. King as vanquishing the Meighen ideas out in Prince Albert. It is a first-rate, wonderful achievement to lick an opponent when you have the field all to yourself. This splendid victory that is so lauded-this return of the vanquished Prime Minister, who had been defeated where he was known, where he had been sitting, yes, where he was within striking distance-was achieved by his having the field all to himself-no Conservative candidate to oppose him.


Some hon. MEMBERS:: Oh, oh.


Henry Lumley Drayton: Hon. gentlemen laugh, but I would ask them whether the Progressive was a Liberal candidate in Grenville in 1922. These vacant laughs ought to stop unless hon. gentlemen are prepared to make that admission. They know that there was no Conservative candidate in that by-election in Prince Albert. The right hon. gentleman had the field to himself and the hon. member now rises to heights of enthusiasm over what he considers the defeat of Meighen principles. Mr. Speaker, it really is to laugh. If the hon. gentleman had desired to come somewhat nearer the truth he would have said that the Hudson Bay railway had delivered its greatest and most important load of eastern bound freight, and that is the only freight it will ever deliver out of the prairie provinces. It worked; and as is usual in such cases the country pays. If my hon. friends can derive any great political comfort from the situation I leave them to it.
So much for my hon. friend's speech, and so much for the present situation in this House. I have no intention of entering into a general political debate, although the door has been left wide open to me through the kindly offices of the hon. member for Nelson (Mr. Bird). I shall simply deal with one concrete matter which would have been considered in relation
1118	COMMONS
The Address-Sir Henry Drayton
to the want of confidence motion, one of those matters which give reason and understanding to the present motion made for the purpose of preventing their proper consideration in the proper place. But before going into the details of the incident I am going to make one or two general submissions which perhaps may not be quite out of place even as applied to this government. Has the country the right to expect from the government frankness in the statements which it makes? Has the country the right to rely upon the word of the government? Or is that word a light and fragile thing, the scattered pieces of which, when it is broken, can be put together again by some of that mysterious cement which is to be provided at the expense of the ratepayers of Canada, the cement that binds together various groups in this House? Again, has the country still the right to expect that affairs shall be so conducted that it will be enabled to put credence in the government? And if it is impossible for the people to place any credence in the government, is not ' that fact sufficient fully to justify even party supporters of the government in voting a lack of confidence in it? Is the government supposed to hold public credit and public cash inviolate except upon the order of this House, or is that, too, something that is to be lightly regarded?
I propose discussing for a few minutes the methods which this government have adopted in the building of railways when they want to build them-railways which they do not want the Senate to defeat, railways which they want to build without this House knowing anything about them. These things of course are done very much under cover. During the last campaign one of the strongest points taken in western territory by the present member elect for Prince Albert was his attack upon the Senate, and one of the chief reasons for that attack, a reason that appealed particularly to western ears, was the assertion that railways which were essential to the proper development of the west had been thrown out by the upper house. The right hon. gentleman did not take the farmers of the west into his confidence and tell them how, when he was considering the requirements of other and more favoured individuals, he could ingeniously arrange matters when it paid him to do so. He did not tell them that. I refer to governmental methods in connection with the building of the Rouyn railway. Now I want to make it absolutely clear that what I am objecting to in this connection is the method which was adopted. The district itself, I believe, is a splendid one.
I do not think that the mineral wealth of the
[Sir Henry Drayton.)
country is confined to northern Ontario; the belt will be found to run right through into Quebec. I have no doubt about it, and development in that country will and ought to achieve a success equal to the success that has been attained in other parts of Ontario. I am not arguing that simply because this country's credit has been strained, simply because many people to-day are of the opinion that our railway deficits are heavier than we have a right to expect them to be, we should therefore put a stop to further extensions. Nor am I suggesting that we should have done nothing in the matter inasmuch as the province of Ontario was willing to save us the cost. Not at all. This issue is not one that can be veiled by provincial interest or prejudice or anything else, and it has nothing to do with the question whether or not the particular country is one through which a railway ought to be built. Unless you want to increase further the deficits on the National Railways, why must traffic be carried forty-five miles up north, to be 'taken again forty-five miles south, with the inverse extra mileage on the return movement? I do not want to go into that. I want to make it perfectly clear that none of these questions need be given the slightest attention, having regard to the matters I purpose urging. What I do intend to go into is the method by which this government deceives and flouts parliament and the people -the method by which it did do so in this particular question. Then I am going to ask the House whether they like that sort of thing, whether the cement is sufficiently strong to reunite over the chasm wrought by such practice as hon. gentlemen opposite engage in in relation to those whose co-operation they have received up to the present.
Now, Mr. Speaker, naturally, for the reasons which I have already pointed out, the people did not know anything about how this matter was proceeding during the election. It would have been very, very inconvenient for my right hon. friend the member elect for Prince Albert, and would have spoilt many of his eloquent speeches against the Senate, but the election being over the matter now is in such a position that it can be safely ventilated. In the first instance, let me point this out. Hon. gentlemen who may be interested in following up this transaction will find at page 1290 of the revised Hansard for 1925 this statement by the hon. Minister of Railways (Mr. Graham):
The Canadian National Railway Company, believing it to be desirable to have a line from their main line into the very rich territory spoken of in the question,

The Address-Sir Henry Drayton
have suggested to capitalists that if they would build a branch line between two points to be named by the Canadian National, one of them being Rouyn, the company would be prepared to lease that line.
That is the information then given to the House. Public money was not to be taken, public credit was not to be used; capitalists were to build the line and the National Railway would rent it. Perhaps hon. gentlemen will be surprised-perhaps they will not, perhaps they will merely think the government is running title to form-to learn that the government itself is building that line through the agency of the Canadian National Railways under the guise of a dummy company incorporated by a charter granted by the government of Quebec. But such is the fact. We have the direct statement that the line will be built by capitalists, while the truth is that the only capitalists are the long-suffering taxpayers of this country.
The elections being over, I came back to Ottawa and in the ordinary way, to see if I could not get a copy of the Rouyn order in council and ascertain what had been going on, I telephoned the Clerk of the Privy Council, Mi'. Lemaire. Not getting the order as a result of that telephonic request, on November 6, 1925, I wrote to Mr. Lemaire as follows:
With reference to our telephonic conversation as to orders in council in connection with the Rouyn railway, have you been able to get instructions for the release of these orders in council?
It would occur to me that with the elections over the secrecy of the past, even on the lowest political grounds, need be no longer observed and the mystery surrounding this matter which is, after all, a public undertaking and one wherein the members of the cabinet are risking not their own but public monies, ought to be dissipated.
I was in hopes that you would be able to give me a definite answer to my telephonic request before now. May I have either the orders in council or information as to when they will be obtainable.
As a result of that letter Mr. Lemaire wrote to me, under date of November 13, 1925, as follows:
In answer to your communication of the 6th inst., I am directed to forward to you herewith a certified copy of P.C. 1758 of September 26, 1925, concerning the Rouyn railway.
The exhibits were not forwarded, but I got them on the 19th. These exhibits, Mr. Speaker, disclosed a state of affairs such as I have indicated. But in order that hon. members may follow tljjs case chronologically, allow me now to refer to the statute of the province of Quebec incorporating the dummy company through which this government is operating. The act of incorporation will be found in the Statutes of Quebec for 1925, chapter 110. The incorporators and provisional directors of the Rouyn Mines Railway Company are:
Albert Henry Millward, clerk; Harold Frederick Mac-Pherson, clerk; Elmer Royce Moore, clerk; Howard James Spence, clerk; and John Thredgoid, clerk.
I pause to point out to the House that all those gentlemen, so far as I have been able to learn, and I think my information is correct, are employees of the Canadian National Railways-stenographers in the office. The outside capitalists are conspicuous by their absence; they have nothing whatever to say in this matter. They simply get the profits owing to railway construction; they do not put up any of the money for constructing it.
The line to be constructed runs down from O'Brien on the National Transcontinental railway through certain townships to a point in the township of Rouyn, some 45 miles. Hon. gentlemen will find it fully described in section 7 of the act.
The company having been incorporated, matters stand until it was suggested-I do not know by whom, but from some unknown source, through some underground current from the cabinet-that there should be a meeting of these five stenographers, and we are duly informed that:
The meeting was informed that arrangements can, it is expected, be made for the lease to His Majesty the king, in the right of the Dominion of Canada, herein called the government, of the line of railway intended to be constructed by the company from a point on the National Transcontinental Railway near O'Brien in the province of Quebec, thence southerly to a point in the township of Rouyn, a distance of about forty-five miles, together with certain works and facilities in connection therewith; the rental to be paid by the government to include an amount equal, in the aggregate, to the interest on certain bonds to be issued by the company and the sinking fund payments to be made under the trust deed or mortgage securing said bonds.
A printed draft of lease between the company and the government was submitted to the meeting and considered, and it was unanimously resolved that a lease of the said line may be made to the government in the general form of the said draft, subject to such changes therein as may be approved or authorized by order in council and agreed to by the president and secretary of the company.
All this certified to be a true extract by Mr. W. H. Nicholas.
Whom the Montreal directory again shows to be another employee of the Canadian National Railways.
Just at that point let me say, so that hon. members who take any interest in seeing the public business of this country properly and honestly run may understand the situation, that the reason for this shift, or for this lease, is very simple. The government did not get from this House the authority to guarantee the bonds of the Rouyn Rail-

The Address-Sir Henry Drayton
way Company-not at all-or to construct the line. They thought they could work it in this way-and I think they are wrong, even legally; morally they are wholly wrong. This piece of twisting, tricky conduct, I say, is absolutely wrong, and it would be a lawyer of the most tricky type who would ever adopt it. I do not believe it is going to work. But this is how it was thought the difficulty could be got around. They say to themselves, "We cannot guarantee.their bonds; we cannot put our hand directly into the public treasury and take the money out, but let us see what we can do. We will lease this precious railway for such a sum of money as will pay all the interest on the bonds, will pay as well all the taxes on the property, all the sinking fund charges in respect of the bonds, and all the expenses of the company, including even the trustees. Oh yes, we will do all that, and we will go a little bit further; we will say that in connection with all this grant and guarantee no taxes are to be exacted. The hand of the Minister of Finance is to be stayed; there are to be no Canadian taxes on this." Well, there is the first step taken to lead to this result.
The next exhibit is the lease. It is long and I hesitate to take the time to read it, but I really think hon. gentlemen should see this precious document in its entirety. Oh, the beautiful way in which the farce is kept up! Covenants here and covenants there; everything done as if they were at arm's length! The first recital is as to incorporation. The second recital reads:
Whereas the lessor by virtue of such powers is about to construct a line of railway from a point on the National Transcontinental Hailway near OBrien in the township of Privat, in the province of Quebec, thence southerly through the townships of Privat, Aiguebelle, Destor, Clericy and Dufresnoy to a point in the township of Houyn, a distance of approximately forty-five miles, such line of railway and all the works, facilities and appurtenances hereinafter demised being herein called the said line of railway.
And whereas the Minister of Railways and Canals (hereinafter called the minister) is of the opinion that the said line of railway is a line of railway which can more conveniently and usefully be operated as a part of the Government Railways System and one which may be deemed necessary or desirable for the more efficient operation of the said system, and the lessor has agreed to give and the Governor General in Council has authorized the minister to accept a lease of the said line of railway upon the terms and conditions hereinafter specified.
Bonds. Issue of bonds.
And whereas the lessor pursuant to section 8 of the act incorporating the lessor proposes to create an issue of not exceeding $5,000,000 of thirty year four and a half per cent first mortgage bonds (hereinafter called the said bonds) of which it is expected that approximately $3,500,000 will be required to provide for the cost of construction of the said line of 
railway; the said issue of bonds to be secured upon the said line of railway and other properties of the company as hereinafter referred to
They have done everything necessary to enable them to sign the lease; and then they go on with the lease. And the country is:
To have and to hold the demised premises unto the lessee for the term of thirty years from the date on which the said line is opened for traffic.
And this is what we are to pay. I read now from the covenant on page 3 of the printed lease:
During the first and every subsequent year of the said term such sum as shall be sufficient (in accordance with the terms and provisions of the deed of trust or mortgage securing the said bonds) to pay the interest and sinking funds upon the said bonds for the time being issued and outstanding, and all other moneys lawfully payable under such deed of trust or mortgage, including accrued interest on bonds purchased or drawn for redemption under sinking fund provisions thereof. The whole of such rental-
I am sure this will fall upon the ears of my hon. friend from Brandon (Mr. Forke) like drops of water on parched land.
-The whole of such rental shall be paid free of all lawful Canadian taxes or deductions of whatsoever nature, and shall at the option of the lessor be payable in the city of New York in gold coin of the United States of America of the standard of weight and fineness existing October 1, 1925, or in the city of Montreal, Canada, in lawful money of the Dominion of Canada, by equal half-yearly payments paid ten days prior to the respective dates for payment of interest and sinking fund moneys under such deed of trust or mortgage. It is hereby declared and agreed that the lessor intends to assign and may and will assign to the trustee or trustees under the deed of trust or mortgage securing the said bonds, the rental payments to be made for and in connection with said interest and sinking fund payments	as in this	paragraph	(a) provided	for;and the	lessor	hereby requests	and authorizes	thelessee to	make	such	payments	direct to the	saidtrustee or trustees, to be received, held and used by said trustee or trustees as and for payment of interest and sinking fund moneys under said deed of trust or mortgage; and the lessee hereby covenants to make	such	rental	payments	to said trustee or
trustees accordingly.
Just pausing there, what else could be found, I wonder, to pay them? Everything is to be looked after. The road is to be built out of $5,000,000 worth of bonds, $3,500,000 of which is to be put up now, then this rent is to be paid; and then, so as to avoid the slightest difficulty in the circuit, for the purpose of paying the rent the dummy is forgotten altogether. Instead of paying the rent to the dummy, the rent, which is the interest and the sinking fund, is paid direct to the trustee. Hon. gentlemen I thirflt will understand that pretty well. What was there in this for the dummy? What outside interest is there? What outside expense is there? What is there in the whole of this except a screen, and a dirty screen at that, under which alone this kind of action could be taken?

