1928-05-09

[Stage Direction]
Mr. F. WELLINGTON HAY (North Perth) moved that the seventh report of the select standing committee on banking and commerce be concurred in.
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I believe I am in order today in making a few remarks on this motion. As I tried to say the other day, the work of the committee was somewhat limited in its scope. We were given to understand that we ought not to bring in any recommendation that would involve a change in the Bank Act, and this made the work of the committee rather academic in character. I would point out that it is impossible to bring witnesses from a distance, such as economists from the United States or Great Britain, who might be considered authorities in this matter. Further, we found some difficulty-those of us who were trying to present the standpoint of the general public-in securing suitable witnesses. I discovered that a number of business men who were complaining about inadequate credit facilities were not willing to come before the committee. Whether or not their contention was correct, they took the ground that if they passed any adverse criticism their credit might be endangered. As a matter of fact, therefore, all the witnesses who appeared before the committee, with the exception of one who

represented the Canadian Council of Agriculture, represented either the department or the banks.
While I think the report as presented fairly gives the main points that were considered, I should like to direct attention to the fact that other suggestions were also offered. For example, it was urged that there might be established small local banks and co-operative credit societies. The committee did not go into these matters in any detail. There were also a good many general criticisms of the present banking system. The bankers claimed that these criticisms were not well founded. In order to save the time of the house as far as possible I have summarized the claims of the banks as follows:
(a)	That the small number of banks in Canada-four banks controlling approximately 70 per cent of the entire deposits (page 28)-is in the interests of Canada, (page 27).
(b)	That according to the bank's code of honour, in the granting of credits, there is no discrimination against a business concern that is a rival to one in which a bank director is also a director. (pages 104-105). That is to say, that the charge that interlocking directorates is inimical to the welfare of the public at large is not well founded.
(c)	That, on the contrary, interlocking directorates are a distinct advantage, (page 105).
It has been said, especially in western Canada and in the maritimes, that the concentration of headquarters of banks in Montreal and Toronto is not good for the east or for the west. The banks claim:
(d)	That districts remote from headquarters are under no disadvantage, (page 44).
It was complained that in some instances business enterprises, especially in their initial stages, were not able to secure credits such as were necessary, and that private individuals had at this stage to do the financing of such concerns. That is the complaint. The claim of the banks is:
(e)	That it is not the function of a bank to take the hazards of the commencement of a manufacturing business (page 102), but that any solvent concern in a liquid shape can obtain all the credit it can reasonably desire for legitimate purposes, (page 100).
Mr. A. E. Phipps was emphatic. He said:
No legitimate loan properly secured has been refused, from one end of Canada to the other, since I have been a banker, (page 44).
It seems to me that the general public will have to decide whether or not these statements of the bankers are in accordance with the facts. I might, in -passing, call the attention of the house to the fact that in Eng-

Banking and Commerce-Mr. Woodsworth
land bankers and other financial men, and industrialists, are considering whether or not the present system -is adequately meeting the credit needs of the country; and when men of the type of Sir Alfred Mond are beginning to give attention to a question of this character, looking to reform, it would seem that we might take some action in Canada.
The main proposal 'brought before the committee was undoubtedly the establishment of a central bank. The statements made in the report are, I think, quite fair; but they do not cover all the ground which personally I should like to have seen covered. I might suggest some of the things that are found in the evidence but not included in the report: (a) That under the Finance Act the government performed, with less machinery and expense, some of the functions of the federal reserve bank, but that the banks use the Finance Act to a very limited degree.
fb) That the control of the federal reserve banks over the money market through the open market transactions might be difficult to exercise in Canada, (page 70).
(c) That, in the opinion of Mr. H. P. G. Harding, governor Federal Reserve Bank, Boston:	(1) The mutual savings banks in
New England have been highly successful, (page 82).	(2) That in the United States
western cities would organize their own banks, (page 89).	(3) That the federal reserve
banks have been helpful in stabilizing the price level by stabilizing the money market, (page 75).	(4) That a federal reserve system
organized on the same basis as in the United States-that is, a regional system-would be impossible in Canada, (page 89).
Now there is only a bare mention in the report of what many of us consider to be the most vital matter, namely, the possible control of the general price level. As many of the members of the house will recognize, there are two distinct schools of thought on this matter. Some bankers and economists claim that there is very little relationship between the amount of money in circulation and (the price levels; others claim that there is a very vital relationship. Indeed, some go so far as to say that the amount of money in circulation determines the general price level and that if this is so the general price level may be controlled by a control of t)he money in circulation. That was considered true when gold was the chief medium of exchange. It is recognized that the issuance of bank notes also has an effect, but more than that I think these newer economists and some bankers such as Mr. Reginald McKenna are recognizing that credit facilities including the checking system,
which is responsible for something like 96 per cent or more of our business transactions today, have a very important effect on the general price level.
Again to summarize what I think hon. members will find in the evidence as submitted to the committee, I would say:
First, that bills and coins constitute less than 4 per cent of the total volume of money (page 42);
Second, that deposits created by loans are not kept, separate from savings deposits (page 40);
Third, that the bankers, in keen competition-to use the words of the bankers themselves-" are a practical people" "meeting the situation from day to day" and not considering the ultimate economic effects of the extension or contraction of credit (page 35);
Fourth, that there is no government control over the extent to which the banks can issue credit; that this is a matter of banking policy (page 3);
Fifth, the preponderant opinion of the witnesses was that only to a limited extent could the banks or a central bank influence the general price level (pages 34 and 84). Mr. Harding, in opposition to the position taken by Mr. McKenna and others of his school, agreed with Mr. Mellon that "neither the federal reserve system nor any other system can control prices (page 84).
It seems to me, Mr. Speaker, that whilst I can endorse the greater part of that report, we should add to it a clause providing that the committee which the Minister of Finance is urged to associate with himself, in addition to the work which they are asked to do, "should further explore the possibility ;of stabilizing the money market and preventing the recurrence of periods of inflation and deflation, with their attendant evils." In view of the very great evils which we have experienced in the past; the inflation that appeared to such a degree at the time of the war; the subsequent deflation which so adversely affected business in this country; the fact that students of this question would indicate to us that all through the past there have been recurring periods of inflation and deflation which have been responsible for upsetting general financial arrangements; for transferring large sums of money from one set of pockets to another and for creating great hardships alike for business men and labour people-in view of these considerations it would seem to me that the time is ripe for the government itself to give more care-
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fill attention to this whole subject, and to attempt to bring scientific knowledge to bear upon this most important financial problem.


[Stage Direction]
Motion agreed to.


Mr. W. T. GOODISON (West Lambton) moved:: That the fourth and final report of the select standing committee on railways and shipping owned, operated and controlled by the government, be concurred in.


Hon. R. B. BENNETT (Leader of the Opposition) :: Strictly speaking this report
should be read, because it contains many clauses which in the view of many of the members of this house are wholly unwarranted, particularly those parts which endeavour to give approval to the method in which the accounts of the company aire kept. In our judgment those accounts are not kept in accordance with the methods which prevail in many similar organizations. It, of course, is a matter of difference of opinion as to how the accounts should be kept in order to exhibit correctly the operations of the system, and possibly this question arises from the fact that the system is divided into eastern and other sections which include parts of several lines. Under these circumstances, since the report has nor, been read, I only desire to state that the report does not represent the unanimous views of the committee, as I am informed, and certainly it does not carry with it the judgment of all the members who sit on this side of the house. We content ourselves merely with observing that the report concurred in is concurred in on division, and not with our consent.


Hon. C. A. DUNNING (Minister of Railways and Canals):: If the fact that the report has not been read has any effect in preventing debate upon the motion for adoption and if that is what my hon. friend has in mind, I would suggest that the report be read in order to permit discussion.


Richard Bedford Bennett: All that was meant was
that, the report not being read, I was not going to point out the particular sections with which we disagree. It will be open to us to do so when the minister deals with the railway estimates, and my object in rising was merely to observe that we should not be understood as acquiescing in the report, that
[Mr. Woodsworth.l
the concurrence was on division and was not the unanimous sentiment of the house.


Mr. T. L. CHURCH (Toronto Northwest):: When this motion was up on Monday last it was agreed that notice must be given for the adoption of this report. This is the most important committee we have, but it has not carried out its instructions; meetings have been held in private, yet the house is asked to concur in this report. I did not feel that any useful purpose could be served by attending the meetings of this committee, which only touched the fringe of the subject. I am not a critic of public ownership; I venture to say that I stand second to no member of this house as a proponent of public ownership, but I do object to the way in which these railways are administered. For instance, the committee held a private meeting and went into the affairs of the merchant marine in private.
The Central Vermont Railway is in liquidation, and this government propose to spend $3,500,000 of the people's money in betterments on that road. Then again, the city of Flint, Michigan, can get a new station while the city of Hamilton, Ontario, can get nothing in this line but speeches and promises. I asked a question in this house yesterday with respect to the relationship existing between certain newspapers in this country and the railways; I asked for the production of the pass list and advertising list, but I was unable to get it. It is a well known fact that many of our newspapers just apply to the government for passes in exchange for advertising and for eulogy articles written in connection with officials of the railway. Just a little while ago the Canadian National Railways gave up a valuable right of way on Woodward avenue in the city of Detroit, of the Detroit-Grand Haven 'Railway on which they paid only $25,000 a year in taxes, in exchange for a right of way on a side street for which they have to pay $150,000 in taxes. This agreement was never considered or passed by this house.
Then there is the question of whether or not there is really a surplus in the operating accounts and annual statement. They have no sinking fund or proper depreciation fund. The annual statement is only a partial statement. It does not include the eastern lines or the Central Vermont or others, or all subsidiaries. It all is a matter of a play on bookkeeping and of accounts whether you have a surplus or not. The $193,000,000 also owed the government on old interest account is left

Railways and Shipping-Mr. Church
out, but it is in the annual report of the Department of Railways and Canals. It depends on what kind of accountancy you have. In the United States to-day, the railways, no matter what railway it is., are subject to the regulation and control and accounting system of the Interstate Commerce Commission. The accountancy, equipment of the road, condition of the roadbed, treatment of the public, grade and passageways, freight and passenger rates, are all brought under this public control of the Interstate Commerce Commission. The trouble with our railway is they are a law to themselves and can do as they like, and all the railway commission does is to issue a form of accountancy which is a scrap of paper with our Canadian National.
I asked for information last year in this parliament, when such a resolution as this had been rushed through in a few minutes and opposed the appointment of this committee but could get no information at all.
I am a supporter of public ownership, but only the kind of public ownership that the people of the province of Ontario have in their hydro, and not the kind of public ownership represented by this particular railway to-day. Mr. Speaker, private cars are being handed out, and passes are being given, both against the good of the railway and the Railway Act. I asked the minister yesterday for the return of these papers, and he said that it was not in the public interest to give me the particulars or that papers receive a hand-out of nearly $400,000 a year for this. I say that it is in the public interest to have this information. We should know what newspapers are receiving free transportation in exchange for advertising and for eulogy articles of the system and its heads. I have never asked for a pass on this system; I do not want any. I did ask this question regarding the newspaper flood of flattery, all for privileges costing $303,809.25 to the system:
1.	What sums were spent on advertising in newspapers by the Canadian National Railways in 1927 and 1928, and to whom paid?
2.	What sums were spent on free transportation in exchange for (a) newspaper space, (b) eulogy articles on the system and its officials, and to what papers in each case was transportation issued accordingly, (c) to aid in securing new business for the system?
3.	How was an item of $175,162 increase in such advertising in 1927 and 1928 expended, and what papers benefited?
4.	What was the number of passes granted each paper, and to whom?
Mr. Dunning:
This question calls for information of a kind that the management of the Canadian National Railways holds not to be in the public interest to divulge in detail, as publication, while serving no useful purpose, may place the Canadian National Railways in an invidious position with respect to competitors whose advertising appropriations are not subject to publication.
Even if it were advisable to bring down the information asked for in detail, it could not be given in the form of an answer to a question as it covers advertising of all kinds-newspapers. magazines, printing of booklets, etc.- and also not only the entire Canadian field, but such portions of the United States as are. served by Canadian National lines in that country.
The item under advertising in Canadian National accounts which the hon. gentleman refers to as having increased by $175,162 during 1927, covers advertising of all kinds throughout Canada and the United States. During 1927. the management expended on advertising in newspapers $303,809.25. In addition thereto there was issued transportation in lieu of cash for advertising space in newspapers in Canada only $197,225.39.
Did you ever hear such an answer? I know two papers where all hands just go in and get passes and pay nothing. The advertising part of it is all a myth and of no value. Little of it is given and it is of no value to the system. The whole system of accountancy needs to be reorganized. Is is a mere matteT of figures, and I just ask for a few days to give the members time to study this report. The committee they have only touched the fringe of the whole question. The committee just sat there and smoked a pipe or a cigar, and it all looked to me like a pipe dream and a smoke screen was thrown up to prevent a proper presentation of the real picture and the extravagant management of the stystem. I challenge anybody to look over these estimates of the merchant marine and discover anything. They went to work with 64 ships, and they sold without tender all but 46. They cleared the committee room when questions on the merchant marine were asked. Let me ask the minister if the Canadian Pacific Railway do not know everything that is going on in the Canadian National Railways? They do, and can tell all the inside affairs of the Canadian National Railways. Why were the head offices moved from Toronto to Montreal? Why should they be in Montreal? iMontreal is not a public ownership city; it never was and never will be. It is from the central regional area that most of the revenue comes. It was a sorry day that the railway offices were taken out of the public ownership province of Ontario. I would rather see these Canadian National railway offices established in Winnipeg, or Hamilton, or Vancouver, or some other place. They should never have gone where they did go, as headquarters of a great publicly owned system.
Last year we asked the government for a return of the railways' new rates obtained
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secretly from the Bell Telephone Company, over the head of the railway commission of this country. There was an application pending 'before the commission for an increase in telephone rates. The application was on the part of the municipalities to remove discrimination. While this was on the Canadian National Railways made a secret contract with the Bell for cut rates. The Canadian National railways board looks like a Liberal campaign committee of directors who do not direct. The service western Ontario gets from the Canadian National Railways, owing to poor rolling stock and terminals, is not fair to Ontario. Let me tell the Progressive members from the province of Ontario that it is a disgrace to any publicly owned road. A few months ago I was in Kitchener, the home town of one of the ministers; you could not get a train out of there on Saturday night after five or six o'clock. It is the same all through western Ontario generally and the trains and equipment are in some cases as old as the hills. What is the reason? I will tell you. This so-called publicly owned road took $22,000,000 of cash out of the old Grand Trunk in Ontario. They took $122,000,000 of credit out of the Grand Trunk. Where did they take that money and credit to? They invested it in what is known as the Grand Trunk Pacific. There has not been hardly one dollar spent since on the Grand Trunk railway in the province of Ontario, although the cream of the business is in Ontario and the chief earning power of the system is there.
I am not criticizing the president of the road personally, but I am criticizing his methods in the administration of the road. I made a speech at the party nomination of the member for Toronto West Centre (Mr. Hocken) along very similar lines, and I have been invited to go there again. I will speak there at the next meeting in his constituency. I do not need to take any lessons from him as a supporter of public ownership. I am a public ownership man first, last and all the time. He tried in 1912-14 to sell the street railway and the electric light company to the city for $32,000,000, but it did not go through. If it had, we would never have been able to take over our railway and would have had 10 cent fares forever.
We proposed a system of hydro radials in Ontario, the electrification of the Grand Trunk branch and suburban lines in the cities and towns of thih province. This was proposed by Sir Adam Beck in the province of Ontario, and the municipalities were prepared to take many of these old lines which were out of use, and some which had been torn up, and electrify them. Sir Adam proposed to take

many of the dead ends of the C.N.R. and electrify them. They extended from western Ontario down to Peterborough. They would have acted as feeders for the National railways. When Sir Henry Thornton arrived in this country he sent telegrams to the municipalities, and the project was defeated; the life work of this great patriot of the province. Sir Adam Beck has done more for public ownership than Sir Henry Thornton ever can do all his life. Sir Adam had an agreement to buy from the government the Toronto and Eastern railway, the Toronto Suburban railway, and the Niagara and St. Catharines railway, but Sir Henry Thornton vetoed it.
The committee was not interested in this matter. They held a meeting regarding the Canadian Government Merchant Marine. I have asked for a return on the matter, and I cannot get it. There was a report made about two years ago regarding the sale of sixteen ships. No tender was called for. Some of these ships cost $1,000,000, $1,250,000 or $1,500,000. I think sixteen of the smaller ships were sold without a tender. Some of them cost $1,250,000, and were sold for $50,000. That was the report made to parliament before the present minister was in the house.
We are asked to adopt the report of this committee. They asked a few questions in the committee regarding the merchant marine, and then they decided that the balance should be considered in camera, and the press were ordered out. The revenues and rates were not brought out at all. Under a proper public ownership system, like the hydro-electric, or the telephone systems of Alberta and Saskatchewan, every dollar of expenditure must be accounted for. In the case of the Hydro Electric Power Commission of Ontario there is $300,000,000 invested in heat, light and power and transportation. When Sir Adam Beck brought down his estimates in the legislature, there was no committee to whitewash the estimates; they were before the whole house and every dollar and every item passed the house-all the cards were on the table.
When you ask a question in the house here, you are told that it is not in the public interest that these things should be given out. In any properly conducted public ownership venture, like the hydro-electric, the utmost disclosures are made to the ratepayers, who are the shareholders. Why all the secrecy? The Canadian Pacific railway know anyway, first-hand, of the running of this "me too" road.
And now, Mr. Speaker, Sir Henry Thornton is going around the province of Ontario and making speeches nightly. He spoke in

