1927-04-04

BUSINESS OF THE HOUSE


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I beg to move:
That on and after Tuesday, the 5th of April, 1927, until the end of the present session, the House shall meet at 11 o'clock in the morning of each sitting day, and that in addition to the usual intermission at six o'clock p.m. there shall also be an intermission every day from one to three o'clock.


Hon. HUGH GUTHRIE (Leader of the Opposition):: Will my right hon. friend consider the suggestion of including Saturday next in that motion?


William Lyon Mackenzie King: I thought of
holding that in reserve for the present until we see what progress we make by meeting in the morning on and after to-morrow.


Mr. H. E. SPENCER (Battle River):: I
would like on behalf of this part of the House to protest against this motion. Various very important committees are sitting this week right until next Friday, and many of us would like to be in the House and in the committee at the same time. This of course is impossible. It seems to me that if the work is so pressing or if we are so anxious to get away from this parliament, we are not justified, when some of us ought to be attending committees, in starting morning sitttings. For that reason I hope the House will not accept the motion.


Mr. M. N. CAMPBELL (Mackenzie):: I
would like to suggest to the Prime Minister that the House, instead of meeting at eleven o'clock in the morning, meet at two o'clock in the afternoon. That would be a difference
Morning Sittings

of just one hour and I think we would get through just as much business. Every possible effort is being made by members on the opposition benches to assist the government and to facilitate business. In view of that and in view of the rate at which we are getting through business, I see no reason for starting morning sessions at this particular time. Every member has a great deal of work to do other than attending the sessions of the House, and if a member has to sit in the chamber from eleven o'clock in the morning until eleven at night it is impossible for him to do justice to his work-. If the Prime Minister would take into consideration sitting at two o'clock in the afternoon, we would get through business just as well as by sitting in the morning.


Mr. G. G. COOTE (Macleod):: If I had
any assurance that we would have to sit only from eleven o clock in the morning until eleven o clock at night, I would not feel so strongly against this resolution. I have a clear recollection of the last weeks of the previous session when, although we started at eleven o'clock in the morning, we sometimes had to sit in this chamber until six o'clock the following morning. If I were sure that this motion would accomplish the end which we have in view I would not oppose it. On Tuesday last we sat here from three o'clock in the afternoon until five minutes to midnight so that three hon. gentlemen could each make a speech. I do not know how those hon. gentlemen are going to get along when we apply the new rule limiting them to forty minutes. We have spent four days in discussing the Imperial conference report and we have not yet arrived at a decision. As a matter of fact there was no motion before the House to discuss except the motion to go into committee of supply.
I want to voice a protest against what appears to be unreasonable haste to wind up this session. Last year along about the 1st of July I stated in this House that I wanted to go home and many members made a good deal of fun at my expense because I used that expression. I still want to go home when the business of the House is concluded; but last year when I made that statement parliament had been sitting for about six months. This year parliament has been sitting not quite two months. One reason why I am rising in protest against this motion is because I have received numerous telegrams

from ex-service men's associations throughout Canada protesting against parliament proroguing in such a hurry and using that as an excuse for not bringing in some further legislation dealing with ex-service men's problems. Might I quote one sentence from a letter written to me recently by Mr. Lapp, superintendent of the service bureau of the Canadian Legion? He said:
The Canadian Legion of the British Empire Service League now appeals to you in the name of those who were disabled by war service and the dependents of those whose breadwinners gave their lives in the service of Canada, to remain on duty at your seat in the House of Commons of Canada for a sufficient length of time to fully consider these matters.
Many other members have been receiving similar telegrams, and I say, through you, Mr. Speaker, to the members of the Llouse and of the government that it really does not look quite right for this House to make such an effort to conclude its sittings this week. While I am very anxious to return home whenever the work of the session is completed, I do not think any hon. member can contradict me when I say that if this House prorogues this week or even by Wednesday night of the following week, the estimates mast be put through in a manner that will not permit proper consideration.


Mr. MANION:: As they always are.


George Gibson Coote: My hon. friend says, "as
they always are." I think that is a good argument for something I have often urged in this House, and that is that the estimates be sent to a select committee for consideration, but I have never been able to get the House to adopt that suggestion. I do not suppose that I shall be able to prevent this House sitting morning, afternoon and evening, or even all night, if it wants to do it, but I simply want to make my protest as a member of the House.


Mr. L. J. LADNER (Vancouver South):: I should not be doing what I deem to be my duty if I let this opportunity pass without a reference to one question which concerns me so far as it relates to the adjournment of the House, and that is in connection with soldier legislation. I too have received communications of various kinds, and I have felt, and I feel, that the responsibility is really upon the government for not having brought down this legislation some time ago, and they should not give as an excuse now for not bringing

Immigration Act
it down the desire on the part of members for an early close of the session. As far as I am concerned, and I believe that a great many other hon. members feel the same way, for the fellows and the dependents of those who spent four years in the trenches in France on our behalf, we can well afford to spend one day or four days or a week or a month, if need be, to deal with any soldier legislation that may be necessary, especially in view of the shortness of this session. In that respect, therefore I protest, and I say that the government should deal with that legislation, and should not offer as an excuse for not doing so the desire for an early prorogation of the House.


William Lyon Mackenzie King: I can assure my hon. friend who has just spoken (Mr. Ladner) that the government's desire in the matter of closing at a certain date has nothing whatever to do with its decision with respect to legislation relating to the returned soldiers. The Minister of Soldiers' Civil Re-establishment (Mr. King) made a statement to the House last week in Which he gave the reasons why the government thought it inadvisable to amend that act this year beyond the one or two amendments that the minister mentioned would be brought in. I can assure my hon. friend, having regard to the number and character of the representations the minister has received, it would not be possible for the government, even if we were to be here for another month, to arrive at a decision different from that already reached in regard to those particular phases of legislation respecting returned soldiers.
I would say to my hon. friend from Macleod (Mr. Coote), who spoke of sitting late at night, that I do not think he will find anyone on this side of the House, certainly not on the government benches, who will desire any more than he does to sit up after eleven at night or midnight. The purpose of starting in the morning at eleven o'clock is if possible to get through by eleven o'clock at night, rather than running on until two or three o'clock in the morning. There does appear to be a general desire on the part of all members of the House, as far as I have been able to gather, to conclude the business by the Easter recess.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: We may not
be able to do that, but I think if we . begin the morning sittings at once, we shall very 32649-115
soon ascertain whether we can or not, and it is with that purpose in view that the government has introduced this motion, which I hope the House will accept.


George Gibson Coote: Would the Prime Minister
then be good enough to accommodate hon. members who may be attending some committee of the House when some item in which they are interested comes up, by postponing consideration- of it until they can be here?


William Lyon Mackenzie King: That is an entirely reasonable request. I might say that the government will endeavour in every way to meet the convenience of members of the House, and if they will just speak to the whips we will seek to have the business so arranged as to best suit the convenience of all.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. ROBERT FORKE (Minister of Immigration and Colonization) moved for leave to introduce Bill No. 269, to amend tip-immigration Act.
Some hon. MEMBERS:: Explain.


Mr. FORKE:: Mr. Speaker, this is the same bill that passed the House last session but failed to pass the Senate. I think the purpose of the bill will be best explained by reading the section of the Immigration Act which it is proposed to repeal. This bill repeals section 41 of the Immigration Act, chapter 27 of the statutes of 1910, as enacted by chapter 26 of the statutes of 1919. The repealed section reads as follows:
41. Every person who by word or act in Canada seeks to overthrow by force or violence the government of or constituted law and authority in the United Kingdom of Great Britain and Ireland or Canada, or any of the provinces of Canada, or the government of any other of His Majesty's dominions, colonies, possessions or dependencies, or advocates the assassination of any official of any of the said governments or of any foreign government, or who in Canada defends or suggests the unlawful destruction of property or by word or act creates or attempts to create any riot or public disorder in Canada or who without lawful authority assumes any powers of government in Canada or in any part thereof, or who by common repute belongs to or is suspected of belonging to any secret

Dominion Elections Act

society or organization which extorts money from or in any way attempts to control any resident of Canada, by force or by threat of bodily harm, or by blackmail, or who is a member of or affiliated with any organization entertaining or teaching disbelief in or opposition to organized government shall, for the purposes of this act, be deemed to belong to the prohibited or undesirable classes, and shall be liable to deportation in the manner provided by this act, and it shall be the duty of any officer becoming cognizant thereof and of the clerk, secretary or other official of any municipality in Canada wherein any such person may be, forthwith to send a written complaint to the minister, giving full particulars: Provided, that this section shall not apply to any person who is a British subject, either by reason of birth in Canada, or by reason of naturalization in Canada.
2.	Proof that any person belonged to or was within the description of any of the prohibited or undesirable classes within the meaning of this section at any time since the fourth day of May, one thousand nine hundred and ten, shall, for all the purposes of this act be deemed to establish prima facie that he still belongs to such prohibited or undesirable class or classes.
I might add that we are repealing section 41 because section 40 of the Immigration Act really covers all that is necessary in regard to sedition and similar offences against the state.
Motion agreed to and bill read the first time.



DOMINION ELECTIONS ACT AMENDMENT


[Stage Direction]
Mr. L. P. BANCROFT (Selkirk) moved for leave to introduce Bill No. 270, to amend the Dominion Elections Act (Voting by teachers and students).
Some hon. MEMBERS:: Explain.


Mr. BANCROFT:: This bill seeks to amend paragraph (c) of section 29 of the Dominion Elections Act, which reads as follows:
Who has ordinarily resided in Canada for at least twelve months and in the electoral district wherein such person seeks to vote for at least two months immediately preceding the issue of the writ of election.
As the election writs are usually issued about two months before election day, the present act disfranchises all persons who change their places of residence during four months immediately preceding the date of an election.
School teachers begin their duties about September 1st and students in the higher institutions about October 1st.
Every federal election since 1896 has been held during the fall months. All teachers and students who, in following their respective duties, change their place of residence at the
[Mi. Forke.J
beginning of the school year, are disfranchised under the present act.
This amendment exempts teachers and students from paragraph (c) of section 29, provided that they can satisfy the registrar that they are otherwise qualified to have their names placed on the voters' list.
This amendment affects approximately 61,000 teachers and 120,000 students.
Motion agreed to and bill read the first time.



CRIMINAL CODE AMENDMENT


[Stage Direction]
Mr. J. S. WOODSWORTH (Winnipeg North Centre) moved for leave to introduce Bill No. 271, to amend the Criminal Code (Blasphemous libels).
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. G. B. JONES (Royal) moved for leave to introduce Bill, No. 256, (from the Senate), to provide in the province of Ontario for the dissolution and annulment of marriage.
Motion agreed to and bill read the first time.

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. BOYS:: 1.	How many estates of bankrupts have paid fifty cents on the dollar or over?
2.	How many have paid less than fifty cents?
3.	How many bankrupts have received a discharge since the introduction of the act?


Hon. Mr. CANNON:: 1,	2 and 3. The Minister of Justice has no information.


DAIRY CATTLE IN CANADA
Mr. CAYLEY:: 1.	What is the number of dairy cattle in
Canada?
2.	What proportion are pure breds?
3.	What is the average yield of milk per cow if known?
4.	What is the estimated cost to carry a cow for one year?
5.	What is the probable value of her products for a year?
6.	Has the government any policies in effect looking to the improving of this situation; if so, what are these policies?
7.	How many inspectors are employed throughout Canada in R.O.P. work among dairy cattle?

Questions


Hon. Mr. MOTHERWELL:: 1.	According to the Dominion Bureau of Statistics the number of milch cows in Canada for 1928 was 3,951,335.
2.	Approximately 1.7 per cent.
3.	The annual production of the average dairy con's is estimated at 4,000 pounds; the average production of cows supervised under the cow testing system of the Dominion Live Stock branch for the last five years is 5,924 pounds milk-(eight months period); the average mature record of pure bred cows of the various breeds entered in the record of performance in 1925 was 11,175 pounds.
4.	The feed cost of a dairy cow, as fed on the average farm, for one year would be between $50 and SGO.
5.	The average value of products per cow is approximately $60 per annum, on the basis of $1.50 per hundredweight for milk.
6.	Yes. The Canadian record of performance system, under which production records of pure bred herds are supervised by the department. Inspectors visit the herds with reasonable frequency about eight times per year. The inspector stays for two days on each occasion; checks the weights recorded; makes the butter fat test for each cow entered, and reports milk yield recorded at the time of his visit in comparison with that recorded during the days immediately preceding. The herd owner obtains information of great value to him regarding the merits of all the cows in his herd as a result of these tests. The primary purpose of the work is to provide production credentials for the dams of dairy bulls, and under this system, a policy of advanced registration of dairy bulls based on the record of performance test is in operation.
7.	At present the number of inspectors on the record of performance staff is 41, but the staff is being increased by ten additional inspectors.


BOVINE TUBERCULOSIS-COMPENSATION
Mr. LUCAS:: 1.	In what year were the first cattle slaughtered in Canada for bovine tuberculosis?
2.	What total number of cattle have been slaughtered in Canada for bovine tuberculosis to December 31, 1926?
3.	What total amount of compensation has been paid for cattle slaughtered in Canada for bovine tuberculosis to December 31, 1926?


Hon. Mr. MOTHERWELL:: 1.	The first cattle destroyed in Canada for tuberculosis by the Dominion Department of Agriculture were slaughtered in the fiscal year 1915-16.
2.	By the Dominion Department of Agriculture, 73,609.
3.	$4,190,574.51.


CONFERENCE ON HOG INDUSTRY
Mr. KENNEDY:: 1.	Does the Minister of Agriculture propose calling a commission to discuss the swine policy of the Dominion ?
2.	If so, when, and why is such a conference
necessary ?
3.	Have the invitations for a conference gone out? If so, to whom, and has any provision been made for members of parliament for representation at the conference?
4.	What will the conference aim to accomplish for the hog raisers and hog feeders?
5.	Have the packers submitted a report to the minister or to the department on the present marketing situation? If so, will the minister lay a copy of this report on the table of the House?
6.	When was the conference held at which it was decided to pay the ten per cent premium, and was it understood at this conference that the ten per cent premium would be permanent?
7.	In view of the official statement by the government some time ago to the effect that bacon grading would be placed under government regulations, what has been done to develop such regulations both in regard to bacon for export and for distribution to the retail trade of Canada?
8.	Are any experiments being conducted or is
a definite study of the system of distribution in Canada under way at the moment which would likely provide information for the (further development of a bacon policy in Canada provided fixed differentials have to be discontinued ?	_ t
9.	Have the packers been active in endeavouring to popularize the discontinuance of the ten per cent premium?


Hon. Mr. MOTHERWELL:: 1.	Yes.
2.	(a) The conference is called for April
22 and 23.	(b) In view of the fact that the
agreement between the packers, the producers and the departments of agriculture was arrived at in a general conference, it has seemed to the Department of Agricuture to be advisable to call a similar conference to further discuss the whole situation, in view of the packers having given notice that they propose to discontinue the payment of the ten per cent premium.
3.	Yes, the invitations were sent to the following:
Provincial Ministers of Agriculture: Hon. Mr. Stewart, Charlottetown, P.E.I.; Hon. Mr. Walker, Halifax, N.S.; Hon. Mr. Smith, Fredericton, N.B.; Hon. Mr. Caron, Quebec, P.Q.; Hon. Mr. Martin, Toronto, Ont.; Hon. Mr. Prefontaine, Winnipeg, Man.; Hon. Mr. Hamilton, Regina, Sask.; Hon. Mr. Hoadley, Edmonton, Alta.; Hon. Mr. Barrow, Victoria, B.C.
Swine Breeders associations: R. W. Wade, Canadian Swine Breeders Association, Truro; F. L. Fuller, Maritime Stock Breeders Association, Truro; A. Morin, Quebec Swine Breeders
Questions

Association., Quebec; R. W. Wade, Ontario Swine Breeders Association, Toronto; J. E. Rettie, Manitoba Swine Breeders Association, Brandon; R. G. Robertson, Saskatchewan Swine Breeders Association, Regina; W. J. Stark, Alberta Swine Breeders Association, Edmonton; G. Pilmer, B.C. Swine Breeders Association, Victoria.
Live Stock associations: D. Brien, Eastern Canada Live Stock Union, Ridgetown; K. Learmonth, Western Canada Live Stock Union, Regina; J. W. Ward, Canadian Council of Agriculture, Winnipeg.
Cooperative organizations: J. J. Morrison, U.F.O., Toronto; Secretary, United Farmers Cooperative, Toronto; F. Bateman, U.F.A., Calgary; E. Rice-Jones, U.L.G., Winnipeg; J. A. Paquet, Cooperative Federee, Montreal.
Railways: W. J. Black, C.N.R., Montreal; J. S. Dennis, C.P.R., Montreal.
Live Stock Exchanges:	A. W. Burrell,
Edmonton; J. C. Paulin, Calgary; J. C. Hackney, Moose Jaw; F. P. Bugee, Winnipeg; W. II. Shields, Toronto; M. G. Donovan, Montreal (Point St. Charles); J. E. Fauv-reau, Montreal (east end).
Meat packing establishments: S. E. Todd, Toronto, Out.; Canadian Meat Packers, Toronto; Sims Packers, Ltd., Charlottetown, P.E.I.; Davis & Fraser, Charlottetown, P.E.I.; Gainers, Ltd., S. Edmonton, Alta.; P. Burns & Co. Ltd., Calgary, Alta.; Eastern Abattoirs Ltd., Montreal, P.Q.; Gunns, Limited, Toronto, Ont.	*
No special provision has been made for members of parliament for representation at the conference, but there will be no objection to any member attending if he is interested.
4.	The conference will be invited to consider the future of the hog industry, having in mind its continued' improvemfent and its present relation to world markets.
5.	(a) Yes. (b) A copy of this report is attached.
6.	(a) The original swine conference was
called on November 2nd and 3rd, 1921.	(b)
The resolution as passed at the 192.1 conference reads as follows:
Resolved that all interests represented at the conference agree that the future of the Canadian hog industry depends upon the production in Canada of select bacon hogs, and declare themselves unreservedly for the principle that a minimum premium of ten per cent should be paid for hogs suitable for the production of Wiltshire bacon.
There was considerable discussion about the permanence of the premium on the part of producers' representatives, the opinion being voiced that it might be temporary. Following this discussion Mr. Fox of the Wm. Davies

Company made the statement in discussing the matter that he saw "no reason why the premium should not be permanent." Another statement made by Mr. Fox was " I myself have no doubt that it is going to last indefinitely." Following) Mr. Fox's remarks Mr. McLean, Harris Abattoir Company stated as follows:	"The most important thing that
Mr. Fox said in supporting the resolution was that our interest at any rate lies along the line of this 'being not for six months or a year 'but forever." Following this discussion an opportunity was given to the packers to express themselves individually The packers intimated that they were in a-ccord with the motion. It was then put to the meeting and carried unanimously.
7.	Tentative plans were outlined some three years ago with the view to providing for the official grading of 'bacon for export, but for reasons which seemed good at the time, these were not put into effect. With regard to the retail trade in Canada no official action has been taken in this direction.
8.	Informal investigations of this subject have been made.
9.	No information.
Copy of Packers' Statement Submitted at
Recent Meeting of Packers' Representatives, Joint Swine Committee and Government Officials
At a conference of all parties interested, held in November of 1921, plans were made to encourage the production of the kind of hogs required to supply the British market with the best quality of bacon.
Two specific actions were agreed upon, the one interlocking with the other. The first was that market hogs should he divided into grades by Dominion government graders. The second was that where differences in price were paid for the various grades such differences should he on a minimum basis of ten per cent of the grade of "select bacon" hogs over the second grade, the "thick smooth" hogs. Thus the "thick smooth" grade became the basic grade for pricing purposes. Price differentials for the other grades were left to market conditions to establish. The policies adopted were, of course, purely experimental, no one having exact knowledge of how they would work out in practice. The understandings arrived at could not then, and cannot now, be looked upon as being permanent.
As the policy was put into operation two big factors began to emerge that complicated the carrying out of the understanding.
1.	It had been hoped that the premium of 10 per cent was to be a minimum premium and that it would he widened. But as the general quality of the hogs improved the difference in value between the "select" and the "thick smooth" grade narrowed instead of widening, owing to the better quality of the latter grade. Thus, whereas in the beginning there was a wide difference in value between the average quality of the "thick smooth" grade and the "select" which might have justified the

Questions
10 per cent premium the improvement of the "thick smooth" grade tended to narrow the difference in value to a point below 10 per cent. The premium which we believe was always recognized as an artificial and arbitrary figure adopted for the purpose of encouraging improvement became more artificial as time went on.
2.	It was found if not impossible certainly impracticable to more than partially organize the sale of hogs by farmers in such a manner as to have each farmer paid for his hogs according to quality produced. As the whole object of the policy was intended to do just that thing, the whole effort was weakened to the extent that the plan failed to accomplish its object, i.e. the payment of the individual farmer for his hogs according to grade.
Other difficulties might also be cited, such as conditions at Montreal where because very few of the hogs were used for the British trade a scheme intended to operate mainly in connection with this trade was very difficult to apply and finally when applied functions only in an arbitrary manner and is practised only by a few of the total number of operators on the Montreal markets.
But in spite of the difficulties encountered the effect has undoubtedly been to direct the efforts of all farmers in Canada to the production of a better quality of hogs. Even in the districts where hogs never have been bought on grade the hope that by the production of a better article more money might be received for it has been a factor sufficiently strong to effect improvement. By modifications which would have placed price differentials on a more natural basis and by organization in other ways most of the difficulties that were encountered probably could have been overcome. But seven or eight months ago a catastrophe overtook our industry which could not be foreseen or the full effects measured until some months after it began to operate. It is now only too plainly evident that a number of factors working together have at least for the time being ruined our trade with Great Britain. It came so suddenly and its effects were so severe that before the exporting packing plants could determine what to do it had cost the packers several millions of dollars and resulted in a most severe drain on their finances.
During the greater part of the year 1925 and 1926 the margin between the cost of feed in America to produce hogs and their selling price
has been very wide, the profit over the cost of feed running from $7 to $10 per hog on a 200-pound hog. Thus even countries that had to buy their feeds from us could easily increase production and undersell us on the British market without loss and indeed, until lately, at a fair margin of profit. The general level of prices for bacon and hogs has been for years, excepting for short periods, quite high and this has encouraged such poor countries as the Baltic states of Europe to go into the bacon business.
But the main factors that brought about the sudden collapse of the market was due to causes that originated in Britain. These were the embargoing of fresh pork imports from Holland and the weakening of the purchasing power of consumers through the effect of the great coal strike. The embargo took effect in June and in the ensuing six months Holland turning from the fresh pork trade to cured bacon sent over 60,000,000 pounds to the British market. The Baltic states increased their exports during 1926 over 1925 by about 31,000,000 pounds. This flood of European bacon coming on top of the greatly weakened buying power of the people caused prices to collapse.
In the United States and Canada, however, hog prices did not follow the course of bacon prices in England. Hog production in the United States was away below normal and prices remained far above the relative values of bacon in England. It is this situation that has been the biggest factor of all in forcing Canada out of the English market. Packers hoped for some time that it could not continue and that the high prices for hogs in the United States would increase production, but there does not now appear to be any quick solution of the problem by this means.
For a short period during the early part of 1926 bacon prices justified high prices for hogs in Canada. It had been a common experience of our packers to have prices of bacon drop below hog values and then come back again. If packers were hopeful of the situation hog prices often did not follow these drops in bacon values. So after bacon prices began to drop in 1926 hog prices carried along at an unjustifiable level, creating excessive losses which might have been minimized if the progressive nature of the decline could have been realized at the start. Finally hog prices came into line with prices in the United States. But the decline in bacon prices was so great that the loss was as serious as ever.


TABLE OF PRICES
[Stage Direction]
Hog Prices	'	Loss or GainS.B.	Toronto T.S.	Cost of Wiltshire	Selling Price	Per Cwt$15 22	$13 88	131/-	115/-	*16/-15 00	13 69	119/-	122/-	t 5/-15 31	13 95	126/-	120/-	* 6/-16 27	14 83	127/-	127/-	16 43	14 96	133/-	112/-	*23/-15 42	14 08	125/-	120/-	* 5/-13 98	12 75	115/-	114/-	* 1/-14 19	12 94	116/-	111/-	* 5/-13 60	12 40	113/-	105/-	* 8/-11 82	10 79	101/-	95/-	* 6/-12 22	11 15	103/-	97/-	* 6/-12 98	11 85	108/-	87/-	*21/-12 70	11 57	106/-	95/-	*11/-*Loss	+Gain
Questions
[Stage Direction]
Thus the losses mounted with astonishing rapidity. Canadian packers loath to abandon their natural market held on long after they should have curtailed their shipments. Finally, their finances drained to the limit, they have had to almost abandon the British market, at least for the present. With the collapse of the British trade, packers have been forced to seek other markets, mostly in the United States. But in these markets our special type of hog receives no special consideration. Temporarily the select bacon grade when used for its special purpose, the British trade, sells at a greater loss than the other grades when they are used in the domestic trade or exported to the United States. In the domestic trade both the " select bacon " and the bacon type " thick smooth " hogs are superior to the fat type and poor quality thick smooths and the other grades. In the United States markets there are practically no differences in value for any of our grades of hogs, except of course, roughs, sows and stags.
Thus 10 per cent premium, always artificial, and even with normal conditions in the British market, becoming somewhat difficult, has now become impossible except under special conditions. Where production conditions are such that the percentage of shops, heavies, etc., allow of deductions that balance the premium the system though not justifiable might possibly be maintained were it not for the export of hogs to the United States. Buyers for these markets not being able to realize any difference in value for the different grades avoid offerings of hogs with any considerable percentage of " selects " or pay a flat price for all grades. In the district and for the shipments of hogs having the biggest percentage of " selects " the greatest difficulties have arisen. It must be recognized that where the biggest percentage of " selects " are produced the hogs as a whole are of superior quality, so that hogs in these districts really are worth more for the domestic trade. But while this is true, nevertheless it is largely a fact that the bigger the percentage of " selects " the bigger the loss to the export packer if paid for on grade. Thus in Ontario where the biggest percentage of "select" hogs are produced and which is also in close proximity to the high priced eastern United States market at Buffalo the situation has been most acute and the buying of hogs on grade has largely collapsed. The effect of flat buying in competition with a certain amount of buying on grade has been to produce unfortunate anomalies. The hogs of southwest Ontario are from the standpoint of our domestic market our poorest hogs, but are accepted on the Buffalo market at the highest price for their weights of that market. Prices for Ontario hogs are largely being based on the price of southwest Ontario hogs and " thick smooths " throughout the rest of Ontario must be merely equal to the flat price of " southwest " hogs. Thus the extra cost of selects is badly out of line with the general value of products. In the west the same condition exists but because the percentage of selects is generally low and the " outw'eight " grades comparatively high it has been possible to maintain to a great extent an artificial condition.
What then i3 to be done about it? There does not appear to be any prospect of a quick return of normal production in the United

States. There is also the possibility that the corn borer will make serious inroads in the United States corn belt within the next four or five years. The Baltic states of Europe will undoubtedly try hard to maintain their output. Poland has a population of about 28,000,000, largely agricultural, which must be reckoned with. Holland being a dairy country will continue a very considerable hog production and there is no reason to suppose that she and Denmark will not be able to maintain their present efficiency.
On the other hand sooner or later Europe and America must arrive at corresponding levels of prices for hogs and pork products. Before the war our European competitors were large producers of hogs, a great part of the products being absorbed by Germany, France and Austria. As these countries return to norma] industrial activity this condition must eventually return. After all hog production cannot exceed grain production. Formerly Denmark, Holland. Sweden and Germany purchased much of their hog feeds from Russia, Transylvania and Roumania. If any of these countries now go into hog production it reduces the grain available for export. It does not seem that Europe, unless it increases its grain production, can as a whole greatly increase its hog production. Temporarily the British market may be loaded with European product. Lastly, it does not appear that the United States will for some years at least be a natural market for our hog products. When normal production returns they will not longer want our hogs. If our hogs at any time are a menace to the United States farmers they will probably close them out by raising the tariff. We now have to pay a duty of i cent per pound on live hogs, J cent on fresh pork and 2 cents on processed pork. Thus our prices have to trail after the United States prices and if prices in the United States go down to something near their cost of production they will be below our costs which will force us to return to the British market.
So at least until the time comes when we can see the future more clearly we cannot afford to lose sight of the British market. Up to the present time almost the total burden of the struggle to maintain connection with that market has fallen on the packers. Are our farmers prepared to do something to maintain the possibilities of a return to that market? All that is required is to continue the present policy of breeding the bacon hogs. This will not cost anything as our hogs will sell at least on a par with the American hog. Suppose that at the worst the bacon bred hog brings no premium, by maintaining his blood lines the farmer will be able to return to the British market whenever the time is opportune.
It was to be expected that the artificial means set up in 1921 to accomplish a specific purpose would eventually have to be placed on a natural basis. Eventually each grade of hogs would have had to seek their real level of value whatever that level was and the plan would have had to be modified to establish natural conditions. If our normal markets had been maintained this could almost certainly have been done to considerable advantage to the industry. But it must be recognized that there is now a serious danger of making a change because the change cannot but be dras-

Questions
tie in its working. For these reasons packers have given months of consideration to the matter. It is greatly desired to retain graded buying to as great an extent as possible. But it is also recognized that it is useless under present conditions to try to set up anything even of a modified kind of artificial arrangement. Therefore, it is proposed that the grading be continued and each grade be priced according, to its value. If the bulk of our surplus hogs or their product is exported to the United States any differentials between the grades will have to depend on the values established by the domestic market. If the British trade returns the high class bacon hog will return to its own. In the meantime the bacon hog blood can be retained and increased without any sacrifice by our farmers.
The Dominion Department of Agriculture has assumed a great responsibility and work in connection with the grading of hogs, and the popularizing of the bacon hog ideal. The Provincial Departments of Agriculture have given most valuable ami able cooperation. It is fitting at this time that full credit should be given to the officers who have been engaged in the enterprise of building up the quality of our hogs. Confronted with this new situation the task of these bodies in continuing improvement work may be more difficult, but in view of the possibilities of the future the woi'k, is we believe. still of utmost importance. It is unfortunate that such changes as eventually would have been necessary in the grading plans could not have been worked out at a time when market conditions permitted a clearer view on which to formulate policy, but as we are dealing with conditions beyond our control we think it must appeal to the judgment of everyone that the only sound policy is to put into operation a system that is and will be sound under any conditions that may arise."

Mr. MILLAR:: 1.	What is meant exactly by a restricted area for bovine tuberculosis?
2.	How many such restricted areas are there in Canada?
3.	Where are they located?
4.	How many cattle are there in each of these restricted areas?
5.	How many reactors were found on the first test?
6.	What percentage of cattle tested reacted to the first test?
7.	What was the cost of compensation in each area in the first test?
8.	How frequently are the cattle in such areas retested?
9.	What are the advantages of such areas?
10.	Has the government in mind the establsh-ing of any more of these restricted areas?
11.	If so, where?
12.	If so, when?
13.	What are the rates of compensation paid for slaughtering animals?
14.	Is compensation paid for all reactors?
15.	Does the province or the municipality play any part in the bringing of an area under this policy?
16.	Who pays compensation for reacting cattle that are slaughtered?
17.	Are there any such areas in the United States, and how is compensation paid there?