The Address-Sir Henry Drayton
Then the second -covenant (b) provides, and this is, of course, the covenant of the country:
Such sums as may from time to time be paid or payable by the lessor by way of interest or discount on loans or advances made to the lessor by any bank or other corporation provided that interest on construction items may be charged to construction costs and that bonds forming part of the said issue may be issued in respect thereof.
Mr. Speaker, do we get the force of that statement? The force of that statement is simply this; that into our rent goes the repayment of any moneys borrowed from any bank outside of these bonds altogether, and goes further to the extent that for interest, repayment of bank loans or anything else, bonds may be issued, bonds which we will have to pay-of course, under the guise and pretence of rent.
Then covenant (c) provides:
Such further annual sum or rent as shall be equal to the actual annual expenses for administering the affairs and maintaining the organization of the lessor-
That, remember, is the Rouyn railway:
-limited, however, to an amount not exceeding one thousand dollars per annum.
1 do not know what they would do with that one thousand dollars. It might be for street-car fares, as has been suggested to me, for going up and down to the office, but when they have not to collect rent or do anything else, I do not see why that should not be one cent instead of one thousand dollars. It continues :
also any remuneration for time being payable by the lessor to the trustees of the said bonds.
I wonder, Mr. Speaker, if any hon. gentleman could think of anything else the country could be made liable for? But I think we shall find a little more later on:
also any remuneration for the time being payable by the lessor to the trustees of the said bonds, the sums payable under this paragraph (c) to be paid without deduction on the same dates and times, and with the same option in the lessoT as to the place and mode of payment, as the rent reserved by paragraph (a).
The railway company then turns around and covenants, in the first instance:
That it will use its best endeavours to complete the said line of railway now about to be constructed and to deliver the same to the lessee, ready for operation, not later than the first day of January, 1927.
That, of course, would be the usual kind of covenant put in if the people were dealing at arm's length. If the lease was anything else but the sham that it is, that covenant would be put in and it would stop there; but the lease being the sham that it is, being done merely for the purpose of justifying and making legal an otherwise illegal endorsation
of bonds, the covenant does not stop there. Oh no, it never would do to stop there. Why, the banker would say: This railway might fall down; you might not want to go on with it; you might just trip up your dummy, and in that case the rent would not be payable, and then where am I with my bonds? So this clause is added to what otherwise would be the usual covenant:
But the non-compliance by the lessor with this obligation shall not in any way prejudice or affect this lease or the obligations of the lessee hereunder with respect to payment of the rents and other yearly sums herein reserved.
But somewhere in this government, Mr. Speaker, there was just a little bit of fairness. Somebody somewhere saw that this thing was perfectly ludicrous, absolutely impossible. I do not know when it was done, where it was done, whether in council or not, as I assume it would ibe done; but whether it was done in council or not, one minister had ait least a little bit of regard for his duty and obligation to the country, because Whether that clause was struck out in council or not, it was struck out. But dad the striking out stand? Oih no, Mr. Speaker, the striking out did not stand. On the other hand, instead of it standing, acteordling to the document furnished me from the Privy Council those saving words which were struck out:
But the non-compliance by the lessor with this obligation shall not in any way prejudice or affect this lease or the obligations of the lessee hereunder with respect to payment of the rents and other yearly sums herein reserved.
-that clause, whidh had been struck out, was reinstated. There it is-stet.	Reinstated,
why? For the sole and only reason that, never mind what else is done, the position of the banker, the position of those taking these bonds, is to be made absolute; the guarantee must be absolute, the rent must be paid, and -the idle pretence of treating this as a business document might just as well be immediately abandoned by everybody. Covenant, yes. Of course, this paper dummy covenants, but then it does not matter-do as you please-this country stands bound and liable for every single cent of obligation under those bonds.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Henry Lumley Drayton: Mr. Speaker,
when the House rose at six o'clock I had been paying attention to this Rouyn railway

The Address-Sir Henry Drayton
situation, and had demonstrated one or two things. These I imagine I Should draw to the attention of hon. gentlemen who may not have been here at the time the House rose.
The first thing that was demonstrated-and I am not making any statement of my own; I am speaking of what is shown by government records, the records of this House, the records of the iPrivy Council-was that this railway line was to have been built by private capital. From the information given to the House in regard to the matter there was no intimation that anything would have to be done at the expense of public credit or public funds; the financing was to be done by private individuals who were to build the line. I then showed, Mr. Speaker, again from the records, that a paper company, a dummy company, was formed for the purpose of doing that which the government had led us to understand they themselves were not doing. Following up the formation of that paper company, we were able to get, after some considerable difficulty, the order in council dealing with this question and the exhibits therein referred to. In the first exhibit, which I was discussing when the House rose, -at was shown that this government-which had absolutely no statutory authority from the House to do so-guaranteed the bonds of this railway company; who were to 'build the line, under the guise, form and pretence of a lease, which while existing in (fact is but a form; and they guaranteed those bonds just as effectively as if full statutory authority had been given to them and the House had not been deceived. The government guaranteed those bonds by undertaking to lease the railway, which was to be built at such a sum per annum as would completely cover the whole of the interest and the whole sinking funds payable under the bond issue. They agreed to pay all that free of Canadian taxes, and in addition to pay the organization expenses of this dummy company as well as other incidental expenses, such as loans from banks and the like. I had got down, Mr. Speaker, to that part of this precious lease which de'alt with those features. I had also discussed the covenant, which was supposed to amount to something and was then made nugatory, so that there is no doubt as to one thing, and.that is the absolute liability of the country in connection with this sorry venture.
The lease in question is long. I do not know that I should burden the House by reading it all, but the form is kept up pretty well throughout. We have everything here,

as I said before, to make it appear that this is a business deal instead of a pretence and a shadowy screen, a discoloured screen, under the cover of which the things I have mentioned, which are wholly and totally illegal, can be done. Now I am going to refer to a few more of these covenants.	We
have the usual covenant for payments, and I	have already given the House the
basis on which rent was to be paid. Just to show how clear it is that these bondholders are to be looked after and that this guarantee is actually given, let me read a few more extracts. Paragraph 10 of the lease on page 7 states:
That the lessee-
That is the crown.
-will during the continuance of this indenture, or so long as the lessee shall remain in possession or control of the demised premises under this indenture, pay to the lessor; or whoever shall be lawfully entitled to receive the same.
It has already been shown that the only person entitled to receive the same is the trustee of the bondholders. The lessor is not even a conduit pipe now. The money goes directly to the trustee for the bondholders. The paragraph continues:
(a)	The yearly rents or sums hereinbefore reserved or made payable at the times and in the maaner at and in which the same are respectively hereinbefore reserved and made payable, free of all taxes and without deductions of any description.
Again it states:
(b)	All lawful taxes, assessments and outgoings whatsoever to the extent only that the lessor is liable therefor that may after the lessee receives possession of the demised premises be payable in respect thereof or be lawfully levied or become chargeable thereon, or on any part thereof, or upon the lessor in pursuance of any lawful authority.
Hon. gentlemen will see that every possible door of expense is covered. The government is responsible for everything, the dummy company responsible for nothing. It goes on;
...and will assume and pay every payment which during the continuance of this indenture may be required to be made by the lessor and not herein otherwise specifically provided for.
In case anything is left out, we have this omnibus clause. One would have thought that everything that could be thought of was provided for; but to make assurance doubly sure, as the back of the Canadian taxpayer is broad and strong, everything else is piled on in case something may be overlooked. Paragraph 11 states that the lessee will assume all the obligations of the lessor-and indemnify and save harmless the lessor against all actions, suits or other proceedings

The Address-Sir Henry Drayton
and against all damage and loss which may arise to the lessor. Then we find in section 13, under deeds and mortgages:
Whereas, under certain conditions-
In case that was not strong enough, paragraph 18 states:
That the lessee will at all times during the said term assume and pay, discharge and perform, all debts, obligations, and liabilities whatsoever, whensoever and howsoever, arising of the lessor in respect of the line of railway (other than and except the curreat expenses incurred for administering the affairs and maintaining the organization of the lessor for meeting which certain rentals are hereinbefore reserved-
We have already had $1,0<K) reserved for that purpose.
-and except also the liabilities of the lessor in respect of the said bonds issued or to be issued by it, or other borrowed moneys.
We have that already covered to every single cent that can be charged for it. It all gets back to the same intent:
To the intent that the rent mentioned in paragraph (a) of the clause next preceding clause 1 hereof may at all times during the said terms be available free from all deductions and claims whatsoever, for meeting the annual charge for interest and sinking funds in respect of the said bonds issued by the lessor pursuant to the provisions of this lease.
One would think that provided for these bonds pretty well, but the ingenuity of whoever was looking after this was not quite exhausted. We have this provision on page 12:
Provided also that if any part of the rent payable under the provisions of paragraph (a) or the granting clause on page 3 hereof be not paid on the due payment date and shall not be paid within ninety days from such date, the lessee shall and will immediately pay' to the trustee or trustees for the time being under the deed of trust or mortgage securing the said bonds, in trust to distribute the same ratably among the holders thereof, in full settlement of all past, present and future claims for rent due or to become due under said paragraph (a) a sum equal to the aggregate of
(1)	The principal amount of all the bonds issued and outstanding under said deed of trust or mortgage on the date on which the instalment of interest or sinking fund constituting said rent became payable, plus
(2)	The face amount of all unpaid coupons on said issued and outstanding bonds maturing on or before the date on which the instalment of interest or sinking fund constituting said rent became payable, plus
(3)	Interest on both of said amounts, at the irate of 5 per cent per annum, from the date on which the instalment of interest or sinking fund constituting said rent became payable to the date of payment of said amounts to the said trustee or trustees, and also shall and will pay to the said trustee or trustees all other sums payable or to become payable to it or them under said deed of trust or mortgage by way of its or their remuneration and expenses in the discharge of the trust created thereby,
Hon. gentlemen will see that every possible thing is done to make this guarantee of bonds absolute, not only as to interest, but as to
principal. If we make a default of ninety days under the terms of this lease, we immediately guarantee to pay the whole of the principal of those bonds and, in addition, not only the interest coupons themselves, but five per cent interest after certain delays. This country, under this so-called lease, becomes liable for the guarantee of all these millions of bonds just as fully and completely as if this House had not been flouted and a proper application made to it for authority to look after the matter in a legal way. Of course it is realiy no lease at all; the whole thing is a sham, a pretence. The whole idea is something to get around the law, something to enable this government to set at naught the ordinary provisions which protect the taxpayers of this country. When the government saw' no other way of doing this, they framed this precious document. So much for the guarantee of the bonds, termed a lease.
Other interesting exhibits have been brought down with the order in council. I have already given the story of the Rouyn Railway Company and the lease. The next one is the agreement between the Noranda Mines, Limited and the King, the guarantee agreement re Rouyn Mines Railway Company. There is in this document a guarantee by the Noranda Mines Limited; but in order to set at rest any possible misgivings and fears on the part of the shareholders of the Noranda Mines, Limited, that their directors have done something foolish and have given something that amounts to anything, let me assure them at once that all those fears are entirely groundless. The business significance of this agreement is no more real than that of the lease! This agreement is not so long as the lease but still it is too lengthy to read in full. The recital begins:
Whereas His Majesty has arranged for the construction by a railway company hereinafter called the railway company-
I pause here. Here we have an admission by this government of everything that I charge; they admit it under the seal of the country. There is no Rouyn Railway Company, but there is a government that wanted to build a railway which they had no right to build; andl they' chose this method. It is all done, on their own admission, through their agency; it is their arrangement.
Whereas His Majesty has arranged for the construction by a railway company, hereinafter called the "railway company", of a line of railway, hereinafter called "the said line of railway", from a point on the National Transcontinental railway at or near O'Brien to a point in the township of Rouyn connecting with the plant of the guarantor to be there erected, which said line of railway His Majesty proposes to lease, which

The Address-Sir Henry Drayton
lease ia hereinafter called "the said lease", and to cause it to be operated as a part of the Canadian National
Railways;
And whereas it is anticipated that during the first few years after the said line of railway has been completed and opened for traffic deficits will arise in connection with the operation thereof;
And whereas the province of Quebec is willing to guarantee the payment against such deficits, if any, of $50,000 a year for five years from the date the said line of railway is opened for traffic, hereinafter called the "initial date,'" but a further guarantee is required of $20,000 a year for the same period from the guarantor who is interested in mining locations to be reached by the said line of railway.
After the delays to which I was subjected and of which I fully informed' the House this afternoon, if I have now got everything that has to do with this precious excursion of the government into this field of operations, the facts would seem to show that they were in an indecent haste to push this railway on for purposes known only to themselves but very strongly suspected to have some political significance in relation to the last election. This very document shows that the Quebec government is to guarantee deficits to the extent of 850,000 per annum, and the government's haste was such that the order in council was passed and the work rushed on apparently without a single thing being done by the government of that province. I do not know whether that is true or not, but what I am stating is that I have here all the papers I could get and there is not one line here to indicate that the necessary legislative authority had been obtained by the Quebec government or that this government had received their bond. I call the attention of the House to Striking evidence which we have before us of the fact that it is the government that is doing all this in the guise of a phantom company. I invite your attention, Mr. Speaker, to the first covenant:
His Majesty agrees-
Olh, what crimes are committed in the name of the King! What a pity it is that our constitutional forms require His Majesty's name to be attached to documents of this kind. However, His Majesty the King is made to agree:
(1)	To cause the railway company to construct and complete the said line of railway with all reasonable expedition and to lease it from the railway company by le^se approximately in the form attached.
Could clearer proof be obtained of what I now charge? This construction is the work of this government: is it possible to get anything clearer in proof of that fact than we have here? Is it possible to make it more clear that this work is the work of this government, executed under subterfuge and carried on under sluch a condition as to amount

absolutely to a misleading, a misguiding and a flouting of the privileges and the jurisdiction of parliament? Could the evidence be more conclusive? The government agrees to cause the railway company to construct and complete the line of railway " with all reasonable expedition There is an old legal maxim which probably hon. gentlemen have forgotten:
Qui facit per alium facit per se.
And many a criminal has done time under that same doctrine-Who does it through another does it himself. Everyone knows that, and here is this government building this railway through a phantom company. The next clause reads:
(2) To cause the operation of the said line of railway when leased to be entrusted to the Canadian National Railway Company for operation under the terms of section 11 of chapter 13 of the Statutes of Canada 1919.
(3)	To cause accounts to be kept of all freight traffic moving over the said line of railway and/or freight traffic originating upon or destined to points upon the said line of railway moving from, through or to points upon the Canadian National Railways in Canada, all such traffic being hereinafter called "such traffic."
(4)	To allocate 30 per cent of the gross earnings received by the Canadian National Railways from such traffic, hereinafter called "the said operating net earnings," to the said line of railway as earnings attributable to said line of railway for the purposes of this agreement.
I said that the shareholders need not be unduly alarmed. I wonder if the House appreciates for one moment what is being done here. Here we have a line of railway 45 miles long to connect with the main line. It is very much the short haul, and its rates and expenses will be of course in proportion to that short haul. Now railway ratios are stubborn things, although very simple, and sometimes we fail to realize their full import. We have to remember that the operating ratio of a railway applies to the dollar: it costs so much to earn the dollar. Supposing we take the earnings at a dollar and expenses at 90 cents, there of course we have an operating ratio of 90; that means we have a profit of 10 cents out of each dollar. Supposing we take from that dollar 30 cents- as is proposed under this so-called guarantee -the dollar would become 70 cents, the expenses would be just the same, 90 cents; but the operating ratio, instead of showing a profit of 10 cents for each dollar's worth of business, would become 128.75, making a loss for each dollar's worth of business done of 28.75 cents. I think everybody knows that the Transcontinental is not a paying proposition for this country. But the effect of this agreement is that before the company can

The Address-Sir Henry Drayton
be called.1 upon to pay five cents towards the deficit, that 30 cents is to be taken away, not from the net-that would not apply, of course, in the case I have been giving- but from the gross earnings, insufficient as they are now to support the property. I wonder why they did not make it fifty per cent at once. Well, I think with the thirty they are probably just as safe as if they had made it fifty, because it seems to me there would have to be an awful lot of bad management, improper expenses of construction and the like, before even this line could be in such a bad position that after getting thirty per cent of all the long-haul National business there would be a shortage on its own short-haul business.
Let us look into it a little closer, Mr. Speaker. The Canadian National Railway's figures are not complete for the year, but I think 1925 can be fairly said to be the best operating year they have had'. Nevertheless the operating ratio of all National lines down to the end of November last amounted to 87.831. Of course, 'the little business off this line would only go to a small extent in that large pool, but to the extent it did go let us take the local business and assume it was good enough-which it !3 not; I am making a violent assumption in favour of the local business-to show an operating ratio of 87.83, and just see what happens. If we take that dollar gross revenue, which we now have on actual figures, with expenses of 87.83, and if we take the thirty per cent off that dollar, thus pulling it down to 70 cents, we then have an operating ratio of 125.52. In other words, we lose 25.52 cents for every dollar's worth of business we do. instead of making 12.17 cents.
Let us look at it now from the other way and see while the government system is penalized on the one hand, and how the receipts of this local system are to be built up on the other. Supposing we have receipts for the local line and expenses worked out in ratio of 840 to 860. we would have a ratio of 150- spending $1.50 to earn $1. Supposing on the other hand you take the exact situation here and add 30 per cent of the long haul gross, your expenses remain at the sixty, and you at once have a profitable undertaking. But all that has to be done before five cents is to be taken from the Noranda company. As I said before. I do not think the Noranda shareholders need be at all anxious-yes, I am inclined to think, as has been suggested to me, Mr. Speaker, that they are just as safe as the stenographers of the Canadian National Railway Company who incorporated the railway. I notice this is to go on and there 14011-72
are to be periods for accounting and the like -I will not bother the House with the details.
That gets us down to the .point where we have the suggestion coming from somebody in this government to the stenographers of the Rouyn Railway Company that the govem-men is willing to do business with them. Acting on that suggestion, we have the lease and we have the agreement with the mining company. The next exhibit produced is an extract from the minutes of a meeting of the board of directors of the Canadian National Railways held in the company's office in the city of Montreal, on June 9, 1925, reading as follows:
With regard to the proposed Rouyn branch, Mr. Rayside reported to the meeting that the matter had been gone into further with representatives of the Quebec government, who had promised that free right of way over Quebec crown lands would be given, together with any timber on such lands, and that other interested parties may increase their contribution to $20,000 per year for five years.
It was unanimously resolved that if the said line be constructed by another company, with free right of way on Quebec government lands as above referred to, and if there be contributed annually for five years $50,000 by the Quebec government and $20,000 by other interested parties, such payments aggregating $350,000 in all, and if the said line were leased for a long term of years to the Dominion government and by it entrusted to the Canadian National Railways for operation, and if said payments are made direct to the Canadian National Railways as representing the said lessee, and if the rental under the lease would represent not more than 6 per cent on the cost of construction, the directors would approve of such construction and leasing and entrusting.
That ties up the Canadian National management to the operation of the line. Their consent is there given. The amusing thing about it is that while again this thing is drawn as a matter of form for the purpose of deceiving the people, carrying the pretence right through,, truth will out every now and again, and truth emerges here, for the minutes start with the statement:
With regard to the proposed Rouyn branch.
Whose branch? What branch? If it had been a line for that company it would have been described as that company's line. If it is a branch of the Canadian National Railways,

well, truth will out, and it is stated to be their branch. If anything further was wanted to show the deception, here it is. The shadow is lifting, the pretence is disappearing. We have an application in Quebec to-day to change the name of the company to the Canadian National Branch Lines Company. It may take a little while to get the truth, but it is coming. We have another thing in these exhibits. Some people like to have the cash to play with-yes, and sometimes do something more than play with

1126	COMMONS
The Address-Sir Henry Drayton
it. Here is a work that was to be done by contract in the autumn of the year. Anybody who knows anything about railway contracting knows that a very substantial sum of money has to be put into the work before any payments are made at all. If you are really in the contracting business, and not in the election-contracting business, you re' quire to have some capital to go ahead with, and the money is put in and you do not get your drawbacks till some little time afterwards. All that should be done at that time of the year, unless a lot of money is to be thrown away, is to clear the right of way and1 take in supplies for the spring work. Everybody in the business knows that. Of course there may be a little more done. I see the hon. member for Pontiac (Mr. Cahill) is laughing. He knows it is true.