Railways and Shipping-Mr. Church
Niagara Falls last night, and mentioned that he had seen the Chippawa plant at the falls. This plant generates an enormous amount of power, and is a real public ownership proposition, owned by the municipalities in the hydro. Sir Henry compilmented the engineers on the administration of that particular work. It cost $75,000,000. All the engineers are Canadian born, and, unlike the administration of this particular railway, everybody connected with it is a Canadian.
Who is Mr. Gaston? Mr. Gaston is a New York gentleman. He was asked in the committee if he was a lawyer and Sir Henry Thornton said last year that he was. He is not a lawyer at all. He graduated from the Yale School of Law; but that does not make him a lawyer. Nobody knows what he is receiving and apparently the work that he has to do is something that any young returned soldier lawyer in a law office could do. I believe in having Canadians put in charge of the administration of our roads which are being run under public ownership and in a policy of Canada for Canadians.
A few days ago I was attacked by a learned paper in the city of Ottawa on this question of public ownership in the administration of this particular railway. They said that my voice was the only one that was raised against this item. As long as I am a member of the house I am going to assert my right and privilege as a member of parliament to criticize the administration of the road, for the way Ontario has been discriminated against, the way the assets of the old Grand Trunk have been used elsewhere by the present head of the system, the way the great province of Alberta and the great maritime provinces have been discriminated against in the coal policy of this road. There was an order in council passed months ago in regard to the movement of coal from Alberta but it is still a dead letter, they say now the switching charges should be added1 to the rates. We will never get any coal brought down from Alberta if Sir Henry Thornton has anything to do with the matter. He would rather quote a rate of $9 to $14 a ton for carrying coal from Alberta and the result of that would be that we would have no business; whereas, if he would quote a rate of $9 a ton we would get the cream of the business. Sir Henry Thornton has done everything he can to defeat the development of the great coal industry of the country and to aid the Pennsylvania coal barons. Our coal industry should be a protectionist industry and one which should bring a great deal of relief and work to the people of Ontario and western Canada. Sir Henry has done nothing to assist the great coal industry in the maritime provinces or Alberta. He has sold sixteen merchant ships of a small type which could be used on the great lakes to go down to the seaboard as far as the ports of Nova Scotia and which could be converted to carry coal from Nova Scotia to central Canada and to cities like Hamilton during the summer.
I have great respect for and I like the Minister of Railways; but I would say, with all due respect, that the committee held only six or seven meetings and there are many other matters that should have been looked into. There is the question of the administration of the Central Vermont. There is the question whether the railway commission has not power to put their officers on the road the same as the Interstate Commerce Commission can do. If there was a proper system of accounting in connection with the system large deficits would be revealed in capital and maintenance. This matter came up on the debate on the address and also on the debate on the budget and it was shown that there is a large sum of money amounting to about $197,000,000 of unpaid interest owing to the government. If anybody else owed that money they would have to pay it, but now it is a mere matter of bookkeeping. That amount should be included in the statement given in the report. The statement in my opinion is not a statement at all, or only a partial one. The eastern lines are not included in it, nor the accounts of the Central Vermont or other subsidiaries. The administration of the Intercolonial has a large deficit, but this is put on the tax rate of the country by way of subventions to the maritime provinces and this is shown not in the statement but in a separate one. The hon. member for Toronto-Scarborough (Mr. Harris) put a very leading question to the committee but he could not get an answer. He asked for the assets and liabilities of the Central Vermont railway but the information was not available since 1926, as they say the railway is in liquidation and the case is before the courts. Yet they can show that the Central Vermont is going to require $3,700,000 for betterments. Where do they get that figure if they cannot show what the assets and liabilities are? Many other matters are left out of this particular statement that has been laid before the house.
There are a number of scrapped railways running out of Toronto; the old Canadian Northern, the Belt Line, the Toronto and Eastern, which could be used to give the people a service that they are not getting today. Sir Adam Beck would have bought the latter. What is the condition of affairs?
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They are tearing up parts of whole railways east of Leaside to Brighton and selling them as scrap. This was done without tender. They are tearing up part of the Canadian Northern bridges, ties, rights of way and everything. It is all very well to ask for a committee but I venture to say that if a proper independent investigation was held into the whole Canadian National Railways matter we would have something nearly as bad as the customs inquiry.
My former hydro leader, the late Sir Adam Beck, upheld the principle of public ownership and development of the great province of Ontario, but this province has failed to get a square deal or the rural places there a service from the National railways under public ownership. They took $122,000,000 out of the old Grand Trunk in credits and $22,000,000 in cash under private ownership, a road that was giving good service, that built up western Ontario and that was doing well, and they spent these assets elsewhere. As Sir Henry Thornton said in the city of Toronto the other night, the main part of the revenues of the Canadian National Railways to-day comes from the central regional area; but the trouble is that we have too much radio, too many frills and fads in the system, too many golf courses, too many deadhead passengers and hotels with deficits. I venture to say they have not an hotel that is a paying proposition to-day and last year the hon. member for Westmorland (Mr. Price) in a return to this house got a return of the hotel deficits showing that every hotel had a large deficit. Yet they proposed to build an hotel in Paris and now they are proposing to build an hotel in Halifax. They are proposing to build two or three new ships to carry on a service between Canada and the West Indies although they have sold, for a few thousand dollars in some cases, sixteen boats that were convertible for further use to the people of Canada.
The last time these matters were up in March I opposed a special committee for these estimates because I believed it would do nothing but whitewash the system. The hon. member for Toronto West Centre (Mr. Hocken) said then that I attacked the system.
I did not. I wanted efficiency and economy. He said that 'he represented ninety-five per cent of the people of Toronto. He did not represent one per cent of the people of that city in the 1913-14 purchase deals to acquire for $32,000,000 the Toronto street railway and electric light plant and all their intan-[Mr. Church. 1
gible assets. I venture to say that he does not represent the people of Toronto in his views that one must keep quiet and say nothing when Ontario gets the worst of it and the United States the best of it from the Canadian National.
The Canadian National have a piece of property at the comer of King and Yonge streets, railway offices, but they went to work and moved to the comer of King and Toronto streets, not once but two or three times. They had the telegraph offices of the old Canadian Northern at the corner of Scott and Wellington streets and they moved them to the corner of King and Yonge streets. Large sums of money have been spent in renovating these properties, but they use them for only a few months and then they move back again, backwards and forwards. They have moved backwards and forwards in this way at a cost of five or six thousand dollars in losses of renovations, business and fixtures, and the system allowed a lot of speculators to use the government's and railways' home towards a deal that fell through for a skyscraper at the corner of King and Yonge streets. There is a large exodus of Canadian university graduates from McGill, Varsity and Queen's to the United States. There have been a large number of articles on that question in the newspapers. Our graduates in electrical science were good enough to develop the whole Chippawa power scheme for Sir Adam Beck, which is the most shining example of engineering there is in the world, but they are not considered good enough by Sir Henry Thornton to be given a position in the engineering department of the Canadian National Railways, or the law department. They fill up with Americans like Mr. Gaston.
Who asked Sir Henry Thornton to go to Mexico? How is he able to leave the work of administering the Canadian National railways for five or six weeks? I asked for a return to be brought down on this subject in the house. A debate was not allowed upon my motion, but I have the return here, and I find a letter in it signed this way:
I have the honour to be, with the highest respect, Sir,
Your most obedient servant,
(Sgd) H. H. Wrong,
(For the minister)
The minister being His Excellency, the Honourable Vincent Massey, Envoy Extraordinary and Minister Plenipotentiary for Canada, Washington, D.C.-and he is I tell

Railways and Shipping-Mr. Church
you most extraordinary. You would think that we were back in the old feudal days of William the Conqueror, with all this vanity and flattery. Sir Henry Thornton must have an awful lot to do when he can be talking on the radio every night all over the country making speeches and promises, and out on the golf links, and going down to Mexico on a mission that was not in the interests of the people of this country. He talks of spending 15 or 20 millions on immigration also. In this return that was brought down I find this letter:
My dear Mr. Minister:
My government is desirous to invite Sir H. W. Thornton, President of the Canadian National Railways to visit Mexico in order to undertake a survey of the present organization and functioning of the Mexican national railway lines, so that he may bring to the attention of our appropriate authorities the suggestions for the reorganization of those lines which his long professional experience may think fit.
As my government understands that an express assent of the Canadian government would be necessary for Sir Henry Thornton to undertake this survey on behalf of the Mexican Railway lines, I have been instructed to approach Your Excellency, which I have the honour to do, to request Your Excellency's good offices near the Canadian government so that Sir Thornton may be given the necessary authority to undertake the aforesaid labours in Mexico.
Sir Henry stirred up a small sized riot in Canada and created more strife and dissension than good will. I think Sir Henry Thornton would be better employed trying to give service to the people of this country. He would have been for instance, better employed to go out to Alberta and see what he can do towards moving Alberta coal out to the central provinces, or he might go to the mari-times and see if he could not utilize the ships that are being sold for almost nothing, to bring Nova Scotia coal to central Canada than in going this time to Mexico or to-morrow to Philadelphia to help the coal barons there. The Mexico business was a farce and a mistake and did Canada no good. Let him solve Canada's ills first.
As one coming from the province of Ontario, I am not satisfied with the investigation which this committee made. The questions asked in the committee did not touch the fringe of the subject. The whole thing was a white wash and of no value whatever. Sir Henry Thornton talks now about electricity, but he was the very man to destroy in the province of Ontario the dream of Sir Adam Beck for electric radial railways which would have revived every dead Grand Trunk Railway line in Ontario and have acted as feeders for the Canadian National Railways main
lines. My hon. friend from Toronto West Centre (Mr. Hocken) used to be interested in the hydro radials and knows, and I am sorry that he was not more critical of the administration of the railways in Ontario and the raw deal Ontario has got. I attended meetings in his riding, and I know that the people in his riding would have been glad to have had the hydro radials which did so much to build up Michigan, New Jersey, Ohio and Pennsylvania.
Sir Henry Thornton, at a great cost, is buying these German engines, instead of using the hydro-electric energy in the province of Ontario for the electrification of our lines. These Diesel engines or electric units are made in Germany. True, they may have later a patent for them in the United States, but I maintain that we should be using our own electrical energy developed on the Chippawa or in the province of Ontario or Quebec, to electrify our suburban lines in these two provinces and bring feeders to the main line, instead of getting a lot of foreign type of Diesel German engines on which the wear and tear is very heavy, and which last only a few years compared with electric power and electrification of the suburban steam lines in industrial centres with trains operated with electricity instead of one coach by a Diesel engine.
There was a great lot of talk in the committee about the traffic which the Central Vermont railway brings to Canada. All that the Central Vermont is doing, when it assembles that freight away out west, is to bring it to the American seaboard through Canada. True, it goes to Portland, but that particular freight should be routed through all-Canadian channels and would mean more to Canada. It could be routed through to Quebec or Montreal by rail and water, or all rail, or be routed to St. John and Halifax by all rail, instead of that traffic being diverted to the United States. The same is true with regard to the shipment of our hard wheat, which is not being sent through Canadian channels and from Canadian ports to United States, lake Erie and American seaboard ports to mill.
I have read every line of the reports of this committee three or four times, and if this is the best that we can get from the investigation of the estimates by a committee, I think nothing is to be gained by referring estimates generally to a committee. The committee met some six or seven times and had some witnesses before them. It was the most obliging and polite committee on deport-
2828	COMMONS
Railways and Shipping-Mr. Church
ment I ever saw. It was, "Please Sir Henry this," and "Please Sir Henry that," and "After you my dear Alphonse," and "after you my dear friend Gaston-you first, not me." The report runs this way: Mr. Harris has asked for some report, and Sir Henry Thornton asks': "Have you got that report, Mr. Henry?" Sir Henry says, " I have got that report," and then Mr. Harris says, "We shall be pleased to accept it." Sir Henry presents it and then "Thank you, Sir Henry, thank you, thank you also, Mr. Harris." Then at page 125 of volume 5 of the evidence I find this:	That Sir Henry after five years of
opposing Sir Adam Beck and his radials and electrification turns around and supports such a policy for suburban areas by electric units of one ear with Diesel engine when he could have had trains of hydro radials five years ago. I quote from the committee report:
Mr. Cantley: What success have you had with suburban car traffic, with either the Deisel or gasoline car? Are you extending that service?
Sir Henry Thornton: Yes, we have certain suburban branch line services which, under steam operation, have been conducted at a loss. We cast about to try and find some cheaper but equally efficient method of operation. In the course of our investigation we developed the Deisel electric unit, which we believe is the solution of the branch line problem or the solution of problems which involve the provision of steam service at a loss. We have built a number of these units and are putting them on wherever circumstances justify them. They have been highly satisfactory. (To Mr. Henry). Do you happen to have with you any figures on the subject?
Mr. Henry: I believe we have.
There was altogether too much " I believe ' and " I think " about this whole committee and the whole evidence. It is pretty nearly time we had a showdown about the way Sir Henry Thornton refused to work with the hydro-electric movement in the province of Ontario five years ago to bring the joy of living to the farmer on the farm and to the toiler and artisan in the city through the Hydro Radials. Michigan, New York, and New Jersey have all become the great states they are to-day through the great network of electric railway lines which they have developed as feeders to the trunk lines. In New Jersey you will find little villages every mile and a half or two miles, but Sir Henry Thornton, when a gilt-edged proposition was put before him by the hydro-electric municipalities of the province, backed by the province itself in 1923-24, threw the whole thing into the waste paper basket. He says, "My dear Mr. Harris", or "My dear Mr. Henry, we will buy a few more donkey Diesel engines and use them in Hamilton and other places throughout the .province", when we

could have had a great system of 1,000 miles of electric radials all through the province, at 'Peterborough, Brockville, London, Toronto, Windsor, Ottawa and many other towns, and have developed a system which would have saved this government the loss which the railway now sustains in the province of Ontario, by electrifying the old Grand Trunk branch lines and making them feeders to the main line of the Canadian National Railways. There are a number of bridge bills before this house at the present time, one at Sarnia, one at Windsor, and three across the St. Lawrence. What is the purpose? It is to build bridges where the Canadian National railways now have the cream of the business and own the territory. The Canadian National Railways declined to preserve .the territory and the local business of motor truck and motor bus competition at the territory tributary to these bridges and with the state governments or United States federal or municipal authority control these international bridges and their rates for the system and the public. The telegraph and telephone system accounts should not be mixed up with a lot of petty subsidiaries in the statement. They have a unit with net earning power of $700,000 a year.
There should be a survey of a plan for electrification of certain main lines for parliament. All betterments now go into capital. This is bad financing and we pay in long-time bonds for some of the betterment plans twice the actual cost, over thirty-year bonds, far beyond the life of the work. There should be a reclassification and revaluation and a physical survey .made of the entire railway at once. There is too much reference to the United States in rates, in accountancy methods. in depreciation plans. We are not in similar circumstances to class "A" American roads and ,our laws, federal and state, are different. Our slow Railway Commission should audit actively itself, and compel sinking funds and depreciation on a modem plan. The committee just dealt with a statement all old and just a post mortem. The auditors' system is merely one of checking; it is worthless to the country. No one knows what is going on. There should be a reclassification between operating and investment accounts and a reclassification of what belongs to each. At present there is no sinking fund that takes care of depreciation which is very rapid in the Canadian National Railways equipment and rolling stock. The same rule should be adopted as the hydro has adopted in Ontario. The huge increase yearly in capital is out of all proportion to the real book value of the Canadian National Railways to-day. There are

Railways and Shipping-Mr. Dunning
too many novices in the Canadian National Railways crying for the fads and frills of American railway associations. The Canadian National Railways, except on lines in the United States, has no depreciation or retirement reserve and is on an unsound and uneconomic basis at present. Had Sir Henry Thornton been alert to the traffic possibilities he would have got control of these proposed international 'bridges for public ownership as a means of mobilizing motor bus and motor truck lines to collect local business to feed the railway. But no. When you get down to private bills you find lobbyists there, representing the Canadian National Railways, actively supporting the granting of these charters to private promoters for speculation purposes. When he was asked to go into a rich district like the Red Lake district, he would not entertain the proposal; but when he is asked to take over a branch line that won't pay for twenty-five or thirty years, it is a different proposition. I intend to take the platform again when the proper time comes, as Sir Adam and I did for five years on the hydro radial program, and explain to the people throughout Ontario the raw deal handed to the province by this railway.


Charles Avery Dunning: Mr. Speaker, I do not intend to follow the hon. member (Mr. Church) who has just sat down in his travels from Toronto to Mexico and back via Germany and then across Canada. I rather agree with the leader of the opposition (Mr. Bennett) that detailed discussion of Canadian National Railway matters can most effectively take place when we are in committee of supply. To attempt to follow the lengthy address in which all sorts of statements regarding the system and its management are made, is not in my view the most effective way of dealing with business of such importance. If when we are in committee of supply my hon. friend has any questions which it is within my ability to answer, I shall endeavour to deal with them. I would, however, commend to all hon. members the study of the reports of the select standing committee on railways and shipping owned, operated and controlled by the government, in order that before the house does get into committee of supply with regard to Canadian National railway affairs there may be a general understanding of the work which that special committee endeavoured to do and also of the information which was placed on record for the use of hon. members.
In connection with Canadian National railway affairs the house adopted a number of sessions ago a practice which has been many times advocated by hon. members in relation
to the estimates of other departments of government. The house adopted, rightly or wrongly, what might be called the budget committee system, with respect to the accounts and estimates of the Canadian National Railways. That practice has been followed for a number of years, and was adopted again this year with the full consent of the house except, I think, of the hon. member who has just sat down. I think almost every other hon. member is convinced of the practical value of the investigation which can be made, and which is made, by a special committee of this character with respect to an enterprise such as the Canadian National Railways. Therefore I again commend to hon. members the study of the reports and evidence, which are all printed and at their disposal.
I desire to make reference to only one matter mentioned by my hon. friend from Northwest Toronto. I will not enter into his disagreement with his colleague from Toronto West Centre (Mr. Hocken). I am quite sure that that hon. gentleman is well able to take care of himself. But my hon. friend did make reference to what is a very serious matter if it is true. He stated, if I heard him correctly, that free transportation was issued to the newspapers of this country by the Canadian National Railways. He made a further statement which appeared to indicate that he had evidence that the Canadian National Railways illegally issued free transportation to people in the Dominion. Statements have been made in various places throughout the country touching upon this matter, and I should like to say to the house at this juncture that the provisions of the Railway Act with respect to the issuance of free transportation are very specific. The method provided by the Railway Act for the audit of free transportation is clear and definite. The Board of Railway Commissioners is the body that conducts the audit and certifies that the provisions of the act have been complied with. I have on many occasions investigated rumours of the improper issuance of free transportation by both our great railway systems, and I must say that I have never yet had an instance brought to my attention which turned out to be a contravention of the law. My hon. friend makes a direct statement in that regard, and, as minister, I would appreciate it if members who believe that transportation has been issued illegally by either of our great railway companies would bring it to my attention or to the attention of the Board of Railway Commissioners, which, as I have said, is the body responsible for the administration of the Railway Act in regard to free transportation.
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Railways arid Shipping-Mr. Dunning
Now, with reference to newspaper transportation, my hon. friend spoke of transportation issued to newspapers as if it were free transportation. No free transportation, Mr. Speaker, is issued to newspapers either by the Canadian Pacific Railway Company or the Canadian National Railways. But for many years before the institution of the Canadian National railway system it had been the practice of the railways to issue transportation to the newspapers in contra account for advertising. That is to say, every newspaper in Canada is from time to time in receipt of an order from the Canadian National or the Canadian Pacific to insert a certain advertisement. That advertisement is inserted. The newspaper has an account against the railway company. With respect to that account the newspaper can draw transportation to an equivalent amount.


