1930-05-22

[Stage Direction]
Eighth report of the select standing committee on miscellaneous private bills.-Mr. Glen.
Third report of the select standing committee on industrial and international relations. -Mr. McIntosh.
21, 1930	2381
Saturday and Morning Sittings


[Stage Direction]
Bill No. 300, an act respecting a certain patent of Staunton's Limited.-Mr. Geary.


[Stage Direction]
Right Hon. AY. L. MACKENZIE KING (Prime Minister):	Mr. Speaker, I would ask
the consent of the house to move the following motion which appears on the votes and proceedings of yesterday:
That on and after Saturday, the 24th of May, instant, and every day thereafter, except Sundays, until the end of the present session, the house shall meet at eleven o'clock, a.m. That in addition to the usual intermission at six o'clock, p.m., there shall also be an intermission every day from one to three o clock, pm. and that the order of business and procedure shall be the same on Saturdays as on Fridays.
May I say with reference to the motion, it is perhaps advisable that hon. members should be informed of one or two considerations of which the government has to take account, not so much in regard to bringing the proceedings of parliament to a close as with reference to arranging for the date of a general election.
I noticed in one of the morning papers the statement that there was some understanding between the hon. the leader of the opposition (Mr. Bennett) and myself as to the date at which the business of parliament should be brought to a close. AVhile I have had a number of conferences with the loader of the opposition, and all of them so far as I am concerned, most congenial, there has been no definite arrangement reached between us as to the time of the closing of parliament. I would say the same with respect to the conversations I have had with the leader of the Progressive group (Mr. Gardiner). AVhat we have agreed to is that so far as possible we would all do what we could to expedite the business of the house in the effort to bring its proceedings to a conclusion as speedily as possible. A great deal of business has been put through within the last few days and there is, I think, every indication that hon. members are disposed to proceed with matters as rapidly as circumstances will justify. I am informed by the Chief Electoral Officer that under the provisions of the Dominion Elections Act, sixty days or possibly fifty-nine days must elapse between the time at which the writs are issued and the date of the election. That means roughly that if we were to conclude the session at the end of the month of May the elections could not come before the end of July.
[Stage Direction]
Saturday and Morning Sittings
There is another provision in the act to the effect that the elections themselves must be held on a Monday. The first Monday in August happens to be a civic holiday throughout the province of Ontario, and I imagine that for that reason there might be some exception taken to having the election on that particular day. If an election is not held on or before the 4th of August, it means that it would have to be as late as the 11th of August, or later. If hon. members feel that it is in the public interest to have the election delayed until the 11th of August or beyond, that is, of course, a matter within their own control, but my impression is that every member of the house feels that those who are present here are at this time at some disadvantage in comparison with their actual or would-be opponents, in that the field is open to the latter wherever they may happen to be, whereas we have to continue to sit here and go on with the business of parliament. That is a consideration which I suppose should not weigh in the minds of those who have to do with public business. However, it is a consideration that I think may affect to * some extent the way in which the balance of the business of the house will be transacted.
May I make this quite clear? The government has no desire to rush through any legislation, estimates or anything else. The estimates have been before parliament practically from the beginning of the session. Hon. members must know from having looked over them what particular items they feel are of a character that should be very fully discussed, which, in other words, will probably be the items of controversy. If those could be indicated to the whips, I see no reason why they should not be brought forward before any others, so that it may not be thought that the government is holding back certain items to rush them through at the last moment. Most of the items in the estimates, I think, will commend themselves to the house without discussion, but there may be some on which there should be some discussion. The most contentious estimates are usually those of the Department of Public Works. With those estimates we have already made very substantial progress. What remains are not very considerable.
That is my reason, Mr. Speaker, for bringing this motion before the house at the present time. It is with the hope that it may be possible to conclude the business of parliament next week; but if that is not possible, we will just have to go on a little longer. What I would, however, point out to hon. members 	.
is this: it will, I think, be agreed that so far as the public interest is concerned it will be best served by having the elections over as soon as possible, having regard to disturbed conditions likely to exist meanwhile and to the fact that there has to be, at the least, a campaign of sixty days, and that to all intents and purposes the campaign is on at the present time outside of parliament, as well as possibly to a very limited extent inside.
Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, with much that
the right hon. gentleman has said I, of course, am wholly in accord. I desire first of all to say that since the matter of a general election was first discussed, the conversations that 1 have been privileged to have with the Prime Minister (Mr. Mackenzie King) have been of the most harmonious character and every effort I think has been made by all who have discussed the subject with him, including my friends to my left, to expedite public business and to discharge our duties as members to the best of our ability, having regard to the public interest as it may be affected first of all by the tariff changes proposed, secondly by the estimates, and thirdly by the impending election. There is a very considerable body of business yet to be disposed of. The discussions that have taken place on the budget resolutions are discussions which I think it will be agreed could not easily be shortened. We realize that the government has a majority behind it for the moment to enable it to put through its resolutions, reluctant though some hon. gentlemen opposite, including the hon. gentleman from Marquette (Mr. Glen) may be to do so; nevertheless, the government has the power so to do, and a frank recognition of that fact may do something to shorten lengthy discussions. It would seem to be improper for us to be standing up in [DOT]every instance and say that we disagree with this or that or the other thing. Rather, a general objection in principle to the measures proposed has I think correctly indicated our position.
With respect to the necessity of expediting an early appeal to the people, I have informed the Prime Minister, as he has indicated, that while we have no agreement, as he has said,
I am anxious, as are those who are associated, with me to the left of the Speaker, in every way possible, to see that the public business is transacted as expeditiously as possible having regard to what I say is the public interest. The suggestion that has been made as to contentious items in the estimates being communicated to the whips prior to discussion commencing in the house will I think do-

Beauharnois Corporation-Mr. Gardiner
much to expedite business. There is a large number of items which must be passed whoever is on the treasury benches. The public service must be maintained, salaries must be paid, fixed charges must be met. All these are purely matters of routine, and we will get rid of them very quickly. There are a few rather disputatious items in the estimates that will involve discussion of, shall we say, administration-a word that I think the hon. member from LisgaT (Mr. Brown) will regard as aptly indicating the situation, although Trench may not say that that is the best word to use in the circumstances.


Mr. BROWN:: Refer to the dictionary.


Richard Bedford Bennett: If we are to consult the dictionary, I would have to refer to the Minister of Railways and Canals (Mr. Crerar).
We shall do everything in our power to determine the items on which discussion will take place at any length. I should, however, like to make clear that we are not to be taken as agreeing to items that are passed by the house simply because we do not take up the time of the house to enter into a lengthy statement of our objections.
The supplementary estimates, I think, should be brought down at as early a date as possible. That would enable the members in the evening to give them some little study and to determine what should be the subject matter of more lengthy discussion in the house. I think I can say on behalf of my colleagues that in every way possible, consistent with what we regard to be the public interest- there will always be a difference as to that- we shall do our best to forward the transaction of public business.
I must say that I have given much consideration to the conditions imposed by the Dominion Elections Act as indicated by the Prime Minister. Having regard to the fact that the election must be held on a Monday, and to the further fact that there is a civic holiday in Ontario on the first Monday in August, I quite agree with the right hon. the Prime Minister, for my information is that it would be entirely out of the question to hold an election on that day, having regard to the conditions that exist in connection with that holiday. Therefore, we are confronted with a condition and not a theory. It is a question of whether or not we shall have an election on the Monday preceding the 4th of August or on some Monday subsequent to that day. That is what the position seems to be.


Mr. MACKENZIE KING:: That is correct.


Richard Bedford Bennett: While there has been no agreement in any sense, I think we are all in
accord that if the public business can be properly disposed of, the election should be held on some date antecedent to the 4th of August. Otherwise, it is in the lap of the gods.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Annual report of the Civil Service Commission for the fiscal year 1929-30.-Mr. Rinfret.


Mr. ROBERT GARDINER (Acadia):: Mr. Speaker, I desire to ask leave of the house to move the adjournment to discuss a definite matter of urgent public importance in connection with the hydro-electric development of the Soulanges section of the St. Lawrence river between lake St. Francis and lake St. Louis by the Beauharnois Power Corporation Limited and its various subsidiary companies, including the Beauharnois Light, Heat and Power Company.
The government has approved of the above development by passing order in council P.C. 422, March 8, 1929, and in so doing the government has not accepted the plan for this undertaking recommended by the joint board of engineers, dated November 16, 1926.
Further, apparently the Beauharnois Light, Heat and Power Company and the Beau-harnois Power Corporation Limited have violated and exceeded the terms and conditions imposed on them by the said order in counoil, and in so doing have committed acts which justify a demand for an explanation by the government as to whether or not there is an agreement between the government and R. O. Sweezey and his associates who own and control the said company and corporation whereby the whole of the unallocated portion of this section of the St. Lawrence river will be turned over to them for exploitation.
The government should disclose to parliament the reasons for its non-acceptance of the said recommendation of the joint board of engineers, and the government should further disclose to parliament whether or not there is an agreement as above indicated between it and R. 0. Sweezey and his associates, and if there is no such agreement the government should take such action as in the premises is proper and requisite.