Air. CAHILL:: I know the opposite.


Henry Lumley Drayton: But it does not make any difference. Some people want to get money, and so we have another meeting of the directors of the Canadian National Railways, held in the company's offices in the city of Montreal, September 21, 1925, and I find the following:
The meeting was informed that the Rouyn Mines Railway Company has been negotiating for a loan through Dillon, Read and Company of New York of up to $2,000,000 to be secured by the pledge of not exceeding $300,000 of its thirty-year, four and a half per cent first mortgage bonds, the interest to be paid on the loan to be at the rate of four and a half per cent per annum and that one of the conditions under which said loan would be made is that payment thereof within a year would have to be guaranteed by the company, the expectation being that within such year the Rouyn Company's bonds could be sold to sufficient amount and at a reasonable rate to pay off such loan.
It was unanimously resolved that a letter in the general form submitted to the meeting or to like effect addressed to American Exchange Securities Corporation. guaranteeing payment of a loan, as above mentioned, may be executed under the corporate seal and delivered, subject to the necessary order in council.
And the report goes on. No date is given to it. I do not know when it was subsequently put through; there was no time to fill it in, anyway, when I got it in November it. is not there. A letter is written from the Canadian National Railway Company's office and it unconditionally guarantees the prompt and full repayment of all advances made under the credit, both interest and principal, in accordance with the terms of the credit. I am not going to read all the letter; it would take more time.
So there we see the guarantee of the government so satisfactorily arranged for and the pledging of the credit of the Canadian National for $2,000,000 of money. We had assurances on the floor of this House that

this sort of thing was to stop with the Scribe hotel; that there would be no more of it, and there is no more of it until the occasion arises. But it is done here, and we have the guarantee given by the Canadian National Railways of $2,000,000 to the American bankers. Over and above that we have the guarantee of the country for $3,500,000 in this rental. We have parliament deceived and flouted. Why? Why were we told during the last session that this road was to be built by capitalists? Why was it not so built? Was it again to indicate to this country that this government is careless of its word and that the country can have and ought to have no confidence in it? Surely there was a better reason. What was it? What impelling reason was there to make this government so advertise itself? And how do you think it is all done, Mr. Speaker? It is all to be carried out by this order in council, and the order in council on its face shows this government running true to form. The order in council is based on the authority of the statutes of 1915. The statute of 1915 is referred to in that order and set out in part. It is chapter 16 of the acts of that year, and under it the Minister of Railways and Canals is authorized and empowered, subject to the authority of the Governor in Council, to construct, purchase, and so on, branch lines of railway in Quebec, in Prince Edward Island, Nova Scotia and New Brunswick. There are provisions and limitations in connection with that act. One provision is that no line which is over 200 miles in length can be acquired. The other is that the minister cannot build any line exceeding twenty-five miles in length. If we are to believe this government, having regard to their statements made day in and day out in this House, the National railways of this country are under the management and control of the Canadian Railway Board. If we are to believe what they have set out in this order in council, they are under the management and direction of the Department of Railways. It cannot be both. Either the Minister of the Interior day by day in connection with that coal question has been misleading hon. members, or this whole order in council is a farce and a sham-either one thing or the other. The only railways that can be taken under that legislation of 1915 are railways which are run in connection with or joined to what are really branches of government railways. Government railways under the definition in the act, which is the controlling act, the statute of 1915, mean any railway and all work or works connected therewith under the management and direction of the department. Will any member of the depart-

The Address-Sir Henry Drayton
ment tell me that at any time last year the Transcontinental was under the management and direction of the department? If they do I am afraid they will prove themselves false witnesses in many cases and on many occasions. They are always saying: We have nothing to do with it; this is none of our responsibility. But for the purpose of pledging the money of the ratepayers of Canada, three and a half million dollars, oh, then they are in management, direction and control. Oh no, the Railway department could not be in control for the purpose of putting on a small twopence-halfpenny rate on fifteen thousand tons, but it can be in full control for the purpose of handling three and a half millions of dollars prior to an election.


Charles A. Stewart: The hon.
gentleman surely is not implying that the government of its own volition could interfere with rates without the sanction of parliament.


Henry Lumley Drayton: I believe I can at once, in view of what my hon. friend says, and in view of the reputation he enjoys with us, say that I am inclined to think he knew nothing about this Rouyn railway company. I think it was something slipped over him. He would never have asked that question if it had not been.


Charles A. Stewart: I w'ould
like my hon. friend to reply to my question. I am making no argument on the other matters my hon. friend has brought up, but will he argue that the government of its own volition have the right to put into effect a rate without the sanction of parliament?
Sir HENRY DRAYTOiN: I believe my hon. friend, not knowing where he is, is jesting with me in connection with this Rouyn railway. They could not put on a twopence-halfpenny rate, but they could pass this precious order in council. Mr. Speaker, there are sometimes when even this government cannot blow hot and cold at one and the same time. They come so close together that the wires get crossed; they are crossed now. I am pointing this out to my hon. friend. The statute of 1915 gave the (Minister of Railways, under certain terms and conditions, the right to acquire branch lines connected with the Intercolonial railway in the provinces I have mentioned, but before he had the right to get those lines, they had to be connected with the railway under the management and direction of the department. Now in answer to my hon. friend's question, I am pointing out that if we go back to the date of this statute the government could' do exactly what
14011-72j
he says they cannot do, namely, make rates. The government could do anything they liked about rates, and they did it on the Intercolonial, and of necessity they had to do it when the whole system was under their direction and control. Here again I am pointing out the parallel to my hon. friend, and perhaps he will be able to assist me: For the purpose of this order in council this government say that the Transcontinental is under the direction and control of the Department of Railways and Canals. They have absolutely no right, no jurisdiction to build this railway, on the one hand, or to pur-9 p.m. chase a railwa}'', on the other, unless the fact is that this Transcontinental is under the management and direction of the department, and for the purpose of this order in council they say it is under their management. The thing is really so clear that if my hon. friend did not raise the question I would apologise for labouring it, but as he has challenged me, it is just as well to labour it.
Under that act of 1915, under section 1- hon. gentlemen can read it for themselves; it is a short act-the whole right is given -by which the whole of this scheme was Con-cocted and put through, and the absolute requisite of jurisdiction is that the line from which the branch is built must be, or the line that is acquired must run to a line of railway, under the management and direction of the department. Now I wonder if all -this was forgotten by the department. I wonder if the inside practices of this government and the railway that we do not know about, although we heard a little about them the other day in connection with the men engaged on the snow work

I wonder if the inside practices of this government and the railway are so close that the government forgot altogether about the -order in council under the legislation of 1919 under which the management an-d control of this railway, the Transcontinental, was -placed in the hands of the Canadian National railway. My hon. friend the Minister -of the Interior (Mr. Stewart) nods his head. Then I -tell him his whole order in council is absolutely improper, because it is an order in -council dealing with the construction of a branch of a line which is not a government railway within the meaning of the Government Railways Act.
I also point out further, that even if that is so, even if we can have Tweedledum and Tweedledee each in turn working for the government-one moment National railways, government control, and the next instant, when it pays, Canadian National control-

The Address-Sir Henry Drayton
even if we can have that, in any event I say this is illegal, in any event it is wrong, in any event it is a scandal. I pay no further attention for the moment to what I said this afternoon as to the way in which this House was misled and tricked. This is a railway forty-five miles in length. Now there is a plain straight limitation here, so plain that he who runs may read, that nothing over twenty-five miles can be constructed except with the -approval of parliament. There is the limitation. Now is there any dispute as to the forty-five miles? Let us concede everything the whole way along. There is always something else Staring my hon. friends in the face-always. What is the answer to the plain breach of the statute except the whip of necessity, to get something done that it pays to do? Well, there we have the twenty-five miles.
We may have somebody get up in this House -and argue: Oh, the government did not build it; the government have the right to buy a railway up to 300 miles in length; they have a right to lease railways up to 200 miles in length; the government are not building. I do not know, Mr. Speaker, which hon. gentleman is going to fake that position, but he ought to be looked upon as the supreme humourist of our day if he ever thinks anyone will ever take that suggestion seriously. Here we have the government doing everything through the Canadian National Railways, the Canadian National Railways having no rights at all. Here we have the trick of the lease just for the purpose of enabling the bonds to be put on. Fo-r what purpose? Because the government had no right to build the line; it had) to do it through a third party. They had no direct right to pledge the credit of the country, therefore they had to do it by way of stealth and subterfuge. Who can say that this is- not government action? Who will say that this is a real thing, a real railway company? Here we have the admission in the contract with the Noranda mines that this is indeed the work of the government, and that this government are causing this railway to be 'built. I wonder if anyone is going to- argue under those circumstances, and in view of the documents from which I have quoted, that there is any room for doubt but that this government is building this railway, and that they had to recourse to subterfuge here, there, and everywhere for the purpose o-f doing crookedly what could not be done in a straightforward manner.
Not only is the action of the government absolutely in contradiction to the statements madle to, but it is absolutely against the knowledge of, the older members of this House. It is 
another case of bad faith with parliament. This matter was discussed in 1915. The hon. Minister of National Defence (Mr. Macdonald) knows all about it. He was in the House at the time and took -the position, following his honoured leader, that we take to-day. The hon. Minister of Railways and Canals knows all about it; he was in the House at the same time and took part in the Same argument. In order -to have even a semblance of right in this matter the provisions of the Government Railways Act -have to be extended to the Transcontinental. That railway was never subject to that act; it certainly was not subject to it at the time this order w-as made. Further it was made clear in the House that under no circumstances were the enabling sections of this act of 1915 to be made use of for the purpose of justifying Such an exploitation as this of the Transcontinental railway.
Mr. Speaker, I appeal to your own recollection. You will recollect that for years we had in this country-particularly in the more easterly provinces of Nova Scotia and New Brunswick, and in Quebec-branch lines which could not be run by themselves with any profit to their owners, or comfort or convenience to t'he public. The country was faced with a double set of rates, double sets of management, no through billing and the like. For years agitation was going on in the matter, and action was taken from time to time in the House. I remember reading the action taken 'by a former Minister of Railways, the late Mr. Emmerson, who I think first brought the matter up in concrete form. The whole idea was not to make possible an exploitation of the country's credit in this manner, not to open up new districts, not to have one set of rules for railway construction in one part of Canada and another set of rules for railway construction in another part of the Dominion; not to play favourites, not to pit the east against the west, Ontario against Quebec, farmers against speculators. No such use was ever intended. In those days the government had very different idea3 from what are found to-day. The matter was not left in doubt, and I refer hon. gentlemen to Hansard of 1915, when this act was up for consideration. I referred a moment ago to my hon. friend the Minister of National Defence. He took part in the discussion at that time and is reported as follows at page 1542 of Hansard of that year:
Mr. Macdonald:	While the Prime Minister is considering the amendment, I may say that I saw in one of the government papers to-day a statement to the effect that the government proposes to operate the National Transcontinental railway system as part of the Intercolonial.

The Address-Sir Henry Drayton
I should tell the House, Mr. Speaker, that at an earlier period Sir Wilfrid Laurier had raised the question that this was a very large order and called attention to its possible effects. Mr. Macdonald goes on to say:
We ought to have a statement in regard to that announcement, which is an important one, in connection with this resolution.
The then Prime Minister, Sir Robert Borden, is reported on page 1543 as follows:
I should be perfectly willing to restrict this legislation so that it could have no possible application to any portion of the National Transcontinental railway which the government might find it necessary to operate, because that is not in our minds at all. If any amendment is desired to that end,
I shall be glad to consider it.
Mr. Pugsley: As to the power to take branch lines, it may be said that there are no branch lines on the Transcontinental railway at the present time.
Sir Robert Borden:	There is one I think.
Mr. Pugsley:	If the government were operating
temporarily, would the Transcontinental be a part of the government system of railways? I hardly think it would, because I think that by statutory definition the government system of railways consists of the Intercolonial and Prince Edward Island railways.
Sir Robert Borden:	I do not think this legislation would cover the case of temporary operation by the government of the National Transcontinental railway. All the government has in mind is not to leave the National Transcontinental railway unoperated if any question should arise that might cause delay.
Mr. Macdonald:	Would it be a part of the government railway system.
Sir Robert Borden:	I do not think so, but I am
perfectly willing to have that made plain.
Sir Wilfrid Laurier: We understand, then, that this legislation applies to the Intercolonial only?
Sir Robert Borden:	And to the Prince Edward
Island railway. That is thoroughly understood.
Why, Mr Speaker, both parties were committed to it, both parties knew what they were doing, and this government by their action are but committing another offence. The parliament of 1925 was deceived, was misled. So far as the parliament of 1915 i9 concerned, its acts are to be put to a purpose which that parliament declared they could not be put to, a declaration m which the leaders of both parties joined. Later the bill is up for third reading, and it was agreed to on what understanding? I quote from page 1685 of Hansard:
Sir Wilfrid Laurier: I understood the other day that the government policy was that this legislation was to apply only to branches of the Intercolonial.
Mr. Cochrane: Yes.
My hon. friends opposite, Mr. Speaker, indeed embarked upon a dark, twisting, tortuous adventure when they determined to set aside their own word in this House; when they determined to set at naught the statement made to members of this House and
accepted by them; when they attempt, under cover of this dummy company, manned by stenographers of the Canadian National Railways, to deceive the public; when they attempt to justify all this under an order in council, held secret until no votes could be lost through the truth being known, held secret so that all the benefits without any loss could' be had in connection with the political affiliations entered into, held1 secret until I got it in the way I have described to the House this afternoon. Ought there not to be an end some time to sham? Should we not start some time trying to deal with things on their merits? Should not even this government commence some time to have the same story for the prairies as it has for the east? Will the government, after this, again attack the Senate for holding up lines required in the prairie provinces for farmers, while at the same time they have special arrangements for their particular friends? In other words, is it really possible for a self-respecting house, irrespective of politics, irrespective of everything except decent Canadianism, to have any confidence in a government that brings down an order in council such as this, an order in council flying in the face of its obligations to this parliament and in face of the law? There are really no words which will property describe the treatment given to certain people at the hands of this government. Is this fair, right or honest?
The order in council is a long one and I propose to hand it to Hansard, as I think it is fair, not only to hon. members but to the government, that the House should see exactly what the government has done, and so that if I have misread it in any way I may be corrected. I therefore hand it to Hansard in the expectation that it will! be printed. In the same way I also hand the exhibits; it is only fair to the government and to this House that I should do so. So far as I know I have stated with absolute correctness the effect of the exhibits. I may be wrong, but if I am wrong I want to be corrected, and I can be put right only if these papers are printed properly in Hansard.
I conclude by asking the same question that I put at the commencement: Ought we to have regard for the word of a government? Ought the country to be placed in a position where it cannot tell whether the word of a government means anything or nothing? Is the word of government to-day such a light thing as to amount to nothing like the snows which have long since melted, of many winters ago? Or, has the country a right to expect that things shall be done decently and in
1130	COMMONS
The Address-Sir Henry Drayton '
the open? Has the country a right to expect that public .moneys and credits shall be held inviolate until the necessary direct authorization is given? Have we a right to expect equallity of treatment, or must this country continue to put up with a farce of this kind which, for some peculiar reason, known only to those doing these things, coincides very closely with election dates?
(The following are the documents referred to by Sir Henry Drayton):
P.C. 1758 (a.)
Extract from Minutes of Meeting of the Board of Directors of Rouyn Mines Railway Company, duly *held in the city of Montreal, on Monday, the 14th day of September, 1925.
The meeting was informed that arrangements can, it is expected, be made for the lease to His Majesty the King in the right of the Dominion of Canada, herein called the government, of the line of railway intended to be constructed by the company from a point on the National Transcontinental Railway near O'Brien, in the province of Quebec, thence southerly to a point in the (township of Rouyn, a distance of about forty-five miles, together with certain works and facilities in connection therewith; the rental to be paid by the government to include an amount equal, in the aggregate, to the interest on certain bonds to be issued by the company and the sinking fund payments to be made under the Trust Deed or Mortgage securing said bonds.
A printed draft of lease between the company and the government was submitted (to the meeting and considered, and It was unanimously resolved,
That a lease of the said line may be made to the government in the general form of the said printed draft subject to such charges therein as may be approved or authorized by order in council and agreed to by the president and secretary of the company. Certified to be a true extract.
W. H. Nicholas,
Secretary.