Hon. Mr. MOTHERWELL:: 1.	A restricted area is a definite specified territory constituted by order-in-council a quarantined area in so far as bovine tuberculosis is concerned for maintenance as a bovine tuberculosis free area.
2.	Six.
3.	(a) The province of Prince Edward Island; (b) The parish of Manor Sutton in the county of York and the parish of Flume Ridge in the county of Charlotte, in the province of New Brunswick; (c) The counties of Beauhamois, Chateauguay and Huntingdon in the province of Quebec (d) The municipalities of Roland, Dufferin, Thompson and Grey in the province of Manitoba; (e) The municipalities of Longlaketon, McKillop, Millington, Last Mountain Valley, Mount Hope and Wreford, in the electoral district of Last Mountain in the province of Saskatchewan; (f) An area of approximately 5,600 square miles extending from the gulf of Georgia to Agassiz, bounded on the south by the international boundary and on the north and east by the Dominion railway belt, in the province of British Columbia.
4.	5, 6, 7.
No. of cattle	No. of reactors	Percentage of	Compensationin area	at first test	Reactors	PaidP. E. I. area	.... 94,772	561	0.59	$ 14,194 00N.B. area	
2,642	20	0.76	513 33Quebec area	.. .. 52,446	4,172	7.95	150,785 00Manitoba area	
22,892	1,306	5.7	43,062 00Saskatchewan area ..	.. .. 21,417	176	0.8	5,240 00B.C. area	46,174	3,643	7.9	124,010 008.	This depends upon the percentage of infection in an area; the greater the infection the more frequently are general tests conducted.
When the infection has been reduced to less than one per cent an interval of three years may occur between general tests.
Questions

9.	The advantages of such areas include all those resulting from the maintenance of healthy cattle. As all cattle in an area are tested, all reactors destroyed and all infected premises cleansed and disinfected, a clean area is provided for the healthy cattle, and infection of'clean herds reduced to a minimum.
10.	Yes.
11.	The government's object is to establish a restricted area in each province and to gradually increase these areas. Their location will depend upon the applications which may be received.
12.	At any time the necessary funds are available.
13.	Maximum compensation for a grade animal is $40 and for a pure bred $100.
14.	Compensation is not paid for reacting grade bulls, steers, nor for reacting cattle with lumpy jaw, but is paid for all other reactors.
15.	The regulations provide that applications may be made to the Dominion Department of Agriculture, by the Minister of Agriculture of the provincial government, stating that the province is desirous of federal aid in the eradication of bovine tuberculosis from a restricted area, upon and subject to the provisions of these regulations. The provincial government must agree to assist in the enforcement of the regulations by conducting prosecutions of persons accused of obstructing, or refusing to assist federal inspectors engaged in the work of testing cattle, and of persons who in any way refuse to obey the regulations,
16.	The Dominion Department of Agriculture.
17.	Yes. They are termed modified areas. Have no definite information regarding manner in which compensation is paid, but understand the state, county and municipality contribute.


LEAMINGTON POSTMASTER
Mr. GOTT:: 1.	Has the Postmaster General recently dismissed or caused to be dismissed, Major W. G. Gidley, postmaster at Leamington, Ontario?
2.	If so, what charges were preferred against him, and by whom?
3.	Was he given any chance to defend himself of the charges made?
4.	If it could be proven that the charges were false and without foundation, would the department consider reinstatement?
5.	Is the appointment of his successor permanent ?
6.	Who was appointed in his stead, and on whose recommendation?
7.	.Has a petition reached the department protesting against his dismissal?
8.	What salary was paid the former postmaster ?
9.	When was Major Gidley appointed?

10.	Has proficiency at the Leamington post office been increased during his term of office?
11.	What were the general reports on the work of the deposed official?
12.	Was any investigation made locally at Leamington, or inquiry made following charges against Major Gidley, and if so, who advised and submitted reports on which the department saw fit to act?


Hon. Mr. VENIOT:: [DOT]
1.	Yes.
2.	A petition bearing 37 signatures was received complaining (a) of postmaster's refusal to distribute prepaid mail matter during last provincial election (b) of lack of courtesy towards public.
3.	Yes.
4.	Yes.
5.	Temporary only-pending Civil Service Commission's selection.
6.	Sam French, on the rebommendation of 'the Postmaster General.
7.	Yes.
8.	Salary and allowance (1926-1927) $6,224.74, out of which he pays his own staff.
9.	26th July, 1920.
10 and 11. Inspection of 29th May, 1924-post office rated very good. Inspection of 10th February, 1925-post office rated good. Inspection of 14th April, 1926-post office rated good.
12.	Yes. Investigation made by local inspector and report submitted by district superintendent, London.


HOME BANK LIQUIDATION
Mr. SPENCER:: 1.	How many shareholders had the Home Bank when it went into liquidation?
2.	How many of these met their double liability?
3.	What was the aggregate par value of the total shares?
4.	To what amount did the shareholders meet the double liability as called for under the Bank Act?
5.	What expectation is there of collecting the balance due under the said act?


Hon. Mr. ROBB:: 1. 1,686.
2.	835 in full.
3.	$2,000,000.	.
4.	$756,765.52 paid to date.
5.	The liquidators believe that a further substantial sum-uncertain in amount-will be realized.


POSTMASTERSHIP AT NEW ROSS, LUNENBURG
Mr. ERNST:: 1.	Was W. S. Barkliouse of New Ross, county of Lunenburg, granted a certificate by the Civil Service Commission for appointment to the postmastership at New Ross aforesaid, in or about the year 1925?

Questions
2.	If so, what was the exact date of the grant of such certificate?
3.	Was W. S. Barkhouse appointed to said postmastership ?
4.	If not, upon whose recommendation was such appointment refused?
5.	What charge or charges were brought against Mr. W. S. Barkhouse's appointment?
6.	By whom were such charges preferred?
7.	Was Mr. W. S. Barkhouse advised of such charges and was he given an opportunity to answer them?
8.	Ts the present postmaster at New Ross a returned soldier?
9.	Is W. S. Barkhouse a returned soldier?


Hon. Mr. VENIOT:: 1.	Yes.
2.	1st April, 1925.
3.	No.
4.	5 and 6. On representations made by government candidate for constituency, and Mr. Samuel Hiltz of lake Ramsay to the effect that Mr. Barkhouse did not possess the confidence of the community, that he was not suitable and should not be entrusted with the management of the office.
7.	No.
8.	No.
9.	Yes.


QUALIFICATIONS OF AVLATION OFFICER
Mr. PARENT:: 1.	What are the necessary qualifications to become an aviation officer?
2.	In whom rests the authority of deciding the qualifications required by the candidates?
3.	What is meant by commission of B. App. Sc.


Hon. Mr. RALSTON:: 1.	(i) Be a British subject.
(2)	Medically fit for air force service
as a pilot	'
and in addition
(3)	Held a commission in the Royal Air Force.
or
A cadet of the Canadian Officers' Training Corps who has performed the requisite qualifying service and passed the practical examination for certificate "A" Canadian Officers' Training Corps.
Following a course of study as an undergraduate leading to a degree in applied science.
Unmarried.
Under 21 yeans of age at the commencement of the course.
Recommended by the military committee of the university as likely to become an efficient air force officer.
Give an undertaking to complete the whole course, both at university and the R.C.A.F. training station.
Have passed tlhe approved tests and examinations.
Be recommended for a commission by the honourable the Minister of National Defence and gazettement approved by the governor general in council, or
Be a first year student of the Royal Military College, who is recommended by the commandant as likely to become an efficient air force officer, or, a second year student of the Royal Military Qo-llege who undertakes to continue air force training after graduation from the Royal Military College, and who is recommended by the commandant as likely to become an efficient air force officer.
Be over seventeen years of age on January 1st, in the year of the commencement of the course.
Give an undertaking to complete the whole course.
Have passed the approved tests and examinations.	,
Be recommended for a commission by the honourable the Minister of National Defence and gazettement approved by the governor general in council.
2.	The Minister of National Defence.
3.	B. App. Sc. is the abbreviation for Bachelor of Applied Science.


CANADIAN NATIONAL RAILWAYS-ROLLING STOCK
Mr. CANTLEY:: 1.	What number of refrigerator and stock cars not the property of the Canadian National Railways were employed in the movement of fruit, vegetables, fish or live stock within the provinces of British Columbia, Alberta, Saskatchewan, and Manitoba during, (a) the calendar year 1926; and (b) the months of January and February, 1927?
2.	At what points did such cars enter Canada?
3.	What was the number of such cars in Canada, February 28, 1927?
4.	Where were such cars built, where owned, and by what company or corporation?
5.	On what terms and at what cost were such cars secured for operation in the train service of Canadian National Railways?
6.	What was the total amount paid as rental or hire of such equipment during the years 1925 and 1926?
7.	What duty, if any, was paid on such railway cars?


Mr. SPEAKER:: Dropped.
Unopposed Motions jor Papers


QUESTION PASSED AS ORDER FOR RETURN
Mr. LAVIGUEUR:: 1.	What number of civil servants have been appointed each year since 1921 by the Civil Service Commission, to higher salaries than $2,400?
2.	How many are French Canadians?
3.	What is the total number of appointments made by the Civil Service Commission for each respective year since 1921?


UNOPPOSED MOTIONS FOR PAPERS
Henry Elvins Spencer: For a copy of all letters, telegrams, documents and other correspondence between the government of Canada and the meat packers of Canada with regard to the grading of hogs, payment of the ten per cent premium and the grading of bacon and for any report or reports submitted by the packers on the present marketing situation.


LEAMINGTON POSTMASTER
Mr. GOTT:: For a copy of all correspondence, letters, telegrams, reports, recommendations, communications or other documents of any kind pertaining to the appointment, connection and dismissal of Major W. G. Gidley, recent postmaster of the town of Leamington, Ontario, and the appointment of his successor.


INSPECTOR OF CUSTOMS, CALEDONIA, N.S.
Mr. ERNST:: For a copy of all letters, telegrams, documents and other correspondence between the Department of Customs or any officials thereof, and officials of the Customs department in the province of Nova Scotia, or any other person or persons, whether officials of such department or not, relating to the discharge of George Banks of Caledonia, in the county of Queens-and province of Nova Scotia, as inspector of customs at the said place, and the appointment of his successor.


WEST RIVER STATION POSTMASTER
William Gordon Ernst: For a copy of all letters, memoranda, telegrams, reports and other documents or correspondence relating to the post office at West River Station, Nova Scotia, and the dismissal of Colin Mackenzie as postmaster thereof.


William Lyon Mackenzie King: I do not abject to the passing of the motion, but I desire to point out that according to the terms in which it is worded it does not relate to correspondence with any department of the government. It is broad enough to include correspondence with anyone. It reads, "Correspondence relating to the post office at West River Station." That may mean with the
fMr. Speaker.]
Public Works department or any other department. I think my hon. friend has reference only to correspondence with the Postmaster General.


William Gordon Ernst: I am quite willing to have
the motion corrected. I want only the correspondence with reference to thle dismissal of Colin Mackenzie.


William Lyon Mackenzie King: Correspondence with the Postmaster General?


William Gordon Ernst: Yes.


[Stage Direction]
Motion agreed to.

Mr. GARDINER:: For a copy of the records of the conference of packers, government officials and others, held in 1921, including discussion relating to hog grading, the ten per cent premium, bacon grading and resolutions.


EMPLOYMENT OF DISABLED VETERANS
[Stage Direction]
On the Orders of the Day.
Robert James Manion: I
desire to ask the Postmaster General a question. I have received-and I think a number of other hon. members of the House have also received-telegrams and letter of various lengths and from various parts of the country, from war veterans associations and amputation associations, protesting against the proposed order that no amputation cases shall be allowed to sit for examinations to qualify for positions in the Post Office Department, the reason being that the efficiency of the post office service would be impaired by employing disabled men. While there is a question on the order paper in the name of the hon. member for London (Mr. White) in regard to this matter, I think the question is of such importance that it is worthy of notice at the present time, and I hope that no such unfair rule wiE be put into force.


Peter John Veniot: I am preparing an answer to be submitted to the House. There is a misunderstanding in certain respects, regarding this matter and I wish to have the answer properly prepared so that it will be fully understood when it is submitted to the House.


PENSION LEGISLATION
[Stage Direction]
On the Orders of the Day:
Leland Payson Bancroft: Mr. Speaker, I should like to draw to the atten-

Pension Legislation
tion of the government the following telegram :
Understand government has announced no pension legislation. Ask you impress government Legion amendments important, need immediate attention. Surely men who gave their health for Canada important as Georgian bay canal.
I want to ask the Minister of Soldiers' Civil Re-establishment (Mr. King) if it is not possible for the government to reconsider their decision and bring down amendments to the act along the. lines suggested.


Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: Mr. Speaker, I miade a statement on Friday regarding the government's position in relation to amendments to the Pension Act at this session. I then indicated that the resolutions and data 'brought before me by the various returned soldier organizations covered a very large field, and that it did not seem possible to give them the consideration that they should have while parliament was in session. But I did intimate that although the government could not consider extending the principles upon which pensions are granted, they had under consideration amendments to the Pension Act, and I suggested there would be several amendments introduced when Bill No. 234 is again in committee. I suggested, for instance, that it was my purpose to move an amendment extending the time from seven to nine years during which claims for pensions might 'be received. It is also proposed to bring in an amendment that where new evidence has been secured within a year, and placed before the Board of Pension Commissioners, there shall be a rehearing of the appeal. These amendments will be introduced when Bill No. 234 is again under consideration.


Mr. N. M. YOUNG (Toronto Northeast):: Mr. Speaker, in spite of the statement made by the Minister of Soldiers Civil Re-establishment, may I call his attention to two telegrams which I have received. The first is dated April 2 and states:
North Toronto branch Legion urgently requests that effort be made to get through returned soldier legislation this session.
Harold Bretjls.
The second telegram is dated April 3, and is as follows:
We note with considerable alarm that the government has stated that no pensions or other soldier legislation will be considered before parliament prorogues. Are those responsible for this action prepared to accept the blame for the unnecessary hardship and suffering now
borne by those in dire need of remedial legislation. We ask. Sir, your prompt action and support in bringing the recommendations of the Canadian Legion before the present session. Thanking you for your past activities in the interests of justice and fair play,
Respectfully yours,
T. Holloway, president Western Branch Post 49, tuberculosis section Canadian Legion British Empire Service League.
In the course of his statement the minister called attention to the lengthy memorandum he had received from the representatives of the returned men. This memorandum has been in the minister's hands for a considerable time, and I think some legislation should be brought down this session to give effect to the proposals therein put forward when Bill 234 is again before the House. I draw these telegrams to the attention of the minister in the hope that he may reconsider his decision at the earnest request of these returned men.


Mr. G. H. PETTIT (Welland):: Mr. Speaker, I wish to inform the government that I also have received telegrams from all the posts of the legion in my constituency complaining of the delay on the part of the government in connection with bringing down the legislation just referred to, and respectfully urging the government, if possible, to do what they can to take action during this session.


Mr. JAMES ARTHURS (Parry Sound):: The minister a few days ago stated that a number of these complaints regarding pensioners could be taken care of by the meritorious clause. Has he given any special attention to that clause, or has any particular effort been made to meet any of the cases under that regulation?


Mr. KING (Kootenay):: A number of cases have been settled under that regulation.


James Arthurs: How many?


John Warwick King: I do not know, but a number have been disposed of.


James Arthurs: A considerable number of these cases might come under that regulation.



PRIVILEGE-MR. CAHAN

[Stage Direction]
On the Orders of the Day:
Mr. C. H. CAHAN (St. Lawrence-St. George):: Mr. Speaker, as a matter of privilege, although not very important, I wish to refer to the remark of the Prime Minister on Thursday last that he had grave doubts as to tKe accuracy of the statement which I then made with regard to dissolution being refused to Mr. Asquith and subsequently
Privilege-Mr. Cahan

granted to him. I have not had an opportunity of visiting my own library, but I have communicated with one of my household, and I find that the source of my information was the memoirs of Sir Almeric Fitzroy, then Clerk of the Privy Council. In the second volume at pages 422 and 423 he refers to the incident of His Majesty the King at first refusing Mr. Asquith's demand for dissolution and subsequently granting it. Also among my private papers there is a note as to Mr. Asquith's speeches of December 18, 1923, and May 24, 1924, which were published in the English papers at the time. As to the reference I made to a dissolution having been granted to Mr. Ramsay MacDonald at the close of nine months of his regime, after he had been defeated some ten or a dozen times in the House, I find the source of my information is an attorney of very considerable eminence who was writing in a friendly discussion as between two who were interested in the same constitutional question. But as the correspondence is marked "personal" I shall have, at a later date if possible, to give with more precision the source of my authority for the statement. With regard to it there may be some doubt in view of the contention of the Prime Minister. As to the other statement, it seems to me that the memoirs of the Clerk of the Privy Council at the time of Mr. Asquith's premiership places it beyond doubt.


Mr. POITLIOT:: It is a very interesting
speech, but it is too short.


Some hon. MEMBERS:: Order.


William Lyon Mackenzie King: My hon. friend will see on referring to Hansard that my interruption related to his reference to the dissolution granted to Mr. Ramsay MacDonald, not to his remarks with respect to Mr. Asquith. My hon. friend has been kind enough to show me the memoirs to which he referred, and I told him that I thought they were somewhat inconclusive. However, I do not wish to question his statement on that point; but as to his remarks on the dissolution granted to Mr. MacDonald, I have no hesitation in saying that I believe he has not been correctly informed.


Charles Hazlitt Cahan: Possibly.



NORTH HURON VACANCY

[Stage Direction]
On the Orders of the Day:
Mr. E. J. GARLAND (Bow River):: Mr. Speaker, I will not ask the government why

the writ has not been issued for an election in North Huron, but will confine myself to the question: When may we expect the writ to be issued?


William Lyon Mackenzie King: Mr. Speaker, this parliament passed a law some time ago requiring writs to be issued within six months of the time a constituency had been declared vacant. I am pleased to inform my hon. friend1 that the writ will be issued within that time.


Edward Joseph Garland: I hope they will keep within the law at least.



CIVIL SERVICE SALARIES-REVISION

[Stage Direction]
On the Orders of the Day:
Mr. JOHN EVANS (Rosetown):: Mr. Speaker, I should like to bring to the attention of the government that I have received a number of protests from Amalgamated Civil Servants protesting that a number of those in the lower classes will not get the benefit of the $120 increase resulting from the recent salary revision. The salaries of these lower grades, it is said, are already below the cost of living line. I would therefore ask the government to reconsider the revision so that these grades will get consideration.


William Lyon Mackenzie King: Mr. Speaker, I will have to direct the attention of the hon. Secretary of State (Mr. Rinfret) to my hon. friend's question, and ask him to reply to it when he is next in his seat.



NOVA SCOTIA REPRESENTATION-EXTRA MEMBER

[Stage Direction]
On the Orders of the Day:
Hon. W. A. BLACK (Halifax):: Mr. Speaker, I should like to ask the Secretary of State- I see he is not in his seat, but my question can be transmitted to him and perhaps he will answer it to-morrow-as to whether or not he has received any communications from Halifax with regard to an extra member for the province of Nova Scotia; and if so, what action the government proposes taking in the matter.


William Lyon Mackenzie King: Mr. Speaker, I might
answer my hon. friend's question. I believe a communication of the purport to which he refers has been received and is now under consideration; as to the action to be taken in regard to it, I am afraid it will not be possible to give a definite reply this session.

C.N.R.-Eastern Freight Rates



INQUIRY FOR RETURNS

[Stage Direction]
On the Orders of the Day:
Mr. GEORGE BLACK (Yukon):: I repeat my request, made over a week ago to the Postmaster General (Mr. Veniot), to expedite a return ordered by the House on February 2S last in relation to the post office at Pelly, in Yukon territory.


Peter John Veniot: I will have the return tabled to-morrow.


George Black: I also request the
Minister of the Interior (Mr. Stewart, Edmonton) to be good enough to expedite the return to an order made on March 9 last in connection with the appointment of a person to fill temporarily the position of mining recorder at Mayo, Yukon. The return could be prepared in a few minutes.


Hon. CHARLES STEWART (Edmonton, Minister of the Interior):: I will see that it
comes down.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved the second reading of Bill No. 224, respecting the Canadian National Railways and the tariffs of tolls to be charged on certain eastern lines.
Robert Gardiner: Explain.


Mr. DUNNING:: I am quite willing to
make a brief statement now regarding the bill, but I presume that hon. members would much appreciate the opportunity of crossexamining me in committee. I suggest therefore that we allow the bill to get into the committee stage, when I shall be able to deal with it in detail. That would be the better course unless there is a desire that I should make a speech, which I feel sure is not wanted.


Robert James Manion: How does my hon. friend
feel about it himself?


Charles Avery Dunning: I am not particular.


Robert Gardiner: I am rather surprised
that the Minister of Railways has not given some explanation of this proposed legislation.


Charles Avery Dunning: I am ready to give it
right now if my hon. friend will sit down. I would rather make a speech than take criticism for not making it. I thought that every member of the House was sufficiently familiar with the subject of the much discussed Duncan report to have studied the relationship
of this particular bill to the recommendations of that report with respect to freight rates, and to be prepared therefore to discuss the details of the bill as they arose in committee. However, I am very glad to make a general statement with regard to the matter.
As hon. members know, the royal commission appointed by the government with respect to maritime claims, comprising Sir Andrew Rae Duncan, the Hon. W. B. Wallace and Professor Cyrus MacMillan, reported upon those claims, among the most important of which is the matter of freight rates. The commission found, as set out in the preamble to the bill we are now discussing, that certain national, imperial and strategic considerations prevailed with respect to freight rates in the maritime provinces which were not present in relation to freight rates in the rest of Canada. They also found-here I am paraphrasing the report- that these considerations had been adequately met up to 1912, when increases in the freight rate structure in the maritime provinces came into effect, and that since that time these rates have been continued up to the present moment. As a matter of fact, from time to time they have been increased along with the changes made in the freight rate structure of the rest of Canada. The Duncan commission report that the recommendation which they make, to be found at page 22, is in their estimation as fair a measure of these national, imperial and strategic conditions as can be suggested and that it will have the effect particularly of restoring in the maritime provinces the parity of rates which the people there enjoyed prior to 1912. That is to say by the action proposed by the commission the relationship of freight rates in the maritime provinces to freight rates in the rest of the Dominion would be made approximately the same as it was prior to 1912.
Let me read exactly what the commission propose:
We recommend, therefore, that an immediate reduction of 20 per cent (so that 192 will become approximately 155) be made on all rates charged on traffic which both originates and terminates at stations in the Atlantic division of the Canadian National Railways (including export and import traffic, by sea, from and to that division), and that the same reduction be also applied to the Atlantic division proportion of the through rates on all traffic which originates at stations in the Atlantic division (excluding import traffic by sea), and is destined to points outside the Atlantic division.
For this purpose, we cannot regard the Atlantic division as ending at Riviere du Loup and Monk, which are its present western limits. The divisional points should, in our view, be

C.N.R.-Eastern Freight Rates
Diamond Junction and Levis, Diamond Junction being the point at which the Transcontinental railway meets the old Intercolonial railway and Levis the point to which, in 1879, the Intercolonial railway was extended.
The bill mow 'before the House meets that recommendation except in two particulars to which I shall now refer. The recommendation of the Duncan commission might be taken to imply that the reduction of 20 per cent might apply upon through rates from the maritime provinces to the United States. The legislation before the House does not provide for the reduction to apply upon the Atlantic division proportion of international rates. I shall be pleased when the bill comes 'before the committee to go into the reasons in detail as to why we could not include that in the bill. I may however state now, on the second reading that in our opinion the people of the maritime provinces would not receive any benefit from such provision had it been incorporated in the bill. I shall be glad to go into the matter more fully and give the details at greater length on the particular section of the bill when in committee.
The other omission, if omission it can be called, is that the 20 per cent reduction will not apply upon goods coming from overseas through maritime ports for distribution within the maritime provinces. That matter raised grave discriminatory questions affecting traffic coming through our ports destined to further western provinces, and the government could not see its way clear to give a 20 per cent reduction on import rates to that part of Canada which is already closest to the port through which the goods are imported. It would create a discrimination against the rest of the country, and in committee I will give the figures to indicate to our maritime friends on both sides of the House that the amount involved in the import rates is, from their point of view, very small indeed, while to make this concession would be establishing a principle which I doubt very much could be defended in this House.
The Duncan report then goes on to recommend the manner in which the relief extended should be borne. At page 22 of the report will be found the following:
The cost of this relief should be definitely borne by the Dominion government, who will make the necessary reimbursement to the Canadian National Railways through the medium of the Canadian National Railways budget, without impairing the financial results of the operation of the system.
To carry that out provision is made in the bill that the deficit on the Atlantic region which by tihe terms of the bill is extended to Diamond Junction and Levis, as recommended,

shall be kept separately and a separate item introduced in the railway budget each year to cover that deficit. Then the Duncan report goes on to say:
We are not overlooking that the other great railway system operating in the area would be entitled to equitable consideration if they find themselves prejudiced as a result of the reduction proposed.
That is a very easy way for a royal commission to escape the solution of a very difficult problem; it is very simple phraseology, but the solution is not so simple. In the first place there is not only the other great railway system to consider but in addition there are at least half a dozen other railway corporations within the area dealt with by the royal commission with respect to freight rates. I do not know that I can remember off hand their different names, but there are at least six other railway corporations which would undoubtedly be prejudiced or affected in their operations by this legislation if some machinery were not set up to take care of them.
This matter is covered in section 9, which relates not only to the other great railway corporation mentioned in the report of the commission but also to all the other railway companies operating within the area which is described as select territory for the purpose of legislation. I should say in this regard that I believe that as a result of this legislation it may be necessary for us to give consideration to the acquisition of some of these lines now being separately operated in the area from Levis and Diamond Junction to the Atlantic ocean as a part of the National system. That is a matter on which we cannot see clearly at present; it will of course require experience for us to determine the effect this legislation will have upon these various enterprises and upon the service which the people in the various districts served by these lines are receiving. That, however, is a matter not dealt with in this bill, but which I know will be raised by some of the members from the various districts concerned.
I do not know that there is anything else I need say on the second reading of the bill except to commend it to the tender mercies of the House as the first instalment-and a very large instalment-of the government's policy in implementing the recommendations of the Duncan commission.


Mr. R. B. HANSON (York-Sunbury):: Mr. Speaker, I desire to make a few brief observations on the second reading of this bill, and in so doing I wish to approach consideration of the problems involved in a very sympathetic manner. In the first place I should like

C.NJl.-Eastern Freight Rates
to observe that this is the first legislative fruit of an agitation which has been going on in the maritime provinces for a considerable period of time, and which resulted from the great economic depression which made itself felt there immediately after the end of the war. I believe that depression was greater in extent in the maritime provinces than in any other portion of Canada, although the rest of the Dominion suffered in common from the economic developments following the cessation of hostilities.
The first manifestation of this economic development was in the federal election' of 1921, when a solid Liberal delegation was returned from Nova Scotia. I may say in passing that I do not propose to treat this matter from 'the standpoint of party politics, although from statements made by the Prime Minister announcing this legislation and from the action of a small body of Liberal politicians in New Brunswick it may be necessary to revert briefly to the political aspect. As .1 say, the economic depression in the maritime provinces made itself manifest in the result of the general election in 1921, when the province of Nova Scotia sent a solid delegation of sixteen members to support the present Prime Minister; when the province of Prince Edward Island sent a solid delegation of four members to sit behind the Prime Minister and when the province of New Brunswick practically divided. It is my considered judgment that had that large delegation, knowing the economic conditions which obtained in the maritime provinces at that time, pressed upon the government of the day those considerations which were subsequently brought to their attention by gentlemen representing the maritime provinces from this side of the House, it would not have been necessary to wait five years for the legislation brought down to-day, and we could have avoided five years of depression with the consequent loss of earning power, prosperity and economic manhood and womanhood. Because of the failure of those gentlemen representing the maritime provinces in the fourteenth parliament of this country, grave dissatisfaction arose in that pant of Canada. The first result of that dissatisfaction was shown in the Halifax by-election, after which came the Kent by-election and finally the general elections of 1925. I claim, Sir, that this legislation brought down to-day is the direct result of the action of the people of those provinces in the year 1925. Be that as it may, I think history will accord to those gentlemen who took up the flaming torch of maritime rights
during those years the credit which is their due, notwithstanding what may have been said here, there, or elsewhere.
The greatest need of the maritime provinces undoubtedly is in connection with this very question of transportation; on that I think we all agree. I think I can safely say that there is a certain degree of satisfaction felt by all parties representing those provinces in the bill immediately under discussion, and I say that as fairly as I possibly can. I must also say, however, that the people down there will find themselves very much disallusioned when they learn what has been authoritatively stated by the Minister of Railways (Mr. Dunning) to-day, that these rates do not apply to international shipments. Speaking for the producers of New Brunswick, I can say that by far the greater volume of the tonnage shipped over our railways is international tonnage, consisting of pulp, pulp-wood, lumber and the products of our fields, particularly potatoes. I do not refer especially to fish because we do not export so much of that commodity from the province of New Brunswick; that is a matter more particularly affecting Nova Scotia. I do know of one company in the province of New Brunswick which makes a daily shipment of at least two train loads of forest product, and that industry will not be benefited to the extent of one dollar by this legislation. For that reason I am sure there will be great disappointment in the maritime provinces when the people there come to realize that this legislation does not go as far as ithe Duncan report recommended, because if I recollect aright-and I have read the report on many occasions-there is absolutely no reservation on the part of the commissioners with respect to international freight rates. I know the reservation was made by the Prime Minister in his announcement. I think I know, at least I have heard, of some of the difficulties that the administration has encountered. It may be the case-and if so I do not wish to lay any blame on the administration- that those conditions have been insurmountable. But if that be the case, then it only adds to the disappointment of the maritime provinces in that particular respect. Speaking with perhaps an all too limited knowledge of the subject, I venture to say that, because of the omission of the reservation in the plan proposed by the Duncan commission, the maritime provinces will be robbed of at least one-half of the fruits under this particular head. I understand that there is no control by any judicial body-

C.N.R.-Eastern Freight Rates


Charles Avery Dunning: I missed what my hon, friend said iust now. Did my hon. friend say that by not getting the international freight rates, the maritimes would be robbed of one-half of the fruits?


Richard Burpee Hanson: That is my judgment. It may be erroneous.


Charles Avery Dunning: It is quite erroneous.


Richard Burpee Hanson: Weeks ago I asked the Minister of Railways if he would give me a statement of the probable cost to the treasury of Canada of the readjustment of rates proposed by the Duncan commission. Unfortunately, whether he could or could not do so, he did not give me the information which I sought. I concluded that for reasons connected with the administration or for some other good and sufficient reasons the hon. gentleman did not want to give that information.


Charles Avery Dunning: If the hon. gentleman
wiil permit me, I stated in the House only the other day, in response to a question asked, I think, by the hon. member for Bow River (Mr. Garland), that I had only just then received any reasonably accurate estimate and I gave it to the House.


Richard Burpee Hanson: I am glad to hear that. It escaped my attention. I am not making any criticism of or charge against the minister in that connection. But with respect to this particular matter I am satisfied, from the reports which I have received from those who are supposed to be in a position to know, that the large industries in New Brunswick will receive little or no benefit from this particular part of the legislation in question.
As regards the Duncan report in connection with the matter of transportation, there is another disappointment in regard to the new location of the Atlantic region, or shall I say the new geographical limitation imposed by the Duncan report and adopted by the government? There is very little tonnage originating in the maritime provinces destined for points north and northwest and within the new limitation of Diamond Junction and Levis. Practically all the goods that we ship west over the National railways are destined for points beyond Diamond Junction or beyond Levis as the case may be. As I understand the matter, the commission were not asked to fix Levis and Diamond Junction as the new delimiting points, although all agreed that Monk and Riviere du Loup were useless in that regard. But the new geographical limitation that was asked for repeatedly by the maritime provinces was the city of Montreal which was the western terminus of the Intercolonial railway in the year 1912. I have

not- yet heard from any authoritative source any good reason why the region was not expended. In the original inception of the regional idea there was never any good reason advanced why the western terminus of the Atlantic region was fixed at Riviere du Loup rather than Montreal. I want to tell the administration, as respectfully but as firmly as I have language to command in which to tell it, that the maritime provinces will not be satisfied until the Atlantic region for freight rate and administrative purposes is extended to Montreal, and that if we do not get that now-and I understand we are not going to get it now-we intend to keep up the agitation in the provinces in season and out of season for the extension of that region to Montreal. That was the terminus of the Intercolonial railway in 1912 and down to the time when subsequently to the act of 1919 it was merged with the National railways. I know I voice the sentiments of the people of the maritime provinces in that respect.
In connection with this freight rate matter as outlined in the bill another feature, which may be perfectly clear but which is not clear at all events to me, is in regard to certain railways to which the minister has alluded, which may or may not be affected by this legislation. I am referring now to the case for example of the Dominion Atlantic railway which begins and ends in Nova Scotia whidh, so far as I understand the situation, is not in competition with the Canadian National Railways, and which may not be affected by the terras of this bill. I propose however to leave whatever remarks I have to make and to reserve judgment on that point until we get the bill into committee.
In conclusion I say that in so far as this is a measure of justice to the maritime provinces, it is welcomed by the ipeople there and when the balance is struck the government will receive from the people of the maritime provinces whatever meed of credit is their due. At the moment I do not desire to say anything further. We welcome the legislation as a halfway measure for what we are to get, and I warn the government that this is only the first instalment of what the people of the maritime provinces want in matters of transportation and transportation rates.