Mr. McGIBBON:: May I ask the minister a question?


Charles Avery Dunning: Certainly.


Peter McGibbon: Is not this advertising
submitted to the newspapers without any expectation of the railway paying for it? That is, the newspapers are simply requested to publish the advertisement, and they are not paid for it except by way of free transportation?


Charles Avery Dunning: Oh yes. Allow me to refer to the answer I made to a question by the hon. member for Toronto Northwest bearing on the point. It will be found in Hansard at page 2722. This is the concluding paragraph of the answer:
The item under advertising in Canadian National accounts which the hon. gentleman refers to as having increased by $175,162 during 1927. covers advertising of all kinds throughout Canada and the United States. During 1927 the management expended on advertising in newspapers, $303,809.25. In addition thereto there was issued transportation in lieu of cash for advertising space in newspapers in Canada only $197,225.39.
That is to say, the railway expended in cash not quite twice as much as it paid for advertising by the issuance of transportation. That answers my hon. friend's question.


Mr. McQUARRIE:: I desire to ask the
minister if any record is kept of the transportation given to reporters and others connected with newspapers.


Charles Avery Dunning: I have just dealt with that. Every bit of transportation issued to a newspaper for a reporter or for anyone else connected with that newspaper is charged up in the Canadian National accounts against the newspaper.


William Garland McQuarrie: Giving details?


Charles Avery Dunning: I cannot say positively as to details, but I do know that the accounts are kept in such a manner as to enable one to give the answer which I gave the other day in that regard. My hon. friend from Toronto Northwest also complained because the Canadian National did not think it well, in answer to his question relating to newspaper transportation, to give the details for which he asked. Now that raises what has always been a delicate matter with respect to an enterprise of this character, as to whether, through the medium of parliament, information should be forced into publication which no competitor of the institution, in the ordinary course of its business, does make public. My hon. friend asked for details in great variety, and the answer given-supplied by the management

is:
The question calls for information of a kind that the management of the Canadian National Railways holds not to be in the public interest to divulge in detail, as publication, while serving no useful purpose, may place the Canadian National Railways in an invidious position with respect to competitors whose advertising appropriations are not subject to publication. Even if it were advisable to bring down the information asked for in detail, it could not be given in the form of an answer to a question, as it covers advertising of all kinds

newspapers, magazines, printing of booklets, et cetera, and also not only the entire Canadian field but such portions of the United States as are served by Canadian National lines in that country.
Then follows the information in aggregate figures which I read a few moments ago. There was no objection on the part of the management to giving aggregate figures, but there was an objection to giving details in relation to different newspapers and different classes of service, and that for the reason which I have just indicated.
I would respectfully urge upon the membership of the house, with respect to the matter of free transportation, that it is not in the interests of the system nor of the country that there should be an idea abroad that free transportation is given by either of our great railway companies in contravention of the law. My object in referring to the matter is to ask hon. members' to bring to my attention, if they will be good enough to do so, or to the. attention of the Board of Railway Commissioners any case which in their opinion constitutes an infraction of the law. As I said at the outset, the law as amended in 1919 is now quite clear and specific. The Board of Railway Commissioners' conduct an audit with respect to free transportation, and I merely ask the co-

Railways and Ship-ping-Mr. Harris
operation of hon. members with a view to dispelling this rumour that the law is being broken in th-is particular.
In regard to Canadian National affairs generally, I agree with the leader of the opposition. We can more properly go into details when the house is in committee of supply than in a general discussion of this' sort, merely upon the adoption of a report.


Mr. J. H. HARRIS (Toronto-Scarborough):: I would have hesitated to intervene in this debate at this particular stage had not my hon. friend from Toronto Northwest (Mr. Church) brought my name into the discussion. But another reason I have for rising at the moment is to acquaint hon. members with the importance of some of the items which are contained in this report. It is quite true perhaps, from the point of view of the hon. member for Toronto Northwest, that we may have been in a little pipe dream when that committee was sitting. But I notice that the evidence adduced in the sittings held by that committee was of sufficient interest to induce the hon. member to read the report three or four times, and of sufficient moment for him to rise in his place to-day. on the motion, and make certain observations with regard to the matter.
Inasmuch as the session is dragging out, and in view of the fact that when the estimates do come down to the house they will probably reach hon. members at a time when they are not just ready to discuss them, I wish to point out to the house as now assembled that the statements made in the report of this committee this year reveal two or three facts' of which, while no doubt other hon. members and I know about them, I am quite certain that the general public, for whom we are trustees in this road, have no real conception so far as the bookkeeping system of the enterprise is concerned. Let me make one or two observations on this question, if I may. With regard to the rank and file of the men on the pay-roll of the Canadian National railway system, what I have observed leads me to the conclusion that during the last five years, at least, these men have been much more loyal to the company than they were previously. One can observe, from one end of the country to the other, the fact that on the whole the men on the pay-roll of the Canadian National system are, to the best of their ability, advancing the interests of the road which is paying them their weekly wages. You can notice it at every little station and in every section of the business; the men are anxious to secure for the system all the business
which it is possible to get. So that in offering a few remarks, which are not necessarily a criticism, regarding the general bookkeeping system of the road, I want it clearly and distinctly understood that I am not in any way whatever referring adversely to those employees of the Canadian National Railways who after all comprise the heart and soul of the entire system-the rank and file. So far as the management are concerned, too, they are taking a keen interest in the success of the road. But I want to point out two or three things to the house.
We have in road equipment to-day a capital investment amounting to 81,914,000,000. I speak from memory. Now that is a sum of real magnitude, and the point I wish to bring out is that year by year we are adding to that sum. The directorate are not offering, nor is the Minister of Railways (Mr. Dunning) in this house, any feasible scheme whereby that fabulous sum, approaching two billions of capitalization, can be brought down to something approximating the real value of the road in order that we may have a truer picture of the operations of the system as disclosed in the balance sheet which is given to us each year. If you refer to page 21 of the report this year you will find additions to capital account amounting to some $43,724,677.16. Very good, if we are having these additions made to capital account. But as a layman who perhaps knows nothing about railways but who has found it necessary each year, in a small business, to take into consideration a certain amount of depreciation on plant and equipment, I say that when this sum is added to the capital account of the Canadian National Railways and no provision is made for exhaustion of the different elements which go to constitute the system, the public should know of these facts. And we sitting in this House of Commons should be in a position to discuss these matters with the public and give them some idea of what this capital account, approaching two billions, really implies.
I appreciate the difficulty one would have in setting up a depreciation reserve to take care of the exhaustion of new elements from year to year, when the capital investment starts with the sum of two billions. You can realize that a mere half of one per cent would be a very large item in the operating account, to foe set aside each year for the purpose of meeting depreciation or exhaustion. Nevertheless the point is that nothing is being done at the present time-apart from those elements which are written off-so that year by year we might have reflected in the statement of the Canadian National system some
2832	COMMONS
Railways and Shipping-Mr. Harris
figure which would denote the amount of exhaustion annually of the elements in the service of the road, and which in any ordinary business would be disolosed in a statement of this kind.	_
Hon. members will find it stated in the report that the accounting system which was reviewed at some length by the committee is in accordance with sound railway practice. I was rather anxious to have a more definite statement as to what railroad practices were meant, and the question was asked whether the system was in accordance with the practice of class "A" roads, which receive their authority from the Interstate Commerce Commission. If hon. members wifi refer to page 174 of the proceedings of the committee they wifi find these words:
-some railroads found it good practice to set up depreciation to take care of the exhaustion of different elements, while other railroads did not. Some of the class "A" roads did and some did not. . . . Speaking of roads in the United States, they all accrue depreciation on equipment-
In reading this report any hon. member might believe that the accounting system is in accordance with railroad practice all over this continent, yet we find that the railroad practice depends upon where the railroad is located. When the Canadian National Railways go through the United States, their accounting methods are in accordance with the requirements of the Interstate Commerce Commission, but as hon. members know by far the greater part of this railway is in Canada, and the accounting practice of that portion is in accordance with the rules of the Board of Railway Commissioners. As far as I can see, the railway commission do not lay down rules and regulations with regard to the accounting system of the Canadian National Railways commensurate with the magnitude of this organization.
When these estimates come up, I want hon. members of the house to understand exactly what they are asked to pass. The hon. member for Toronto Northwest (Mr. Church) discussed the withdrawal of the eastern lines from the report this year. I remember when legislation was passed by this house affecting a 20 per cent reduction in freight rates on eastern lines, and I remember that the loss occuring therefrom was to be a statutory payment. I felt glad to do anything I could to assist the development of the maritime provinces; if by making a 20 per cent reduction in freight rates and paying the difference out of the consolidated revenue fund we would heLp the maritime provinces I was quite content to do so. However, I must admit that I was disappointed, although perhaps it is my own fault
TMr. Harris.]
because I did not study the situation sufficiently last July, to find that this statement which most members of the house expected to cover all the operations of the Canadian National Railways for last year, does not deal with the deficit arising from the operation of the eastern lines. So while this statement is in accordance with the legislation we passed last year, I want hon. members of the house to know that the loss occasioned by the operation of the Maritime Freight Rates Act is not included in this report, so these figures do not present a complete picture of the operations of the railway.
Two or three other rather important matters came before this committee, but I think the time has come in Canada when we should expect from the directors of the Canadian National Railways and from the government who have that directorship more or 'less under itheir control, some statement of policy as to what they are going to do to put the Canadian National Railways on a business basis, so that when the members of the house and the people of Canada, who are the shareholders in this Tailway, receive the annual statement each year they will get a fair reflection of the operations of the road. As it stands now, in my humble judgment this report does not show the people of Canada all that is happening. I would like to emphasize that in just one other way. Over a period of perhaps fifty years it is quite true that this statement issued year by year will be a true reflection of what has transpired, but as a yearly statement it is of little value. This year $40 000,000 has been added to the capital account; these elements all in use on the road will be exhausted during the next twelve months, and that exhaustion represents real money in dollars and cents. Yet when the statement ia received next year the exhaustion of that $40,000,000 of additions will not he reflected in any way. I say again that in my opinion the time has come when the government and the directors !of this road should give some thought to putting the Canadian National Railways on a business basis so far as their accounts are concerned, so that when the annual statement is presented we will be able to get some idea of what is going on.


William Garland McQuarrie: The hon. member for Toronto Northwest (Mr. Church) referred to the issuance of transportation to reporters and others connected with newspapers, and it seems to me that that matter should be investigated. The explanation given by the minister seems to reveal the fact that a pernicious practice exists, or at least that it is customary with

Raihvays and Shipping-Mr. Ralston
both railways to pay for advertising by issuing passes. That seems to me entirely wrong; at least in connection with the Canadian National Railways we should pay for advertising in the regular way, and should only issue passes to newspaper men who are entitled to have them under the provisions of the act. I have heard rumours to the effect that publicity is Obtained through issuing passes; that when matters are before the house in connection with which railway officials desire to have the gentlemen in the press gallery stop giving publicity which might hurt them, or when they desire publicity which might be of benefit to them, it is quite customary to have some high official of the railway come to Ottawa and issue passes in a rather wholesale manner to members of the press gallery. These are stories which I have heard; I do not know whether or not they are true, but I do not believe the minister should pass up this matter, as he seems inclined to do, by saying, "Oh, if any of the members hear of these things they should give me particulars of them." It seems to me that the minister or some one in his department should investigate matters of this kind.


Charles Avery Dunning: Will my hon. friend permit a question? Is he now referring only to the Canadian National Railways, or does he include the Canadian Pacific Railway as well?


William Garland McQuarrie: The rumours I have referred to were connected with the Canadian National Railways. So far as the press gallery is concerned, we have them writing articles from day to day, calling attention to the fact that members of parliament are receiving this and that perquisite, using free transportation, and having the privileges of the restaurant, and so on, while they themselves are doing exactly the same thing.


Charles Avery Dunning: Oh, no, Mr. Speaker, that is quite wrong. The transportation issued to the press by the railway is not free transportation; it is paid for, and that is the distinction.


Richard Bedford Bennett: An annual pass is not computed.


William Garland McQuarrie: That is where the iniquity of the thing comes in. It seems to me that it is all wrong in principle. It is hypocritical for the pressmen to speak about the indemnities and perquisites that the representatives of parliament receive, when it is a fact that we do not get any privilege that the members of the gallery are not receiving. If they are receiving free passes on the railways, contrary to the act, then I say that there should be an investigation, and that kind of thing should be stopped.


Charles Avery Dunning: That is right, if it is true.


William Garland McQuarrie: It should be stopped. I asked the minister if particulars could be obtained of the transportation issued to newspaper reporters, and others connected with the newspapers, and he said, "Yes." When I said, "Can you give the details?" he said, "Oh, I do not think so." A general statement in regard to the issuance of transportation is not good enough; we need the details. I submit, in all seriousness, that the member for Toronto Northwest (Mr. Church) has raised an important matter, and one which should be fully investigated.


Charles Avery Dunning: If the hon. member will give me anything to investigate, I shall be very glad to do so. With regard to the general situation, I will assure myself that the situation is as I outlined it a little while ago.


Hon. J. L. RALSTON (Minister of National Defence):: I want to say just a word or two with regard to what has been said by the hon. member for one of the Torontos. He intimates that he is surprised to find that, under the Maritime Freight Rates Act of last year, the deficit on the eastern lines is estimated for and paid out of the funds of Canada rather than out of the funds of the Canadian National Railways. I only want to say that I am sure my hon. friend was in attendance last year, and he should not be surprised. I have before me the Maritime Freight Rates Act-


Joseph Henry Harris: I rise to a point of order; is the hon. gentleman referring to the member for Toronto-Scarborough? I want to say that I was not surprised.


James Layton Ralston: I am glad if my hon. friend was not surprised. I thought my hon. friend at least expressed dissent from the principle which we laid down, and which I understood him to say he did not understand was laid down last year. If my hon. friend did not understand it, and dissents from it, I should think he would be surprised to find that that principle was laid down. In the Maritime Freight Rates Act the principle was laid down just as clearly as it possibly could be that the deficit on the eastern lines would be estimated for by the Department of Railways and Canals. That was a recognition by this parliament, as those from the maritime provinces claimed, of the principles of the confederation pact, whereby it was provided that the Intercolonial railway was to be built. I am a little surprised to find the gentleman on the other side of the house now taking exception to that principle.


Richard Bedford Bennett: He did not.

2834	COMMONS
Railways and Shipping-Mr. Ralston


James Layton Ralston: He says he dissented from it.


Joseph Henry Harris: No exception was taken to the principle. The only exception was that it was not found in the consolidated accounts of the Canadian National Railways. I agreed with the principle.


James Layton Ralston: I only want to say that I think some other hon. members in this house got the idea that the hon. member was not favourable to the principle which had been laid down in the Maritime Freight Rates Act.


Richard Bedford Bennett: He said distinctly that he desired to support it. He said that in his main speech.


James Layton Ralston: I just want to take this opportunity to make it clear so that everyone else will understand, that the principle laid down in the act was put there because of the recognition by the whole of Canada of the rights' of the maritime provinces with regard to the Intercolonial railway. Due to certain considerations of a national character, it cost a good deal of money, which resulted in some deficiency on the road. It was felt that there should be a distinct recognition of the obligation of the Dominion of Canada in that regard and therefore section 6 of the act was passed. It provides:
For accounting purposes, but without affecting the management and operation of any of the eastern lines, the revenues and expenses of the eastern lines, including the reductions herein authorized which shall be borne by the eastern lines, shall be kept separately from all other accounts respecting the construction, operation or management of the Canadian National Railways	*
2.	In the event of any deficit occurring in any railway fiscal year in respect of the eastern lines the amount of such deficit shall be included in a separate item in the estimates submitted to parliament for or on behalf of the Canadian National Railways at the first session of parliament following the close of such fiscal year.


Mr. GEARY:: That has not been done.
(Mr. RALSTON: That act was passed on the recommendation of the maritime claims' commission. And the following appears on pages 20 and 21 of their report:
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, viz:-
(a)	That leading Canadian statesmen in urging the adherence of the maritime provinces to confederation defined the purposes of the railroad to be
(i) A means of affording to Canadian merchandise, and to Canada herself in times of

national and imperial need, an outlet and inlet on the Atlantic ocean-available all the year round-and
(ii) To afford to maritime merchants, traders and manufacturers, a market of several millions of people instead of their being restricted to the small and scattered populations of the maritimes themselves, particularly in the light of the disturbance with which their trade was threatened as the result of the discontinuance by the United States of the reciprocal arrangements that had prevailed.
(b)	That stategic considerations determined the actual course of the line-making it many miles (estimated by Sir Sandford Fleming at 250 miles) longer than was necessary-if the only consideration had been "to connect the cities of the maritime provinces with those of the St. Lawrence."
(c)	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.


