1929-05-14

OFFICIAL REPORT


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o^jst_a.:da.
liottst of Commons iebatfs
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Tuesday, May 14, 1929

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Ninth report of the select standing committee on miscellaneous private bills-Mr. Parent.

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Right Hon. W. L. MACKENZIE KING {Prime Minister): On the orders of the day of May 10, 1929, the hon. member for Vancouver Centre (Mr. Stevens) called my attention to a press despatch from Paris stating that the plan for revision of German reparations under consideration by the experts' committee would leave Great Britain nothing for the dominions or for arrears of interest on debt and that the British delegation would be practically certain to reject that phase of the proposals which would reduce the German payments to the dominions to zero. He requested that I lay on the table a statement showing the terms upon which the present payments are made, the arrears, if any, which exist, and the amount received to date together with any information regarding the suggested new arrangement. I accordingly now table a brief statement.


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Bill No. 216, for the relief of Laura Grace Osborne Lea.-Mr. Lawson.
Bill No. 220, for the relief of Andrew Ralph Wilson.-Mr. Garland (Carleton).
Bill No. 221, for the relief of Marion Jane Stewart.-Mr. Hepburn.
Bill No. 224, for the relief of John Carbery Hickman.-Mr. Garland (Carleton).
Bill No. 225, for the relief of Lydia Alice Hinch.-Mr. Anderson (Toronto High Park).
Bill No. 226, for the relief of Allan Plant. -Mr. Garland (Carleton).
Bill No. 227, for the relief of Pansy Jean Van Luven.-Mr. Spence.
Bill No. 230, for the relief of Frederick Herman Schelke.-Mr. Young (Toronto Northeast).
Bill No. 232, for the relief of Alma Berlinda Swayne.-Mr. Boys.
Bill No. 235, for the relief of Edyth Viola Beaeock.-Mr. Lawson.
Bill No. 236, for the relief of Bertha Nichols.-Mr. Spence.
Bill No. 23S, for the relief of Albert Victor Walter Holman Homan.-Mr. Geary.
Bill No. 240, for the relief of Frances Vera Carter Van Luven.-Mr. Garland (Carleton).
Bill No. 243, for the relief of James Colling-wood Darroch.-Mr. Anderson (Toronto High Park).
Bill No. 244, for the relief of Ross James Smalley.-Mr. Anderson (Toronto High Park).
Bill No. 24S, for the relief of Fanny Green Fuchs Webber.-Mr. Hepburn.
Bill No. 249. for the relief of Henry Lawrence Jones.-Mr. Ladner.
Bill No. 250, respecting The Dominion Fire Insurance Company.-Mr. Ryckman.
Bill No. 251, to ratify and confirm the organization and the election of directors of Family Trust, and to change the name of that company to Financial Trust Company.-Mr. Laflamme.

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On the orders of the day:
Mr. E. J. GOTT (South Essex):: I would
like to draw the attention of the government to a most alarming situation which exists in Essex county. I have under my hand a lengthy telegram apprising me that the Minister of Public Works had been informed that 7,000 acres or almost the total area of Pelee island is threatened with flood owing to the unprecedented high water in lake Erie; that a further rise in level or a storm may break the banks, and that, private efforts are unable to cope with the situation. The people are asking for immediate attention and consideration on the part of the government, and they suggest in the wire that if a dry land dredge is on the ground- promptly to raise the inner embankment the situation may be saved. They are asking for immediate action. The Public Works department have been communicated with and I would be glad if the Prime Minister (Mr. Mackenzie King) would assure us of immediate action.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: If the hon. member, as
I understand, has communicated with the

24G4

Regxdation of Liquor Traffic
Department of Public Works, I feel sure the department will do whatever may lie within its power and scope.
FISH TRAPS IN BRITISH COLUMBIA On the orders of the day:


Mr. A. W. NEILL (Comox-Alberni):: I
should like permission to ask a question of *the Prime Minister. In order to make the question intelligible, I would need to state very briefly the facts upon which the question is based. It will not take me more than two minutes to do so, and it will expedite the business of the house, because otherwise I would feel justified in moving the adjournment of the house to discuss the matter.
There has just finished its sitting in British Columbia a commission which has been considering the advisability of allowing the use of fish traps in northern British Columbia waters. All the fishermen, or to be accurate, 99 per cent of the fishermen in British Columbia generally, irrespective of their location, are bitterly opposed to fish traps as well as to the commission, and I think I am safe in saying that 90 per cent of the population in the vicinity affected, that is, Prince Rupert, irrespective of their occupations, are also bitterly opposed to both propositions. I said that they were against the commission. The reason for that is two-fold. First, they think it is uncalled for, the matter having been already decided, and, second, they object to a commission consisting of only one man. While he is a man of undoubted repute and integrity, they are afraid that in a matter of such importance, the personal views of one commissioner might affect his report. I now . come to the question, or rather, the request that I wish to make of the Prime Minister. To be quite definite, I have put it in writing and it is this: whether, before adopting any policy of again allowing the use of fish traps in northern British Columbia waters, he would refer the matter to the house by resolution or otherwise, so that it could be fully discussed.


William Lyon Mackenzie King: In reply to my hon. friend I should like to say that I am only one member of the government, and I should like to have an opportunity to confer with my colleagues on the matter, and give my hon. friend a reply later.



REGULATION OF LIQUOR TRAFFIC


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On the orders of the day:
Mr. C. H. CAHAN (St. Lawrence-St. George):: I would ask the Prime Minister 
(Mr. Mackenzie King) whether he can give us any information as to when the correspondence in regard to the convention of 1924 between Great Britain and the United States will be laid before the house. I have seen published in the press what purported to be partial extracts from that correspondence, and I thought that perhaps it had already been officially published in whole or in part so that one could have access to it.


William Lyon Mackenzie King: I do not know whether my hon. friend was in the house yesterday when I referred to this matter. I then tabled the correspondence between Great Britain and Canada with reference to the treaty, and I mentioned at the time that the British government had advised us that they regarded the correspondence between the United States and Great Britain as largely confidential. I might say to the hon. member that when that communication was received we drew the attention of the British government to the very fact he has just mentioned, namely, that there had been press reports which would indicate that much of the correspondence had not been regarded as confidential but was already published. Having drawn the attention of the British government to that fact we hope that possibly they may be able to meet my hon. friend's wishes in the matter of having that portion of the corespondence tabled as well, but the decision must rest with the British government.


Charles Hazlitt Cahan: In the communications which passed between the Hon. Mr. Massey, representing the Canadian government, and the Secretary of State of the United States, certain quotations were made from the correspondence which had taken place. I wonder if we could have laid on the table of the house the parts of the correspondence which contain those quotations.


William Lyon Mackenzie King: I shall be very pleased to supplement the despatch which we have already sent with an exact quotation of what my hon. friend has just said.



PRIVILEGE

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Mr. CANTLEY
On the orders of the day:
Mr. THOMAS CANTLEY (Pictou):: Mr. Speaker, I rise to a question of privilege. Some time ago I asked for information of the Department of National Revenue as follows:
What were the sums refunded by way of 39 per cent rebate of duty on imported coal used by iron and steel makers and/or other industries in each province of Canada during^ each year since these rebates came into force?

Privilege-Mr. Cantley
The answer I got to that question was that there was no record kept of the amount of drawback paid by provinces, but I was given the total amount of the refunds in each year from 1908 to 1928. That did not comply with my request. I then asked the question:
1.	What persons or corporations, during the year 1928, received refunds by way of 99 per cent rebate of duty on foreign coal imported for use of iron or steel makers, and what was the amount of refund in each case?
2.	What persons or corporations, during the year 1928, received refunds by way of 99 per cent rebate of duty on foreign coal imported for use of other than iron and steel manufacturers, and what was the amount of refund in each case?
To that the Minister of National Revenue (Mr. Euler) replied:
1 and 2. It is contrary to the practice of the Department of Customs and Excise to give information which would disclose the business of an individual concern.
My reply to that is that a proper reply to my question would not have disclosed the business of any individual concern, because I was dealing with provinces. However, in
order to make it undoubtedly possible for the department to give the information I sought, without disclosing anything that should not be disclosed, I put the question in another way:
1.	Of the total amount of $1,060,096.16 reported on page 2121 of Hansard of April 29, as refunded to importers of coal during the year 1928, what was the amount refunded on coal used in the production or manufacture of iron and/or steel in each of the several provinces of Canada?
An answer to that question certainly would not disclose the private business of any concern. I also asked:
2.	What was the amount so refunded on account of coal imported and used in connection with metallurgical processes other than the production of iron or steel in each of the provinces of Canada?
To the first part of my question the answer was:
1. $662,986.28.
That amount referred to the whole of Canada. The information was not given by provinces, which is what I asked for. The answer to part 2 of my question was:
For metallurgical processes other than iron or steel, nil.
I doubt if that answer is correct, although I am not quite sure. The department also gave by way of information in reply to my second question which figures I did not ask for, as follows:
For production of coke, $383,072.96.
That was not a matter of any interest to me at the time. The third part of my question read:
3.	What was the amount so refunded on account of coal imported and used in connection with the production or refining of salt in each of the several provinces of Canada?
To that I received the answer:
3.	$14,036.92.
And this note is added:
To give fuller details would disclose the business of individual concerns which is contrary to the practice of the Department of National Revenue.
I state emphatically that it would not. In the province of Ontario, for instance, there are two large concerns, and to give the information I asked for would not disclose the business of either one or the other, because I grouped them all together. I would also point out to the minister and to the house that in the case of bounties paid on iron and steel while the Bounty Act was in force, a statement was given each year, if I am not mistaken, of the amount of bounty paid to the different concerns coming under the act.


Mr. SPEAKER:: Order. There is no
question of privilege so far. I would ask the hon. gentleman to state his point as briefly as possible, or to put his question on the order paper.


Thomas Cantley: I have put my point,
Mr. Speaker, and I wish to tell the Minister of National Revenue that I want and expect to get a definite answer to my question giving me the information asked for and to which I believe I am entitled.


Hon. W. D. EULER (Minister of National Revenue):: Just a word in reply to my hon.
friend. I want to assure him that there is absolutely' no disposition whatever to withhold from him or anybody else any information that may properly be given out by the department. The' statement that was made in connection with one of the answers that my hon. friend quoted that it was contrary to the practice of the department to give out information that might disclose the business of any individual concern was. given entirely in good faith. In the opinion of my hon. friend the information he asked for would not disclose the business of any private concern, but in the 'opinion of the Commissioner of Customs the opposite was the case, and I think I am obliged to take the opinion of the executive officer of that branch of the department.
2466	COMMONS
Migratory Birds Convention Act
My hon. friend also questions whether one of the answers given is correct. I think that is 'hardly a fair statement for him to make. I have every reason to believe that when a question is answered by the department it is answered honestly and sincerely.
Perhaps one way out of the difficulty would be for my hon. friend to go to the department, where he might possibly be given access to the figures without betraying any information which it is the practice of the department to treat as confidential. That perhaps might be better than making a demand in the way in which he did.


Thomas Cantley: If I can get the information by applying to the department, I shall be very glad to do so. So far as the information wrongly given, or possibly wrongly given, is concerned, I still think that there was an error on the part of the officer of the department.


William Daum Euler: That might very well be cleared up if my hon. friend would visit the department.



MIGRATORY BIRDS CONVENTION ACT


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On the orders of the day:
Mr. F. P. QUINN (Halifax):: In the absence of the Minister of the Interior (Mr. Stewart) I wish to draw the attention of the Prime Minister (Mr. Mackenzie King) to a despatch which appears in the Halifax Herald of May 9th last, from Wolfville, reading as follows:
"Intolerable political interference, which was such as to hamper effort to deal with major offences against the Migratory Birds Convention Act, based on agreement with United States," was given to-night by R. W. Tufts, inspector in the maritime district, for his resignation which has been forwarded to Ottawa. No answer has been received from the capital as yet as to the course which will be followed there.
"Recently my work lias* been hampered by intolerable political interference in my efforts to suppress some of the major offences against the Migratory Birds Convention Act. In these circumstances I felt obliged to tender my resignation, conditions being such as to seriously hamper my work in the protection of our wild life."
I ask the Prime Minister if it is the policy of this government to allow political interference in prosecuting offences under the Migratory Birds Act.


William Lyon Mackenzie King: Not only is it the policy
of the government not to permit the con-

tiniuance of political interference in these cases, but it is the government's policy not to permit political interference in any case.


Mr. W. G. ERNST (Queens-Lunenfeurg):: Mr. Speaker, further in connection with the nuestion asked by the junior member for Halifax (Mr. Quinn), may I inquire of the Prime Minister, in view of the statement made by Mr. Tufts, as to the cause of his resigning being political interference-a statement, by the way, which appears in both the Halifax Chronicle and the Halifax Herald

if he will have the department which is responsible, the Department of the Interior, table all correspondence in connection with Mr. Tufts' resignation.


Mr. DUFF:: I am not guilty.


William Lyon Mackenzie King: Perhaps the
hon. member would put a motion on the order paper. Iam sure that it will be granted.


William Gordon Ernst: It is a matter reflecting on
the government.	.


Mr. BENNETT:: We will get the papers
when the estimates are up.


William Lyon Mackenzie King: I am sure it
will be granted.



NEW WESTMINSTER PENITENTIARY

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On the orders of the day:
Mr. W. G. McQUARRIE (New Westminster) :: On the orders of the day yesterday, Mr. Speaker, I asked the Minister of Justice (Mr. Lapointe), regarding a return which was ordered on May 14, 1928. On page 2433 of Hansard he is reported as making the following statement:
I will look into the matter, and if the return is ready, I shall be pleased to lay it on the table. But may I call the hon. member's atten tion to the fact that I do .not think he has the right to criticize me, because, under the rules, a motion for a return drops after the session is over. If the motion has not been renewed this session, my hon. friend cannot get the papers as of right, although I will give them to him.
When I differed with his statement of the rule, he said:
Yes, I am correct, I will show my hon. friend Bourinot, Beauchesne and all the other authorities. I was reading them yesterday.
My hon. leader (Mr. Bennett) also differed with the Minister of Justice. I now ask the minister if he has looked through the authorities. I would refer him to standing order 81, which reads as follows:
A prorogation of the house shall not have the effect of nullifying an order or address of the

Imperial Cable
M ergcr-71/ r. II eaps
house for returns or papers, blit all papers and returns ordered at one session of the house, if not complied with during the session, shall be brought down during the following session, without renewal of the order.


Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, I desire to congratulate my hon. friend on hawing been right. Obviously he wanted it. to be made public that he was right. I may say I was right in principle; that was the former rule, because every decision of the house drops when the session is over, but the practice has been established in recent years so that these orders have not to be renewed. I shall be pleased indeed to give these papers to my hon. friend, and again I congratulate him on having been right this time.


William Garland McQuarrie: The minister was right two years ago, but he is not up to date.


Sir GEORGE PERLEY (Argenteuil):: That has 'been the rule of the house for many years.



MOTOR AND PLEASURE BOATS

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On the orders of the day:
Mr. PETER McGIBBON (Muskoka-On-tario):: I desire to ask the Minister of Marine (Mr. Cardin) when I may expect to hear from him in regard to rescinding the order in council imposing a tax on motor boats and canoes on the Muskoka lakes.


Hon. P. J. A. CARDIN (Minister of Marine):: Mr. Speaker, I am considering the
representations made to me from different sources, and expect to be in a position to give a final decision in the course of a few days.



NOVA SCOTIA-COAT OF ARMS

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On the orders of the day:
Hon. W. A. BLACK (Halifax):: May I ask the Secretary of State (Mr. Rinfret) whether he has had any correspondence with the premier of Nova Scotia with regard to the coat of arms of that province? If so, would he be good enough to lay the correspondence on the table?


Hon. FERNAND RINFRET (Secretary of State):: I do not recollect any such correspondence. There may have been an exchange of letters directly with the department. I will look into the matter.



IMPERIAL CABLE MERGER

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Hon. P. J. VENIOT (Postmaster General) moved the second reading of Bill No. 213, to authorize consent to the sale of certain cable and wireless telegraph undertakings
established under the Pacific Cable Acts, 1901 to 1924 (Imp.), and the West Indian Islands (Telegraph) Act, 1924 (Imp).
Mr. A. A. HEAPS (North Winnipeg):: Mr. Speaker, before this motion is carried, I think in fairness to the house the Postmaster General ought to make a complete statement, giving full particulars with regard to the whole bill. Until now the house has very little information with regard to the question. I have been anxiously awaiting a statement from the minister.


Mr. VENIOT:: Mr. Speaker, this bill was before the house last week, and both the Minister of Justice (Mr. Lapointe) and myself went into the question as fully as possible; we gave the house all the information we could. If there is any further detailed information required, I think it ought to be given when the bill is in committee of the whole house.


Abraham Albert Heaps: If I may ask a question now of the minister, will he give us some enlightenment before the bill receives second reading?


William Lyon Mackenzie King: We are on the second reading now.