Mr. SPEAKER:: I have read the considerations which the hon. member has brought in support of his motion. I consider them of
Beauharnois Corporation-

-Mr. Gardiner
urgent public importance in view of the early close of the session. But twenty members must rise in their place.
And leave having been granted:


Robert Gardiner: Mr. Speaker, the subject matter which I desire to discuss this afternoon is of very great importance to the people of Canada. It is not only important to the eastern section, but to the whole Dominion. In the first instance, it will be my purpose to give the history of this undertaking from the beginning. Inasmuch as probably members have not had an opportunity of giving very much serious consideration to this important question, I believe that such a history would be very valuable to them in this connection. After I have done that it will be my privilege to discuss the financial terms of the various organizations comprised in the parent company to show very clearly how the capitalization of these companies has been such that it is not in the public interest in any way whatsoever.
Dealing with the history of this corporation, it might be said that at a certain date the Beauharnois project came under the ownership and control of what are known as the Robert heirs. It is not necessary for me to go back beyond that time, because we are not interested in the situation anterior to that particular date. The Robert heirs caused to be incorporated in 1902 what is known as the Beauharnois Light, Heat and Power Company. We have no information as to the capital stock of this particular company or what its total assets were at that particular time. After the incorporation of the company the Robert heirs transferred to it their rights in the Beauharnois project and retained other rights for themselves. They owned, however, all the shares of the Beauharnois Light, Heat and Power Company. The Robert heirs also owned, either personally or through the Beauharnois Light, Heat and Power Company, the entire project.
The Beauharnois Light, Heat and Power Company had the right to divert 1,050 cubic feet of water per second. However, there developed a dispute between the company and the Dominion government over those rights, and finally it was settled in 1910 by an agreement between the company and the Dominion government, which was amplified by order in council, by which the rights of the company were definitely dealt with.
Eventually the company applied to the Dominion government to divert 40,000 cubic feet of water per second. The Dominion government secured the reports of various engineers in connection with this application,
(Mr. Speaker.]
among which was the report of Henry Hol-gate, dated May 16, 1916. The Dominion government refused to make the grant. However, in 1927, Mr. R. O. Sweezey purchased from the Robert heirs the entire Beauharnois project for himself personally. This was established by Mr. Sweezey when he gave evidence in Montreal in connection with a lawsuit between himself and the Transportation and Power Company of Montreal. During the trial the following questions were put to Mr. Sweezey and were answered by him:
Q.	Did you buy any rights from the Robert heirs within that year, that is, the year from April 28, 1927?
A. Yes. I am just trying to think of the elate. It was in 1927 I bought from Robert's. It was within the twelve months from April 28, 1926.	y
Q. And you bought it personally?
A. Yes.
Q. That is, you were acting for somebody else, L suppose, but you bought in your own name?
A. I bought it personally.
Q- (By the court) Your answer as I understand it, is that in 1927, within a year from April, 1926, you purchased the Robert interests m this scheme?
A. Yes.
So that as a result of what I have stated to the house we have Mr. Sweezey owning the entire Beauharnois project which he purchased from the Robert heirs in the spring of 1927. The price that Mr. Sweezey paid for this is not known, but a reasonably accurate idea will be given later.
During the hearing of the case of R. O. Sweezey and the Transportation and Power Company, a letter signed by R. O. Sweezey was placed in evidence and I propose to read it. I trust hon. members will follow my reading of this letter very carefully because of the fact that there are many very important implications in it. This is' the letter:
J. Alderic Raymond, Esq.,
Windsor Hotel,
Montreal.
136 St. James Street, Montreal.
14th October, 1926.
Dear Mr. Raymond,-
Further to our conversation regarding the St. Lawrence power project, in which we are both interested, I may say that though I have been familiar with this situation for some twelve years, it is only during the past twelve months that I have devoted some serious attention to the study of the economic possibilities of this one million horse-power development, near the city of Montreal, and on deep water navigation in the St. Lawrence.
Briefly stated, the power site is comprised in the natural fall of eighty-three feet, in the distance of some fourteen miles, between lake St. Francis and lake St. Louis. It is proposed to divert by a canal through a clay section of level country on the south shore a minimum of
75,000	cubic feet per second on St. Lawrence
MAY 22, 1930	23S5
Beauharnois Corporation-Mr. Gardiner
*water, or a possible maximum of 150,000 c.f.s. The effective working head would be seventy-five feet. In case of maximum diversion and 70 per cent load factor, a development of
1,350,000	h.p. is possible, and at a cost which competent authorities place at not over $100 per h.p.	_
To place ourselves in possession of all the rights essential to this undertaking, we should pursue the following course:-
1.	Acquire the Robert rights which are fundamental in regard to an initial grant which he holds to divert 40,000 c.f.s. He also holds rights granted by charter to expropriate for the proposed canal route. Numerous other incidental rights are included in his holdings which he is anxious to sell, though he wishes to participate partially in the organization svndicate.
2.	Acquire the control of the St. Lawrence Waterways & Power Company stock, which is available to us, and upon which we have already a substantial hold.
3.	Enlist with our syndicate two or three individuals, who in addition to providing some cash as their fair share, can assist us in getting our rights extended or enlarged so as to develop the entire available flow of the St. Lawrence at this point. As the whole situation is entirely within the province of Quebec, our influence has to be exerted only in Canadian political circles-that is at Ottawa and at Quebec.
4.	It will probably be advisable to enlist the participation of certain United States interests, who for their capital and initiative can be relied upon to absorb some of the power in Quebec province in connection with some powerusing industry-similar to the Aluminum Company of Canada.
The promise to use a substantial block of power in Quebec province will facilitate our negotiations with Quebec authorities, and further facilitate our exporting of power to the province of Ontario.
5.	The cash to be raised for the early stages of this project for the sole purpose of acquiring and enlarging rights to the extent of 150,000 h.p. diversion will approximate some six or seven hundred thousand dollars. It may take three or four years then before actual development starts.
In connection with personnel of syndicate, I have in mind the individuals we should enlist with us, and although I have been in touch with United States people showing a desire to join. I have hesitated to accept any one definitely until certain that each and every one is persona grata to all others.
I have said nothing about the vision necessary to an appreciation of such a project from an economic standpoint, nor have I touched upon the huge profits that may be expected, as these are matters that the ordinary business man can well picture for himself. I do not wish to minimize, however, the task that presents itself in rounding up and launching such a scheme. The actual raising of the money becomes easy, however, once the physical properties and rights have been gathered in.
Yours sincerely,
R.	O. Sweezey.
Hon. members will note two very important points in this letter. The first one is that they expect tremendous profits by securing control of this company, and also by securing 2419-151
certain rights either from Quebec, from the Dominion government or from both. It is stated very definitely in this letter that while it is essential that certain persons who have some cash should be in the organization, it is abosolutely essential that there be some people in the organization with political influence.
As soon as Mr. Sweezey assumed control of the Beauharnois Light, Heat & Power Company he advised an application to be made by the company to the legislature of the province of Quebec for the right to divert 40,000 cubic feet of water per second from lake St. Francis. This application was granted subject to the approval of the plans by the Dominion government. A lease between the province of Quebec and the Beauharnois Light, Heat & Power Company was entered into to give effect to the granting of the above mentioned application. Application was also made by the company to the Dominion government for the approval of those plans. The company, in depositing its application, submitted the following as a basis for an agreement with the Dominion government:
(a)	When making its initial installation, the company will construct its power canal to such plans and specifications and will operate its power development in such a manner that the canal when completed will conform to the navigation standards as set out in paragraph 111 of the main report, and paragraph 13 of appendix C of the report made by the International Joint Board of Engineers 1926-27.
(b)	The capital amount properly chargeable to navigation, in this connection as calculated by the International Joint Board of Engineers will be approximately sixteen million dollars ($16,000,000) and will be paid by the company. The company will also install such remedial works as may be necessary to avoid injury to existing power developments and will maintain the level of lake St. Francis at such elevation as may be required for navigation.
(c)	At any time that the government may demand, and after three years' notice, the company undertakes to install in connection with its power canal, such locks and other necessary works as may be required to make the power canal available for through navigation for vessels of a size and draught as large as any vessels which will be able to use the _ new Welland canal upon its completion, provided:
I.	That concurrently with the installation of such locks the company shall have the right to enlarge its canal and to divert through it and utilize for the development of power all the flow of the St. Lawrence river between lake St. Francis and lake St. Louis with the exception of water required for floatage through the existing Soulanges canal, and with the exception of that quantity of water to the user of which existing power plants are now legally entitled.
II.	That the cost of such locks and other improvements to be borne by the company shall not exceed eighteen million dollars ($18,000,000).
III.	That in any event the company shall not be obliged to install such locks and other works above referred to until such time as will enable

2386	COMMONS
Beauharnois Corporation-Mr. Gardiner
the company to complete such installation concurrently with the final completion of the remainder of the St. Lawrence deep waterway.
Very strong protests were entered against this proposal. So strong were they that the Minister of Public Works (Mr. Elliott) thought it wise to hold a hearing, and the company sent in an amended application. The amended application is altogether different from the first one. We must remember, however, that it was the intention of the company in the first place to secure if possible the whole flow of the St. Lawrence river. I am going to read the amended application for the information of hon. members.


Mr. RICKMAN:: What is the date of that application?