BETWEEN

[Stage Direction]
Noranda Mines, Limited (no personal liability), hereinafter called the "Guarantor",
of the first part,
[Stage Direction]
His Majesty the King in the right of the Dominion of Canada, herein represented by the Minister of Railways and Canals, acting by virtue of an order in council, dated the	day of
1925, hereinafter called "His Majesty",
O'f the second part.
Whereas His Majesty has arranged for the construction by a railway company (hereinafter called the "Railway Company") of a line of railway (hereinafter called "the said line of railway") from a poinit on the National Transcontinental railway at or near O'Brien to a point in the township of Rouyn connecting with the plant of the guarantor to be there erected which said line of railway His Majesty proposes to lease (which lease is hereinafter called "the said lease") and to cause it to be operated as a part of the Canadian National Railways;
And whereas it is anticipated that during the first few years after the said 'line of railway has been completed and opened for traffic deficits will arise in connection with the operation thereof;
And whereas the province of Quebec is willing to guarantee the payment against such deficits (if any) of fifty thousand dollars ($50,000) a year for five (5) years from the date the said line of railway is opened for traffic, hereinafter called the "initial date", but a further guarantee is required of twenty thousand dollars ($20,000) a year for the same period from the guarantor who is interested in mining locations to be reached by the said line of railway;

The Address-Sir Henry Drayton
Witnesseth that in consideration of the premises the parties hereto have agreed each with the other as follows:
His Majesty agrees:
1.	To cause the railway company to construct and complete the said line of railway with all reasonable expedition and to lease ait from it'he railway company by lease approximately in -the form attached.
2.	To cause the operation of the said line of railway when leased to be entrusted to the Canadian National Railway Company for operation under the terms of section 11 of chapter 13 of ithe statutes of Canada, 1919.
3.	To cause accounts to be kept of all freight traffic moving over the said line of railway and/or freight traffic originating upon or destined to points upon the said line of railway moving from, through or to points upon the Canadian National Railways in Canada, all of such traffic being hereinafter called "such traffic."
4.	To allocate thirty per cent (30%) of the gross earnings received by the Canadian National Railways from such traffic, hereinafter called "the said operating net earnings", to the said line of railway as earnings attributable to the said line of railway for the purposes of this agreement.
The Guarantor agrees:
5.	That should the said operating net earnings of any one year of the first, five (5) years from the initial date be insufficient to cover the rental including sinking fund payable under the said lease, after crediting the fifty thousand dollars ($50,000) per annum agreed to be paid as aforesaid by .the province o-f Quebec, to pay to the Canadian National Railway Company as operators of the railway within thirty (30) days after the receipt of a summarized statement of account showing a deficit, the amount following:-
(a)	When said deficit equals or exceeds twenty thousand dollars ($20,000) the sum of twenty thousand dollars ($20,000) in cash.
(b)	When such deficit is less than twenty thousand dollars ($20,000) the amount of such deficit in cash.
And mutually agreed:
6.	That the certificate of the Vice-President of Finance of the Canadian National Railways, or such officer as may at the time be performing the duties of said vice-president, shall be conclusive as to the existence and amount of such deficit, but the guarantor may, if it so desires, take steps at its own expense to verify such statements and for such purpose shall have access to all the records and accounts upon which the certificate is founded, and any inaccuracies discovered shall be rectified in subsequent years, but no payments due, or accruing due, shall be deferred pending such verification.
7.	That the liability of the Guarantor under this agreement is limited to the amount of the deficit (if any) in any one of the five years after the initial date, ascertained as provided in paragraph 5 hereof, but not exceeding the sum of $20,000 in any one year of such period of five (5) years, or One Hundred Thousand Dollars ($100,000) in all.
8.	That the accounts specified in Clause 3 of this agreement shall be continued for ten years from the initial date and if at that time it appears and is so certified by the Vice-President, or other officer as aforesaid, that the said operating net earnings have been sufficient to pay all the rentals including sinking fund payable under the said lease, after crediting the Fifty Thousand Dollars ($50,000) per annum agreed to be paid by the Province of Quebec, leaving a balance arising from such operation, then and in that case His Majesty will cause to be repaid to the Guarantor, without interest:
(a) When such balance equals or exceeds One Hundred Thousand Dollars ($100,000) the sum of One Hundred Thousand Dollars ($100,000).
(b)	When the balance is less than One Hundred Thousand Dollars ($100,000) the amount of such balance.
9.	If pursuant to the taking of accounts provided for in Clause 8 there results-
(a)	No repayment to the Guarantor.
(b)	A partial repayment only to the Guarantor.
Then the same accounts shall be continued for one further period of five years, or until fifteen years from the initial date, and if then a balance is found to arise and is so certified from such operation His Majesty will cause to be repaid to the Guarantor, without interest-
(c)	When such balance equals or exceeds One Hundred Thousand Dollars ($100,000) (less any amount repaid previously under the provisions of Clause 8) the sum of One Hundred Thousand Dollars ($100,000) less such repayment.
(d) When such balance is less than One Hundred Thousand Dollars ($100,000) (as reduced by any such partial repayment) the amount of such balance or profit.
The underlying principle in both Clauses 8 and 9 of this agreement being no repayment except from operating net earnings, as specified.
10. Clauses 8 and 9 have been drawn upon the assumption that the Guarantor was called upon to nay and duly paid the whole One Hundred Thousand Dollars ($100,000) covered by their guarantee. It is, of course, understood that in the event of the Guarantor not being called upon to pay and not paying the whole One Hundred Thousand Dollars ($100,000) the obligation of His Majesty to refund shall in no case exceed the actual contribution without interest, by the Guarantor to His Majesty under the terms of this agreement.
11.	That after fifteen years from the initial date the taking or continuing of accounts, as provided for in Clauses 3, 8 and 9 of this agreement shall cease absolutely, and all claims for repayment remaining unsatisfied after the application of the provisions of Clauses 8 and 9 shall be waived.
12.	That should the operation of the said line of railway prior to fifteen years from the initial date be permanently abandoned or service be withdrawn continuously for a period of six (6) months (other than on account of the closing down of all mines served by such line of railway or the withholding of traffic by the mining interests) then His Majesty will repay to the Guarantor, without interest, any amounts paid to His Majesty by the Guarantor under this agreement.
13. This agreement shall enure to the benefit of and be binding upon the successors and assigns of the respective parties.
In witness whereof the parties hereto have executed this agreement.
Signed, sealed and delivered in the presence of
Noranda Mines, Limited,
(No Personal Liability.)
James Y. Murdoch,
President.
F. W. Ross,
Assistant Secretary.
Extract from Minutes of meeting of the Board of Directors of the Canadian National Railway Company.
Held in the Company's Offices in the City of Montreal on Monday the 9th day of June, 1925.
With regard to the proposed Rouyn Branch Mr. Ray-side reported to the Meeting that the matter had been gone into further with representatives of the Quebec Government who had promised that free right-of-way over (Quebec) Crown Lands would be given, together
1136	COMMONS
The, Address-Sir Henry Drayton
with any timber on such lands, and that other interested parties may increase their contribution to $20,000 per year for five years.
It was unanimously resolved.
That if the said line be constructed by another Company (with free right-of-way on Quebec Government lands) as above referred to and if there be contributed annually for five years $50,000 by the Quebec Government and $20,000 by other interested parties such payments aggregating $350,000 in all, and if said line were leased for a long term of years to the Dominion Government and by it entrusted to the Canadian National Railways for operation and if said payments are made direct to the Canadian National Railways as representing the said lessee and if the rental under the lease would represent not more than 6 per cent on the cost of construction the Directors would approve of such construction and leasing and entrusting.
Certified to be a true extract.
R. P. Ormsby,
Secretary.
Extract from Minutes of meeting of the Board of Directors of the Canadian National Railway Company.
Held in the Company's Offices in the City of Montreal, on Monday the 21st day of September, 1925.
The Meeting was informed that the Rouyn Mines Railway Company has been negotiating for a loan through Dillon, Read and Company of New York of up to $2,000,000 to be secured by the pledge of, not exceeding $3,000,000 of its 30 year, 4.} per cent First Mortgage Bonds, the interest to be paid on the loan to be at the rate of 4£ per annum; and that one of the conditions under which said loan would be made is that payment thereof within a year would have to be guaranteed by the Company; the expectation being that within such year the Rouyn Company's Bonds could be sold to sufficient amount and at a reasonable rate to pay off such loan.
It was unanimously resolved.
That a letter in the general form submitted to the Meeting or to like effect addressed to American Exchange Securities Corporation, guaranteeing payment of a loan, as above mentioned, may be executed under the corporate seal and delivered, subject to the necessary Order in Council.
Certified to be a true extract.
R. P. Ormsby,
Secretary.
Montreal, Canada, 1925. American Exchange Securities Corporation,
128 Broadway, New York City, N.Y.
Dear Sirs:-You are about to grant a credit to Rouyn Mines Railway Company, a corporation incorporated by an act of the Legislative Assembly of the province of Quebec, for the term of one year from date hereof, in, the sum of Two Million Dollars ($2,-C00.000); the terms and conditions whereof are set forth in the attached letter, dated	, 1925,
from you to said Railway Company.
This Company is to operate said line of railway of said Railway Company under an order in Council entrusting to this Company the management and operation of said line of railway. This Company also expects to acquire at least a controlling interest in the capital stock of said Railway Company.
In consideration of the benefits to accrue to this Company from the granting of said credit, which will enable said Railway Company to construct said line of railway, and in order to induce you to grant said credit,

this Company hereby unconditionally guarantees to you the prompt and full repayment of all advances made under said credit, both principal and interest, in accordance with the terms of said credit.
Very truly yours,
Canadian National Railway Company. By
New York, -1925.
Rouyn Mines Railway Company,
Montreal, Canada.
Dear Sirs,-We are willing to grant you a credit, for the term of one year from date hereof, in the sum of Two Million Dollars ($2,000,000) for the purpose of enabling you to construct a line of railway from a point on the National Transcontinental Railway near O'Brien, in the Province of Quebec, to a point in the Township of Rouyn, in said Province, about 45 miles distant, on the following terms and conditions: Said credit to be availed of in amounts of $500,000 from time to	time,	and the	first $500,000 thereof to	beavailed of within 60 days from date hereof; the amount of said credit availed of to be placed to your credit on the books of The American Exchange-Pacific. National Bank, not subject to payment of drawing interest, and to be withdrawn from time to time by	you	only as	construction requirements	inrespect of the said line of railway necessitate; as soon as the first $500,000 advance upon the credit is exhausted a new advance of $500,000 to be taken and similarly credited to your account on our books, and this procedure	repeated	until the full $2,000,000 hasbeen advanced or all advances under the credit have been repaid in full; the advances made to you under the credit to bear interest at the rate of 4£ per cent	per	annum;	payable quarterly, and	no
interest to be otherwise payable; each advance to be secured by your promissory note for the amount of the advance, with interest at the rate of 4$ per cent per annum, repayable on or before the expiration of one year from the date of the granting of the credit, and, as collateral security, by a principal amount of your First Mortgage Thirty-Year 4^ per cent Bonds equal to 150 per cent of the amount of the advances made under the credit; said bonds to be part of an issue limited to $5,000,000 and the mortgage securing the same to constitute, in the opinion of our counsel, a first lien on the said line of railway and on the lessor interest of your Company in lease of said line of railway to the Crown for a term extending at least to the maturity of the bonds, at a rental at least sufficient to meet the full interest and sinking fund requirements on all bonds outstanding under the mortgage; the Canadian National Railway Company to unconditionally guarantee to us the prompt and full repayment of all advances made under said credit, both principal and interest, in accordance with the terms of said credit.
The above is subject, of course, to the approval of our counsel as to all legal matters connected herewith.
Very truly yours,
American Exchange Securities Corporation,
By
Vice-President.