Abraham Albert Heaps: Unfortunately the house has not any information worth while on which it can give judgment whether this bill ought to receive second reading or not. About the end of February I had a question on the order paper asking for the production of all documents and correspondence pertaining to this question. On the second day of May, nine weeks afterwards, the papers were tabled, but there was very little in them. I have before me now the correspondence tabled and I find a report of the conference held last year in London, England, and three letters. These letters afford very little information to the house. I find one communication dated November 10 and a telegram from our Secretary of State for External Affairs to the Secretary of State for Dominion Affairs in Great Britain as follows:
Ottawa, November 10, 1927.
All circumstances make it clear that it is urgently necessary to give immediate consideration to commercial position of the Pacific cable as requested in our cables of July 30 and August 16 on which no action has yet been taken.
There is absolutely nothing in any of this correspondence to show the nature of the communications sent by the Canadian government on those dates-the summer of 1927 Further, it is stated:
Canadian government therefore proposes that a committee be set up in London comprising
2468	COMMONS
Imperial Cable Merger-Mr. Heaps
representatives of the four interested governments to consider and report on whole commercial position of cable and question of broader policy as to future management, and particularly as to how cable and wireless systems can work together for their common advantage. Representatives on this committee should be invited to make concrete suggestions as to how cable might best be operated in future. Immediate appointment desirable as cable is losing money daily due to wireless competition and whole question becoming very serious one for all governments concerned.
In this paragraph it is intimated that the cable was losing money daily. From the information I have, however it appears that in the year 1927-28 the cable actually made a profit, after paying all depreciation and allowing for interest charges, of about $100,000. I have not the exact figures by me, but I can get them. The communication proceeds:
We appreciate force of considerations as to appointment of chairman and advisability of visiting cable stations to report as to what economies can be effected but believe essential first to deal with broader questions of policy, particularly as recommendations of policy committee if set up might involve change in entire organization of Pacific cable board. Canadian government therefore of opinion appointment of permanent chairman should be deferred until report of policy committee received which should be at latest before end of this year.
Secretary of State for External Affairs.
Having read this communication, I will now give the next one, dated Ottawa, December 15, 1927, from the Secretary of State for External Affairs and addressed to the Secretary of State for Dominion Affairs in London.
Telegram, code, secret.
Your secret telegram 8th December

This refers to a telegram or cablegram received from the Secretary of State for Dominion Affairs in London, but there is nothing in the correspondence to show what are its contents. Evidently the whole trouble in this connection arose after the competition began between a government-owned and a privately-owned utility. The government-owned utility was giving such hot competition to the other that it was necessary for a conference to be called, and that conference resulted ultimately in a privately-owned utility, which was losing money, taking over the publicly-owned utility which was a hugs success.
-competition between beam wireless and cables. Government of Canada agrees that special conference be held in London as soon as possible to deal with situation but requests that terms of reference allow of representatives sending for such British cable and wirelss bodies as they may wish and receiving from them such solutions of the existing problems as they may care to submit. Government of Canada nominsMr. Heaps.]
ates Sir Campbell Stuart as its representative on such conference board and will send a member of the Postmaster General's staff as adviser.
Secretary of State for External Affairs.
I want to ask the Postmaster General (Mr. Veniot) who recommended to the government the name of Sir Campbell Stuart, because it will be shown before this debate has concluded that this gentleman was an interested party in the whole matter and was not a fit and proper person to represent the government at such a conference. There is one other communication, and this is all that the government have submitted. This communication is dated the 4th day of January, 1928, and is as follows:
Sir Campbell Stuart, C.B.E.,
Hyde Park Hotel,
Knightsbridge,
London, S.W. 1, England.
Dear Sir Campbell: I enclose papers re the Pacific cable as the minister will bring them before council to-morrow. We have sent a copy on to Mr. Gaboury also-he is in Montreal prior to sailing on the "Montrose" from St. John on the 6th. Should there be any change at council, or anything to add, we will cable you-in code, if necessary, using the code which Mr. Brown left with us when here last summer.
Yours sincerely,
Assistant Deputy Postmaster General.
It does not appear where the communication was from or even who signed it. However, I should like to know who Mr. Brown is. Can the Postmaster General inform the house who this gentleman is? This is rather important? because it is evident that in the summer of 1927 a Mr. Brown-I have no idea who he is-was in Canada and left certain codes to be used if necessary. I have tried to find out who he is. I find in one of the documents before me the name of Mr. Brown, but I am not inclined to think it is the same gentleman referred to in this correspondence. I am anxious to have some information on this point, and I think the house would appreciate it if the Postmaster General would say at this stage who this Mr. Brown happens to be, to whom reference is made in the communication of January 4, 1928.


Ernest Lapointe: Does not my hon. friend think that such questions might be more properly asked and answered in the committee stage? If the Postmaster General replies now the hon. gentleman will not be able to speak again.


Abraham Albert Heaps: 
Abraham Albert Heaps: Would the Postmaster General tell us who Mr. Brown is?


Peter John Veniot: I cannot see that there is
very much importance attached to the name of Mr. Brown; I do not know who the gentleman is but I will endeavour to find out.


Abraham Albert Heaps: Will the Postmaster General allow this to stand until he obtains that information?


Ernest Lapointe: What has Mr. Brown to do with this bill?


Abraham Albert Heaps: He has a great deal to do
with it.


Peter John Veniot: He is not connected with
the department at all.


Abraham Albert Heaps: All the more reason why
we should know who he is.


Peter John Veniot: If the hon, member has
any suspicions he had better express them.


Abraham Albert Heaps: The information appears in
the correspondence that a Mr. Brown was in Canada during 1927. He was in negotiation with certain officials of the government, and
zm
Imperial Cable Merger

I will again read certain portions of the correspondence which might explain why I want to know who Mr. Brown is. The following appears in the correspondence:
Should there be any change at council, or anything to add, we will cable you-in code, if necessary, using the code which Mr. Brown left with us when here last summer.
I think it is quite evident that Mr. Brown is an important personage. He evidently carried in his possession certain secret codes winch he handed over to some official of the Post Office Department. It goes without saying that he must have been acting for some other party. If Mr. Brown acted as an intermediary between the Canadian government and some other party, I want to know who Mr. Brown is and whom he was acting for. Surely that is not an unreasonable question.


Peter John Veniot: The only person that I or the department had any transaction with in connection with this matter was the representative of Canada on the cable board in London, Sir Campbell Stuart. I know of nobody else.


Abraham Albert Heaps: I do not think any hon.
member will claim that I am asking for anything unreasonable. The Postmaster General has said that all the conferences he had were with Sir Campbell Stuart. I take that as being correct; I would not for a moment doubt the statement made by the Postmaster General. But this is a communication from the Assistant Deputy Postmaster General. Evidently he had been in touch with Mr. Brown. Has the house not a right to know whom the Assistant Deputy Postmaster General was negotiating with on such an important question. Why is the house to be denied an answer to my question?


Ernest Lapointe: Will my hon. friend
state what Mr. Brown seems to be doing? What is the purport of all this?


Abraham Albert Heaps: I am sorry that I have not
made myself clear t<3 the Minister of Justice. Mr. Brown left in this country some secret codes to be used in case of necessity between this government and other parties interested. I claim that a gentleman who comes to this country and who evidently is in negotiation with the highest officials of the Post Office Department-


Ernest Lapointe: The negotiations took
place at a conference in London. Was Mr. Brown there? Who is ha?


Abraham Albert Heaps: This makes ii all the more confusing and all the more necessary that we should know who Mr. Brown is.
IMr. Heaps.]


Mr. GUTHRIE:: What is his first name?


Abraham Albert Heaps: There is no initial given. This letter is signed by the Assistant Deputy Postmaster General.


Mr. STEVENS:: Who is now present.


Peter John Veniot: I think I have discovered
the mysterious Mr. Brown. There was a Mr. Brown engaged in financial arrangements for carrying on the business of the old Pacific board as between companies interested and ourselves, but he had absolutely nothing whatever to do with any negotiations-carried on for this merger. That is one Mr. Brown.


Henry Herbert Stevens: What was his first name?


Peter John Veniot: I forget the Christian name of the first Mr. Brown, but I have a second Mr. Brown. He is Mr. F. J. Brown, C B, C.B.E., who is a director and who is among the list of witnesses called at the conference in London in connection with this merger. He ' was called by the board of trustees, if I may use that term, of the Pacific cable board when they were investigating the condition of affairs in connection with that cable prior to the suggestion of a merger. Those are the only two Browns.


Abraham Albert Heaps: The Mr. Brown whose name I have here represented the Indo-European Telegraph Company.


Peter John Veniot: This Mr. F. J. Brown is the man who represents the Indo-European Telegraph Company.


Abraham Albert Heaps: I understand from the Postmaster General that the other Brown was a gentleman who was here in the summer of 1927 in a financial capacity. I want to know whom he represented, what financial institution if any he represented?


Peter John Veniot: All the information I have is that he was an accountant of the Pacific cable 'board, but had nothing whatever to do with the merger.


Abraham Albert Heaps: The Postmaster General
stated a moment or two ago that this Mr. Brown was interested in the financial aspects of the whole question, or he used words to that effect. Am I to understand that he represents the Pacific cable board or another board?


Peter John Veniot: Which Mr. Brown does
my hon. friend mean?


Abraham Albert Heaps: Not the Brown in that report, not the Brown that gave evidence, but the Brown in this letter of the 4th January. The minister need not try to confuse the matter. It is very simple.

Imperial Cable Merger


Mr. VBNIOT:: I am trying to give the
hon. gentleman the information, but he has placed on my shoulders a heavy task in distinguishing one Mr. Brown from the other. I have told the hon. gentleman and the committee that the first Mr. Brown, of 1927, had absolutely nothing whatever to do with the merger that has been carried on of the Pacific cable and these other interests. Surely that ought to be satisfactory. As to Mr. F. J. Brown, I am informed that he was connected with the old Pacific cable.


Abraham Albert Heaps: Whom was he connected
with at the time this letter was written by the assistant deputy?


Peter John Veniot: I have not a copy of the
letter from which the hon. member has been reading. Will he let me have it?


Abraham Albert Heaps: The department of which
the Postmaster General is the head has duplicated all the correspondence to make it look as though something were being given to the house. I will send it over.


Alan Webster Neill: While Mr. Brown is being
paged, might I ask a question of the Minister of Justice? Does he consider section one good law? It says: that the governor in council- that means the government-can sell certain things " in the manner specified in the said act," the said act being the Imperial Telegraphs Act which is named, " and upon the terms set out in the said report," the report being the report of some conference. The report of the conference is not an annex to the bill; neither is the imperial act. I have sent for the imperial act and I have the report that it is not in the library, so that I do not know whether the conference report is an annex to it or not. So far as I know, it is not. Therefore we are committing ourselves to giving the government power to do a very important thing on the terms of an invisible report of a conference. Fifty years from now, when this comes to be interpreted, that report may not be in existence or not available. This is a very important matter. The members of the house do not seem to appreciate the point of view expressed by the hon. member for North Winnipeg. Does the Minister of Justice not think we should have as an appendix to the act or embodied in the act, the actual terms upon which this important transaction is taking place?


Ernest Lapointe: I understand both the
report and the imperial act have been laid on the table. I agree that perhaps it would be more convenient if the act had been printed as an annex to this bill. I do not, however, think it is essential that this should be done.


Alan Webster Neill: We can find the imperial act at any time and it will be in existence for all time. But the report, which is simply a blue book of the Canadian government, may be here to-day and undiscoverable to-morrow; it may be like this Mr. Brown. I submit that it ought to be embodied in the act or be an annex to it. This act is nothing at all; it is simply a permission to the government to go out and sell something to the world at large. It is limited only by the terms of the imperial act and by the terms of this conference. There is a report somewhere. We do not have it. It is not in the act and it should be an annex to the act.


Ernest Lapointe: If it be a mistake, the mistake was also made in the Imperial parliament, because the imperial act also refers to and is really based upon that report.


Richard Bedford Bennett: It is not often that I find myself so wholly in accord with the hon member for Comox-Albemi, but in this instance I do incline to the belief, although it might mean a little extra printing, that it would be desirable to put upon the statute books as an annex the authority upon which the legislation proceeds. I think the Minister of Justice will agree that the point is rather well taken.


Ernest Lapointe: I think it would be better, but as my hon. friend knows, there was some urgency in introducing this bill.


Richard Bedford Bennett: I agree, and it was because of that that I hesitated to say anything at all about it, but I apprehend that the government has intimated that it will execute this agreement in any event. I think the hon. member for Argenteuil made it perfectly clear the other day that the government, if one might say so without offence, cannot do anything else. The other partners having concluded to dispose of the assets of the enterprise in a certain manner, this partner in a general way has also to do it. I can see no other way out of it myself. But inasmuch as the urgency has passed for the moment, inasmuch as the government has intimated, I assume, that it proposes to do in good faith whatever may be necessary to give effect to the arrangement arrived at by the partners who own the undertaking, I think it would not be too difficult to add as a schedule to the act the report. I think the suggestion is certainly a sound one. It is one which in times past I have urged upon legislatures and parliaments, so that anyone who picks up legislation for the purpose of ascertaining what it means shall be able without reference to any other document to find out exactly what was
Imperial Cable Merger

done and why. Might we not, without delaying the legislation, add as an annex to it such further documents as would enable the causes operating in the mind of this parliament in arriving at the conclusion it did to be stated in the legislation itself?
While I am on my feet, I must say that I think the inquiry made by the hon. member for North Winnipeg (Mr. Heaps) as to who Mr. Brown is is an entirely pertinent one.


Ernest Lapointe: Supose my hon. friend the Postmaster General moves that the two documents should be annexed to the bill. We could do that now.


Peter John Veniot: I move accordingly, Mr. Chairman.


Richard Bedford Bennett: Probably one should be schedule "A" and the other schedule "B", because one is a report and tihe other is a statute. The imperial act should probably be schedule "A" and the report schedule "B".


Ernest Lapointe: There is no objection to that.


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: I would not want to be factious or captious, but I think when the hon. member for North Winnipeg asked who Mr. Brown was, in view of the correspondence and what it indicates, he was not going beyond his rights. It seems to me that when any member of parliament in connection with legislation of this kind finds correspondence indicating that a gentleman by a certain name has undertaken to play a very considerable part in connection with certain financial transactions, the minister in charge of the bill should be in a position to indicate who the gentleman is and why he comes into the transaction. Surely the department must have known who Mr. Brown was, or else Mr. Brown would no.t have left the secret code. It does occur to me that a member of parliament, if he were making a just and proper inquiry in order that he might be informed in relation to the matter, might properly expect the minister in charge to indicate who Mr. Brown was.


Ernest Lapointe: He got his answer, unless we are to produce Mr. Brown as schedule "C".


Richard Bedford Bennett: That is not quite good
enough.


Alan Webster Neill: The Canadian terminus of
the Pacific cable is in the district I represent, at a place called Bamfield. I would like to know if these employees of the board who entered the service somewhat as if they were

entering the government service with the prospect of continuity of service, pension, and so forth, will in the transfer have their rights as to continuity of service, salary, and pension safeguarded.


Peter John Veniot: That is to be found in the agreement which will be signed by' the contracting parties. I have a skeleton of the agreement here.


Alan Webster Neill: Is the agreement to be embodied as an appendix to the bill?


Ernest Lapointe: No.


Alan Webster Neill: How am I to find out if the
interests of these employees are being safeguarded?


Peter John Veniot: While I have not got the
details at hand at the present moment, I can let my hon. friend have all those details.


Alan Webster Neill: Perhaps the Postmaster
General would say whether steps have been taken to look fully after their rights.


Peter John Veniot: Yes.


Mr. GARDINER:: In what manner is that provision being made? Let us have the details.


Peter John Veniot: The agreement provides
that the company shall take over the existing staff of the board subject to and in accordance .with the provisions set out in the second schedule thereof.


Alan Webster Neill: Could not the agreement be laid on the table?


Abraham Albert Heaps: Why not table the other
correspondence ?


Ernest Lapointe: The agreement is not
published yet.


Peter John Veniot: I do not think it should
be tabled until all the parties have signed.


Mr. GEARY:: Who are the parties to the agreement and what is it all about?


Henry Herbert Stevens: The chairman was just
about to call section 1 carried, but if these schedules are to be added), section 1 will have to be amended by adding after the words "chapter 7" the words "as set forth in schedule A attached hereto," and by adding after the word/ "report" the words "schedule B." I understand that it would require one of the ministers of the crown to move this amendment.


Abraham Albert Heaps: I would suggest that the
minister report progress so that all the information desired by the committee can be

Imperial Cable Merger
made available when the bill is taken up again. In the meantime perhaps he would find out who Mr. Brown is.


Peter John Veniot: I have already given the
information touching Mr. Brown.


Abraham Albert Heaps: No.


Clarence Joseph Veniot: I cannot see what other information I can give. I have already stated that Mr. Brown was connected with the Pacific cable board1, that he was an officer of that board. I might add that when he came to Canada he accompanied Sir Campbell Stuart, and while on this side they visited and inspected the West Indies cable system.


Abraham Albert Heaps: When was that?


Clarence Joseph Veniot: That was long before the
merger was contemplated.


Abraham Albert Heaps: This was early in 1927, I
presume?


Peter John Veniot: Yes, there was no merger
contemplated at that time or even suggested.


Abraham Albert Heaps: I do not know whether the
minister intends proceeding further just now with the bill. When Mr. Brown came to this country with Sir Campbell Stuart in the spring or summer of 1927, I should like to know whom he represented. He was one of the men behind the scenes of whom very little was heard subsequently. However, when he returned to England, he left a secret code in case it might be necessary for the Post Office Department to communicate with him. I think under those circumstances he assumed a position of importance. He evidently had a good deal to do with shaping the policy of the government. I do not know whether he was an Englishman, a Frenchman or what. We should like to be informed where he came from and what he is engaged in at the present time.


Peter John Veniot: The only information I
have before me is that Mr. Brown lives in London, England. He came here from London. So far as the secret code is concerned, my assistant deputy informs me that, while no merger was contemplated, at the time, there were communications with Sir Campbell Stuart, the representative of Canada on the cable board in London, and this code was so arranged that whatever passed between our representative and the department here would be secret. That is the information I get from the gentleman who apparently signed this with the title of "Assistant Deputy Postmaster General."


Henry Herbert Stevens: Whom did Mr. Brown
represent? That is the point.


Peter John Veniot: I am told when he came
over here he acted as Sir Campbell Stuart's secretary and returned with him to London.


Henry Herbert Stevens: Have you his initials?


Peter John Veniot: No, we have not.


Abraham Albert Heaps: Does the minister know if
this Mr. Brown is in any way connected with financial institutions that are interested in private cable corporations?


Peter John Veniot: No, I do not.


Ernest Lapointe: May I move, in order to
give effect to the suggestion of my hon. friend from Vancouver:
That the words "as set forth in schedule A hereto" be added after the words "chapter 7" in the fourth line of section 1; and the words "as set forth in schedule B hereto" be added after the word "report" at the end of section 1.