Robert Gardiner: January 15, 1929.
The application of the Beauharnois Light, Heat and Power Company now pending before the governor in council is purely and simply for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall be diverted from the river-from lake St. Francis, to be returned to lake St. Louis and used for power purposes by the company between these two points; and any condition that the government may exact, in any wording satisfactory to the government, involving that limitation, is accepted in advance by the applicant. If the engineers think that the plans should be altered to meet this declaration the company will submit to any such alteration.
Plans and specifications of the company were finally approved, and order in council PC. 422 was passed on March 8, 1929, confirming the approval. It will be noted that approval was granted subject to not more than 40,000 cubic feet of water per second being diverted from lake St. Francis. The order in council recites other conditions, but they are too numerous to discuss at this moment.
When the Beauharnois Light, Heat and Power Company had secured approval of its plans to develop this work, a new company was formed, namely, the Beauharnois Power Corporation Limited. The solicitors who incorporated this company was Messrs. Mc-Giverin, Haydon and Ebbs, of Ottawa. The Haydon referred to in this company is now Senator Haydon of Ottawa, and so far as the records on file in the Department of the Secretary of State show, this company was formed of the office staff of the above law firm, and thus constituted it entered into certain agreements all of which are set out in the statement in lieu of prospectus which was filed with the department on September 30, 1929. In paragraph 1 of this statement we find the following information with refer-
[Mr. Gardinar.l
ence to the construction of the share capital of the company:
Five management preferred shares without nominal or par value;
1,799,995 class A common shares without nominal or par value;
3,200,000	class B non-voting common shares, without nominal or par value.
Provided, however, that the said shares without any nominal or par value may be issued for such consideration as may from time to time be fixed by resolution of the board of directors of the company, not exceeding in the aggregate the sum of $50,000,000, or such greater amount as the directors may deem expedient and as shall be authorized from time to time by the Secretary of State of Canada.
In addition to the above the company entered into an agreement to isue $30,000,000 worth of thirty year, 6 per cent collateral trust sinking fund bonds of the company. At this time it must be remembered that the Beauharnois Power Corporation Limited had no assets whatsoever. The company now having been formed, they were ready to proceed to do business. In the meantime, however, from the date on which Mr. Sweezey had acquired the assets of the Robert heirs in the Beauharnois undertaking, he had manipulated affairs in such a way that when the Beauharnois Power Corporation Limited wanted to purchase these assets, they were owned by what was known as the Beauharnois syndicate. The members of this syndicate are not known, but I submit that in the public interest they should be disclosed to parliament. The Beauharnois Power Corporation Limited, after its incorporation and organization,^ then purchased from the Beauharnois syndicate the Beauharnois project which previously had been purchased by Mr. Sweezey from the Robert heirs. The details of these transactions are contained in paragraph 6 of the statement in lieu of prospectus.
In the first place the Beauharnois Power Corporation Limited assumed the liabilities of the Beauharnois syndicate, and amongst these liabilities was a liability by the Beau-hamois syndicate to the Robert heirs. This liability no doubt arose, through the sale by the Robert heirs of the Beauharnois project to Mr. Sweezey, who formed the Beauharnois syndicate which took over the agreement with the Robert heirs to pay the purchase price provided in the agreement. The syndicate apparently did not pay this purchase price, but in conveying their rights to the Beauharnois Power Corporation Limited they provided that this purchase price should be assumed by the Beauharnois Power Corporation Limited. The liability therefore assumed in respect to the Robert heirs was a liability to pay them the sum of $20,000 cash

Beauharnois Corporation-Mr. Gardiner
and to issue to them 21,000 fully paid up class A shares of the Beauharnois Power Corporation Limited. This, then will give some idea of the real price of the Beauharnois project when Mr. Sweezey purchased it, and using this as a basis for computation we can realize how the property increased in value from the time Mr. Sweezey purchased it until it was subsequently acquired by the Beauharnois Power Corporation Limited.
In addition to assuming the above liability, the Beauharnois corporation agreed to pay the Beauharnois syndicate, which was Mr. Sweezey and his friends, $4,750,000 in cash; to assume all their liabilities, and to pay them the sum of $10,000 in cash to wind up the affairs of the syndicate. On the other hand, the Beauharnois syndicate agreed to buy 1,000,000 class A common shares of the Beauharnois Power Corporation Limited at $1 per share, and to pay for the same at the time the syndicate received the above mentioned sum of $4,750,000 in cash from the company. Valuing Class A common shares at the value, placed upon them by Robert Dodd and Company, investment bankers, of $60 per share, we find the Beauharnois syndicate getting class A common stock worth $60,000,000, and $3,760,000 net in cash from the Beauharnois Power Corporation Limited for selling to them the Beauharnois undertaking which I have already mentioned as consisting of the rights and assets of the Robert heirs, which previously had been acquired by Mr. Sweezey.
This value of $60 per share is indicated in a comprehensive and analytical study of the values of the Beauharnois Power Corporation Limited by these investment bankers in the Financial Post of Toronto, which sets forth the value of the securities of the Beauharnois Power Corporation Limited. I have before me, Mr. Speaker, a copy of the Financial Post of April 3, 1930, not very long ago, which contains an analytical study of the values by Robert Dodd and Company, Incorporated, Royal Bank building, Montreal. I desire to read a few of the paragraphs of this particular study.
It will be remembered that I have already mentioned that Beauharnois Power Corporation Limited decided to issue bonds to the extent of $30,000,000, and this is a study of the prospects of this company in regard to the sale of these bonds. The first paragraph which I desire to read is as follows:
A Bond-iShare-Warrant Investment
It should be appreciated by investors that to every $1,000 bond is appended five shares of A common stock free; also warrants entitling the holder to purchase twenty shares at $35 per share of B stock, which ranks equally with the 2419-1511
A stock, though without voting rights. Neither the free shares nor the warrants may be detached from the bond certificate, until in the case of the bonus stock, October 1, 1932, and in the latter-
That is the B stock.
-from October 1, 1932, to October 1, 1937, therefore the prevailing market value of these A and B stocks is at all times a market equity on behalf of the bond itself.
Now I go down to another paragraph which is important, and which gives an analysis of the earning powers of this company:
Briefly, our analysis discusses in circumstantial detail, the expectations of this 30-year bond-share-warrant investment over a five-year period, when 1.000,000 horse-power should be in operation, and we show with that production-unit (50% of the final objective), an earning power equal to slightly over $4 a share on the A and B shares combined, after all charges.
With this $4.25 earning power per share, we believe a price of $60 a share to be quite conservative, without giving consideration to the investment momentum which will gather force when the public realize the company's industrybuilding characteristics in the territory adjacent to the Beauharnois operations.
We have another paragraph headed: Unusual Increment Indicated
The following tabulation considers the market equity of the 30-year bond and its share attachments. if all securities, bond and shares, are held for permanent investment, taking the pTice of say $60 a share, within a period of 5 years.
A $1,000 bond cost	 $1,000
5 free shares valued at $60	 300
Increment on 20 shares at $25.. ..	500
Market value of $1,000 investment. $1,800


Mr. GARLAND (Bow River):: As well as 6 per cent interest.


Robert Gardiner: And 6 per cent interest. Let me remind the house that these figures are quoted from the Financial Post of April 3, 1930.


Mr. JACOBS:: Is the hon. member reading
from an advertisement in that publication?


Robert Gardiner: I am reading from an
advertisement issued by Robert Dodd & Company, Incorporated. I would like to direct attention to the following which appeared in this advertisement:
Briefly, our analysis discusses in circumstantial detail, the expectations of this 30-year bond-share-warrant investment over a five-year period, when 1,000,000 horse-powder should be in operation, and we show with that production-unit. (50 per cent of the final objective), an earning power equal to slightly over $4 a share on the A and B shares combined, after all charges.
This company has received from this government the approval of plans to carry 40,000 cubic feet of water per second. That amount
2388	COMMONS
Beauharnois Corporation-Mr. Gardiner
of water should produce approximately 500,000 horse power, but this advertisement states that within five years 1,000,000 horse power will have been developed. Under these circumstances Your Honour will understand why we look upon this project as being inimical to the interests of the people of Canada. The advertisement states that the development of 1,000,000 horse power would be only one half of the final objective.
After negotiating this transaction, the Beauharnois Power Corporation Limited entered into another agreement with Newman Sweezey <fe Company Limited, and the Dominion Securities Corporation, Limited, the details of which are set out in the statement in lieu of prospectus in paragraph 1. I have a copy of that statement should any hon. member desire to see it.
Under this arrangement the Beauharnois Power Corporation Limited agreed to sell $30,000,000 worth of their 6 per cent bonds and 770,000 class A common shares to the above mentioned two companies for $27,000,000 cash. Of the 770,000 class A common shares thus disposed of, 150,000 thereof had to be set aside to bonus the $30,000,000 worth of bonds at the rate of 5 A shares for every thousand dollars worth of bonds. This would leave 620,000 class A common shares in the hands of Newman Sweezey & Company Limited and the Dominion Securities Corporation Limited after the bonds had been bonused. To understand what the result of this agreement is in
Syndicate
Newman Sweezey & Co., and Dominion Securities Corporation Limited	
so far as the corporation and the promoters are concerned, we will continue to calculate the value of these securities as set out in the analytical study by Robert Dodd & Company Incorporated. The 620,000 class A common shares which remain after 150,000 class A common shares have been provided for bonus-ing purposes, at $60 per share, would amount to $37,200,000. Thus far we have this situation. The company has $27,000,000 and Newman, Sweezey & Company Limited and Dominion Securities Corporation Limited have bonds worth $3,000,000 and 620,000 class A common shares worth $37,200,000. In addition to the above there should be added to the $3,000,000 worth of bonds kept by Newman Sweezey & Company Limited and the Dominion Securities Corporation Limited 15,000 class A common shares as a bonus, each valued at $60, making a total of $900,000. In the final analysis, therefore, Newman, Sweezey & Company Limited and the Dominion Securities Corporation Limited get $3,000,000 worth of bonds and $38,100,000 in class A common shares, and the company gets $27,000,000, an arrangement which cannot by the wildest stretch of imagination be considered in the best interests of the company or of the public. To sum up the whole situation in a few words, Mr. R. O. Sweezey and his associates receive through the Beauharnois syndicate, the Newman Sweezey & Company Limited, and the Dominion Securities Corporation Limited the following:
Cash	 $ 3,760,000
1,000,000 class A common	shares.	60,000,000
63,760,000
Bonds	 3,000,000
635,000	class A	common	shares.	38,100,000
Total	 $104,860,000
In addition they obtain the whole Beauharnois project paid in full by the Beauharnois Corporation Limited, which means that Sweezey and his associates have not one single dollar of their own money invested in this transaction. In other words, for promoting this transaction they receive S104.860,000, the company has some $23,300,000 and in addition has to pay any other liabilities of the Beauharnois syndicate.
Contrast to this the total cost of the entire work as set out at page 39 of Mr. Brown's report -which will be referred to later by one of my colleagues-given at $65,339,750. If we deduct the sum of $16,000,000, estimated by Mr. Brown as being the approximate amount properly chargeable to navigation and to be