[Stage Direction]
Certified copy of a Minute of a Meeting of the Committee of the Privy Council, approved by The Deputy His Excellency the Governor General on the 26th September, 1925.
The Committee of the Privy Council have had before them a report, dated 25th September, 1925, from the Right Honourable the Prime Minister, for the
FEBRUARY 18, 1926	H37
The Address-Sir Henry Drayton
Minister of Railways and Canals, representing as follows:
1.	That the Rouyn Mines Railway Company, hereinafter referred to as the "Mines Railway" or "the Company," is a body corporate, duly incorporated under the Statutes of the Province of Quebec, 1925, Chapter 110 thereof, with authority to construct and operate "a line or lines of railway from a point on the National Transcontinental Railway near O'Brien, in the township of Privat, in the Province of Quebec, thence southerly through the townships of Privat, Poularies, Destor and Dufresnoy, or other adjacent township, to a point in the township of Rouyn; with power to build branch lines from a point in said township of Rouyn westerly to a point on the provincial boundary between the Provinces of Quebec and Ontario, and easterly to a point at or near Grand Lake- Victoria, and a point on the National Transcontinental Railway west of Parent.
2.	That the Mines Railway under its Act of Incorporation	is	authorized to	borrow in	Canada or
elsewhere the sums of money needed for the construction, maintenance and operation of the railway, the purchase of the land and the construction or acquisition of other properties or works, other than the railway which the said Company is authorized to acquire, construct or operate and to issue bonds, debentures and other securities for any sums so borrowed.
3.	That the Mines Railway under its Act of Incorporation	is	authorized to	lease, sell	or transferthe whole of its railway or the whole or any part of its interests in the whole railway or any part thereof to	any	railway company or to	the Crown.4.	That, pursuant to its statutory authority, theMines Railway is constructing a line of railway from a point on the National Transcontinental Railway, near O'Brien, in the township of Privat, in the Province of Quebec, thence southerly through the townships of Privat, Aiguebelle, Destor, Clericy and Dufresnoy to a point in the township of Rouyn, a distance	of	approximately	forty-five	(45) miles,
which line of railway is hereinafter referred to as "the railway."
5.	That under the authority of the Statutes of Canada, 1915, Chapter 16, Section 1, Subsection (1) thereof, the Minister of Railways and Canals is authorized and empowered as follows:-
1. The Minister of Railways and Canals is authorized and empowered, subject to the authority of the Governor in Council, to construct, purchase, lease either with or without an agreement to purchase, or otherwise acquire in whole or in part, any line or lines of railway, branch line, railway bridge, railway station, railway terminal, railway ferry or other railway work in the provinces of Quebec, New Brunswick, Nova Scotia and Prince Edward Island, or in any of the said provinces, which in his opinion can more conveniently and usefully be operated as part of the Government Railways system, or which may be deemed necessary or desirable for the more efficient operation -of the said system; Provided, however, that a copy of every such lease or contract of purchase shall be laid before Parliament within one month after the execution thereof, if Parliament is then sitting, or, if Parliament is not then sitting within ten days after the opening of the next session thereafter:	Provided,
further, that no such line of railway so leased, purchased or otherwise acquired, shall exceed two hundred miles in length in any single instance: Provided, further, that no contract for the construction of a line of railway exceeding twenty-five miles in length shall be entered into or the purchase price of any such railway or other work be- paid until after a sum of money for the purpose has been appropriated by Parliament:	Provided, further, that any such
railway, or other work, when so constructed, leased, purchased or otherwise acquired, shall form part of the Government Railways system and shall be subject to the provisions of the Government Railways Act: Provided, further, that no such railway shall be so constructed, leased, purchased or otherwise acquired unless it directly connects with some part of the then existing Government Railways system.
6.	That the Mines Railway by a resolution of the
Board of Directors passed at a meeting of the said Board held in the City of Montreal on the 14th day of September, A.D. 1925, unanimously resolved in effect that a lease of the railway may be made to His Majesty the King in the right of the Dominion of Canada in general form of a printed draft lease submitted,	subject	to such	changes therein	as maybe approved or authorized by the Governor in Council and agreed to by the President of the Company, a certified	extract	from the Minutes of the Meeting of the said Board of Directors passing the said resolution and covering the same hereto attached marked "A," and	a copy	of the general	form of
the said printed draft lease hereto attached marked "B."
7.	That the draft lease market "B," amongst other things, provides in effect as follows:
(a)	That the Mines Railway proposes to create an
issue not exceeding $5,000,000 of Thirty Year Per Cent First Mortgage Bonds, of which issue it is estimated that approximately $3,500,000 will be required to	provide	cost of	construction of	the railway; the said issue of bonds to be secured upon the railway and other properties of the Mines Railway ;
(b)	That the Mines Railway lease to His Majesty the railway, together with all moveable and immoveable properties of the Mines Railway acquired for the purposes of the railway, or constructed or used in connection therewith, or in connection with maintenance and operation thereof, and also rents, revenues, etc., including corporate and other franchise rights, etc., of the Company, for a term of thirty years;
(c)	That the rentals to be paid by His Majesty to the Mines Railway under the lease during the terms to be as follows:-
(a) During the first and every subsequent year of the said teams such sum as shall be sufficient (in accordance with the terms and provisions of the deed of trust or mortage securing the said bonds) to pay the interest and sinking funds upon the said bonds for the time being issued and outstanding, and a'Jl other moneys lawfully payable under such deed of trust or mortgage, including accrued interest on bonds purchased or drawn for redemption under the sinking fund provisions thereof. The whole of such rental shall be paid free of all lawful Canadian taxes or deductions of whatsoever nature, and shall at the option of the lessor be payable in the city of New York in gold coin of the United States of America of the standard of weight and fineness existing October 1, 1925, or in the city of Montreal, Canada, in lawful money of the Dominion of Canada, by equal halfyearly payments made five days prior to the respective dates for payment of interest and sinking fund moneys under such deed of trust or mortgage. It is hereby declared and agreed that the lessor intends to assign and may and will assign to the trustee or trustees under the deed of trust or mortgage securing the said bonds, the rental payments to be made for and in connection with said interest and sinking fund payments as in this paragraph (a) provided for; and the lessor hereby requests and authorizes the lessee to make such payments direct to the said trustee or trustees, to be received, held and used by said trustee or trustees as and for payment of interest and sinking fund moneys under said deed of trust
1138	COMMONS
The Address-Sir Henry Drayton
or mortgage; and the lessee hereby covenants to make such rental payments to said trustee or trustees accordingly.
(b)	Such sums as may from time to time be paid or payable by the lessor, by way of interest or discount on loans or advances made to the lessor by any bank or other corporation provided that interest on construction items may be charged to construction cost and that bonds forming part of the said issue may be issued in respect thereof.
(c)	Such further annual sum or rent as shall be equal to the actual annual expenses for administering the affairs and maintaining the organization of the lessor, limited however to an amount not exceeding one thousand dollars per annum, and also any remuneration for the time being payable by the lessor to the trustees of the said bonds, the sums payable under this paragraph (b) to be paid without deduction on the same dates and times, and with the same option in the lessor as to the place and mode of payment, as the rent reserved by paragraph (a)."
(d) That the Mines Railway shall not, without consent of His Majesty, issue any additional bonds ranking prior to or pari passu with the bond issue first above referred to, except bonds to reimburse His Majesty for work of extensions, enlargements, improvements, etc,, to be made at cost of His Majesty and subject to the approval of the Mines Railway
(e)	That His Majesty shall not assign, transfer or part with the lawful ownership of the railway, but may entrust the management and operation of the railway to the Canadian National Railway Company, or any company amalgamated with the last named company or to any other company approved by the Governor in Council, and may make traffic agreements respecting the operation of the railway.
(f)	That His Majesty shall pay all taxes, assessments and outgoings respecting the railway that the Mines Railway is liable therefor after His Majesty has taken possession of the railway under the lease, and His Majesty shall assume the contracts and obligations of the Mines Railway.
(g)	That His Majesty w'ill join in any mortgages or deeds of trust, hypothecs or other documents necessary to be executed to provide for the issue or the payment or retirement of the said bonds for the purpose only of providing that the payments of rental to be made under the iease be payable and available in such manner as may be specified in such mortgages, deeds of trust, hypothecs, not inconsistent with the provisions of the lease, His Majesty to assume no liability to pay any sum or sums on account of principal due or to become due under any such instruments, except in so far as the rent payable under the lease may provide for such payment.
(h)	That His Majesty shall assume and pay, discharge and perform, all debts,	obligations and
liabilities of the Mines Railway (except the expense of administering the affairs of the Company in excess of the one thousand dollars per annum under rental provided, and except the liabilities of the Company in respect of bond issues) to the extent of the rental provided.
(i)	That any extensions, enlargements or improvements, etc., made by and at the cost of His Majesty as above set out, may be taken over by the Mines Railway, if they be paid for by bonds or other securities of the company.
(j)	That re-entry may be made by the Mines Railway upon six months' notice after thirty days' default in payment of any rental instalment when due; if rent be not then paid, or upon like notice after thirty days of any breach of performance of observance, if the default be not then remedied and made good to the satisfaction of the Mines Railway; and in case

of default in payment of any rental instalment in respect of interest or sinking fund in connection with the said bonds within
all the remaining rental instalments for the full term of the lease immediately become due and payable.
(k)	That His Majesty may, at any time upon sixty days' notice to that end, during the term of the lease, acquire the railway upon assuming the bonds then outstanding with interest thereon, the bonds retired by means of the sinking fund payments or by means of the rental payments under the lease to be purchased and retired bonds by the lease and not outstanding bonds.
(l)	That every disagreement which may arise between the parties under the lease shall be the subject of settlement by arbitration.
8.	That the premier of the government of the province of Quebec has advised in effect that his government agrees to pay the Canadian National Railway Company as operators of the railway fifty thousand dollars annually for the period of five years to meet deficits incurred in the operation of the railway, payments to commence upon the completion of the first year's operation, and that the necessary authority of the Lieutenant-Governor in council and of the legislature of the province of Quebec will be sought accordingly.
9.	That the Noranda Mines, Limited, a body corporate, interested in certain mining locations to be served by the railway, has agreed, in case the railway be leased to His Majesty as above set out, to supplement the guarantee to His Majesty of the province of Quebec of deficits in the operating net earnings of the railway for the period of the first five years of the term of the lease, in effect as follows:
That should the said operating net earnings in any one year of the first five (5) years from the initial date be insufficient to cover the rental including sinking fund payable under the said lease, after crediting the fifty thousand dollars ($50,000) per annum agreed to be paid as aforesaid by the province of Quebec, to pay to the Canadian National Railway Company as operators of the railway, within thirty (30) days after the receipt of a summarized statement of account showing a deficit, the amount following-
(a)	When said deficit equals or exceeds twenty thousand dollars ($20,000) the sum of twenty thousand dollars $20,000) in cash.
(b)	When such deficit is less than twenty thousand dollars ($20,000) the amount of such deficit in cash.
And the Noranda Mines, Limited, in connection with guarantee aforesaid, has agreed to enter into an agreement with His Majesty in terms as in draft agreement hereto attached marked (C) the draft agreement marked " C " hereinafter referred to as the " guarantee agreement ".
10.	That the guarantee agreement provides, amongst other things, in effect as follows-
That His Majesty agrees:-
(a)	To cause the Mines Railway to complete the railway and lease to His Majesty by lease in form generally as set out in draft lease marked "B";
(b)	To entrust the operation of the leased railway to the Canadian National Railway Company;
(c)	To cause accounts to be kept for all freight traffic moving over the railway and of all freight traffic originating on or destined to points on the railway;
(d)	To allocate thirty per cent (30%) of the gross earnings received by the Canadian National Railways from such traffic as operating net earnings to the railw'av.
11.	That the guarantee agreement further provides:
(A)	That the Noranda Mines, Limited, agrees:-
5. That should the said operating net earnings in any
one year of the first five (5) years from the initial date

The Address-Sir Henry Drayton
be insufficient to cover the rental including sinking fund payable under the said lease, after crediting the fifty thousand dollars ($50,000) per annum agreed to be paid as aforesaid by the province of Quebec, to pay to His Majesty, within thirty (30) days after the receipt of a summarized statement of account showing a deficit, the amount following-
(a)	When	said deficit	equals or	exceeds	twenty
thousand dollars ($20,000) the sum of twenty thousand dollars ($20,000) in cash.
(b)	"When such deficit is less than twenty thousand dollars ($20,000) the amount of such deficit in cash.
(B)	That the liability of the Noranda Mines, Limited, is limited to the amount of the deficit, if any, in any one of the first five years of the terms of the lease, not exceeding $20,000 in any one year, or $100,000 in all.
(C)	That	the	accounts	of	freight	traffic shall becontinued for ten years of the term of the lease, and if then the operating net earnings have been sufficient to pay all rentals, including the sinking fund payable under the lease, after crediting the $50,000 per annum payable by	the	province	of	Quebec,	leaving	balance
arising from the operation. His Majesty will repay to the Noranda Mines, Limited, without interest:-
(a) When such balance equals or exceeds one hundred thousand dollars ($100,000) the sum of one hundred thousand dollars ($100,000);
0b) When	the	balance	is	less than one	hundred
thousand dollars ($100,000) the amount of such balance.
(D)	That if after taking accounts as above provided, then results:-
(a)	No payment to the guarantor;
(b)	A partial repayment only to the guarantor;
(E)	That after fifteens years from beginning of term of lease the taking of accounts of freight traffic shall cease and all claims for repayments remaining unsatisfied waived.
(F)	That should the operating of the railway at any time prior to fifteen years be permanently abandoned or service withdrawn continuously for a period of six months other than on account of the closing down of the mines served by the railway or the withholding of traffic by the mining interests, His Majesty shall refund, without interest, any amounts paid by the Noranda Mines, Limited.
12.	That the Canadian National Railway Company, through its board of directors at a meeting of the said board held on the 9th day of June, 1925, unanimously passed a resolution as follows-
"That if the said line be constructed by another company (with free right of way on Quebec Government lands) as above referred to and if there be contributed annually for five years fifty thousand dollars by the Quebec Government and $20,000 by other interested parties such payments aggregating $350,000 in all, and if said line were leased for a long term of years to the Dominion Government and by it entrusted to the Canadian National Railways for operation and if said payments are made direct to the Canadian National Railways as representing the said lessee and if the rental under the lease would represent not more than 6% on the cost of construction the directors would approve of such construction and leasing and entrusting"; a certified extract from the minutes of meeting of the board covering the resolution referred to herein attached marked " D ".
13.	That the Statutes of Canada, 1919, chapter 13, " An Act to incorporate Canadian National Railways Company and respecting Canadian National Railways", section 29 thereof provides as follows:-
29. The company may, with the approval of the Governor in Council, acquire, hold guarantee, pledge and dispose of shares in the capital stocks, bonds, notes, securities or other contractual obligations whatsoever of any railway company, or of any transportation, navigations, terminal, telegraph, express, hotel, electric power or of any other company authorized to carry on any business incidental to the working of a railway, or any business which in the opinion of the board of directors may be carried on in the interests of the company.
14.	That the Canadian National Railway Company through its Board of Directors at a meeting of the said Board held on the 21st day of September, 1925, unanimously passed a resolution in effect, subject to the authority of the Governor in Council, that the said Company may guarantee payment of a loan to the Mines Railway of up to $2,000,000 to be secured to the lender by the pledge of, not exceeding $3,000,000 of 30 Years 4£ per cent First Mortgage Bonds of the Mines Railways, the interest to be paid on the loan to be at the rate of 4^ per cent; and that one of the conditions under which said loan is to be made is that payment thereof within one year would have to be guaranteed by the Canadian National Railway Company, a certified extract of the minutes of said meeting of the Board covering the resolution referred to, hereto attached marked "E".
15.	That the guarantee by the Canadian National Railway Company of the loan to the Mines Railway has been agreed upon in the general form hereto attached marked "F".
16.	That in the opinion of the Minister of Railways and Canals it is necessary and desirable for the more efficient operation of the Government Railways system, that the railway be leased by His Majesty upon terms and under conditions as generally in draft lease hereto attached marked "B" set out and contained, and that it is considered in the interests of both the Government Railways system and that of the Canadian National Railways that the Canadian National Railway Company guarantee payment of the loan to the Mines Railway to extent as approved by the Directors of the said Canadian National Railway Company under resolution as covered by copy of extract of minutes of meeting of the Directors of the said Company hereto attached marked "D" and that His Majesty avail himself of the guarantee of the Noranda Mines, Limited, in terms and under conditions as generally set out and contained in the guarantee agreement, draft hereto attached marked "C".
17.	That the Statutes of Canada, 1919, Chapter 13, "An Act to incorporate Canadian National Railway Company and respecting Canadian National Railways", Section 11; thereof provides as follows:-
'11. The Governor in Council may from time to time by Order in Council entrust to the Company the management and operation of any lines of railway or parts thereof, and any property or works of whatsoever description, or interests therein, and any powers, rights or privileges over or with respect to any railways, properties or works, or interests therein, which may be from time to time vested in or owned, controlled or occupied by His Majesty, or such part or parts thereof, or rights or interests therein, as may be designated in any Order in Council, upon such terms and subject to such regulations and conditions as the Governor in Council may from time to time decide; such management and operation to continue during the pleasure of the Governor in Council and to be subject to termination or variation from time to time in whole or in part by the Governor in Council. Any such Order in Council shall be laid before Parliament within ten days after the opening of the next ensuing session, or if Parliament be sitting at the time such Order in Council is passed, then within ten days from the date of said Order in Council.
In view of the facts as above represented and the considered advantage and benefit to the Government Railways system and the Canadian National Railways system, as each in the respective matters may be
The Address-Mr. Robb
[Stage Direction]
affected, and upon the advice of the Deputy Minister of Railways and Canals for Canada, to this end, the Minister recommends:-
(1)	That the Minister of Railways and Canals be authorized and empowered to lease the railway from the Mines Railway for a term of thirty years, subject to and generally in accordance with the terms and conditions as set out and contained in draft lease hereto attached marked "B", and to enter into such lease accordingly with option of purchase of the railway as in said draft lease provided.
(2)	That the Minister be authorized and empowered to execute the guarantee agreement in general form as hereto attached marked "C'.
(3)	That the approval be given to the Canadian National Railway Company to guarantee the contractual obligations of the Rouyn Mines Railways Company to repay a twelve months' loan or credit not exceeding $2,000,000 bearing 4& per cent interest per annum, to be made or granted to the Rouyn Mines Railway Company by the American Exchange Securities Corporation or other corporation or institution to be approved of by the Minister of Railways and Canals, such guarantee, subject to such detailed changes or amendments as the Minister of Railways and Canals may approve, to be in the general form hereto attached marked "F".
(4)	That upon the railway being acquired by His Majesty by and under a lease the management and operation of the railway be entrusted to the Canadian National Railway Company during the pleasure of the Governor in Council and subject to termination or variation from time to time in whole or in part by Your Excellency in Council.
The Committee concur in the foregoing recommendations and submit the same for approval.
E. J. Lemaire,
Clerk of the Privy Council.
Hon. J. A. ROBB (Minister of Finance):: Mr. Speaker, had my hon. friend (Sir Henry Drayton) confined his remarks to the question of the legality of the charter and the right to construct, 'the Rouyn railway, I would not have attempted to reply, because I have learned, through a number of years of experience in parliament, that it is useless for a layman to get into an argument with a lawyer and particularly a man well versed in railway law like my hon. friend. I have never found in the seventeen odd years that I have been in parliament that lawyers can agree amongst themselves; they can always put up a fair argument on either side of the question. But when my hon. friend attempts to show, or rather, because he did not even attempt to show, to insinuate that some grave pre-election scandal was associated with the building of this railway, I hope to convince even my hon. friend that he is very much in error in his conclusions.
Hon. members will recall that away back in 1922, 1923 and 1924, there were reports of great mineral development in the northern part of Quebec. In 1923 and 1924 particularly, reports came to us of rich finds in that part of the country, and representations were made, not only to the Canadian National Railways, but to other railways, that they should extend 
a line into that district. In 1924, Mr. Timmins of the Hollinger mines approached the president of the Canadian National Railways urging him to build a line into that section of the country. A survey was made but the railway directors and the president were not satisfied that the building of a road in there would be a profitable venture.
Shortly afterwards another discovery was made of the Noranda mines and again they were approached to build a road. Representations were such that engineers were sent there to make a very careful survey of the possibilities of that section of country. It was discovered that there were very rich mineral deposits and there was a rush not only of miners, but of railways to get into that district. It is well known that an Ontario railway that has made it very profitable to the province at large by going into the mining country was anxious to build a line, and other railway companies were similarly anxious. The Canadian National Railways made a survey, and on reports made to them it was indicated that it was questionable whether, even with the prospects of building a 500 ton smelter, the road would pay at first. The government of Quebec was approached. The people of Quebec, like the people of Toronto, appeared to be anxious that feeders going into this district should be feeders running into their different cities. I am not going into that because it is natural that each should want to get the business. The government of Quebec were asked for a railway land grant and they said: We will not give you a railway land grant, but we will give you a grant of some $.50,000 a year. I will come to that a little later on. Early in the summer of 1925 a location survey was made of this road, because of additional proof coming out of rich findings in that part of the country.