The CHAIRMAN:: Shall the amendment
carry ?


Abraham Albert Heaps: Before the amendment
carries, I should like to know who recommended to the department the name of Sir Campbell Stuart to act for Canada?


Peter John Veniot: As I remember, it was done by order in council.


Abraham Albert Heaps: How did his name come to
the government?


Ernest Lapointe: He has represented Canada on the Pacific board for years, and naturally was the man who should be appointed in a commission of this kind.


Peter John Veniot: I know he was a member
of that board when I took charge of the department. I had an interview with him before he left for London.


Abraham Albert Heaps: Did the government at any
time receive a report from Sir Campbell Stuart making any recommendation with respect to: what should be the policy in regard to the Pacific cables?


Peter John Veniot: We did receive a recommendation based on the investigation held. He was a member of the investigating committee and the recommendation is contained in the report.


Abraham Albert Heaps: Is there any objection to
tabling the report Sir Campbell Stuart made to the government?


Peter John Veniot: We have no objection to
raise to what he recommended to us.


Abraham Albert Heaps: No, I am asking if there is
any objection to tabling the report which Sir Campbell Stuart made to the Dominion government as to his ideas on this subject.
Imperial Cable Merger


Peter John Veniot: The only report we have
that I know of is the report of this commission which has been laid on the table, and of which I believe the hon. gentleman has a copy. We certainly did not take objection to any of the recommendations made in that report.


Abraham Albert Heaps: But did not Sir Campbell
Stuart make any recommendations to the government? Or did he just simply sign the report and submit it to the government? I think it is customary in a case of this character where so much is involved that the gentleman representing the Dominion government should make a separate report to his government as to what his attitude was on the question.


Peter John Veniot: No, there is nothing that
I have other than what was contained in the correspondence laid on the table. There is some correspondence in connection with the one matter of the merger, which the home government will not allow us to make public j-et, nor will the other contracting parties. Apart from that, I have laid everything on the table.


Abraham Albert Heaps: Has the minister available
for the house a statement showing the receipts and expenditures of the Pacific cable board including the receipts and expenditures for the last two years?


Peter John Veniot: Yes, I think we have.


Abraham Albert Heaps: Would the minister give it
to the house?


Peter John Veniot: I have not got it with me. I did not think the question would arise, otherwise I would have had it on hand. Certainly I think the report given with the details it contains, which have been submitted to the house, would be sufficient in that respect. If the hon. gentleman is determined to delay the passage of the bill by his insistent demand, I will endeavour to see what I can do to obtain the information.


Abraham Albert Heaps: I think it is only fair. There is no particular hurry for this bill.


Peter John Veniot: There is an absolute rush.


Abraham Albert Heaps: That is rather surprising,
Mr. Chairman.	A couple of weeks ago we
had no idea this bill was to be introduced. Members of the house were not even to be consulted in the* matter. To-day we are asked to pass a bill regarding which the Postmaster General himself has not the particulars. I ask for the information because there has been a difference of opinion between the Minister of Justice and myself regarding certain

financial matters pertaining to the Pacific cable board. The minister stated that the last year or so the cable board was losing money.


Ernest Lapointe: Yes.


Abraham Albert Heaps: 
Ernest Lapointe: 
Alan Webster Neill: Is there control of rates?


Ernest Lapointe: Rates are controlled
through an advisory committee on which Canada is being represented. More than that, on the board of directors of the merger there will be two representatives to be selected by the Imperial government. In short, we have everything without paying anything, and we are getting back $700,000 of the $900,000 which we paid during the period of deficits. And the other governments of the empire have agreed to that; they have passed legislation to that effect. We are interested only to a certain extent We were interested in the payment of deficits in this proportion: Canada 5, England 5, Australia 6 and New Zealand 2; 5/18 was our share. All others agreed to this scheme. We are going to enjoy every benefit that may come to us because of cable and wireless facilities and we do not pay anything. Why should we object to the scheme?


Abraham Albert Heaps: I wish I could be as enthusiastic about the proposal as the Minister of Justice is. The control which the government have in this whole matter is more apparent than real. As a matter of fact, the two representatives who, the minister says, are to be nominated by the British government, may sit only with the consent of the new company that is being formed, and if these two representatives whom the British government may appoint do not meet with the approval of the
new company they will have no right to sit on the board. Moreover, what control can two representatives exercise on a board of this kind comprising thirteen, especially when the two must be nominated subject to the approval of that board? I say, therefore, that the control is not very real.
As regards -rates, there is little control. According to the statements that have been made there is some arrangement whereby rates are not to be increased for a certain time, but there is nothing about reducing the rates; not at all. Personally I cannot see very much in the argument of the minister. It is true that there were deficits for a number of years until 1916. But just at the -moment when they are showing a surplus it is decided to sell out. When all the pioneer work has been done, when the years of struggle have been passed which have been spent in making the Pacific cable board a success, then they sell out.
There is another point which the minister never touched, and that is that the government themselves issued a license to a private company-I do not know just what it is called-to operate a beam system between this country and Australia in competition with our own cable system. If there is to be a loss, as the minister has pointed out-if as he says a loss on the cable system is inevitable-is there any reason why this government could not own and operate a beam wireless between this country and Australia? What is to prevent it? Nothing, except the question of policy. The beam wireless, I would point out, is a huge success from every point of view. It can transmit messages at two-thirds of the rates charged by the cable companies, and at the same time it makes for greater efficiency; furthermore, it shows a large surplus over operation expenses. If this is the case, was there any reason why in 1926 a license should have been issued or permission given by the government to a private concern to operate a beam wireless between this country and Australia?


Ernest Lapointe: At that time the beam wireless was in operation between England and Australia quite independently of any license given the Canadian Marconi.


Abraham Albert Heaps: Yes, and operated by the
British Post Office.


Ernest Lapointe: That is where the profits went.


Abraham Albert Heaps: They got the profits and not the private company; and now it is proposed to hand the enterprise and profits over to a private corporation.
Imperial Cable Merger


Ernest Lapointe: There was no private
company operating between England and Australia, at least not with regard to the beam wireless.


Abraham Albert Heaps: There was a private company operating the cables, although a large amount of the stock was owned by the Australian government. The beam system, of course, was operated by the British Post Office Department; they were getting the profits and the private companies were losing money, so the companies said that unless some arrangement was made, they would be forced out of business, and they threatened the British government that they might have to sell out to American interests. That threat worked with the British government and apparently it has worked with the government here as well.
My friend the Minister of Justice says the system is entirely under British control, but I would venture to assert that this cable merger is at least one-third under foreign control at present. I dlo not think there can be any dispute as to that in view of the interlocking directorates which I discussed this afternoon. There are people of foreign extraction-whether or not they are British subjects I do not know-connected with this cable merger; American interests are interlocked with it and consequently I do not believe the idea that it is entirely under British control is entirely in accordance with the facts.


Ernest Lapointe: That is one of the conditions of the whole transaction, that British control shall be guaranteed.


Abraham Albert Heaps: Control may only mean 51
per cent of the total stock, a majority control rather than an absolute control.


Ernest Lapointe: More than that, there is a provision that in a time of emergency the government will be able to take over the whole system.


Abraham Albert Heaps: Does not the minister think
that in view of what is involved in this question and in view of the importance of these communications in time of emergency, we should have had all this information before us in order at least to form an intelligent opinion? I may be wrong in some of the facts I stated but surely we oan expect nothing else when no information is presented to the house.


Alan Webster Neill: I have studied this question
to quite an extent, and as far as I know the statement made by the Minister of Justice is substantially correct. We may be assured that the British government will take care to ensure British control of this system; we may

leave that to the British government, and I certainly understood that to be the arrangement. The fatal mistake was made when this Pacific cable board, under the direction of some gentleman in England quite unadapted to the position, to put it mildly, embarked on the project of duplicating the cable against the firm opposition of the Canadian government and of the then Postmaster General, Hon. Charles Murphy. Had his views prevailed at that time there is no doubt that we would not be in this position at present. At the very time when money was becoming available for distribution to the shareholders, so to speak, or the different portions of the British Empire, the board embarked upon this duplication of the cable in spite of the fact impressed upon them by the Canadian government that the beam system was just coming into operation, and certainly should have been tried out first. The result is that we have this white elephant on our hands, and I think the arrangement made by the different governments concerned is a good arrangement. The hon. member for North Winnipeg says there was a profit last year. That is so, but it was a diminishing profit; the full effect of the competition of beam wireless has not been felt as yet.
Then there is another element which would affect the situation further in future with regard to the competition of beam wireless. At present in the transmission of messages by beam wireless there is a condition, called fading; at certain periods of the day which cannot be foreseen reception fades out entirely. The beam wireless people accept messages for Australia at the rate which would prevail if all the traffic were handled by the beam system; when this fading commences, in order to keep up their record for rapid delivery they turn over their business to the cable board at the full cable rate for the period of the fading. As a result the cable board makes a profit and the beam wireless company loses heavily on that particular business, because they must pay the full cable rate although they only receive the reduced wireless rate on the whole business. There is no question but that with the advance of science it will be only a short time before this fading will be overcome, and when that is accomplished the position of the cable board financially would be very poor indeed. So, if the Canadian government comes out of the business financially as well as the Minister of Justice says will be the case, with the protection of rates guaranteed by the British government, I think the best we can do is to accept the situation and the bill as it is presented here.

Western Postal Employees
There are features about the whole proceeding which I know are not as satisfactory as they should be; there have been suggestions that some of the competing companies had too much to do with the negotiations, but at any rate this whole business was arranged with the consent of the British government and the other dominions, who presumably knew what they were doing, so I think our best plan is to accept the situation and let the bill go through.


Abraham Albert Heaps: I asked for some information from the Postmaster General in reference to the financial standing of the Pacific cable board, and I wonder if he has that information available as yet?


Peter John Veniot: I am told that quite a bit
of work is necessary in order to secure this information and that it will take some time to complete. Would the hon. gentleman be satisfied to allow this bill to go through on my undertaking to produce the information later? It will take more than a day to obtain what he desires, because we will have to go over all the traffic accounts and everything submitted to the department, and that will mean a good deal of work.


Abraham Albert Heaps: I do not wish to hold up
the bill but I do think we should have had all this information some time ago in order to allow us to discuss this question more intelligently. However, perhaps the Postmaster General can tell me something about the contract entered into between the government and the company operating the beam system between Canada and Australia?


Peter John Veniot: That information will have to come from the Department of Marine and Fisheries, as far as I know.


Abraham Albert Heaps: Was a license issued by the
Department of Marine and Fisheries?


Peter John Veniot: I believe that is the only department with authority to issue such licenses, but I do not know whether or not such a license was issued.
Section as amended agreed to.
Section 2 agreed to.
Bill as amended reported.
Amendments read the first and second times and concurred in.
Mr. VENIOT moved the third reading of the bill.


William Lyon Mackenzie King: I did not wish to interrupt the discussion when the bill was in committee, but I deem it advisable to place on 78594-158
record the reason why our government has been anxious to proceed with the measure and not occasion delay through waiting to bring down some of the further information which has been requested. As my hon. friend from North Winnipeg (Mr. Heaps) knows, the sale of the Pacific cable is a matter which concerns the British government, the Australian government, the New Zealand government and the Canadian government; all these governments met together through their representatives and concluded the arrangement which is now before this house. The British government naturally was anxious to conclude this transaction before its present term of office was up, and the reason we have been handicapped in the matter of securing much of the data is because it is only within the last day or two that the business has been finally concluded. The parliament in Great Britain has been dissolved and it is unknown just what government may be in office after the next general election. The present administration is anxious that this transaction should be completed before that particular unknown period is reached. If we were to delay our consent to the agreement, we might be assuming the responsibility of upsetting a transaction which three other governments have already approved of and assented to, and which we believe to be in the interest of Canada. There would be, too, the possibility of returning to the position we were in a year or two ago when instead of assets to the government's credit we were confronted with increasing liabilities.
Motion agreed to on division, bill read the third time and passed.



WESTERN POSTAL EMPLOYEES


[Stage Direction]
The house resumed from May 6 consideration in committee of the following proposed resolution-Mr. Veniot-Mr. Johnston in the chair.
Resolved, that it is expedient to provide for the readjustment of the salaries of certain postal employees in western Canada who were dismissed in 1919 and subsequently re-employed, to give them the benefit of salary they would have received had they re-entered the service in the class equivalent to the one they were in when dismissed, and of subsequent salary revisions, and to make provision whereby certain former employees not now in the said service shall be eligible for reappointment as vacancies occur.
Peter John Veniot: When this resolution was before the committee certain interpretations were placed upon it, and those interpretations,

Civil Service Act

if correct, did not meet with the views I had expressed to the house in connection with this matter. Since that time the matter has received considerable attention and I propose to move the following amendment:
That the proposed resolution be amended by striking out all the words after "them" in the third line thereof, and substituting the following:
"payment as from the date of their reemployment for services actually performed at the rates of remuneration paid to other employees for similar services."
The amendment would then read:
Resolved that it is expedient to provide for the readjustment of the salaries of certain postal employees in western Canada who were dismissed in 1919 and subsequently reemployed to give them payment as from the date of their reemployment for services actually performed at the rates of remuneration paid to other employees for similar services.
If the legislation proposed by this resolution is enacted it is our purpose to work out a system in order to determine what would be coming to each employee who had gone out on strike and then returned. It is my intention that the Civil Service Commission be requested to appoint a man to work in conjunction with an official of the Post Office department, perhaps the Assistant Deputy Postmaster General, to arrive at the amounts, if any, which would be due to tihe different persons whose names apear on the list of ninety-six submitted to the house.


[Stage Direction]
Amendment agreed to.
Resolution as amended agreed to.
Resolution reported, read the second time and concurred in. Mr. Veniot thereupon moved for leave to introduce Bill No. 252, respecting certain employees of the postal or railway mail service of Canada.
Motion agreed to and bill read the first time.


[Stage Direction]
Hon. FERNAND RINFRET (Secretary of State) moved the second reading of and concurrence in amendments made by the senate to Bill No. 7, to amend the Civil Service Act (Private Secretaries).
Henry Herbert Stevens: Explain.


Louis Édouard Fernand Rinfret: The amendments proposed by the senate are purely technical. Section 60, subsection 1 of the act reads as follows:
Any person may be appointed by a minister of the crown or other member of the government to be his private secretary,

In the amendment submitted at the beginning of the session, which was passed by the house, the following words appeared, " and in the event of the minister" without stating " or other member of the government," and the amendment proposed by the senate makes subsection 2 of the section agree with subsection 1.
Mr. II. E. SPENCER (Battle River): This bill was called to my attention by certain of the civil servants of Ottawa. Under the Civil Service Act an employee expects promotion from year to year, and it seems to me that if private secretaries are taken into the service when the ministers leave and employed as chief clerks they would be preventing the promotion of those under them. We should have some information from the minister as to what hardship is likely to be imposed upon those already in the service.


Louis Édouard Fernand Rinfret: The house has already
approved of the principle of this bill, and I think on a previous occasion I made an observation on the very point the hon. member now raises. If a minister takes from the service one who is to be employed as his secretary, and that person remains as his secretary for three or four years, in the meanwhile the work of the department must be done and naturally the positions will be filled. I have explained before that it does not matter very much to the civil service whether you employ a man already in the service or one from outside. If this bill carries, it means only that when a minister retires his secretary becomes a member of the civil service. If the minister had taken a person from the service instead of from outside, that person would go back into the service just the same. It will be for the commission and the department, of course, to adjust the situation, but it is expected that this will not occur very frequently.


Henry Herbert Stevens: Very few cases.


Louis Édouard Fernand Rinfret: It will apply to only a
few cases. I think the house was unanimous in approving the bill, and I desire to repeat that the amendment made by the senate does not add a single individual to the scope of the bill, but merely provides for a clearer wording of it.


Mr. SPENCER:: Has there been any opposition to this bill from the organized civil service?


Louis Édouard Fernand Rinfret: None has come to my
notice.
Motion agreed to; amendments read the second time and concurred in.
C.N.R.-Refunding Obligations



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved that the house go into committee to consider the following proposed resolution:
Resolved, that it is expedient to bring in a measure respecting the Canadian National Railways to provide for the refunding of certain maturing financial obligations, and to issue substituted securities therefor guaranteed by the Dominion as to principal and interest, but not exceeding $18,000,000, the aggregate face value of the original securities.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
Henry Herbert Stevens: I want to make it perfectly clear that I am not rising to voice any objections to providing ample finances for the Canadian National Railways. The resolution however, affords an opportunity of my presenting to the committee some facts which I think the committee ought to have in mind in dealing with this and other similar resolutions. It will be noted that another resolution on the order paper provides for $50,000,000 for Montreal terminals, and there are perhaps half a dozen or more other bills providing for the purchase of certain railway lines. We also have before us the estimates of the railway department, calling for a capital expenditure of $53,000,000 and so on. I want simply to bring to the attention of the committee and of the house the commitments of the next year or thereabouts in connection with this great undertaking.
Before addressing myself to that technical phase of my remarks, may I observe that we have recently, in the special committee on national railways and shipping, given considerable study to the position of the national railways and listneed to mo* elaborate reports from the president and his officers-and I may interpolate that the president and his staff undoubtedly came before that committee exceedingly well equipped to give to the committee the fullest information. But the study of this information, the consideration of the various phases of the undertaking, impressed most of us, I think, with the gigantic character of it. Perhaps we are prone to pass over a little too lightly many of the commitments that come before the house. It might be advisable just to call attention to the fact that the Canadian National Railways, as reorganized and brought into their present combined or composite condition, constitute a system that is larger than the Canadian Pacific system as regards mileage. It is a tremendous undertaking. As the net revenues 78594-1581
increase, we naturally congratulate ourselves. During the last several years there has been a tendency on both sides of the house-I am speaking particularly for this side-to give to the government, and to the minister who asks, on behalf of the railway, for appropriations, a pretty generous response. I note, for instance, that the minister will come before parliament, present a very heavy item and indicate that this has had the consideration of the management, who recommend it. These recommendations have been received with favour and have been given every consideration, and I think the minister would be one of the first to state that we have given every reasonable consideration to his .presentations of that character. But as they come sometimes in this form of individual items, we are prone to forget the magnitude not only of the undertaking in its physical state but of the many obligations that we are incurring from time to time. I wish to give to the committee-and what I shall say now will apply as well to resolution No. 32 for the $50,000,000 for the Montreal terminals-a picture of some of the country's commitments to the railway for the immediate future.
There is a carry-over from last year of $40,000,000 of capital expenditure which was provided for by the Canadian National Railways by borrowing from the banks, I think last October, for a period of six months, and this was renewed on April 15 for a further period of six months. To provide for the capital expenditures for 1929 a further sum of $100,000,000 is required. I am just giving the general outline of the figures.