paid to the company by the Dominion government, we would have a total net cost to the company for power development fixed at $49,339,750, or in round figures $50,000,000,
As the matter now stands the company have some $23,000,000 in their treasury, and to get the remaining $27,000,000 they propose to issue first mortgage bonds of the Beauharnois Light, Heat and Power Company to the estimated amount of $50,000,000. This is established by reference to the prospectus issued by A. Iselin and Company and Wood Gundy and Company Incorporated. This will net them an amount more than sufficient to build the entire undertaking. There will be no need to sell the 3,200,000 class B shares which have an estimated value of $192,000,000.

Beauliarnois Corporation-Mr. Garland
If these shares were sold dividends would have to be paid and they are now being offered for sale. In other words, we have this situation:
Beauharnois Power Corporation Limited
30-year bonds	 $ 30,000,000
Class A shares	 108,000,000
Class B shares	 192,000,000
Beauharnois Light	Heat	& Power CompanyFirst mortagage	bonds..	..	50,000,000Share capital	
unknownTotal	
$380,000,000
Securities outstanding total $380,000,000, plus the shares of the Beauharnois Light, Heat and Power Company, in order to build a project which will cost some $50,000,000 and the entire transaction based and financed on assets for which the Robert heirs received in 1927 $20,000 in cash and 21,000 class A shares at $60 each, or $1,260,000, making a total of $1,280,000.
This is sufficient in itself to justify the rescinding of the order in council which enables Mr. Sweezey and his associates to perpetrate such an outstanding grab of the natural resources belonging to the people of this Dominion, and Canada should follow the precedent established by the people of the state of New York in connection with the Long Sault Development Company, and cancel the charter of the Beauharnois Power Corporation, Limited. The Dominion government has granted this charter. Sweezey and his associates have abused the privileges conferred upon them by the house, which should therefore act at once and cancel their charter.


Edward Joseph Garland: Mr. Speaker, it i3. I think, to be regretted that the rules of the house on this occasion prevented the hon. gentleman who introduced the subject from concluding the argument in connection therewith. Because of the forty minute rule it has fallen to my lot to build the second half of the argument on this matter. I remember right opposite me in the very seat which is at present occupied by that tribune of the common people from Saskatchewan, the hon. member for Weyburn (Mr. Young), there sat last year another tribune of the common people, this time from Quebec. When we were then discussing a subject of this kind, that man, turning to the Prime Minister (Mr. Mackenzie King), said: "It would be a blessing to the people of Canada if the Prime Minister would show the gate to some of the gentlemen who compose the big interests, the Beauharnois crowd and all the rest of them." A good chief bouncer, he said, was what the government needed.


Mr. MANION:: Who said that?


Edward Joseph Garland: The hon.
member for Labelle (Mr. Bourassa). In emphatic terms he made reference to this question last year, at the very time that the negotiations in respect of the application of the Beauharnois people were taking place. The hon. member for Acadia (Mr. Gardiner) has placed before the house a picture of a colossal financial structure built up on one of the most valuable natural resources of the people of Canada, bult up only by virtue of rights granted the company by the Dominion government under order in council. We have in that structure an example, not only of financial brigandage in its extreme, but of the old situation of interlocking directorates to which reference has been made in past years. On looking at the board of directors of the company, I find the following names:
Hon. W. L. McDougald, M.D., president of the Harbour Commissioners of Montreal.
I think he is a senator.
R. O. Sweezey, Esq., president of Newman, Sweezey and Company, Limited.
This company has apparently profited immensely in the financial transactions of the Beauharnois corporation to date.
A. F. White, Esq., vice-president of the Canadian Bank of Commerce.
Aime Geoffrion, Esq., K.C., director of the Canada Life Assurance Company.
Mr. Geoffrion is one of Sir Herbert Holt's able counsellors.
J. H. Gundy. Esq., president of Wood, Gundy and Company Limited.
Where have we heard that name before, even in the house? Gundy is Holt's partner in many of his firms.
G. H. Montgomery, Esq., K. C., director of the Montreal Light, Heat and Power, Consolidated.
I will speak of him a little more later. This company is another Holt concern.
S.	Godin, junior, Esq., director of British Columbia Power Corporation, Limited.
He was formerly a secretary to Sir Herbert Holt.
Miller Lash, Esq., K.C., president of the Brazilian Traction, Light and Power Company, Limited.
Hon. P. J. Paradis, director of Quebec Power Company.
M, W. Wilson, Esq., general manager of the Royal Bank of Canada.
Holt, by the way, is president of the Royal Bank of Canada. Thus we observe a board of directors unquestionably "Holt" in character, and yet in it are the necessary political influences, the necessary financial influences to
2 3w>
COMMONS
Beauhamois Corporation-Mr. Garland
which Mr. Sweezey referred in his letter to the brother of Senator Raymond, Mr. Alderie Raymond, which letter was quoted by the hon. member who preceded me.
There was associated with this company in the earlier stages of its activities a gentleman named Jones. Jones, I understand, was president of the Canada Cement Company. He was a rather famous gentleman at one time and possibly still is. In the newspaper despatches last fall, the public learned that Mr. Jones had departed out of this country and had taken with him, it is alleged, the sum of $3,500,000. Search as we may, we can find nowhere any record of any service that Mr. Jones rendered the company to justify the payment of this $3,500,000. It would be immensely interesting to know to what purpose that amount of money was put. What has happened to it? Above all, what has happened to Mr. Jones? He has, so far as I am informed, not been seen in Canada since. I do not know where he has gone, but my information is that he is not in Canada at the present time and he has not been here since this transaction took place.
Thus you have the plan: first, acquisition of property as cheaply as possible; second, the creation of a gigantic capital structure for the purpose of exploiting the public, and third, the securing of the necessary political influence to bring political pressure to bear in the matter. The structure pictured by my predecessor in this debate, the obvious intention to create a gigantic public steal in connection with the matter, constitute justification for the conclusion of the hon. member for Acadia that the incorporation of this company should be cancelled. Is there a precedent for this? I find one in the case of the Long Sault Development Company, a United States concern which commenced operations and spent, it is stated, more than $1,500,000. Their charter was cancelled for reasons given subsequently by the state of New York from the government of which they had secured their charter. Amongst the grounds for the attack on the company was that it was overcapitalized. This, of course, was not the only ground upon which cancellation was granted, but it was one of them. In the proceedings in connection with the cancellation of this charter an examination of some witnesses took place. One witness, a Mr. Freeman, was examined. The examination appears in the report of the Commission of Conservation of Canada, 1913, which I have under my hand and at pages 83 to 84 the testimony of this gentleman will be found. The statement is made:
IMr. E. J. Garland.}
You cannot finance a water-power project of this kind in a locality like that without putting in various other elements and speculative elements in the way of common stock and preferred stock and brokerage and percentages to the underwriting syndicate.
Then follows the examination:
Mr. Littlefield: Do you mean to say that you do not think you could handle this proposition without the familiar process of overcapitalization, and watering of stock?
Mr. Freeman: I do not know that it is overcapitalization.
Mr. Littlefield:	Some people think it is!
The issuing of stock without anything but the expectation or the hope of successful speculation. Is that right?
Mr. Freeman:	Yes.
Mr. Littlefield:	Instead of its being watering of stock, it is issuing stock on the hope of a successful speculation ?
Mr. Freeman:	Capitalized hope?
Speculation by corporations upon the hopes and desires of the unwary and deliberately deceived public is not an unfamiliar practice in modem financial and commercial business.
It is interesting to learn that this new corporation, getting great rights from the Dominion government, is carrying out true to form this now time-honoured principle of exploitation. The question for us to decide is this: Is parliament going to sanction a speculative enterprise of this gigantic form of financial brigandage? "Capitalized hope"? What a tragic mockery! Here you have the Beauhamois Power Company with 500,000 horse-power, and with the expectation that they are going to ge't the balance, or 2,000,000 horse-power in all; and capitalizing the expectation of getting the 2,000,000 horse-power, they aTe selling to the innocent public of Canada stocks and bonds based upon their intention to acquire that 2,000,000 horse-power. There again is one further reason for the cancellation of the charter of incorporation of this company.
I now come to a new stage in this discussion-to the plan to acquire the whole flow of the St. Lawrence river. The members of the house must have been staggered by the financial picture which has been placed before them by the hon. member for Acadia, and they can now hardly be in a position to receive without absolutely falling over mentally the suggestion that it is the deliberate intention of the corporation to secure the entire flow of the St. Lawrence river at this section and to put that flow through an artificial river. Do the members of the house want t'he proof?
I have the proof for them. I turn to the report of the engineers, Mr. Frederick W. Brown, asisted by Mr. W. S. Lee and T. H. Hogg. Their firkt report was made in 1927, and from that I shall make just a few quota-