Peter McGibbon: May I ask the minister
a question? Did the Minister of Railways and the Prime Minister not ridicule that principle two years ago?


Charles Avery Dunning: Mr. Speaker, I must
object, and I ask my hon. friend to withdraw that statement. On no occasion did I ridicule anything of the sort.


Peter McGibbon: The principle of taking
money out of the treasury to pay for the reductions.


Charles Avery Dunning: I did not ridicule it.


James Layton Ralston: I am glad to pay tribute to my hon. friend the Minister of Railways. He was the one who carried this bill through the house, and who gave to the house reasons why the Dominion of Canada should adopt this principle and why the reductions in freight rates should be borne by the Dominion of Canada as a whole.


Peter McGibbon: Not in his election
speeches.


James Layton Ralston: I did not follow my hon. friend in his election speeches, but, from what I have heard of him I think he is able to take care of himself.
I want to say that the deficits were incurred as a result of the operation of the road, operating, as it was, not simply as a commercial proposition but from the point of view of national and strategic considerations. Lower freight rates were charged on that road than in the rest of the Dominion of Canada. In 1912 there came a drive to increase the rates on that road, in an endeavour, apparently, to make the people of the maritime provinces pay the deficit. Those rates were increased by a considerably greater



192S

[Stage Direction]
Railways and Shipping-Mr. Geary
percentage than the rates in other parts of the Dominion of Canada. What the Maritime Freight Rates Act did was this: First, it reduced the freight rates to the proportion which they bore previous to 1912 to the other freight rates in the Dominion of Canada. It said: The people of the maritime provinces shall not be required to pay a greater percentage of increase than the people of the rest of Canada. It did not restore to the people of the maritime provinces the excess rates which they had paid from 1912 up to the time of the Maritime Freight Rates Act, but it said that from 1927, when the act was passed, the rate should be reduced by 20 per cent.
It went one step further and it laid down as a principle of the statute, a principle recognised by parliament and by the Canadian people, that because of the national and strategic conditions under which the road was built the deficit on this road above the amounts which were properly collected as rates which the traffic would bear, should be paid by the people of the whole Dominion of Canada. That principle was assented to by parliament. I thought I heard from my hon. friend that he dissented from that. I am glad to hear I was wrong. I have heard of it in some other quarters, and so far as I am concerned I want to make it abundantly clear that that was the principle on which the act was passed and that it was a recognition of that principle by the people of the whole of Canada which led to the insertion of section 6 whereby to-day the Minister of Railways, when he is bringing down his estimates in regard to the Canadian National Railways, estimates the whole deficit on the eastern lines.
George Reginald Geary: I
should like to say a word with reference to the speech of the Minister of National Defence (Mr. Ralston) who has just sat down. I see no point to his speech. I do not see any object in what he has been at such great pains to repeat. He is only repeating what everybody in the house and the country knows. The whole of his speech seems to be an effort to indicate that on this side of the house we are renouncing the principle upon which we insisted in order to have the Maritime Freight Rates Act passed last year. My hon. friend knows that we on this side were as insistent as they on the other in passing that act. He should know further that it was the insistence of members from the maritime provinces sitting on this
side that procured the issuance of the Duncan report. The hon. member for Toronto-Scar-borough (Mr. Harris) said nothing to draw from a member of the government such remarks as the hon. member has just made. He said nothing whatever to indicate that he did not understand the principle upon which we were paying these deficits and nothing at all to justify the remark of the minister as he sat down that he was afraid that he saw on this side of the house symptoms of a failure to understand the principle upon which the Maritime Freight Rates Act was passed, and moreover that there was objection on this side to the payments required under that act. As a member of the house who does not come from the maritime provinces, but who is fully aware of the feeling on this side, I desire to say that it seems to me the minister's remarks were directed not to the question at issue, not to the- point of trying to convince anybody in the house about anything, but to people outside of the house who, he hopes, may read or hear of his statement.
Motion agreed to on division.



BUSINESS OF THE HOUSE

James Shaver Woodsworth: Under the order of motions, in accordance with a resolution of which I gave notice on April 215, I beg to move, seconded by Mr. Kennedy:
That the resolution passed by this house, on Friday, the 23rd of March, 1928, providing that on and after Monday, 16th April, 1928, and all subsequent Mondays and Wednesdays until the end of the session, government notices ot motions and government orders shall have precedence over all other business except questions and notices of motions for the production of papers, be rescinded.
I think the last few private members' days have made it quite clear that there is not sufficient opportunity for the adequate discussion of private members' legislation. On the one hand we have had blocking tactics and on the other an attempt to railroad through certain legislation. It seems to me that the only possible way in which we can conduct the business of the house with some dignity is that we should have sufficient time for the consideration of each of these measures on its merits.


Mr. SPEAKER:: I have grave doubts as to this motion being in order. Any motion relating to the business of the house must be moved by a member of the government. May, at page 250, 13th edition, states:
Questions

Motions relating to business of the house which must stand in the name of a minister of the crown, are placed first, and a motion for a vote of thanks, when moved by a minister of the crown, is placed among these motions.
This motion can be moved only by a minister of the crown, not by a private member, because it reflates to the business of the house. In my judgment the motion is out of order and I so rule.



QUESTIONS

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

Mr. HANSON:: 1.	Did an immigrant by the name of Kirzak
land at Saint John, New Brunswick, on or about April 13, 1928?	.
2.	If so, from what port did he sail? _
3.	Was he examined by a Canadian medical officer at port of embarkation, and was he examined by a medical officer at Saint John, New' 11 r mis wick?
4.	Is it a fact that the immigrant was picked up on the main street of Yorkton, Saskatchewan on or about the 23rd of April, 1928, and subsequently adjudged insane and ordered committed to the asylum at North Battleford, and does the department intend to deport Kif zak?


Mr. FORKE:: 1.	Yes.
2.	Danzig.
3.	Yes, at Danzig; and passed by medical officer at St. John, N.B., on production of evidence establishing his medical examination at Danzig.
4.	Only information available is that alien was committed to Battleford mental hospital on April 24, 1928. Order will be issued for his examination and investigation of the facts in accordance with section 42 of the Immigration Act.


PRINCE ALBERT DOMINION LANDS OFFICE- EMPLOYEES
Mr. WILSON (Wentworth):: 1.	Who are the present employees of the Dominion Lands office at Prince Albert?
2.	What was the date of their several appointments?
3.	What are their several salaries?
4.	Have any employees of the Dominion Lands office at Prince Albert been dismissed since 1921?
5.	If so, who?
6.	When were they dismissed and for what reason?


Mr. STEWART (Edmonton):: 
CHICOUTIMI HARBOUR COMMISSIONERS
Mr. SENN:: 1.	Who are the harbour commissioners for the port of Chicoutimi?
2.	When were they appointed?
3.	What salary does each commissioner receive ?
4.	Who is the chief engineer of the harbour commission of the port of Chicoutimi?
5.	(a) When was he appointed, (b) at what salary?.
6.	What money has been expended on the port to date?
7.	Have bonds or debentures of the harbour commission been lodged with the government?
8.	Has interest been deducted by the government on any advances made to the harbour commission?


Mr. CARDIN:: 1.	Vincent Dubuc, president; Adjutor Bouli-ane, commissioner: Adelard Tremblay, commissioner.
2.	24th June, 1927.
3.	No salary authorized.
4.	There is no chief engineer.

Questions
5.	(a) Answered by No. 4. (b) Answered by No. 4.
6.	To March 31, *39,367.07.
7.	No.
8.	No advances have yet been made.


INVERNESS COUNTY PICKLED FISH INSPECTORS
Mr. MACDOUGALL:: 1.	How many inspectors of pickled fish are there in Inverness county?
2.	What are their names?
3.	What is the salary of each?


Mr. CARDIN:: 1.	One seasonal inspector employed about eight months each year.
2.	J. D. Aucoin.
3.	At the rate of *1,500 per annum.


INVERNESS COUNTY PREVENTIVE OFFICERS
Mr. MACDOUGALL:: 1.	How many preventive officers are there in Inverness county?
2.	What are their names?
3.	What is the salary of each?
4.	How many seizures, if any, have been
made by each officer?


Mr. EULER:: 1. 5.
2 and 3.	Per annum.
John C. Bourinot	S 1,920
Archibald J. Campbell	 1,320
Ronald D. McDonald	 1,200
John Sydney McLean	 1,200
Arsene Burns	 1,200
4.	Customs' Excise
John C. Bourinot	
3	1Archibald J. Campbell..	5	14Ronald D. McDonald..	-	1John Sydney McLean..	3	1Arsene Burns	
4	5


TRANS-PROVINCIAL HIGHWAY
Mr. KENNEDY:: 1.	Has the Dominion government been requested to co-operate with the government of British Columbia in the construction of a highway through Glacier national park as part of what is known as the trans-provincial highway between Revelstoke and Golden, British Columbia?
2.	If so, it is the government's intention to meet the request of the British Columbia government?
3.	If the government does not intend to meet such request does it intend to co-operate by financial assistance toward the construction of a highway around the Big Bend of the Columbia river between Revelstoke and Golden?
4.	Does the government intend to construct, or contribute toward the construction of a highway from a point on the Big Bend highway to Jasper Park, or other points in the Peace river district?
5.	Has the government advised or intimated tc the British Columbia government the amount of money it is disposed to contribute toward this work?
6.	If so, what is the amount?
7.	How much will be spent by the federal government this year on this work?


Mr. STEWART (Edmonton):: 1.	The matter is under discussion.
2.	The policy of the government will be
announced later.	.
3.	Answered by No. 2.
4.	Answered by No. 2.
5.	Answered by No. 2.
6.	Answered by No. 2.
7.	Answered by No. 2.


CANADIAN NATIONAL RAILWAYS-SHERBROOKE-PORTLAND BRANCH LINE
Mr. MacLAREN:: 1.	Are the Canadian National railway branch lines extending from Sherbrooke. Quebec, to Portland, Maine, and the Canadian National railway dock at Portland, Maine, being taken over by the Canadian Pacific railway?
2.	If so, upon what terms and conditions?


Mr. DUNNING:: 1.	No.
2.	Answered by No. 1.


HARROW EXPERIMENTAL FARM
Mr. GOTT:: 1.	IVhat was the total cost of operating the Harrow. Ontario, experimental farm for the year 1927?
2.	What returns did the farm make?
3.	Who is the superintendent of the farm?
4.	'What salary is he paid?


Mr. MOTHERWELL:: 1.	*24,716.32.
2.	$12,348.75.
3.	The position is vacant at present.
4.	Answered by No. 3.


QUESTION PASSED AS ORDER FOR RETURN
Mr. CHURCH:: 1.	Have any lawyers or law firms been employed by the Dominion government, or any departments thereof, in the city of Toronto during the fiscal year 1926-27?
2.	If so: (a) by what departments; (b) who are those lawyers or firms; (c) what were the nature and extent of the services rendered; (d) what remuneration was paid in each case?


UNOPPOSED MOTIONS FOR PAPERS
Mr. SPENCER:: For a return of exhibits containing the forty reports and documents bearing the signature

Validation of Orders in Council
of Richard A. McClymont. which were given to Mr. Alexander Smith, K.C., royal commissioner, by the Department of the Interior for investigation.


Henry Elvins Spencer: For a copy of the evidence, exhibits and correspondence in connection with the investigation held recently before Mr. Alexander Smith, K..C., royal commissioner, appointed to enquire into certain charges made by one Richard A. McClymont, with regard to the Department of the Interior.


AMHERSTBURG PUBLIC BUILDING-CARETAKER
Mr. GOTT:: For a copy of all correspondence, telegrams and communications of any kind, relating to the vacancy of caretaker of the government building at Amherstburg, Ontario, and the appointment by the civil service commission of a successor. Also a copy of all papers and documents preceding and subsequent to the supposed appointment, and subsequent correspondence and recommendation by any one, of any other person for the position, whether under the civil service or another department of state.


VALIDATION OF ORDERS IN COUNCIL
Charles A. Stewart: That the following orders in council, laid on the table on the twenty-seventh day of January, 1928, be approved:-[DOT]
Orders in council which have been published in the Canada Gazette between 11th November, 1926, and 20th December, 1927, in accordance with the provisions of section 77 of the Dominion Lands Act, chapter 20, 1908;
Orders in council which have been published in the Canada Gazette between the 11th November, 1926, and the 20th December, 1927, in accordance with the provisions of the Dominion Forest Reserves and Parks Act, section 19, chapter 10, 1911;
Orders in council which have been published in the Canada Gazette and in the British Columbia Gazette between the 11th November, 1926, and the 20th December, 1927, in accordance with the provisions of subsection (d) of section 38 of the regulations for the survey, administration, disposal and management of Dominion lands within the 40-mile railway belt in the province of British Columbia.


Richard Bedford Bennett: Mr. Speaker, I cannot think
it was ever the purpose of parliament, when enacting the statutes to which reference has been made, that this house should merely give approval to orders in council about which it knows nothing. The orders in council should either be in a schedule to be approved, or the orders in council themselves should be available beyond merely laying them on the table at the beginning of the session. But leaving that aside for the moment, I direct the attention of the minister to the faet that this parliament should not under any circumstances be asked to give approval to an order in council that appears in the British ColumfMr. Spencer.1
bia Gazette. I think the Minister of Justice (Mr. Lapointe) will agree with me that the practice is not only bad, but highly improper that this government should be asked to give approval to an order in council from the British Columbia Gazette without at least having the order in council before us in order that we may deal with it.


Charles A. Stewart: They are
in both Gazettes.


Richard Bedford Bennett: Yes, but it says:
Orders in council which have been published in the Canada Gazette and in the British Columbia Gazette between the 11th November, 1926, and the 20th December, 1927, in accordance with the provisions of subsection (d) of section 38 of the regulations.
There is nothing here to indicate what these orders in council were except that they referred to the administration of what is known as the railway belt, and under those circumstances, the orders in council in the British Columbia Gazette not being before us-


Charles A. Stewart: They were
placed on the table.


Richard Bedford Bennett: The ones published in
our Gazette were placed on the table, but the orders in council published in the British Columbia Gazette were not.


Charles A. Stewart: They are
the same.


Richard Bedford Bennett: It does not make any
difference. We are being asked to approve something that appeared in the British Columbia Gazette, over which we have no control, and which Gazette is not laid upon this table. It is the form of the resolution that I am pointing out is wrong, and I suggest that it stand and be modified to meet what I conceive to be the correct constitutional practice, namely, that this parliament should not endeavour to approve any order in council issued by any authority other than the authority that speaks in the right of the crown of the Dominion. That is the constitutional practice.


Charles A. Stewart: It is done
merely to notify the people of British Columbia. The lands in question and the administration of these acts are under the jurisdiction of the federal government, and the orders in council are published in the Canada Gazette, but in order that the people of British Columbia may have an opportunity of seeing what is being done, they are also published in the British Columbia Gazette.

Ascension Day Adjournment


Richard Bedford Bennett: The minister surely
realizes that you do not say, in dealing with orders in council that affect Alberta or Saskatchewan-at all events you have not done it heretofore-


Charles A. Stewart: No, for the
very good reason that we have only a very small portion of the lands of British Columbia, the railway belt and the Peace River block.


Richard Bedford Bennett: And you should have
only a very small portion in Alberta.


Charles A. Stewart: Be that as
it may, we have them all now. May I say to my hon. friend that this is merely to close out the year, and what I propose doing next year, if I am here, is to introduce legislation to make compulsory the publication of these orders in council in the Gazette, and to discontinue the practice of having parliament approve of a resolution in order to validate the orders in council.


Richard Bedford Bennett: Continuing my observations, I only desire to point out that I assume that what was done was that the order in council was passed here and was published in the Canada Gazette and also published in the British Columbia Gazette, but we have no control over the matter of its publication in the British Columbia Gazette except the sending of it down there, and why we should make it appear that we are approving of an order in council that is published in some other publication than the official publication of this country, I cannot for the moment understand. Why mention the British Columbia Gazette at all? Why not strike out those words?


Charles A. Stewart: I am perfectly willing to do that. I move, Mr. Speaker, to strike out in the second line of the last paragraph of the resolution the words "and in the British Columbia Gazette."


[Stage Direction]
Amendment agreed to.
Motion as amended agreed to.

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That when this house adjourns on Wednesday the 16th instant, it stand adjourned until Friday, the 18th instant.
That when this House adjourns on Wednesday, the 23rd instant, it stand adjourned until Friday, the 25th instant.
He said:	The house understands that the
17th of the month is Ascension day, and that it has been customary for the house not to sit on that day, it being a holy day. The 24th of May is Victoria day, and on that day also it has not been customary for the house to be in session.


Richard Bedford Bennett: Although we have sat on Dominion day.


William Lyon Mackenzie King: And there have been occasions when we have sat on the 24th of May.


Richard Bedford Bennett: Some of our friends are
greatly exercised over two holidays following in those two weeks. If they leave for home on Wednesday night to come back here on Friday morning in both instances, it will be very difficult for some of them. I do not know how the matter might be dealt with, for I have not yet had an opportunity to discuss it, but on one of the days it might be well for the house to adjourn until the succeeding Monday.


William Lyon Mackenzie King: I was going to make a suggestion, which possibly would meet with the approval of the house, and might facilitate bringing the session to a close within a reasonable time; that is, that we should sit on Saturday of each of those weeks.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: If the house
will agree to it unanimously I should like to move:
That on Saturday, May 19th instant and every Saturday thereafter until the end of the session, the house shall meet at three o'clock in the afternoon, and that the order of business and procedure shall be the same as on Fridays.
It means that if this motion should carry the house will not sit on Thursday either of next week or the week following, but will sit on Saturday of next week and, if the house is still in session, on Saturday of the week following. I think it might facilitate the passing of the motion later, Mr. Speaker, if it were allowed to stand until to-morrow. The three motions could be considered together then, unless there is unanimous consent to its adoption now.