Mr. DUNNING:: Including refunding, of course.


Henry Herbert Stevens: Not in the $100,000,000. I will give the items of that in a -moment. This, together with the Canadian Government Merchant Marine and the W-est Indies service, another $2,000,000, makes a total of about $145,000,000. In order that I may not be thought to be giving these figures recklessly, let me quote from the evidence of Sir Henry Thornton before the special committee. I am reading from page 117 of that committee's records:
Sir Henry Thornton: I can tell you what our total requirements are, item by item.	.
Hon. Mr. Stevens: Then, let us have them.
Sir Henry Thornton: The Edmonton, Dunve-gan and British Columbia Railway, $2,500,000; Quebec, Montreal and Southern, $6,000,000; Inverness Railway and Coal Company, $375,000; Quebec, Oriental and Atlantic, Quebec and Western Railway, $3,500,000; The Kent Northern Railway, $60,000; 1927-1930 branch line program, $1,500,000; new branch lines now be-

C.N.R.-Refunding Obligations
fore parliament, approximately, $1,500,000; 1929 budget, $53,750,000; Manitoba Northern Railway, $7,000,000; loan account, Central Vermont bonds, $8,609,000; temporary borrowings from bank, $40,000,000; new equipment, $18,000,000; all of which make a total of $142,794,000.
There is included in the $53,000,000 certain requirements which I shall not analyse at the moment. To the figures already given there must be added approximately 11,000,000 for the Canadian Government Merchant Marine and approximately $1,000,000 for the West Indies service, or $2,000,000, bringing the total to $145,000,000, which will have to be provided for this year by some form of financing.
But that is not the whole story. There is accruing due by June of next year, within about a year from now-we must bear in mind that approximately half of this year has now passed, and that the railway operates on the calendar year, not the fiscal year -the following securities:
4J per cent 5 year gold bonds,
Canadian National, February 15,
1930	 $18,000,000
4 per cent consolidated debenture bonds, Canadian Northern, June 30, 1930	(Manitoba guaranteed) 10,785,000
4 per cent Ontario division bonds,
Canadian Northern, June 30,
1930	 5,700,000
4J per cent Ontario division bonds,
Canadian Northern, June 30,
1930	 61,000
4 per cent first mortgage debenture stock. Canadian Northern, June
30, 1930	 2,860,000
4i per cent Prince Albert branch bonds, Canadian Northern, unguaranteed,	June	30, 1930	 300.000

There must- be added to that a further sum, namely, the $10,000,000 estimated as being required in connection with the $50,000,000 vote for the Montreal terminals. That $10,000,000 may not be required for. the balance of this year, but within one year at least it may reasonably be estimated as required. That, together with the $142,000,000 previously given, brings the figures up to the enormous total of $192,000,000.
But by June next one-half of the railway year will have expired, and provision will have to be made in the early part of next session, as provision has already been made this session, for the current year's capital expenditures. Estimated on the basis of the railway expenditures for the past few years, that will amount to another $35,000,000, which will have to be authorized by parliament like the sum we have in the estimates to-day. That would bring the total up to $227,000,000

which we might properly say the Canadian National railways must raise or finance for the year from now until June, 1930. That is an enormous sum of money, Mr. Chairman. These funds will be raised by guaranteed bonds; that is, the railway will issue its securities which will be guaranteed by the government. It is true that part of this sum may be raised in the way this $40,000,000 is being carried at the moment, by borrowing from the banks, but that is only temporary financing. Sir Henry Thornton indicated' that it was his intention to take care of that $40,000,000 temporarily borrowed from the banks as early as could reasonably be done. So we may say that the Canadian National railways must go into the money markets during the next twelve months for the enormous sum of $227,000,000. They will do that, of course, with the assistance of the Minister of Finance; * that is, the Minister of Finance, acting for the government, will guarantee the bonds of the railway.
But we find that the Minister of Finance has also some obligations maturing. I checked these figures up with the Finance department this morning and I find that during this year there is accruing due in August next a 5\ per cent bond loan of $60,000,000; in February next, 44 per cent securities amounting to $20,000,000, and in the latter part of next year, 4 per cent bonds, three-year treasury notes, amounting to $45,000,000. Part of that $45,000,000 comes due beyond June, 1930, but it will have to be provided for. There is an additional $125,000,000 which must be raised. A substantial portion of this amount the Minister of Finance in his budget speech indicated he expected to retire out of consolidated fund surplus. We have then facing the financial experts of the. country the raising of these two enormous figures, $227,000,000 for railway purposes, and $125,000,000 of the country's obligations, making a total of $352,000,000. I would just in passing indicate that this $352,000,000 amounts to more than the whole national debt of Canada in the pre-war period.
Where is this money coming from? We look to the New York market for the raising of this money; there is no doubt of that. I understand that some indication has been given that possibly we might look to London for part of this financing. I am bringing this to the attention of the committee and of parliament not for the purpose of reflecting in any way on the Canadian National Railways, but with this idea: When the railway committee are studying, as they will study several of these resolutions and bills-not thL one but some of the others-which will obli-

C.N.R.-Rejunding Obligations
gate this country to the expenditure of large sums of money for the purchase of small railways in different sections of the country, and when they come to examine the Montreal terminals bill, which will require an expenditure of $50,000,000, I suggest that they consider at that time the total obligations of the national railways for the next twelve months period.
May I be permitted, not that I want to digress and discuss another resolution, but merely to make this picture complete, to refer to the Montreal terminals? ' I am not referring to that project with the suggestion that the work in Montreal should not be proceeded with, because I want to postulate this at once' Montreal undoubtedly must have additional terminal facilities at the earliest possible moment, because the present terminals in Montreal are a disgrace to the railways. Let us bear in mind that the Canadian Northern terminals in Montreal represent a capital obligation-for which this country has assumed full responsibility, and will undoubtedly pay -of SIS,000,000; I refer to the Canadian Northern mountain tunnel terminal, which will become part of the main terminal. It is proposed this year to authorize a further expenditure for the Montreal terminals of $50,000,000. I think any thoughtful member will agree with me when I say that when you enter upon a scheme estimated to cost, say, $50,000,000, you may reasonably expect that ultimately the project will cost much more than that sum. I think that all who have discussed it agree with that statement. So I suggest that with the $18,000,000 in the tunnel terminal, with the proposed $50,000,000, which would make $68,000,000, we may anticipate the cost of the Montreal terminals to reach the enormous sum of approximately $80,000,000.


Charles Avery Dunning: I am sorry to interrupt
my hon. friend. I think he would be well within the mark in making that statement, if he included the cost of the present old Grand Trunk facilities there and the Moreau street property of the old Canadian Northern, which of course were not included in the tunnel scheme. Our total commitment, including the new $50,000,000, would probably be at least $80,000,000.


Henry Herbert Stevens: So we can say between
$80,000,000 and $100,000,000.


Charles Avery Dunning: Including what ha*
already been invested.


Henry Herbert Stevens: Including what is already
there.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: I am not saying that the most favourable consideration should not be given to the problem, but I do say if we are to authorize such an enormous expenditure, then the committee that takes hold of this legislation when it leaves the house should give to it the most careful study and be perfectly sure that the most economical form of development has been adopted. I pause just to say this to the minister and to pass it on to the committee for what it may be worth; for it is a different committee from that which considers Canadian National Railway matters-it is the regular standing committee on railways, canals and telegraph lines. In passing I suggest this might have gone to the other committee.	*


Charles Avery Dunning: I would have preferred
that course, but it was not possible.


Henry Herbert Stevens: The other committee has
ill the information before it. That is why I am anxious to give expression to these view3 this afternoon. I do not wish in any way to disparage the standing or reputation of Mr. Palmer. I understand the terminals which have been suggested have been planned by the railway engineers, but that their plans have been modified or changed somewhat by Mr. Palmer and now bear his imprimatur as an expert. Mr. Palmer is, as far as I know, an estuarial engineer, that is, an engineer who has made a specialty of that branch of engineering dealing with difficult streams and currents and so forth-a very, very important branch of engineering-but he is not necessarily a city passenger or freight terminal engineer which is a vastly different thing.


Charles Avery Dunning: He is.


Henry Herbert Stevens: The minister indicates
that he is. I cannot put my opinion in opposition to that of the minister.


Charles Avery Dunning: If my hon. friend will
permit me, it is not a matter of the opinion of either of us, but a matter of fact. I shall be glad to give my hon. friend information in respect to the very large railway schemes on which Mr. Palmer has been engaged. I will discuss that on the Montreal terminals resolution.


Henry Herbert Stevens: The reason I am reciting it now is to get the whole of the picture together. But I submit very great care should be taken-


Charles Avery Dunning: Hear, hear.


Henry Herbert Stevens: -not necessarily to accept Mr. Palmer's dictum as the final word in this matter. We are going to authorize the ex-

C.N.R.-Refunding Obligations
penditure of a huge sum for these terminals, in addition to these enormous obligations of $227,000,000 to which I have referred. It should be further borne in mind when we are considering this matter that a terminal of this character produces very little revenue in itself. Undoubtedly it contributes to facilitating the despatch of business, but the passenger end of it unquestionably will be a total loss, or at least a charge against the freight revenues of the railway system, because the passenger revenue I do not think at the present time any more than about breaks even. So the freight revenues of the Canadian National Railways will have to bear the fixed charges of these enormously expensive terminals. Therefore no plan should be adopted without the most careful scrutiny and study.


Charles Avery Dunning: Hear, hear.


Henry Herbert Stevens: There does arise in my
mind a question whether this year we should actually authorize and proceed with the expenditure of money on that terminal, or whether it should not be studied for a further period of a year. The minister will be able to state-if he will just give ear to this as I pass along-whether I am right or wrong, but my information is that the railway traffic engineers and the railway construction engineers made certain plans, and that these plans have been modified or changed by Mr. Palmer. I will not say against their wishes, but leave it at that-'they have been changed by him. I would be inclined to trust pretty well the opinion of Canadian engineers who have lived and grown up with Canadian railway traffic rather than that of an outside expert, unless that expert can be shown to have had wider experience in traffic similar to that which would occur in a Canadian terminal.


Charles Avery Dunning: I may dispose of that if my hon. friend will permit me. I share with him in appreciation of the qualities of the engineering assistance which the Canadian National system has been able to assemble, and I can say on behalf of those engineers that all of the suggestions which Mr. Palmer made are not only accepted by them, but are enthusiastically supported. Mr. Palmer testifies to the ability which has been displayed in the drafting of these plans. In fact he said to Sir Henry Thornton and myself: "Naturally as a matter of vanity I should like to have evolved a plan which would be described as the 'Palmer plan' but after carefully going into it I am in a position to say that your engineers have taken into
JMr. Stevens.]
account every possible factor. I have only this and that suggestion to make with respect to the detailed working out of the major plan as affecting the Canadian National."


Henry Herbert Stevens: I am glad to hear that.
But let me again emphasize the necessity for great care, because once a plan is adopted, property acquired, and progress in construction made, it will be exceedingly costly and difficult to change or modify such a plan.


Charles Avery Dunning: I agree.


Henry Herbert Stevens: I have already intimated
that a terminal of this character is not usually a revenue producing unit; almost invariably it is a load upon the freight revenues of the system. But in a city such as Montreal I believe it would be possible to adopt a plan in the development of which revenues might be produced in the improving of properties and the establishing of business contiguous to the terminal.


Charles Avery Dunning: Hear, hear.


Henry Herbert Stevens: I submit again that the
committee of parliament having this in hand should take great care that a survey of that feature be exhausted before any plan is finally adopted.


Charles Avery Dunning: Hear, hear.


Henry Herbert Stevens: It is not my intention
to delay the minister or to offer criticism of his predecessor, but merely to present these enormous commitments-which as I have indicated, amount for the railway in the next twelve months to the huge sum of $227,000,-000-and to ask parliament, and particularly the committee which from now on will have these various matters before them, to scrutinize with the utmost care the proposals that are made and to see that nothing is passed or adopted that is in any sense unnecessary or may well be put off. Furthermore, parliament and the country should be impressed with the magnitude of this undertaking, which calls for the expenditure of this huge sum, a portion of which of course is for renewals. I had intended to say that, in respect to some of these renewals, securities which at present are unguaranteed will become Canadian government guaranteed securities. For instance, the Prince Albert one; and I am not sure whether this $18,000,000 is at present guaranteed.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: It is guaranteed. And
then we have the Manitoba one. It is not guaranteed by the Dominion but it is guaranteed by the Manitoba government, and it

C.N.R.-Refunding Obligations
amounts to $10,000,000. I presume the Manitoba government's guarantee will now be removed and it will become a direct obligation of this country. The point in regard to that is that all these renewals will now become actual guranteed obligations of this country for which we as a parliament are taking full responsibility.
Had time permitted I might have said a few words on the necessity of hastening the remodelling of the financial structure of the railway system. This, I understand from the minister, oannot be done at present, for certain very good reasons which he gave to the committee. But undoubtedly there exists a very urgent necessity for an early and complete remodelling of this financial structure, so that if possible we can place this great system on a basis where it will take care of itself, at least to a large degree. I wish also to say that in these figures which I have quoted no note is taken of the interest of the public, which amounts to $43,000,000 annually and which at present is taken care of out of surplus operating revenues of the railway; nor is any note taken of interest due to the Dominion government for advances made by it to the railway system. These two items have not been included in my remarks.
I present these views so that we may keep them before us when considering this very important matter of the financing of the national railways.


Charles Avery Dunning: I appreciate very much
the constructive tenor of the remarks of my hon, friend from Vancouver Centre (Mr. Stevens) with respect to what is the country's major business enterprise. I shall not offer any observations at this time with respect to the Montreal terminal matter; I propose to go on with it immediately after this resolution is disposed of so that my hon. friend's remarks in that connection may be in the minds of hon. members when the question is before the house.
With respect to the general situation as outlined by my hon. friend, I can find no fault with the figures he presented as having to do with the financial requirements of the National system; I believe, listening to them, that they are approximately correct. He calls attention very properly to the magnitude of the figures and to the responsibility which rests upon the management, upon the minister and upon parliament in connection with an undertaking so huge, involving as it does problems of financing very large in character. Let me say, however, that we might easily go to the opposite extreme in our view of this great institution. These capital commitments would be just as necessary and would be just as large if not larger were these railways to-day owned by the three institutions which formerly owned them. They would be split up, it is true, among the three corporations or institutions; but the requirements would be there, and I am inclined to think that if the management were divided into three, as formerly, in all probability the aggregate financial requirements would be greater than they are to-day when we have the benefits of coordination in management, in operation and in the financing of the undertaking.
My hon. friend is quite right in pointing out that these obligations are not merely corporate obligations as they were in the days of private ownership, but are now really obligations of the Dominion of Canada, by way of direct guarantee, as he indicated; or even if not guaranteed they are in fact obligations of the Dominion; because no one can conceive of the Dominion retaining ownership of the property while repudiating the bonded indebtedness attaching to the property, I appreciate to the full my hon. friend's suggestion that the committees of parliament charged with these matters should go thoroughly, sympathetically and constructively into all proposals made. My experience with the management, going back now as minister, to early in 1926, convinces me that we have in the present management and official personnel of the Canadian National Railways, men who really desire to make this undertaking succeed as an undertaking, and without regard to the fact that they are able to come to parliament for money. When any proposal is put before me requiring parliamentary sanction the railway officers are always anxious to demonstrate to me, and through me to parliament, the intrinsic economic merit of that proposal. With _ respect to new extensions and things of that sort, it is always the effort of the railway officials to demonstrate that the proposal will earn more than sufficient to pay interest on its cost -more in other words than 5 per cent per annum, and make some provision for capital in addition.
Necessarily in a new country our calculations must admit of the presence of some uncertainties. We are developing new country in many directions. Up to now experience has indicated that this development has been wise from an economic point of view. But necessarily, in commencing it, there must be a willingness to take a certain degree of chance; there is always a certain degree of economic chance in entering upon the development of new country. I am happy to be able to say that so far as one can accurately

C.AT.R.-Rejunding Obligations
analyse the results of proposals for extensions from time to time wh-ch have 'been made by the Canadian Nartiomal officers, their judgment has been vindicated in the main by results; in fact in most oases, the results of extensions and developments have gone beyond the initial expectation as presented to (parliament. That, 1 think, is fairly wed borne out by the increased traffic returns of the system which are apparent practically all along the line, from coast to coast.


Mr. MATTHEWS:: Is that basis used in
the purchase of new lines?