Robert Gardiner: I appreciate very much the short statement which the Minister of Railways has made in regard to this particular piece of legislation. I had hoped that on the second reading of the bill, before the principle of the legislation was accepted by the House, the minister would have given a little further explanation than

C.N.R.-Eastern Freight Rates
he did. But we appreciate the explanation, which he has made because it gives us some intimation of what is intended. I do not want to criticize to any extent the remarks of the hon. member for York-Sunbury (Mr. Hanson). He has made the statement that this is only a part or portion of what the maritime provinces expect by way of legislation in order to assist them in their economic struggle.


Charles Avery Dunning: I understood the hon. member for York-Sunbury to say that with respect to transportation rates this was only a halfway measure.


Robert Gardiner: That makes the statement all the more ridiculous. I have a great deal of sympathy for the maritime provinces. Some two or three years ago I had the privilege of going through a part of the maritime provinces and, getting into close tduch with the people there, we were able to gather at first hand some information os to the disabilities under which they were labouring at that particular time. Since that occasion I have not had the privilege of being down in the maritime provinces, consequently I cannot say whether they have improved their economic condition since then. No doubt it probably has improved to seme small extent, if not to the extent that they would like.
This proposed legislation arises out of the report of the royal commission that was appointed last year to inquire into the question of the alleged maritime claims. The representatives of the maritimes who have presented their claims have stated on many occasions that the people of the maritimes were under a handicap or disability because of the fact that they had entered into confederation. As far as the report of the commission is concerned, it rejects that contention altogether. The commissioners state emphatically in their report that in their viewpoint that claim cannot be substantiated. Let me quote from the introduction to the report:
The outstanding fact, it seems to us, is that the maritime provinces have not prospered and developed, either in population, or in commercial, industrial and rural enterprise, as fully as other portions of Canada. We are unable to take the view that confederation, is, of itself, responsible for this fact. The trend and nature of economic development generally throughout the last sixty years has made !within the maritimes changes in the structure of business and employment which are unrelated to confederation, and which would have taken place whether or not the maritime provinces had been independent units outside of Confederation. Even within confederation there has been such a measure of responsibility resting on each
province for its own development that much at least of what has happened within the Maritime provinces must be related to their responsibility and not to the responsibility of the Dominion.
That is a very emphatic statement, Mr. Speaker, and it comes from the commission itself. They state that much responsibility lies within the maritime provinces themselves, that they themselves are largely responsible for the condition the}' are in to-day, and not the Dominion as a whole.
There is another quotation I wish to make from the report, and this is my last, dealing with the question of a general stocktaking in Canada, a review of the situation throughout the length and breadth of the country in order to see how the component parts of the confederation are progressing and ascertain their needs, if needs they have. On page 1 of the introduction to the report the commissioners state:
But reasonable balance is within accomplishment if there be periodic stocktaking. We venture to regard the present occasion as such a period of stocktaking, so that in the future progress of the common great enterprise the prospects of the maritime provinces may be brought into line with the prospects of other parts of Canada and the prospects of the Dominion as a whole.
I think every hon. member of this House will accord support to that statement. Realizing as we do how far-flung this country is, and its great diversity of interests, it is only reasonable to expect that once in a while a general stocktaking of the situation within Canada should be had in order to see how the component parts are progressing.
Coming to the proposed legislation, we find set out in the preamble, as the minister has already stated, certain claims. In the first place, the Intercolonial railway was built as part of the confederation pact. There is no question about that; no one denies it. The next claim is that this railway was built primarily for national and imperial reasons, together with the object of giving the manufacturers and traders of the maritime provinces a larger market in the central and western provinces of Canada. It is quite true that this railway was built primarily because of confederation. It is true also that the route it follows is a much longer route than probably would have been chosen if it had not been that the builders had to take into consideration national and imperial needs and the necessity for an outlet and inlet on the Atlantic seaboard.
But there is another question that is also important in connection with this railway. It is claimed that because of the course followed, the curvatures and the grades are not such



C.N.R.-Eastern Freight Rates
as will allow the railway to be operated with efficiency. That is a very important consideration which the proposed legislation does not take into account. This legislation does not make any provision for the elimination of these sharp curvatures and heavy grades, and consequently we are not going to have a railway which can be operated efficiently. This point should not be lost sight of in dealing with this important matter. But I will come back to that a little later.
It is claimed that the rates in the maritime provinces have increased to a greater extent than they have in other parts of Canada. That in a measure is true. We must remember that while there was an increase in certain classes of rates in 1912, there was also an increase in local rates in 1016, I believe, and I wish to deal with that a little more fully so that we may have these rates properly before us. I am going to take the time of the House for a few minutes to follow the rate structure from the earliest time of which we have any records down to the present, so that the House may understand the situation.
Following the opening of the all-rail route between Montreal and St. John, New Brunswick, the through rates from the maritimes to points west were made up of arbitraries over the Montreal rate. The earliest record is the tariff of 1891-1894, showing an arbitrary of 30 cents added to the Montreal rate to make the through rate to and from St. John. The record is not clear 'between 1894 and 1900, but during this period the arbitrary was reduced from 30 to 20 cents, and the 20 cent rate was continued until 1916, when in the eastern rate case it was raised to 24 cents.


Charles Avery Dunning: What record is my hon. friend quoting from as to rates? The railway during the period he speaks of was being administered by the then Minister of Railways, and there should be accurate information as to rates.	.
Mr.	GARDINER:	So	far	as these reductions in 1916 are concerned, I am quoting from the eastern rates case. Probably the minister will have the record.


Charles Avery Dunning: Is my hon. friend referring to grain rates?
Mr.	GARDINER:	No,	general rates.Mr.	DUNNING:	On what	commodities,
for what classes of goods?
Mr.	GARDINER:	On	all	commodities.
Following the percentage increases and decreases from 1918 to 1921, the rate became as
'Mr. Gardiner.]
high as 471 cents on September 13, 1920, and it was reduced to 421 cents on December 1, 1921.
The 1922 judgment of the Board of Railway Commissioners reduced this arbitrary applicable on traffic to western Canada to the old rate of 24 cents, but it did not change it on traffic in eastern Canada west of Montreal. However, in 1924 the Canadian National Railway, in conference with eastern interests, reduced the arbitrary to 32: cents, so that to-day we have the following arbitraries in effect: St. John to eastern Canadian points, add 32 cents to the Montreal rate to points west; St. John to western Canadian points, add 24 cents to the Montreal western Canada rate. These amounts advance from the farther points and vary to the extent that the Yarmouth rate is 56' cents over the Montreal rate to western Canada and 64 cents over the Montreal rate to eastern Canada points, or 32 cents more than the St. John-Montreal arbitrary in each case. My understanding of the legislation is that these arbitraries are to be reduced by 20 per cent on all traffic to and from the Atlantic division.


Charles Avery Dunning: My hon. friend is quite wrong there.


Robert Gardiner: Traffic originating in the province.


Charles Avery Dunning: My hon. friend said "to and from".


Robert Gardiner: I mean from. As regards the class rate scale in the maritimes, this was on a lower basis than the rest of eastern Canada up until 1912. At that time it was put on an equality. As there was no general increase in Canada between 1912 and 1918 this accounts for the maritime claim of the rates being 92 per cent higher than they were in 1912 as compared with 55 per cent in the rest of Canada.


Charles Avery Dunning: My hon. friend's figures
are wrong. The figures are 155 as against, 192.


Robert Gardiner: It is 92 per cent increase, or 192. As a matter of fact the correct comparison is maritimes 92 per cent; rest of eastern Canada 80 per cent, the difference of 12 iper cent being the advantage the former enjoyed previous to 1912. Notwithstanding the fact that western Canada class rates are only 50 per cent above pre-fwar rates as against 80 per cent in eastern Canada, the actual class rates in western Canada are as much as 20 per cent higher than eastern Canada, varying in different mileage down to 3 per cent higher.

C.N.R.-Eastern Freight Rates


Charles Avery Dunning: Again my hon. friend is wrong.


Robert Gardiner: No. In addition eastern Canada has what is called schedule "A" class rates-and these rates are the class rates on which the traffic moves-which are again much lower than the rates 'above, than which western Canada rates are from 3 to 20 per cent higher.
An examination of the tariffs in effect to-day from the maritimes to Montreal, Toronto and other large markets in the central provinces shows that the general level is lower than the lowest general class scale basis in effect in Canada to-day, namely schedule "A".
Par example: St. John to Montreal, distance 488 miles; schedule "A" would Ire $1.04, actual rate is Sl.OOi and note that this short Canadian Pacific Railway mileage is the rate over the longer Canadian National Railway mileage. St. John to Toronto, 822 miles; schedule "A" rate would be $1.33 per 100 lbs., while the rate in effect is $1.15, so that one can see the advantages the maritimes have which the west certainly have not.
The other two proposals are 20 per cent reduction on all local rates on traffic originating and terminating in the Atlantic division. The 20 per cent reduction in local rates is in my judgment a vicious proposal in this piece of legislation. It is to all intents and purposes a subsidy to the consumers and shippers and can have no effect in the expansion of trade. The legislation itself in my judgment cannot be supported as being fair and equitable to all concerned. It would seem to me that legislation of this character should be national in its scope, and if it cannot be national in its scope, then we should try to find out some other method of dealing with this matter.
I am going to read a statement made by F. J. Watson, the Canadian National Railways expert who appeared before the Board of Railway Commissioners. This statement is taken from volume 2 of the railway commission report, pages 4620, 4621 and 4623. He says:
In the framing of freight tariffs generally between the maritime provinces and the territory Montreal and west irrespective of the reason therefor, a greater reduction than 200 miles has been made in practically every instance, as the following examples, both of class and commodity rates will illustrate:
From Saint John to Montreal the distance via Canadian National Railway Company is 729 miles and the first class rate $1.00J. Schedule "A", which is the lowest basis of class rates in Canada to-day, provides a rate of $1,001 per 100 pounds for a distance of 480 miles, so that the difference between 729 miles and 480 miles, namely 249 miles, has been eliminated.
Of course the shorter mileage from Saint John to Montreal via the Canadian Pacific rail-
32649- 1164
way fixes the class scale referred to, but this does not alter the fact that 249 miles have been absorbed, and while Saint John itself is competitive there is a considerable local territory east and north of Saint John through Moncton where competition does not exist, and whereby under the application of recognized rate-making principles the full distance would be taken into consideration. For example take Moncton; the distance from Moncton to Montreal is 649 miles and the first class rate $1,004 per 100 pounds, which, as already stated, is schedule "A" basis for 480 miles, so that in the ease of Moncton 169 miles have been eliminated.
When we come to Halifax we find the first class rate to Montreal is $1.04 for a distance of 838 miles, while this rate of $1.04 would apply, under schedule "A", for only 520 miles, so that 318 miles have actually been taken out of the Intercolonial railway in constructing class rates from Halifax to Montreal.
In the same manner 328 miles have been cut out of the distance from Mulgrave to Montreal, and 391 miles from Sydney to Montreal.
To Toronto, which may be taken as typical of western Ontario, we find the distance from Saint John via Canadian National railways to be 1,060 miles with a first class rate of $1.15 per 100 pounds, which is the rate under schedule "A" for 640 miles, so that 420 miles have been disregarded and the same principle observed from Halifax to the extent of 489 miles, from Mulgrave 499 miles, and from Sydney 562 miles.


Mr. RALSTON:: Is that first class?


Robert Gardiner: Yes, first class. The
statement continues:
The same policy or principle has been carried out in connection with commodity rates, and taking potatoes as an example, upon which there is a general mileage scale lower than the class rate applicable in all Canadian territory east of Port Arthur and Armstrong, we find the distance say from Charlo, N.B., to Montreal is 461 miles and the commodity rate 321 cents per 100 pounds. The mileage scale referred to applicable throughout eastern Canada gives a rate of 32J cents for 325 miles or a shrinkage of 136 miles. From Shediae, N.B. to Montreal, a distance of 666 miles, the present rate on potatoes is 34 cents per 100 pounds, which under the special mileage scale mentioned would only apply for 350 miles, indicating a shrinkage of 316 miles.
From Charlo, N.B. to Toronto, 812 miles, the rate is 43 cents per 100 pounds, which rate applies under the mileage scale for 525 miles, representing the elimination of 287 miles; and from Shediae, N.B. to Toronto, 997 miles, the rate is 43 cents per 100 pounds, which would apply for only 325 miles under the mileage tariff referred to, showing a shrinkage of 472 miles.


Sir EUGENE FISET:: What is the date of those figures?


Robert Gardiner: They will be found in volume 502 of the railway commission reports. I merely read that statement to show that the claim of the maritime provinces, that they

C.N.R.-Eastern Freight Rates
are paying on the full mileage of the old Intercolonial railway, is not correct, and that a large portion of the mileage has been elminated by virtue of their paying rates on the shorter mileage instead of on the actual mileage.
If this statement of Mr. Watson's is correct, it certainly destroys the argument of the maritime provinces that they are working under a disability because of the fact that the Intercolonial railway was built for strategic purposes and not solely as a business proposition. I presume that Mr. Watson, being connected with the Canadian National Railways, presented that statement before the Board of Railway Commissioners as a traffic expert knowing just exactly what he was talking about, so we can disregard once for all the claim of the maritime provinces that they are paying higher rates because of the extraordinary length of the old Intercolonial railway, which was laid out for strategic reasons.


Mr. SINCLAIR (Queens):: Where does my hon. friend find the claim made that we are paying higher rates on account of distance?


Robert Gardiner: That claim has been made by the maritime provinces ever since I have heard anything about maritime claims.


John Ewen Sinclair: I should like my hon. friend to quote one instance so we will have it concretely before the House.


Robert Gardiner: I will quote one later when I have had an opportunity to refer to papers which are in. my office. There is one other point I should like to bring to the attention of the House, and it is very important. The Intercolonial railway, I understand, was always operated by the Department of Railways and Canals. I have read several reports of the railway, and I have never yet found that it ever paid operating expenses.


Richard Burpee Hanson: You have not read yery' much.


Peter John Veniot: The hon. gentleman had better read that over again.


Robert Gardiner: Yery well, I will do so.
I am going to take an example from the 1905 statement. In that year the total revenue for the railway was $6,783,522, while the operating expenses were $8,508,826, showing a deficit on operation of $1,725,303. Nothing is allowed for interest on the investment. I have not been able to find where any interest has ever been paid from the revenue

of that railway. The capital in 1905 is presumed to be about $77,000,000. The rate of interest at five per cent on that capitalization represents $3,850,000.


Richard Burpee Hanson: Can the hon. gentleman show that the canals of this country, which were built solely or at least very largely for the benefit of the west, ever paid any interest on capital account?


Robert Gardiner: The canals were not built wholly for. the benefit of the west. It is true the west has benefited from the building of some of these canals. But as to freight rates, we have to pay them, and naturally we expect that in those rates provision is made for the interest charges and also for dividends in the case of a privately operated railway. Now, the interest charges at five per cent added to the deficit give a total of approximately $5,570,000. This does not take into account the Prince Edward Island railway at all, the operating deficit on which in 1905 was $151,375. So in that particular year hon. members can very well see what it cost the Dominion to run those railways. At the present time it is hard to say what the deficits are on the eastern section of the Canadian National.


An hon. MEMBER:: Not at all.


Robert Gardiner: Probably when we get into committee the minister will be able to tell us what the present-day deficit is. I rather fancy it is very substantial, but I have not the figures, so I refrain from making any specific statement as to the amount. The minister has not given us any information as to what will be the probable cost of this proposal. I think the other day he estimated that it would probably cost the country $2,000,000.


Charles Avery Dunning: Perhaps my hon. friend will permit me. I should not like a wrong statement to get into the record. I stated that so far as we could now forecast it would cost $2,000,000 for the Canadian National. In addition, provision must be made for the other lines. A correct estimate is not possible in the absence of knowledge of what the future traffic will be.


Robert Gardiner: I was going to qualify my statement by saying that the minister added that there were several other railways in the maritime provinces for which no doubt money would have to be voted, but he did not have at the time information as to the probable cost.

C.N.R.-Eastern Freight Rates
Now, the other day I noticed in the Citizen a statement by a Mr. Cornell who, I understand, appeared before the Duncan commission on behalf of the maritime provinces in regard to freight rates. No doubt he is familiar with his subject, because he must have given it a good deal of study in order to represent the provinces in this matter. I cannot say whether or not his statement is correct, for here again we are lacking in some information, and I am merely going to read it as an indication of what he thinks is going to be the cost to the country by virtue of this legislation. In the Ottawa Citizen of March 24, 1927, appeared the following:
Ottawa, March 23.-"The implementing of the Duncan report with regard to transportation costs and facilities will undoubtedly be a long step toward reinstating a proper basis of transportation costs and services in the Maritimes," says a statement issued here to-day by F. C. Cornell, K.C., who presented the case for the maritime governments with regard to freight rates before the Duncan commission.
Mr. Cornell estimated that $5,000,000 would be a conservative estimate of the amount involved in the rate reductions.
It is quite true, probably, that Mr. Cornell thought the Duncan report would be implemented in full, which would naturally take into consideration the traffic that my hon. friend who preceded me dealt with. However, it will be interesting to listen to the Minister of Railways in committee and discover what his estimate is of the cost to the taxpayers of Canada. It is presumed that this bonusing of rates to the extent of 20 per cent is going to make a good deal of difference to the people of the maritime provinces. In some particulars it may assist them somewhat, but I am very doubtful whether on the whole it will create the measure of prosperity which we should all like to see in the maritime provinces in the near future.
Last year, representing the constituency of Shelburne-Yarmouth in this House, was a gentleman who, fortunately or unfortunately for himself, is now in another chamber. I wish to quote a brief paragraph from a speech he made last session on this maritime question. The remarks I am about to read, from revised Hansard of 1926, page .3436, refer to the freight rate on fish, and I hope hon. members will follow me in this quotation, wh^ph has an important bearing if the contentions therein set out are correct. The member in question had this to say:
Now as to fish. Can we, through the process of cheapening the freight rates, ever find a. sufficiently large market in central Canada for1 our fish so as to enable us to build up a great fish industry in the province of Nova Scotia? Hon. gentlemen must take this fact into account:
the man who catches the fish gets from one to two cents a pound for it. Afterwards there is a shrinkage in the fish to the extent, perhaps, of forty or fifty per cent. Finally it is sold up here for twenty-five cents a pound, and the freight amounts to $1.80 per hundred pounds. You can see from these figures where you are going to get in, undertaking to create a big demand for fish in the central provinces through the process of cheapening the freight rates. If we are ever to have a market established here for our fish there must be a lessening of the spread between the price as paid to the producer and what the consumer has to pay for his fish.
I do not know whether the gentleman just quoted was correct in his statement that the fishermen receive from one to two cents per pound for their fish. Probably the figures he gives in regard to freight rates are absolutely correct. Nor am I sure whether that same fish is sold at twenty-five cents per pound in this part of the country. But when you take into consideration the fact that, according to this gentleman's statement, it costs only $1.80 per 100 pounds to transport fish from the maritime provinces into central Canada, it will be realized that a 20 per reduction in freight rates will not amount to very much so far as the fishermen are concerned. I do not think they will benefit to any great extent. Furthermore, I doubt whether the consumer, so far as any of these rates go, will receive any great benefit from the present proposal. It is quite probable that before this bill passes the House we shall hear members referring to special legislation that has been adopted in the matter of freight rates in regard to the grain growers of western Canada. It would be only natural to expect, after the statements I have made, someone to get up and say "You in western Canada have received special legislation, and it is due to the maritime provinces that legislation of a similar character be enacted in their interests." If this proposed legislation were of the character of the Crowsnest pass agreement I do not think there could be any great objection to ih. I am going to give a short history of the Crowsnest agreement so that the House may be able to draw a comparison between it and the proposed legislation now under consideration. This will help us to judge the two methods of approach to an important question. Before the railway committee last week one of the officials of the railways made the statement that the Crowsnest rates were a losing proposition for the railways in the west. The Minister of Railways (Mr. Dunning) will probably recall that statement. In order to make the matter understandable to hon. members in all

C.N.R.-Eastern Freight Rates
parts of the House I propose, as I say, to give' first of all a short history of that western agreement, comparing it with the present proposal, and then I shall quote some evidence that has been given only recently before the Board of Railway Commissioners.
Up until the year 1896, I believe, railway companies used to come to the government of Canada and secure subsidies by way of land and money grants, but the people were getting pretty well tired of that sort of thing. Finally, when the Laurier government came into power in 1896, the Canadian Pacific Railway approached the government for assistance in the construction of what is known as the Crows-nest pass railway. True, the government felt that in view of public opinion they could not give a straight money grant or subsidy, but they found ways and means of meeting the difficulty. There were certain rates in effect at that particular time on the main line of the Canadian Pacific Railway and the government of the day gave a cash grant of so much per mile in consideration of an agreement entered into by the Canadian Pacific Railway that the rates should never be higher than they were then. It cost this country $3,400,000 to implement that agreement with the Canadian Pacific, and since that time grain rates in western Canada have been below that level for many years. Hon. members, more particularly those who were in this House some years ago, will recall the fact that the western rates were finally suspended, coming into effect again in part in 1922, and partly again at a later date.
Now, the claim has been made that these Crowsnest rates are a losing proposition for the railways, and in that regard I want to place on Hansard, for the information of hon. members, certain evidence bearing on the subject. What I am going to read is taken from the records of an investigation before the Board of Railway Commissioners under date Tuesday, March 8, 1927, a short time ago, as found at pages 4439 and 4440. Mr. Mallory, the director of the bureau of statistics of the Canadian National Railways, was the gentleman under cross-examination at the time, the examiner being Mr. Symington of Winnipeg Let me observe before I go further that I am quoting this evidence merely in order to make a comparison between the Crownsnest pass agreement and the present legislation. The examination reads:
Q. Now Mr. Mallory, I am looking at exhibit No. 126, pages 69 and 70. I see that in the first six months of the year 42 per cent of the freight revenue yielded 1.47 per cent of the net profits, that is Canadian lines.-A. Yes.
Q. That is true, is it not?-A. I assume your figures are correct.
'Mr. Gardiner.]
Q. They are your own figures. The percentages are shown at a glance. You can say it is correct.-A. I have not checked them over, but I will take your word for it.
Q. In the last six months 57.94 per cent of the traffic produced 98.53 per cent of the net profits, on Canadian lines.-A. Yes.
Q. That is, taking the two six months periods. -A. Yes.
Q. In the last six months' period the greater portion of the traffic was handled in the west, was it not?-A. The ton miles accrued in the last period, the greater portion would be in the west.
Q. Yes.-A. I would have to check that up. I would not like to say that offhand.
Q. You are saying it, and you will find it in your returns; 70 per cent of that traffic was grain traffic; 72 per cent I think you gave us for the last four months.-A. In the west 72.6 per cent of the traffic.
Q. 72.6. per cent of that traffic was grain traffic.-A. Yes.
Q. Looking now at page 70 of the same exhibit, taking it in another way, the number of tons carried one mile in thousands that is your gross ton mile, is it not?-A. No.
Q. Is that the revenue tons one mile?-A. I think it is the net ton one mile. [DOT]
Q. Are these figures compiled from the Dominion Bureau of Publications? Are they in the Canadian National statement the revenue ton miles?-A. That is right.
Q. On your whole Canadian system you carried 38.72 per cent of your revenue ton miles, and you earned 1.47 per cent of your net in the first six monts; that is right, is it not?-A. Yes, that is right.
Q. And in the second half you carried 61.28 per cent of the revenue ton miles on your whole system.

A. Yes.
Q. And you earned 98.53 per cent of your net earnings?-A. That is right.
Q. And again it is during the last period the percentage of grain movement is so high, the figures you gave me a moment ago.-A. It is 72 in the last four months of the year.
Q. And 60 throughout the year.-A. Sixty throughout the year, so that the first period would be less than 70.
Q. And the Canadian system, Mr. Mallory, in the year 1924, also at page 70, entered the last six months business with a deficit of $10,000.- A. Yes.
Q. And emerged with a net profit of $11,764,000 at the end of the year.-A. Yes.
Q. In 1925 it ended the six months period with a total net earning of $352,000 and it earned in the last six months $23,493,000 throughout the whole Canadian system.-A. Yes.
I have also a table which I ask permission to place on Hansard without reading. It will thus be available to hon. members.
^Mr. RALSTON:	Would the hon. member
give us an outline of the contents of the table? .


Robert Gardiner: The table gives those
jfigures which substantiate the answers to these Various questions and the fact that the Crowsnest rate is a paying rate.

C.N.R.-Eastern Freight Rates


Mr RALSTON:: Was it filed as an ex- Mr. RALSTON:	Was the table filed?
Libit?	Mr- GARDINER: Yes it was. The table


Robert Gardiner: This is the evidence be- js as follows: fore the railway commission.
Government of Saskatchewan
Exhibits in General Freight Rates Enquiry, 1925. Filed by Counsel for the Government of Saskatchewan. Compiled by Alex. McDonald, Winnipeg.
P.68	.
In the last four months of 1925 the Canadian Pacific Railway moved 52 Per	of
(ton miles) and only 34 per cent of the passenger traffic (passengers earned one mile) and ne^ earning, ot $26?5M,611 were produced therefrom, as against net earnings of $15,393,122 m the first eight months of 1925.

Canadian National Railways in Canada
Operating Statistics No. 2
-	Freight Revenue	Passenger Revenue	Total Operating Revenue	1925	1924	1925	1924	1925	1924$ 10,104,184 10,243,744 11,186,668 10,364,428 10,835,685 10,326,222	$ 11,210,631 , 11,012,056 12,901,230 11,178,722 11,733,204 11,895,014	$ 2,276,152 2,003,618 2,277,939 2,397,279 2,307,528 2,756,820	$ 2,492,067 2,106,739 2,584,085 2,818,587 2,515,560 2,940,337	$ 14,061,522 13,879,333 15,311,036 14,623,281 15,166,296 15,166,025	$ 15,506,105 14,722,775 17,200,097 16,041,974 16,510,126 17,081,936
June							
	63,060,931 42-06%	69,930,857 48-90%	14,019,336 42-10%	15,457,375 45-94%	88,207,494 42-36%	97,063,013 48-24%
						
-	Freight Revenue	Passenger Revenue	Total Operating Revenue	1925	1924	1925	1924	1925	1924July	
August	
September	
October	
November	
December	$ 11,339,756 11,009,545 13,928,371 18,802,694 16,718,708 15,037,519	$ 11,464,233 9,395,293 11,248,283 15,227,071 14,013,134 11,637,091	$ 3,643,960 4,106,762 3,189,814 2,745,723 2,501,573 3,096,004	$ 3,528,570 3,946,674 3,116,447 2,568,602 2,350,325 2,683,721	$ 17,340,084 17,539,764 19,455,257 23,761,137 21,484,346 20,430,839	$ 17,418,539 15,662,837 16,388,986 19,839,351 18,411,570 16,440,196T otal	
Last 6 months	149,897,524 86,836,593 57-94%	142,915,862 72,985,005 51-10%	33,303,171 19,283,835 57-90%	33,651,714 18,194,339 54-06%	208,218,921 120,011,427 57-64%	201,224,493 104,161,480 51-76%"D" Deficit	Net Operating Revenue	Number of tons carried one mile (in thousands)	Number of Revenue Passengers carried one mile (in M's)	1925	1924	1925	1924	1925	1924$ 126,982 146,380 960,186 556,117 D191.732 D991.764	$ 16,990 D768.681 1,400,289 748,879 D433.895 D974,131	1,052,376 1,052,817 1,197,020 920,702 918,178 897,391	1,159,656 1,201,283 1,284,374 1,076,954 1,274,052 1,357,740	83,210 72,207 82,909 93,169 88,893 105,840	86,140 78,322 96,734 108,133 97,358 114,168
June							
	352,205 1-47%	D10,549	6,038,484 38-72%	7,354,059 49-84%	526,228 41-36%	580,855 46-03%
						
						
!836	COMMONS
C.N.R.-Eastern Freight Rates
"D" Deficit	Net Operating Revenue	Number of tons carried one mile (in thousands)	Number of Revenue Passengers carried one mile	1925	1924	1925	1924	1925	1924July	
August	
September	
October	
November	
December	
Total	
Last 6 months	$ 1,317,363 1,901,810 3,206,368 7,305,836 5,620,743 4,141,387	$ 324,318 252,882 1,515,058 4,161,149 3,367,165 2,154,065	1,007,320 919,657 1,550,905 2,138,722 1,999,611 1,938,687	1,043,822 793,500 1,057,876 1,689,571 1,620,098 1,197,714	132,246 175,109 117,201 106,813 99,832 114,614	135,253 154,357 106,208 93,010 91,437 101,11623,845,719 23,493,514 98-53%	11,764,089 100%	15,593,387 9,554,902 61-28%	14,756,638 7,402,581 50-16%	1,272,042 745,814 58-64%	1,262,238 681,383 53-97%
Now, Mr. Speaker, there is quite a difference between these two classes of legislation. In the legislation now before us it is proposed to grant a subsidy to certain classes of traffic in the maritime provinces, while the Crows-nest rates on grain are a paying proposition. It is true that there is a maximum above which the railways are not supposed to charge, but notwithstanding what the railways and those who apologize for the railways have said, the evidence I have just read is ample proof that the Crowsnest rates are paying and at least the Canadian lines of our Canadian railways earn the greater bulk of their profits through the hauling of grain from western Canada, It is quite true that during the six months' period indicated in the statement I have read there is quite a movement of other goods, but that is by virtue of the fact that the harvest is imminent in western Canada. The grain movement causes these other movement of goods, and hon. members will recognize at once the value of the grain grower in western Canada to the total business of this country.
I do not think this particular legislation will be of very great help to the maritime provinces, because it does not touch any of the basic economic problems which they have to face. Unless you deal with those problems all that can be said of this legislation is that it is simply a handout for the time being. It is very similar to a man who comes to vour back door out of work and hungry; you give him a handout by way of some food or a little money but that does not solve his problem^ of being out of work and unable to earn a living.


Mr. ILSLET :: Would the hon. gentleman permit a question? How would he solve what he calls the fundamental economic problems of the maritimes?


Robert Gardiner: I will come to that later. Therefore I say that this legislation does not

touch any of the basic economic needs of the maritime provinces. There are no doubt a good many things which could be done for the maritimes, but we must remember that we have not before us the evidence which was taken by the commission, and are not therefore in a position to say whether any study was made of the economic problems affecting that part of Canada. I am rather inclined to believe that such a study was not made, and in my judgment the proper way to approach this question would be to go into the basic economic needs of the people dealing more particularly with their natural products and their natural resources. That should be the foundation of any legislation calculated to assist the people of the maritimes in recovering their economic prosperity.


Mr. MacLEAN (Prince):: Will my hon.
friend permit a question before he leaves the matter of the Crowsnest pass rates? When the Crowsnest pass rates on grain were retained by this House, was my hoh. friend in favour of that legislation?


Robert Gardiner: I certainly was.


Alfred Edgar MacLean: Can my hon.
friend show the difference between the two pieces of legislation? The same Object is sought in both cases. The method of arriving at it is immaterial.


Robert Gardiner: I thought I had already explained the difference between the two pieces of legislation.


William Gordon Ernst: What is the difference in principle?


Mr. SHORT:: This legislation is designed to increase the business, as-was the case with the Crowsnest pass legislation.


Robert Gardiner: I was, coming to that. Here we are going to subsidize the railway.

C.N.R.-Eastern Freight Rates


James Lorimer Ilsley: Is any subsidy to the Canadian National lines necessary if business increases sufficiently? A subsidy would not be necessarily involved in this legislation.


Robert Gardiner: If my hon. friend will permit me, I will make my own speech and will come to that subject a little later. No doubt there are several other things which could be done. For instance, when I was in the maritimes some three years ago, I was informed that cold storage plants were very essential to the fishing industry. That is a matter which might be given some consideration. I believe we have on the statute books to-day legislation that will assist in providing cold storage facilities for our fishing industry.


James Layton Ralston: Perhaps the hon. gentleman is not aware that an announcement is made to-day in the Montreal Gazette and Halifax papers respecting the establishment of a cold storage plant under that legislation.