Beauhamois Corporation-Mr. Garland
tions. I have pages of extracts from it, every single extract supporting the contention that the intention of the corporation in 1927 was to get the whole flow of the river. On page 1 of the engineers' report we find this:
The initial installation is designed for the use of a daily average flow of 40,000 cubic feet per second, and the designs provide for the ultimate extension of the power development and navigation provisions, so that finally the whole flow of the St. Lawrence river could be used through the proposed power canal (or, rather, at that stage, the artificial river).
On page 7 of the same report we find this:
Later when the proposed waterway is enlarged, from time to time as required, additional remedial works could be placed in the river and the existing interests compensated, and finally the whole flow of the river could be diverted through the new artificial channel.
At page 8 we find:
The new waterway should therefore be designed for an ultimate peak flow in excess of
200,000	cubic feet per second.
A flow of 200,000 cubic feet per second takes approximately the whole flow of the St. Lawrence at that section of the river. I have pages and pages of quotations from the report of 1927 substantiating that contention, but there is no need to weary the house with them.
Now I come to a further report made by Mr. Brown, the engineer, in 1928. He not only confirms the statements made in the 1927 report, but in a letter introducing the report I find the following:
Briefly I conclude that the project as outlined in my previous report can be extended so that finally the whole flow of the St. Lawrence river could be used through the proposed power canal, and, if lake Ontario be regulated as proposed, the ultimate installation might be about 2,000,000 horse-power for commercial use including spare equipment.
The report itself contains paragraphs on pages 1, 2, 3, 5 and 7, all confirming that statement. On page 13 there is a summary of the conclusions of Mr. Brown, in the course of which he says:
If the whole flow of the St. Lawrence were used there the proposed waterway-
Indicating the intention to do it. Then in paragraph 2 I find:
Additions can be made to the proposed initial use of water by enlarging the waterway and power plant.
In paragraph 3-but there is no need to weary the house further. So much up to the year 1928.
Now I come to the year 1929, the fatal year, the year in which these valuable resources were alienated definitely from the people of Canada, In the year 1929 these interests appeared before the government of this country
and applied for certain rights. In their original application they used these words: That concurrently with the installation of such locks the company shall have the right to enlarge its canal and to divert through it and utilize for the development of power all the flow of the St. Lawrence river between lake St. Francis and lake St. Louis with the exception of water required for flotage through the existing Soulanges canal, and with the exception of that quantity of water to the user of which existing power plants are now legally entitled.
In their first application to the government they ask for all of the river, but owing to the pressure of various interests, international as well as national in character, owing to the magnificent case made out by many others, this tremendous steal was for the moment stopped. The applicants had to amend then application, and the order in council which was finally agreed to reads as follows:
The application of the Beauharnois Light, Heat and Power Company now pending before the governor in Council is purely and simply for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall be diverted from the river.
That is a clear indication that the interests, and there were many of them-municipalities all over the province of Ontario, interests in the United States of America, navigation and marine associations, our own people in Canada -all were opposed to this Beauharnois scheme and they registered their opposition to it. In fact, almost everybody that I can think of made a protest. Then what happened? The application is reduced to 40,000 cubic feet per second. That is all that the government granted, a flow of 40,000 cubic feet per second.
By the way, there appeared before the private bills committee of the Quebec legislature a gentleman named Montgomery, to whom I have already made reference. At that time this gentleman represented some interests in Montreal who were definitely opposed to this scheme, and in the course of his statement on February 29, 1928, before the private bills committee of the legislative assembly of the province of Quebec, Mr. Montgomery, K.C., said:
Last year when we came down here there was not even a plan before the house; the idea was to grab the rights.
I submit that the promoters of the scheme have only modified to some slight degree their plans in order to meet the opposition, and they have succeeded in grabbing everything that they require. My evidence in support of that is contained first in the statement to which my hon. friend from Acadia has referred. I have in my hand an analytical study of the Beauharnois Power Company
2	COMMONS
Beauhamois Corporation-Mr. Garland
prepared by Robert Dodd and Company, the first paragraph of which reads:
In a review of the hydro-electric power situation in the provinces of Ontario and Quebec upon which we have been engaged for the last six months, the data secured has warranted our implicit belief in the inherent possibilities of great market increment being assured for the securities of the Beauharnois Power Corporation, with its prospective 2,000,000 horsepower development on the St. Lawrence river.
They can only develop 2,000,000 horse power if they get the whole flow. If they get those rights, whether from this government or the Quebec government matters not, if they get the rights to move that water through the canal, they get the entire flow of the river.
As I said earlier, I find that in making their offerings of securities to the public they are deliberately and maliciously deceiving the public unless another contingency, to which I will refer later, arises. They say:
It will be observed that our analysis discusses in circumstantial detail the expectations of this 30-year bond- share-warrant investment over a five-year period, when 1,000,000 horsepower should be in operation; and we show with that production unit, which is 50 per cent of the final objective, an earning power equal to slightly over $4 a share on the combined common stock outstanding.
I find in that same analytical study other clauses concerning additional capital reductions, another reference in column 2, and a third on the second last page, all of them confirming the foregoing. My time is limited and so I cannot quote them all. I find confirmation of these statements in the statement in the Financial Post. I pass that over. I find it in an excellent editorial on St. Lawrence power costs which appeared in the Toronto Daily Star of Tuesday, January 14, 1930. The editorial was evidently inspired by the presence of Mr. Sweezey in the city or by a speech which he made. This is the first paragraph:
An interesting suggestion was made by Mr. horman Sweezey, president of the Beauharnois Power Company, in the speech he made last week	
The combined plans enable the company to develop 500,000 horse-power at reasonably low capital cost and if, at a subsequent date, the company should be authorized to use the whole flow of the river, as is likely, the capital cost per horse-power will become extraordinarily low.
I have referred so far only to an editorial and to some analytical studies, the latter, it is true, made by a responsible financial house of some standing in this country. That is not enough, and I am not satisfied to base my case on evidence of that character. Therefore I intend to go further. I take the pros-
pectus of the Dominion Securities Corporation, Limited. It is true they are allies of this general outfit. The Dominion Securities Corporation, Limited and Newman, Sweezes' & Company, Limited, are the two companies that secured this tremendous and very profitable transfer of $30,000,000 bonds and 770.000 class A stock for $27,000,000-a pretty nice deal for anybody. I have another prospectus by A. Iselin and Company, connected with the Dominion Securities Corporation and Wood, Gundy and Company. I have a third prospectus issued by Wood, Gundy and Company themselves. Mr. Gundy is a director of the concern. The Dominion Securities Corporation are directly interested in the concern. All of them put out the following statement in their respective prospectuses:
It is estimated that the unallocated balance of about 100,000 cubic feet per second, if passed through the company's canal would permit installation of approximately 1,000,000 additional horse-power. The company's proposed development, m the opinion of its engineers, is the most efficient method of utilizing the entire drop ill this section of the river. In view of the above, provision is made in the plans and considerable work is now being done -with a view to installing further units if additional water becomes available.
This is contained in the prospectuses. But what is it? It is a letter three foolscap pages in size, headed "Beauharnois Power Corporation Limited, Montreal," and is dated December 2. 1929. Why, the ink was hardly dry on the order in council passed only a few months previously when this letter appears and becomes part of their bond-selling campaign. It is addressed to Newman, Sweezey & Company, Limited, The Dominion Securities Corporation, Limited, and Wood, Gundy & Company Limited, and it is signed by R. O. Sweezey, president of the Beauharnois Power Corporation Limited. Mr. R. O. Sweezey takes responsibility for saying: first, that work is now being done-and second, that the plans have been altered with a view to putting through the canal more than the amount of water they secured the right to put through from the Dominion government and the legislative assembly of Quebec-much more. The entire flow of the river is their obvious intention.
Now, Mr. Speaker, I ask this question: Is it believable that these firms with their reputation built up in this country for a fair measure of truth and honesty in dealing, men whose future will depend on the integrity of their actions, the truth of their statements, and not only the truth of their statements but the truth of the implications in their state-

Beauharnois Corporation-
-Mr. Garland
ments-is it conceivable that these men would be guilty of deliberate misrepresentation amounting to fraud? To me it seems inconceivable. I can hardly credit that the Dominion Securities Corporation, A. Iselin & Company, Robert Dodd & Company and several others-I need not bother to specify them-I cannot conceive that these great financial houses would be guilty of this deliberate fraud, for it is nothing short of that if there is no truth in the expectation of securing the entire flow of the river. So I ask this question of the Prime Minister of Canada: Is there an agreement secret or otherwise? The right hon. gentleman need not answer at the moment because my time is limited.


William Lyon Mackenzie King: I know absolutely of none. There is none.


Edward Joseph Garland: I ask the
leader of the opposition:	Is he aware of any
agreement between his own party and these interests in connection with the matter?