Charles Avery Dunning: In regard to the purchase of new lines, as I shall explain when I come to the individual lines, we are unfortunately linked to the past in many cases; and that linking to the past-the obligations arising out of the past-does occasionally involve that the same standards which would be applied to-day by railway officers in recommending new development cannot be applied to all of the proposals for the acquisition of properties carrying obligations reaching back into the .past. I shall be glad to go into them individually when we come to the items.
In the Canadian National system we have possibly the greatest agency under the control of parliament for the material development of the resources of this country. That system must be allowed to grow if this country is to grow, and I feel sure it is not in the mind of any member of this parliament that we should adopt a parsimonious attitude towards the Canadian National in connection with its bona fide extension to meet the growing needs of this country as it develops.
Unfortunately, as my hon. friend from Vancouver Centre mentioned, we have in _ prospect in various places, notably Montreal at the moment, terminal situations which must be dealt with in order that the railway may adequately function, and which run into large sums of money not in themselves productive of a large earning. A terminal scheme such as that of Montreal or Toronto does not bring large increases in revenue to the railway. It does involve in practically every case economies in operation for the railway, representing savings along that line, but I should be the last to pretend that any terminal scheme in a city the size of Montreal or Toronto can produce economies at all proportionate to the expenditure which is required in order to give to the public the service to which they are entitled. I am sure Sir Henry Thornton would confirm that view. However, the provision of adequate terminal facilities is inseparable from the operation of a great railway property, and I agree with my 
hon. friend to the fullest extent in his suggestions; in fact I will amplify them a little when we come to the Montreal resolution. As he has suggested the railway committee of the House of Commons should give the closest possible study to the proposals of the Canadian National railways in that regard.
I have a few words to say with respect to the resolution now before the committee, which has to do with the refunding of $18,000,000 of maturing bonds. The $18,000,000 of guaranteed securities in question fall due on February 15, 1930, but in view of the fact that it is uncertain whether a bill could be put through parliament next session in time to meet the situation we are asking for the necessary parliamentary authority now to renew the obligation.


George Reginald Geary: I would suggest to the minister that this is a matter we would like to consider at some length and as it is just six o'clock perhaps he -would not proceed with his remarks at the moment.


Charles Avery Dunning: I had not expected to
finish before six o'clock.


George Reginald Geary: Then perhaps the minister
might commence all over again when the committee resumes this evening.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Mr. G. H. PETTIT (Welland) moved the third reading of Bill No. 22, to incorporate Niagara Falls Memorial Bridge Company.
Hugh Guthrie: Mr. Speaker, there appears to be a slight mistake in the bill as printed, in that there is a difference between the preamble and the enacting Clause. The preamble sets out one location for the bridge while the enacting clause changes that entirely. I think they should be made to agree.


Hewitt Bostock: Unless it is by unanimous consent of the house, the only thing to-do would be to ask the house to refer the bill back to the committee of the whole with instructions to alter the preamble so as to make it agree with the amended enacting clause:


Hugh Guthrie: Very well.
Motion agreed to and bill read the third time and passed.
Procedure Respecting Divorce



THIRD READINGS

[Stage Direction]
Bill No. 94, for the relief of Edyth May Shields.-Mr. Young (Toronto Northeast).
Bill No. 98, for the relief of Marion Ruth Laidman.-Mr. Young (Toronto Northeast).
Bill No. 127, for the relief of Sophia Love. -Mr. Young (Toronto Northeast).
Bill No. 138, for the relief of Harry Freeman Switzer.-Mr. Young (Toronto Northeast) .

[Stage Direction]
Mr. N. M. YOUNG (Toronto Northeast) moved the third reading of Bill No. 95, for the relief of Mary Melvina Guerin.
Mr. HENRI BOURASSA (Label'le):: Mr. Speaker, this is one of the bills on which I gave notice of motion which appears in the votes and proceedings of yesterday. I move, seconded by the hon. member for Provencher (Mr. Beaubien):
That the said bill be not now read a third time, but be referred back to the select standing committee on miscellaneous private bills for further consideration.
I need not dwell at any length upon the reasons which I think justify the house in sending this bill. back to the committee for further consideration. This bill is for the dissolution of a marriage between two Roman Catholics who had married according to the rites of their church. As I pointed out last night-and I insist upon this point-I am not making this appeal to the house from the viewpoint of one church in particular, but I am basing my argument on the principle which I then enunciated. When the two parties concerned in legislation of this nature belong to one religious body, it is unfair to the children of those parties, who are unrepresented in the case, who have no one to place their position before parliament, that their future welfare should be prejudiced. Several divorce bills on previous occasions have been rejected by parliament for the very same reason. As I reminded the house last night, one such bill was rejected by the house not many years ago. Besides, this bill should not pass the house upon the evidence which is before us. The supposed guilt of one of the parties is evidenced by the other party, the petitioner, and the declaration of the petitioner is corroborated only by one other witness, a child of fifteen years of age. This was the daughter of the two parties in the case. She was brought before parliament for the purpose of proving the adultery of the father in order that the Qother might obtain a divorce. I claim that hat is unmoral' and anti-social to an extreme
degree. In any case involving a severe penalty to a man or a woman I do not think any court of law would base a verdict upon the testimony of a child placed in that cruel and unnatural position. That ground itself, it seems to me, should be sufficient for referring this bill to the committee, so that the facts supposed to have been proven in this case should be corroborated by some other witness.
The third ground is that there are four children involved in the case. Several hon. members have taken the position, and I think rightly so, that some pronouncement or some investigation should be made by the select standing committee as to the exact status of the law at present with regard to children. If it .has been found necessary or opportune to raise the point in a case involving one or two children, surely it is as pertinent when there are four children concerned. This is the only case into which I have looked so far in which such a number of children are involved. The reason which has been presented by the hon. member for Winnipeg North Centre and others with regard to children applies in principle to this case and, as a matter of fact, it applies a fortiori. It is for these reasons that I offer the amendment of which I gave notice and which I moved at the outset of my remarks.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I should like to say a word on the amendment. The other day when this matter came up I voted in favour of the bill passing simply because there are, it seems to me, two issues that are rather confused. One relates to the question of the religion of the people concerned, and it was sugegsted that since both the individuals were Roman Catholics, there ought to be some hesitation in granting a divorce. I understood that to be the argument of the hon. member for Labelle (Mr. Bourassa). I could not accept that position. I think we must take the stand in this house that we must deal with these questions on their merits and entirely disregard church affiliations; that if people come to us with petitions for divorce against the will of the church, it is not for us in any way to discipline them by refusing to grant a divorce on that ground.
I was, however, greatly impressed with the argument of the hon. member for Labelle when he spoke about the children. All along I have taken the ground that we ought not to grant these divorces leaving the children unprovided for. I would go so far as to say that I was impressed with the plea that for

Procedure Respecting Divorce
children to go to an environment entirely different from tihat in which they were brought up, involves a hardship. That is a matter which deserves very careful consideration. Unfortunately the two questions were interinvolved, and so the other night I had to vote for the passing of the 'bill. I have not, however, the slightest objection to the bill being held for further consideration; I would be in favour of having that done when there are children-whatever the religion of the people-because, it seems to me that in this a fundamental principle is involved. The reference back is merely for reconsideration in order, if possible, to secure the rights of the children. I shall be very glad to support the amendment.


Mr. A. L. BEAUBIEN (Provencher):: Just before the motion carries, as seconder of the amendment I should like to make a few observations. I think the hon. member for Labelle (Mr. Bourassa) has fully explained the position of the children in regard to their future in their community, both the parents being Roman Catholics, and I do not intend to deal with that phase of the matter. Leaving aside, if you wish, the question of religion, I think hon. members should consider the matter seriously and not allow a divorce to be granted on the testimony of a child fifteen years of age, a child of the parties concerned, who is brought before a committee of senators and whose testimony is the only evidence, outside of that of the interested party, on which a divorce is asked.


Hon. CHARLES MARCIL (Bonaventure):: Unfortunately, ninety-five per cent of the divorce cases that come before us are ex parte cases; they are uncontested, and we hear only one side of the story. Evidence is usually given first by the petitioner; then that is corroborated by the detective or police agent and, the facts alleged not being opposed, the divorce is granted. This case, as has been pointed out by two hon. gentlemen, is an exceptional one. Outside of the religious aspect, with which this house has nothing to do, there is the fact that four children are involved. These four children should receive some consideration at the hands of the committee, and if the bill is referred back the committee would hesitate before granting a divorce, especially on the evidence that was adduced in this case, namely, that of a child of fifteen years of age who was called upon to testify against her father. I do not think the sentiment of the house or of the Canadian people is in favour of granting a divorce on

such evidence. For that reason I am glad of the opportunity to support the amendment which has been presented by the hon. member for Labelle (Mr. Bourassa).


George Reginald Geary: May I ask the mover of the amendment a question? His motion is to refer the matter back to the private bills committee. What can that committee do? Where do we get by sending it back to the private bills committee?
Mr. BOURA8SA: Am I allowed to answer, Mr. Speaker?


Hewitt Bostock: By unanimous consent.


Joseph Henri Napoléon Bourassa: I have adopted this procedure because it seems to be the only one which can bring results. To refer the bill back to the committee of the whole house would simply mean that we would rehash the debate of last night, but I understand that the select standing committee could call for other witnesses; and one of the reasons why I ask that this bill be referred back is, as I have just explained, because I consider that the evidence adduced is not such as would be received in a court of law.


George Reginald Geary: What can be done with regard to the children by referring the matter back to the committee?


Joseph Henri Napoléon Bourassa: That applies to several
bills; but suppose the committee made a test case in connection with one of these bills where children are involved and called for carefully considered legal opinions from the Department of Justice and perhaps others on the question of whether or not parliament can do anything for the care of the children.


Mr. ADSHEAD:: We have such a case
before us now.


Joseph Henri Napoléon Bourassa: Yes, and there are others. There is the question of the children, there is the question of evidence, and there is besides the broad question of principle upon which I have touched in my previous remarks on the subject.


Mr. N. M. YOUNG (Toronto Northeast):: As the sponsor of this bill perhaps I should say a word or two. The evidence in support of this case has been understated. There is such a thing in law as res ipsa loquitur-the thing speaks for itself. This man had venereal disease, and no one would deny that that is a reason for divorce. As far as the children are concerned, whether this house has jurisdiction or not there is in the province where the petitioner resides jurisdiction to grant the custody of the children, and there are institutions to look after these' children if the

Procedure Respecting Divorce
parents are unable to dlo so. I do not think it becomes us to give any petitioner coming before this house more relief than is asked for. There is no relief asked for in this case so far as the children are concerned, and I am prepared to take the responsibility of saying that institutions in Ontario will provide sufficient protection for the children either at the behest of or in'spite of their parents.


George Reginald Geary: I wonder if the Minister
of Justice would be prepared to express to the house his view whether there is any jurisdiction in parliament to make an order in respect to the children.


Ernest Lapointe: No. I have already
stated in another case that I believe there is none. It is purely a provincial matter.


James Shaver Woodsworth: But divorce might be refused on account of the position of the children.


Ernest Lapointe: Of course parliament has the right to refuse the divorce for that or any other reason.



MINERVA ELLIOTT

[Stage Direction]
Mr. N. M. YOUNG (Toronto Northeast) moved the third reading of Bill No. 88, for the relief of Minerva Elliott.
Joseph Henri Napoléon Bourassa: Mr. Speaker, this is the second bill with respect to which I gave notice of motion. My object in asking for the reference of this bill to the committee is that the evidence be reconsidered. The three witnesses in the case are police agents in the city of Montreal hired by the petitioner or on her behalf. Yesterday I proved conclusively that the testimony of at least one of these witnesses is not acceptable. Here is a police agent living in the city of Montreal, who states, among other things, that he followed the accused party, who left his car in front of the Place Viger station "on Bleury street" -a street half a mile distant from the Place Viger. I pointed out last night that in any court of law where the two parties were represented, or where there was somebody acting in the public interest-the king's proctor in England-immediately the testimony of this witness would be rejected, because it is manifest that either he did not reflect for a moment on his statement or took it for

Procedure Respecting Divorce
granted that the five judges in the case-I mean the five members of the senate committee-not knowing anything about Montreal, would swallow anything. Here in the evidence is a statement that a car was parked in front of a station which as a matter of fact is situated about a quarter or half a mile distant from the street indicated as that on which the station is. That is one point. Then two other witnesses like himself shadowed the man; they followed him. There is not a tittle of evidence by any of the witnesses that they followed the man into any . room or saw through the door or the window, or saw in any way whatever into that room. The whole thing is based simply on presumption. My object in asking to have the bill referred to the committee is to find out whether in that committee there are some rules of evidence. If they have no rules in the committee of the house surely that committee should inquire from the committee of the senate whether that body is governed by some rules of evidence.
Looking through May's Parliamentary Practice, 12th edition, 1917-it is quite recent -I find that in the House of Lords in England there is the following standing order:
No petition for any bill of divorce shall be presented to this house unless an official copy of the proceedings taken or had in the court having jurisdiction over matrimonial causes at the .place of his domicile or residence, or in some other court having jurisdiction in that behalf, at the suit of the party desirous to present such petition, be delivered upon oath at the bar of this house at the same time.
I understood that the object of this rule is to have some kind of evidence taken in a judicial manner in order to enlighten the committee of the House of Lords. Here we have nothing of the kind.
I am informed by people who know that there are now both in Toronto and Montreal, but in Toronto especially-I do not say this in any disparaging sense but simply because most divorce cases come from that city or its surroundings-special agencies who make these cases. The most respectable detective agencies, private agencies, do not wish to have anything more to do with such cases; some of the agents of respectable agencies are not prepared to make cases with as much ease as others do. Now the granting of divorce is becoming the most important business of parliament; parliament is passing more divorce bills every session than all public and other private measures put together; and it seems to me that we have reached the point where we shall either slaughter public business in order, as has been frequently said, to do iustice to the parties concerned in these di-

vorce cases, or go on at an increasing rate granting divorces on evidence collected and presented to a- committee of the house, under apparently no rules such as obtain in ordinary tribunals, or at least without a sufficient study of the various points of law that may be raised. In these circumstances it is about time, especially in a case where it is obvious that the ordinary rules of evidence have not been observed, that we discovered whether or not we are guided by some definite procedure. In this case it is clear that the testimony of one witness at least is not admissible, and the whole evidence is such that no man could be convicted on the strength of it in any court of law.
Are we going to countenance this? Are we going to discharge our responsibility by merely saying that there is a committee which has taken the proper precaution? The committee has not taken that precaution, and it is precisely because I desire to have the committee reconsider the matter that I suggest that the case be referred back in order to find out whether or not the evidence can be corroborated by genuine witnesses. It is becoming important also to ascertain the standing of these detective agencies who are now making a trade of the manufacture of evidence in divorce cases. Just by way of illustration I may observe, in connection with another case which has now been disposed of, that one of the agents testified, when asked why he had not gone further in the gathering of evidence, that there was not sufficient money in it. He said there was not much money in the case and he was in a hurry. That agent was candid enough to admit that when they are not sufficiently well paid they content themselves with what flmsy evidence they can ge>t hold of, relying probably upon the complacency of parliament to overlook such discrepancies as there may be in the evidence. Are we going to encourage that sort of trade? Is it to be known that parliament is putting a premium on organizations of police such as every civilized country is stamping out and forbidding to operate?


Henry Elvins Spencer: To what police agencies is my hon. friend referring? Are they city police?


Joseph Henri Napoléon Bourassa: In the case of Bill No. 88 the whole evidence is made by three police agents of Montreal.


Henry Elvins Spencer: Private agents


Joseph Henri Napoléon Bourassa: Yes, all of them are private-private investigators, private detectives. If my hon. friend will look through

Procedure Respecting Divorce
some of the records he will see that there are very few policemen-in fact, I have not noticed any this year-of either a municipal or a provincial force giving evidence. They are hired agents, just like some secret agents who are hired to locate smugglers and who receive from the government a share of the fines collected. That may be excused on the ground of public policy in view of the sad necessity of collecting revenue. But is it allowable in civil life? In a so-called civilized country which boasts of having a system of justice and a police so far superior to the system of justice and 'the police in the country to the south of us, is it allowable that parliament should lend its authority to the carrying on of that sort of trade, which apparently is beyond the control of any public body, municipal, provincial or federal?
My object in asking that the bill be referred back to the committee is to have these questions looked into more carefully. I am sure the members of the committee will be glad to have their attention called to the anomaly; and members of the high court of justice on the other side will also be pleased no doubt to have occasion to put themselves right in the eyes of the people of this country. If they are politically irresponsible, I do not think they are without a sense of moral responsibility. I believe they realize their moral responsibility in this matter and would like to do the right thing. This action would enable them to find out the real status of these police agencies. It would also save them from being imposed upon in the future as they have been heretofore. The committee should call before them witnesses who would testify just as they would before an ordinary court of law. In court such testimony would be brought to the attention of the crown prosecutor and action would be taken for perjury. What has been done in this case, and what will be done? It is to secure that information that I have asked the house to refer this bill back to the committee.


Hewitt Bostock: Is the house ready for the question? Those in favour of the amendment will kindly say aye; those opposed will kindly say nay.
The members having been called in:


Hewitt Bostock: The hour for private bills being exhausted the house will now revert to consideration of the resolution concerning the Canadian National Railways.


Peter McGibbon: I would draw attention to the fact that the vote already has been called, and must be completed.


Hewitt Bostock: The question has not yet been put. Unless unanimous consent is given to continue the vote rule 15 must apply. I am quite ready to take the division, but it must be by unanimous consent.


Peter McGibbon: I raised the same question last night but Your Honour gave a different ruling.


Hewitt Bostock: That was a different question. If there is unanimous consent I am ready to proceed with the division.


Hewitt Bostock: The hour for private bills being exhausted, the house will revert to consideration of the resolution respecting the Canadian National Railways.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
The house resumed consideration in committee of the following proposed resolution -Mr. Dunning-Mr. Johnston in the chair.
Resolved, that it is expedient to bring in a measure respecting the Canadian National Railways to provide for the refunding of certain maturing financial obligations, and to issue substituted securities therefor guaranteed by the Dominion as to principal and interest, but not exceeding $18,000,000, the aggregate face value of the original securities.
Charles Avery Dunning: When the house rose at six o'clock I was explaining the need for the legislation which will be based upon this resolution. Canadian National Railway guaranteed bonds were issued in February of 1925, maturing February 15, 1930, and it is necessary to secure authority at this session of parliament for the refunding of these bonds in case it should not be possible to enact legislation and secure royal assent next session in time to take care of the refunding. I think the committee is aware of the fact that in the case of Canadian Northern debentures, or the debentures of any of the companies comprising the Canadian Northern system, a general authority exists for refunding, but the securities to be dealt with by this legislation are Canadian National securities issued since the consolidation and maturing, as I have stated, in February of next year.
The bill to be based upon this resolution will contain the usual provisions with respect to the issue of Canadian National securities. I believe that is all the information I have to give the committee at the present time.