Robert Gardiner: I had not heard it but I am pleased to hear it. If further cold storage facilities are required in order to assist the fishing industry, the matter should be looked into and given every consideration.
There is the question of developing new markets. It is quite true that we may transport from the maritime provinces into the central provinces and western Canada certain commodities, but in my judgment those commodities will be what may be termed natural products. As regards manufactured products, unless the product is one manufactured from a natural product of the maritime provinces, it seems ridiculous to grant subsidies in connection with freight rates in order to transport from the maritimes manufactured goods which are already manufactured in Ontario and Quebec. It is true that we might do a good deal to develop foreign markets for the products of the maritime provinces. It might be necessary, for instance, to appoint special commissioners who have a good knowledge of the natural products of the maritime provinces, so that they might go into the world' markets and assist in creating new markets for those provinces. Since I have been a member of this House I have heard members from the maritime provinces state in this chamber that there is only one thing the maritime provinces want and that is higher protection. That statement has been made on several occasions.


William Gordon Ernst: Who made the statement?


Robert Gardiner: I think the hon. member for York-Sunbury (Mr. Hanson) has on several occasions made the statement or something similar to it.


Richard Burpee Hanson: I never made that statement. I stated that we required protection for certain of our industries and I repeat the statement. We require it in regard to steel, for instance.


Robert Gardiner: I accept the hon. member's statement; but the situation as I see it is that the maritime provinces are in much the same position as we are in western Canada in regard to manufacturing. We in western Canada can not expect to be much of a manufacturing country, and I do not think the maritime provinces can expect to be much of a manufacturing country.


Charles Avery Dunning: Why should they not?


Robert Gardiner: Except in regard to their natural products.


William Gordon Ernst: We have quite a number.


Robert Gardiner: I am glad to hear that. The reason why I make that statement is this: We have in Canada a banking system which controls the whole credit of the country. The boards of directors of those banks are mostly men in big industries in central Canada. If they find in the maritime provinces, or in western Canada, as the case may be, an industry which is competing to any extent with their particular industry, they are always in the position of being able more or less to withhold the credit of the bank and, by withholding that credit, to cripple the industry.


Some hon. MEMBERS:: Oh, oh.


William Gordon Ernst: Give an instance.


Robert Gardiner: I think, if hon. members will examine the situation thoroughly, they will find that when the head offices of some banks were transferred from the maritime provinces to Montreal or Toronto, that was the time when industry in the maritime provinces commenced to decay.


Mr. CANTLEY:: There is no connection
whatever.


Robert Gardiner: There is a big connection. Our banking system as it exists at present lends itself to monopoly.


William Anderson Black: It is the best in
the world.


Robert Gardiner: I will admit it is very
fine for those who are in it; it is the best banking system in the world for those who are bankers and control the banking system. But credit is a factor which should be given consideration because, after all, the question of credit to any business is very important.
C.N.R.-Eastern Freight Rates

If you cannot secure reasonable lines of credit, or if you have to submit your case to the head office in either Montreal or Toronto, probably a thousand miles away, you are not going to receive the same consideration as you would if there was a head office in the locality or a different banking system. It is reasonably safe to say that the banking system of the United States, while it is true there have been many casualties, has been largely responsible for the splendid development of that country, because the people who control those different banks, localized as they are, are interested in the development of the locality and consequently those parts of the United States flourished to a greater extent than they would have done under our banking system. I merely throw out as a suggestion that this matter might be given some serious consideration. I know hon. members to my right will pooh-pooh the idea that there is any connection between banking credit and success in business. There is a very close connection. Without reasonable banking credit you can never hope to make any business a success.
I regret that the government has introduced this legislation in this manner. I wish to see the maritimes prosper; I would1 like to see this House do everything legitimate to allow them to prosper, but I think the best way to give them an opportunity to prosper is to give them an opportunity to help themselves. I am not of opinion that handing out bonuses or subsidies of this description is in the interest of the people to whom they are handed out. There are many things that could be done to assist the maritime provinces. I am not satisfied that the commission made a proper economic study of the situation. If they had done so, I think their report would not be as it is to-day, because in my judgment, at any rate as far as the report indicates, they did not begin to touch the basic economic factors, and until you remedy the conditions that attach to those economic factors, there can be no prosperity in the maritime provinces. Handing out bonuses may help them for a time, but it will be only for a time and they will be back here asking for something else.


Peter John Veniot: Just as you were.


Robert Gardiner: I do not know that we got from this House anything for which we did not pay. I think we in western Canada have paid for everything we have received, and furthermore I am going to say this, that we expect to pay for everything we get in the future, if we ever get anything. My hon.
[Mi. Gardiner.]
friend seems to be very much perturbed about the situation. I would challenge him to show where western Canada has ever received from the hands of this House anything for which we did not pay.


Peter John Veniot: If that is a challenge, I will take it up when the time comes.


Mr. MacNUTT:: What about the Crowsnest pass?


Robert Gardiner: I have already explained that. The hon. member probably was not in the House at the time. I am opposed to this legislation and I am going to vote against it. But if the maritime provinces or the government can bring forward a legitimate proposition that is going to remedy the situation that exists in the maritime provinces, I can assure my maritime friends that I shall be only too willing and eager to support it.


William Gordon Ernst: The hon. member has given
the figures for first-class rates pertaining to the maritime provinces and compared them with rates in the rest of Canada. Has he the figures for articles that come under other classifications? The firsCclass rates include only a very few commodities. Does the same proportion apply in respect of the other classifications?


Robert Gardiner: I was dealing with first-class rates and I used only the first-class rates.


William Gordon Ernst: Does the same proportion
apply with respect to rates for other classes?


Robert Gardiner: Pretty nearly so far as
I know. I will probably give some further information before the debate is concluded.


Peter John Veniot: Mr. Speaker, I did not intend to speak on the second reading of ithis bill. It was rather my intention to wait until the hill came before the committee of the whole House. I thought that after the Minister of Railways and Canals (Mr. Dunning) had fully explained the purport and effect of the bill, it would then perhaps be in order for me to meet as far as possible any criticisms that might be made in connection with the action of the government in implementing the recommendations of what is known as the Duncan report so far as they touch upon freight rates in the maritime provinces. Had it not been for the remarks of my hon. friend from York-Sunbury (Mr. Hanson), who always seems ready to drift into a political fight no matter

C.N.R.-Eastern Freight Rates
how the other members of this House may feel over a bill of this kind, I would not have spoken on this occasion.
After I was elected in the last campaign and was honoured with a call to form a part of the government of this country, I revisited my native province and was met on all sides by Conservatives and Liberals, and I wish to state here that assistance was offered1 to me by the leading Conservatives in the province of New Brunswick, as well! as by the chief Conservative associations. They were all prepared to forget party affiliations, to forget whatever party politics we may have played in the past, so that Liberals and Conservatives of the province of New Brunswick, at least, could join hands in bringing to a successful issue the requests of the people of the maritime provinces. It was left to my hon. friend from York-Sunbury to inject into this discussion a political spirit which should not exist here to-day. I regret it very much, Mr. Speaker, because since the Duncan report has been before the country I have received the sympathetic aid of many leading Conservatives in the province of New Brunswick in whatever efforts I might be inclined to put forward in bringing the Duncan recommendations into effect. I am sure the hon. member for YoTk-Sunbury is not voicing the feeling of the other Conservative members of the province of New Brunswick when he attempts, for tilie sake of a little political1 aggrandizement, to surround this discussion with a political atmosphere. But since he has done so, I think it is only right that I should place before this House at least some part of the history of the agitation on behalf of what is known to-day as maritime rights.
My hon. friend from York-Sunbury referred to a small group of Liberals in the province of New Brunswick who, he says, have injected a spirit of political partisanship into this fight. He is referring, no doubt, to a motion moved on the floor of the legislature of New Brunswick in connection with the Duncan report, which motion was treated by the government of the province as a want of confidence motion and voted down. If that is the basis for his injection of a political atmosphere into this discussion,, I regret it very much, and I want to say to the hon. gentleman that the Liberals sitting on this side of the House have nothing whatever to do with what is being carried on to-day from a provincial standpoint in the legislature of the province of New Brunswick. I do know that the Liberals who are sitting there in opposition, eleven in number, are strongly in
favour of this government carrying out the recommendations of the Duncan report, and if the word of the Premier of New Brunswick can be relied on, and I believe in this instance it can-politically I have no faith in him, but when it comes down to a question of this kind, and where he feels it is in the interest of his province to support such a movement as this, I have considerable faith in his word- when I see that the Premier of the province of New Brunswick through the press and other channels of communication has told the province of New Brunswick that he is entirely satisfied with the action of the government in bringing down legislation implementing the Duncan report, and when he gqes to the point of stating that this government has implemented the Duncan report one hundred per *cent, it ill becomes the hon. member for York-Sunbury to say to this House and to the province of New Brunswick that we on this side of the House in bringing down this legislation that we are pledged to bring down are only giving half a loaf so far as the Duncan report is concerned, more particularly in the matter of freight rates.


Richard Burpee Hanson: Altogether in the matter of freight rates.


Peter John Veniot: That is not what the Premier of New Brunswick says. He says that we could not do any more than we have done in the matter of freight rates, and I am prepared to accept the word of the Premier of New Brunswick against that of the hon. member for York-Sunbury.


Richard Burpee Hanson: When the Premier of
New Brunswick gave that interview, was this freight rates bill before the House of Commons? Had he seen it? Did he know it did not provide for international freight rates?


Peter John Veniot: The Premier of New Brunswick knew that there would be international complications arising, and he so stated. He was honest enough to say that if those international complications did arise, then the Duncan report could not be implemented to its fullest extent so far as freight rates were concerned. That was the statement of the Premier of New Brunswick, and I want to give him credit for it. That is more than I can give to the hon. member for York-Sun-bury.
My hon. friend from York-Sunbury states that this is the fruits of an agitation that has been going on for a number of years in the maritime provinces, and he refers to what was

C.N.R.-Eastern Freight Rates
known as the solid Nova Scotia group at one time in this House. He says that the government of that day turned a deaf ear to all their requests. Has my hon. friend forgotten that in 1920 the three Liberal governments of the provinces of Nova Scotia, New Brunswick, and Prince Edward Island sent a memorial to this very House, to the Conservative government of that day-I am not referring to this to make any political capital but merely to keep the record straight-and the Conservative government of that day, of which my hon. friend from York-Sunbury was a supporter, turned a deaf ear to that memorial. Does not my hon. friend remember that in 1920 in the legislature of New Brunswick, led by the Hon. Walter E. Foster, a Liberal premier, he and the leader of the opposition, the Hon. J. B. M. Baxter, a Conservative, both joined hands in passing a resolution unanimously, which was afterwards passed by the legislatures of Nova Scotia and Prince Edward Island, asking the government of that day to take into consideration the grievances of the maritime provinces, and stating specifically what those grievances were?
To a large extent the Duncan report supports the requests that were made at that time, in 1920. Not a word was said, no reply even was given to the representations then made by the three governments of the maritime provinces, and in 1921, again to keep the record straight, the same representations were made, and when the elections came on in that year the representative of the province of New Brunswick in the government of Canada, being then the Minister of Customs in that government, sat in council, and there was staring him in the face the request of the maritime provinces to protect our Canadian ports, and to prevent the export of wheat through American ports. He sat there when an order in council was passed by which he consented that $1,450,000 should be voted for the maintenance, upkeep and repair of the docks in the port of Portland, against the claims of the city of St. John, New Brunswick. That is the record, Mr. Speaker. I do not wish to go any further into that. I merely mention it because I want to keep the record straight, and I hope the next time my hon. friend speaks of maritime rights he will leave the political issue out of it.
I do not intend to go to any extent into the details of the argument which have been presented. I am much surprised that my hon. friend from Acadia (Mr. Gardiner) is not more sympathetic, coming from a place of that name, when he knows that in old Acadia, the oldest colony in Canada to-day, there is
[Mr. Veniot.J
a feeling in favour of what we call fair play, and I want to say to him that he has a misconception of the reasons why the maritime provinces are asking for this measure of justice. I want it to be distinctly understood -and I believe it is understood, and it will not be necessary for me to say it-that the maritime provinces are not before the House of Commons as suppliants for favours. We are here standing on the pact of confederation, and when my hon. friend from Acadia makes a comparison between this legislation and the legislation that brought about the Crowsnest pass rates, it is apparent he never lias studied history. If he had studied the history of confederation he would have found that there was a pact between the fathers of confederation and old Canada, at that time Ontario and Quebec, that if we would consent to come into confederation they on theiir part would do so-and-so in order to help us out 'commercially, economically as they said, and otherwise, and when they laid the proposition before the maritime provinces those provinces were very prosperous. In 1867 Nova Scotia, New Brunswick and Prince Edward Island were prosperous, and showed greater prosperity than the provinces of Ontario and Quebec. While I am a strong and firm believer in confederation, while to-day I would not change my allegiance so far as confederation is concerned, I want it to be understood that I come down from a family that fought confederation from the beginning almost until the death of the parent that brought me into this world. I later on understood what confederation would mean, not only to Canada but to British connection on the North American continent, and for that I stood and for that I stand to-day. I want the rest of Canada to understand that when Nova Scotia and New Brunswick came into confederation in 1867, drawn into it almost against their will, when they were called upon to make the sacrifice they did it on account of a deep rooted sense of loyalty to the British Empire. and a desire to maintain British supremacy in this half of the North American continent.
When the proposition was placed before the maritioTes to go into confederation, the question of constructing a national railway came up, and it was pointed out that the Intercolonial railway could in five years become a paying proposition, but not if we were forced to build it, or to consent to its construction, along or.in the direction laid down. By whom? Not by Canada of that day, Ontario and Quebec, but as a result of representations made from Great Britain

C.N.B.-Eastern Freight Rates
through the admiralty to our Canadian authorities, that to build a road along the line originally proposed would endanger British connection, because at any time an unfriendly nation-although at that time the nation to the south was not unfriendly-might take charge of the railroad and prevent the transportation of troops and prevent the ports of Halifax and St. John, from being used in aid of 'Great Britain should war break out. The railroad was distinctly promised to the people of the maritime provinces and there is no gainsaying the fact. People may say "You cannot find it in the law". It is true it is not enacted in the law, but Canada can depend upon the honour of its public men such as Sir John A. Macdonald, or Sir George Etienne Cartier, or the Hon. George Brown. We in the maritime provinces depended on their word of honour, and I desire to say to this House that the word of honour of these men, in so far as it touched or related to the Intercolonial railway, was kept until 1912.
For forty long years the Intercolonial railway was administered and operated in accordance with the promise given to us when we entered confederation. The freight rates at that time were arbitrary and preferential and so arranged as to bring back, or help to bring back, to the maritimes something in return for the sacrifices they made when in the name of loyalty they came into confederation. Up to 1912 the maritimes enjoyed those rates, and I want to correct my hon. friend. Sir Andrew Duncan need not say it to convince me of the truth of the statement; I knew it before Sir Andrew came to this country. The Intercolonial was completed in 1876, and it would appear from the evidence we have that from that time till 1912 the interests of the maritime provinces were fairly well guarded, the freight rates structure being such as to take into account the requirements of their traffic.
Let me once more keep the record straight. In 1912 an act was introduced into this House of Commons sanctioning the increase of freight * rates on the old Intercolonial, and my hon. friend from York-Sunbury (Mr. Hanson), who has tried to inject a tinge of politics into this matter, might go back to that record and ask who was in power at that time. It was not the Liberal party that was in poweT in 1912. I want to draw the attention of the House, especially the attention of my friends in the far-off corner, to the fact that in 1912, before we undertook to increase the freight rates on the Intercolonial and make them equal to the freight rates in Upper Canada, the Intercolonial had a surplus of $1,000,000. While I am
on the question of surpluses and deficits, let me say to this House that in all the forty years of operation of the Intercolonial the operating losses were a little over $9,000,000, while during the same period the surpluses amounted to $1,666,000. So during the forty years the railway incurred an indebtedness of only about seven million dollars.
Mr. 'SPENCER: Was any allowance made during those years for interest on the capital investment?


Peter John Veniot: Can hon. gentlemen show me any instance of interest being allowed on government expenditure in the west?


Henry Elvins Spencer: That does not answer the question.


Thomas Cantley: Or on any public works?


Peter John Veniot: Yes. As my hon. friend suggests, no interest is allowed on any public works that the government constructs. It is not a fair basis of comparison, and I am surprised that my hon. friend from Battle River should ask the question.


Henry Elvins Spencer: I asked the question for the sake of information. I am glad the hon. minister has informed the House that no interest was allowed.


Peter John Veniot: All right. Let me go a little further for the sake of those who have not read the history of the maritime provinces. When New Brunswick and Nova Scotia came into confederation we had a railway from St. John to Shediac, and another, the old eastern section, from Halifax down to New Glasgow. Each of those railways was being operated by the provincial governments and making money. We handed them over as a part of the Intercolonial to the government of the day as one of the terms of the confederation bargain. We had undertaken to continue the road from Truro to St. John, and thence to the American border in order that we might get our natural and manufactured products into t-he New' England states. What happened? The Imperial government in conjunction with the government of Canada, then Ontario and Quebec, forbade us to proceed with our undertaking for fear of international complications that might arise, and we were forced to accept this road along the north shore, 250 miles more in length than it otherwise would have been, to reach the seaports Of the maritimes. It is for these reasons that to-day we are asking that faith be kept with us in regard to the Intercolonial railway.
Now, some of my hon. friends in discussing this matter tried to be fair, I suppose, but
C.N.R.-Eastern Freight Rates

they were not fair. This may be because they do not entirely understand the situation. I am not going to undertake to meet the hon. gentleman from Acadia on all the freight rate comparisons he made between different sections of the west and the east. Allow me to say, though, to him that we do not regret any transportation advantage now enjoyed by the western provinces. Indeed, we are prepared to continue it because we are patriotic enough to pay our share, to help with our little mite in making the west more prosperous, even if we have to go down deep into our pockets to do so. I would remind my hon. friend that to-day wheat from the west is being hauled to our Atlantic ports over the old Intercolonial at a percentage rate lower than the actual haulage cost. The percentage is .63 cents per ton mile, while in the maritimes it costs us for through freight or otherwise 1.090 cents per ton mile. Now, although we are hauling western freight below cost and thus creating a deficit, we are not complaining. My western friends will always find the maritimes ready to fight side by side with them for what they can convince us to be right; and what we are prepared to do for them in the way of fair play we expect they will do for us in so far as the maritimes are concerned.


John Evans: Does not the wheat that goes down over the Intercolonial to-day take that route at the request of the maritimes?


Peter John Veniot: My hon. friend should not raise that question. If it would not benefit you you would never send it over the Intercolonial. If it were not for the fact that we are in a hurry to prorogue parliament before Easter, I would be delighted to discuss that point with my hon. friend. But I want to go a little further. I am not aggrieved because of the criticism of my hon. friend from Acadia, for I feel that both sides have a right to be heard, and that we should point out as far as possible the righteousness-if I may use that word-of our case. My hon. friend made a comparison of local and through rates on similar mileage. Why did he not make a comparison of what I might call the domestic freight rates within his own province with what we are paying in the maritime provinces on the same mileage? I refer to this because I have heard it in the corridors of this building and in the lobbies of the hotels that we in the maritimes enjoy much lower local rates than Ontario and the west. It is not true. I have in my hand a comparison of freight rates for a 200-mile haul in the maritimes, in Ontario and in the west on grain
[Mi. VeniotJ
and wheat products. In the maritimes the rate is 25 cents per hundred pounds, in Ontario 18 cents, and in the west 20 cents. Even Ontario gets a lower rate than the west. Now, let me take the rates we pay on our potato crop, which to Prince Edward Island and to New Brunswick, and to a large extent to Nova Scotia, is what the wheat crop is to the west. On an equal mileage we are paying for the transportation of this commodity per 100 pounds the highest freight rates.


Robert Gardiner: Might I ask the hon. member to give the figures for hauls between certain points?


Peter John Veniot: Yes. For a 200-mile haul the rate in the maritimes is 23 cents, while on the prairies it is 22J cents. I have not the Ontario figures.


George Gibson Coote: Will the hon. member give the points between which these rates apply?


Peter John Veniot: 
George Gibson Coote: Unless the different points are given it is hard to verify the figures.


Alfred Edgar MacLean: These are
standard mileage rates.


Peter John Veniot: It need not be at all difficult to verify the figures. I give you a two hundred mile haul and you may take it where-ever you like. My hon. friend says that he cannot verify the figures I have given. Was he able to verify the figures given by the hon. member for Acadia?


George Gibson Coote: What is the minister quoting from?


Peter John Veniot: I am quoting from the
freight rate tables of the Canadian National Railways prepared and compiled by one of the best expert freight men in the Dominion of Canada. Now some hon. members who have been listening to me may have some doubts as to the justice of our claim for what is ours by right under the pact of confederation. For the sake of these hon. gentlemen let me quote the observations of one of our great statesmen of that generation with reference to the Intercolonial railway. Speaking at Halifax on September 12, 1864, Sir John A. Macdonald said:
I do not hesitate to say that, with respect to the Intercolonial railway, it is understood by the people of Canada-

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That is, Quebec and Ontario.
-that it can only be built as a means of political union for the colonies. It cannot be denied that the railway as a commercial enterprise would be of comparatively little commercial advantage to the people of Canada.
Then Ontario and Quebec.
While we have the St. Lawrence in summer, and the American ports in time of peace, we have all that is requisite for our purpose. We recognize, however, the fact that peace may not always exist, and that we must have some other means of outlet if we do not wish to be cut off from the ocean for months in the year. We wish to have greater security-to know that we can have assistance readily in the hour of danger. In the case of union, this railway must be a national work, and Canada will cheerfully contribute to the utmost extent to make that important link without which no political connection can be complete in Canada.
There Sir John A. Macdonald recognized this as a national enterprise and he was fully cognizant that the honour of Canada

that is, Quebec and Ontario-was at stake. If the Intercolonial had been built as a commercial enterprise and the maritime provinces had entered confederation distinctly on the understanding that the road would be built only as a commercial railway, then we of the maritimes to-day would be ready, to use a common expression, to take our medicine with the rest of the country. But that is not the case; we came into confederation on certain definite and well understood conditions. Just as Ontario and Quebec, Alberta, Saskatchewan, Manitoba and British Columbia all entered confederation in their respective days on condition that certain things would be done, so the maritime provinces joined the union fully believing that the pact would be lived up to so far -as what was promised them. The government of this country is therefore in duty bound to adhere to the conditions of confederation, no matter what sacrifice this may mean to the treasury of the Dominion. That is the stand we take today, and it is the stand which I know every honest man in this House and in the country, every man who believes in British fair play, every man who believes that our public honour should be vindicated, will defend. Although we may not always see eye to eye with one another in our political transactions, although we may not all play the political game on the same side, the time, I firmly believe, has come when the people in this Dominion, of all shades of political opinion, are broad enough in mind and spirit to see that after sixty years of confederation the maritime provinces shall receive their due. I have faith enough in the broadmindedness and the sense
of justice of Canadians to believe that there will be a general desire in this country to endorse such legislation as is necessary to implement the confederation agreement so far as the maritime provinces are concerned.
The Intercolonial was taken away from the maritimes in 1912 for no satisfactory reason whatever; it was not necessary to increase freight rates in order to make it self-sustaining.
I therefore appeal with confidence to hon. members in all parts of the House to restore to us in that part of the Dominion that which rightfully belongs to us, and which will put us in a happier position, where we can feel that we are not abandoned by the rest of Canada. I know that when justice is done the maritime provinces by this Dominion there will be a widespread spirit of contentment in those provinces and a greater degree of happiness than at present exists. There never has been any fear on the part of the people of the maritime provinces that that section of the Dominion would ever become disloyal, either to Canada or to the British Empire at large. The people of the maritimes, in this sixtieth anniversary of confederation, are just as true to the Dominion as they have been at any time in its history, and if such calamity as occurred in 1914 should take place again I can assure the House that the maritime provinces will once again rally to the defence of British institutions. All we ask now is that we be given that modicum of fair play to which we are convinced we are entitled.


George Gibson Coote: Before the minister concludes, may I ask just one question? Is there any justification, from that statement which he has quoted from Sir John A. Macdonald, for the claim of the maritimes to have lower local freight rates than other parts of Canada?


Peter John Veniot: Sir John A. Macdonald
recognized that, in view of the fact that the Intercolonial railway was built for strategic military purposes, nothing would militate against the province of Nova Scotia or the province of New Brunswick in so far as domestic transportation was concerned. I did not take the trouble to read the whole of Sir John A. Macdonald's speech, but I would recommend it to my hon. friend's perusal, as well as the speeches of Howe and Brown. Brown opposed the construction of the Intercolonial for two years, but what was his attitude in 1866 before the conference was called in London? The Intercolonial railway was to be a national enterprise, and although he said it might not be a commercial success they wanted the road built in order to

C.N.R.-Eastern Freight Rates
send Canadian traffic through the Canadian ports of Halifax and St. John. Ever since that time successive governments, both Liberal and Tories, have been letting too much freight go through Portland instead of through those two Canadian ports of Halifax and St. John.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.
Mr. JOHN EVANS i(Rosetown):	Mr. Speaker, in dealing with conditions in the maritime provinces, I realize that we are face to face with a serious problem which is of consequence not only to the maritimes but to the whole Dominion. This bill is brought in as a government measure to provide relief for the maritime provinces so that they, at the expense of the taxpayers generally, may find a market in the Dominion of Canada. But why the government first of all selected this part of the Duncan report and made it their measure as the first and chief way of creating prosperity down by the sea, is best known to themselves. All I can say is that I am utterly opposed to it, for two reasons. In the first place it is vicious in principle and it cannot but lead to serious consequences in the future. In the second place it does not meet the situation, as the difficulty which the maritime provinces are experiencing is due less to freight rates than to other causes.
But let me deal with my first reason for opposing this measure. If confederation is to be a success, every part of this Dominion must be on an equality, and for this reason I say that this legislation in itself is unreasonable. The commission that was created to study conditions in the maritime provinces has not found there anything essentially different from what is prevailing in other provinces, with the exception perhaps of those industrial centres which lean upon the protective tariff and the politician. . The rural parts of Ontario are in exactly the same position. The commission too asserts on page 10:
There were none who would assert, with any degree of positiveness and assurance, to what extent, and in what ways, there could be precise apportionment of fault to confederation.
But the vicious part of the whole matter in my opinion lies in the fact that the government in 1925 put on the statute books a bill to provide for the equalization of freight rates over the whole Dominion. That bill has

been a dead letter ever since. The government has made no attempt to equalize freight rates, but now it seeks to place one-fifth of the freight rates of the maritime provinces on the rest of the Dominion, including the three prairie provinces which are already paying -from 15 to 20 per cent higher freight rates than any other part of this country.


Charles Avery Dunning: My hon. friend referred to a statute enacted in 1925 for the equalization of rates. Can he give me the reference to the statute in question? What is the chapter and the title?


John Evans: I do not have the act with me, but I will get it for the hon. gentleman when the bill comes into committee.


Charles Avery Dunning: Is my hon. friend quite sure that there is such a statute?


John Evans: Quite sure. The hon. member for Acadia (Mr. Gardiner) quoted from an account of the investigation which took place lately before the commission. I will not repeat his quotations, but I would like to read part of an editorial that appeared recently in the Free Press of Winnipeg, a newspaper which MacLean's magazine says is the Manchester Guardian of Canada. The editorial reads:
The investigation going on at Ottawa at the present into railway rates in Canada has already performed two notable services to western Canada. The first is that the old argument that the railways, under the Crows-nest pass agreement, hauled grain at a loss in western Canada has been exploded.
I would like my maritime friends to observe this:
The second is that it has been established that the railways have been keeping their general rates from 15 per cent to 20 per cent higher on the prairies, not because of any real reason, but because they have been able to get away with it.
Public men made the east and particularly the maritimes believe that the east was being soaked in the matter of rates in order to make up the loss in the west on hauling grain. At the investigation the railway experts admitted to Symington and Pitblado that the prosperity of the railways depended on the western wheat crop. The editorial continues:
At the rate investigation at Ottawa admissions have been obtained from high railway officials that wheat is not carried at a loss. The railway officials have been unable to maintain their argument that they lose money carrying grain at the same time that they increase their net profits when there is a lot of grain to be carried.

C.N.R.-Eastern Freight Rates


Edward Joseph Garland: Is the hon. gentleman aware that only a matter of a few weeks ago the railway officials admitted before the Board of Railway Commissioners that the western grain traffic was very, very profitable?


John Evans: That is what I am reading, from the Free Press editorial.


Charles Avery Dunning: Surely if there is evidence available such as mentioned by the hon. member for Bow River (Mr. Garland) we should have the evidence itself quoted, instead of an editorial based upon the evidence. I am very anxious to see that evidence that the railways are making handsome profits in connection with the handling of grain.


Edward Joseph Garland: I shall be glad to show it to the hon. gentleman.


Charles Avery Dunning: I shall be glad to have it quoted and put on Hansard.


Hugh Guthrie: Mr. Speaker, I rise to a point of order. We are on the second reading of the bill, and there are rules of debate applicable to the second reading, all of which are being disregarded. I agree with the minister that the bill should go into committee where we could have a full discussion, but this is not the stage to carry on a debate of this kind.


Hewitt Bostock: The hon. member who has the floor may allow a question out of courtesy, but no cross-examination or general debate can take place.


John Evans: I promise the Minister of Railways (Mr. Dunning) that he shall have that information. I cannot but express my surprise that he is not already acquainted with it.


Charles Avery Dunning: I must be permitted to say, Mr. Speaker, that I was not speaking of my own acquaintance with it, but of the desirability of getting the actual evidence, instead of editorial quotations, placed upon Hansard. While I am on my feet, may I say with reference to the point of order raised by the hon. leader of the opposition (Mr. Guthrie), that I had thought of raising it myself this afternoon. What we are discussing is a maritime freight rates bill, which is now up for its second reading, but hon. members ' are using the occasion to place on Hansard all sorts of views with respect to the banking system of Canada, free trade and tariffs, and freight rates in other parts of Canada. I did not attempt to go into any
of these matters in introducing the bill, and I presume, Sir, you would rule me out of order if I attempted to reply to them. As a matter of justice I think hon. gentlemen should be held more strictly to the question now before the House.


John Evans: I would adhere strictly to the rules, Mr. Speaker, but the Minister of Railways did not raise any question of order when my friends from the maritimes were condemning the Crowsnest pass agreement as one of the factors why they have to pay such high freight rates.


Charles Avery Dunning: I did not hear any such expression from any member who spoke from the other side.


John Evans: Well, it was said.


Charles Avery Dunning: I do not think that
statement was made.


John Evans: The legislation to equalize freight rates was enacted, in my opinion, to find an excuse for robbing western Canada of statutory protection against the skyrocketing of freight rates, and it has lain dormant here for two years, during which time a part of the crop has been hauled out, not on Crowsnest rates, but at a higher rate not regulated- at all by the Crowsnest pass agreement. Now added to that, we have to bear one-fifth of the rate charged in a part of Canada which lies by the sea, and which, from an export country like Canada, should find a market for its products overseas. The maritimes also have the advantage of having a line of boats running below cost to their most prolific market, under the West India agreement, and the deficit on that service will have to be met every year by the country at large. The west has an average rail haul of 1,800 miles to reach tidewater, on which it is charged from 15 to 20 per cent more than any other part of the Dominion.
Again, I would quote an editorial from the Free Press which has gone out throughout western Canada, -and I hope the west is taking particular notice of this. The Free Press of Winnipeg asks: "If this ds the case, why should -the west have to pay rates averaging 15 to 20 per cent higher than the tariff in eastern Canada? Have we been paying more because the railways were able to gat away with it? Why should the rates foe higher in the west especially when it has been shown that the cost of operation on the prairies is lower than anywhere else in Canada." This is something for the west to think about.