Richard Bedford Bennett: I am delighted to inform the hon. gentleman that all this is largely news to me. I have no agreement, secret or otherwise, in respect to the matter.


Edward Joseph Garland: Now, Mr. Speaker,-


Samuel William Jacobs: I think you might put the
same question to the leader of the Progressive party.


Edward Joseph Garland: Your
declaration is not important, but we will assume you are honest in the matter; the obvious answer is no. Now, Mr. Speaker, we have the situation that the heads of the two political parties in Canada that are likely to have power in this house deny that any agreement exists under which, or because of which, or by reason of which these people would be justified in assuming that they will become possessed of the entire flow of the river. Then I say, Mr. Speaker, these firms are guilty of deliberate misrepresentation.


Mr. CHURCH:: They should be prosecuted.


Edward Joseph Garland: They are
guilty of deliberate misrepresentation, and the Department of Justice of this Dominion should, in my opinion, take definite action immediately in regard thereto. Furthermore, if Sweezey, the president of this organization, is responsible for the statements contained in these prospectuses, then I say the incorporation should be cancelled and the rights which the Dominion have granted to him should be withdrawn.


Richard Bedford Bennett: May I ask the hon. gentleman a question?


Edward Joseph Garland: Yes.


Richard Bedford Bennett: I think I heard him say that the expenditure was limited to $18,000,000 for the canal between the two lakes.


Edward Joseph Garland: I did not
say that.


Richard Bedford Bennett: Perhaps it was the hon. gentleman who preceded him.


Edward Joseph Garland: I did not
make a full statement of the actual financial structure. I have now shown the intention of the Beauharnois Power Corporation to secure the whole flow of the river; Both political parties repudiate any agreement in connection with the matter; I have shown that in the absence of agreement there is deliberate misrepresentation of the situation in respect of this company. I demand definite action by the Department of Justice.
I come now to the next stage. By the way, it is interesting to note that these gentlemen have overlooked nothing. Not content with the steal they are prepared to make by misrepresentation-I must assume it is that now- not content with the steal they are preparing to make by virtue of the overcapitalization with its watered stock, they are going further, and hon. gentlemen will be astounded by the story. It will be necessary, you see, to transmit the power from the buss bar to the industrial plants in different parts of the country, and so they have organized a transmission company to take care of that- not for the purpose, I assume, of losing money. They have also organized a construction company. What for? I pressume to build the canal. How are they going to get the money for the construction of the canal? By the issue of bonds. Who is going to pay for the canal? The public. It is all very easy. The next stage is to have a land company. Why? Because real estate values in the vicinity of the canal will likely advance if they have control of the water power. They want to get industries there, and they are asking them to come there now. They will have control of the Beauharnois townsite; they will have control of this place and that place, and they expect to be able to make very considerable accretions to their real estate value. They have established a land company to handle that part of the project, and to buy more land on a speculative basis. The final subsidiary company interested in this enormous octopus is a railway company. I do not know what that railway company will do, but there you have them all. These are all based upon the parent body incorporated under Dominion charter, and it may be that bonds issued by all these concerns may become prior rights on
2394	COMMONS
Beauhamois Corporation-Mr. Garland
the earnings of the bonds of the first corporation. I do not wish to deal at length with that part of the question because my time is running to its close. Let me revert however to the letter written by Mr. Sweezey. In part, he said:
In view of the above, provision is made in the plans-
Note that, that provision is made in the plans.
[DOT]-for the diversion of the entire flow of the river.
But we learn from the Dominion government, through its Minister of Public Works, that only 40,000 cubic feet per second can be used, and we learn that in the lease granted by the legislative assembly of Quebec only
40,000	cubic feet can be used. Yet we find this man coming out and saying definitely in a public letter that the plans have been altered to make it possible to secure control of the whole flow. In view of this deliberate violation of the order in council, and of the spirit and letter of the order in council, I ask that it be rescinded by the prime minister, and I think I am making a fair request. That is not the only violation in respect to the plans; we are told in the same letter that considerable work is being done and money is being spent with a view to taking the whole of the river and producing 2,000,000 horse power. The fact that it is in the future makes no difference; the principle is at stake. Either the order in council must be rigidly adhered to both in letter and in spirit, or that order in council must be rescinded. On behalf of the people of this country I ask that this order in council now be definitely rescinded; and if any legal grounds can be found for cancellation of the charter of incorporation I ask that it be revoked. To my mind this is one of the most appalling steals that has ever taken place in Canada.
I have one further reason for my stand- the effect upon the whole of the St. Lawrence scheme. In 1926 a joint board of engineers issued a report which I have in my hand. The board consisted of six engineers, three of whom were appointed by the United States and three by Canada. They went into every possible detail as to the construction of a great St. Lawrence waterway, and after their deliberations they made their report. I refer particularly to the report as it affects the Sou-langes section, and which is contained in pages 35 to 38. The main report is embodied in the opening chapter, and the appendices carry other detailed information and refer to other representations which have been made.
I find in this report that the engineers con-
sidered a plan which is equivalent to the Beau-harnois project, and they pushed it to one side; they did not favour such a plan, but they favoured the choice of two others. They favoured either the development of the Sou-langes canal section or further river development. On page 36, at section 162 of the report, I find this paragraph:
162.	Improvement of the river for navigation and power, Soulanges section: The board finds that it is practicable and advantageous to combine the improvement for navigation in this section with the development of power on a progressive program of construction of power plants, only the first part of the power development being undertaken in conjunction with the works required to carry navigation through the section.
163.	In brief, this plan provides for a dam at the head of the Cedars rapids-
The report goes on for several sections, but I shall not worry the house by reading the detailed description of the project. That project is not the Beauhamois project, it is not the one on the south side of the river. Then at page 38 I find that three proposals were made:
. (a) A lateral canal on the south side of the river

This is similar to the Beauhamois plan. Then under section (b) there is mention of a lateral canal on the north side of the river, and in section (c) there is a proposed river improvement. Under the heading "conclusions" I find the following:
The board unites in the view that the navigation improvement combined with the progressive development of power (paragraphs 162 to 169) hereinbefore set forth better provides for the present and future development of the waterway than any scheme for navigation alone, and is therefore a desirable scheme, if arrangements are made whereby power interests bear a fair proportion of the cost of the initial expenditure required.
I might explain that paragraphs 162 to 169 inclusive refer to the plan for the north side of the river.
In section 176 we find a statement which may at some future time prove to be the chief excuse for departure from the unanimous report which I have just read. Section 176 is as follows:
If it be found impossible to arrange for such cooperation in meeting the initial cost, a majority of the Canadian section-
I would ask hon. members to note the expression "a majority of the Canadian section." That would mean two out of three. The section goes on to say:
-favour the construction of the lateral canal on the south side of the river.
Only two out of three Canadians, and two out of six engineers, which is the total number

Beauharnois Corporation-Mr. Elliott
of engineers on the joint board of engineers. The evidence is that the government of this country departed from the definite unanimous recommendation of the joint board of engineers. They alienated to a group of private individuals whose story has already been related the Dominion rights in regard to this section. I can say further that the Brown engineering reports, both the one of 1927 and the one of 1928 upon which the application to the Dominion government is based, embodied within their pages many paragraphs which reflected an inability to arrive at definite conclusions in many important matters. I could quote for an hour paragraphs that would say in effect:
While this equation and the levels to be derived from it may not be absolutely correct for the range of levels for which the first remedial works were designed, and while it is possible that beyond these levels it may not be accurate, it is moderately certain that for the present case it is as accurate as can reasonably be expected.
All through the report there is vagueness and uncertainty. On the other hand, we have the report of the joint board of engineers, which is definite and conclusive. There should never have been alienation of a single section of this river. It is a great international waterway and nothing should have been done until the plans were completed for the entire development and until they had been agreed upon by the governments and the interests concerned. I have come to that conclusion because this is not a river in the same sense as the Ottawa river or the Peace river; it is an international stream. I am not a lawyer, but I doubt very much whether the Navigable Waters Protection Act can apply with the same force and effect in reference to the St. Lawrence river. It is more than a river; it is a great international boundary line of waterways. Other countries have rights on the river; we are tied up by two treaties in this connection with the United States. I am informed that France still retains certain rights and that Great Britain has certain rights. The St. Lawrence might be called the jugular vein of Canada, stretching from the sea to the middle of the continent, and the waterway scheme is now being jeopardized by the alienation to private interests of these Dominion rights. I make this statement because the joint board of engineers recommended that power should be used in helping with construction in the canalization. The government have alienated a part of the section without providing for the other sections, and have definitely jeopardized the scheme. A second reason, as I said before, is that they have definitely departed from the plan of the joint international board.
Now it will take me just about one minute to sum up. First, I find that there has been gross over-capitalization of this company by greedy, calculating, cold-blooded promoters, who stop at nothing, not even the exercise of political influence, as stated in Sweezey's own letter to J. Alderic Raymond. I find further that he is guilty of statements to the public in a letter, which is public, that would lead us to conclude that he has violated the terms and spirit of the order in council. I find that there is deliberate misrepresentation amounting to fraud in the prospectuses issued by his associates in their different companies; by Gundy, one of the directors; by Sweezey, president of the corporation and one of the interested gentlemen in Norman Sweezey and Company, and so on. Finally, I find that this alienation jeopardizes the whole future of the St. Lawrence.
For these reasons and others, Mr. Speaker, which I could enumerate if time permitted, I ask that the government now rescind the order in council and, if legal provision can be made, cancel the incorporation of the Beauharnois corporation.