Hewitt Bostock: Is it the desire of the
house that the three motions stand until to-morrow?


Some hon. MEMBERS:: Carried.


Hewitt Bostock: The three motions stand until to-morrow.
Fisheries Commission


CIVIL SERVICE
[Stage Direction]
On the orders of the day:
Hon. P. J. VENIOT (Postmaster General):: Mr. Speaker, yesterday the hon. member for Vancouver South (Mr. Ladner) asked if I would produce the correspondence in connection with the recommendations made to the Civil Service Commission for increased salaries of postal clerks and other employees. I promised that I would endeavour to do so to-day. I now desire to lay the correspondence on the table.


HOME BANK DEPOSITORS
[Stage Direction]
On the orders of the day:
William Garland McQuarrie: Mr. Speaker, may I ask the Minister
of Finance if the government has come to any conclusion with regard to further payments to the Home Bank depositors?


Hon. J. A. ROBB (Minister of Finance):: Mr. Speaker, some few days ago I made a statement regarding the Home Bank depositors. If my hon. friend will contain his soul in patience until the supplementary estimates are brought down, he will there find what we propose doing for the Home Bank depositors.


DANGER TO BORDER RESIDENTS
[Stage Direction]
On the orders of the day:
Thomas Langton Church: Mr. Speaker, I desire to ask the Prime Minister (Mr. Mackenzie King) what will be done to protect Canadian citizens and Canadian interests at Port Colbome from the invasion of several armed American cruisers, as set out in articles in yesterday's Mail and Empire and the Toronto Star. One man was shot at. There is a heavy tourist traffic in this district at the opening of the season, and it is important that the necessary protective measures should be taken.


William Lyon Mackenzie King: Mr. Speaker, the hon.
member has raised a very large question when he speaks of an "invasion". I should like to see the articles to which he refers in order that I may consider them and give him a reply later.


TOBACCO GROWING INDUSTRY
[Stage Direction]
On the orders of the day:
Eccles James Gott: ( Mr. Speaker, I should like to say to the Minister of Agriculture (Mr. Motherwell) that the people of western Ontario have been anxiously and patiently-


Some hon. MEMBERS:: Order.


Eccles James Gott: Will the minister state when
we may look for the report of the commission appointed by the house to inquire into the tobacco situation in western Ontario, in view of the fact that he promised some -me ago to lay it on the table?


Hon. W. R. MOTHERWELL (Minister of Agriculture):: Mr. Speaker, I expect to
table it some day this week.


ROYAL COMMISSION ON FISHERIES
[Stage Direction]
On the orders of the day:
Mr. W. G. ERNST (Queens-Lunenburg):: Mr. Speaker, may I ask the Minister of Marine and Fisheries (Mr. Cardin) if the fisheries report is being printed for distribution amongst the members of the house. While I am on my feet I wish to draw attention to the fact that a synopsis of the report was published in La Presse of Montreal on Monday preceding its tabling in the house.


Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: Mr. Speaker, the report is being printed, and I think it will be ready for distribution to-morrow. As to the synopsis which appeared in La Presse, I think certain information was given out by the members of the commission themselves, subject to an understanding which, I am told, was not observed. I disclaim any responsibility for what happened.


Richard Bedford Bennett: The other day, Mr. Speaker, I directed the attention of the right hon. Prime Minister to what had happened in connection with another report. It would appear to me that the proper way to deal with members of a commission who give to the public the contents of a document that should be in the hands of the administration before it appears in the newspapers, would be neither to pay their expenses, nor to allow any sum by way of compensation for services. The hon. Minister of Marine and Fisheries has,

Naturalization Act-Mr. Bennett
I think, taken the correct view, but something should be done to prevent this premature publication. This is the second time it has occurred this session.


Mr. LAPOINTE:: Withhold their salaries.


Richard Bedford Bennett: Exactly.


NATURALIZATION ACT AMENDMENT
Hon. FERNAND RINFRET (Secretary of State) moved:: That Bill No. 19 to amend the Naturalization Act be now read a third time.


Richard Bedford Bennett: Mr. Speaker, I beg to move,
seconded by Mr. Guthrie:
That the word "now" be left out, and the words "this day six months" be added to the end of the question.
It is not my intention, Mr. Speaker, to address to the chamber any extended remarks in connection with this matter. We have considered the bill very fully in committee and also upon second reading. The fact is that in 1914 we enacted legislation with respect to naturalization, which legislation might be de-vided into two parts. The first part deals with the conditions under which applicants for naturalization may obtain British citizenship-no longer Canadian citizenship, but British citizenship. The second part deals with the procedure under which the Secretary of State satisfies himself that the conditions imposed with respect to qualifications have been observed by the applicant. The conditions under which applications are to be dealt with are: that the applicant should have resided in Canada for five years, should have a good character, should possess an adequate knowledge of English or French, and should have the intention of residing in the British dominions or remaining in the service of the crown. If those conditions are satisfied, and the Secretary of State is seized of sufficient information that those conditions have been complied with, the applicant is entitled, not as of right, but in the discretion of the Secretary of State, to British citizenship.
We differ with respect to the question of procedure. Heretofore in this country the procedure has been to leave the matter to the judges of the country. There is a provision in the present statute that unless there be grave reasons why it should not be so, the applicant should appear before a judge and satisfy him of his having complied with the conditions to which I have referred. These conditions with respect to procedure are now being swept away, and hereafter two persons,
who are natural-iborn British subjects, and a justice of the peace, who may not be, will certify to the Secretary of State that there has been compliance with the conditions under which citizenship could be obtained.
We object to these changes for two reasons. First, because no evidence has been adduced of any sufficient weight indicating that there has been any difficulty that should be considered sufficient by this parliament in the administration of the act as it now stands. In other words, there has been no crying grievance for which a remedy should be provided. Secondly, the minister himself, as well as the only judicial opinion to which he referred in the course of the debate on this matter, has made it abundantly dear that the department desired uniformity or, as Chief Justice Meredith said, the "even administration of the law." There being no evidence of any crying grievance on the part of anyone that could not be remedied by existing legislation, the first ground disappears.
With respect to the second, the method now proposed not only does not make for uniformity or convenience in the administration of the law, but permits a variation in the administration of the law, within an area of five miles, in dealing with two applicants. Entirely different standards are observed. That not only makes for inconvenience in the administration of the law and lack of uniformity, but it puts a premium on laxity in administration. For these reasons, without going into the details that have been traversed in committee, we deem it incumbent upon us to move that this bill do not receive the sanction of parliament and be enacted into law, but that it disappear from the order paper.
If there were any crying grievance in the law as it now stands, if the law were inadequate to deal with the difficulties that have been referred to, if it were shown that a new method would conduce to convenience and to uniformity in the administration of the law, or that the safeguards which should surround naturalization of aliens were any better than those that now exist, there would be no difficulty in acceding to the proposals now being advanced by the administration. But as the matter now stands we are asked to substitute, for the traditional fairness and discretion of the judiciary of this country, the discretion of two persons, perhaps illiterate, who may reside near the intending applicant, together with a justice of the peace who might not himself be able to speak the English language or to understand whether the applicant's knowledge of it was adequate or inadequate. For the discretion of the judiciary

Naturalization Act-Mr. Rinfret
we are asked to substitute a discretion such as that. Against that we protest, and for that reason we move the six months' hoist with respect to this legislation.


Louis Édouard Fernand Rinfret: I do not desire to offer any extended remarks at this stage; I agree with the leader of the opposition (Mr. Bennett) that the matter has been thoroughly discussed at one stage or another, either on the second reading or in committee. I merely wish to summarize now the main reasons for the changes we have proposed.
In 1911 at the imperial conference an agreement was reached between the representatives of the British government and those of the government of the dominions on certain enactments with relation to the granting of British citizenship throughout the empire. As has been pointed out during this discussion, it was required that an applicant should have resided five years within the British Empire and one year in that part of the empire wherein the application was filed; that he should be of good character; that he should possess a knowledge of one of the official languages of the dominion wherein the application was made; and that he should indicate his intention to reside within the British Empire in the future. These were the requirements that were made compulsory with respect to the granting of naturalization within any part of the empire. But the local regulations were left to the various legislatures or governments within the empire. The principle was laid down, however-and this is not disputed now-that absolute discretion should rest with the government in every dominion as to allowing or disallowing the granting of a certificate. The local procedure, as I have just said, was a matter for the individual government to determine.
In this country prior to 1914, when the present act was put on the statutes, applications for naturalization were filed and presented to the courts of the land, and I believe that in the act of 1914 that feature was retained in our legislation rather as a remnant of the past than as a new enactment. Since then it has been found-and the claim has been pressed upon the Department of the Secretary of State-that for a number of years there has been great inconvenience in the less settled parts of the country on the part of applicants desiring to be naturalized. They have found it difficult to appear in person before the judge. This difficulty has been amply illustrated in the debate that has taken place on this bill. We have tried to 
show that leaving it to the discretion of the individual judge to pass upon the requirements as to character or adequacy of knowledge does not make for uniformity in decision but tends rather to serious discrepancies.
I would point out that in no other dominion of the empire does the applicant appear before a judge. This is a provision that exists onlly in Canada. And, I repeat, it was carried into legislation in 1914 not so much as a new provision but rather as a remnant of the practice in the past in the granting of naturalization. During this debate we have been asked what would be substituted for the present procedure requiring appearance before the court and the decision of a judge. I have indicated what the regulations will be On this point some hon. members have expressed the opinion that there would be a greater safeguard and a greater guarantee if the regulations, instead of being merely departmental, were made statutory. The government at once yielded to that opinion, deeming it proper and just. We accepted it because we were very anxious to demonstrate to the house and to the country that we had not the least unworthy motive in the matter. For no consideration did we desire either to make naturalization something that could be obtained without a proper guarantee or, as some hon. members have suggested, to make use of it for any political or electoral purpose. For these reasons we at once yielded to the demand that the regulations be made statutory, and that is why we have embodied in the bill, now proposed for third reading, the provision regarding the posting of a copy of the application in 'the nearest post office, retaining as well the period of ninety days which is now in the act. We are providing that a copy of the application shall be printed in the nearest newspaper and we have also made statutory the provision that the application shall be accompanied by a certificate signed by 'two native-born British householders and by one justice of the peace. And after all these statutory safeguards and guarantees have been properly observed the department will, as it has done in the past, inquire into every case brought to its attention through the Royal Canadian Mounted Police. This body, I may point out here, is no longer local or territorial in character; it is now a national institution operating throughout the country and giving magnificent results.
I do not think I need stress these points any longer. I have spoken on many occasions in the course of this debate and have done my best to explain the policy of the government and to indicate the intentions of the depart-

Naturalization Act-Mr. Rinjret
ment in the matter, and I ask the house to pass the third reading of the bill, which will vest in tihe government the power of allowing or disallowing the granting of a certificate of naturalization, Which we claim is a matter of policy and not a matter of a judicial nature. This legislation will bring our act into perfect conformity with the statutes in other parts of the empire. We make our regulations statutory, following the practice which exists in other dominions, and by doing away with the inconvenience to the applicants of appearing in person before the courts, after which they must wait for a period of months before receiving their certificate, the government will be enabled within a reasonable time and under perfect guarantees and. safeguards to grant certificates of naturalization to immigrants who have legally entered this country and have resided here in a peaceful and law-abiding way for five years. I think every hon. member will agree that if we want to build up this country and if we want to make Canada prosperous and progressive it will not suffice to invite immigrants from all parts of the world to settle in this country; it will not be sufficient to open our doors to these immigrants. After they have lived here for a number of years, after they have shown themselves to be of good character and have learned one of our official languages we should bind them to this country by making it possible for every one of them to receive the priceless gift of British citizenship.


Mr. BOTHWELL:: I was paired with the
hon. member for Ontario (Mr. Kaiser). Had I voted I would have voted against the amendment.
White (Mount Royal),
Anderson (Halton), Simpson,
McGibbon,
Preston,
Lennox,
Maloney,
Ladner,
Geary,
Rowe,
Bell (St. John-Albert), Anderson (Toronto), Smith (Cumberland), Spotton,
Ryerson,
Price,
Hanson,
Stinson,
Manion,
Matthews,
Maybee,
MacLaren,
Macdougall,
Garland (BowRiver), Embury,
McRae,
.Tones,
Wilson (Wentworth), MacDonald (Cape Breton South), Hubbs,
Wilson (Vaudreuil-Soulanges), Prevost,
Cahill,
Young (Saskatoon), Edwards (Ottawa), Pouliot,
Guerin,
McPherson,
Mercier (Laurier-Outremont), Lacroix,
Foster,
Fontaine,

Hepburn,
Taylor,
Verville,
Veniot,
Goodison,
Euler,
McMillan,
St-Pere,
Fiset,
McLean (Melfort), Bancroft,
Bothwell,
Blatchford,
Sinclair (Queens), Kay,
Bissett,
Hay.


Mr. RYERSON:: I was paired with the
hon. member for Norfolk-Elgin (Mr. Taylor). Had I voted I would have verted for the amendment.


Mr. LADNER:: I was paired with the
hon. member for Portage la Prairie (Mr. McPherson). Had I voted I would have voted for the amendment.


Mr. SIMPSON:: I was paired with the
hon. member for Pontiac (Mr. Cahill): Had I voted I would have voted for the amendment.


Mr. ROWE:: I was paired with the hon.
member for Beauce (Mr. Lacroix). Had I voted I would have voted for the amendment.


Mr. SMITH (Cumberland):: I was paired
with the hon. member for Antigonish-Guys-borough (Mr. Duff). Had I voted I would have supported the amendment.
(Owing to the impossibility of recording several statements of pairs simultaneously announced, the list of stated pairs is incomplete.)


[Stage Direction]
Motion agreed to, on same division reversed, and bill read the third time and passed.

[Stage Direction]
Hon. J. H. KING (Minister of Health) moved the third reading of Bill No. 205, respecting the Department of Health and Soldiers' Civil Re-establishment.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved the second reading of and concurrence in amendments made by the senate to Bill No. 72, to amend the Fertilizer Act.
Mr. GARDINER:: Will the minister explain the nature of these amendments?


Sir EUGENE FISET:: I was paired with the hon. member for St. John-Albert (Mr. MacLaren). Had I voted I would have voted against the amendment.


Mr. McLEAN (Melfort):: I was paired
with the hon. member for Inverness (Mr. Macdougall). Had I voted I would have voted against the amendment.


Mr. BANCROFT:: I was paired with the
hon. member for Bow River (Mr. Garland). Had I voted I would have voted against the amendment.


William Richard Motherwell: The amendments
made by the senate are for the purpose of clarifying the meaning of the term "agent in Canada," in section 2 and have it mean agents domiciled and resident in Canada. Three further lines are also added to section 2, providing that unless such agency or a like agency be so maintained registered, the applicant shall cease to have the right to import, sell or offer or hold for sale any fertilizer in Canada.
Motion agreed to; amendments read the second time and concurred in.

Pension Act


RETURNED SOLDIERS' INSURANCE ACT AMENDMENT
[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved the second reading of Bill No. 290, to amend the Returned Soldiers' Insurance Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Payments in case of disability not due to war.
Richard Bedford Bennett: Is this bill wholly in accordance with the recommendations of the committee? Some of those who are not members of the committee aTe desirous of knowing what it means.


James Alexander Robb: The explanations are all on
the right hand side. The act has already expired. Under section 2 it is now reopened and the time is extended to 1933. Section 3 removes the right to insure from those whose expectation of life is very doubtful. That is about all there is to the measure.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Bill reported, read 'the third time land passed.

[Stage Direction]
Hon. J. H. KING (Minister of Health) moved the second reading of Bill No. 289, to amend the Pension Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Pensions and National Health in place of Soldiers' Civil Re-establishment.
Richard Bedford Bennett: Do I understand that this bill represents the legislation founded upon the unanimous report of the committee to which the question of pension was referred at the beginning of the session?


Mr. KING (Kootenay):: That is true.
There are other sections but they are of a departmental nature and have been agreed upon.


Richard Bedford Bennett: It would be well to
state in the committee those sections unanimously agreed upon by the special committee and those that are departmental.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Section 3-Definitions.
John Warwick King: This is departmental.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Commission attached to department.
John Warwick King: This is departmental.


Richard Bedford Bennett: Was this section agreed
to in its entirety by the special committee?


Mr. POWER:: This is a section of the department.


Richard Bedford Bennett: I should like some time
to consider it.


John Warwick King: The section might stand.
Section stands.
On section 6-Regulations.


John Warwick King: This is departmental.
Section stands.
Sections 7, 8 and 9 agreed to.
On section 10-Pension suspended on imprisonment or paid to dependent.


John Warwick King: This is departmental.


Richard Bedford Bennett: Some time ago a letter came to me from a friend in England, saying that the widow of a member of the forces who had been killed in action had been deprived of her pension because she had been charged with improper conduct. I see that by this section we continue the pension even in the event of the imprisonment of one of the dependents. Would a case such as I mention be met by this legislation?


John Warwick King: No.


Richard Bedford Bennett: I presented the case to the pension board, because it struck me as one of extremely great hardship.


John Warwick King: Under the new
section there will be an opportunity to appeal on misconduct.


Richard Bedford Bennett: There is no doubt about the misconduct.


John Warwick King: They never had that privilege before.
Pension Act


Richard Bedford Bennett: The misconduct is admitted; that is the point I make. In the case before us there is imprisonment, and still the pension is continued; in the case I mention there was improper conduct. One was a crime against the laws of the country and the other was a crime against good morals-it did not happen to be a crime against the laws of the country. It struck me at the time that it was a case of tremendous hardship, because the frailities of human kind, both men and women, are well known. I took the case up with the pension board, but nothing apparently could be done because the woman in question would not make a declaration that she had not been guilty of misconduct. But she was endeavouring to reform, and the very fact that she did not get the pension drove her into a worse and worse condition. This friend of mine who had investigated the matter thought that we were treating her rather harshly, having regard to the well known frailties of human nature.