C.N.R.-Eastern Freight Rates
The admission made by Mr. Watson before the railway commission that a special privilege is given to the manufacturers on their products going to western Canada which somebody else has to pay for was quoted by my hon. friend from Acadia this afternoon. That admission clarifies the situation somewhat. But that is not all the privilege these manufacturers receive at the people's expense. For instance, the rates from Ontario and Quebec to the maritime provinces or to maritime ports are to-day 18 cents per hundredweight less than from the maritimes to Quebec and Ontario points; the traffic expert of the three prairie provinces is my authority for that statement. I want to tell this House that while the Crowsnest pass agreement did prevent to some extent the skyrocketing of freight rates in western Canada, the manufacturers in this privileged area in Ontario and Quebec enjoy a rate both ways that does not begin to cover the cost of the service.
Another feature of the policy of the government is this, that while ignoring their own measure to equalize freight rates over this Dominion, they also ignore the fact that the present rate structure to and from the maritimes is based on the short straight haul of the Canadian Pacific railway, and not as put forward by the maritime righters on the Canadian National railway, our old Intercolonial, which was constructed over a route 250 miles longer than it should have been. Those 250 miles which were built, as they say, for strategic purposes, are surely a benefit to those provinces since the railway rate is based on the short haul, and it has been responsible for a part of the deficit which the country has had to meet nearly every year. This has been practically a subsidy to those provinces ever since confederation. The 20 per cent proposed in this bill is an extra subsidy to be paid to cheapen the transportation of products of the maritimes going west. It is not meant to widen the markets of the maritimes for their products by hauling them further west, but is simply to be a charge on the taxpayer presented by way of a bill each year by the railway companies to parliament for the haulage of freight over this division. No one knows what it will cost. If it proves successful in improving conditions it will be to that extent each year an increasing burden on the rest of the Dominion. I say it is unfair because the present rate is based upon the Canadian Pacific railway straight haul, and not on the National Transcontinental. No one who has advocated maritime rights in this House during the last two or three years has ever once asserted that any pledge was given to these provinces at the

time of confederation regarding this matter: that, after providing means by which their produce could be marketed in the Dominion, [DOT]the Dominion was to pay any part of the haulage cost. No pledge was given regarding freight rates, and no one expected that part of the freight rate would ever have to be paid for them; in fact the Duncan report failed to establish the fact that any of the present trouble was due to any promises or pledges given at confederation. The rates in the maritime provinces have never been higher than the rates in the provinces of Quebec and Ontario, and anyone using the Crows-pest pass agreement as an argument for this subsidy must not forget that the Crowsnest pass rates were higher than in any other part of Canada on a given commodity over a given distance.
But let us look at this matter from another angle. When the maritime provinces, by agitation and threats of secession, can obtain a free gift of one-fifth of its rail rates, which are lower now by fifteen to twenty per cent than in some other parts of the Dominion, is it not natural that western Canada may ask herself if she is not paying too high a price to remain in confederation, and there will be more excuse for complaint than has ever been in the maritime provinces. Further than that, what will the industrial areas of Ontario and Quebec care how much they pay in taxes to meet their subsidy each year, as long as they can pass it on in the price of the goods they manufacture doiwn here, and compel us to buy at their own price? By this measure I say the government is simply increasing the dose of the dope that has already reduced the country to a state of helplessness. This legislation is only a short cut-out for the time, and I can but classify it as shortsighted, unfair, vicious and unstatesmanlike. I am in sympathy with the maritime provinces as they are, but I want to meet conditions as they exist and go to the root of the evil now.


Harry Bernard Short: Give us your remedy.


John Evans: I will. Now 1 come to my second reason for opposing this bill. I have said that it does not meet the situation, as the difficulties of the maritime provinces are due less to freight rates than to other causes. Those causes of impoverishment to-day are common to every province in the Dominion, and no one is feeling the result any more than the three prairie provinces. I contend the difficulty is common to every province and parts of provinces throughout Canada, with the exception of those towns and cities in central Canada which have thrived by the

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adversity in other parts, of which adversity they have been the cause. I hold in my hand a pamphlet entitled, The Position, of the Maritime Provinces in the Political Economy of Canada. It contains a lecture given by L. W. Simms. It would be well perhaps for this House to know who Mr. Simms is. Pie is president of the T. F. Simms & Co. Limited, St. John, N.B., .president of the St. John Board of Trade. He is also president of the maritime board of trade, vice president of the Canadian chamber of commerce and second vice president of the Canadian Manufacturers Association. Surely this man knows what he is talking about. I will quote one or two paragraphs from this pamphlet. He says:
Turning to industry; the story of the maritime provinces under this head since confederation is a long series of tragedies. Some would-be comforters have tried to convince us, without knowledge of the facts, that the hard times in the maritimes were but the result of post-war depression that was common to all sections; but this industrial record belies them. You will find splendid industrial plants in many places in the maritimes standing gaunt and empty, or the stark ruins of once thriving industries staring mutely in a setting of tumbling cottages, once happy homes, their owners forced to go to New England for a livelihood. Not a few of these have been bought out, closed down, and dismantled by central Canadian competitors.
Then after describing how industry under the system of protection has been closed out to the maritime provinces by combines located in this central area, he says that the customs tariff and the law of trade restriction reduced the people to the state of slavery.


Harry Bernard Short: Where are they reduced to slavery?


John Evans: Wait a minute. He crystallizes the whole situation by relating an incident, and I think there is nothing like an incident to bring home to anyone an unjust position. He says:
A year or so ago, a circumstance occurred which is unfortunately not an isolated instance of the nationally disruptive forces that commercial life has been guilty of. The jobbers of central Canada in a certain commodity went to the producers of this article, all of whom happened to be located in Ontario, and stipulated that no jobber in the maritimes was to get within ten per cent of the price they received. The size of their combined business was too important to be ignored, so the manufacturers agreed. Quite by accident a maritime wholesale house discovered the discrimination and protested vigorously. One manufacturer yielded to his protest for fair play, with the result that the central Canadian jobbers punished him by depriving him of hundreds of thousands of dollars worth of business.
That is what is the matter with the maritimes to-day.
32649-117*


Harry Bernard Short: Is that slavery?


John Evans: It is Slavery. It is price fixing, which means death to industry. I had a resolution on the order paper dealing with this matter.


Harry Bernard Short: How about the wheat pool in the west? Is that slavery too?


Hewitt Bostock: Order.


John Evans: I did not catch the question. I will pause for it.


Harry Bernard Short: If that combine is slavery, what about the wheat pool in the west-is not that slavery too?


John Evans: Mr. Speaker, the hon. gentleman cannot distinguish between cooperative company which collectively sells the product of its members, and a combine which under the law is able to put its own price on the commodities that it sells to the public.


Harry Bernard Short: Do not the wheat pool put
their own prices on the wheat in the west?


Some hon. MEMBERS:: No.


John Evans: As I said, Mr. Speaker, the hon. gentleman fails to distinguish between cooperative enterprise and a combine formed for the purpose of price-fixing. The wheat pool operating in the west to-day is a cooperative enterprise and is able to a very great extent, not wholly, to market the wheat of its members at a price which it obtains against the competition of the whole world, and the benefit of that price accrues to the members of the pool, but formerly the combines reaped the benefit. That is one of the remedies that I would recommend to the maritime people to-day-to cooperatively market and distribute their own products.


An hon. MEMBER:: They do.


John Evans: Well, we are aiming to do so in the west. Mr. Simms goes on to say:
The government and the railway commission may do much to adjust more equitably the burden of our abnormal 3,700-mile length and 100-mile width, but the business men of the country can, I believe, do much more by getting together and substituting a broad patriotism for shortsighted selfishness; a patriotism that will yield far larger returns to each of them, and thus evolve a policy of equitable distribution on a give-and-take basis.
I maintain, Sir, that they do not have to do it on a give-and-take basis. Not only the manufacturers but the distributors have a price-fixing power in the Dominion to-day.

C.N.R.-Eastern Freight Rates


Harry Bernard Short: Do not the wheat pool fix
their prices?


Hewitt Bostock: Order.


John Evans: No, the wheat pool sells its products in the markets of the world against world competition. In doing that it has to compete with the cheap labour of Asia and certain countries of Europe where men are paid a few copecks a day. It is unreasonable to compare the wheat pool with combines that are organized by the politicians of this country. The customs and tariff acts to-day are so administered as to give not only the manufacturers but the distributors the pricefixing power that they desire. Mr. Simms has well pointed this out in the paragraph which I have read from his address. Surely my friends from the maritimes are bound to take note of this fact.
Now, the government instead of meeting the real cause of trade stagnation in the maritimes, which is practically the protective tariff, have withheld the maritime report from this House for discussion, and in this piecemeal fashion seek still to aid the same combines which with this price-fixing power have despoiled the maritimes and now seek to clean up the whole Dominion. I say that deliberately. When the burdens of the maritimes are placed on the taxpayers of the whole country, it is simply a declaration on the part of the government that they are not willing to meet the real cause of the evil- the price-fixing power which they have given to these combines. Is it any wonder that maritime freight rates are high? Is it any wonder that freight rates are high throughout the Dominion? It is simply because the railway workers, to some extent, have been able to organize and demand a wage rate somewhat commensurate with the high cost of living caused by these combines. Let us meet things as they are. I tell the government right here that this measure ought not to become law until at least the bill passed in 1925 to equalize freight rates over the whole Dominion is put in force.


Charles Avery Dunning: Again I ask my hon.
friend for a reference to that statute.


John Evans: I will get it for you.


Charles Avery Dunning: It does not exist.


John Evans: No excuse can be given for robbing western Canada of the Crowsnest pass agreement, which is not now being applied on the haulage of any commodities going west, and only to a very small portion of western territory on grain going east. I
fMr. Evans.]
hope the west will take notice of what is being done. Then they will ask themselves the question:	What part have we in confederation?
I want to repeat, though, Mr. Speaker, that I am sympathetic towards the maritime provinces. Why? Because we are in the same boat. We in the west have to meet the same conditions. I would urge the government not to beat about the bush as it is seeking to do by this bill. Confederation is a great and providential gift, and it is surely a travesty on our statesmanship that now on the eve of our jubilee celebration parts of this great Dominion are ready to withdraw from the union. What is the reason? Class privilege-nothing but class privilege. All industries in the Dominion, particularly since 1879, have leaned on the politician. It is time for a change. This Dominion can be a prison or a palace to its people as we choose either to follow the path of economic class selfishness or to further the righteous cause of humanity.


James Lorimer Ilsley: Mr. Speaker, my remarks on the second reading of this bill will be very brief. I realize the desire on the part of every member to finish this session at the earliest possible moment, and I would not say anything on the bill at all if I did not deem it my duty to do so. Thus far in the debate no one on either side of the House has given expression to a very wide spread sentiment existing in the maritime provinces at the present time, namely, a sentiment of appreciation of the efforts of the government in introducing this and other measures for the benefit of the maritime provinces. I was very much surprised this afternoon to hear the partisan speech of the hon. member for York-Sunbury (Mr. Hanson), and I should like to remind the House that in his remarks he did not in any way represent the true sentiment, either Liberal or Conservative, of the maritime provinces. I can assure hon. members that the feeling of the people of Nova Scotia, New Brunswick and Prince Edward Island is one of appreciation of the government's activities at the present time.
I do not propose to go very fully into the merits of the bill before the House. The bill carries out one of the findings of the commission which was presided over by Sir Andrew Duncan. It has the weight of the findings of a non-partisan, independent and judicial inquiry presided over by a brilliant Englishman, Which of itself, in my opinion, creates the presumption that these

C.N.R.-Eastern Freight Rates
findings are sound and should be implemented by legidation.
I want to congratulate the Minister of National Defence (Mr. Ralston), the Postmaster General (Mr. Veniot), the Minister of Railways (Mr. Dunning) and particularly the Prime Minister (Mr. Mackenzie King) upon the statesmanlike way in which this whole question of maritime rights has been handled. If we look back on the agitation which has been made for a recognition of maritime claims I think it will be agreed that there is not a man in this House, indeed there is not a person in the maritime provinces, who will not now say that the proper step to have taken was precisely the step that was taken, namely, the appointment of an independent commission of inquiry. It will be recalled that, during the course of the agitation for maritime rights, various views were put forward by various persons in the maritime provinces as to what should and what should not be done in that part of Canada. The Conservative party conducted the agitation for some years with great political success. They suggested a number of remedies of various sorts. Some of these suggestions have been condemned by the Duncan commission while others have been partially adopted. The course of the Conservative party in the province of Nova Scotia in the matter of maritime claims has been a tortuous one. In the year 1923 they started by advocating secession of the province. A little later they branched off to secession of the Intercolonial railway; and in the array of remedies which they advocated one was always in the forefront, namely, the restoration of the integrity of the Intercolonial railway. No one believes to-day that the integrity of the Intercolonial railwaj'- should be restored, that is to say, that the Intercolonial should be withdrawn from the Canadian National system. As a matter of fact the Duncan commission specifically finds against anything of that sort being done. I say, therefore, that the Prime Minister took the proper course when he decided, prior to the session of 1926, upon the appointment of a non-partisan commission of inquiry. It will be remembered that in the session of 1926 the government was bitterly assailed by the members from Nova Scotia on the Conservative side because of the appointment of that commission. It is quite interesting at this time to find the hon. member for York-Sunbury (Mr. Hanson) attempting, as he did this afternoon, to claim for the Conservative party credit for what has been accomplished. It is interesting to refer to Hansard of last year to see what stand was taken then by hon. members on
the Conservative side of the House in relation to the appointment of this commission. My predecessor in the representation of Hants-Kings cun page 969, said this:
Surely we have a right to conclude that Bourbon stupidity could not be better exemplified than in the present proposal to appoint a royal commission to inquire into this matter.
The hon. member for Digby-Annapolis said on page 1415:
We want no commission to tell us what is required to bring prosperity to this part of the country	We have no faith in commissions of this sort; they will not satisfy the minds of the people. .	.	. Why waste the
country's money on needless expenditures of this kind.
That was the attitude of the member for Digby-Annapolis in the last session of parliament. At page 2331 the hon. member for Pictou (Mr. Cantley) said:
I have no present intention to here or now attack the personnel of the proposed commission, but for the weighty reasons I have referred to and others eqally important we decline to submit our case to or to be in any way guided or obligated by any finding arising out of an investigation by such a commission.
Later on:'
I again tell the government we do not want a commission.
The junior member for Halifax, at page 436
of Hansard, is reported in terms most emphatic against the commission, while the hon. member for Cape Breton South said, as reported at page 1351:
We do not want any commission in Nova Scotia.
The hon. member for Inverness is reported as follows on page 1407:
As to the appointment of a commission of inquiry, however, I want to tell them that on October 29, the people of the maritime provinces appointed their own commission. That commission now sits within the four walls of this chamber.
It would be very interesting if we had the recommendations of that "commission" put into force at the present time rather than the recommendations of the Duncan commission. To begin with, in regard to the question of freight rates, the Duncan commission has recommended three times as much in the way of benefits to the maritime provinces in this direction than the Conservative party ever advocated. The whole remedy as prescribed by the Conservatives of Nova Scotia for the conditions in those provinces consisted in the reduction of freight rates on certain traffic originating in the maritime provinces and terminating in central Canada.

C.N.R.-Eastern Freight Rates
: That was the sum total of their proposal, You may scan their platform from beginning to end and you will not see any evidence of its having occurred to them that there was anything wrong with other freight rates than those on traffic originating in the east and terminating in central Canada. The Duncan report, on the other hand, properly recognizes the importance to the maritime provinces of local traffic and of the export trade. I was very much interested this afternoon to hear, from the lips of the hon. member for York-Sunbury, admissions which he never would have made in 1911, for instance, the admission that maritime produce is rushing by carloads from New Brunswick into the United' States. In my own constituency, I know, the most important feature of the Duncan report, so far as freight rates are concerned, has to do with the export rates. In my constituency we grow a great many apples. Of this commodity we export more from that constituency, than is shipped from any other part of Canada. Some time ago I had occasion to look into the figures to see -where these apples went and I found, taking the last five years, that of every 100 barrels of apples packed and shipped in Nova Scotia only seven went to the central provinces, while nine were sold in the maritime provinces and no fewer than eighty-four were sold abroad, most of them in the English market. Take potatoes, of which we raise large quantities:	ninety-nine per cent of our
potatoes go to the United States, Cuba and the West Indies. In the county of Hants we have large deposits of gypsum, more probably than in all the rest of Canada put together. East year our output was 600,000 tons, practically all of which went to the New England States and to New York. Take, again, evaporated apples. We sent 300,000 barrels of apples to the evaporators in 1925. The finished product went largely to Germany and the Netherlands. Practically all of it was marketed abroad. And a great many of our other farm products such as turnips and strawberries, to mention a few, go to the New England states; others produced in the constituency, and which I cannot recall at the moment, find their markets abroad. It is therefore of the utmost importance to people in. that part of Nova Scotia that the export rates should be lowered. From the map it may be thought that, being on the sea, we have no export rates to pay. This is not so. In the matter of apples, for instance, the rate from the town of Berwick in the county of Kings, which is a large shipping point, to Halifax was seventeen cents per barrel in 1915; it is now thirty-four and a half cents. The 
shippers consider that the rates on apples form an onerous burden which is not justified by the circumstances, and they are looking with great interest to the action of the government with respect to export rates.
With regard to the course this debate took this afternoon, I do not intend to pursue the lines of inquiry which were then started, but I agree with a great deal of what has been said by the hon. member for Acadia (Mr. Gardiner) and1 by the hon. member for Rosetown (Mr. Evans). From the best consideration I can give the economic history of the province of Nova Scotia I believe that the question of tariffs is more important than that of freight rates, and that the greatest injury to that province has been done by the protective policy of Canada. I am not here to enter into a discussion of protection versus free trade, but I believe that the population figures, the figures relating to industry, and the facts which are apparent from an examination of the whole countryside show that the decline has been rapid in the province of Nova Scotia since and because of the protective tariff of 1879 and those Which have followed. I am fully aware that certain industries in Nova Scotia may benefit from a. protective tariff, such as the steel industry and possibly the coal industry, but nothing is more useless and nothing is more absurd than for hon. gentlemen to get up in this House and advocate a duty of SI or $2 or $3 on coal, because at present it is not at all practicable.


Thomas Cantley: Why?


James Lorimer Ilsley: I will tell the hon. member why. The Liberal and Progressive sentiment of the country is against it on low tariff principles, and the Conservative sentiment of the country is against it on business principles.


Thomas Cantley: If I may be allowed to
say so, the leader of my hon. friend is on record to the contrary.


James Lorimer Ilsley: Not at all; I think my hon. friend is entirely wrong.


Thomas Cantley: I can show my hon. friend a little later.


James Lorimer Ilsley: Consider the Conservative
party in Canada at present; we find one group from the maritime provinces which probably would be in favour of a higher duty on coal; we find a group from Ontario which would certainly be against a higher duty on c:oa!l, while the third group from the province of British Columbia would also be against it, because in that province they depend very greatly upon their export trade. As my hon. friend knows, a market ior 50 per cent of the output of the

C.N.R.-Eastern Freight Rates
Crowsnest pass mines is found in the United States, and about 10 per cent of the output of the Vancouver Island mines is marketed in that country. The United States has a countervailing duty; that is, the duty there is equal to the Canadian duty on coal. As the hon. member for Comox-Alberni (Mr. Neill) said the other night in the course of another debate, a duty of SI on Canadian coal would automatically raise the American duty to $1, which would put out of business a great many of the coal mines of British Columbia. I suppose ry>
man in the House better knows the sentiment of the country with regard to the question of coal than does the hon. member for Cape Breton South (Mr. MacDonald), who represents a coal mining constituency. In the Halifax Chronicle of February 5 he is reported as follows:
On the general trade policy recommendation of the report, and its lack of tariff recommendations, Mr. MacDonald said candidly, "With regard to duties on coal I am not hopeful."
He said his experiences on the coal committee of the House last year had convinced him that central and western Canada are immovable in their opposition to such relief for the east.
That question was raised in the House, and his answer corroborated rather than contradicted that statement, because he said it was probable that central and western Canada would be against it. It is well known, so why do my hon. friends opposite tell the people in the coal mining constituencies that if returned to power they would raise the duty on coal? That is absolutely impractical as a political proposal, and I venture to say that hon. members on the other side of the House know it.
To come back to the argument from which I was distracted, I was about to say that I agree to a large extent with the hon. member for Acadia (Mr. Gardiner) and the hon. member for Roeetown (Mr. Evans) as to the fundamental causes of the decline of the maritime provinces. I think the Canadian tariff is probably the greatest cause, and that next in importance comes the American tariff. That is particularly true with relation to the fishing industry; twice in the history of Nova Scotia our fish have had free access to the American market, once between 1854 and 1866 under the old reciprocity treaty and again between 1873 and 1885 under the Treaty of Washington. ^During both of these periods the fishing industry was prosperous, reflecting a great deal of prosperity upon the province as a whole. We rejected a third opportunity in 1911, for which the great majority have been sorry ever since.


Harry Bernard Short: Might I ask a question?
Did we not have practically free access into the United States in 1912 or 1913, after we rejected the reciprocity treaty in 1911?


James Lorimer Ilsley: No; there was a lowering
of the tariff.
Mr, SHORT:	.And many articles were
placed on the free list.
M.r. SPEAKER:	I must ask hon. gentlement to come back to the question of freight rates.


James Lorimer Ilsley: With regard to the question of my hon. friend I will say that under the democratic tariff the duty on fish was lowered for some years, and perhaps some kinds of fish were allowed to enter the United States free. At any rate, that does not in any way detract from the argument I have been making.	_
1 have referred to the Canadian and American tariffs, and next in importance to those have been the high freight rates, the gradual rise of freight rates on the Intercolonial railway. The historical course of events was set out very well this afternoon, and I do not need to repeat very much of it. The Intercolonial railway was built not as a commercial enterprise but as a public work, a national undertaking; its route was chosen not from commercial considerations but because of strategic considerations, and the understanding was that it was to be a great highway of traffic between the maritime provinces and the central parts of Canada. From its completion in 1876 until 1912 the understandings entered into at the time of confederation were faithfully carried out, but in 1912 when Hon. Frank Cochrane became Minister of Railways in the Borden government the rates on that railway were raised. As the rates were raised, and to the extent that they were raised, traffic was frozen along the Intercolonial railway; industries were forced out of business, and the raising of those rates contributed in a very large degree to the lamentable decline of industry in the maritime provinces which is so apparent at present. From 1918 to 1923 the Intercolonial railway was the only line in Canada which was not under the control of the Board of Railway Commissioners; various local rates were raised here and there and the shippers had no means of redress and no court to which they could appeal.
I am thoroughly in accord with the spirit and the provisions of this bill, and I wish to express the gratitude of a very great number of people in the maritime provinces for the step taken by the government in this matter. I deplore such remarks as that it is only a

C.N.R.-Eastern Freight Rates
half a loaf, and about keeping up the agitation, as stated by the hon. member for York-Sunbury (Mr. Hanson) this afternoon. On this side of the House, and I think on the other side as well, I believe we have a fair degree of unanimity of opinion; we have heard members from Quebec and from the western 'provinces express their sympathy with the maritimes and say they are prepared to back up the government in the steps which have been taken in introducing this and other measures. Nothing could be more fatal to the cause of the maritimes and nothing is more certain to forfeit the respect of the rest of Canada than to have a group of agitators continue to talk about this being only half a loaf and about keeping up the agitation until all sorts of things are Obtained, things which are reported against by the Duncan commission and which, as a matter of fact, would not be of any real merit or benefit to the maritimes.


Mr. A. A. HEAPS (North Winnipeg):: 
Charles Avery Dunning: Mr. Speaker, I rise to a point of order. What has the school population of Winnipeg to do with maritime freight rates?


Abraham Albert Heaps: If I might explain, Mr. Speaker, we have before us the Duncan report, which deals with the decline in population, and therefore the question of the decline in population in other parts of Canada may have some bearing upon the particular question before us.


Charles Avery Dunning: This is the second reading of a bill dealing with freight rates.


Hewitt Bostock: Yes, but the hon. gentleman is answering some statement made this afternoon by the Postmaster General (Mr. Veniot). I hope, however, that the hon. member will come more closely to the question at issue and discuss freight rates.


Abraham Albert Heaps: It may be pretty difficult,
Mr. Speaker, to keep exactly within the confines of the bill itself. I notice that the Minister of Railways did not get up and check his own colleague the Postmaster General when he was wandering from the subject this afternoon.


Charles Avery Dunning: I did not hear him
wandering into Winnipeg.


Abraham Albert Heaps: No, but the freight rate
question wandered into Winnipeg as exemplified by the fact that the Duncan commission sat for some little time in the city of Winnipeg. They wandered there anyhow.
I do not think it is fair, Mr. Speaker, to blame confederation for the conditions that exist at the present time in the maritimes. I think there may be other conditions that have brought about the depression in the maritimes apart altogether from the pact of confederation. Supposing that confederation had not come into effect; would the position of the maritime provinces be any better than it is to-day? I think there has been nothing given to show that it would be any better. Perhaps t'he nearest parallel that we have is the colony of Newfoundland. Newfoundland has been a self-governing colony all through.

C.N.R.-Eastern Freight Rates
She refused to come into confederation, and Newfoundland to-day is in no better position than the maritime provinces, if as good. I think the increase in population in New-foundland-perhaps the Minister of Railways will not like me going into this question of population again-has been about the same as in the maritime provinces.
The maritime provinces have been complaining a good deal about the position in which they find themselves. I have in my hand some figures pertaining to the capital expenditure and receipts of the maritime provinces, and I find that in the year 1924 the per capita taxation of Prince Edward Island was $3.76; Nova Scotia, $3.72; New Brunswick, $3.60. I compare those figures with the figures of some of the western provinces.


Charles Avery Dunning: Again, Mr. Speaker, I
rise to point out that this is a freight rates bill, which has nothing to do with provincial taxation. I rise only in the interests of order and to keep the discussion more closely to this very important matter which is before the House.


Abraham Albert Heaps: Does not this bill arise out
of the Duncan report, Mr. Speaker?


Hewitt Bostock: This bill certainly is the
outcome of the Duncan report, but it touches only one phase of that report, railway rates, and this legislation is brought in to correct what has been considered as a grievance of the maritime provinces. I quite understand, however, the trend of the remarks made by the hon. gentleman, and if we were now discussing the whole Duncan report I would say that he was perfectly in order, but we are discussing in connection with this bill only one phase of that report, and I would ask him kindly to confine his remarks to that phase of the report.


Abraham Albert Heaps: It is perhaps a little hard,
Mr. Speaker, after all the other members have had the opportunity of discussing tariffs and every other question in connection with this report, that I should find myself in the unfortunate position where I have to confine myself strictly to the bill before the House. But I gladly accept your ruling, and I will try as far as possible in my remarks to keep within the rules of the House.
The question then arises as to whether these reduced freight rates are going to solve the problem of the maritimes. Supposing this palliative which is now suggested by the government does not palliate; supposing it does not bring prosperity; what is going to be the consequence? Will the representatives of

the maritimes then come here, as has been suggested, and agitate for something more that they want, agitate to have the rate extended as far as Montreal, and if that does not help them sufficiently, to have it extended as far east as Toronto? Will there be any finality to it? The fact is, in my humble opinion, that reduced freight rates are not going to solve the problems of the maritime provinces, and I object to this legislation on the ground that it is going to give to the maritime provinces a preferential treatment which I do not think they ought to have any more than any other part of Canada. We are in this particular bill giving to a geographical area within the confines of confederation a preferential treatment, and in my opinion you cannot have confederation on a sound basis when you give preferential treatment to certain provinces within the confederation, because where you show favouritism on the one hand, you are bound to create an injustice on the other, and where you have an injustice you are going to have an agitation to have that injustice remedied. The consequence is we are now setting up a precedent for someone to come forward at a later date and ask for similar privileges for other parts of Canada. I am in favour of giving privileges to none, and of treating all people in all parts of Canada in exactly the same way.
It has been stated that the Crowsnest pass rates are in themselves something akin to what is proposed under this bill. Personally I cannot see the similarity at all. In the Crowsnest rates as existing at the present time a preference is given to a certain commodity which passes through three or four different provinces over a long haul. In this bill we are confining its provisions to the geographical area of three provinces, and we are giving a twenty per cent rebate on all local traffic in those provinces, in an area which commences and finishes in the three maritime provinces. It is altogether different from anything in the Crowsnest pass agreement as it exists at the present time, and those who try to show us that this is equal to or similar to the Crowsnest pass agreement are not, in my opinion, conversant with the situation.
I now come to the question as to how much this is going to help the great masses of people in Nova iScotia. Will it give the workers of Nova Scotia any better working conditions? Will it give them higher wages? I do not think so. I think that ultimately all the subsidies given under this bill will find their way to a very small percentage of the people of those provinces; the great masses of the people there will receive very

C.N.R.-Eastern Freight Rates
little indeed of the money which it is proposed to expend in the maritimes. The minister has claimed that these subsidies will amount to about two million dollars, as far as one of the railways is concerned. It will amount to twice that sum before we get through-four million dollars. And who is going to receive it? The railways will receive part of it and the large industrial and financial institutions will receive a great part of it. But the masses of the people of Nova Scotia will receive very little indeed. I hope I am in order in reading a reproduction from an article which appeared in MacLean's Magazine of October 15, 19^5. It is written by a gentleman who is a good Conservative I believe. This is what he says about the maritime question-and I think it has something to do with freight rates:
There are fishing communities where half the population drink in promises of wharves and breakwaters for six weeks. For the next four years they wonder when the material is to arrive, and then they start all over again. During the recent provincial campaign in Nova Scotia clever publicity men on both sides ignored the real issues, invented ridiculous slogans and appealed to the emotions and lowest instincts of the people rather than to their brains. In Queens county opposing candidates threw pulp mills at one anothers' heads, but it is a safe guess that the river Mersey will wind its way to the sea for many a long day before its waters lap the tanks of ''the largest pulp and paper mill in eastern Canada."
Is Canada playing fair with the maritime provinces? Who leased for ninety-nine years six hundred thousand acres of Nova Scotia's pulp and timber lands to be culled for export, at an annual rental of one cent per acre ? Who developed hydro-electric power at a cost of millions of dollars, permitted it to fall into the hands of a corporation for one cent per kilo-wott hour, to be retailed to the citizens of Nova Scotia at approximately ten cents per kilowatt hour ?
Ah hon. MEMBER: A Liberal government.


Abraham Albert Heaps: That may be all right, but it was not the Dominion government. If it was the Liberal government of Nova Scotia who committed the blunder, it is the people of Nova Scotia who should right these wrongs.


Hewitt Bostock: Hon. members must confine their remarks to the matter before the House, and I think the present discussion is not relevant.


Abraham Albert Heaps: During the whole afternoon the different speakers covered the situation and a good deal of the discussion was from this angle. They went into the question of confederation, into the various industrial questions and many other matters, and I am very sorry that I am unable to follow the hon.
members in the remarks which they made.
I would like to deal with many of these subjects, but under the ruling you have given, Mr. Speaker, I shall not be able to do so. The question of the wealth of the provinces was mentioned very often by counsel for Nova Scotia and mentioned also in the report itself, and if the government adopts the course of having the report brought in piecemeal and comprised in several bills it is impossible for any hon. member to deal with the report itself. It is a most unfortunate thing, because personally I would have liked to discuss the whole report. There are so many phases of the Duncan report which are outside the scope of any one bill now before the House that we find it impossible to discuss the basis of the report. And I think it is more important to discuss the reasons why the report has been brought in than to discuss the report itself.
I was saying that I did not think that the report was going to bring prosperity to the great masses of the people of Nova Scotia, and, Mr. Speaker, in view of the fact that I find myself so restricted-which was not the case with other hon. members-I will close my remarks with that statement.


George Gibson Coote: It was not my intention to take part in the debate on the second reading of this bill until I heard the remarks of the Postmaster General (Mr. Veniot) this afternoon,. I think that some of the statements which he made1 should not go unchallenged. He seemed to be under the impression that the freight rates paid by the maritime provinces are higher than those which are being paid in western Canada. I am not very well supplied with quotations on railway rates, but I have here a few rates which might be some indication of the charges which are being levied in western Canada as compared with the east, on certain commodities.
I find that the rate on coal oil from Fort William to Tompkins, Saskatchewan, 978 miles, is $1.17, while the rate from Sarnia, Ont to St. John, New Brunswick, 980 miles, is only 68 cents. I find that on binder twine the rate from Fort William to Pilot Butte, Saskatchewan, 767 miles, is 98 cents, while the rate from Montreal to Halifax, a similar distance, is only 64 cents. The rate on agricultural implements from Fort William to Tilley, Alberta, 1,129 miles, is $1.17.


James Layton Ralston: Will the hon. gentleman
tell me if the same rate does not apply to his own territory, and does the rate not carry it considerably further than the particular point to which he refers?

C.N.R.-Eastern Freight Rates


George Gibson Coote: Not to the best of my
knowledge. I think these rates which I am quoting are fairly comparative. Then the rate froim Hamilton to Halifax, a distance of 1,129 miles, is 63 cents.