Henry Lumley Drayton: By what engineers was the survey made?


James Alexander Robb: By the engineers of the Canadian National Railways.


Henry Lumley Drayton: That is right.


James Alexander Robb: It is true that last session the Minister of Railways, from his place in parliament, declared that the road if built would be built by capitalists, and I am prepared to prove that it is being so built. I will give the names of the directors and I am sure my hon. friend will be satisfied that they are all responsible men. The hon. gentleman laid very much stress this afternoon and again this evening upon his allegation that this was a dummy company. I am sure he was
11,41

The Address-Mr. Robb
not serious in that. As a lawyer who has organized a good many companies he knows that the names are never given of those who are really behind the concern.


Henry Lumley Drayton: Did the minister read the lease?


James Alexander Robb: I have not read it.


Henry Lumley Drayton: If the minister
reads it he will agree that the company is a dummy one.


Mr ROBB:: My hon. friend knows that in the organization of companies the method adopted is as I have stated; the names of clerks and stenographers in the office are used so that the public will not know who are behind the concern. But I propose to show just who the directors of this company are in order that the House may know what class of men are responsible for it.


Arthur Meighen: What difference on earth does it make what the names are in the light of the terms of that lease?


James Alexander Robb: My right hon. friend will not drag me away from the argument which was advanced this afternoon by his colleague, who attempted to show that this was a straw company. The directors of the company are these-Mr. Robert Adair of Montreal, to begin with. Will anyone say that he is not a respectable and a leading financial man in the city of Montreal?


Henry Lumley Drayton: Will you tell us what stock he has in the company?


James Alexander Robb: I have no idea.


Henry Lumley Drayton: Not one cent.


James Alexander Robb: Surely my hon. friend is not serious. Is there any company who would have a director on their board if he had no stock?


Henry Lumley Drayton: I am absolutely serious. Having read these documents I know that no money could have been put up; if there was, then the documents are misleading.


James Alexander Robb: Another director is Mr. Charles M. Hart of Montreal. Does anyone suggest that he is not a responsible and a respectable business man of that city? Mr. Donat Raymond is also on the board, and he is proprietor of the Windsor hotel in Montreal, being also a large shareholder in the Hollinger mines. He has large interests in the city of Montreal and can pay his way.


Henry Lumley Drayton: They all have money, of course.
HOil-73


James Alexander Robb: The bond people who are financing the organization in New York are represented on the board by Mr. Harold Fowler and Mr. Clifton M. Miller of New York City. These gentlemen are associated with the bank which is doing the financing. Right here I want my hon. friend to withdraw his insinuations; I am sure he will when he has heard me. He tried to create the impression that the contract was let at a time when it would be of great value as a campaign fund for one of the parties. Now he has had some experience in the running of elections and I would ask him, of what use is a campaign fund of this sort where the work done, which I suppose would consist in getting out the ties and clearing the road1way, represents a total amount paid out up to January 31, 1926, of only a little over $130,000?


Henry Lumley Drayton: I do not mind answering the question at once. That certainly would not add very much to my hon. friend's fund, but I would ask him a question in reply: why was there any necessity for arranging for $2,000,000 of cash? It looks to me as if anything that might be done was scared off by the Journal.


James Alexander Robb: The road is to be leased by the Canadian National Railways and my hon. friend wants to know why these people were controlling the construction of it and had men there. The reason was that no padding of accounts should take place and that there should be no extra cost attached to the building of the road. They wanted the cost to be reasonable and the railway company insisted that if they were to operate the road and pay interest on the bonds, which would be the rental they would pay, they should know exactly how much money went into the building of it. They therefore have complete control of the expenditures and it is all subject to auditing by the auditors of the Canadian National Railways.


Arthur Meighen: Does the government also supervise the expenditure the same as has always been done in the padt in connection with government guarantees?


James Alexander Robb: I do not care to stir up some
of the government guarantees of my right hon. friend.


Arthur Meighen: I am not asking you to
do so. Answer the question.


James Alexander Robb: My right hon. friend will not
drag me into that to-night. I want to emphasize this fact, that the directors whose

The Address-Mr. Robb

names I have just given are on the board not as representatives of the Canadian National Railways nor of the government but as representatives of the bankers who are putting up the money to build the road. I could not follow my hon. friend (Sir Henry Drayton) this afternoon in his reference to certain payments which were to be made, not exceeding SI,000 per year. What are these payments? It is provided that after the road is built and everything is cleaned up these directors shall not get more than SI ,000 a year, which sum is to be divided among the whole group of them. That is my understanding of the matter.


Henry Lumley Drayton: But they do
nothing.


James Alexander Robb: The cost of the road for the
45 miles is to be $2,655,000; it is to be financed on 4J per cent 30 year bonds, and no bonds whatever are to be issued until the road is complete and ready to be handed over to the company for operation. They have arranged with the bankers who are advancing the money that they shall provide it in sums of $500,000 as required, and all they are paying is 4i per cent.


Henry Lumley Drayton: The bonds to
be deposited with them.


James Alexander Robb: I suppose.


Arthur Meighen: The bonds are issued to the bankers; read the letter.


James Alexander Robb: My hon. friend has had some experience as Minister of Finance and his leader had a long experience in different departments of the government. Hon. gentlemen opposite were in power when railways were being built, and I would ask them whether in their time the money was provided at as low a rate as 4| per cent.


Henry Lumley Drayton: We always got the money at the lowest current rate and I hope my hon. friend is doing the same. The minister is missing the entire point, however. He admits this guarantee in the lease; why did he not get his legislation?


James Alexander Robb: I tell my hon. friend that I
am not going to be drawn into any legal argument on the question.


Henry Lumley Drayton: It is not a legal question; it is simply a matter of morals, and on that ground the minister is perhaps better fitted to speak on the question than any of his colleagues. Should not the ordinary
[Mr. Robb.l
procedure have been taken if there was nothing to hide? Why was it not done? There was considerable time in which to do it, for the minister's men had the matter under review twice.


James Alexander Robb: I repeat, I will not be drawn
into a legal argument with my hon. friend.


Henry Lumley Drayton: That is not
legal.


James Alexander Robb: I do not say he is right, I do not say he is wrong; it is purely a legal question.
Now, Sir, as said a moment ago the funds for the construction of this railway are not being provided by the government of Canada, but by a banking institution in New York. The directors I have named represent that institution. Before undertaking to operate the road the chairman and board of directors of the Canadian National Railways secured an agreement from the government of the province of Quebec that it would give a bonus of $50,000 a year for five years, and from the Noranda mines that they would give an additional bonus of $20,000 a year for five years, or a total bonus of $70,000 a year for thai period. The traffic experts have carefully surveyed and investigated the local conditions, and they estimate that the road will carry itself with this subsidy, and that within five years at most it will return a profit to the company. Because it must not be forgotten that every person familiar with the mineral resources of that country agrees that the prospects of a railway being a profitable undertaking are exceedingly good. That is why there was not only a rush of miners into the district, there was also an attempted rush of railways. I do not say that my hon. friend is finding fault because the road which the nation had to take over and operate got a branch line into the Rouyn district before any Ther roads, but I appeal to the good sense of my hon. friend as a railway man to bear me out when I say that a trunk line railway cannot pay unless it has feeders. This line looks like a pretty good feeder for the Canadian National Railways.
Let me remind the House that the government does not undertake to say where railways are to be built. It accepts the advice of the chairman and directors of the Canadian National Railways on railway policy. And is there anyone in this House who will say that the chairman of the Canadian National Railways is not a good railway man? He has had his certificate of ability not only from the railway officials throughout the country: he is acknowledged by my right hon. friend

The. Address-Mr. Robb
as a good railway man. Looking into the traffic possibilities, he and his board of directors unanimously said to the government: This is a good feeder for the Canadian National trunk line, and we recommend to you that we should have authority to build the road.
I am not going to detain the House. I think I have shown that this was not a dummy company, that on the contrary it was a real company composed of real financial men; that the money was advanced by banker? in New Tork, who had a local board of directors looking after their interests; that the most careful survey was made of traffic possibilities; that provision is made for a most careful examination of the expenditures upon which the Canadian National Railways will have to pay rental; that the money was obtained at reasonably low rates of interest- that is admitted by my hon. friend-and that, in a word, everything was done above board. Well, what more does the House want? I say hon. members can have something more. This matter might properly be referred to the House Committee on Railway Estimates that is appointed each year. There hon. members will have an opportunity of calling in Sir Henry Thornton, the traffic experts and the auditors, and we will invite the fullest and freest examination into the accounts of this railway that is to be leased by the Canadian National Railways.


Henry Lumley Drayton: Mr. Speaker,
my hon. friend promised to answer my questions as soon as he had finished his address.
I have two to ask him. What was the date of the contract with the government of Quebec for the $50,000 guarantee? I have not been able to find it in the papers. Or is that still in the air?


James Alexander Robb: I did not think I had anything more to say about this matter, but a memorandum was placed before me: at about six o'clock, which 1 have not yet had much time to look into. It states that the government of Quebec had previously agreed to give $50,000 pe-r annum. I thank my hon. friend for asking me the question, for it gives me an opportunity of answering one of his statements. I said a moment ago I did not want to get into any controversy with lawyers. My hon. friend questioned the right of the chairman and his board of directors to enter into this contract.


Henry Lumley Drayton: 1N0, the government's action.


James Alexander Robb: 
Henry Lumley Drayton: Will my hon..
friend just allow me-


James Alexander Robb: I will quote this legal opinion first, and then answer my hon. friend. Mr. Ruel's opinion is expressed in the following terms:
There is no question that under the provisions of Chapter 16 of the Statutes of Canada, 1915, the crown may lease the line of railway specified in the draft lease, even before completion, and may of course agree to pay rental from the date of the lease. The language of the Act (Statutes Canada 1915, chapter 16, Section 1) cover? "any line or lines of railway or any railway work in the province of Quebec." The line under construction is unquestionably a railway work.
That is the considered opinion of the gentleman who was the legal adviser of my right hon. friend.


Henry Lumley Drayton: Will my hon.
friend give his opinion on what I have charged, namely, that this government had no right to construct this line? He is speaking of the leasing of a line which does not exist.


Mr. STEWART (Leeds):: Will the minister answer two questions?


James Alexander Robb: One at a time, please.


Hugh Alexander Stewart: Who will ultimately own this railway?


James Alexander Robb: I have not read the contract.


Henry Lumley Drayton: The lease will show it-the company.


Mr. STEW  ART@Leeds: The company
will own it, will it not?


James Alexander Robb: I have not read the contract.


Hugh Alexander Stewart: And who is paying for it?


Arthur Meighen: The bankers.


Henry Lumley Drayton: And we pay the bankers.


James Alexander Robb: The bankers are paying for it, and the Canadian National Railways are leasing it.
Mr. MEffiGHEN: Who pays those people?


Hugh Alexander Stewart: Are not the
rentals sufficient to pay the cost of the railway?


James Alexander Robb: To pay interest on the investment.

The Address-Mr. Bourassa


Henry Lumley Drayton: And sinking
fund.


Hewitt Bostock: Order.


Hugh Alexander Stewart: As I understand it now, the company will ultimately own this road, and the Canadian National Railways- the Canadian people-will pay for it.


James Alexander Robb: iMr. Speaker, my hon. friend is another of the good lawyers in this House, and I suggest that he present a legal argument on this legal question.


Hugh Alexander Stewart: I am asking for information.


Mr. HENRI BOURASSA (Labelle):: Mr. Speaker, when I left the chamber this afternoon the House was discussing the motion of the member for Nelson (Mr. Bird) that the previous question should be put as soon as possible, that is. as soon as allowed by hon. gentlemen opposite. As I may be absent from the House to-morrow, I should like to say in a few words what my position is on that motion, and what vote I will cast if it comes to a division when I am here. I do not purpose to take up any of the arguments that have been raised either before or during this debate. I shall merely confine myself to the attitude which I feel I must take in regard to the motion.
I gave my vote to maintain this government in power in preference to the opposition. That was in absolute accord with the attitude I took before the people who elected me to this House. Secondly, I voted against all amendments proposed by the opposition, which appeared to me as mere catching motions for election purposes, and I propose to do so in future. Were hon. gentlemen opposite on this side of the House, in the same position as my hon. friends to my left, I would do exactly the same thing. I also voted in favour of the motion made by the government to adjourn the House after the Address is adopted, because the ministers claim that they must have a recess to enable them to reorganize their government and to carry out the mandate which has been given to them, temporarily at least, by this House.
Now, Sir, it is one of two things: either the government needs that adjournment, or it does not. If the government requires that adjourn' ment, then it should take the means to obtain it. If it does not require it, I do not think it should shelter itself behind what I would call a side motion, which does not bring on the adjournment. I said at the time I voted for the adjournment that the House would be transformed into an electoral committee,
[Mr. Robb.3
and there would be no use in our being here.
I think this has been amply justified. But I do not think the motion of the hon. member for Nelson (Mr. Bird) at all advances the position of the government or the affairs of the country, nor does it give the House a chance to do anything useful; therefore I propose to vote against that motion. If the government needs the adjournment, I am prepared to vote for a straight motion for closure, which they should bring in if they require it. If they do not require it, then why take advantage of a process which simply lengthens the debate, and, although it prevents hon. members on the other side or hon. members of any group in this House from presenting further amendments to the Address leads us nowhere.
Some references have been made on one side or the other about liberty of speech. Quite so: liberty of speech, if it leads to something, is very desirable; but if I read well what is in the minds of the people outside of this House, I think they are more concerned about parliament doing something than about members of parliament talking individually or collectively. I do not begrudge either party all the advantage they may take; but I humbly submit that there is more at stake in the present situation than either the fate of the Liberal party or of the Conservative party.
I have been out of this House for many years. I have kept in contact with people who, I think, have a public conscience, and who are becoming disinterested more and more from day to day and more separated from party shibboleth, from party spirit. It is not, I repeat, the fate of the Liberal party or of the Conservative party whidh is at stake: it is the confidence of the people in the usefulness of our public institutions. We have been here a month and a half. I have indulged in my share of the sin of talking, but I do not propose to repeat that sin too often, or to make the sin too heavy. Therefore, I simply state to-night that I do not think the motion of the hon. member for Nelson will lead us to any practical point. I do not begrudge him the right to make his motion, and I do not dispute the sincerity of his purpose. I do not try to ascertain whether he is acting under agreement with the government or not. I take him at his word. I believe in his word of honour, and as a matter of fact I believe that if he had consulted the government they would have advised him he was not rendering them a service by proposing that motion.


Some hon. MEMBERS:: No, no.