Charles Gavan Power: The case to which my hon. friend calls attention is the case, I assume, of a dependent-


Richard Bedford Bennett: She was the widow of a member of the forces.


Charles Gavan Power: The act provides for the
suspension or the taking away altogether of the pension-


Richard Bedford Bennett: They did take it away.


Charles Gavan Power: -of a widow of a member of the forces who has been guilty of immorality. At one time the act was much wider than it is at the present time, and the pension could be taken away for practically any offence. The matter was argued in the committee, and there has to be distinct immorality of a flagrant kind-


Richard Bedford Bennett: This was not flagrant.


Charles Gavan Power: She has to be openly living with another man or living as a prostitute before the commission can suspend the pension. I do not think it was thought well to go beyond that. I have not the section before me at the moment.


Richard Bedford Bennett: The difficulty is a very real one. My information is that the cancelling of the pension when the lapse from proper conduct was discovered has driven the woman into a life of shame, because she has nothing to live on at all and is incapable of doing work. She appealed to them to give 
her a chance to start anew, and they said they had no authority to do it. My information came some months ago, and I do not know whether dhe is now living, but it struck me at the time that that is not the sort of case in which we should deprive the woman of a chance in life. She was deceived by this particular individual, and that is all there was to it.
Section stands.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


PRIVATE BILLS
[Stage Direction]
Sir EUGENE FISET (Rimouski) moved the third reading of Bill 17 respecting the St. John River Storage Company.
Mr. J. F. POULIOT (Tamiscouata):: Mr. Speaker, I move seconded by Mr. Woods-worth:
That the said bill be not now read a third time, but that the subject matter thereof be referred to the Supreme Court of Canada, in accordance with the Revised Statutes of Canada 1927, chapter 35, section 56, in order that the constitutional question therein involved may be given a legal interpretation.
This bill involves several most important questions of law, and -to elucidate those questions I think it welll to state some -matters of fact. I would draw the attention of the house to -page 5 of the bill, where will be found the preamble of -chapter 100 of the statutes of Quebec, 1927, which we are called upon to adopt and confirm by this bill. The first paragraph reads thus:
Whereas the New Brunswick Electric Power Commission Company has, by its petition, represented:-
That it was incorporated by the Act 15 George V, chapter 117, for the purpose of regulating the flow of the waters in the Madawaska and St. Francis rivers, constructing certain dams for the storage of water, and other incidental powers required for the purpose of carrying on the development of the water-power at Grand Falls, in the province of New Brunswick.
It will be observed that this paragraph recites that the act of 15 George V, -chapter 117, was passed to enable certain dams for the storage of water to be constructed. This I will deal with later on. The work was to be

St. John River Storage Company
undertaken, by the New Brunswick Electric Power Commission Company. The second paragraph of the preamble is as follows:
That arrangements have now been made whereby the development of the water-power at Grand Falls is to be undertaken and carried out by the Saint John River Power Company, a company incorporated by the Act 16 George V, chapter 45, of the acts of the legislature of the province of New Brunswick.
The .third paragraph is in these words:
That the lieutenant-governor in council of New Brunswick and the New Brunswick Electric Powrer Commission, with the approval of the said lieutenant-governor in council, were, by the terms of the said act, authorized to transfer or otherwise render available to the Saint John River Power Company all property, rights, powers and privileges vested in the province or in the New Brunswick Electric Power Commission-
The same concern.
-which the company might deem necessary or useful for or in connection with the development and generation of hydro-electric power or energy at Grand Falls and pondage and storage thereof in New Brunswick or beyond its borders,-
"Beyond its borders" is most important.
-and, without limitation of the generality of the foregoing, all rights, powers and privileges of the province of the New Brunswick Electric Power Commission under or by virtue of the Act 15, George V, chapter 117, incorporating the company petitioner, and any and all other property and rights acquired for the development of storage in the province of Quebec.
To sum up, Mr. Speaker, the province of New Brunswick decided to embark on two big undertakings. T'he first had to do with the development of hydro-electric power at Grand Falls on the St. John river; the second was for the purpose of constructing certain works in the province of Quebec to regulate the flow of the Madawaska and St. Francis rivers in connection with <the water-power development at Grand Falls. It will be noted that the new Brunswick Electric Power Commission Company, although incorporated by the province of Quebec and also by the province of New Brunswick, forms one single body, acting for and on behalf of the province of New Brunswick. Projected as a public ownership undertaking, after a change of government the legislature of New Brunswick empowered the new government to sell to a private company all the rights belonging to the New Brunswick Electric Power Commission. It ceased to be a public utility concern and became a private company. What sort of company? It is a branch of the International Paper Company, and if hon. members will look at page 258 of the New Brunswick statutes of 1926 they will .see the name
of that well known financier, Mr. Archibald Graustein, manufacturer of Framingham, Massachusetts, who is the head of the International Paper Company. But a distinction must be made between the province of New Brunswick on the one hand and that gentleman on the other. When the province of New Brunswick sold its rights to a private individual there was a transfer, according to the preamble of the act, of all rights, powers and privileges vested in the province or in the New Brunswick Electric Power Commission:
Which the company might deem necessary or useful for or in connection with the development and generation of hydro-electric power or energy at Grand Falls and pondage and storage thereof in New Brunswick or beyond its borders, and, without limitation of the generality of the foregoing, all rights, powers and privileges of the province and of the New Brunswick Electric Power Commission under or by virtue of the Act 15, George V, chapter 117.
The acts which we are now called upon to confirm contradict themselves. In the preamble to the second act. we see that the province of New Brunswick has no longer any rights. I say that as a lawyer and without prejudice, because I am not now discussing the legal aspect of the question. My first wish is to make a statement of the facts according to this official document which we have in our hands. The moment the second Quebec bill was passed in 1927 the New Brunswick Electric Power Commission ceased to have any rights. The province of New Brunswick no longer had rights either in the power or in the storage; those rights were all transferred in virtue of the act of the New Brunswick legislature.
Another paragraph of the preamble to which I wish to direct the attention of the house is the following:
That in order to make fully effective such change of enjoyment of the benefits of the act incorporating the petitioner and to render the same effective for the purpose intended, and to change the name of the company, it is necessary that the said act be amended.
It was two years after the first act was passed, and one year after the transfer of the rights of the province of New Brunswick and of the New Brunswick Electric Power Commission to a private company, that another Quebec act was passed, "to make fully effective such change of enjoyment of the benefits of the act". I believe the deed of sale was completed, but the St. John River Storage Company was not a party to the sale. What I find strange is this. After the province of New Brunswick had sold all its rights to< a private company there were no more rights

St. John River Storage Company
that could be enjoyed, no more rights from which there were benefits; yet an act was passed1 in Quebec "to make fully effective such change". At that moment the former directors of the New Brunswick Power Commission, incorporated by the Quebec act, ceased to act for the province of New Brunswick. A change of government had taken place; they were no longer representing the province. And, I may add, they had not been incorporated alone; their successors also had been incorporated under the same name of the New Brunswick Electric Power Commission. And their successors, according to the Quebec act, were to be replaced by the lieutenant governor of the province of New Brunswick. The first three directors of the company, incorporated by the first act, were incorporated not in their private capacity but in their official capacity as representatives of the executive of New Brunswick. I am ready to believe that they had no personal interest in the matter; and it could not be otherwise, because everyone in this house knows that no member of the executive can have any personal interest with the executive. Such persons can act only in their public capacity. If therefore they had had a private interest-which I cannot believe -it would have been strictly illegal and against the general principles of government, not only in Canada but in every other democratic country.
After that change of government, when the three gentlemen were defeated who are named in section 1 of the first act, chapter 117 of the Quebec statutes of 1925, those gentlemen no longer had any right to speak for the executive of the province of New Brunswick. The only three gentlemen who are named in this bill-named in both acts, according to schedule A-are:
The Hon. Pierre J. Veniot, of the town of Bathurst, in the county of Gloucester, in the province of New Brunswick, premier of the province of New Brunswick, the Hon. Ernest A. Smith, of the town of Shediac, in the county of Westmorland, in the province of New Brunswick, chairman of the New Brunswick Electric Power Commission, and the Hon. Joseph Enoil Michaud, of the town of Edmunds-ton, in the county of Madawaska, in the province of New Brunswick, member of the executive council of the said province of New Brunswick, and a commissioner of the New Brunswick Electric Power Commission.
They are the three gentlemen mentioned in section 1 of the first Quebec act; and according to section 4, to which I alluded a moment ago, the persons named in section 1 of the act shall be the first directors and shall remain in office as such until replaced by the lieutenant governor in council of the province

of New Brunswick. That section has been changed in the second bill, and now reads as follows:
The persons named in section 1 of this act shall be the first members and directors, and their successors in office at the date of this amendment shall remain in office as such until the election of their successors in accordance with the provisions of the Quebec Companies Act.
When the second bill was passed at Quebec the gentlemen who were mentioned in the first bill were no longer acting for the province of New Brunswick, and even if there had been no change after the general election they would have had no power to act for that province because at that moment New Brunswick had sold all its rights in the New Brunswick Electric Power Commission to a private company. The same thing cannot be sold twice, or to two different people; they had sold their rights and had nothing left.
Now, Mr. Speaker, I come to a very delicate question. I have the greatest regard for the Postmaster General (Mr. Veniot); I believe he is an honest man; I believe in his sincerity and integrity, and because I so believe I cannot think he has any interest in the matter. If he had an interest in it I would say that I have no more confidence in him, and I believe the people of the country would say the same. If the Postmaster General has no private interest in this matter I will appeal to my friends on this side of the house to divide equally, in order not to displease my friend from Rimouski (Sir Eugene Fiset); I will ask the support of my hon. friends opposite, and that will give me a nice majority. At any rate, I have explained the facts as shortly as possible in order to acquaint the house with the question now before it.
Here we have two Quebec bills coming before us for approval and adoption. Are they legal? Are they intra vires? Or on the other hand are they illegal and ultra vires? If they are illegal can we make them any better by adopting and confirming them? This is not only a matter of interest to the county of Temiseouata which I have the honour to represent in this house and in which this proposed storage plant will be built, involving the flooding of about forty square miles of farm land, as a lawyer for one of the companies interested in this matter told me on Sunday last; this is not only a matter of interest to that county but it is a matter of interest to the country at large.

St. John River Storage Company
We should know the jurisdiction of this parliament and of the provincial legislatures in order that we may not exceed that jurisdiction, and before any measure is passed we should ascertain whether or not we have sufficient authority to so deal with it. In connection with this matter I represent my county under a special power of attorney, contained in a resolution passed by the county council of Temiscouata some time ago. I do not wish to hurt the feelings of anyone; I think this matter should be considered from a broad point of view; it should be considered without favouritism and without any suggestion of friendship or enmity. If it is good this house should pass it, and I am sure that if the house finds it to be bad the amendment will be adopted and the matter referred to the supreme court for interpretation.
Section 1 of this bill reads as follows:
In so far as the parliament of Canada has authority so to do the two acts of the legislature of the province of Quebec, set forth in schedule "A" to this act, are hereby adopted and confirmed, to the same extent as if re* enacted herein.
That reminds me of the labels we sometimes see, bearing the words, "Glass. Fragile. Handle with care." This section clearly shows that the promoters of the bill know it is illegal. Under the British North America Act the imperial parliament delegated authority to the Dominion parliament and provincial legislatures of Canada to enact laws, and duly fixed the limits of their respective jurisdictions. Such is the constitution of this country, drafted by those statesmen who are rightly called the fathers of confederation, and later adopted by the Imperial parliament. As it now stands, that act cannot be changed by the Dominion or Imperial parliaments except by and with the unanimous consent of the provinces, who were a party to that agreement. Moreover, the rights and powers conferred upon the Dominion parliament by the Imperial parliament cannot be delegated to the provincial legislatures, or vice versa. The Dominion parliament is bound to act within the limits of its own jurisdiction as defined and determined by the British North America Act, and those limits may not and cannot be exceeded. The same rule undoubtedly applies to the provincial legislatures, and when the Dominion parliament or any provincial legislature exceeds in its enactments the limits fixed by the British North America Act, such enactments are ultra vires and null and void, because of the lack of
authority possessed by the legislative body. These are fundamental and elementary rules of constitutional law.
To sum up, no legislative body can confer upon anyone rights or privileges which it does not possess.. Part VI of the British North America ActJ entitled "Distribution of legislative powers'", contains the following disposition under the subtitle "Exclusive Powers of Provincial Legislatures." Section 92 of the act reads thus:
In each province the legislature may exclusively make laws in relation to matters coming within the classes of subjects next hereinafter enumerated; that is to say,-
10.	Local works and undertakings, other than such as are of the following classes:-
(a)	Lines of steam or other ships, railways, canals, telegraphs, and other works and undertakings connecting the province with any other or others of the provinces, or extending beyond the limits of the province;
11.	The incorporation of companies with provincial objects.
Both the above-mentioned provisions 3hall be construed with the last paragraph of section 91, which enumerates the powers of parliament, and which reads as follows:
And any matter coming within any of the c'asses of subjects enumerated in this section shall not be deemed to come within the class of matters of a local or private nature comprised in the enumeration of the classes of subjects by this act assigned exclusively to the legislatures of the provinces.
Such are the limits fixed by the imperial parliament for the respective jurisdiction of this parliament and of the provincial legislatures with regard to incorporation of companies. One should note that the words "exclusive" and "exclusively" have been intentionally repeated to clear any possible doubt on the legislator's intent and also to remove all conflicts of jurisdiction. What interpretation has been given by the fathers of confederation to that part of our constitution? In the legislative assembly on February 6, 1865, the Attorney General, Sir John A. Macdonald said:
Any hon. member on examining the list of different subjects which arc to be assigned to the general and local legislatures respectively, will see that all the great questions which affect the general interests of the confederacy as a whole, are confided to the federal parliament, while the local interests and local laws of each section are preserved intact, and entrusted to the care of the local bodies.
It will be seen that the local legislatures have the control of all local w-orks; and it is a matter of great importance, and one of the chief advantages of the federal union and of local legislatures, that each province will have the power and means of developing its own resources and aiding its own progress after its own fashion and in its own way. Therefore all the local improvements, all local enterprises or undertakings of any kind, have been left to


Some hon. MEMBERS:: Time.


Jean-François Pouliot: I apologize to the house
for referring closely to my notes, but I wish to make my remarks as brief as possible and this is the only way in which I can do so, as this is a technical case; otherwise, I would speak just as long as I did in the private bills committee.
Was the legislature of the province of Quebec empowered with jurisdiction or authority to incorporate by section 1 of chapter 117 of the statutes of Quebec the first members and directors of the New Brunswick Electric Power Commission Company in their official capacity as representatives of the executive of another province? The three members and directors or promoters of the company are thus designated in section 1:
(a)	The first one, as premier of the province of New Brunswick.
(b)	The second one, as chairman of the New Brunswick Electric Power Commission.
(c)	The third one as member of the executive council of the province of New Brunswick, and a commissioner of the New Brunswick Electric Power Commission.
Their private occupation is nowhere mentioned in the act, and as I have stated before, it was not possible for them to act for the province both in their private capacity and as members of the executive of the province. According to section 4 they shall be the first-


Hewitt Bostock: Order.