Hon. J. C. ELLIOTT (Minister of Public Works):: Mr. Speaker, I have listened with great interest to the very carefully prepared addresses of my hon. friends who have already spoken on this question. May I first of all express to the leader of the Progressive group , (Mr. Gardiner) my apreciation of the fact that before lunch I was handed a memorandum which gave me some idea of the arguments which he proposed to submit to the house this afternoon. For the opportunity that I had of considering the question for a few moments before the house opened I want to thank my hon. friend.
May I first of all endeavour, as briefly as possible, to point out to you, Mr. Speaker, what was the position of the company at the time the application for approval under the Navigable Waters Protection Act was presented to the department over which I have the honour to preside. First I should like to refer to one remark made by the hon. member for Bow River (Mr. Garland) in which he stated that the Navigable Waters Protection Act, in his opinion, cannot have reference to a river like the St. Lawrence.


Edward Joseph Garland: No, I did not say that; I said with the same force and effect as it would have to other rivers. There is a question in my mind as to that.


John Campbell Elliott: I just want to say to my hon. friend that if he will read the act carefully he will see that it was intended that it should apply to the St. Lawrence river with
2396	COMMONS
Beauharnois Corporation-Mr. Elliott
regard to everything except bridges over that river. That is made clear by section 11, which states that no approval shall be given to the site or plans of a bridge over the St. Lawrence river. I submit that this makes it perfectly clear that this is the only exception with reference to the St. Lawrence river.
Now, what was the origin of this company? I do not intend to go into the details which my hon. friends asked to be laid on the table of the house weeks ago. All the material for which they asked, giving all the information in the possession of the government and particularly of the Department of Public Works [DOT]vith regard to this matter, was placed before them. The Beauharnois Light, Heat and Power Company, incorporated under a charter from the province of Quebec, made an application to the province of Quebec for a lease, which application was granted. I should like just to direct my hon. friends' attention to the terms of that lease. That was a lease of '*'the rights of the province of Quebec to such part of the hydraulic powers of the St. Lawrence river that could be developed between lake St. Francis and lake St. Louis through a diversion canal on the right (southern) shore, having a maximum flow capacity of 40,000 cubic feet per second." The province reserved the ownership and the free disposition of the surplus. That was a lease of "the rights of the province of Quebec," not the rights of the Dominion of Canada, and since my hon. friend has studied carefully the order in council which was passed and which was tabled in this house the day it was passed, namely March 8, 1929, he will see that the order in council makes it perfectly clear that the permission to divert the water applies only to such rights to that water as are owned by the province of Quebec. That is the first point.
They come to the department with a lease from the province of Quebec of fights of the province of Quebec to divert certain water, which must belong to the province of Quebec under that lease. They propose to divert it in a certain way, and under the Navigable Waters Protection Act the duty of the department is to look at the plans under which that diversion is proposed and say whether or not they affect navigation. It is not a question of property rights but a question of navigation of the particular stream in which these waters flow. That was the position when they came to the department.
Notice of the application was advertised at length, and as it was a matter of special importance a hearing was given to which all 
the interested parties were invited to come and make their representations. The representations made at that hearing were, in most cases, not representations objecting to the granting of the approval of these plans, but were largely arguments from another company, which afterwards put in an application saying that if they were given approval of a somewhat similar scheme they would put in the locks as well as dig the canal. I believe the evidence taken at that application, if carefully read, will absolutely convince my hon. friends that those were the main objections made at that time.


Edward Joseph Garland: May I suggest that there were also objections presented by international bodies, by marine associations, by navigators and by others. I have all the files in the matter, and I know there were many more than those two or three companies specifically interested.


John Campbell Elliott: I think my hon. friend
is quite right as to the number of associations which were present. The marine association and the various other associations to which he has referred directed their attention very largely to the fact that at that time they proposed eventually to get the whole flow of the river, and they could not agree to that proposition. That was the main objection, and it was made perfectly clear to the applicants on that occasion that an application for the whole flow of the river would not be granted. They presented an amended application, asking for only the 40,000 cubic feet per second as the total amount to which they should be entitled.
That is the proposition which was passed upon by the department under the Navigable Waters Protection Act. Section 4 of the Navigable Waters Protection Act reads:
hio work shall be built or placed in, upon, over, under, through or across any navigable water unleg the site thereof has been approved of by the governor in council, nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council.
I appreciate the fact that no criticism has been offered as to the conditions imposed. Every precaution was taken, but we were passing only upon rights which the province of Quebec had the right to give to the applicants. The order in council and the contract based upon that order in council provide that if at any time it is found that any waters sought to be diverted by this scheme do not belong to the province of Quebec but belong to the Dominion, then the approval does not

Beauliarnois Corporation-Mr. Elliott
have effect. There is a right to cancel the approval and to take over any works which have been constructed thereunder.
What my hon. friend has said with reference to the finding of the joint board of engineers is not quite accurate. Section 22b of that report reads:	.
In the Soulanges section (second division), the board recommends a scheme for navigation correlated with a progressive development of power instead of a side canal for navigation only.
Section 176, which my hon. friend quoted, reads as follows:
If it be found impossible to arrange for such [DOT]cooperation in meeting the initial cost, a majority of the Canadian section favour the construction of the lateral canal on the south side of the river (Melocheville-Hungry bay project) which is the least expensive means of providing navigation.
A lease had been granted by the province [DOT]of Quebec and the lessees came to the department asking for approval of the plans under which the waters covered by that lease were to be diverted. It was considered to be a matter of urgency, and there was taken into consideration the fact that the water to be diverted was not in the right of the Dominion, but rather in the right of the province of Quebec. The charter and lease had been granted by the province of Quebec. The question was whether or not the diversion proposed might affect navigation, and the Department of Public Works were called upon to consider that question. The department said in effect: Navigation will not be prejudiced, injured or detrimentally affected by diverting 40,000 cubic feet per second of water in a canal, providing the canal is of a certain type. Those familiar with the evidence know that at that section navigation is very *difficult, and the type of canal which the Department of Public Works said must be constructed in order to divert the water was declared to be a canal 27 feet deep, 800 feet wide at the top and 600 feet wide at the bottom. The department said to the applicants, " If you divert that water through a canal of that type and give to the Dominion of Canada the use for all time of that canal, then it will approve your plan and not otherwise."
I do not know that it is necessary for me to -go into the financial aspect of this situation; I think that has changed entirely since approval was given on March 8, 1929. I will state quite frankly that I was not familiar with the individuals who constituted the corporation at the time application was made, nor am I familiar with the present personnel of that corporation. This matter was considered on its merit and with the greatest
possible care, and we were called upon to pass upon an engineering proposition in which the best other engineers available, along with the engineers of the department, advised that not only would navigation not be prejudiced by this water being diverted in a canal of the dimensions provided for, but that we would have better navigation than was possible with the river in its natural flow, as a matter of fact we would have one of the best navigation canals in the world.
The agreement provides further:
Whenever the governor in council so declares the right of public navigation within and along the proposed canal or any portion thereof to the same extent and in manner similar to that provided in the case of the new Welland ship canal shall thereafter exist and be recognized by the company.
My hon. friend was good enough to provide me with a copy of his notice, which reads:
The government has approved of the above development by passing order in council 1' V-422, March 8, 1929, and in so doing the government has not accepted the plan for this undertaking recommended by the joint board of engineers, dated November 16, 1926.
I have already answered that by saying that the majority of the Canadian section were favourable to a scheme similar to that provided for in section 176. The notice states further:
and in so doing have committed acts which justify a demand for an explanation by the government as to whether or not there is an agreement between the government and K. U. Sweezey and his associates who own and control the said company and corporation whereby the whole of the unallocated portion of this section of the St. Lawrence river will be turned over to them for exploitation.
It is unnecessary to conduct any investigation to find out whether or not such an agreement is in existence-there is no such agreement in existence and no such agreement has been applied for by the parties connected with this matter.


Robert Gardiner: Is there any understanding?


John Campbell Elliott: No understanding, and it
was to prevent the possibility of any misunderstanding that it was made perfectly clear at the time of the hearing. As my hon. friend has said, the first application suggested the possibility ultimately of the diversion of the whole flow of the river, but that was refused. It was made perfectly clear that the application had to be changed so as to have it understood that only 40,000 cubic feet per second was proposed to be diverted.
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Beauhamois Corporation-Mr. Elliott


Robert James Manion: Had that first application, for the diversion of the whole flow been accepted by the province of Quebec?


John Campbell Elliott: I do not think it had ever been made to the province of Quebec. We had before us from the province of Quebec only the lease of the 40,000 cubic feet per second. It is not necessary for me to repeat. We were dealing at that time with the application for approval of plans for the quantity of water permitted to be diverted under that lease, but it was made abundantly clear that that must be limited for the purposes of the company to the 40,000 cubic feet per second. That is the answer to that portion of my hon. friend's question.
I have already given the reasons for the departure, if you can call it such, from the terms of the recommendations of the joint board of engineers. We granted approval of a policy which the majority of the Canadian section advised.


Robert James Manion: The minister says that the province of Quebec had granted the diversion of 40,000 cubic feet per second. Do I understand him to say that the company then applied to the Dominion government for the diversion of the whole flow?