Charles Avery Dunning: Will the hon. member
tell me what he is quoting from, so as to enable me to follow him? If he is quoting export rates as against domestic rates, I should like to know for my own information. The minister requires to examine these things. Just what tariff is it that my hon. friend is quoting?


George Gibson Coote: These figures are taken from Canadian Pacific Railway tariff No. W4965 C.R.C. No. W2655. The distances are from the official distance table of the company. I will quote only one or two more-they seem to be so objectionable to the hon.. minister.


Charles Avery Dunning: Not at all. I really need the information. If my hon. friend is making a fair comparison, the rates he is quoting are very significant and need looking into. If, on the other hand, the comparison is between export rates and domestic .rates, the House well knows the difference between the two.


George Gibson Coote: Some of these points I will quote are not export points. The rate on agricultural implements from Fort William to Swift Current, 929 miles, is 98 cents; from Hamilton to Edmundston, N.B., a similar distance, the rate is 61-1 cents. The rate on binder twine from Fort William to Gull Lake, 964 miles, is $1.17; from Welland, Ontario, to Edmundston, N.B., 967 miles, the rate is 66| cents. The rate on wire, iron and nails, and so forth, from Fort William to Swift Current, 929 miles, is $1.14; from Welland to Edmundston, N.B., a similar distance, the rate is 57 cents.
This afternoon the Postmaster General spent considerable time telling us what eastern Canada had done for the west. I think it might be well if the people of eastern Canada knew something of what the people in the west have done in contributing to railway earnings. I am going to quote from the evidence given by Mr. Symington before the special transportation rates committee of this House in 1923. He took the figures I am about to quote from data supplied by the Canadian Pacific Railway Company to the railway commission,, and anyone can verify the figures by referring to the official reports of that committee. He said:
For the years 1907 to 1911 inclusive, the net earnings of the Canadian Pacific Railway on
fMr. Ralston.]
western lines as compared with eastern lines are as follows: on eastern lines, $43,500,000; on western lines, $91,500,000; or 110 per cent greater in western Canada than in the east.


James Layton Ralston: Would my hon. friend
give the comparative mileage?


George Gibson Coote: I have not the comparative
mileage before me. I am trying to show the Postmaster General what western Canada has contributed to the net earnings of the Canadian Pacific.


Peter John Veniot: The Postmaster General
never denied that western Canada had done its share. I found no fault with western Canada at all.


George Gibson Coote: I am not finding any fault
with eastern Canada either, but I am trying to enlighten the Postmaster General on what western Canada has done.


Peter John Veniot: You need not.


George Gibson Coote: For the next live year period, 1912 to 1916, the net earnings on eastern lines were $60,000,000, while on western lines they were $152,000,000, or 154 per cent greater. For the next five-year period, 1916 to 1920, the net earnings on eastern lines were $70,000,000, while on western lines they were $144,000,000, or 105 per cent greater. For the year 1921 the net earnings on eastern lines were $11,000,000, while on western lines they were 430,000,000, or 157 per cent greater.
For this total of sixteen years the net earnings on eastern lines were $184,500,000, while on western lines they were $417,500,000.
There seems to be a pretty general impression in this House that the railways in western Canada are not getting sufficiently high rates, but I think these' figures should quiet the fears of hoe. gentlemen in that regard.
Then I should like to remind the House, when it is thought that western Canada is getting some undue benefit in respect of freight rates, of a speech delivered by Mr. E. W. Beatty, president of the Canadian Pacific Railway, in New York on February 22, 1925, to an audience of railway men. Referring to the Canadian Northern railway, he said:
While a great conception carried to physical completion it failed because it was built before its time, and could not be operated successfully through the dislocation of war time. If instead of turning its prairie lines into a portion of a transcontinental system, the owners had been content to make as their termini the mountains on the west and the Great Lakes on the east, they would have been the wealthiest men in Canada, and Canada would not to-day be facing the railway burden it is compelled to bear.
I hope hon. gentlemen will compare the earnings made by this railway in western

C.N.R.-Eastern Freight Rates
Canada during the period I have given with what the Intercolonial was able to accomplish during the same period in the maritime provinces.
Now, Mr. Speaker, I know the House is very anxious to adjourn by Easter, and I should not like to be held responsible for delaying prorogation, but I want to direct the attention of the Minister of Railways to the remarks made this afternoon by the hon. member for York-Sunbury (Mr. Hanson). It seems to me that if this bill passes we are doing something very substantial for the maritime provinces. But the hon. member for York-Sunbury says the maritimes are not going to be satisfied until they get Montreal fixed as the western end of the Atlantic division of the Canadian National system. He also warns the government that this is only the first instalment of what the maritimes expect to get. If so, I am looking forward with a good deal of interest to what the " first instalment " is going to cost. Then maybe we can get some vague idea of the ultimate cost. The Postmaster General this afternoon referred to certain pledges made by Canada, or what was then Canada, to the maritime provinces to induce them to enter confederation, and he said that now we were only carrying out the terms that were really agreed to at that time. It seems to me, Mr. Speaker, that the provinces in western Canada had nothing whatever to do with any promise made to the maritimes, but I want to say right now that we do not object to any promises so made being carried out, although our only share in these to-day appears to be to help pay the bill. The railway commission found away back in 1914 that freight rates in western Canada were from 15 to 18 per cent higher than in the east. That view was concurred in by the late Hon. Frank Carvell in one of the judgments which he gave as chairman of the railway commission. It is true that the increases which have been made since that time were slightly larger in western Canada than in the east, but I think the railway commissioners themselves are still of the view that the rates in western Canada are higher in general than they are in the east. I cannot see how anyone can say that the maritimes are only getting justice if western Canada is called upon to pay her share of the 20 per cent which will probably have to be handed over by the government to the railways. If the maritimes consider that it is just that they should have lower freight rates than central Canada because central Canada gets some advantages from the tariff and other things, then I think that we in western Canada are justified in the statement that we are entitled to the same preferential treatment. Is the Minister
of Railways (Mr. Dunning) prepared to accept that as a principle in fixing freight rates in Canada to-day? The pledge I refer to, so far as I can find it in the report, is to the effect that the Intercolonial railway, having been built for strategic reasons and being therefore 200 miles or so longer than it would be if constructed in a direct line, should impose only such charges as would be justified in connection with a direct route. I do not think the maritimes are paying any greater charges to-day than they would if the line had been built over the shortest course; that is to say, the through rates to the maritimes are all based on the length of the Canadian Pacific Railway, short haul.
I would not object to the legislation now before us if it applied only to interprovincial traffic.^ If we wanted to do something to make it easier for the maritimes to trade with central Canada we should, in my opinion, give sympathetic consideration to such a proposal. But I do not see why one part of Canada should be singled out for preferential treatment in connection with local freight rates rather than any other section of the country. I do not see how the principle can be defended. I almost feel like saying that if the Minister of Railways can swallow that proposal, then surely we ought to admit that it is probable the whale did swallow Jonah.
I listened to the minister this afternoon as he spoke in support of this bill-or rather spoke on the bill, 'because I could not find very much in his speech that was in support of it. I may be doing him an injustice, and I do not want deliberately to do so. But, as nearly as I can remember, the reason he gave for bringing in this bill was that the Duncan commission had recommended it. I agree with the hon. member for Cartier (Mr. Jacobs) in the statement he made in his speech on the budget, that this investigation was a very one-sided affair, what the legal men, I believe, term an ex parte hearing. Only one side was represented. The Dominion government itself was too busy with an election campaign to be represented at the inquiry, and everybody else who should have been looking after this matter was also busy. But evidently somebody in the maritime provinces was interested and was busy entertaining the royal commission, putting them in the humour to recommend something that would certainly be [DOT] of some benefit to that part of Canada.
There are one or two things in the report that strike me as being somewhat peculiar. It is pointed out at page 10 that the commission did not find that any pledges had been
C.N.R.-Eastern Freight Rates

made to the maritime provinces at confederation which the commission would be justified in endorsing. Let me quote briefly from what is stated on page 10:
As much indeed was admitted by witnesses who discussed this aspect of the case with us in the course of the evidence, and there were none who would assert, with any degree of positiveness and assurance, to what extent, and in what ways, there could be precise apportionment of fault to confederation. The truth is that the responsibility of confederation can only be a matter of speculation and not of proof.
It seems to me that the commission have stated in fairly definite language that they are of the opinion that it was not proved to them that there were any pledges made to the maritime provinces at confederation which had not been carried out, and that conditions in those provinces could be regarded as being in no way attributable to any failure to observe any such pledges.


Charles Avery Dunning: The language my hon. friend quotes certainly is not to the effect of what he says.


George Gibson Coote: It seems to me that is the only inference to be drawn from it. But suppose we agree that a pledge was given to the maritime provinces that a railway was to be built-let us admit that- and that although the railway would be longer than it should be inasmuch as, for strategic reasons, it followed the course of the river St. Lawrence, keeping in Canadian territory, it would not impose such rates as might be termed strictly commercial. Let us suppose that. But was there any promise, implied or otherwise, that after the railway was built local rates within the maritime provinces themselves-and there were railways in the maritime provinces before the Intercolonial was built-would be lower than in other sections of Canada? Surely that was not implied in any pledge given the maritime provinces. At any rate I have never heard it stated in this House, nor do I recall any such argument presented by members from the maritime provinces in the last six years.
The recommendation of the Duncan commission as to freight rates is to be found at page 22 of the report. It seems to me that there is one sentence in particular that calls for some explanation. Let me quote:
He further explained that, owing to grades and curvature, the operating and maintenance expenses of this branch of the railway were much greater than the average of the rest of the system and,-
IMr. Coote.]
These are the words I want to direct attention to particularly.
-still further, that winter conditions in the maritime provinces necessitated special expenditure arising from snow and ice conditions.
I want to ask: Since when has it been adopted as a principle, in the fixing of freight rates in Canada, that because operations in a particular part of the country are expensive, therefore there shall be a reduction there in freight rates? The people of Alberta and British Columbia particularly are suffering from high freight rates; the interprovincial rates, I believe, are 25 per cent above the level of the rates charged on the prairies. This is due to difficulty of railway operation on the Canadian Pacific between Alberta and British Columbia through the mountain section. Now, are we going to reverse our railway rate policy in Canada and declare that because of difficulties in the mountain section, similar to those referred to in the paragraph of the report I have just quoted, therefore lower freight rates will be conceded? The rates are higher on the prairies than they are in the maritime provinces at the present time, and I say without fear of contradiction that there is no part of Canada where railways can operate so cheaply as on the prairies, and particularly in the western end. They are not bothered much with snow and ice conditions there, although the general opinion in Canada may be very -much to the contrary. In the part of Alberta in which I live we never see a snow plow, and we have no snow and ice conditions to combat. Nevertheless we are paying higher rates.
It does seem to me that there is no true economic basis for this freight rate bill. I regret very much that a Liberal government has fallen for this idea of bonusing freight rates. Where is it going to stop? Why let us stop with the maritime provinces? Why have not the prairie provinces as much right to ask for the same thing? Why should) not the Peace River country ask for the same thing also; they are isolated a thousand miles away from the ocean? Why should; the maritime provinces be the only ones to receive such a benefit? I will put this question to the Minister of Finance (Mr. Robb) because he will have to arrange to pay the bill. Why should the maritime provinces get a 20 per cent lower rate on the butter for instance, which they hope to export to England, over that part of the haul which is across New Brunswick or Nova Scotia to tide water, while the farmers of Alberta must pay a higher rate if they desire to ship through Atlantic

C.N.R.-Eastern Freight Rates
ports, on a three thousand mile rail haul? I cannot see on what grounds this legislation is introduced unless it is in the nature of a compassionate allowance to these provinces. Some maritime province members may be impatient with us for opposing this bill at all, but I wish they were in our position. We are seven hundred miles from the Pacific ocean, but the railway commission says that because the Canadian Pacific railway has a difficult section of line to operate through the Rocky mountains we must pay a rate 25 per cent higher than that paid iby the people on the prairies. Then we have a bill presented to us by which the Dominion government is to pay 20 per cent of the freight rates on the products of the maritime provinces in order to get them to the sea board possibly one hundred or two hundred miles away; that is beyond our understanding. I do not doubt at all that the legislation will go through, but-


Charles Avery Dunning: Would my hon. friend
permit a question? Is he not asking at present for substantially the same principle to be applied to coal coming eastward?


George Gibson Coote: No, I have not yet asked
for it, but I can assure the minister that it will not be very long before we will ask for it, because when this bill is passed the principle is firmly fixed. I would ask the minister a question. Is he prepared to give to all the other applications for preferential treatment just as favourable consideration as was given to the application of the maritime provinces?


Charles Avery Dunning: I shall be glad to answer
that when it is my opportunity.


George Gibson Coote: Then I would ask the minister a further question. Does he consider it good policy to place such legislation upon the statute books simply because a royal commission recommends it? As near as I can gather that is about the only reason the minister can give. He may have other reasons, which I would have expected him to present to the House on the second reading of the 'bill.


Charles Avery Dunning: I gave them once and I
will give them again.


George Gibson Coote: If this House gives second
reading to a bill they agree to the principle, and I was a little surprised this afternoon that the Minister of Railways expected the House to give this bill its second reading with no further arguments than had been advanced at that time.
Before sitting down I would like to say that if this proposal were to assist the maritime
provinces in their dealings with the other provinces, that is, to assist interprovincial trade by lowering rates over this long distance which separates them from central Canada,
I would view the legislation very sympathetically, as I would view any legislation which would help bring western and eastern Canada closer together. May I say to hon. members that we in the west are under a great handicap. Under the tariff system of this country we are compelled1 to trade with central Canada; we are compelled to buy our supplies in central Canada; they must be hauled for a long distance across practically one thousand miles of rocks and Christmas trees, as one hon. member used to put it, and we have to pay the freight bill. Central Canada does not pay it; we pay the freight on everything we bring in and on everything we send out. Under these circumstances we feel, this long haul very keenly, and we sympathize with the maritime provinces in their endeavour to overcome a similar handicap. It is true that the haul in their case is not so long, but it presents a difficult problem. But we fail to understand, why local rates in the maritime provinces should be reduced 20 per cent with the Dominion government paying the bill, because that means that every section of Canada must pay a share. Because I think this policy is unsound, Mr. Speaker, I intend to vote against the second reading of the bill.


James Layton Ralston: I am sorry to detain the House at this late stage and at this late hour of the evening, but I feel that it is my duty as a supporter of this bill to give the House some reasons why I think it should receive the support and sympathy not only of those in the maritime provinces but of Canadians generally. I would not be human and I would not be of the generous disposition generally accredited to Canadians if at the outset I did not express the appreciation and the satisfaction which exists in the maritime provinces with the statement made by the Prime Minister (Mr. Mackenzie King) on March
18.	I also wish to place on record our acknowledgments to the commission presided over by Sir Andrew Rae Duncan, of which Judge W. B. Wallace and Doctor Cyrus Macmillan were members, for the work they did. In four months' time that commission dealt with questions which have vexed and perplexed the souls and tempers of the people of the maritime provinces and of other parts of Canada as well for a good many years. The subject had been dealt with repeatedly in speeches; it has been the subject of election
iOMMONS
C.N.R.-Eastern Freight Rates
programs and campaigns, and in that short time these gentlemen heard evidence and arrived at conclusions far-reaching in character which I at least, as one Canadian, believe will do much to solve the problems and settle the difficulties which have existed. I feel that not only the sympathetic spirit with which they approached this question but also the businesslike attitude and expedition which they displayed is worthy of note in these days when commissions are reputed to take so long and to be so dilatory in their work. Notwithstanding what has been said from some parts of this chamber to-day, I believe the country generally is indebted to these gentlemen for the work they have done and for the way in which they dealt with the task in hand.
As for the Prime Minister, I want to express my personal appreciation of the earnest consideration he has given this matter and of the statesmanlike way in which he has carried out what we regarded as honourable obligations to the people of the maritime provinces in view of the appointment of this commission. I do not propose to make a partisan speech, but the Liberal party can at least say to the people of Canada that after speeches had been made on this question and after it had been a political football for a good many years, they dealt with the matter in a businesslike fashion, appointed a commission, told the people of the maritime provinces to bring on their evidence and make their case, and directed the commission to make a finding in accordance with the facts, and to make concrete recommendations. That commission acted promptly and made these recommendations, and it was with a great deal of satisfaction indeed that the people of the maritime provinces heard the announcement of the Prime Minister that these recommendations would be carried out. I am sure he would be the first to acknowledge that the decision which was arrived at came not only from efforts of his own, but from the generous spirit manifested by his colleagues in the cabinet, by members on this side of the House and I believe on the other side as well, and generally by the people of Canada, who felt that the time had come when this problem should be effectively dealt with. Therefore I feel that it is only doing justice that we should recognize-as I know the people of the maritimes do recognize-the splendid spirit in which this report and announcement have been generally received by all parts of Canada.
I regret that in this House there has been the suggestion of an issue between the east and the west. I deprecate any idea of com-
[Mi. Ralston.]
petition between the east and the west for special favours at the hands of this parliament. I presume each hon. member has at heart the particular section of the country from which he comes. A man who came from Nova Scotia would be a very poor Canadian if he were not a Nova Scotian too. A man who oame from Alberta would be a very poor Canadian if he did not stand up for the rights of his province. But I feel that when we come to this parliament, these problems can best be solved by taking a broad Canadian view of them, and I would commend to hon. members in the other corner of this chamber the action which was taken by that solid bloc from Nova Scotia in 1933 when they solidly voted for a very similar measure to that which is being asked for to-day on the part of the maritime provinces, namely the Crows-nest rate legislation. In that they showed that they as Canadians were anxious to help to solve the problems of the west. I believe, before the vote comes, our friends will feel that they as Canadians should be equally solicitous and anxious to help in this way to solve the problems of the east.


Edward Joseph Garland: Is the hon. gentleman not rather asking us to stretch our generosity a point when he remembers that the government, under the same leader which he has to-day, took away from us all the westbound rates under the old Crowsnest pass agreement?


James Layton Ralston: I will deal with the
Crowsnest pass agreement. May I just make this point now? I am not making this statement in the spirit of throwing it up to anybody; I am doing it only in order to indicate that this parliament is big and broad enough to deal with the difficulties of any particular section which feels that it has problems which call for solution. The Crowsnest pass agreement and the statute which was passed in 1923 did what this legislation does not suggest doing. It said that for all time to come, or at least for as long as the statute remained in existence, the freight rates which existed away back in 1897, nearly thirty years before, on grain and flour, should be reverted to in the year of grace 1923, and that those rates should apply not only to the stations to which they applied under the Crowsnest pass agreement and to Canadian Pacific lines, but to all lines and between all stations. That was at least a spirit of justice. The hon. member for Bow River uses the term "generosity". It may have -been a spirit of generosity. Nevertheless it was something which it was thought was required at that

C.N.R.-Eastern Freignt Rates
time by the people of western Canada and it was freely given by this parliament.


Edward Joseph Garland: The hon.
gentleman is still stretching our generosity. He has overlooked entirely my reference to the fact that the government in which he is now a minister took away from us the westbound rates under that agreement.


James Layton Ralston: I am not aware of any
taking away. If my hon. friends got for all time a rate which had been in existence thirty years before, notwithstanding the fact that the cost of labour and cost of operating must have doubled since then, and if they got it between all stations and on all lines of railway, surely that must have been some quid pro quo for not restoring the old westbound rates between the original stations on the Canadian Pacific. My hon. friend also knows that immediately an application was made to the Board of Railway Commissioners citing the Crowsnest agreement as a new basis of rate making and asking that the Crowsnest rates should apply westerly as well as easterly. I mention that simply in order that hon members in the country may realize that this House has endeavoured to deal fairly with all sections of Canada.
I must confess that I do not know as much about western rates as some hon. members have suggested they know about eastern rates. I can only take what records I have and be subject to correction if in any way I am speaking other than by the book. In regard to the difficulties of the maritime provinces in connection with freight rates, the increases in rates began, as has been said to-day, in 1913 when a 10 per cent increase was imposed on Intercolonial railway rates alone without any corresponding increase in rates in other parts of Canada. That was followed in July, 1915, by another increase of 5 per cent on Intercolonial rates, and still the rest of Canada suffered no increase. That was followed again in November, 1915, by another 5 per cent increase in rates on the Intercolonial railway alone. It was not until a year after that an increase of 5 per cent was made in freight rates in Canada, and I call the attention of the hon. member for Bow River to this fact that this first increase by the Board of Railway Commissioners applicable outside of the Intercolonial Railway applied only to stations east of Port Arthur. That was followed in 1948, March 15, by what is known as the 15 per cent increase which applied east and west both, but it excepted wheat, which is a pretty important commodity out west. That was followed again on August 32649-118
12, 1918, by a 25 per cent increase in rates all over Canada, but what happened? When that increase was imposed all over Canada, the 15 per cent increase which had been imposed by the previous order was knocked off so far as western Canada was concerned. This left the maritime provinces and Ontario with the pyramided increases of 15 per cent and 25 per cent, whereas the western provinces suffered only the 25 per cent increase. That was followed on September 13, 1920, by a further 40 per cent increase-40 per cent in eastern Canada, and 35 per cent in western Canada. A provision was made that on January 1, 1921, a reduction was to take place, but the reduction in western Canada was a reduction down to 30 per cent of the previous rate, whereas the reduction in eastern Canada was a reduction down to 35 per cent of the previous rate. Thus, comparing eastern and western Canada respecting increases in freight rates, we have first a 10 per cent increase, then two 5 per cent increases and then a 15 per cent increase, all on eastern rates but not on western rates, and the first three of these applied to the Intercolonial railway alone.
In addition my hon, friends know that branch lines to a great extent have been built in western Canada. I am finding no fault with that whatever; but when the hon. member for Macleod (Mr. Coote) referred to the comparative operating revenue on the Canadian Pacific in eastern and western Canada respectively I do^not think he was giving us very much useful information. This all depends on the comparative mileage in the east and west of road that is operated.


George Gibson Coote: Is the fact that these railways are very often in competition with each other for a certain piece of territory in which to build a branch line not pretty good evidence that they want more mileage in western Canada?


James Layton Ralston: I am endeavouring to
show that eastern Canada along with western Canada has tried to do its share toward providing railways for western Canada, and that these railways in western Canada just as much as the railways in eastern Canada are not attempting to pay the interest on their investment, because it is part of the development of Canada that western Canada shall have an opportunity to have its wheat transported for export purposes.
Somebody suggested in this chamber this evening that the west was paying 20 per cent more for transporting its wheat than the



C.N.R.-Eastern Freight Rates
wheat ' rates in the maritime provinces. I want to refer my hon. friend to what I understand are the comparative rates on grain and grain products, not in any spirit of criticism, but only so that the facts may be known. Let us take a 200-mile haul.
The rate on grain and grain products for 200 miles in the maritime provinces, I am told, is 25 cents per 100 pounds; in Ontario, 18 cents per 100 pounds; in the western provinces, 20 cents per 100 pounds.
On potatoes, the rate for 200 miles in the maritime	provinces	is	23	cents	per	100
pounds; in the prairie provinces, 22j cents per 100 pounds.
On lumber, the rate for 200 miles in the maritime	provinces	is	14	cents	per	100
pounds; in the prairie provinces, 11J cents per 100 pounds.
So I do feel that the criticism is not quite accurate when hon. gentlemen are suggesting that western rates are already 20 per cent higher on grain, and that it is now proposed to reduce the maritime province rates by a further 20 per cent.
I would also call the attention of hon gentlemen to this. This country is expected to provide for the building of the Hudson Bay railway. The eastern members expect tc vote for that railway. I think members on all sides of the House are pretty well committed to it, and there is going to be no grudging about expending that money. If conditions warrant the railway will be built and it will be for the benefit primarily of the western province?; further it will divert a certain amount of traffic from the eastern ports, but nevertheless it has been dealt with as a Canadian policy and I assume that members on both sides of the House will support it.
I had a statement made up in order that the House may realize just exactly what has been done in this country of ours with regard to transportation, of expenditures and commitments by the Dominion government on railways, waterways and immigration from 1867 to 1925. I may say that the expenditure on immigration is a very small amount. I am going to hand this statement to Hansard. It is as follows:
Dominion Government Expenditure and Commitments on Railways, Waterways and Immigration-1867 to 1925 Aid to All Railways
Reference	Form	Amount
S.R.S. (1925) 10 Cash in form of Subsidies	 $ 176,693,510
10	Land, 31,678,318 acres at $5	
158,391,590R. &. C. (1926) 11	Dominion Investment in Railways	
1,188,482,34111	Funded debt due public Canadian	Nat. Rys. (x)	931,329,30212	Cash for Can. Northern Shares	
10,000,000Total	
$2,464,896,743R.	& C.	13 (x) Of this amount the Dominion has actually
guaranteed or assumed guarantees amounting to $674,947,283.
S. R.S.	49 & 51 Item does not include allowance for $343,994,000
shares of C.N., G.T., and G.T.P., not held by
Government.
Aid to Waterways
R. & C.	73 Total expenditures on Canals (less income) ..	225,730,355
To complete Welland	 60,000,000
Expenditure on St. Lawrence below Montreal..	27,703,145
Total	 $313,433,000
Immigration
Y.B.	183 Total expenditure 1868-1925	 39,059,479
Grand total expenditures and commitments.. ..	$2,817,389,222
Aid to Railways in Maritime Provinces R. & C.	82	Capital expenditure on all Railways in maritime provinces	
166,998,856R-&C.	71	Capital expenditure on St. Peters Canal.. ..	648,547Grand total	
$167,998,856
Maritime provinces share of total expenditure and commitments on all railways, waterways and immigration, in proportion to population,
or 11 per cent would equal	 309,912,000
Expenditures in maritime provinces	 167,998,856
Deficit	 $141,913,144
Annual interest on above at 5 per cent	 7,095,657

C.N.R.-Eastern Freight Rates
I will just give the House the totals if I may be permitted. The grand total of federal expenditures and commitments for railways, waterways and immigration since confederation is $2,817,389,222.


William Anderson Black: How much of that has been expended in the province of Nova Scotia?


James Layton Ralston: I am sorry I cannot give that, but the amount which has been expended in the maritime provinces, of that $2,817,389,222 is $167,998,856. The amount which would have been expended had the maritime provinces had railway expenditures made within their borders proportionate to their contribution based on population would have been $309,912,000. In other words $141,913,144 more than the share of the population of the rest of Canada has been expended outside the maritime provinces, and the maritime provinces have paid it. I am not suggesting, and this House will understand me I know, that there should be a meticulous accounting, and that you should argue that because the maritime provinces have contributed that $309,000,000 odd, they should ask that it all be expended within their own borders. But I do say that it makes a fair case at least for suggesting that if that extra $141,000,000 odd has been spent for the purpose of developing the natural resources of the rest of Canada and the transportation of those resources to market, the maritime provinces might fairly ask that in some other way they be compensated, and that some additional assistance be given to them in the development of their natural resources. That is fair, I think.


Mr. ADSHEAD:: Is the hon. gentleman
basing his argument for decreased freight rates for the maritime provinces on the suggestion which was made by the Postmaster General this afternoon that there was some promise made at confederation which has not been carried out?


James Layton Ralston: I am dealing with the
argument of the hon. member who last spoke who was pointing out the difference between the treatment of the east and the west, and I am endeavouring to show that the expenditures which have been made in connection with transportation facilities have paid no regard to the amount which the maritime provinces have contributed.


Mr. KAISER:: You are taking the population as of what date?


James Layton Ralston: In 1921.
32949-118*	.


George Gibson Coote: Has the hon. member any
figures to show the amount expended since confederation on steamship subventions and on harbours and rivers in the maritime provinces as compared with the western provinces?


James Layton Ralston: I thought I had those
figures under my hand; I have them somewhere, but I can assure my hon. friend that the fraction they make of the expenditure in the rest of Canada is very small. That will not help my hon. friend very much if he has the idea there is any large disproportion in the expenditures on public works in the maritime provinces as compared with the rest of Canada. May I just say here, for the benefit of my hon. friend, who has no wharves in his constituency, that public works, wharves, breakwaters and things like that do not run into money like the construction of railways or canals. You can build a good many breakwaters and wharves for the price of one railway terminal.
Just one other figure with regard to comparisons between the east and the west. I have here the ton-mile earnings. Ton-mile earnings mean the amount which is paid by the shipper for carrying one ton of freight one mile. The ton-mile earnings on the railways in 1925 in the Atlantic region of the Canadian National railway were 1.130, while the ton-mile earnings on the western region were .764; in other words, it cost the people of the maritime provinces, or of the Atlantic region, 33J per cent more than those of the west to carry a ton of freight one mile. Those figures are for the year 1925.


George Gibson Coote: I suppose the hon. member
would admit that the earnings per ton mile depend largely on the number of miles the railways carry those tons.


James Layton Ralston: Not at all; that is just
where my hon. friend is wrong. The per ton-mile earning just represents one ton carried for one mile, and the only thing which can throw out the calculation is if you get some high class freight which yields a very high revenue per ton per mile. No, the per ton-mile is the best and soundest way by which to decide how a country is taxed for its freight.
One other thing. We have heard a good deal about the Crowsnest rates, and my hon. friend from Rosetown (Mr. Evans) had something to say with regard to those rates and certain evidence which had been given. He is right and he is wrong. He read some evidence given, I think, by a statistician of the Canadian National railways to the effect
1864	COMMONS
C.N.R.-Eastern Freight Rates
that under the Crowsnest rates the railways .had paid. I want to point out to him that apparently it is not because of the Crowsnest rates that the railways have paid, I have been referred to the evidence given by Mr. Watson of the Canadian National railway on March 24, 1626, page 6269, before the railway commission in the freight rates investigation where this evidence appears:
The Chief Commissioner:	Do I understand
you to say that $6,000,000 a year was the loss in the grain movement?
Mr. Watson:	Yes, west of the lakes.
Tlie Deputy Chief Commissioner:	And east
of the lakes you are not aware?
Mr. Watson:	No.
Apparently-and this is not by way of recrimination at all, but according to that evidence the grain rates taken alone did not at that time pay the cost of the service performed.


Some hon. MEMBERS:: No, no.