Mr. CLARK:: Earlier in the day the minister was dealing with the capital expenditures of the Canadian National Railways for branch

lines, terminals and so on. We have another great railway corporation in this country, th1 Canadian Pacific Railway Company, which : also necessarily well equipped and whie.'i necessarily must make capital expenditures annually. It would be interesting to know whether or not the minister, or any of his officials, has examined the report of the Canadian Pacific Railway Company and made a comparison over a period of years of the capital expenditures of the two companies.


Charles Avery Dunning: I have no doubt that
such a study as suggested by the hon. member would be of interest, but it would only be of academic rather than of practical value. In the one case we have a putting together in 1923 of three systems which had been allowed- to run down during a long period of years. This condition had been brought about by necessities and by circumstances of which we are all aware. On the other hand we have an institution which has had a long continuous period of management efficient in character and prosperous in results, enabling it to keep its property up to a standard far above that of the three privately-owned corporations which were the original proprietors of what is now the Canadian National system. I do not think the upbuilding of the Canadian National system since Sir Henry Thornton took charge could be made comparable in any sense with the history of the Canadian Pacific Railway during the same period. I do not know that I can answer the hon. member any more intelligently than that.


John Arthur Clark: It may have been of academic value a few years ago, or for the first two or three years after the amalgamation of the units which now comprise the Canadian National system, but since that amalgamation an amount of capital has been expended greater than the estimated total cost of the transcontinental railway. It seems to me that the time has come when it should be comparable to the Canadian Pacific Railway, and such a comparison would be of tremendous value to those of us who are not experience1 in railway matters but who are responsible t the people for the capital expenditures which are now being made in connection with the Canadian National. If the minister has not done that already I suggest that it be done in future years, as I believe there will be an increasing demand for such a comparative statement.


Charles Avery Dunning: I shall be glad to produce the information, but in advance of producing it I would say that it is not exactly relevant to the matter now under discussion

C.N.R.-Refunding Obligations


John Arthur Clark: This matter was discussed
at some length this afternoon.


Charles Avery Dunning: X do not believe such a comparison would have a practical value. Let me give one illustration. The Canadian Pacific Railway Company has a free choice as to whether or not it will spend large sums of money on terminals in the city of Montreal. The Canadian National system has no choice in the matter; it is absolutely necessary that it spend large sums on terminal facilities in that city, the matter having been neglected in the past by the privately-owned companies now forming part of the system. The hon. member very properly said that for a period of years following Sir Henry Thornton's appointment it was necessary to spend large sums in order to bring the property up to its maximum earning capacity. I am sure there is no doubt in the mind of any member of the special committee that the period of years required gradually to bring the property up to the standard required for efficient and economical operation cannot yet be said to be over. If my memory serves me aright, some criticism was made at the sittings of the special committee during this session as to the delay in bringing the property up to the required standard. I do not think that was the general view of the committee, but individual members requested the management to move faster in that respect, particularly as related to branch lines.
I do not see any reason why the information requested by the hon. member for Vancouver-Burrard should not be brought down. As a matter of fact the information is available now. Each year the Canadian Pacific Railway Company publishes a statement showing the amounts which it proposes to spend on capital account, and these amounts are authorized in due course by the shareholders of the company. From the minutes of the special committee we know the amounts which it is proposed to spend on capital account for the Canadian National system. It is quite easy to make a comparison, but I do urge that such comparisons really lead to nothing but an academic result and do not offer any conclusion of practical value, because it is impossible to take into account relatively the physical necessities of the two systems.


John Arthur Clark: The minister has mentioned the matter of terminals in Montreal. When that question is being considered I suggest that it would be of great interest and of practical value to this house to know how much has been spent on the terminals which are now being used by the Canadian National system in Montreal, and how much has
been spent on the terminals now being used by the Canadian Pacific Railway. The condition of the terminals of the Canadian Pacific Railway might be stated also. It will be of great interest to us to know how usefully the money has been spent in the past or how usefully it will be spent in the future. I think the plan of the terminal should be before the committee, as well as full information as to the situation as it applies to the two railway companies.


Charles Avery Dunning: I intend to take up the resolution dealing wi'th the Montreal terminals after this one is disposed of. The hon. member for Vancouver Centre introduced this matter this afternoon really as part of a larger picture which he was trying to present, and I would prefer not to enter into a discussion of the details at this moment.


George Reginald Geary: These matters came before
the committee and each in its turn was quite fully dealt with. As the minister has just stated, the question was raised whether or not the maintenance of way was being caught up with, as well as the question whether or not the system was paying too much or too little in that regard.


Charles Avery Dunning: And equipment also.


George Reginald Geary: And equipment. Every
member of the committee had the opportunity of asking questions, and it was very clearly brought out that the Canadian National system does spend money, when it has it to spend, in order to bring its equipment and right of way up to date; but it is often obliged because of lack of funds, particularly from ordinary operating income, to leave matters in a less complete state than it otherwise would. If we could compare the cost of construction of branch lines, which is absolutely new work, we could ascertain whether or not the one company was getting the work done more cheaply than the other. There are problems connected with the Canadian National system which the Canadian Pacific has long ago solved, such as tying up different parts of the system and making expenditures which from the standpoint of operating return did not at the time appear to be warranted, but which subsequent results may have fully justified. I remember one matter which came up in that connection-the ballasting of the track from Montreal to Sarnia. It may be that on that sort of ballast the Canadian National will have to spend more than a competing system in the same territory. I do not see how we can get very much

C.N.R.-Refunding Obligations
information from a comparison, but from consultation with and cross-questioning of the officials-and officials of all sorts will be before the committee-we can get information as to each item of expenditure as it comes up. It might be for a hotel purchase, for a property purchase in Paris or Toronto. The competing road is doing much the same in the way of 'building hotels. Whether we are doing much more in building structures than the Canadian Pacific is a matter of some interest, but whether we are building wisely more or fewer hotels than the Canadian Pacific can be judged only from a consideration of the circumstances attaching to each expenditure. I know what the hon. member for Vancouver-Burrard wants, and if the money that is being spent on similar objects is being spent as advantageously by the Canadian National as by the Canadian Pacific, I think he will be quite satisfied so far as that particular matter goes. My impression at the committee was that the expenditures, so far as they are carried out by contract, are very carefully guarded, and not much fault could be found with the actual expenditure of money provided that the reasons for spending it have been approved.


Robert Charles Matthews: Will there be opportunities later on to discuss the form of securities to be issued?


Charles Avery Dunning: The bill itself will deal with that, and the opportunity will occur on the second reading, and in committee on the bill when the various sections can be dealt with.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 253, respecting the Canadian National Railway's and to provide for the refunding of certain maturing financial obligations.
Motion agreed to and bill read the first time.




[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved that the house go into committee to consider the following proposed resolution:
Resolved, that it is expedient to provide that the Canadian National Railway Company may construct and complete terminal stations and facilities and other railway works and improvements at or in the vicinity of the city of Montreal, and the governor in council may guarantee the principal and interest of securities to be issued for these purposes by the company
[Mr. Geary.1
to an amount not exceeding $50,000,000, and the proceeds of any sale, pledge or disposition of the securities shall be deposited to the credit of the Minister of Finance in trust for the company, and released from time to time to the company by the said minister to be applied to expenditures made or indebtedness incurred in connection with the said works.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
Charles Avery Dunning: I think at would be well for me to make a brief general statement regarding what is contemplated as a result of this resolution, although necessarily, in dealing with a matter so large, as was indicated during the discussion on the last resolution, it will be desirable for the proper committee of the house to go very carefully into the proposal in all its bearings, into all the plans of what is proposed and generally into the manner of dealing with it.
One of the many problems with which the Canadian National railway management has been faced in the development of that system has centred around the city of Montreal, a particularly important railway centre. The problem is not a new one; it has for some years engaged the attention not only of the present management of the national railways, but of previous managements of the constituent parts of the system, as well as the city council and the citizens of Montreal. Prior to the war the Grand Trunk Railway Company, in conjunction with the city and the Board of Railway Commissioners, had made a study of the situation affecting principally the separation of grades between Bonaventure station and Victoria bridge and Turcot, and had developed a plan involving the raising of the tracks of the railway company in this area to a sufficient extent to permit vehicular traffic to pass underneath the railway facilities. This plan involved the construction of a new passenger station upon the site of Bonaventure station. The estimated cost of the project at that time before the War, was 815,300,000, and when the government acquired the Grand Trunk, it was considered as a capital expenditure which would have to be faced in time, the then estimated cost, due to advancing prices, being slightly over $20,000,000.
The Canadian Northern Railway Company, through its subsidiary the Mount Royal Tunnel and Terminal Company, broke ground in June, 1912, in connection with the construction of a tunnel entrance to the city. The work was in progress at the time the Canadian Northern railway system was taken over by the Dominion government in 1918, and shortly before the end of the war the tunnel was

C.N.R.-.1/ontreal Terminal
opened for traffic, the first train 'being oper~ ated into the tunnel station on Lagauchetiere street on October 28, 1918. In connection with the general plan of this Canadian Northern entrance, considerable property was acquired between the tunnel station * at Lagauchetiere street and the harbour front for the purpose of extension to the harbour tracks, but because of the financial situation of the Canadian Northern and the evident necessity of coordinating these terminal facilities with those of the Grand Trunk Railway, the acquisition of which was under negotiation by the government in 1918, the completion of this work was halted and the situation remains exactly the same to-day as it did then. During the war and the period immediately after the war, public agitation for improved conditions naturally died down in spite of the fact that grade crossing difficulties and terminal congestion due to the constantly increasing traffic both in the railway terminals and on the city streets crossing the railway tracks, became more and more acute.
When Sir Henry Thornton took charge of the administration of the Canadian National Railways, public agitation for an improvement in the situation had again developed, and steps were initiated to study the situation from the Canadian National point of view. It soon became evident to Sir Henry Thornton and his officers that the expenditure involved in a readjustment of the terminal facilities would be very large, and also that the financial position of the Canadian National at that time would hardly justify the immediate assumption of the capital load involved. Studies were continued with a view to developing the most satisfactory plan from the point of view of the Canadian National Railways. Meanwhile the conditions affecting the operation of the Canadian National Railway traffic at Montreal became so acute because of interference with vehicular traffic at the numerous grade crossings, that it became evident that the problem required to be speedily dealt with. Accordingly, as Minister of Railways, on the advice of the management of the Canadian National, on October 24, 1927, I filed expropriation plans covering property between the tunnel at Lagauchetiere street and the waterfront in the vicinity of Victoria bridge so as to protect the Canadian National against an undue rise in price due to speculative influences in the area which anyone might presume would be the area affected by any possible terminal scheme development. By that time the investigations instituted by Sir Henry Thornton and his advisers had progressed so far as to convince the management of the railway that the site 78594-159
of the tunnel terminal was the most advantageous at which to construct a modern passenger station in which the passenger facilities of the Canadian National railways could be concentrated. It had also become evident to Sir Henry Thornton that the amount of money involved to meet satisfactorily the terminal situation at Montreal was larger even than he had at first anticipated. These views were communicated to me and discussions took place upon the question at that time. In order to make the matter more clear I should point out to the committee that there are at the present time three separate Canadian National stations in the city of Montreal which do not at all directly connect with each other; indeed in one case there is no connection save by going many miles around. That is very inconvenient both for the public and for the operation of the railway.
After discussing the matter on many occasions-and I may say that the management has kept the government through myself, well informed of any developments in that connection-when it became apparent that the problem was so enormous from the point of view of possible financial commitments, while having the utmost faith in the officials of the Canadian National who were particularly charged with the duty of dealing with an engineering enterprise of this character, it was nevertheless thought best both by the government and by the management of the Canadian National railways, and I might add by the engineers of the Canadian National railway staff particularly concerned, to secure if possible some entirely independent outside advice, an outside review, if you will, of all that had been developed in connection with this problem both by the Canadian National engineers and also the eight or nine other proposals which had from time to time been made as tentative solutions of the Montreal terminal problem by various interested parties. In order to obtain this independent advice on the whole terminal question, not only from the standpoint of the Canadian National but also from the standpoint of the interests of the public, the government decided to engage Mr. Frederick Palmer, who was mentioned this afternoon by my hon. friend from Vancouver Centre, an eminent British engineer who had previously reported on the Hudson Bay terminals, to review and report on the terminal situation in Montreal.
As to Mr. Palmer's qualifications to deal with railway terminal matters, I may tell my hon. friend from Vancouver Centre that Mr. Palmer's initial engineering experience was

C.N.R.-Montreal Terminal

in railway work. He has kept up his connection with large railway enterprises from that day until this, and is in fact at the present time still consulting engineer to the government of India in connection with all Indian railway problems. As my hon. friend probably knows, the government of India owns the major part of the Indian railway systems.
Mr. Palmer came to Canada and in due course reviewed the local conditions, physical and traffic, and made a personal study of all the various schemes which had been advanced and to which I referred a moment ago. Eight or nine plans had been advanced by various private interests. The results of the studies which were made by Mr. Palmer have been embodied in his report, dated January 31, 1929, which has been printed and copies of which have been distributed to all Montreal members, and are available also to any member of the house who is interested, and for public distribution. Mr. Palmer in his report states that in his opinion the location development of the Canadian National railway in its studies for a central passenger station is the best which could be thought of not only from the Canadian National standpoint but also from the standpoint of a union terminal to provide for the requirements of both railways should a union terminal be decided upon. That, Mr. Chairman, I believe to be a very important factor, as to whether this proposal of the Canadian National railways would close the door for ever to a union terminal of all the railways in the city of Montreal. Mr. Palmer has studied the situation carefully from that point of view and advances the opinion that the scheme now under consideration, while providing adequately for Canadian National requirements for many years to come, does not close the door to a possible unionizing of all the passenger traffic entering the city of Montreal, should that be decided upon by the parties interested to be in their own best interests and in the interests of the city of Montreal and its people.


Thomas Cantley: That will hardly be accepted.


Charles Avery Dunning: I am not speaking of
its acceptance; I am referring merely to the question whether this scheme closes the door to a possible union in the future. I would regard it as a matter of some importance if we were at this time closing the door to and thus effectually preventing the development of a union terminal should that be desired in Montreal in the future. I am now merely
[Mr. Dunning.'
advancing the idea, which is confirmed by Mr. Palmer, that the scheme proposed by the Canadian National does not close the door to a possible union in the future.


Thomas Cantley: Not if you have unlimited funds. Anything is possible if you have enough money.


Charles Avery Dunning: Of course these things do cost money, but I would not follow my hon. friend so far as to say that unlimited money is required. The economic desirability of creating union facilities would, of course, be carefully studied by all the parties who would be required to spend money, and I have no doubt that none of them, the Canadian National, the Canadian Pacific, the Montreal Tramways or the city of Montreal, would be prepared to spend the necessary money unless they were convinced from their own point of view, of the economic desirability of doing so.
Mr. Palmer suggested certain modifications in the Canadian National proposal to permit of a more convenient distribution of passengers to and from the passenger terminal and to avoid the congestion of street traffic in the vicinity. He also suggested the development of improved yard facilities accessible to both railways at the west end of the harbour for the purpose of improving the interchange of traffic between the harbour and the railways-a very important factor in the traffic in and around the city and port of Montreal.
With regard to grade separation-and this I think will illustrate the difficulty of that problem for the average member of the house better than anything else I can say-one. of the principal reasons for the complaint on the part of the citizens of Montreal in connection with the Canadian National terminal has been the large number of grade crossings at which there exists an element of danger, and at which delay in the movement of street traffic has been growing. Between Bonaventure station and Victoria bridge and Turcot there are at present 27 grade crossings, some of which are particularly important. Between Moreau street station and the present city limits there are 39 grade crossings. The town of Montreal East and Point aux Trembles contain an additional 9 grade crossings, and on the balance of the line to the east end of the Island at Bout-de-l'Ile, there are, 6 more grade crossings. The total grade crossings are 81. These have always been a source of complaint on the part of the public of Montreal.
Now, as to the importance of the terminal from the railway point of view, I only desire to place on record a very few figures which

C.N.R.-Montreal Terminal
I think graphically illustrate the growth in freight traffic of the city and port of Montreal. The tonnage handled into and out of the city of Montreal by the Canadian National railways has increased rapidly, as the following figures will show:
Year	Originated Terminated Total
1913	
586.000	1.729,000	2,314,0001924	
1,146,000	2,295.000	3,441.0001925	
1,329,000	2,360,000	3.689,0001926	
1,490,000	2,434.000	3.924,0001927	
1,699.000	2,567.000	4,266,0001928	
1.969.000	2,948.000	4,917,000
I would point out that the increase as between 1927 and 1928 is.nearly 700,000 tons.
With respect to this proposal to expend $50,000,000, I should explain that the bill to be introduced will provide an expenditure of not more than $10,000,000 in any one year, except with special permission by order in council. It is planned to develop the works during the course of the next seven years. I do not expect, neither does the railway management, that during the current fiscal year it will be possible or desirable to spend up to the $10,000,000 which is provided as the yearly limit. As my hon. friend from Vancouver Centre has said, it is difficult in planning works of this magnitude to place any definite limit on what the expenditure will be. My attitude towards engineering estimates for large works is well known. I take a somewhat sceptical view of such estimates. 1 usually regard it as being necessary to allow a proportion over the forecast made by the engineers.


Ernest Lapointe: You are as bad as the
lawyers.