Joseph Henri Napoléon Bourassa: Well, at least, that is my point of view. I do not think the government
FEBRUARY IS, 1926	1145
The Address-Mr. Kennedy (Winnipeg)
would make a happy move or would place themselves in a strong position morally or numerically if they tried to find shelter under the motion proposed by the hon. member for Nelson. To adopt such a motion would not improve the position of the government and would not enable them to reach the point they are aiming at, namely, to obtain the recess which they claim to be absolutely necessary for their purpose. Such a course would put them in the 'humiliating position of accepting a proposition dictated by another section of the House.
I am prepared to vote against the motion proposed by the bon. member for Nelson, but, I am also prepared-and I state it quite frankly-to take my responsibility in voting for a motion for closure, if proposed by the government, as it must be under the rules, in order to reach something practical.
Then, we would have the recess, and the government could prove the advantage and necessity of having that recess to complete their membership and come back to us on the fifteenth of March with their policy. Then, we will judge them by that policy, and we will also judge hon. gentlemen opposite on their attitude in regard to measures submitted by the cabinet.
Mr. W. \\ . KENNEDY (Winnipeg South Centre): Probably I could suggest to the hon. member for Labelle (Mir. Bourassa) an answer to the question which he has propounded to this House. He advances the argument that the hon. member for Nelson (Mr. Bird) could not have sought counsel with the government in taking the action that he did, because if he had done so, and if they wanted to close the discussion in this House, they would have introduced closure and would not have adopted closure by the less direct method. I should like to say if the hon. member has followed the conduct of this government in the past four years he would have observed that the record of the government is neither one of courage, nor of direct action. This is not a government having the courage to do what it wants to do, but as enunciated by its leader, the Right Hon. Mackenzie King, on many platforms. it believes in the policy of the middle way, the policy of political expediency; J suggest to the hon. member for Labelle that perhaps, following that same policy by which it has been guided for four years, the same policy which has put it into the dilemma in which it finds itself to-night, by virtue of that same sort of policy it finds itself supporting the motion of the hon. member for Nelson.
In view of what the hon. member for Labelle. an old and distinguished member of
this House, has said as to prolonging this discussion, I naturally feel, as a new member, a little diffident about continuing the discussion further. But, Sir, were it not for the circumstances under which the government of the day seeks to adjourn this House, I would not at this late day and at this late hour take part in the debate. What are the circumstances under which the government seeks to adjourn the House? A committee of this House is investigating the gravest charges which have ever been preferred, I understand, in this House of Commons for two generations and under these circumstances the government asks this House to adjourn, and, as I am informed, to leave that committee without the power to function effectively. If there were no other reason beyond that, Sir, I submit that that in itself is reason enough, not only for members on this side but for members in all quarters of this House, to take part in this debate with the object and with the intent that this government shall continue to sit; that this parliament shall continue in session so that witnesses may be examined here and be forced to give the evidence which is necessary in order that the committee may effectively proceed.
Mr. Speaker, in venturing into this debate I am conscious of many handicaps which are normally incident to the first effort of a new member of this House. Some thirty years ago I believe, Sir, you yourself, were in the position of a new member, and like myself, "with all your troubles to come." Perhaps when I recall those days to you, you will be able to recall some of the handicaps to which I refer.
Let me say, first, that there is borne in upon me at the beginning of my speech a consciousness of the comparative futility of talking at all. I say that for this reason: I have heard in this House, and you have heard, members of this parliament of mature experience bring forward matters of national interest and of national concern, bring them forward and elucidate them with outstanding ability; yet when the time came to vote no weight of argument, no amount of logic, no reason would stand up against the crack of the party whip. Does this House desire an illustration? I will give it two. We had, in the first instance, in this House a motion tantamount to a motion of want of confidence in the government. We heard expressions of opinion from all corners of this House; we speculated naturally as to the result. I for one when I heard the hon. member for Southeast Grey (Miss Macphail) declare that she had no confidence in this government, thought: "There
1146	COMMONS
The Address-Mr. Kennedy (Winnipeg)
is one against them". But like many others, I counted wrong. When I heard stated in this House the opinion of the government entertained by the hon. member for Rosetown (Mr. Evans), and as expressed by him before he came down to this House, I thought: Well, the hon. member for Rosetown will not vote confidence in this government-and so with many others. Yet when the time for division came, all but five of the Progressive group in this House-and mark you, all but five of those hon. members who throughout the campaign recently closed talked and fought against this government and declared to their constituents that they had no confidence in it

all but five of them stood up in this House and voted confidence in the government.
In passing, let me remark as to the attitude taken by these five, without naming them. Within so short a time as I have been in politics I have come to realize that it takes considerable courage to get up in this House and vote against your party; and when five members of that group virtually take issue with the other members of it, I must say that I find only admiration for their courage.
One other example. We had a vote yesterday on the question of the treaties contracted by this government. Everyone in this House is aware that the amendment voted on referred particularly to the Australian treaty. I am informed and believe it is correct that when the same Australian treaty came up for discussion before in this House every one of the present members of the Progressive party who then sat in this House voted against it; yet when 'the vote came yesterday they all voted tantamount to endorsation of the treaty.
If appears, therefore, that argument is futile; but if futility of argument as affecting the result were a conclusive reason as to whether or not a man would speak in this House, I submit that the record would not
10 p.m. contain nearly the number of speeches that it does; and when I say that I refer not to one side of the House alone.
Another handicap. Sir, is the attitude, of which I do not complain, of the members opposite, and it applies to a new member speaking either on this side of the House or on the other side. A new member realizes that he is facing old and experienced parliamentarians who are watching, perhaps in a kindly way, but nevertheless watching his every step, and as he proceeds, questions apparently innocent in themselves are propounded with the object that the feet of the unwary may be trapped. The only armour
fMr. W. W. Kennedy.*
that a man can carry against such tactics is the armour of belief in his cause and sincerity in the arguments he puts forward. I hope, Sir, whatever else I may be accused of, that hon. members in all parts of this House will concede to me when I am through at least this measure of merit, that I have tried to be fair in my discussion of this Address.
There is also the matter of one's friends. After ailL, one's friends have a right to be critical, and they are.
Through the obscurity of all this maze of difficulties there comes one beckoning light. That, Sir, is the kindly features and the gracious mien of the honourable and honoured Speaker of this House. It may be a platitude to say that first impressions are lasting, but in this case it is indeed fortunate, for whether my time in this House be long or short, I shall carry with me always pleasant memories of your attitude towards the young members of this House, and of the kindly reception accorded to new members by this House on all sides and from all quarters.
I had heard, Sir, before the election and during the campaign something of the Liberal party. I had heard some pretty harsh things about them. I had heard too about many hon. gentlemen opposite whom I now see, but I have since learned not to think so badly of them, and, Sir, having become acquainted with you, by virtue of your position, perhaps a 'little better than with most of the others, I am encouraged to hope that, as you came from out among their ranks, perhaps when we get a little better acquainted we shall find many, many other hon. gentlemen whom we shall be delighted to know. I have met some of the hon. members outside of this House, and it has been a distinct pleasure. I must remark though, Sir, that in this House they seem to be an entirely different kind of people from what they are outside. Outside, in the corridors or at meat, they are human, likeable, lovable, but here they seem to be operating under some strain, under some handicap, under some overshadowing cloud. Then I endeavoured to speculate as to what the reason might be, as under the caucus system, no one outside of one's own caucus is allowed to know what takes place at those meetings. It has occurred to me that it might be because of this irksome alliance which they seem to have made with the Progressive party.
Objection, I think, has been taken in this House to their relationship being called a coalition. Some have called it co-operation. I saw a cartoon the other day where it was pictured as "A marriage of convenience". I

The Address-Mr. Kennedy (Winnipeg)
think, though, that when they call it a "marriage" they go a little bit too far. I doubt whether it is as permanent even as a temporary marriage. I doubt whether a decree of divorce will be necessary to put an end to it. Perhaps, Sir, it might be more properly described as a liaison. I do not know whether the hon. member for Brandon (Mr. Forke) will object to that term. If he does object he hides his feelings very well indeed for he smiies pleasantly as he sits opposite to me.
In any event, whatever the alliance may be between the government and the Progressive group, it is one that is very definite in its working whenever a division occurs. No amount of denial from members among the Progressive group or from any other part of this House will prevent the country at large from believing that there is a distinct working alliance for a certain purpose, and that purpose is to maintain the Liberal government in power. It is not by chance that hon. members of the Progressive party, or of the Labour group, who time and time again have expressed opinions very critical of the party in power; it is not by chance, I say, that hon. members who have so expressed themselves support the government in every move in this House.
Complaint has been made by the leader of the Progressive party, the hon. member for Brandon, of articles appearing in the newspapers throughout this country imputing to the- party of which he is leader reasons for supporting the government which do not reflect credit upon it. He has complained of that somewhat bitterly. Complaint has also been made of certain terms used in this House by which it was attempted to describe the reasons, which in the opinion of the hon. members in question, actuated the majority of the Progressive group in supporting the government on the motion for the adoption of the Address in reply to the Speech from the Throne. Well, hon. members may be prevented from using here such words in the English language as, perhaps, most fittingly describe their thoughts. Yet throughout the length and breadth of this country the people will not be prevented from placing their own construction upon the situation here. If such a construction has been placed upon it by hon. members of this House, or by the people of Canada from the Atlantic to the Pacific, I say to the hon. member for Brandon that he and his party have no one to blame but themselves. I a.m not finding fault with them for resenting the construction which is placed upon their conduct. However, the reason lies at their
own door. Any time a man in either private or public life attempts to sail or fight under two separate colours, there is bound to be some misconstruction as to his real intent; and from hearing the speeches of the hon. member for Brandon in this parliament, as well as reading those made in previous parliaments, I can come to no other conclusion than that he is an out and out supporter of the Liberal party at all times. Therefore I say that if the hon. member for Brandon were sitting in his right place here it would not be at the head of the Progressive group, but where he is sitting now, just opposite me among the government benches. I will name another hon. gentleman, the hon. member for Lisgar (Mr. Brown). The hon. member for Lisgar has no more right to the name "Progressive" than I have. If he were as open and frank as he would lead us to believe he is, he would get up from his seat, walk across the floor, and take his place with the government on that side of the House. Coming to the hon. member for Rosetown (Mr. Evans), who sits here and declares that he believes the best policy for Canada is a policy of absolute free trade, I ask hon. gentlemen, I ask the members of the Progressive party, what right has such a man to a place in the Progressive ranks? He does not belong there; I submit he should be in a party by himself.
I think it was the hon. member for Nelson (Mr. Bird), who deems himself, apparently, to be a reincarnation of Robin Hood, who gave us a lecture last night upon the duty of man in this world. He himself declared that he was like the mythical Robin Hood. He was actuated by a consuming desire to right wrong wherever it might be found, and to uphold the weak. To use his own classic phrase, "he was always for the bottom dog". That has long been the express attitude of a number of members-I do not say of all-of the party to my left. Since they came into being they have always posed as being the one party that was in parliament to right the wrongs of the downtrodden of Canada; the one party that did not believe in election campaign funds; the one party that did not believe in election caucuses, but did believe that the older parties had outgrown their usefulness; and that they themselves were in parliament to purify politics. But has their conduct fulfilled their promise? Some of the hon. members of the Progressive party may think I am unfair to them, but I will state my reasons before I get through.


Robert Forke: You are all right.
114S	COMMONS
The Address-Mr. Kennedy (Winnipeg)


Donald MacBeth Kennedy: Perhaps I may take some liberties with the Progressive party, because I come from the part of the country that is just on the fringe of their field of operations. I have the honour of representing the constituency of Winnipeg South Centre. During the recent campaign, and for the last number of years, I have had the privilege of moving about and mixing with them-sometimes fighting with them, sometimes against them-and I will say this: I believe that in their hearts most of them are sincere, but for what purpose? Sincere in righting the wrongs of Canada as a whole? Sincere in bearing up the weak of Canada as a whole? I say no. I say that the Progressive group is fundamentally and in fact an economic group that has for its definite object the advancement of the interests of that particular group, the grain growers of western Canada. I doubt if in their heart of hearts many of the Progressive members will disagree with that. I want to say more: I do not blame them as an economic group for endeavouring to advance their interests; but let them frankly acknowledge that they are an economic group in this parliament for a definite purpose in the interest of that group, and then we shall know where they stand. That is why I say that they are fighting under false colours.
Now I come to the Speech from the Throne. While I have read it, I do not say that I understand it all. Part of it I understand, the rest of it I can only use as a basis for assumption. I will not say that there is no merit in the Speech from the Throne. It foreshadows certain legislation with which I am in accord, and I propose to advance some reasons why I am in accord with those measures. But first, what is the purpose of the Speech from the Throne? What is it intended to contain? It appears to me that the Speech from the Throne is the vehicle through which the Prime Minister, after consultation with his trusted ministers constituting the government, presents to parliament a forecast of the legislation which the government intends to introduce, based upon the national needs of the country. Accepting that as the test of what we should look for, I am going to point out later on some things in which I think it is lacking. This Speech does not find favour with many in this House because it does not represent the considered judgment of this government translated into terms which would indicate what it thinks itself is best for this country, and because it does represent largely such legislation as this government believes would attract to it suf-

ficient support in this House to pass the Speech from the Throne and thereby clothe it with some semblance of authority as a government. I suggest that it is an obvious compromise between what the government of this day thinks Canada needs and what the Progressive group, assisted by the Labour and Independent groups, demands should be placed in the Speech. In saying that I am not finding fault with the Progressive party as an economic group. Once we get the point of view of what they are here for, not so much blame attaches to them. Once we take the view that they are an economic group here for a definite purpose, namely, t.o get legislation which they desire to have enacted, I have little fault to find with their attitude. In fact, I am not surprised at the stand they have taken, because many of them have intimated as much.
The other night the hon. member for Lisgar (Mr., Brown) likened the Speech from the Throne to a berry patch, and so did the hon. member for Nelson (Mr. Bird). They said: If we find the berry patch offered by the Liberals more alluring than that offered by the leader of the opposition (Mr. Meighen), no blame should attach to us for going to the better berry patch. It is true the Speech from the Throne as originally brought down did not contain anything by way of special allurement to the Labour group who are represented in this House by two friends of mine from the city of Winnipeg. But they were not asleep; matters did not go very far until the hon. member for Winnipeg North Centre (Mr. Woodsworth) came into this House with a letter from the Right Hon. Mackenzie King before the first vote was taken, promising his party what they Want. If they are here as another economic group seeking certain legislation for that group, I do not know that any particular blame attaches to them. But the sum and substance of the whole matter is that this Speech is not such a one as represents the studied judgment of the government; it is a Speech such as by inducement shall win the support of two other groups in this House, which, during the election, were antagonistic to this government.
I wish to refer briefly to the matter of rural credits as suggested in the Speech from the Throne. I belfeve the question of rural credits is one of primary interest to the farmers of western Canada. I believe it is legislation that is essential in the interest of the farmers, not only of western Canada but of the whole country, for this reason: Our banking system as it is to-day is modelled for the purpose of supplying, not long term, but short term loans. You go to the bank to borrow money

The Address-Mr. Kennedy (Winnipeg)
and, if you get a loan, you get it on your note for a term of three months. At the end of three months, you either pay off the note or renew it with a renewal charge, and so on until it is paid off. That is all right in mercantile business and other lines of industry; but in farming there is only one occasion in the year when the farmer, out of his produce, can meet his liabilities at the bank. Although some of my friends may not give me credit for knowing much about the farming industry, I grew up on a farm and I know something about farming. When a farmer needs money to put in his crop in the spring, he goes to the bank in March for a loan. Although he borrows the money until June, he knows and the banker knows he is not going to pay it back in June. He pays a renewal charge and the loan is carried forward until September, although the banker knows and he knows that he is not going to pay it back then. Then it is again renewed until December. Thus, you have three renewals, all with expense to the farmer, with this absurdity; that throughout all these proceedings both parties to the transaction know that the money will not be paid on the date originally agreed upon.
Do hon. members need any further proof that the farmers of this country need some other system of borrowing money? They need a system of loans placed at their disposal whereby they know, when they borrow money, they will obtain it for the period required and they can pay it back when they say they will. That, I submit, is the basis of the demand for rural credits which, shortly, is some system of placing at the disposal of the rural parts of this country credit whereby the farmers can obtain money upon such terms as to time and repayment as will be suitable to the conditions of their industry. As to what form that legislation will take, this House has no inkling. It is true that the leader of the House (Mr. Lapointe) has been asked for information on a number of occasions and to all such questions he has blandly told us to wait until the legislation is brought down. Perhaps that is not an unreasonable answer if the legislation is not ready; it is not an unreasonable answer if the government does not yet know what it intends to do. But probably some of us on this side of the House may be pardoned if as new members we are labouring under the impression that when a government proposes legislation in the Address it knows just what that legislation is going to be.
However, I will say that in the province of Manitoba we have had some experience in the matter of rural credits, and if the proposed legislation which this government intends to bring down is of the nature of that which has been in force in Manitoba I for one shall vote against it. In that province the money was placed at the disposal of the farmers in such a way and on such terms that it was, frequently, not the thrifty farmers who needed it, that got it, but those who happened to operate in certain cliques and circles. The result has been that although the law has been in operation in Manitoba only a few years the government of the province is obligated for loans to farmers there to the extent of $3,000,000 of which already $700,000 is gone, a loss to the province. The hon. member for Brandon (Mr. Forke) nods his head and he knows that I am right. I think he knows too that before the end of the story at least half of that $3,000,000 will have been lost to the province.