James Layton Ralston: All right. I am simply
quoting the evidence. Anyone may question it. I, of course, have no knowledge of the matter, so I am giving the page and line so that hon. members may comment as they see fit. So much for the west. I have referred to these matters only in order to show that equitable consideration is to be given in [DOT]connection with railway matters all over this [DOT]country.
I do not propose to go into the inception of the Intercolonial. It has been dealt with at length. It has been said that military and strategic considerations had influenced the location of the road, but I come immediately to the finding in the' report of the Duncan commission, on page 21, which it seems to me clinches the matter. I am going in a moment to deal with the argument that the decision of the commission was ex parte. They say:
The maritimes case on railway rates was put to us in very considerable detail. The railway *commission is at the present time dealing with *these same details, and we have not formed any opinion on these matters so far as a judgment [DOT]on their merits would involve consideration of railway administration and policy. On the broader question, however, of the incidence of the existing rates as a whole upon industry and employment in the maritimes, we have come very definitely to the conclusion that the rate .structure as it has been altered since 1912 has [DOT]placed upon the trade and commerce of the .maritime provinces (a) a burden which, as we have read the pronouncements and obligations undertaken at confederation-
Some hon. members suggested that there were no pronouncements.
. -it was never intended it should bear, and (b) a burden which is, in fact, responsible in very [DOT]considerable measure for depressing abnormally
IMr. Ralston.]
in the maritimes to-day business and enterprise which had originated and developed before 1912 on the basis and faith of the rate structure as it then stood.
With that as the starting point the commission proceed to say that in their judgment the changes which have been made in the rate structure since 1912, the increases which have taken place in the maritimes as compared with the rest of Canada, is as fair a measure as can be made of the disadvantages under which the three provinces suffered and of the special considerations which should be thought of when fixing the rate structure for those provinces.
They recommend a twenty per cent reduction in the local rates, Someone asks why. Let me deal with that for a moment. They recommend that the rates between stations on the Atlantic division shall be reduced by twenty per cent. I have already pointed out that that would only approximately put them back to the comparative position which they held before 1912, because there had been the various increases which had been made in the maritime rate structure, without corresponding increases in the rest of Canada. But there are reasons why the local rates in the maritime provinces should have been on a different basis, and might have been in the first place put and maintained on a different basis from the local rates in the rest of Canada. In the first place, the principle of rate-making is that the railways may charge "what the traffic will bear." That is the time honoured formula- not "all the traffic will bear," but "what it will bear." One factor is the value of the commodity. You naturally charge a higher rate on diamonds than on coal, and more per mile for a short haul where there is dense traffic than for a long haul where you have little traffic. These are all factors to be taken into consideration. Taking that as a basis the situation in the maritime provinces was that industries were from' time to time established for the benefit of the people of those provinces and for the manufacture of goods for domestic consumption. Rates were made on such a scale that the products of those industries would move to their customers. The position was not the same as in Ontario, where a man could manufacture goods and could almost throw them over his back fence into his customer's yard, but in the maritimes they had to move them a great many miles; therefore the unit rate had to be lower the further the goods had to travel. Another feature about the maritime traffic was that these goods were not canned in carload lots as they were in Upper Canada. Goods in the maritime provinces had to be moved as way freight

C.N.R.-Eastern Freight Rates
and consequently the class rate had to be lower than in Upper Canada where the same goods got the benefit of a low car load rate. Distributing centres gradually formed at Moncton, Sackville, Amherst, and other places. In all these places where wholesale houses were established, rates were fixed so that they could reach the local market and compete with the man from Ontario, who had the advantage of the through rate although they had a longer haul. These were some of the matters which entered into the rate making on the Intercolonial when it was a separate entity from the Canadian National Railways. And lastly, they were dealing with a population only one-fifth the density of Upper Canada; therefore if a man was to serve his customers and get his goods to market he had to have a lower rate, because he had less goods to handle, his average haul was longer, and he was unable to do business on the larger scale. And so because of these factors the local rates in 1912 were considerably lower than the rates in other parts of Canada.
Now in reference to the deficit, which has been so much talked about; notwithstanding the fact that the maritime provinces had 250 miles of non-commercial road, notwithstanding that they had as I say only one-fifth the density of population of the other provinces of Canada, that they had not the possibilities of trading enjoyed by other provinces, and the railroad had not the same traffic, the rates were such and the transportation tax imposed on the maritime provinces was such that in thirty-seven years there was only seven million dollars of a deficit on the Intercolonial. What would have happened if the 250 miles of railway had been cut out, and if we had been able to save our operating expenses on the 250 miles of road which was noncommercial? Take the lowest rate of operating expenses on any road in Canada and you will find that in ten years the maritime provinces would have saved, if that 250 miles of road were eliminated, some $14,000,000, which means that the deficit would have been wiped out and the maritime provinces would have shown a surplus. Hon. members must remember this fact-which was presented to the commission-that there are many other conditions in the maritimes which make it very expensive to operate the railroad, the climatic conditions, expensive terminals, car ferries-the effect of all these is included in the deficit.


George Gibson Coote: Would the hon. minister
not admit that the maritime provinces have a more dense population than the western provinces?


James Layton Ralston: I cannot tell my hon.
friend about that.


George Gibson Coote: Alberta has about the same
population as Nova Scotia, and the minister knows the difference in the sizes of the provinces.


James Layton Ralston: I am only stating-and
I say it without offence-what occurred before Alberta was heard of as a province. The condition I have outlined is what prevailed in the maritime provinces when Alberta entered confederation.
One of my hon. friends said something about the fact that the west was not bound by the undertakings which were made at the time of confederation. Alberta came into confederation after the promises had been made, and not only after the promises had been made but after conditions had become crystallized, and when as I say traffic conditions had developed as they were before 1912. That is the situation with regard to local rates. And so when the people of the maritime provinces discovered that the Intercolonial was being put in as part of the great National system and that all the rates were to be made uniform, they realized that difficulties would arise and that manufacturing and distributing centres which had flourished under the old conditions were likely to be adversely affected. As we all know, the situation did become worse. I am not one of those, Mr. Speaker, who contend that the only difficulty down in the maritime provinces is freight rates. I said that very frankly before the Board of Railway Commissioners a year ago, and I repeat it now; but I do feel that a return to the freight rate conditions which relatively speaking existed before 1912, will be of advantage to every producer and consumer in the maritime provinces. I am of course particularly interested in the fishing business of my constituency and while lower freight rates will be a benefit, the future of that great industry lies largely in the opening of wider markets, particularly in the United States. I cannot stress too strongly my personal opinion of the importance of continued and earnest activity with that object in view.
I am reminded that besides local rates there is another recommendation contained in this report and sought to be carried out by the bill. That recommendation is for a reduction of 20 per cent on the maritime or the Atlantic region proportion of the through rate. This simply means that the maritime manufacturer ought to be able to get his goods to Upper Canada on at least the same rate basis as if he distributed them locally. Montreal is the

C.N.R.-Eastern Freight Rates
first great competitive market for maritime goods. There the maritime manufacturer meets his competitor from Toronto, and he wants to have somewhere near an even chance. I grant there is a longer haul from the maritime provinces to Montreal than from Toronto, but let me say that geography has been wiped out too many times in connection with freight rates for us to worry about it to-day.


Hugh Guthrie: Hear, hear.


James Layton Ralston: You will find in Ontario zones of two or three hundred miles where the rate is identical from any point within that zone to points outside. My hon. friend from Maeleod (Mr. Coote) to-night quoted a rate from a point in Ontario to a point in the west. I have not the rates before me, but I will undertake to say that if he looks at the tariff he will find that the rate applies not only to the particular point he mentioned but to a hundred miles on each side of that point. Geography is wiped out entirely by the flat rate or zone system, and it is recognized everywhere. Further, as the Minister of Railways says, my hon. friend was comparing export rates with domestic zone rates, and as everybody knows, the two have nothing whatever in common; they are fixed on an entirely different basis. It stands to reason that the maritime manufacturer should at least have the benefit of the opportunity of marketing his goods in Upper Canada if we in Canada are to develop domestic trade at all. I understand that hon. gentlemen opposite, or at least some of them, advocate that that is the only and ultimate market for the maritime manufacturer. I am bound to say that I do not subscribe to that doctrine. But the way he can get a chance to place his goods there is by having his freight rates reduced.


Mr. WOODSWORTH:: At that point would the hon. minister explain a little more clearly why there should be a reduction in the purely local rates? I cannot quite see his reason.


James Layton Ralston: I do not want to be
discourteous in the slightest, because I know my hon. friend is seeking for information, but I have already gone over the ground pretty thoroughly and the explanation is somewhat long. He will understand that the object of this bill is to get back by an arbitrary figure of 20 per cent reduction to the basis of 1912 when local rates were lower; or to put it another way,'to wipe out the disproportionate increases which have been made in maritime rates since 1912. His question is really why were the maritime rates lower before 1912?
I will try and restate what I have said, and

will put the last reason first. First, because of the sparse population; second, because of the long establishment of industrial centres in the maritimes, local rates from which were made sufficiently low to enable manufactured products to move to the manufacturer's customers; third, because of the establishment of distributing centres at certain points in the maritimes and the fixing of distributing rates to move the goods, and, fourth, because of the small volume of goods moved, the less than carload rates had to be made considerably lower than in Ontario and other parts of Canada where goods generally speaking moved at the low carload rate.


James Shaver Woodsworth: Would it be true, as stated on the floor to-day, that the greater the volume of local traffic the greater the bill that will have to be paid by the government?


James Layton Ralston: No. You have to have an engine and train crew with only twenty cars, and if your volume of traffic requires a forty-car train you necessarily reduce the ton-mile cost. I think everyone will acknowledge that the minute you begin to divide your overhead by a greater volume of business down goes your cost.


Mr. BROWN:: Is not that the explanation of the low ton-mile cost on the western prairies?	1


James Layton Ralston: Possibly.


Henry Elvins Spencer: What the hon. minister
says is quite true as far as the cost to the railway goes; but as far as the Dominion exchequer is concerned, the more freight that is moved, the freight rates being the same, it will have to pay one-fifth of the bill.


Charles Avery Dunning: My hon. friend has not
studied the bill.


James Layton Ralston: If he studies the bill he
will find that the Dominion treasury pays the deficit, not one-fifth of the cost. That was the objection suggested to the method proposed by the commission. It is overcome in this bill by the provision that the federal treasury shall pay only the deficit. I do hope that within five years the record which my hon. friend says is true of the Crowsnest rates may prove to be true also of the maritime rates, and that because of the lower rates we may have a surplus. The peculiar thing was that after the rates were raised in the maritimes in 1918 and 1919 on the amalgamation of the Intercolonial with the larger system the deficits began to increase, and instead of one or two million dollars they were from five to six million dollars a year although the rates were higher.

C.N.R.-Eastern Freight Rates
The lower westbound rate permits the maritime manufacturer to deal with his customers in upper 'Canada and to compete with Ontario and Quebec firms. I wish to put on record what I think is of some significance in our national development. I confess it was a surprise to me when it took place at the meeting of the Board of Railway Commissioners in Moncton. Quite unsolicited, a resolution was presented from the Board of Trade of Toronto formally and distinctly recognizing that the maritime provinces were entitled to a market in Quebec and upper Canada. The last paragraph is, I think, worthy of going on Hansard. It was read by Mr. Thomas Marshall, traffic manager of the Toronto Board of Trade, and is as follows:
The Toronto Board of Trade is desirous that our friends of the maritime provinces obtain some measure of relief which will assist them in marketing their products in the central provinces, and to that end would favour extending to them a reasonable westbound freight rate differential, and feel that in so far as the membership of this. board of trade is concerned it would not object to such an adjustment in class rates as would be found necessary to recoup the carriers for loss in revenue ensuing from such a reduction in the westbound rates.
It pretty nearly marks an epoch in the history of the Dominion when a board of trade in central Canada says, in effect, if the railways are going to lose by making a rate which permits the maritime shipper to send his goods to the markets of Ontario and Quebec, we are willing that there shall be such an adjustment as will recoup the carriers for that loss. I thought it showed a very fine spirit. Somebody will ask, why are not east-bound rates reduced also? For a very good reason, well known, they tell me, in freight rate making. The man on the circumference who has to trade towards the centre is entitled to a little better rate than the man who, situated in the centre, can trade towards both sides of the circle. Therefore, while the Halifax or St. John shipper gets a certain rate to Montreal or Toronto, the Toronto man will not, under the recommendations of the Duncan report, receive equal consideration coming east. The rate which will take goods from Halifax to Toronto will probably bring goods from Toronto only as far as Truro; or, putting it the other way, the rate for goods from Toronto to Halifax will probably carry goods from Halifax to a point, 100 miles west of Toronto. As I say, the man on the seaboard can trade only in one direction and he is therefore entitled to an advantage. Some people have been shocked by this, but I may assure the House that this provision was recognized in the freight rates as they
existed up to 1912. For example, the rate from Montreal to Halifax was 56 cents, whereas from Halifax to Montreal it was only 50 cents. In May 1912, however, the whole thing was ironed out, and a 56 cent rate was inaugurated both ways. Before 1912 from Montreal to Sydney the rate was 64 cents as against a rate from Sydney to Montreal of 55 cents. The same thing appertains in th<3 United States. The rate from Chicago to Boston is SI.49 per 100 first class, whereas from Boston to Chicago it is only $1.42; from St. Louis to Boston it is $1.73, and from Boston to St. Louis, $1.66. The difference was specially accentuated on what we know as the differential all-rail route, which is a route in the United States from Boston to Chicago participated in to a large extent by Canadian lines, and the differential there is as great as. on the standard all-rail route. The through rate from Chicago to Boston is $1.49 whereas from Boston to Chicago it is $1.42 the reason for the lower rate in one direction being as I have stated.
I will not at this stage deal at any length with the question of international rates, but in committee I shall if necessary have a word or two to say with regard to the international and import rates which are excluded from the provisions of this bill. I do not want to delay the House further with any citation of rates. I merely want to emphasize what I stated a few moments ago with reference to my appreciation of the provisions of this bill and the manner in which the Duncan report has been received. The bill will, I think, be found to be a practical implementing of the Duncan report, as to local and through Canadian rates. But it is something more than that. There are in the maritime provinces certain roads which are not under the control of the Canadian National Railways; I might mention the Dominion Atlantic railway, owned by the Canadian Pacific Railway Company, the Canadian Pacific from St. John to Montreal, the Sydney and Louisburg, the Cumberland Railway and Coal Company's road from Springhill to Parrsboro, and some others. These are not dealt with directly by the Duncan report, but the commission suggests that if, as the result of a reduction of rates on the Canadian National Railways, the "other great railway system" meaning of course the Canadian Pacific Railway, finds itself prejudiced, then "equitable consideration" should be given it. This means that if, in the case of the Dominion Atlantic Railway for example, the conditions were such that it was competing with the Canadian National Railways on some certain traffic and had to bring its rates down to
1868	COMMONS
C.N.R.-Eastern Freight Rates
the new reduced rate of the Canadian National in order to hold the business, then the government should make some provision to help out. But there is no suggestion anywhere in the report that if the Dominion Atlantic is not forced by competition to reduce its rates, the government shall come to the assistance of those making use of the railway. [DOT]In other words the report only applies in terms to traffic on the Canadian National Railways or on such portions of the Canadian Pacific as are in direct competition and therefore have to reduce their rates. Section 9 of the bill provides however that all railways in the maritime provinces, whether competitive or otherwise, who reduce their rates below the normal in accordance with the spirit of the act, shall be reimbursed. It seems to me that this is carrying out in a broad spirit and not in the spirit of the half loaf, as suggested by one hon. gentleman opposite this afternoon, the recommendations submitted in the Duncan report. It meets the practical situation more than half-way, for it shows a determination to do full justice by the people of the maritime provinces and is an evidence that the government, having put its hand to the plough, will not turn back and that the shipper on a line other than the Canadian National has not been forgotten. By the way it has been said that the Dominion was not represented on the hearings before the commission. That is true, but the railways and their experts and their counsel were there, and it must be remembered also that the very constitution of the tribunal was such as to justify confidence in the thoroughness of its investigation and to ensure that all statements made and contentions put forward were duly tested and weighed.
I am not standing here as a special pleader for the maritime provinces. While it is true I come from Nova Scotia, I fully realize my responsibilities as a member of the government of Canada. Let me remind the House that confederation was, in the broad sense of the term, a partnership entered into by four provinces. Five more have come in and there is no use ini our trying to get along if some of the provinces are unhappy and discontented. I believe that a reasonable effort has been made to bring contentment where there has been dissatisfaction. We in the maritime provinces have had no quarrel with the rest of Canada in anything that this Dominion has done to benefit other sections of the country. When other provinces have received what they felt to be their due, in order that their prosperity as members of Canadian confederation might be assured, we have always ungrudgingly supported their

claims. When the province of Quebec added to her domain what was virtually an empire, when her railways were subsidized, her canals deepened, and Montreal was made an ocean port; when Ontario had her area trebled and her canals built; when Manitoba was doubled in area and means were afforded whereby the products of that province could be marketed at a cost 25 per cent lower than could the products of the country immediately to the south; when Alberta and Saskatchewan, in view of special circumstances, received substantial annual subsidies to facilitate their entry into the Dominion in at least comparative affluence; when, in the interests of British Columbia the construction of three transcontinental railways was authorized and that province had extended to her certain special treatment in relation to her railways; when all these benefits were received by the other provinces of Canada the people of the maritimes gladly acknowledged the right of their fellow citizens to generous treatment. It is in the same spirit of justice that the maritime provinces appeal to the House to-day to recognize the claims now made and to support the legislation now being brought down implementing the recommendations of the Duncan commission. My hon. friends in the far corner opposite suggest that railway rates are not the only thing. I agree and they seem to have overlooked that the program announced by the Prime Minister (Mr. Mackenzie King) on March 25 included a great deal more than freight rates.
I want to impress upon the House that this report and this legislation mean much more to the people of the maritime provinces than is involved in a mere mathematical calculation, or in the printed words of a statute. I believe it will be and in fact it has already been received by the people of my native province as an earnest and genuine evidence of the practical good-will which those in other parts of the Dominion bear toward them. And so the people of these provinces will I believe realize that their fellow citizens throughout the country have sympathy with them-and in using that word sympathy, I mean it in its root sense as "thinking along with" them-and when you get different races, different provinces or different localities thinking along with one another there cannot be much doubt of their ultimate understanding and of the agreement and unity which is bound to follow. We have industry and energy and intelligence down there by the sea. Our people have become a bit discouraged, sometimes irritable, and, most disturbing of all, have felt a sense of injustice. I am prepared to believe, how-

C.N.R.-Eastern Freight Rates
ever, as I want the House to believe, that this legislation brings to them a new outlook, a new conception of Canadian unity, a new determination to ply their individual trades and vocations with vigour and industry and thrift, and a renewed eagerness to help make this Dominion, as a whole and without distinction as to provincial boundaries, a better place in which to live and a model of contentment and progress for the democracies of the world.


Hugh Guthrie: Mr. Speaker, I a.m sure the
whole House enjoyed the very able exposition of conditions in the maritime provinces which has just fallen from the lips of the Minister of National Defence (Mr. Ralston). It must be remembered', however, that the bill with which we have been dealing this afternoon is a concrete proposal. The debate on the second reading of this bill has assumed rather wide proportions, and 'has involved a discussion of practically the whole maritime situation and a very general discussion of the Duncan report itself. In the few remarks which I propose to offer this evening I will try to confine myself to the bill now before us, which is entitled, "An act respecting the Canadian National railways and the tariffs of tolls to be charged on certain eastern lines." Lest silence on tihe part of those sitting to your left, Mr. Speaker, should be construed as dissent from the proposal, I desire to offer a few remarks.
We on this side of the House desire in every way to facilitate the passage of these proposals arising out of the Duncan report, and desire likewise to expedite the passage of the various measures. The report has been before parliament and the country for several months now, and we assume that we have all read it, considered it and digested it. Personally I can say I have considered it very fully; I have discussed it with many men qualified to speak upon the subject and have also discussed it from an academic point of view in one of our institutions of learning. Therefore I have no hesitation in saying, Mr. Speaker, that as far as it goes the Duncan report is acceptable to those who constitute the official opposition in this chamber.
It is not my intention to go over the whole question to-night; I think it is unnecessary, and I will content myself with this remark; This is the second reading of a bill, but throughout the whole afternoon and evening it has resembled very much the discussion of a bill in committee. I have no objection to that if we do not have to go through the same discussion when the bill gets into committee, but I do think it has gone pretty far for a discussion on the second reading of a bill such as this. I am satisfied from a careful study of this bill that it carries out the main features of the Duncan report in regard to freight rates, and as such it should be adopted by this House. I do not consider and have never considered the maritime provinces in the position of communities basing their claims upon charitable grounds; I have always considered the claims advanced by these provinces to be founded upon principles of equity and justice, and the more I have studied them the less reason I find to dissent from any of the views expressed by Sir Andrew Rae Duncan and his colleagues in this report. If I could offer a criticism it would be that the report does not perhaps go far enough in the way of remedial arrangements for the maritime provinces. I agree with the argument of 'the Minister of National Defence; I could enlarge upon it very much, perhaps, but I am satisfied that the House is now fully seized of the whole situation, and under the circumstances I believe it is our duty to pass these bills as expeditiously as possible.


Some hon. MEMBERS:: Question.


Milton Neil Campbell: Mr. Speaker. I may say that I have no intention of being intimidated by those cries of "question"; I intend to say what I have to say and if there are any interruptions it will mean that I will accupy the time of the House so much longer.
At the outset may I say that I wish to make a few observations on this bill, and in doing so I find myself in the somewhat unhappy position of differing with the rest of my colleagues in this part of the House, differing not on principle but on practice, not on fundamentals so much as on incidentals. I feel, Sir, that in the consideration of maritime problems I must defer, and I think we from the west must defer, to a considerable extent at least to those gentlemen from that section of the country who should understand better than we from the far west can understand what their particular section of the country requires. In tihe last few years we have had under consideration many western problems, and in the consideration of those problems the members from the maritime .provinces, from Ontario, Quebec and British Columbia were obliged of necessity to defer to us, who understood those problems and who should know the ibest remedies. Nevertheless, Sir, it is fitting and proper that I should give my own opinions of the problems of the maritime provinces, and in
C.N.R.-Eastern Freight Rales

so doing I do not wish to express myself dogmatically at all; I am not inferring that they are really the problems of the maritimes, because I am prepared to leave' that largely to the members from that section of the country. I wish to give to the House, however, what I feel to be some of the problems of the maritimes which have not been dealt with in this report.
May I say, first, that as I understand it the lack of markets is perhaps one of the fundamental problems facing the maritime provinces to-day, and in a measure at least that may be due to the protective system under which this country has been run for many years. Perhaps I may be pardoned if I have a little more sympathy for that part of the country than some of my friends who have never lived there, because half of my life was spent in the provinces by the sea. I well recall in my boyhood days hearing many bitter acrimonious debates on the question of the protective system, and I recall that in Prince Edward Island at any rate in the early days the great majority of the people were of the opinion that they had lost something by entering confederation, that by coming under the Canadian protective tariff they had lost the markets of the United States which they considered they could have held if they' had remained out of confederation. I am not going to state whether or not that is so; I am simply going to give the House the impressions I received in my boyhood days when I heard these questions discussed in that part of the country.
I remember the feeling in the maritimes in 1896, when the Liberal party came into power after being out of office for many years; the great mass of the people thought the promises of Sir Wilfrid Laurier and Sir Richard Cartwright would be put into effect immediately, and a good many people thought that on the day after the election the grass would grow greener than it had been the day before, that the wheels of industry would start to hum in the maritimes and that the thousands of their young men and young women who had sought jobs and made homes in the United States would in time come back to the maritimes. But, Sir, they were disappointed. I am not going to enter into the history of that time, but the fact was that the new government simply carried on the policies of the old. They usurped the Conservative policy and no change whatever in tariff policy followed the change in government. It is possible that the maritimes sacrificed something in coming into confederation. It is possible that if they were outside

of confederation to-day, they might negotiate with the United States a reciprocity treaty which would be of some advantage to them and, by admitting United States manufactured goods in free or at reduced rates of duty, they might be able to secure a favourable position for trade in that part of the country. I am not prepared to take a dogmatic stand on that. That may or may not be so. But I feel that those provinces sacrificed something in this regard when they entered confederation, and because they sacrificed something, it behooves the Canadian parliament to reimburse them, in a measure at least, for what they have lost.
I agree with the hon. member for Acadia (Mr. Gardiner) that, in so far as I have studied the question, the troubles of the maritimes are due in some degree to the centralization of banking power, the centralization of the control of our banks. Some hon. gentlemen from the maritimes in this chamber to-night seemed to question the opinion of the hon. member for Acadia when he made a similar statement on the floor of this House. But I have in my hand a pamphlet written by the Hon. F. B. McCurdy, who is not unknown to many of my hon. friends, and he places this as one of the principal problems of the maritime provinces.


William Gordon Ernst: Is the hon. member aware that the Hon. F. B. McCurdy is to-day an avowed secessionist?


Milton Neil Campbell: The only difference
between the Hon. F. B. McCurdy and many others is that he is quite honest and frank in stating bis opinions. From the time I was five years of age in the maritime provinces to the time when I left there twenty-five years ago, I have heard secession talked in season and out of season, and every time I go down there I hear the same thing. I do not blame those people for talking secession, and I think, as a result of insistent propaganda on their part, they are getting some relief to-day. I am endeavouring to look at this from the standpoint of the maritime provinces.
Let me come back again to this pamphlet issued by the Hon. F. B. McCurdy. He points out that in the early days when the provinces of Nova Scotia, New Brunswick and Prince Edward Island controlled their own banks, those banks were housed in very modest structures. He paints a beautiful picture of the palatial edifices in which these banking magnates are housed to-day, and he shows how all this expense is shouldered on those who use the banks. He goes back and speaks particularly of the Halifax Banking Company.

C.N.R.-Eastern Freight Rates


Charles Avery Dunning: I rise to a point of order. When the Speaker was in the chair a little while ago, he ruled that the discussion in future on this bill should be along the lines of freight rates, the subject matter of the bill before the House. If I have followed my hon. friend's remarks correctly, we have come back to a discussion on banking. I merely suggest that the ruling which was made while the Speaker was in the chair should be adhered to by all speakers so that we may expedite business.


Milton Neil Campbell: I am basing my remarks on the preamble of the bill which deals with the Duncan report and I submit that the whole question of maritime problems can be considered on the preamble which I am discussing. In deference, however, to the request of the minister to facilitate the passage of the bill, I will take as little time as possible, but I want to point this out because I believe it is one of the problems of the maritimes as well as one of our western problems. The Hon. Mr. McCurdy, referring to the Halifax Banking Company, made this statement:
Probably the total annual cost of the president, board of directors, and the inspection staff of the Halifax Banking Company did not exceed $8,000 or $9,000.
The total amount of its investment in bank premises was $1,800; in safes and office furniture for its head office-


Mr. DEPUTY SPEAKER:: Order. According to a ruling given earlier this evening, I must ask the hon. member to confine his remarks more closely to the bill before the House dealing with the freight rates.


Milton Neil Campbell: I bow to your ruling. I submit however that the preamble should give me the right to discuss anything dealt with by the Duncan report. In conclusion on this point I will read the closing sentence in this pamphlet. He says:
Centralization and autocratic control are rampant in this country, as well as the States, and it is not improbable that the next revolt in that great country will be against the system that is rapidly reducing the human being to the position of an inarticulate cog in a huge machine that operates for profit alone.
I wish to deal briefly with the reference made by the Minister of National Defence (Mr. Ralston) to the Crowsnest pass rates, and in this at least, I assume that I am in order because I am discussing the question of freight rates. The minister stated that those rates were not profitable to the railways. I think he quoted Mr. Watson of the Canadian National Railways as stating that in 1926 the haulage of grain in western Canada meant a loss of $6,000,000 to the Canadian
National Railways. I will give my hon. friend in that regard a few figures which will perhaps convince him and which, I think, should convince any reasonably minded member that the Crowsnest pass rates to-day are profitable to both of the great railway systems.
First, I might refer to the freight rate investigation in 1922 before a committee of this House. Before that committee we find Mr. Beatty, president of the Canadian Pacific railway, predicting that if the Crowsnest pass rates came into effect in the next year, the Canadian Pacific railway would fall short by $15,000,000 of paying its fixed charges and dividends. That is a remarkable statement. Yet what do we find? In addition to paying fixed charges and dividends we find that the Canadian Pacific had a larger surplus than they had the previous year. That was after the Crowsnest pass rates had been in operation for one year, so we see how much the predictions of these officials are to be relied upon when the question is one of dollars and cents to them and when they are trying to influence a committee of this House.
I am not going to weary the House with lengthy quotations, but we find Mr. Hanna, president of the Canadian National Railways, making similar predictions for that road. He predicted that the deficit in 1922 would be $26,000,000 or $10,000,000 more than it was in 1921. Instead of that the deficit was considerably less than it was the previous year. I am going to give just a few figures for different months which, I think, should show clearly to any unbiased mind that the handling of grain means a considerable profit to both the railway systems. I will take the Canadian Pacific Railway for the year 1924. For the first four months of that year their net earnings were a little over $5,000,000. For the next four months, May, June, July and August, their net earnings amounted to $9,000,000. Those were the eight months in which little or no grain was being moved. When we come to the next period, September, October, November and December, the four months in which the great bulk of the traffic is grain, what do we find? We find that instead of $5,000,000 or $9,000,000, the net earnings amounted to $22,000,000 or more than for the previous eight months.
In the first four months of 1925 the net earnings amounted to $4,980000; in the next four months they amounted to $10,000,000; but in the last four months of the year, the months in which again the great bulk of the grain was handled, we find the net earnings increased to the enormous total of $26,500,000. Surely in face of those figures

C.K.R.-Eastern Freight Rates
no hon. gentleman who will give intelligent consideration to the subject can say that grain is being transported at a loss. Again we find that in the year 1925 the net profit was $23,000,000, but the four grain-handling months accounted for over $20,000,000 of that $23,000,000. I have similar figures here for the Canadian National Railway. I find that in 1924 their total net revenue was $11,764,000, of which $11,197,000, or almost the whole thing, was earned in the four months in which the grain was being moved.
When we come to the operating ratio, which is really one of the decisive indications, telling us how much money the railway has to spend to earn a dollar, I find that in 1921 the operating ratio of the Canadian Pacific Railway was 82.28; that is, the railway had to spend 82.28 cents to earn one dollar. The next year, 1922, was the year in which the Crowsnest rates were fully in effect, the year in which Mr. Beatty predicted that their net earnings would fall below the amount necessary to pay fixed charges and dividends, but what do we find? Instead of increasing, we find that the operating ratio decreased to 80.55; in other words, the railway made 2 per cent more profit than the year before, and so on; the profits crawled up year after year. That should clearly prove to anyone that the Crowsnest rates mean a profit to both railway systems.
In the consideration of the particular question before the House I must admit that I cannot find room for the criticism of the government that has come from other speakers in this section of the House. I am not entirely convinced that this is the fundamental remedy. I believe that there are probably other remedies. I think there are other questions that the Duncan commission might have investigated and should have reported on. But looking at it from the strictly legal point of view and from the standpoint of precedent, which is what seems to govern everything in this House, the government appointed a commission to inquire into the grievances, alleged or real, of the maritime provinces. They appointed a commission of able, capable men. I think this House would have approved of the personnel of the commission had it been asked to do so. The commission came back and made a very definite report to the government, and for the life of me I can hardly see what else could be expected of the government than to carry out these recommendations. Therefore I find myself in the position where I cannot criticize the government for carrying out the report of their own commission. The bill we are considering was

framed with that end in view, to carry out the recommendations of the commission.
When I listened to the speeches of several of my colleagues in this section of the House, I compared them with speeches I heard here in 1922 against the Crowsnest rates, when some of the members from the maritime provinces opposed, and bitterly opposed that legislation, and again in 1924 they opposed the building of the Hudson Bay railway and many other issues of interest to the west. I think, after all, we have to be a little broader. We have, as Bums would say, to try and see ourselves as others see us. We have to try and judge a thing from the other fellow's standpoint. I believe the members from the maritime provinces who opposed the construction of the Hudson Bay railway, and who very bitterly criticised the decision of parliament in 1922 to reinstate the Crowsnest rates, were just as honest and sincere in opposing those measures as my friends in this comer of the House are in opposing this. They looked at it from the standpoint of the maritime provinces. They were not as well acquainted with the problems of the west as we were. But in the last analysis parliament deferred to the wishes of the west, and I think in this matter we have at least to defer to the wishes and opinions of the people of the maritime provinces.
The question of rural credits, for instance, is not one of interest to the people of the maritime provinces. When I visit down there the people I meet always want to know why we in the west should want the parliament of Canada to give us cheap money. They say they can alwa]^ go to a neighbour and borrow what they want at five per cent. They do not understand our problem, and naturally they object to parliament, for which they have a responsibility, being tied up to this thing. Another thing I always hear about when I visit down in the maritime provinces is the Crowsnest rates. The people there seem to think they have a distinct grievance on that account. Some people whom I know will always be convinced that parliament did them a great injustice in 1922, when it gave us a rate which they think is not profitable to the railwa]''. Again, take a measure such as the amendment to the Canada Grain Act, which is of vital importance to western Canada. Our maritime friends offered no objection to those amendments, although most of them are not interested in the matter, and a good many of them may think that it is not striking at the root of our problems in the west, but they were fair and deferred to our judgment in the matter because we were dealing with our own

C.N.U.-Eastern Freight Rales
problems, and I am asking my hon. friends in this part of the House to grant to the people of the maritime provinces the same consideration which we have received at tiheir hands in these other matters.
Another great burning question in western Canada to-day is the return of our natural resources, and just here I might say that it is a matter of concern to our people to see something extra new being given to the maritime provinces when we see by this report that a province like New Brunswick is securing 375 per cent of its revenue from its forests; when we do not even control our own timber. That is a grievance of ours, but I realize that to oppose the granting of this measure of relief to the maritime provinces will not assist us in western Canada to get possession of our natural resources. I ask my hon. friends from the maritime provinces to continue to extend to us the consideration which they have in the past, and at some future time I trust that this parliament will be fair to us and give back to us our natural resources, which are of vital importance to us.
I do not wish to delay the House any longer. I have some more notes, but I think I have said sufficient. I am supporting this bill with certain mental reservations. I will frankly admit supporting it in the spirit that is emphasized on page 11 of the report of the Duncan commission, and in concluding I would just like to read those words because they furnish the guiding principle of my 'action here to-night.
We believe that the claims which these provinces have submitted in connection with the present condition, and the future possibilities, of their own part of the Dominion, should now be reviewed with sympathetic consideration and understanding, so that in approaching the future a better balance of territorial prosperity can be assured, and the original hope of confederation-unity, prosperity and contentment for all the provinces, as well as for the whole of Canada-can be made capable of realization.
I think, sir, if we in this corner of the House by supporting this bill can bring about anything like that and assist in maintaining Canadian unity in this country of ours, the little sacrifice it may mean will be amply repaid.