Charles Avery Dunning: I am not as bad as the lawyers, but the engineers are in that respect, although in some other respects the profession stands very much higher than the legal profession, particularly with respect to the fees charged to the public. The intention, then, is to submit this bill, based upon the resolution, to the general committee of the house on railways, canals and telegraph lines. My hon. friend from Vancouver Centre suggested that he would rather have it referred to the smaller special committee, but of course that committee is appointed by the house only for the specific purpose of dealing with Canadian National railway accounts and estimates, and in any case in a question of this magnitude there is merit in referring it to the larger committee.
I have requested the Canadian National railway officials to provide in the railway committee room full detail maps of the whole proposal, and to bring models which they have 78594-159J
prepared, which illustrate graphically what is involved in the entire scheme, and show the city of Montreal and the island of Montreal in miniature. These will enable any member of the committee or of the house to grasp the details in a very short time. When therefore this bill gets before the railway committee I would suggest not only to the members of the committee itself but to all members of the house that they take the opportunity of studying at close range all that is involved in this vast terminal project.
I have only one word more to say. I do hope that when the railway committee is dealing with the matter, if there are interests in the city of Montreal having any constructive views to offer or criticisms of any kind, that they will attend and give the committee the benefit of their advice. As my hon. friend from Vancouver Centre has said, this is one of the largest projects in connection with the Canadian National Railway that we have ever entered upon, and I do hope that all phases of it can be fully developed and fully studied before the committee. I hope the critics, if critics there be, will be present and give us the benefit of their views. The officials of the Canadian National Railway system, who have spent years in studying this project, will be present with all plans, details, and models of what is involved. I know the Canadian National Railway management is desirous, and the government also desires, that the right thing be done in embarking upon an enterprise, so large as this.


George Reginald Geary: Would the minister think it well, not to speak of the plans in detail at the' moment, but to tell the committee something of that part of the scheme which has to do with the development of property in the vicinity of the new terminal? I understand attention has been paid to the development of that part of Montreal, that highways for vehicular and pedestrian traffic have been laid out to suit the station, and I believe there is a plan for util'i7ing the ground purchased but not required for actual railway purposes for warehouses, factories, shops and that sort of thing. That, I assume, Mr. Palmer would know very little about, but I should like the assurance of the minister that this part of the scheme has been carefully studied. Perhaps he can- give us some indication of what the plans lead to in that regard.


Charles Avery Dunning: The broad plan in that particular can 'be much better understood in the committee room from the models and plans than I can convey by any description. But it is planned to utilize to the fullest extent what might be called the surface rights
C.N.R.-Montreal Terminal

over the terminal property generally. The terminal station which the Canadian National Railways own is situated, as my hon. friend knows, in the heart of Montreal, on property which in rvalue would approximate very closely to the most valuable property in Canada. Now, we are evolving a plan contemplating the complete coverage of the station proper and utilizing the area above that for building, not only for railway purposes but valuable property rights for sale or rental or lease to other parties, such as has been done in the case of one or two of the larger terminals in New York city. The plans also contemplate the creation of entirely new streets over and around the terminal property. Every effort is being made to utilize the property in a manner which will produce the maximum revenue to the Canadian National Railways. I will make a special point when the models and the plans are brought here that this feature is given special attention in the committee room.


Mr. McRAE:: I share the hon. minister's uneasiness with regard to engineer's estimates. Perhaps he would tell the committee of the care which has been taken in arriving at this $50,000,000, because, as we all appreciate, it is rather an ambitious program.


Charles Avery Dunning: I should like to be able to ,-go further into that. Frankly I had not ^anticipated going into so much detail at this -[DOT]stage because of the fact, as my hon. friend from North Vancouver will appreciate, that the officers who have been working on this will be available to give reasons for the faith that is in them, or at any rate in their own estimates, and I hope for a full representation of the committee on that occasion. I may say it has always been the practice in the railway committee to welcome any members of the house who are not members of the committee and to permit them to ask questions.


Peter McGibbon: There are many other
committees meeting at the same time.


Charles Avery Dunning: I appreciate that, and I
shall endeavour, so far as in my power may lie, to avoid in this case any inconvenience from that cause. I will ask the chairman of the railway committee to endeavour as far as possible to cooperate. In any event, perhaps this would help: It might be arranged to have the plans and models in the railway committee room over a number of days with a Canadian National official! present most of the time, so that any member may go in at any time and obtain information. That, I believe, would probably facilitate arriving at an understanding of the whole matter by the

membership of the house generally. I shall be glad to arrange that and shall also endeavour to avoid as far as possible anything that will inconvenience hon. members.


Peter McGibbon: Very good of the
minister.


Charles Avery Dunning: No, merely decent.


Thomas Cantley: 1 think the minister is
to be congratulated on his method of bringing the matter before the house. He made reference to some area which at one time was under consideration and might have been secured by the Grand Trunk Railway between the Victoria bridge and the Point St. Charles property. How much land was it proposed to secure for the $16,000,000?


Charles Avery Dunning: The plan involved in
the $15,000,000 scheme was a four track elevated line west from Bonaventure station and the acquisition of a strip of property alongside sufficient to make it possible to erect a four track elevated line and to provide for the necessary grade separations.


Thomas Cantley: There may be good
reasons for it, but frankly I am surprised at the decision of the management to put the station at the point suggested. I am surprised for several* reasons; one is that the climb up from Bonaventure depot or the brack levels between the Victoria bridge and' the Bonaventure depot will mean surmounting a very considerable elevation. Of that there can be no doubt. I understand that Sir Henry Thornton, the president of the road, makes a strong point of the necessity for having what, he calls a through station. I would point out, however, that most of the great railway stations on this continent are not through stations, such, for example, as those of Boston, New York and Philadelphia. These are not through stations, and if you take the old country-London, where there are half a dozen stations, Liverpool and Glasgow- you will find that the same thing applies. There are no through stations in any of these large centres which handle enormously greater numbers of passengers than we can expect to handle for a good many years to come. Surely some other solution of the problem is possible than that the traffic from Montreal coming westward shall go through the tunnel. That means a bottleneck of simply two tracks, one inward and one outward. Is not that correct?


Charles Avery Dunning: Only for passenger purposes.

CN.R.-Montreal Terminal


Thomas Cantley: Only for passenger purposes; but certainly if this country is going to grow, as the minister believes and as we all believe, this will be a factor of considerable importance in a very short time. Further, in my opinion, it will be impossible to climb up from Bonaventure station or the level of the Bonaventure station tracks except by the erection of a tremendously expensive steel structure; and then we get to a point which I think means congestion from almost every point of view as a terminal. As regards the 27 grade crossings between Victoria bridge and Bonaventure depot-and there are really more than that number-I have long thought that what should have been done by the Grand Trunk, or lateir on by the Canadian National Railways as soon as they got round to it, was to acquire most or all of the tract of land between the Victoria bridge and the present terminals at Bonaventure station. That would elm mate the whole question of grade crossings and give the railway control of all the land at the head of the harbour and connection with the canals coming up this way, with yard standage of great value to the railway.


Charles Avery Dunning: That would cost more
than the terminal scheme.


Thomas Cantley: It might have cost a
little more, but the railway would then have an enormous amount of territory for all time to meet the growth of this country for years to come, and we should not be hemmed in, as the present proposal will mean. What we did not need we could have disposed of to very great advantage. These are some of the points that occur to me. I have no doubt they must have been considered by the minister and the officers of the railway, but I hope that when the matter comes before the committee, as the minister suggests, we shall then have some further information with reference to these various points, which I regard as of considerable importance. Frankly, I repeat, I am surprised' at the decision reached in regard to this matter.


Charles Avery Dunning: I shall not attempt now to go into this detailed criticism my hon. friend offers; I hope he will present it to the officers of the company and get, as I am sure he will get, full information regarding the points he has raised. With respect to the question of gradient, my recollection is that the rail level at Victoria bridge is identical with the rail level at the present tunnel station. There is, it is true, a dip in between, but the problem of dealing with Bonaventure, no matter who may have viewed the situation from Bonaventure west involves a
grade separation; all are agreed that a grade separation is necessaiy, and a grade separation in that area does involve elevated tracks to a considerable extent. However, I will not follow my hon. friend' in any detail at this, time inasmuch as the committee is the proper place for all these matters to be carefully-examined.


Alexander Duncan McRae: In view of the great importance of this work, I would suggest to the minister that the railway committee, and also such members of the house as may see fit to accept his kind invitation to attend the meetings, be given an opportunity to go over the ground and examine the actual layout after they have heard the plans.


Sir ELTGENE FISET:: By special train.


Some hon. MEMBERS:: Hear, hear.


Alexander Duncan McRae: I am not particularly interested in a special train.


Charles Avery Dunning: From the applause I hear I take it that some other things will be found for hon. members to do in Montreal in addition to going over the ground. I can assure my hon. friend that the Canadian National Railways will be only too happy to show over the ground any member or members who may wish to go to Montreal. I know that a number of members on both sides have been to Montreal, have visited the offices and seen the plans, and have gone over the ground, and I can assure every other hon. member that he is more than welcome to go and do likewise. The Montreal members who sit behind me and one of them across the way will see to the entertainment of their fellow members.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 254, respecting the construction by the Canadian National Railway Company of certain terminal facilities with grade separation and other works at and in the vicinity of the city of Montreal.


[Stage Direction]
Motion agreed to, bill read the first and second times and referred to the select standing committee on railways, canals and telegraph lines.


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved that the house go into committee on Bill No. 71. to
2500	COMMONS
C.N.R.-Purchase oj Alberta Railways
incorporate the Northern Alberta Railways Company, and respecting the Canadian National Railway Company and the Canadian Pacific Railway Company.
Mir. A. D. M'cRAE (Vancouver North): Mr. Speaker, in rising to speak on this bill I give expression to my own personal views only; I feel that the principle art stake merits a further discussion before going into committee.
The residents of the Peace River district, as I found them last fall, were indifferent as to who should be the purchaser of their transportation system so long as the province of Alberta got out of the railway business. 32ither of our two great transcontinental railway systems would be satisfactory to them, but they had some doulbts as to the joint ownership proposed; they feared that the board of directors which will result from the combination, with all the conflicting hopes and ambitions of their principals-agreements bo the contrary notwithstanding-will not make for the rapid development of that new country. They feel certain that in the difference which inevitably will arise the interests of the district will suffer.
I must say that I share their feelings. I can understand our two great railways getting together on joint terminals and perhaps on a main trunk line where density of traffic and cheap ton mileage are the only ends to be considered, but I am sure that a partnership of this kind would not have brought about the present development of the west, which was the work of broad-visioned, courageous men who were in charge of the competing railway companies.
I cannot see that in the joint ownership of the present Alberta railways the interests of pur two railway systems are identical. To begin with, it must be apparent even to the blind that the increasing traffic of the Peace River country cannot long continue over the present railway via Edmonton. Some more direct outlet to the coast must be built, the Canadian Pacific Railway cannot possibly continue to carry its half of the Peace River wheat crop via Calgary to the sea. The Canadian National Railways already have a line to the coast within striking distance of Grande Prairie, but that route is not the natural nutlet for the larger pant of the Peace River district which is north of the Peace river itself.
The economic outlet for this part of the Peace river country is, undoubtedly, by Peace pass, Prince Geoige and Vancouver, and will-
(Mr. Dunning.]
ingly or otherwise that is the outlet which, in the development of that great district, eventually must be constructed.
Why do I say this? Let me give this house a brief description of the country north of the Peace river. Immediately on the west of the Peace river agricultural district, some 150 miles north of Prince George, is the Findlay river mining section, a district already well under development. A few miles east we have a large coal area which Providence has conveniently located at the western door to the Peace river agricultural country, and there is also available nearby, in the Peace River canyon, sufficient water-power to supply cheap power for the entire mining, smelting and refining requirements of that mineral zone. Then, for about 600 miles northeastward to the source of the Mackenzie river, at the northwest end of Great Slave lake, there is a continuous tract of excellent agricultural land.
When we get to the Mackenzie river we are on the doorstep of that now famous precambrian shield which extends across the northern part of the Dominion, the value of which all hon. members fully understand. This shield continues through the Coppermine river mineral reserve to the Arctic, a district which has long promised to be one of the great copper mining areas on the continent. As a matter of fact on the shores of Great Slave lake preparations already are being made for drilling the extensive zinc and lead deposits during the coming summer.
In addition this railway which, we may anticipate, will be joined by a short extension from Peace River Crossing and Edmonton, will meet the Mackenzie river somewhere below Great Slave lake in the vicinity of Fort Providence. When completed it would give a forty-hour rail service from Edmonton to that point as compared with the present infrequent boat journey of eight days down stream and twelve days up stream, and that for a limited time each year. This railway would provide a daily service for twelve months of the year. In fact such a line, by escaping all the boat delays occasioned by ice jams in Great Slave lake, would make it possible to reach the open Mackenzie river six weeks earlier in the spring and leave it two weeks later in the fall, increasing the present season on, the Mackenzie from two and a half months to four and a half months, thus opening up a new Arctic region for this country. The present boat season on the Mackenzie is from July 1 to September 15, but when railway connection is established the Mackenzie river season will be from May

C.N.R.-Purchase of Alberta Railways
15 until early in October. This railway connection would bring into the market via Edmonton the fish of the Great Slave and Great Bear lakes, the Mackenzie river and the Arctic ocean. It would give the mining area to which I have referred a year-round service as against the present limited boat service of two and a half months yearly, under which the country never can develop. Such is the future of this great northern empire when railway facilities are provided.
The unusual attractiveness of this whole railway program is due to the fact that over its entire length from Findlay Forks to Great Slave lake, almost 700 miles, every mile is freight producing and undoubtedly would justify the construction of the line when a definite program for the development of the country is assured.
The Peace pass has been long regarded as the most favourable pass through the Rocky mountains. Undoubtedly there would be some difficulties to contend with in securing acceptable grades; but considering what we have accomplished in that respect already, there need be no fear of eventually not getting the minimum grade necessary for a heavy freight line, which this railway is destined to become, from the Mackenzie river to Vancouver.
From this hurried resume of the district north of the Peace river, I am sure that hon. members will appreciate that there is ample room for both our national railways in that country. I do not believe that this joint proposal is sound. It savours too much of a combination which I am sure will not work out to the benefit of the district.
What does this partnership of our two competing railways actually mean? Does it go any further than the 60 miles of new branch lines provided for in the purchase agreement? Under schedule B, rights, good for five years, are granted to this new combination-provided they start the construction within two years-of four branch lines, totalling approximately 600 milles. At $40,000 per mile this would work out at about $24,000,000, and parliament would have to vote one-half of this amount, or $12,000,000, if these branches are to be built. If this house or either of the railway companies do not feel inclined, because of financial or other reasons, to go ahead, then the branches cannot be built.
It will be observed that this schedule includes the 60 miles the new company is obliged to build under the purchase agreement, so the necessary start is certain to be made. By passing this bill we are tying up for five years the principal branch lines in the Peace River district without any certainty that the construction essential to its development will be proceeded with. It is no assurance of prompt action to say that in case of differences each railway could build its own branches. That is not practical and, therefore, is not probable.
What about the hauling of freight to the sea over the most economical route regardless of who owns it? This is certainly in the interests of the settlers and residents in the Peace River district, and yet this agreement provides for the interests of the companies but not the district.
Are both the railways equally interested in another route through the mountains to the sea? I do not believe they are. As I have already pointed out, the Canadian National system has a line within striking distance of this district. These, and a thousand other equally contentious questions are sure to come before the board of directors representing both of our rival companies.
What about the Peace River country when this new railway partnership does not agree? Where does the district get off at? Is it to stagnate? These are matters which I think the house should consider before giving effect to this legislation. The success of the industries of this country depends upon the continuance of the present healthy competition between our two national railway systems. They are two separate corporations and should always be considered in that way and be treated alike. The joint ownership of the Peace River railways would be the first serious breakdown in this competitive position.
The people of the west might well take heed lest in the precedent about to be established the interests of our two railway systems may in time become so harmonized that this competition, obtained after a waste of so much effort and money, will become a thing of the past.
When speaking about the future railway development in the Peace River district the hon. Minister of Railways said that public opinion would protect the interests of the residents of that district. I have always looked upon public opinion as being a late cure; sometimes too late, and never farsighted, particularly when the development of a new country is concerned.
I cannot see how hon. members from the prairie provinces can support a bill which puts the new settlers of the Peace River district in a position similar to that from which the farmers of Manitoba freed themselves more than a generation ago. Mr. Speaker, I am opposed to the merger, even by slow
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C.N.R.-Purchase oj Alberta Railways
degrees, of our two national transportation systems. I oppose this bill because I consider it a railway combination which is not in the best interests of the Peace River district or of the country as a whole.
Mr. J. C. BRADY (Skeena):: Mr. Speaker, I hoipe the house will pardon my saying a few words concerning this bill. There is no doubt that this agreement between the Canadian National and the Canadian Pacific Railways for the development of the Alberta railway lines was arrived at after considerable care and thought, but I would remind the house of the discussion which arose in 1925 regarding the Peace River country. At that time an estimate was passed to construct an elevator at the port of Prince Rupert, the terminal of the Canadian National lines. If some of the ministers present this evening can remember what they said at that time they will realize that they expressed the view that the building of this elevator and its functioning in the future would become a part and parcel of the development of the Peace River country. It was definitely connected up with the opening of the shortest route to the Pacific coast.
I am opposed to this bill, not because it will be a benefit to Alberta but on the ground that it will materially interfere with the opening up of the legitimate, natural outlet for the Peace River country. I think that is the most important aspect of this matter. The hon. member for North Vancouver (Mr. McRae) has summed up very well the difficulties which must be met. The Canadian National Railways should carry out what I consider to be a moral obligation on their part to protect and guard their own line to the port of Prince Rupert.
I do not think it would be advisable at this time for me to say where the outlet from the Peace River should go to, nor do I believe it is possible for anyone to say that. During the past three years we have had many reports from the engineers of both the Canadian Pacific and the Canadian National Railways, Four passes, Obed, Monkman, Pine and Peace river, were mentioned. I contend that in no instance have we been able definitely to say where the proper economic outlet to the Peace River district should be. It may be known to the Canadian National, or the Canadian Pacific, or to the engineers of both these great railway systems, but I honestly believe that this is where the Canadian National failed. The Peace River country is really a district that the Canadian National. should have taken the utmost interest in. What has happened? We must acknowledge facts as we see them. I hope the Min-
[Mr McRae.]
ister, of Railways will not be offended, but I believe the Canadian National have been negligent in the duty which devolved upon them in not taking over for themselves the development of the Peace River country. The Canadian Pacific entered the field; they sent in their engineers repeatedly, and finally- they were prior to the Canadian National so far as I am aware

they decided that they were going to develop that country. Then it was that the Canadian National entered.
A few weeks ago I asked the minister whether he believed that this agreement would interfere with, retard or hasten the development of an outlet from the Peace River district to the Pacific coast, and he replied that he believed it would facilitate it. I do not believe that it can facilitate the development of the nearest economic route to the Pacific ocean for this reason: Can anyone say that either of these two great railway companies, working on a fifty-fifty basis, can break away from this contract and start in to feed their own lines irrespective of the other? I do not know how this can be done. I believe both railway companies have agreed to a survey along the Pacific Great Eastern. If that survey is satisfactory and if it meets the requirements as regards possibilities of freight, these companies will be obligated to connect up with the Pacific Great Eastern say from Prince George. If that be the case -and it is a possibility-I say to the Minister of Railways: It is futile to think that the Canadian National port of Prince Rupert will benefit in the least degree from that. If Prince George is connected with the Pacific Great Eastern, undoubtedly, geographically the only way whereby freight from the Peace River district will flow in accord with that railway development, will be down that line.