Peter John Veniot: Mr. Speaker, in rising to speak to this amendment I may say that it is not my intention to deal with the legal aspect of it, but may I call the attention of the committee to this fact, that the Quebec legislature passed two acts touching the franchise which was granted to New Brunswick and later to the company in question? One act was passed in 1925 and the other in 1927, and if either of those acts were considered by my hon. friend ultra vires of the province of Quebec, there has been sufficient time to apply to the Dominion government for a veto. No such application has been made.
I wish at this point to give a history of the question so that hon. members may be seized of all the facts and be placed in a position to vote intelligently upon the amend-50103-181J
ment. In 1925, the province of New Brunswick, of which I had the honour at that time of being premier, adopted a policy of hydro development by public ownership. An act incorporating myself as premier, the chairman of the New Brunswick hydro commission and one of the commissioners was passed by the province of New Brunswick. An application was then made to the province of Qudbec to incorporate the company so that they could hold property and franchises in the name of one province, namely, New Brunswick, in another province, namely, Quebec. The reason for that was this. The development was to take place and the dam to be built at Grand Falls on the river St. John which, at a point two and a half miles above this site, forms the international boundary between the province of New Brunswick and the state of Maine. The water flowing in the international river was not sufficient to warrant the expenditure of a large sum of money at Grand Falls to develop 50,000 or 60,000 horse-power, without privileges being obtained either in the state of Maine on the Fish river or in Quebec at the Temiseouata lake. The matter was brought before the International Joint Commission and after that question was settled and the International Joint Commission reached a decision on all matters pertaining to the international waters, we made application to the authorities of the state of Maine for the privilege of damming what is known as the Fraser river and its ten lakes emptying into that river. That privilege we did not obtain.
We then applied to the province of Quebec for the privilege of damming the Temis-couata lake where it empties into the river whose waters flow into the St. John river at Edmundston. That privilege was granted on certain conditions, one of them being that the province of New Brunswick was to reserve for the use of the province of Quebec 5.000 horse-power to be delivered at the boundary between the two provinces at the will and call of the government of Quebec, they to do what they liked with it after it was delivered at the boundary. We entered into that agreement and the province of Quebec passed the first act in 1925. It is true, as my hon. friend says, that the government which had propounded the policy of public ownership was defeated, but I cannot admit with him that the government was defeated on that question alone. After the new government came into power and after considerable deliberation on their part, they decided to change the policy, and pass the franchise
2852	COMMONS
St. John River Storage Company
to a company. Those rights were never sold as he wished the house to infer they were. They passed the franchise to this company for the development of Grand Falls under certain conditions. Among other conditions there was this, that they would enter into a contract with Frasers, Limited, for 13,000 dependable horse-power and 7,000 seasonal horse-power to be used by Frasers, Limited, for the establishment of a new pulp and paper mill on the north shore at or near Campbell-ton, a distance of 110 miles from Grand Falls across the province. The company to which was transferred this franchise by the local government also undertook as their part of the bargain to establish a new pulp mill on the north shore of New Brunswick either at Campbellton or at Dalhousie. It was also a condition of obtaining the franchise that the company should reserve six thousand horse-power for the absolute use of the New Brunswick hydro commission, which was then operating at Musquash. Those are the conditions under which the government coming into power in 1926 changed its policy of public ownership. This company under those conditions, under the franchise granted, began construction operations at Grand Falls in 1927, and to-day those operations have been completed, and they are prepared to distribute 50,000 horse-power throughout certain sections of the province of New Brunswick, but they cannot distribute that 50,000 horse-power unless the power as conferred upon them under the franchise granted by the government of the province of Quebec shall be left intact. That being so, they will go on with the construction- of a dam at the foot of Temiseouata lake. The construction of that dam will not overflow 40,000 acres of land, as my hon. friend says. He is getting his information from somebody who does not know what he is talking about. The survey of Temiseouata lake and of all that country was made under the direction of myself, then Premier of New Brunswick and Minister of Public Works for the province. The construction of that dam will raise the level of the lakes seven and one-half feet. It will not, according to engineering reports, cause any undue damage to land under cultivation in that country, but should such be the case the owners of that land are protected under the act, and damages, of course, will have to be paid.
My friend in his remarks said that he did not wish to hurt the feelings of anybody, and that he hoped he would not be hurting my feelings, because he felt that. I had no personal interest in this matter. With the stand which the hon. gentleman has taken on this question I have no fault to find. He rep-
IMr. Veniot.]
resents the county of Temiseouata, and he has a perfect right to stand up for what he considers to be the rights of the people he represents, and nobody has any right to criticize him for that, but I want to say to him that I have an interest in this matter. I have a very deep interest in it, not simply as an individual, but as a resident of the province of New Brunswick, to see that no barrier shall be placed in the way of the development of the industries of that province. While I did not, now and perhaps never will, agree with the principle of private ownership in the development of hydro, now that -that policy has been adopted by the government of New Brunswick there is nothing else I can do in the interest of my province, and in the interests of the industries of the province, but to accept the situation as I find it, and do all I can to encourage the development of the industries of that province, be it under private or public ownership. That is the interest that I have in this bill.
As to the legal aspects of it. as I said before I do not intend and, in fact, I am not capable of discussing them. I am not a lawyer, and I cannot deal with technical legal questions, and therefore I shall not attempt to touch the legal aspects of the case. But I do say this, that this bill was before the private bills committee, where my hon. friend from Temi-scouata (Mr. Pouliof) took one hour and forty minutes -of the two hours of that commitee to discuss the question in its legal and other aspects, and the committee after hearing him decided unanimously to report this bill without any amendments. I do hope, in the interests of the province of New Brunswick, in the interests of a province that is looking today for industrial development, a province that is rich in natural resources but has not the cheap power to develop them as they should be developed, that this amendment will not carry.


Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, I merely want to lay emphasis upon what I brought to your attention last night when this bill was railroaded through the committee. It is surely evident to the house now that this is a very contentious bill, but we are now not even permitted to ask a question nor to have the sponsor give an explanation as. could have been done in committee of the whole last night, and the house is in practically total ignorance of the merits of this question. It does seem to me, in view of the sudden railroading of the bill through committee last night, that the sponsor of the bill must have some fears lest there be some weight in the opposition to the bill. That is about the only conclusion I can come

St. John River Storage Company
to, judging from the action that was taken last night, and I should like to suggest to some able lawyer of the house that he meet the argument of the hon. member for Temis-couata, who has taken exception to the bill. We who are laymen wish to vote intelligently on this question, and if his charges are not completely answered by those who are capable of doing so, although I am in favour of public ownership, and this is a public ownership proposition, as I understand it, nevertheless I would feel inclined to oppose the bill.


James Shaver Woodsworth: I was asked to second this amendment, and I did so solely on the character of the bill itself. I am not a lawyer, but I do not think that even a layman can read this bill without recognizing that it is most peculiar in its framing. I know nothing of the details of the situation in Quebec and New Brunswick other than what has been given to us by the mover of this amendment and by the Postmaster General (Mr. Veniot), but I must say that the explanation given by the Postmaster General has not made me feel that I made any mistake in seconding an amendment of this character.
As I have listened to the presentation of the argument in support of the amendment, it has struck me that the object of the bill is really to secure succession rights for an illegitimate still-born child. I am trying to put into ordinary phraseology what my hon. friend from Temiscouata (Mr. Pouliot) has conveyed in a very exhaustive and elaborate and learned discourse. I say a still-born child because the original company really never came into existence, never had life given to it. It was a public commission, and the effort is to try to give whatever rights it had to somebody else-to a private company. I would say that the child is illegitimate because evidently, if these rights were firmly established, the promoters of this bill would not be coming to us to-night. Apparently this is an elaborate, if somewhat clumsy, scheme by which, through collusion, the purposes of the British North America Act may be defeated.
I am not going into the question of public ownership versus private. Some of us believe in public ownership, but I do not think we need discuss that matter to-night. The Postmaster General has outlined the general background of the bill. Evidently an attempt was made by the province of Quebec to pass legislation incorporating the company. That legislation apparently is not intra vires. If it
is, we would not have this bill presented here.
Now, let me very briefly call attention tc two clauses of the bill. They are very simple I am leaving out the preamble. It may very well be made out from the legal standpoint that the present company seeking incorporatior is not the original company, but I suppose that is a matter between the two provinces concerned, and I do not know whether we ought to ask the Dominion authorities to interfere with that aspect of the case. Section 1 reads:
1. In so far as the parliament of Canada has authority so to do the two acts of the legislature of the province of Quebec, set forth in schedule "A" to this act, are hereby adopted and confirmed, to the same extent as if reenacted herein.
It does strike me, Mr. Speaker, that that is most peculiar phraseology. The bill contains two schedules. We have no right whatever to amend these schedules; we can only accept or reject them. So a bill is presented to us which really we have no right to amend. I think there was very good reason for pushing this bill through the committee stage last night, since the committee could not have changed a single clause. In dealing with this matter we are simply passing a piece of enabling legislation. The opening phrase of the section which I have quoted is very strange:
In so far as the parliament of Canada has authority so to do-
I do not like to be a party to passing legislation of that kind. Either we have authority or we have not, and we ought not to act in this conditional fashion. Then the second clause:
Notwithstanding the provisions of section one of this act,-
Which we were supposed just now to pass, -the company shall be governed by the applicable provisions of the Quebec Companies Act,-*
Evidently the legislature of Quebec had not the power to pass the legislation which it enacted, and now the promoters come to this parliament to legitimize their offspring. The scheme is that once we have legitimized the offspring, we are to turn it back to the province of Quebec, which will then exercise jurisdiction over it. Let me repeat, either we have jurisdiction or we have. not. Either the province of Quebec has jurisdiction or it has not. I take it that had it full jurisdiction this bill would not be before us. If we have jurisdiction, we have no right to resign our powers of administration to somebody else.
I think of the closely parallel case in my own province in which the province of Ontario was concerned. We have water powers in the Winnipeg river, the head waters of which and of the English river are in the province
2854	COMMONS
St. John River Storage Company
of Ontario. Several years ago an effort was made to establish storage dams at Lae Seul in the province of Ontario in order that the flow of water might be regulated and increased for the benefit of Manitoba. What was done? The right thing. Mr. Meighen, then Prime Minister, introduced legislation in this house which declared the works in Ontario to be for the general advantage of Canada, and as such they came under the federal jurisdiction, and they have been under that jurisdiction ever since, notwithstanding some attempt to repeal the legislation. Then the water-powers were developed under the Dominion authority. Now it strikes me the proper thing in this instance would have been for the province of New Brunswick to have come to the federal authorities and asked that -the works in Quebec be declared to be for the general advantage of Canada. Had that course been taken we would have been able to make suitable provision.


Mr. YENIOT:: Was not that part of the water flowing through Manitoba under the jurisdiction of the federal government? It was not owned or controlled by the government of Manitoba.


James Shaver Woodsworth: That may have been one reason,-


Clarence Joseph Veniot: The two eases are entirely different.


James Shaver Woodsworth: -but that does not affect my argument, because clearly under the British North America Act any such work an this may be declared to be for the general advantage of Canada. Suppose that in Manitoba we had control of our own natural resources, and -suppose we made a bargain with regard to Boundary falls, we will say, situated within the province of Ontario, can you imagine the Ontario authorities remaining quiescent? Not at all. Undoubtedly if we have the right to legislate in this case, it is because we control navigable streams, and I submit the proper course would have been to declare this work to be for the general advantage of Canada. Then it would have been carried out under the jurisdiction of the federal authority. Section 2 seeks to put the company back under the control of the province of Quebec. Again I submit that that is not in keeping with the spirit of the British North America Act.
Since this is an exceedingly complicated question, involving as it does the jurisdiction of the province of New Brunswick in which the works are actually situated, the jurisdiction of the province of Quebec in which the storage basin is located, and the jurisdiction of the
fMr. Woods worth.]
Dominion in so far as these are navigable streams, and as this work might well be declared for the general advantage of Canada, it seems to me that under these circumstances, and in order to remove all the constitutional difficulties, we might well have the matter referred to the supreme court for decision. This would cause a few months delay, but it would straighten out the tangle, and would not create the precedent that might be created by the passage of this bill.


Thomas Langton Church: Mr. Speaker, it is of vital importance to preserve the water powers of this country for the people. That part of the province of Quebec bordering on the province of New Brunswick is rich in water-powers. Those water-powers should not be alienated by parliament without good reason. The great principle of public ownership is involved in this bill. If the principle of this bill, which it is sought to apply to New Brunswick and to Quebec, had been applied to Ontario, there would have been no hydro-electric movement in this province, and instead of the two-cent unit we would now have a ten or twelve-cent unit.. This particular company is nothing but a subsidiary of the International Paper Company, which is tied up more or less with some fifteen or twenty corporations in Ontario and Quebec and in the United States, all parts of the great electrical merger, which is one of the most powerful trusts across the line.
This is a most dangerous bill, for many reasons. It is a most extraordinary bill, for it is proposed to make it retroactive, which is something that has never been done before by this parliament. Bill No. 17 is a most extraordinary measure. This parliament is called upon to give retroactive power to privincial enactments by adopting and confirming them. There are doubts expressed in the bill itself about the authority or jurisdiction of this parliament. If we have authority, the provincial legislatures have none; if, on the contrary, the provincial legislatures have authority we have none, and it is absolutely impossible for us not only to adopt and confirm but even to consider such provincial enactments. If they are ultra vires they cannot be confirmed; if they are intra vires we are deprived of jurisdiction or authority in the matter.
I do not care what political party takes up this question of water-power, whether it be the Liberal party or the Conservative party: I submit that it has no right to commit this country to private ownership. We must remember what was the condition of affairs in Ontario around 1900 and 1905. It was pretty much the same in Ontario at that time as it

St. John River Storage Company
is in Quebec, New Brunswick and Nova Scotia to-day. The Ross government had given away al the water-powers of the Niagara river to private ownership and there remained about 10.000-horse-power. In 1905 Sir James Whitney was returned to power and he cancelled the last orders in council with the result that the hydro-electric was instituted in Ontario.
The rights of various private companies were taken over on a fair basis, and the province was given a chance to develop its own waterpower. The result is that to-day we have cheap light and power in Ontario. That was a lesson to the people of New Brunswick, but it does not seem to have been taken to heart. I have read reports of surveys made in the province of New Brunswick and the province is admirably adapted to cheap electrical power. Unfortunately however that province has given away all its resources to private ownership, just as the province of Nova Scotia has done. The Liberal party in that province, in power for thirty-four years, handed over to private ownership the magnificent resources of the province including water-powers, fisheries, timber and mines. What was the result? The province became stagnant and' lost its population. There was no industrial growth, for the simple reason that he who has the key to the development of the water-powers of any country has the key to the future industrial development of that country.
I say therefore that the principle of this bill is wrong. It is unsound from a legal standpoint. But on grounds of public policy it is outrageous. We have no power to amend an act of the Quebec legislature and to hand over a public utility to private ownership. The gentlemen named in the bill as directors were appointed to act in an official capacity on behalf of the province of New Brunswick, so that the Postmaster General Mr. Veniot) and those associated with him in that capacity could have no individual interest in the matter. The gentlemen named in the bill are, first, the premier of the province, secondly, the chairman of the New Brunswick Electric Power Commission, and, thirdly, a member of the executive council of the province of New Brunswick, a commissioner of the New Brunswick Electric Power Commission.


Peter John Veniot: And their successors.


Thomas Langton Church: In Ontario the chairman of the commission was a member of the provincial cabinet, Sir Adam Beck, and the two other commissioners were nominated by the executive council; and they were appointed to act not in any private capacity but as public officials in order to preserve the water-powers of the province so as to provide the people with that boon of cheap light and power.
I regret very much indeed that the Conservative party has not seen fit to emulate the noble and inspiring example of Sir James Whitney in Ontario. At the coming election it would do that .party a great deal of good if the policy followed in Ontario in regard to water-powers were adopted not only in New Brunswick and Nova Scotia but also in British Columbia, a province which gives great promise for the future. That province, if given a chance, will go ahead by leaps and bounds. Everyone is proud of its growth and, I repeat, it would be an excellent thing for British Columbia and for the maritime provinces as well if the Conservatives would only follow the policy adopted in Ontario. If they did so they would reap a greater advantage in one day than they have been able to derive in all these years under private ownership.
I desire .to quote some prophetic words of the late President Roosevelt in regard to a similar situation which arose in his own country when he was in power. In regard to the waste of water-power in the United States he predicted that the day was not far distant when that country would run out of coal and other natural resources, particularly petroleum and gas. He said:
The people of our country are threatened by a monopoly more powerful than has been ever seen, as it affects very closely their domestic and industrial life. Our next generation will witness a shortage of those natural resources, petroleum and gas. The price of coal will be such that hydraulic power turned into electrical energy will, owing to its cost, become the prevailing factor for transport, for manufacturers, for lighting and heating our towns. Our hydraulic power alone, entirely and judiciously employed, would be adequate for the present needs of transport, industries, municipalities and private individuals. The major portion of these powers is not developed and remains the national property. It would be madness to part, without conditions, with one of our greatest resources. If we become guilty of this crime, our children will be bound to pay an annual royalty on a capitalization fixed at the highest price that the trade will stand for. They will see themselves struggling with powerful sweaters entrenched behind the doctrine of discharged rights strengthened by all means of protection that money can buy and the cunning of corporations defended by legal men. These ogres of finance will have succeeded long before then to monopolize those resources so as to be able to dictate to the people the management of their affairs and their way of existence. Public opinion will be their least worry.
These were the words of a prophetic statesman. In conclusion I have to say: American capitalists have found Canada a happy hunting ground. In the maritime provinces, in Quebec, Northern Ontario and the northwest, they have seized the water-powers which should be developed under public control. We find Mr. Backus getting control of the water-
2850	COMMONS
St. John River Storage Company
powers in the northern section of new Ontario, and in addition to these magnificent rights and privileges he is given what virtually is a principality of timber as well. It will be a sorry day for the province of New Brunswick when they hand over their resources to any private monopoly. The province of Ontario spent a good deal of money for cheap light and power, but if we obtained that light and power from private companies it would have cost us many millions more to pay for the over-capitalization of these companies. When you pay for hydro power to-day you pay the actual cost of generating and distributing that power, but when you buy bread, milk, and many other things you have to pay a price which will return a profit on the millions of dollars invested of split common stock of no par value. I 'hope this legislation will not pass, and I intend to oppose it; I think we are on dangerous legal ground. I think we should not change this act of 1925 which incorporated certain gentlemen in their official capacities to operate a great public utility on the border of [DOT]these two provinces for the public good rather than for private gain.


Mr. A. J. ANDEIRSON (Toronto-High Park):: I wish to offer just a few remarks on the question now before the house, and I am sorry I must differ with the hon. member for Toronto Northwest (Mr. Church). We are both supporters of public ownership in the province of Ontario, but this bill affects the provinces of New Brunswick and Quebec, and it must not be forgotten that the province of Quebec has always supported private ownership. That province has seen fit to legislate in regard to this matter at the instance of the province of New Brunswick, and I take it that when this proposition was first started the province of New Brunswick intended to establish a public ownership enterprise under the direction of the present Postmaster General of this government, who was then premier of that province. To-day someone else holds power there, and they have seen fit to change the position of the matter, apparently preferring private ownership. That is a matter quite within the rights of the province of New Brunswick, and I do not see why we should interfere in any way. These two provinces undertook to pass legislation of this kind in connection with their natural resources, and it would appear now that there is some doubt as to the validity of that legislation since these waters are interprovincial.

The hon. member for Winnipeg North Centre (Mr. Woodsworth) referred to a case involving the provinces of Manitoba and Ontario, but these two provinces are in a very different position. Ontario is in possession of its own natural resources while Manitoba is not, so the jurisdiction of this parliament must prevail. That is why that legislation was passed in this house. This legislation does not imply that the province of Quebec or the province of New Brunswick have not power to deal with this matter; the fact is that there may be some feature in connection with the fact that these are interprovincial waters which may require the consent of this parliament, and as I understand it we are asked to deal with it on that basis. I dio not know of any reason why we should not allow the province of New Brunswick look after its own industries according to its own ideas. I would not wish to force my opinion or those prevailing in Ontario on the people of New Brunswick; this is within their jurisdiction and they should be left free to exercise their judgment in the matter. In my opinion this legislation is drawn very carefully, with all due respect to the member for Winnipeg North 'Centre. We simply grant such power as we possess in order to make this legislation more effective.