Mr. MURRAY MacLAREN (St. John-Albert):: Mr. Speaker, after such a long debate as we have had to-day, and at this hour, I do not propose for one moment to discuss the subjects raised by this bill, although I regret not having the opportunity, because many of the points that have been raised I am sure could be successfully refuted. But a measure of this character is one of such tremendous importance to many of us that I would not like this opportunity to pass without placing
myself on record, and I feel that I am fully justified in saying that all the maritimers on this side of the House will coincide with my statement in these few words; that we are thoroughly behind the bill.
Hon. W. A. BLACK (Halifax); I think this matter has been pretty fully discussed and that anything further that any hon. members may say will be merely a repetition of what has already been stated. Coming from the maritime provinces as I do, I suggest that if there is to be a vote it be taken now, but if a vote is not to be taken, that we pass the bill.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): This discussion has wdndered far afield from the subject matter of the bill itself, and I do not intend to follow in the many by-paths taken by some of the hon. members.
There are two outstanding criticisms of the measure. One comes from the hon. member for York-Sunbury (Mr. Hanson) and it is very plain in its terms. He states that the bill does not go half far enough. He will accept it as a half measure, or less than that, of what is really due to the maritimes with respect to freight rates and transportation matters. I regard his view as sectional in the extreme from that point of view.


William Gordon Ernst: Personal.


Charles Avery Dunning: As my hon. friend from Lunenburg says, a personal rather than a party view. The other criticism comes from the members for Acadia (Mr. Gardiner), Macleod (Mr. Coote) and Rosetown (Mr. Evans), and is sectional in an entirely different way in my judgment. My mind goes back to the time when we who come from western Canada were putting up the fight for the return of the Crowsnest rates and their application to the whole of our western territory. I took some part in that fight, and I know what it means to feel as the people in the maritimes feel with respect to this matter. I know that the people of western Canada feel grateful to the parliament of the whole of Canada that the Crowsnest charter of freedom was returned to us with respect to our major product, and I want to express that gratitude to-day, because we were then, and may be again, in the position which the maritime provinces occupy to-day, that of coming to the parliament of the whole of Canada and asking for the measure of what we regarded as simple justice with respect to something which was vital to our economic welfare.

C.N.R.-Eastern Freight Rates
My hon. friends in the corner spoke ostensibly for the people of western Canada in criticism of this measure, treating it as if it were a measure of special privilege to the people of the maritimes instead of a measure of economic justice to them. I think it was my hon. friend from Macleod who impugned my bona fides in presenting the measure, indicating that I presented it in a half-hearted fashion, and so forth. We inserted a preamble in the bill; it is rather an unusual thing to preface a bill with a preamble, but it was the government's desire that this rather extraordinary measure-because measures of this kind are extraordinary-should be prefaced with a set of reasons as clear as we could formulate them; so the language of the Duncan report was condensed and put in the form of a preamble to the bill. I say to my hon. friend from Macleod that I come from western Canada; I expect to have to defend myself out there from the kind of attack which he and his friends will make with respect to this measure, and I will tell him now the ground of my defence. It will be found on pages 20 and 21 of the report of the royal commission. The chairman of the commission certainly cannot be accused of having behind him a history which would incline him to lean toward a particular section of Canada, but rather the attitude of mind of a judge brought from the old land, a man of wide experience and of high attainments who would look at this matter not from the point of view of one biased in favour of eastern Canada or western Canada or any part of Canada, but as one seeking to help Canada as a whole in the solution of an acute problem. He says:
We think, however, that a balanced study of the events and pronouncements prior to confederation, and at its consummation, confirms the representations submitted to us on behalf of the maritime governments in regard to the ultimate construction of the railway.
Then I turn to paragraph Oc), page 21:
That to the extent that commercial considerations were subordinate to national, imperial and strategic considerations, the cost would be borne by the Dominion and not by the traffic that might pass over the line.
I am content to ask the people of western Canada to take a big Canadian attitude and not a little Canadian attitude on a matter of that kind. I am content, Sir, to meet my hon. friends opposite on that ground in western Canada. I think I know the broad, generous spirit of the people of the plains, and I am sure they will be content to give to the people of the maritime provinces the measure of
fMr. Dunning.)
economic justice indicated by the commission which weighed judicially all the facts of the case.


[Stage Direction]
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Johnston in the chair.
George Gibson Coote: How late does the Prime
Minister intend to sit to-night?


Some hon. MEMBERS:: Finish the bill.


William Gordon Ernst: Finish it.


William Lyon Mackenzie King: We might see if it is not possible to make progress with a few of the clauses.
On section 1-Short Title.


Mr. LAVTGUEUR:: I have listened with
great interest to the remarks made by the leader of the opposition, by the Postmaster General, the Minister of National Defence, and last but not least by the Minister of Railways.
I have observed1 the broad view taken by these members on the question of maritime rights, and I have noticed the wholesale way in which they accept the bill. We in the province of Quebec feel it our duty and consider it a pleasure to accept this bill. I think I may be permitted to speak for my province, especially for the district and city of Quebec. The favourable reception of this bill makes me hope, Mr. Chairman, that the reasonableness of the claims of the city of Quebec may in the near future receive similar consideration in this House, for I think we in the city of Quebec have a claim as strong as that of the maritime provinces. For many years we have been promised consideration of the railway situation in the Quebec district. We have been asking for the equitable freight rates which were promised at the time when the legislation went through parliament in 1903 for the building of the Transcontinental rail- , way. Indeed, one of the objects of the building of that line at' a cost of $180,000,000 was to bring the grain of the western prairies to the seaports of Quebec, Halifax and St. John.
I was pleased to see the Postmaster General (Mr. Yeniot) and his colleague the Minister of Defence (Mr. Ralston) espouse the rights of the maritime provinces, and I hope that the claims of the city of Quebec may find equally able champions. The Postmaster General stated that at the time of confederation verbal engagements had been made by Sir John A. Macdonald, George Brown and others and that the claims of the maritime provinces were based on legal and moral

C.N.R.-Eastern Freight Rates
obligations. Well, Me. Chairman, the obligations of the Dominion towards the city of Quebec are based on just such legal and moral grounds. The city of Quebec subscribed $650,000 towards railway building and handed over to the Dominion a property worth over $2,000,000 without any compensation whatever, as I mentioned a few minutes ago. But outside the written contracts we had the verbal promise of Sir Robert Borden in 1913 that Quebec was to receive what was due to her.


Mr. STEVENS:: Mr. Chairman, I rise to
a point of order. I hesitate to interrupt my hon. friend, but I know a number of hon. members would like to discuss the claims of their various communities. It would be wholly unreasonable for us to do so, yet if one hon. gentleman presents such claims others will be tempted to follow his example. I submit that the claims of another province are scarcely in order. I know my province has a claim that I might be tempted to argue, but I do not think it should be done under this bill. As the Minister of Railways has repeatedly asked to-night, I suggest, Mr. Chairman, that we keep within the bounds of the bill.


Henri-Edgar Lavigueur: Mr. Chairman, before
you give your ruling let me call your attention to the title of this bill:
An act respecting the Canadian National Railways and the tariffs of tolls to be charged on certain eastern lines.
I submit that what I am discussing is relevant to the bill now before the committee.


John Frederick Johnston: I must point out to
the hon. gentleman that the clause under discussion is number one, Short title. Therefore his remarks are scarcely in line with the subject before the committee.


Henri-Edgar Lavigueur: Mr. Chairman, I
submit to your decision.
Section 1 agreed to.


Charles Avery Dunning: I move, Mr. Chairman,
that the committee rise, report progress and ask leave to sit again.


Some hon. MEMBERS:: Put it through.


Some hon. MEMBERS:: Carried.


Charles Avery Dunning: I withdraw my motion, Mr. Chairman.


John Frederick Johnston: Has the hon. minister
leave to withdraw his motion?


Some hon. MEMBERS:: Carried.
On section 2-Eastern lines.


Abraham Albert Heaps: Will the 20 per cent subsidy apply to that portion of the line which runs through the state of Maine?


Charles Avery Dunning: The question arises on
section 9, and can better be discussed when we reach that section.
Sections 2 and 3 agreed to.


Charles Avery Dunning: You and the committee are using the reprinted bill, I presume, Mr. Chairman?


John Frederick Johnston: Yes.
On section 4-Preferred movements-Local traffic, all rail, etc.


Some hon. MEMBERS:: Carried.


George Gibson Coote: Mr. Chairman, this is a
very important bill, and personally I protest against certain members shouting "carried." I thank the Minister of Railways for his suggestion that the committee might rise and report progress. I realize that the committee can go on all night if they wish to put the bill through without consideration, but lately we have been too busy in the House to read these bills carefully and to consider them thoroughly clause by clause. If this bill is to be passed bolus bolus to-night the various clauses will bo called and declared earned, but I do not see how members can be held responsible for the provisions of such an important bill if this procedure is to be adopted. In view of what is taking place I think my protest is fully justified.
* Some hon. MEMBERS:	Carried.


Charles Avery Dunning: With much of what my
hon. friend says I am in agreement. I have not given weeks of study to the evolution of this bill without knowing something of its complex and far-reaching character, and in continuing I simply deferred to what appeared to be the general wish of the House to proceed.


Some hon. MEMBERS:: Hear, hear.


Charles Avery Dunning: I am entirely in the
hands of the committee.


Some hon. MEMBERS:: Carry on.


Charles Avery Dunning: It is rather a compliment that they are willing to take so readily the clauses of such a complex bill.


Henry Elvins Spencer: Mr. Chairman, if we are
going to carry on I would ask that you read the bill clause by clause so that we may follow it intelligently.
1S7G

C.N.R.-Eastern Freight Rates


John Ewen Sinclair: On this section I would ask the minister to make the explanation which he mentioned in his speech on the second reading in regard to why international rates are excepted from the preferred movement.


Peter John Veniot: It comes under clause 5.


John Ewen Sinclair: The explanation should be given on section 4.


Charles Avery Dunning: We went very thoroughly into the question of international rates, and I may say, especially for the benefit of my hon. friend (Mr. Hanson), that having agreed to the major principle of the Duncan report with respect to the 20 per cent reduction, the difficulty was not the financial load involved in the extra amount which would have accrued had it been possible to include the maritime province proportion of the international rates.
I may tell him that the total freight receipts from the international outbound traffic-that is, the Atlantic division proportion of the Canadian National returns-was only $1,300,000 out of a total of $10,800,000 last year from .the whole of the movements contemplated by the Duncan report.


Richard Burpee Hanson: Has the minister the
figures for the Canadian Pacific movements?


Charles Avery Dunning: I have not the figures
for the Canadian Pacific Railway for the same movement, but they are negligible compared to the other movements to which I have referred. The problem in connection with international rates is simply this: international^ through rates are not controlled by the Board of Railway Commissioners for Canada nor are they subject to the Interstate Commerce Commission of the United States. The railways concerned, both American and Canadian lines, .agree upon a through rate and submit it to these respective national bodies which control rates in the two countries, but in reality the matter is one of agreement. I am sure my hon. friend appreciates the business .shrewdness of the Americans. Let me ask him, therefore, whether he really thinks that the American roads would agree to a reduction on through rates, let us say, from Bathurst to Boston without arranging for an equivalent reduction on goods coming from Boston to Bathurst. The American people are not so slow as that. I can assure the hon. gentleman positively that we could not make an arrangement which would enable the 20 per cent advantage to be passed on to the Canadian shippers, and I say that after having

thoroughly investigated the matter and made the fullest inquiries as to means whereby this could be done, presuming we included international rates within the scope of the bill.


Richard Burpee Hanson: Can the minister tell us
what the proportional movement would be over each, and if any attempt was made to get a reciprocal arrangement?


Charles Avery Dunning: Yes, the matter has been discussed, and while of course no formal presentation was submitted either to the Interstate 'Commerce Commission or to the Board of Railway Commiskmers, tentative approaches were made. I might point out, in order to illustrate the complexity of the arrangement such as would apply in connection with international rates, that at the present time there are four routes over which lumber may be moved from New Brunswick to the United States, and the same rate applies over all four. Although the proportion of that rate applicable to the Canadian railways is different in each case, the aggregate is the same. If we applied the provisions of the Duncan report to the Atlantic division proportion of those international roads, we should have four different rates on lumber from New Brunswick to Boston; and these four different rates would apply in some cases from the same town to the city of Boston, depending upon the particular route which the lumber took im course of transit. Let me point out still further, as proof of our inability to make an arrangement, that there was in existence in the summer of 1923-my hon. friend will remember this if he is familiar with the lumber business, as I gather he is-a temporary reduction of rates on lumber from points in northern Maine served by the Bangor and Aroostook Railway, and the Canadian National Railways were successful in having this reduced basis extended into New Brunswick. This meant a reduction of four cents per 100 in the existing, rate. The reduction when first made was to 'expire at the end of 1925, but before that date negotiations were conducted with the United States lines looking to a continuance permanently of the reduced rate basis. Our railways wanted the reduction continued. The United States lines however, flatly refused to continue the reduced) rates, although they agreed to one month's extension into 1926. The reasons advanced by the United States lines for their refusal to continue the reduced rates are set out clearly in a report submitted by the general freight traffic manager to his vice-president. Perhaps it would clear the situation if I read from the report:
Mr. Fort of the Boston and Maine and Mr. Eaton of the Maine Central presented their

C.N.R.-Eastern Freight Rates
situation, which, in substance, was that if these rates were continued they would be compelled to reduce their local rates throughout New England. It was not altogether a matter of competition with Pacific coast lumber travelling via the Panama canal, but in their own lumber fields in Maine, New Hampshire, etc., where they were being importuned to reduce their rates because of the reductions made in northern Maine and the New Brunswick district.
Mr. Fort's contention was that the Lumber Association of New Hampshire and some of the interests in the state of Maine on the Maine Central had brought forward such pressure that if they continued to participate in these reduced rates they would have to reduce their local rates and that would reflect itself in demands for reductions in their rates on water borne traffic, whether from the Pacific coast or elsewhere.
Then follow instances cited by the American railways in which, under the reduced schedule, through rates were actually lower than local rates from American lumber centres to the city of Boston.


Richard Burpee Hanson: Is not that true in Canada also?


Charles Avery Dunning: 
Richard Burpee Hanson: I am willing to accept the minister's explanation although I must say that it is with great regret that we find ourselves in the position indicated. My information is that the movement was very much larger than the minister's figures would lead us to believe, and that a real advantage would be gained by the shippers of New Brunswick if they could get this 20 per cent reduction on that movement. My information further
is that the amount of traffic moving backward would be negligible as compared with the westward or southwestward movement, but of course if nothing can be done nothing more need be said. I did not make the suggestion in an acrimonious spirit, but our people have been looking for this reduction and will be disappointed if they do not get it. If it cannot be done that is all there is to it.


John Ewen Sinclair: It was not in a spirit of criticism that I asked the minister to make the explanation, because that is one of the things recommended by the Duncan commission which the government have not been able to implement. I think sufficient reason ha^ been given by the minister as to why the recommendation in that regard could not be carried out. There is another point, Mr. Chairman, on which I think it wise to have information and that is found in subsection (c), of section 5, which has to do with imports into Canada, I think that is also an exception to the recommendations of the commission, and it would be in the interests of the country generally to have on record the reason why that was excepted.


Charles Avery Dunning: I am glad to be able to give the reason. On that point the government is of opinion the Duncan commission did not give due weight to all the factors involved in the proposal that the area of Canada which lies nearest to the sea should have in addition to the ordinary low import rates, which are lower in any case than local rates, a 20 per cent cut from that special schedule of import rates for the benefit of people who, in the nature of things, now pay a lower import rate than any other people in the Dominion of Canada, Of course there immediately arose the consideration of whether the usual principle should be adopted, that is, that a reduction should apply not to those who had the advantage of being nearby but rather to those who had to pay a higher rate on account of being a long distance from the port. We could not work out any scheme whereby that advantage could be given to importers further west than the maritime provinces without upsetting the whole schedule of import rates in Canada, therefore we thought it better not to apply it in the maritime provinces. May I say also, with regard to the figures-I think I am correct but I will check it up-that from memory the total amount involved in freight receipts in this connection on the Canadian National Railway last year was $117,000. That is not the 20 per cent, but the 100 per cent, of freight receipts in 1926 under the special import tariffs for which no provision is made.

1878	COMMONS
C.N.R.-Eastern Freight Rates


Robert Gardiner: I would ask the minister if he can now give us the information he promised this afternoon with regard to the total amount involved. When we were speaking on the second reading the minister said that when the House got into committee he would be glad to give us that information.


Charles Avery Dunning: My estimate with regard to the Canadian National railways, based upon the 1926 business, is approximately $2,000,000; with respect to the Canadian Pacific railway, based upon the 1926 business, it is between $400,000 and $500,000. I have no means of making an estimate with regard to the small lines, that is, the Quebec lines up to Gaspe and the other local lines in Nova Scotia <and New Brunswick, but that will be a very small amount. I think we can say that the total initial cost, based of cou-rse upon the 1926 business, would be in the neighbourhood of $2,500,000. I do n.ot wish to be tied down to that figure, because it depends upon the development of business and the relationship of that business to operating expenses.


Jean-François Pouliot: I have just a question
to ask the minister. Will the expansion of the Atlantic region for freight rate purpose affect the operation of the railway?


Charles Avery Dunning: Not necessarily. Section 6 says, "Por accounting purposes, but without affecting the management and operation of any of the eastern lines . . The management and operation is still under the control of tne board, as it always has been.


[Stage Direction]
Section agreed to.
On section 5-Movements not preferred.
George Gibson Coote: For many years we in this
House have had demands from the maritime provinces that steps be taken to increase the import and export of goods through maritime province ports rather than through United States ports. May I ask the minister if, in his opinion, there is anything in this bill intended to increase the volume of the export and import traffic through the maritime provinces?


Charles Avery Dunning: Subsection (c) of section 4 is as follows:
Traffic moving outward, export traffic, rail and sea, from points on the eastern lines through ocean ports on the eastern lines destined overseas.


Robert Gardiner: That does not answer
the question of the hon. member for Macleod (Mr. Coote). I think his inquiry was addressed more particularly to the goods from further west, either western Canada or Ontario and Quebec.


Charles Avery Dunning: That is covered in the
section now before the committee, and I am sure my hon. friend can read it as plainly as . I can. I might say, however, with respect to grain, that the present differential of Halifax over Montreal represents the lowest cost of moving grain anywhere of which I know; it is one cent per bushel. That is the differential, and there is no plan recommended by Sir Andrew Rae Duncan and his associates or contained in the bill intended to reduce the rate between Montreal and Halifax.


Murray MacLaren: I might say that that
matter has been referred to the board of railway commissioners for consideration, and the Duncan commission expressly excluded it from their report.


Charles Avery Dunning: I should have mentioned that, and I am glad my hon. friend has called it to my attention.


George Gibson Coote: I take it the whole question
of freight rates in the maritime provinces was referred to the railway commission, but the Duncan commission did not wait for that.


[Stage Direction]
Section agreed to.
On section 6-Separate accounts to be kept.
Herbert Bealey Adshead: May I ask the Minister
of Railways to explain the relation of section 6 to section 9? Is the Dominion government to pay the whole 20 per cent, or merely the deficit which may arise?


Charles Avery Dunning: I would first ask for a
small amendment to this section. I move that the word "railway" be inserted before the word "fiscal" in line 47 of page 3, which will make the sentence read, "In the event of any deficit occurring in any railway fiscal year in respect of the eastern lines . . This is just for the sake of clarity, in order that we may know what year is referred to.


Herbert Bealey Adshead: Would the minister tell
us whether the government is to be liable for the deficit only cr for the whole 20 per cent? Under section 9 it would appear that the government is liable for the whole 20 per cent, but under section 6 it appears to be only the deficit.


Charles Avery Dunning: If I may, I will deal with section 6 now and with section 9 when we come to it, in order not to complicate matters. In section 6 we are dealing with railways owned by the government of Canada, in which the government is the shareholder and upon which we are now meeting the deficits. In connection with these lines-and be it remembered that we expect these lines will, as

C.N.R.-Eastern Freight Rates
the figures which I gave a little while ago will demonstrate, carry most of the traffic affected by this legislation in the proportion of at least four to one as compared with the other lines-we are proposing to set up separate accounting for the lines covered by this measure and to come to parliament each year with a separate item in the railway budget for the deficit on these lines. I want to say to my hon. friends in that corner who are disposed to be critical of this whole bill, that the deficit figure which will be brought forward in the next railway budget will include not only that portion of the deficit due to the operation of this legislation but the general deficit upon eastern lines. It must in the nature of things. I attempted to work out a scheme whereby we would keep the deficit due to this 20 per cent separate from the ordinary operating deficit on the eastern lines, but it was too complicated to be worth while. Consequently the provision in clause six is being put before the House: that is, with respect to Canadian National lines there will be each year in the railway budget a separate item covering the deficit on eastern lines, but without in any way otherwise affecting management or operation of the eastern lines.


Robert Gardiner: At this point could the minister give the committee any indication as to the present deficit on those same lines?


Charles Avery Dunning: The operating deficit on the Atlantic division from Riviere du Loup, which is the present terminus, was in 1926, 84,777,000. My hon. friend must understand that I am speaking from memory, but I think the figure is practically accurate.


Jean-François Pouliot: Would the minister have any objection to amending clause 6 by suppressing these words in the first and second lines:
But without affecting the management and operation of any of the eastern lines.


Charles Avery Dunning: I am afraid I could not accept that amendment, because it is desirable to leave the management free to deal with management and operation as from time to time circumstances may warrant. We are quite clear that for accounting purposes we desire this portion of the line separated, but we are not quite clear that we should tie the hands of the management in any other way.


Jean-François Pouliot: Would the minister agree to suppressing the words "and operation" in the second line?


Charles Avery Dunning: I am sorry I could not.
Amendment (Mr. Dunning) agreed to.
Section as amended agreed to.
M,r. COOTE: I would like to suggest to the government that this would be a good time to adjourn. It is ten minutes after twelve o'clock.


Some hon. MEMBERS:: Put die bill through.
Sections 7 and 8 agreed to.
On section 9-Other companies may make competing tariffs.


Richard Burpee Hanson: Why is the first subclause of clause 9 made permissive instead of peremptory?


Charles Avery Dunning: The other lines involved cover such a wide range of types of railway operation that it was difficult to arrive at a suitable wording. I may say that in one draft I had the word "shall", and found, in connection with some of the local lines, that they had special freight tariffs of their own higher than the rates now in effect in the area referred to and especially authorized by the railway commission as a result of particular conditions operating in that area. Therefore I thought it advisable to leave the matter permissive instead of mandatory. My hon. friend is probably interested and I know the hon. member for Hants-Kings (Mr. Ilsley) is interested in whether or not the Dominion Atlantic Railway, which, while a separate corporation, is owned by the Canadian Pacific and which serves a large portion of Nova Seotia, will put these reductions into effect. I may say in that connection that, as soon as the financial resolution appeared on the order paper, the Canadian Pacific very naturally wanted to know where they came in. As a result of interviews and consultations between the parties affected, including some of the other railways as well as the Canadian Pacific, the present clause as it appears in the reprinted bill was evolved. During those consultations I received from President Beatty of the Canadian Pacific absolute assurance that these rates would be met in full on all lines controlled by the Canadian Pacific in the area affected. Further than that I cannot go.
With respect to other lines of railway I am finding new lines of railway down in the mari-times every day or two. I get a wire from some railway 1 never heard of before and which I find some of my maritime friends never heard of before asking if they will not be permitted to put this tariff into force and to secure the benefits of clause 9 in the reprinted bill. I feel sure that this feature of the clause will work out satisfactorily without being mandatory, because if it were mandatory, other more serious problems would arise in connection with some of the local lines.

C.N.R.-Eastern Freight Rates


Harry Bernard Short: Are we to understand that
this clause covers practically all railways in the maritimes outside of the Canadian National and the Canadian Pacific? I am very much interested in the Dominion Atlantic Railway because it runs through the whole of my constituency. It is one of the prominent railways in Nova Scotia; it covers 217 miles from Yarmouth to Halifax, one of the most important parts of the province. I want to know distinctly from the minister whether it is going to 'be included in this 20 per cent reduction.


Charles Avery Dunning: As I said a few moments ago the Dominion Atlantic, if it so desires, may under clause 9 file a tariff meeting the tariff set forth in this legislation. I have the assurance of President Beatty of the Canadian Pacific, which controls the Dominion Atlantic, that such tariffs will be filed and that the rates will be met on the Dominion Atlantic.	[DOT]


Robert Gardiner: I take it that under this particular clause the country will be called upon to reimburse to railways other than the Canadian National the full 20 per cent reduction.


Charles Avery Dunning: Again I can only refer my hon. friend to the language of the clause. It was a very difficult thing to devise because of the fact that, if we said in so many words that the difference between existing normal rates and the rates reduced by 20 per cent would for all time, or at least so long as this statute remained in existence, be paid by the Dominion, we might very well run into difficulty in a few years time on account of increases in the volume of traffic consequent upon the reduction and a consequent decrease in operating ratio due to a greater density of traffic, while the Dominion would still be paying the flat 20 per cent. In drafting this clause an effort has been made to get around the difficulty by providing that the railway commission shall be required to certify what would have been the normal tolls on that railway in that area if this special legislation had not been in effect. In that way we hope to have the conditions sufficiently elastic so that if there is a great increase in traffic and, as a consequence of greater density, a better operating ratio is obtained, the Dominion government will not then be compelled to pay the full 20 per cent. That is the principle of section 9. But my hon. friend is quite correct, that to start with 20 per cent will have to be borne by the government.
I Mr. Dunning.]


Henry Elvins Spencer: Otherwise it will be put up to the railway commission to say whether lower rates will be charged?


Charles Avery Dunning: No. If my hon. friend will read subsection 3 he will see that it provides:
The board on approving any tariff under this section shall certify the normal tolls which but for this act would have been effective and shall, in the case of each company, at the end of each calendar year promptly ascertain and certify to the Minister of Railways and Canals the amount of the difference between the tariff tolls and the normal tolls above referred to on all traffic moved by the company during such year under the tariff so approved.
If my hon. friend will then read subsection 4, he will see that it provides:
The board shall, in every third year and at any time upon the request of the governor in council, ascertain and certify to the Minister of Railways and Canals whether under the provisions of the Railway Act, the normal tolls referred to in subsection three hereof, should be revised and in the event of such revision the revised normal tolls shall thereafter be used instead of the normal tolls referred to in the said subsection in calculating the difference to be paid to the company thereunder.


Mr. IRVINE:: Suppose that through the reduction the traffic increases considerably so that in 1928 the railway companies will .make more money than they made in 1926; would the government still have to pay this 20 per cent?


Charles Avery Dunning: I expect that it will be the duty of the Department of Railways and Canals each year to watch the operation of this statute with great care. In each third year it will be the duty of the railway commission in any case to take into account such factors as that mentioned by my hon. friend, but in addition to that being done every third year, the governor in council may demand that it be done at any time in order to ensure that there shall be a reasonable parity between the improvement made in operating ratio upon the railway and the amount paid annually by the Dominion.


Herbert Bealey Adshead: Does the $2,500,000 which the minister mentioned a moment ago include all that we shall have to pay next year under the 20 ,per cent reduction?


Charles Avery Dunning: We propose to celebrate the diamond jubilee of confederation by bringing this act into effect on July 1st, so the whole year will not be involved. But on the basis of the 1926 volume of business and on the basis of the spread set out in this law, it will be about $2,500,000 a year; that is to say, if it runs from the 1st of July, 1927, to the 1st of July, 1928, I would estimate that about $2,500,000 may be involved.

C.N.R.-Eastern Freight Rates


Henry Herbert Stevens: And as the traffic improves, the spread diminishes; is that right?


Charles Avery Dunning: We hope it will.


Abraham Albert Heaps: Some time ago I asked a question as to that part of the Canadian Pacific railway line which runs through the state of Maine, and the minister said he would give an explanation on section 9.


Charles Avery Dunning: Subsection 1 of section 9 speaks for itself. It says:
(1) Other companies owning or operating lines of railway in or extending into the select territory may file with the board tariffs of tolls respecting freight movements similar to the preferred movements, meeting the statutory rates referred to in section seven of this act.
That means that the Canadian National Railway under this act has a certain rate from Halifax to Montreal; that is the outbound movement referred to in a previous section. The Canadian Pacific also has an outbound rate from Halifax to Montreal. The fact that the Canadian Pacific passes through the state of Maine makes no difference whatever. They meet the Canadian National rate between these two points, and hence they get the benefit on that portion of the mileage which is in the maritime provinces.


Abraham Albert Heaps: Do they get the 20 per cent on that portion which is not in the maritime
provinces?


Charles Avery Dunning: The railway commission
will certify what the tariff would have been but for the existence of this legislation, and they will be paid that.


George Gibson Coote: I would ask the minister to be good enough to explain to me just what is meant in the fourth line of subsection 4, where it says: "whether under the provisions of the Railway Act, the normal tolls referred to in subsection 3 hereof, should be revised."


Charles Avery Dunning: The normal tolls are the tolls at present in existence on the lines in question and approved by the board-the tolls which would continue to be in existence but for this act-the tolls which necessarily must be used as the basis of calculation for the payment to be made to railways other than the Canadian National. My hon. friend will see therefore in a moment the importance of having the ordinary provisions of the Railway Act apply to a revision of these normal tolls, although they are no longer being used for freight rate purposes, but merely for the purpose of calculating what is due the railways under the statute. Therefore we require to have provision made whereby the railway commission can revise the tolls which should have been charged but for this legislation. Is that clear to my hon. friend?


George Gibson Coote: I would ask this question to clarify it:	Does this subsection mean that
if the rates outside of the maritime provinces should go up or down, a change will be made in the 20 per cent such as to keep the rates in the maritime provinces at the level they will be under this act when it comes into force?


Charles Avery Dunning: I cannot follow my hon. friend there; I do not quite know where he is going. But perhaps he would be satisfied with this general assurance, that all the provisions for elasticity under the control of the railway commission which could be inserted in this act have been inserted.


George Gibson Coote: Is it the intention of the
government to have the committee rise, and adjourn the House when (this bill is reported?


Charles Avery Dunning: I am content to rise at
any time. I am completely in the hands of the committee.


George Gibson Coote: The only reason I ask is
that I want to know whether or not there is any further business coming on to-night.


William Lyon Mackenzie King: No, we will
just get this through.


[Stage Direction]
Section agreed to.
Sections 10, 11 and 12 agreed to.
On the preamble.
Abraham Albert Heaps: I move to add to the bill
the following clause:
That this act shall remain in force for a period of ten years from the date on which it comes into operation, after which the act may by parliament be renewed either in its present form or with such modifications as the then existing conditions may render desirable.


Charles Avery Dunning: I must oppose that
amendment because it seeks to bind future parliaments. I am surprised that my hon. friend should arrogate to this parliament sufficient wisdom to make it absolutely certain that no future parliament for ten years shall have authority to amend or change this act. I will not do that at all.


Abraham Albert Heaps: Then do I understand that parliament may within the next ten years amend the present act?
1S82

C.N.R.-Eastern Freight Rates


Charles Avery Dunning: The authority of parliament remains supreme, but my hon. friend's motion would undermine that supremacy.


Abraham Albert Heaps: If there was no question
asked and no statement made, it might be taken that this was something which was being granted in perpetuity.


Charles Avery Dunning: No, no.


Abraham Albert Heaps: It is all right to say, "No, no," but I have seen these things happen previously and the inference has been drawn, because there is nothing in the act to the contraiy, that it will simply continue in force and that no changes can possibly be made in it.


Charles Avery Dunning: I think the amendment is really out of order, as limiting the power of parliament.
Amendment (Mr. Heaps) negatived.


[Stage Direction]
Preamble agreed to.
Bill reported.
On motion of Mr. Mackenzie King the House adjourned at 12.25 a.m. to meet at 11 o'clock on Tuesday, April 5th.
Tuesday, April 5, 1927