Charles Avery Dunning: Down to Vancouver?


James Charles Brady: Down to Vancouver.


Charles Avery Dunning: Over the Pacific Great
Eastern?


James Charles Brady: If the Pacific Great Eastern is found acceptable-and both companies have agreed to make a survey of it-and if it were understood, according to the hon. member for North Vancouver, that from Grand Prairie a line would be built to Prince George, I contend that the Canadian National line to the port of Prince Rupert would be left practically high and dry. I ask the Minister of Railways to consider this seriously. One of two things should be done regarding the national line to the port of Prince Rupert. One is that steps should be taken to connect

C.N.R.-Purchase oj Alberta Railways
up their branch lines in Alberta with some point on the Canadian National west of Prince George, so as to ensure that the port of Prince Rupert and the line of the Canadian National will receive a portion of freight developed, or let the Canadian Pacific take over the line. What do we find today? Anybody who has read the wheat records of the past week must realize that a great change has taken place regarding the movement of wheat to the various world ports. We find that the Argentine and Australia are now big competitors with Canada in the matter of wheat. The reason is obvious, namely, that their wheat moves when our wheat is lying in cold storage, in the elevators on the great lakes. The result is that we must turn more and more to the movement of wheat to the Pacific coast. Vancouver has received so far over 80,000,000 bushels of wheat and no doubt she will receive more. The reason is that the port is open for twelve months in the year. The port of Prince Rupert is likewise open for twelve months in' the year and it is nearer to the Orient than any other port on the Pacific coast. It is 480 miles nearer to five big ports in the Orient, for instance, Kobe, Shanghai, Tokyo and others. That being the case, the people of Prince Rupert look upon this development in Alberta with very grave fears; they are afraid that it means the holding up of rightful development or a great delay in the matter of bringing a share of the produce from the Peace River district to the port of Prince Rupert. I believe there is plenty of room for Stewart, Prince Rupert and Vancouver to share in this development; I do not believe the grain will flow through one main channel; it will break up and divide into these three channels if the opportunity is afforded. I trust therefore that the Minister of Railways will satisfy us regarding the future of the port of Prince Rupert. We have a large ocean dock there; we have also an elevator that has been closed throughout the year, and I am sorry to say-but this is the place to say these things; after all, it is the only place where a man can determine whether he has facts or not-that I have it on good authority that last season's shipments of wheat destined for the port of Prince Rupert were changed at Jasper and deflected to the port of Vancouver. I should like to know on whose authority or why that deflection took place. There must be a good reason for it and as the port of Prince Rupert is a national creation, the people expect that at least it shall receive some attention in the big development that is going on and will go on
in the Peace River country. I do think that some clause should be placed in this bill to assure the people of western Canada that there shall be no interference with any extension which the Canadian National might make towards joining up their own line to the port of Prince Rupert, and I would like the Minister of Railways before this bill is sent to the committee to enlighten us as to what he considers the situation will be should this bill pass. I have read the bill carefully and I find that first of all three conditions must be met, and that practically immediately the bill becomes law. Then there are other conditions which are introduced with the word " may," such as, "The company may construct and operate one hundred and two miles," and so on. In other words, they do not need to enter upon that work at all; they "may" do it. Therefore I think we are entitled to be satisfied that the future of the port of Prince Rupert is not in danger and that that port will not be overlooked.
I would just like to draw attention to another feature. The other evening the minister mentioned that certain existing lines in eastern Canada were to be taken over by the Canadian National at a sum running up to about $10,000,000. We have the great Hudson Bay railway on our hands, and I do not think that anybody in this house or anyone in Canada can say definitely that that great engineering work is going to be a success. These will involve heavy responsibilities financially. The Hudson Bay railway is still a theoretical proposition; there is no guarantee that it will fulfil the requirements, and that it will function in accordance with our expectations. The Peace River development will benefit all Canada.
There is one other thing which I think cannot be denied and that is that the Canadian National has in the port of Prince Rupert a port second to none strategically, and second to none as a port itself, because there is no expense attached to it. It is looked upon by ocean captains as one of the finest harbours on the whole coast of America. Therefore I do not think that I am trespassing upon the time of the house when I request the Minister of Railways to see that the Canadian National safeguard the interests of that port and maintain the line running to .Prince Rupert in their own system and make it function, in order to build up the port of Prince Rupert, instead of concentrating the whole movement of grain and all other produce on the line down to the port of Vancouver. I do not think that that is the best think to do either nationally or
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C.N.R.-Purchase of Alberta Railways
economically, and I believe there is a moral obligation resting upon this government to see that Prince Rupert will receive the consideration to which it is undoubtedly entitled.


Mr. J. A. FRASER (Cariboo):: I must
congratulate the province of Alberta on being able to dispose of their railways at so fair and equitable a price. I have on a great many occasions pointed out the necessity for coupling up the Peace River country with the western outlet, and I very much regret that such a provision is not contained in this bill. This bill does not do anything to forward in the slightest degree the connecting up of the Peace River country with the western outlet. I think there should be some indication in this bill that it is the intention of the companies who are acquiring the control of the Edmonton and Dunvegan road to connect up the Peace River country with the western outlet. The Minister of Railways (Mr. Dunning) a short time ago seemed rather surprised that anyone would venture the suggestion that the Pacific Great Eastern really could carry the freight of that country to the city of Vancouver.


Charles Avery Dunning: No, my hon. friend does me an injustice there.


John Anderson Fraser: I am sorry if I do.


Charles Avery Dunning: Perhaps I might clear up the point so that my hon. friend could then discuss it. The hon. member for Skeena (Mr. Brady) was arguing that grain which moved to Prince George over a railway from the north would go to Vancouver over the Pacific Great Eastern rather than to Prince Rupert. I shook my head, because from what I know of the Pacific Great Eastern it would not be economical to haul grain to Vancouver over that road from Prince George, when it could be hauled over our good grades to Prince Rupert. I do not think it would be economical to haul grain from Prince George ever the Pacific Great Eastern as compared with shipping it from Prince George to Prince Rupert.


John Anderson Fraser: The distance from Prince George to Prince Rupert and from Prince George to Vancouver are the same. Of course under present conditions, with the Pacific Great Eastern uncompleted for eighty miles of its length, it would be impossible to haul grain over that line, but I .wish to make it quite plain that it is not by any means an impossibility to haul wheat from the Peace River country over the grades on the Pacific Great Eastern if that road is properly completed. The completion of that road will have to be undertaken before we can discuss the question 
of hauling grain or anything else over it. As a matter of fact the grades over that line are not as high as those on the Canadian Pacific from Calgary to Vancouver, over which they are hauling wheat to-day.


Charles Avery Dunning: I would hope not.


Mr. L. J. LADNER (Vancouver South):: I have just one observation to make, Mr. Speaker. The time is not opportune to engage in a discussion of the advantages to be gained from an extension to the coast from the Peace River district. We have all enthusiastically supported that. Provision is made in this bill particularly for the ratification of the contract between the two railways and the government of Alberta with respect to the Edmonton, Dunvegan and British Columbia Railway. Paragraphs 7 and 8 of the agreement provide specifically for certain extensions. One extension consists of 25 miles of railway from Wembley to Hythe; another, of 15 miles from Whitelaw to the Waterhole district. Paragraph 8 of the agreement provides for the construction of not less than 60 miles of additional branch lines, within a period of five years, of the Edmonton, Dunvegan and British Columbia 'and Central Canada railways in the Peace River district. Now, my point is that provision could be made, and in my judgment should be made, in the bill to empower these railways, if they consider it expedient or good business, to extend that railway system in conjunction with the branch lines or otherwise, so as to make an outlet from the Peace River district, either at Vancouver or at Prince Rupert, by connecting up with Prince George.


Charles Avery Dunning: My hon. friend does not care which -way they want to go; he would have parliament give them a free hand to get through provided they went via Prince George ?


Leon Johnson Ladner: I understand the railway
commission would have something to say as to that; they must give their approval.


Charles Avery Dunning: To the route map only.


Leon Johnson Ladner: Is not that the most
important tiling?


Charles Avery Dunning: No, that is a detail.


Leon Johnson Ladner: If the minister would incorporate that empowering clause, the good judgment of the railways in any event would dominate the situation, and parliament would not likely go against the joint judgment of the Canadian Pacific and 'the Canadian National railways with respect to the route or the method of extension. I urge upon the minister that by cutting off the extensions as set out in the agreement, without any en-

C.N.R.-Purchase of Alberta Railways
abling clauses in the bill itself, is a step which in my judgment makes more difficult the possibility of bringing about a connection between the Peace River district and the coast.


Mr. D. M. KENNEDY (Peace River):: Mr. Speaker, I wish to record in a general way my support of the proposed legislation now before the house. I am not going to say that I am absolutely satisfied with its provisions, I am one of those who have laboured for some time to persuade the government and the Canadian National Railways to act in connection with this matter, both as to the taking over of the Peace river section of the Alberta railways and the construction of a railway out to the Pacific coast. I have declared in Alberta as well as here my disappointment that some provision was not made in connection with the coast outlet. However, to oppose the bill does not, as I see it, get us anywhere nearer a Pacific coast outlet than to allow it to pass; in fact it is just the reverse, in my judgment. I think it has been recognized in all our discussions of this question that one of the chief difficulties in connection with a coast outlet was simply the fact that the Edmonton Dunvegan and the Central Canada Railways which would be part of the system to connect the Peace River country with the Pacific coast, belonged to the province of Alberlta, and it was not expected by anyone in that province or outside of it, so far as I know, that Alberta would build a railway through British Columbia to any Pacific coast port.
Now, to oppose this bill, as I understand it, would simply mean that the Canadian Pacific Railway would get the Alberta railways. It may be that some hon. members, as well as certain people outside this house 'believe that that would ensure the best development of the Peace River country. But I am not convinced of that. I am not insensible to the possible difficulties in connection with the working out of this legislation, that were referred to to-night by the hon. member for North Vancouver (Mr. McRae); but when it ooroes to the question of the Objection he raised, as I understood him, to the House of Commons, possibly not being ready to vote $12,000,000 to build its share of the 600 miles of branch lines for which this railway company will hold charters in the Peace River country, I think it more likely that parliament would provide that $12,000,000, than that we would carry out the program referred to in the correspondence which was brought down yesterday. I find that on September 20th, i92S, Sir Henry Thornton wired the Minister of Railways as follows:
Canadian Press announce Canadian Pacific has made independent offer something less than twenty-five million for Alberta Government Railways and receipt of offer acknowledged by Brownlee Montreal urgently suggest and 1 agree we should announce we propose ask parliamentary authority build line Obed through Grand Prairie northwesterly towards Peace or Pine pass with branch from Sturgeon lake northeasterly towards McLennan and Peace river crossing. Kindly telegraph quickly your views.
Thornton.
That expenditure would not open up anything like the vast area of new territory that the 600 miles would open up, and yet it would cost, not $12,000,000, but possibly $20,000,000 or S30.000.000, if we are to go by the experience in the province of Alberta, and I think they built their mileage just as cheaply as the Canadian National Railways. If that is the only alternative to joint ownership, I would rather wrestle with the problem of joint ownership of the present railways and the problem of future development in the extending of branch lines, because I do not believe this parliament would be likely to vote money for the duplication practically of the present railway without serving any very large amount of new territory.
During the last three or four years the Peace River country has been very, very anxious to see the Canadian National Railways take over the Edmonton, Dunvegan and British Columbia Railway. I find also that the Alberta government was very anxious that the Canadian National Railways should buy the Alberta railways, and two years ago, May 3, 1926, according to sessional paper 226A of 1928, I find an offer by the Premier of Alberta, Mr. Brownlee, to the Minister of Railways, Mr. Dunning, in which he argues for the taking over of the Edmonton, Dunvegan and British Columbia Railway and the Central Canada Railway at a price just a little over $14,000,000. These figures were submitted, not as a final offer, but as a basis for consideration. I may say that the price agreed to be paid for the Edmonton, Dunvegan and British Columbia Railway by the Canadian National and the Canadian Pacific must be $20,000,000. Probably I should read one or two paragraphs of this letter:
Dear Mr. Dunning,
In submitting, for your consideration, the proposition that the Canadian National Railways-


Charles Avery Dunning: What is the date of that, please?


Donald MacBeth Kennedy: May 3, 1926; sessional
paper 226A of the session of 1928.


Charles Avery Dunning: But the letter is early
in 1926.
2506	COMMONS
C.N.R.-Purchase oj Alberta Railways


Donald MacBeth Kennedy: Yes, I am showing just what the Alberta government was trying to do at that time.
In submitting, for your consideration, the proposition that the Canadian National Railways should take over the Edmonton, Dunvegan and British Columbia Railway and the Central Canada Railway, I desire to draw your attention to the following:'-[DOT]
1.	The Grand Trunk Pacific Railway, between Wolf Creek and Prince Rupert, was constructed at a very heavy cost as a main artery to serve the country which is tributary to it, and, as this portion of the national railway system is short on traffic, the loss on operation, maintenance, and interest on capital represents a large proportion of the annual deficit on the national railway system. The mileage between the above points is 834.3 and, at $125,000 per mile, which is a fair estimate of the cost at the present time, amounts to $104,287,500 capital investment. If the Peace River territory is not obtained as a feeder for this main artery, it will preclude any possibility of the traffic necessary to provide revenues sufficient .to carry the interest on this capital investment.
2.	The Edmonton. Dunvegan and British Columbia and Central Canada railways tap the productive portion of the Peace River territory which has been developed up to the present time, and are a valuable addition to any railway system which assumes the responsibility for the future development of that country. These railways were built as colonization lines and, as such, should have received a subsidy from the Dominion government: in fact, 50 miles between Roycroft junction and Grande Prairie on the Edmonton, Dunvegan and British Columbia was subsidized to the amount of $6,400 per mile, and $175,000 was paid to assist in the construction of the bridge across Peace river on the Central Canada railway, which sets out clearly the fact that the Dominion government did partially recognize their responsibility in this respect.


Charles Avery Dunning: I suggest that the hon.
member put the whole letter on Hansard.


Donald MacBeth Kennedy: Very well.
3.	The traffic which these lines provide will justify their purchase by the national system, as, under present conditions, the profits on the traffic will almost meet the interest on the capital to be assumed in addition to taking care of the cost of operation and maintenance, and with the future development and settlement of that vast territory will become very valuable to the system as the years go on.
4.	The Peace River tract of land in northern British Columbia, which is owned by the crown in the right of the Dominion, contains 3,500.000 acres, 1,200,000 acres of which is reported to be good agricultural land and through which the proposed western outlet for the Peace River would pass; if sold it would provide a large portion of the cost of construction to connect the Edmonton, Dunvegan and British Columbia with the national railway at Prince George.
5.	For the above reasons it is submitted that the interests of the taxpayers of the Dominion of Canada will be served by obtaining the Peace River territory as a feeder to the Canadian National system.

I have handed you a memorandum showing that a fair valuation of the Edmonton, Dunvegan and British Columbia and Central Canada railways is approximately $17,472,994.43. Against this, the province has guaranteed debentures totalling $9,420,000, payable in thirty years from the date of issue, and has advanced other sums, from time to time with proper security, totalling $9,388,456.93, making a total claim, as at December 31st, 1925, of approximately $18,808,456.93.
As a basis for consideration, it is suggested that the Dominion government should:
(a)	Assume the liability for payment of the said guaranteed bonds, amounting to $9,420,009.
(b)	Issue debentures or other security, pay-.able on such terms as may be agreed, for 50 per
cent of the amount advanced by the province ($9,388,456.93) as above $4,694,228.47.
I have informed you orally of the nature of the security held by the Royal Bank of Canada, totalling $2,400,000, with accrued interest, and the terms of settlement already suggested. We propose the Dominion government should assume this obligation in addition to the above.
Yours very truly,
J. E. Brownlee.
Honourable C. A. Dunning,
Minister of Railways and Canals,
Ottawa.
On motion of Mr. Kennedy the debate was adjourned.



PUBLIC ACCOUNTS COMMITTEE

William Lyon Mackenzie King: I move that the name of
Mr. McGibbon be added to the list of members of the select standing committee on public accounts.


Hewitt Bostock: By leave of the house.


[Stage Direction]
Motion agreed to.
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, May 15, 1929