Robert Forke: I do not want to interrupt, for I am enjoying the hon. gentleman's speech, but I do not like the expression that certain cliques are operating in the province. On second consideration the hon. member will not repeat that expression. I know that mistakes were made but I do not think the hon. gentleman should say that.


Donald MacBeth Kennedy: I do not
want to be offensive to the hon. member and possibly if I explain what I mean it will serve the purpose. Under that system of rural credits, rural credit societies were formed in various municipalities. A board was created in the municipality consisting, I think, of nine members or directors. If I were a farmer seeking a loan in the province I would have to go to the society in my own municipality and put in my application to that board of nine. Now the intention of the legislation was good. The government took the view that no better advice could be obtained as to the desirability of any particular loan than the advice of nine men who were right in the heart of the municipality where the borrower lived. And in theory that is all right. But hon. gentlemen know that municipal politics are just as heated sometimes as provincial, and just as keenly contested as Dominion politics; under that system a temptation crept in among the members sitting on the board to pass loans, not on the strength of the security offered but because of other considerations. I do not think that the hon. member for Brandon will suggest that this phase of the question was entirely absent from the rural credits scheme in Manitoba. I do not say that it has been widespread, but just the same it is one of the weaknesses of
1150	COMMONS
The Address-Mr. Kennedy (Winnipeg)
the system. In any event the result of the operation of rurail credits in that province has been an obligation on the part of the government for S3.000.000, of which as I have already said $700,000 has been dissipated, and before the thing is through at least half of that total sum will represent a loss to the province. And by whom will that loss be met? It will be paid for by the taxpayers of the whole province, not only by those engaged in farming alone but by people in all industries throughout Manitoba. They are the ones who will have to pay that $1,500,000 for the benefit of a certain number of farmers who borrowed and defaulted in payment. If that were all it might not be so bad, but there is another aspect.
In many cases, instead of being an assistance to the farmers themselves for the purpose of developing their farms and improving their position in the community, the loans have only served to put them deeper into debt from which they will never be free, so that ultimately when the government endeavours to realise on the loans they will find that many of these farmers whom they sought to help have been ruined by the very generosity extended to them and will be driven from their farms. The hon. member for Brandon will, I think, agree with that. That is why I say at this stage it is impossible for any member to deal intelligently with the question of rural credits.
There is another matter that interests me and which I almost hesitate to mention because of the warning I received in the election just past as to the attitude that would be displayed by members from the east. You can guess, I think, that I am referring to that old political chestnut, the Hudson Bay railway. I am quite aware that that measure will receive support from a number of members on the opposite side of the House while it will be opposed by some other hon. gentlemen over there. I am aware too that it will be opposed by some members on this side while it will receive support from others in all quarters of the House. On the question there is a great diversity of opinion. When the matter comes up for consideration it will be the duty of those of us who support it to bring to the attention of the House all those reasons which we can fairly urge in its behalf. I am not going to go into details now, as I hope to have the privilege of discussing the subject on a subsequent occasion. I shall simply touch upon it in passing. I want to give you the picture of the Hudson Bay railway as it stands to-night. We are sometimes told, "You members from the west want this

Hudson Bay railway whether it is feasible or not. You want the Dominion of Canada to dip into the treasury and spend millions of dollars on a thing that is economically impossible".
Well, let me first ask those hon. members who are of that mind this question: by whom were we encouraged to believe that the Hudson Bay railway was a practical proposition and one that would be carried to completion? Is the answer to be found on one side of the House alone? I say that if you will examine the records you will find that right back to the days of Sir John A Macdonald every Prime Minister of prominence of whom I know has at one time or another expressed himself in favour of that railway; and not once or twice, not ten times, but on scores of occasions members of parliament from both sides of the House have gone to the west at election time and definitely and explicitly promised the completion of that railway.
WThat was the stand of the late Sir Wilfrid Laurier in this matter? He was a great champion of that railway. It was under his administration that the contract for its construction was let. The Minister of Railways (Mir. Graham) in 1910 turned the first sod, but the government of that day failed to turn any more. The following administration under the Right Hon. R. L. Borden proceeded with the construction and continued it until the war put a stop to it. Now what is the position? Under the Borden administration the whole line from the Pas to Port Nelson was graded, steel was laid for three hundred miles, and switches and other accessories were installed. At Port Nelson millions of dollars were expended on terminal facilities. Large quantities of materials were brought in through the channel which is not supposed to be navigable, and those materials are still stored on the shores of Hudson bay at Port Nelson. Today another ninety miles of steel will complete the road. To date approximately twenty-two and a half million dollars has been expended on the undertaking. How much more money will be required to complete it?
I do not know, but here is what we are up against. I have recently received, as no doubt other members have, a pamphlet from Calgary giving pictures of floating icebergs in the straits during practically every month in the year. Personally I am not in a position to say whether those pictures represent abnormal conditions or not; but I do know that experts engaged by past governments have examined the route, and while it is true that those opposed to the completion of the road can produce experts to say that it is not feasible, yet many honest and reliable men

The Address

Mr. Kennedy (Winnipeg)
who have been on the spot say that the route is practicable.
Now, I grant you, Sir, that with this conflict of opinion, if we were initiating the road, I would not vote a single dollar for its construction until something more definite and concrete was presented to me. But with three hundred miles virtually ready for operation and the balance ready for the laying of steel, with twenty-two and a half million dollars already expended, and the road promised by all governments practically since confederation, I say that if the expenditure of further money within reason to complete the road forthwith did no more than prove that as a grain route to the markets of the world it is not practicable, it would be money well spent. And for another reason, that it would remove once for all a question which at every election is no small factor in raising dissension between the east and the west at a time when the expressed desire of all Canadian statesmen is for a strong and united Canada.
I think, though, that the House should be given the information that was asked of the leader of the government as to what extent he intended to commit this parliament to further expenditures for completion of the road. While I desire its completion, yet I know I would not be representing the best interests of my constituents or of the people of western Canada if I worked in season and out of season for the expenditure of large sums of money which would be wasted. I say that the attitude taken by the right hon. leader of our party in favour of spending such an amount of money as is necessary to give that route a proper test is the correct attitude to take, and I do not believe that members from the west, if they consult the interests of their constituents and their own real convictions, will ask for more; but that much they will ask for, and in pressing their demands I intend to bring to the question such energy as I can exert and the results of such investigation as I personally can make respecting this undertaking.
Now, while it does not appear in the original Speech from the Throne, yet in what is referred to as the supplementary Speech from the Throne there is a promise of some legislation along the line of old: age pensions. I am in sympathy with the principle of such legislation. I think I have gone far enough along the road of life to believe that in the final analysis a country is responsible for seeing that those of its people who are aged and infirm and no longer able to fare for themselves are not allowed to starve. I believe in the principle that they should at least be
taken care of. I believe that a reasonable measure in this direction will find support in all parts of the House. With a view to obtaining information, I placed on the order paper early in the session a question as to whether or not the government proposed to include in that legislation some measure of relief by way of pension for the blind. To that I have received no answer.
The Speech from the Throne suggests something which was intended, I think, to meet with the approval of members from the Maritime provinces. I will not attempt to go into the question or to discuss their needs. We have heard from them at length, and their views have been put forward very ably. Unless I am mistaken, I gather that what is suggested in the Speech from the Throne is not really what they want. It occurs to me that the offer of a royal commission, instead of mollifying the members from the Maritimes, haa rather increased the urgency of their demands for something a little bit more tangible.
So much for the measures forecast in the Speech from the Throne. I wish to refer, now Sir, to some of the things that appear to me to be lacking, for I feel that not having expressed any animus against the government in the discussion of these matters in which I see some element of virtue, no one will deny to me the right at least to criticize. When I look through the Speech from the Throne I suggest to the government that it is not unreasonable for me to expect to find there the legislation which during the election the leader of the Liberal party told the country was so urgently needed. It is not surprising that I would expect to find some proposals to deal with those pressing problems which, at 'Richmond Hill, the leader of the government declared could not longer wait for solution.
Now what were those pressing problems? I want hon. members to mark them in their minds and see to what extent a solution is offered in this Address. Speaking at Richmond Hill, as reported in the Ottawa Journal of September 7 last, the Prime Minister asked, "What are some of the national problems pressing for solution?" and he said:
First and foremost is the problem of taxation.
Well, do you find any suggestion in the Speech from the Throne as to alleviating taxation? He goes on to say:
I can see no solution of the problems of taxation, no means of reducing materially our public debt, our income tax, our sales tax and other taxes, apart from a satisfactory solution of the four problems I have mentioned.
1152	COMMONS
The Address-Mr. Kennedy (Winnipeg)
When the matter of income tax was mentioned early in this debate, if I am not mistaken, the hon. member for Brandon when referring to it intimated that he was not very much concerned with cutting down the income tax, or that he would not favour it. Well now, what prompted such an expression? What about the sales tax? What about various other taxes which have the effect of holding back the wheels of industry? who pays these taxes? If it were true that when I pay income tax this same tax would not affect my neighbour. I could very well understand the selfish interest that would prompt him to say "I am in favour of keeping on the income tax." It is the same with the sales tax and a multitude of taxes. But in the final analysis all taxes come out of the producer, and therefore what is for the benefit of the man who pays the income tax is also for the benefit of the producer, in so far as reduction of those taxes is concerned, and I say that we should endeavour to give business an impetus in this country, to unshackle industry by cutting off all special taxes at the earliest possible moment.
Sir, while no solution appears in the Address I will suggest one avenue through which some relief might come, and the avenue I suggest-is that the government concern itself with collecting all the customs dues which are properly payable into the exchequer, and not permit goods to be smuggled into this country wholesale, brought in by people without paying the customs duty. If it is true, as has been charged, that not one million but many millions of dollars have been lost to the treasury of this country through that channel, then I say that every million dollars collected in that way by the diligence of the government means that by that amount it will be able to reduce the extent of the other taxes collected from the honest people of the country. While these smugglers of whom we have heard so much, these pariahs of business, become wealthy by evasion of the customs laws of this country, honest business men find themselves unable to meet their honest debts, and while these men with their ill-gotten gains parade the streets of our cities, honest business men are closeted with their creditors.
I say to this House and to the government: that if the government knew that smuggling was being conducted in a wholesale way, as the charges would indicate, then it was the duty otf the government not to wait until forced by a resolution of this House, but on its own initiative to take proceedings to stop it, and to see that the exchequer was recouped. I suggest that it would not be amiss, under the heading of taxation, to have inserted in

the Address something to this effect:	"That
your government regrets that many millions of dollars of the money of people of this country have been lost to Canada by smugglers bringing in goods from foreign countries without paying the customs duty thereon, thereby defrauding the treasury, and that this government expresses its intention to proceed forthwith to rectify that state of affairs." However, that apparently is not the custom, so far as governments are concerned, in the Speech from the Throne.
The second problem mentioned by the Right Hon. Mackenzie King at Richmond Hill was the matter of transportation. Is there any concrete suggestion in the speech as to a solution of that problem? Is the "building of the Hudson Bay railway forthwith" the real solution of the transportation problem of Canada? I think some of my friends from the Maritime provinces will not agree that it is. Many from the province of Alberta who want to get their coal into centra! Canada will not agree that it is the whole solution. Right there I want to point out to this House that the Speech does not represent a real effort on the part of the government to bring about a solution of this country's problems. On the contrary, it represents an attempt by this government to obtain support by suggesting these measures which it thinks will appeal to some of the groups in this House.
Another one of the four problems mentioned by the Right Hon. Mr. Mackenzie King was the matter of immigration. I will deal with that later, but in passing I may ask what solution of the immigration policy is offered by the government? They have told us that they have entered into an agreement with the railways for the purpose of encouraging immigration into this country, and by the terms of that agreement they are getting people to come in by guaranteeing these people employment for five years from the time of entry. I suggest to this government that it would be a sounder policy, in dealing with the matter of immigration, if, instead of guaranteeing employment to people who are not here, they should adopt a policy which would give employment to people who are here in order to hold our people here and prevent them leaving the country. Surely the basis of a sound policy in the matter of immigration is not to bonus people to come here, but to make conditions in Canada such that those who are here can make a living and remain in Canada. If you do that and make the country prosperous you will not have any difficulty in bringing people to Canada.

The Address-Mr. Kennedy (Winnipeg)
The other and last matter with which he dealt was the fiscal policy. He called it one of the outstanding problems. Well, there is some mention of that in the Speech from the Throne. It says:
My ministers are of the opinion that a general increase in the customs tariff would prove detrimental to the country's continued prosperity and prejudicial
to national unity.
Now what is that? Is that a solution? It is not in itself a policy. It is simply a statement of negation of policy; it offers no solution. It simply says that to do something would not be good for the country. To be fair, the Speech does suggest the appointment of a tariff board for the purpose of studying tariff conditions in this country and seeing what changes should be made. Now is the tariff a new question? Is it not discussed on every election platform during every election campaign? It has been since I can remember, and I believe since any hon. member of this House can remember. Has not a great amount of data been gathered by the departments upon that question already? I submit that with all the data at its disposal the government ought to do one of two things: it ought to declare definitely either that it believes in a policy of protection of industry in this country, or that it does not so believe. They did not do that in the last campaign, but they did it once. In August, 1919, when the National Liberal Convention was held in the city of Ottawa, among other resolutions, one was passed on the tariff. On that occasion they were very specific. I shall not read the whole resolution, but only those portions that are pertinent to my argument:
That the best interests of Canada demand that substantial reductions of the burdens of customs taxation be made.
Did you hear any reiteration of that during the recent campaign? They go on to say, and I ask Progressive supporters of the government and also the Liberals from the west who delight to be connected with the party that always keeps its pledges to pay attention to these words:
That, to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery: farm tractors, mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into same.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption.
And they finish up by saying, so that there shall be no doubt where they stand:
And the Liberal party hereby pledges itself to implement by legislation the provisions of this resolution when returned to power.
Now they were returned to power, I think they will admit, in 1921, and did they implement these pledgee? Did we hear any repetition of those promises during the recent campaign? Did we see any indication of their intention to proceed along those lines foreshadowed in the Speech from the Throne? Not one single word. Only do they say that they believe a general raising of the tariff would not be good.
Mr. DARKE. Does the hon. gentleman contend that no reductions have been made in the tariff by the Liberal government?


Donald MacBeth Kennedy: No.


Mr. DARKE:: The hon. member's statement implied that.


Donald MacBeth Kennedy: I contend
that there were no substantial reductions all along the line, or anything approaching it. I contend, further, that the Liberal government as at present constituted does not intend to bring in any substantial reductions all along the line, or anything like it.


Francis Nicholson Darke: You know more than the party does.


Donald MacBeth Kennedy: We can
judge them by their past performances and by what is suggested in the Speech from the Throne. If they believe in these substantial reductions, why do they not say in the Speech from the Throne that they intend to put them in force? What do they do? They simply shirk the question by saying: We will appoint a commission to inquire into what changes should be made.


Francis Nicholson Darke: Is it not a fact that the right hon. leader of the opposition (Mr. Meighen) has declared himself in favour of a tariff commission?


Donald MacBeth Kennedy: Quite 90, and I am in favour of it. But there is this difference: the right hon. leader of the Conservative party declared his belief in the efficacy of a tariff commission in 1912, and a bill looking to the creation of such a commission was introduced into this House but was killed by the Liberal party in the Senate. That is the history of the tariff board. It is true that t'he present time it is a plank in the platform of the Conservative party, but with this difference from the policy of hon. gentlemen opposite: The Conservative
Hudson Bay Railway

party's policy as to a tariff board starts with the premise that the Conservative party believes fundamentally in a policy of protection for building up the industries of this country. With that as a basis, it says: We will appoint a tariff commission, which, believing in that policy of protection, will head right into the storm, face the needs of this country, and give this country a tariff policy which is suited to the needs of the country. I submit that between that attitude, and the appointment of a tariff board by a government which says it believes in substantial reductions, but never carries them out, there is alll the difference between life and death so far as an effective policy is concerned. I hope I have made myself clear to my hon, friend.
Mr. Speaker, I move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Lapointe the House adjourned at 11 p.m.
Friday, February 19, 1926