Jean-François Pouliot: Might I ask my hon. friend a question? Has he read the bill of 1927 which appears in schedule A?


Alexander James Anderson: I have just read the material before me.


Jean-François Pouliot: Des my hon. friend know who are the present directors of the St. John River Storage Company, and if so, are they acting in their private capacity or for the province of New Brunswick?


Alexander James Anderson: I am not very much interested in that. The province of Quebec has seen fit to continue its legislation and to pass an order in council consenting to the transfer of whatever rights are affected by this legislation. I think the government and the legal advisers of the province of Quebec are quite capable of looking after their own interests.


Jean-François Pouliot: Is that order in council mentioned in the schedule?


Alexander James Anderson: It is referred to in the bill. I have never seen the order in council but it is referred to in this bill, and I am satisfied that no government would pass such an order in council unless it were satisfied it had the power to do so.

Niagara Falls Memorial Bridge


Jean-François Pouliot: In what part of the
schedule is that order in council mentioned as approving the transfer of the rights of the New Brunswick Electric Power Commission to a private company?


Alexander James Anderson: I can only refer to what is in the bill before the house. One has only to read it, and if I have misunderstood it my hon. friend will correct me. It seems quite clear that the province of Quebec did consent to that transfer, and we are only asked to grant whatever power we may have in that regard in order to make this legislation more effective. This will help out the province of New Brunswick and I propose to do so if I can.


Jean-François Pouliot: Mr. Speaker-


Hewitt Bostock: The hon. gentleman cannot speak, because, by moving his amendment he has spoken on the main question. It has just come to my mind that the same question arose on the budget debate, when the hon. member for St. Lawrence-St. George (Mr. Cahan) was debarred from speaking. By moving or seconding an amendment, a member, if he utters only a few words, actually speaks on the main motion. It is only after the amendment has been put by the speaker that it is considered a new question.
Motion, agreed to, bill read the third time and passed.


NIAGARA FALLS MEMORIAL BRIDGE COMPANY
[Stage Direction]
Mr. G. H. PETTIT (Welland) moved the third reading of Bill No. 14, to incorporate the Niagara Falls Memorial Bridge Company.
Mr. GEORGE SPOTTON (North Huron):: I move that this question be now put.


Hewitt Bostock: Mr. Spotton moves,
seconded by Mr. Garland (Carleton), that this question be now put. This is the previous question.


Mr. CHAPLIN:: I should like to have your ruling on this point, Mr. Speaker. There are already on the order paper five different amendments, proposed by me in the regular course, to be added to this bill. I should like to know what Your Honour has to say regarding that.


Hewitt Bostock: There is a notice on the order paper of some amendments concerning

Niagara Falls Memorial Bridge
this bill, but they have not been moved before the house and therefore the previous question precludes any amendment to the main question. If the previous question is defeated, the bill is also defeated. The question is whether or not this question shall now be put.


Hewitt Bostock: Mr. Petit	moves,
seconded by Mr. Garland (Carleton) that bill No. 14, to incorporate the Niagara Falls Memorial Bridge Company, be now read a third time. Is it the pleasure of the house to adopt the motion?
Mr. EDWARDS	(Frontenac):	Do I
understand, Mr. Speaker, that a debate under these circumstances is not permissible on the motion for the third reading?


Hewitt Bostock: No. That is the effect
of the previous question. Bourinot says, at pages 326 and 327:
The "previous question" means the question whether the main issue shall be voted or not at once. The previous question prevents an amendment to the main question and thus forces a direct vote on the main question. If the previous question be carried, the Speaker will immediately put the question, without further debate.


Mr. EDWARDS (Frontenac):: Thank you.
Motion agreed to on division and bill read the third time and passed.


THE FEDERAL LOAN COMPANY
[Stage Direction]
The house resumed, from May 8, consideration in committee of Bill No. 59, to incor-corporate the Federal Loan Company (as amended, and recommending that the title be changed to "An Act to incorporate the Federal Lending Company")-Mr. Lang- Mr. Johnston in the Chair.
The CHAIRMAN:: When the bill was last before the committee, all sections had been adopted with the exception of section 5.
On section 5-Objects.


Henry Elvins Spencer: When this bill was
before the committee the other night the mover was not present. When clause 5 came up, a question was asked with regard to paragraph (b) which reads:
Notwithstanding anything contained in the Interest Act, and the Money Lenders Act, and in section 63 (c) of the Loan Companies Act.

Federal Loan Company
Information was requested why this company should be exempted from those acts. I should like to ask the mover of the bill for an explanation.


Mr. LANG:: The company proposes to
lend, mainly on personal security, but also on mortgages, its own capital only. The bill prohibits the taking of deposits or the issue of debentures.	The company in lending
money on personal security will impose a loan charge in addition to a stipulated rate of interest and, in the case of small loans, the combined interest will exceed the limitations imposed by the Interest Act and the Money Lenders Act. These acts are therefore overridden by this bill. The section respecting interest which is overridden, and in regard to which a question was asked by my hon. friend a moment ago, reads:
Except as to mortgages on real estate, whenever any interest is, by the terms of any written or printed contract, W'hether under seal or not. made payable at a rate of percentage per day, week, month, or at any rate or percentage for any period less than a year, no interest exceeding the rate or percentage of five per centum per annum shall be chargeable, payable or recoverable on any part of the principal money unless the contract contains an express statement of the yearly rate or percentage of interest to which such other rate or percentage is equivalent.
That section is done away with by this bill, because the loan is going to be made on personal security mainly, but also on second mortgages or securities such as would not be accepted by the banks or loan companies. Therefore, in order to take care of the further risk, they are being withdrawn from the operation of these provisions. Then certain provisions have been incorporated in the bill from the Loan Companies Act. I may say that all these provisions have been gone into thoroughly by the Superintendent of Insurance and have his approval. We believe that this bill will result in a great deal of good in different parts of Canada in allowing men and women who sometimes find it necessary to raise money quickly upon securities that the banks and loan companies will not accept to get assistance without going to sharks and money leaders who will charge extortionate rates of interest. Believing that the bill is a good one, we confidently ask for the support of the house in passing it.


Mr. CAMPBELL:: Does the exemption of this company from the operation of these acts mean that they will be allowed to charge just as high rates of interest as they can get?


Malcolm Lang: No. They are allowed to charge a 6 per cent discount interest in making the
loan, and also after the loan is made a small charge, an investigation charge, which is regulated by the bill and depends upon the size of the loan, so that altogether the interest and charges may run up to as high as twelve or fourteen per cent, but that gets them by where they could not get by if they applied to a bank or loan company for a loan.


Robert Gardiner: Is that the only charge
they are permitted to make?


Malcolm Lang: Yes, that and the 6 per cent discount, which is paid weekly or monthly according to the provisions of the note itself.


Mr. HAY:: I might add a word of explanation in regard to this bill, which was gone into very thoroughly by the committee in view of the fact that the bill embodied a new principle so far as we in Canada are concerned. This bill follows very closely along the lines of the Morris system which has been operated successfully in the United States.


Robert Gardiner: Successfully for the borrower or the lender?


Francis Wellington Hay: For both. They have found it to work very satisfactorily for a number of years. I believe that this bill will fill a want particularly in the larger centres of population. This company, however, is debarred from taking deposits or selling debentures; they are lending simply their own money. The committee has added certain provisions at the suggestion of the superintendent of loan companies. I might add that the whole proposition has been agreed to by the secretary of the loan association in Canada, and there is no objection from any quarter to this bill becoming law, the general desire being to prevent men and women from falling into the hands of loan sharks, who exact very high rates of interest and show very little mercy on the maturing of the debt. I make this explanation only because the sponsor of the bill was not a member of the committee. I repeat, the committee gave very careful consideration to this bill because it embodied a new departure in this country.


Mr. JACOBS:: What did Mr. Finlayson
have to say about it?


Malcolm Lang: He is quite in accord with the provisions of this bill, having gone into them all very carefully.


Mr. CAHAN:: Did any official of the Finance department appear before the committee?
Private Bills


Francis Wellington Hay: The Superintendent of Insurance appeared before the. committee, as well as the representative' of the loan companies, and everything was agreed to by all. the parties interested.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Mr. S. W. JACOBS (Cartier) moved the
second reading of and concurrence in amendments made by the senate to Bill No. 15, respecting certain patent application of William H. Millspaugh.
Robert Gardiner: What is the nature of
the amendments proposed by the senate?


Louis Édouard Fernand Rinfret: If my hon. friend will allow me, I
have the bill as amended by the senate, and although not the sponsor of the bill, as the minister in charge of the patent branch I wish to say that there is no objection to the amendments which have been made by the senate.
After the words "Patent Act" in line 5 of the preamble, the senate has added the words "then in force, chapter twenty-three of the statutes of 1923." In the twenty-second line they specify the Patent Act, which means chapter 150 of the revised statutes, 1927. This is merely a clerical change. Besides that the senate has added as clause 2 of the bill the usual clause:
If, as provided by section one of this act, the said forfeited application is restored and a patent is granted for any invention therein described, any person who between the nineteenth day of May, 1925, and the twelfth day of November, 1927, has commenced in Canada the manufacture, use or sale of that invention, may continue such manufacture, use or sale in as full and ample a manner as if this act had not been passed.
That is the usual precautionary clause, but it had not been incorporated in the bill. So the amendments made by the senate improve the bill.
Motion agreed to; amendments read the second time and concurred in.


DOUGLAS J. MARTIN PATENT
[Stage Direction]
The house in committee on Bill No. 66, respecting a certain patent of Douglas J. Martin-Mr. Clark-Mr. Johnston in the chair.
Section 1 agreed to.

On section 2-Rights saved.
Henry Elvins Spencer: As one of those not a
member of the private bills committee, I should be glad to have the bill explained.


Leon Johnson Ladner: Mr. Chairman, this is
merely a renewal of patent rights. The wording of the bill is quite clear. If the hon. gentleman desires I can go over the section with respect to the rights saved, but I think it would save the time of the committee not to engage in an extended explanation.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 219, respecting the Sisters of Charity of the North West Territories-Mr. Marcil-Mr. Johnston in the chair.
On section 1-Increase of real estate that may be held.
Robert Gardiner: I should like to' have
an explanation of this section, particularly with regard to the amount of real estate to be held by this organization.


Mr. PARENT:: I may be permitted to
give an explanation to the hon. gentleman. Not longer than a year ago we gave the Sisters of Charity of the city of Ottawa power to own property to the extent of five million dollars. That congregation is of far less importance than the one concerned in this bill. The Sisters are asking for power to have money or hold property to the extent of six million dollars, if I remember correctly.


Charles Hazlitt Cahan: That is right.


Mr PARENT:: Compared with what has
been done in the past it appeared to the members of the committee that the request was very reasonable. The representative of the sisters stated to the committee that they were the owners of four or five large hospitals, and that the capital value of those buildings would represent at least half of the six million dollars. Under the circumstances the committee recommended that six million dollars be considered fair.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.

Great Lakes and Power Company

[Stage Direction]
Mr. J. J. DENIS (Joliette) moved the
second reading.of Bill No. 152, respecting the Great Lakes and Atlantic Canal and Power Company, Limited.
Hon. H. H. STEVENS (Vancouver Centre):: Mr. Speaker, personally I have no desire to object to the second reading, but in consenting to it I should like to say that I am not agreeing with the principle of the bill. May I ask one question: Is this bill to be referred to the committee on railways and canals?


Ernest Lapointe: I take the same stand as my hon.
friend.


Hon. LUCIEN CANNON (Solicitor General) :: That is the rule with private bills.


Mr. DENIS (Joliette):: I do not want to take up the time of the house, but it is perfectly understood and agreed that no member is committed to this bill by the mere fact that it gets its second reading. We simply want to send it to the committee to have it examined.


Thomas Langton Church: I do not think that this bill should be read the second time. The leader of the opposition (Mr. Bennett) is not here, and it is questionable whether the bill comes within the four corners of the jurisdiction of this parliament. It covers territory starting at Cornwall and going all the way into Quebec. The points presented in the bill have been sent by the cabinet to the supreme court for consideration and the question is to be heard within a few days. The bill involves a division of authority between the federal parliament and the provinces regarding international streams. This question was discussed a few years ago in reflation to the Morrisburg dam, and the matter of provincial rights then came under review. We have a series of documents and papers exchanged between the governments of the United States and of the Dominion of Canada touching the very points involved in this bill, and the moment we give the bill the second reading we automatically approve the principle of it. This, I submit, we have no right to do under the circumstances, especially in view of the statement made by the Prime Minister (Mr. Mackenzie King) some time ago that an opportunity would be afforded later on to discuss the whole question.


Jean-Joseph Denis: Let me assure my hon. friend, as I said in answer to the hon. member for Vancouver Centre (Mr. Stevens), that no hon. member is by any means committed to the principle of the bill in voting for the second reading of it. The sole purpose is to have the bill sent to the railway committee. I would not ask my hon. friend to commit himself to the principle of the bill. Indeed I am not committed to it myself, if it can be .proved that it is unsound.


Robert Gardiner: Why do you not explain it?


Thomas Langton Church: So far as I am concerned, I am opposed to sending the bill to any committee because it is altogether out of order in view of the fact that provincial Tights in the matter of water power are involved, and that this question has been referred to the supreme court. There is too much of this sort of thing in this house. Under the rules, the second reading of a bill approves the principle of it. This is in accordance with all the authorities-Bourinot, Beauchesne, May and others. This is a contentious stage of the bill, and especially a bill of this description.
I understand that a measure similar to this has passed the provincial legislature and this bill is now before parliament; we are asked to adopt concurrent legislation. And now the point is raised: What are the rights of the provinces and of the Dominion respectively in regard to the diversion from the river of water needed for navigation purposes? This question is among those referred to the supreme court, and it should not be discussed now, nor should the bill be sent to a committee of the house. This house has already dealt with questions similar to those involved in the bill. Such questions appear on the order paper, and it is not competent for us to forestall the action of parliament in the matter. The announcement has also been made that irrespective of the decision that will be rendered by the supreme court there is to be an appeal to the Privy Council on these various questions involved in the St. Lawrence waterway. This matter was under discussion the other day and the question came up in that connection as to whether these private bills should be passed. On April 10 the question was undeT consideration, and the very matters involved in the bill now before us were covered in the debate that then took place. That debate lasted one afternoon and the Prime Minister rose in his place and proposed an adjournment.
I would remind the house that the correspondence between the United States and the Dominion of Canda in regard to the St. Lawrence has been printed-500 copies in English and 200 in French. Various questions arise in these documents: What are the rights of the state of New York? What
2862	COMMONS
Great Lakes and Power Company
are the rights of the province of Quebec in regard to the St. Lawrence, in so far as it lies exclusively in that province? What are the rights of the province of Ontario in relation to waters passing by its doors on their way to the St. Lawrence? And what are the international rights and the rights of this Dominion in respect of surplus water? There is a statute in this country known as The Navigable Waters Protection Act, which provides that before an application can be brought to parliament it shall be sent to the Minister of Public Works. Before any erection can be made on an international stream it must conform to the provisions of the Navigable Waters Protection Act. Now, the preamble to this bill contains certain provisions which are hardly within the powers of this parliament, and it also raises the question of jurisdiction, which, I contend, is sub judice. Mr. Speaker has ruled upon this point; a similar question arose last session and, having been considered, the ruling was given.
I submit that this bill is out of order for the reasons I have indicated. I have here opinions from counsel for the Hydro Electric Power Commission of Ontario of a few years ago, with regard! to this particular question, and there is no doubt, that the control of navigable water lies with the Dominion government. If it is desired to carry on any construction which will affect navigable waters application must be made to the Minister of Public Works, who holds a hearing and reports to the governor in council. These questions are now before the supreme court; counsel are acting for the Dominion government and for the provinces of Ontario and Quebec; the pleadings are all in and a day has been named for the hearing. In view of that situation, how can we pass this bill?
Let us look at the preamble, which states:
Whereas a petition has been presented by the Great Lakes and Atlantic Canal and Power Company, Limited .... praying that it may be authorized to construct and operate a deep waterway from the western end of lake St. Francis at or near the town of Cornwall in the county of Stormont, in the province of Ontario to Hungry bay in the county of Beau-harnois in the province of Quebec, and to build a canal from said Hungry bay to a point at or near Melocheville, in the said county at lake St. Louis, and a deep waterway through lake St. Louis to a point at or near Caughna-waga in the county of La Prairie-[DOT]
They are not satisfied with that; they even name an alternative route. The canal system of this country, as I understand it, has been under the control of the Dominion government since about 1854, and since that
[Mr. Church.J
time we have spent over 8200,000,000 on that system. To-day we are spending large sums of money on the Welland canal, so I say we should not give a private company power to construct a canal of this kind. Here we have a canal to be built near the great port of Montreal, where we have spent so much money; we have the United States requesting permission to divert a great quantity of water to the Mississippi river through the Chicago drainage canal; they propose another canal from Ogdensburg to Albany, and if this sort of thing goes on there will not be a drop of water left in the port of Montreal. If this were purely a power company I would have no great objection to it; in Quebec they have a progressive premier who is always looking out for his province, but this is not such a company.
This bill gives this particular company the power to build a canal in the counties named, to the head of navigation, in and near the city of Montreal. It says:
so as to make and complete throughout the entire distance from Cornwall aforesaid to the harbour of Montreal as aforesaid, a navigable canal or canals.
This bill gives this particular company the power to build a private canal, because that is all it is going to be. It is going to be a private canal, and it is changing the whole canal policy of this country by handing it over to a private company, incorporated as it is in the province of Quebec, and giving this company powers in this province. You are going to upset the whole policy of canals in this country.
In 1854 the jurisdiction over these waters was in the Montreal harbour commission. They transferred the whole jurisdiction, in order to build a ship canal in 1854, from the port of Montreal to Quebec. The country spent $54,000,000 to dig that waterway. To hand over to this particular company the power to build this private canal, a private undertaking, as this preamble sets out, I must say is an entirely wrong principle.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, May 10, 1928