John Campbell Elliott: Their application was worded very broadly and it contained a clause providing that the applicants would put in the locks and other works necessary in addition to digging the canal, if they were allowed to take the whole flow of the river. Of course that was definitely refused.
The findings of the joint board of engineers were submited to the Canadian national advisory committee. I think my hon. friend has before him the details of the proceedings before that committee and will know what I am stating is correct. On January 11, 1928, that committee made certain recommendations which will be found on page 19, section (4) of the- report entitled "St. Lawrence Waterway Project." They recommended the development of the national section "by private agencies able and willing to finance the entire work, including the necessary canalization, in return for the right to develop the power."
Mr. A\ OODSWORTH: Will the minister give us the personnel of the national advisory committee?


John Campbell Elliott: Mr. W. E. Foster was the chairman. I do not know that I have before me but I would be glad to supply to my hon. friend the names of the advisory committee. Mr. Foster as chairman signed the report to the Prime Minister, that is the report to which I am referring, and in section (4) they say:

We believe that if a reasonable time were permitted in which to enable the resultant power to be economically absorbed the development of this national section would be undertaken by private agencies able and willing to finance the entire work, including the necessary canalization, in return for the right to develop the power.
I am not going to enter into the reasons which are possibly somewhat international, as to why a certain section of the Canadian portion of the joint board of engineers favoured development on the Canadian side. Two out of three of them believed that was the better course, I think in the general interest as well as in the interest of Canada in particular.


Richard Bedford Bennett: That is the same view which Mr. Sweezey put forward in Hamilton the other day.


John Campbell Elliott: I am really not familiar
with the view he has put forward, because I have not followed the matter in that way any more than I have followed the financial arrangements of the company.
Regarding the objections raised by my hon. friends, I think they are addressing them to the wrong tribunal. The province of Quebec claimed the right to lease this water. If the province has not that right, it does not pass under the order in council. If it does have that right, the province is the jurisdiction which has power to say whether or not the water flow should be leased. We have passed upon what came before us, exercising the jurisdiction which we were bound to exercise one way or another under the Navigable Waters Protection Act.


Edward Joseph Garland: Why, in
view of all this, did the minister and his government not await a definite plan for the completion of the whole St. Lawrence scheme?


John Campbell Elliott: We were dealing in this
case with waters that did not belong to the Dominion. If we felt that the interests of navigation were being prejudiced, we could,
I suppose, have refused to approve these plans, but under the Navigable Waters Protection Act, what was left to us was to say whether or not the plans as submitted to us would interfere with navigation. We were bound to decide that question and after very careful consideration we came to the conclusion, on the recommendations of the engineers, that not only would they not interfere with navigation, but they would aid navigation and give us in that section of the river a canal which would be a great improvement on anything in existence at the present time, indeed, adequate canal facilities, the very best that could be provided.

Beauhornois Corporation-Mr. Geary
I would say also that this order in council was not passed until the decision of the Supreme Court of Canada, to which a reference was submitted as to the rights of the Dominion and the province, was given.


Edward Joseph Garland: Were the
findings of the supreme court definite, complete?	.


Richard Bedford Bennett: The order in council says that they were not.


John Campbell Elliott: They were not; of course they left somewhat unsettled the question whether or not the province of Quebec had a right to this water, and we said:	This
approval applies only if the province has the right.


Mr. G. R. GEARY (South Toronto):: Mr. Speaker, I have followed the argument of the Minister of Public Works (Mr. Elliott) and if he will allow me I shall deal more or less categorically with the different points he has introduced before making some observations I have in mind to make. My hon. friend reads the Navigable Waters Protection Act and draws from a perusal of section 11 a conclusion that that act applies throughout to the St. Lawrence river. In other words he says, because the act expresses an exception in regard to bridges, it includes, by reason of making that very exception, the right to deal with the St. Lawrence river in every other particular. I do not follow the minister there. Of course, this act as far as it is sound, as far as it is constitutional, will have effect in the St. Lawrence. No one will deny that the Dominion government in connection with a harbour, for instance, or some work on the Canadian shore would, if the matter came before the governor in council, have jurisdiction to deal with it. But my hon. friend will be good enough to remember this. In stating what he did, he has missed the whole point of the argument of my hon. friend from Bow River (Mr. Garland); that is, that in respect to the national right of navigation in a boundary water that is international, the Navigable Waters Protection Act has no application. My hon. friend may say that this is not an international boundary water inasmuch as at the very spot with which we are dealing the St. Lawrence passes entirely through Canadian territory. That, to say the least, is a moot question. It was not a lawyer, but an authority whose report has been frequently quoted and whose conclusions have been generally accepted, Mr. Holgate, who made a report in 1915, and says at page
19 of that report, after reciting the treaty with the United States and other treaties in connection with this matter:
It is therefore quite clear that the St. Lawrence river is an international highway from the Great Lakes to the sea, and that neither country, following the spirit of the various treaties, could do anything to the detriment of the other country in so far as the navigation of the river is concerned.
That, I take it, is the point of my hon. friend from Bow River, and one cannot get away from that by interpreting, through the reading of one section excluding a certain thing, that the rest of the act does apply to the St. Lawrence river and that you may deal with it in the manner which has been under review. My hon. friends opposite have acquiesced in that position because when it came to a question of the diversion of water from the Niagara river, they did not attempt, although obstructions were placed in the stream, to say that that should be a matter under the Navigable Waters Protection Act. They very properly entered into a consideration of it through a treaty between the two countries, and therefore I say that at the least it is a moot point as to whether or not any arrangement such as was contemplated preceding the order in council or by the order in council should not have been carried through by a treaty between the United States and ourselves.
The second point I have taken is that this lease is a lease of the government of the province of Quebec. Very well. We went to the trouble in this parliament not so long ago of submitting to the Supreme Court of Canada certain questions for decision, questions which involved very definitely water powers on the navigable streams of this country and water powers arising from the construction of such works as canals upon the navigable streams of this country. That reference was quite futile. The questions were badly framed. It has always seemed to me that there should have been some foresight in the drafting of those questions, because it would be obvious to anyone reading them that there was nothing in them upon which the supreme court could give a judgment. It could in any event only take the place of the law officers of the crown with reference to them and tender advice. The judges of the supreme court said in effect that they could not make a decision in regard to any of the matters submitted to them unless a concrete case arises; that whatever they might say would be purely academic, and they did not choose to say anything of that character. But here we have a most important matter, a concrete case capable of determina-
2400	COMMONS
Beauharnois Corporation-Mr. Geary
tion before the courts-the question of the right to the water. It was held in Tetreaultvs. Harbour Commissioners of Montreal that the river 'bed of the St. Lawrence in the province of Quebec was held by the crown in the right of the province. There has been nothing, of course, to say that the water itself, and what water provides, that is, the power possibilities of water, belong to the province any more than they do to the Dominion. We may have our views in that matter, but it was thought by the present government that on such an important matter the question should be submitted to the supreme court for decision. So I say that when we come to these two points, when we have a concrete case in which the question arises as to the rights of navigation in international waters which are navigable, and secondly the question as to who has the right to the water powers, they might very well have been submitted to the highest court of the realm for decision before the time came to pass upon this application. I think the government had that in mind and should have had the courage to press it to a conclusion. It is amply clear that the government had that in mind from a reading of the order in council, wherein the government goes out of its way to provide that should there be in some lawsuit arising in the future a decision adverse to the provinces all these rights should be cancelled. Having that in mind, would it not have been far better for the government to settle the question once for all, rather than let these people go on with their undertaking? If it was right, and was so decided, then they could go on about their business.
My hon. friend passed on to his next point, that the application was opposed by other interests. He wanted it made clear that the opposition arose not from people who objected to this company particularly, but objected only to its being granted more than a flow of 40,000 cubic feet per second. I should like my hon. friend to look at the order in council and the amendment just a little more carefully than apparently was done earlier. I am inclined to think that the applicants for this order in council were a little too adroit for those whom they had to meet, and I think that they have really made their original application over again, although they were pretending to make an amended application. The original application asked for the whole flow. You will remember that in 1928 we had a bill before the house asking for all those rights, but it did not get past its second reading. The company amended its application, and this is how it read:

The application of the Beauharnois Light, Heat and Power Company now pending before the governor in council is purely and simply for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall
be diverted from the river	 If the
engineers think that the plans should be altered to meet this declaration the company will submit to any such alteration.
You will note "now pending". The company has not applied for an order in council limiting them in all matters to plans which will provide for a diversion of nothing over
40.000	cubic feet per second. They have asked for the approval of plans which will meet their purposes, plans which can be enlarged, only reserving to themselves what they think is likely to be granted, the right at some future time to come to the governor in council and say: "Look at the money we have spent in order to develop the whole flow of the river. You have passed upon and approved our plans, and we have gone ahead and constructed the works. We are now using our
40.000	cubic feet per second and selling the power developed therefrom. Is it not fair to give us the rest of the power?" I say, Mr. Speaker, that they have laid for themselves a very firm foundation for making such a request in the future. I would like the government to recognize what they have let themselves in for. I refer to Mr. Sweezey's letter, which has already been quoted. Near the top of it he says:
The Beauharnois Light, Heat and Power Company has acquired under a lease from the province of Quebec extending to the year 2003 and under authorization from the governments of the Dominion of Canada and the province of Quebec water-power rights on the St. Lawrence river, twenty-five miles above Montreal.
They ars using there, without any context that limits it whatsoever, a statement which I think the government should take note of, that under authorization from this government they are proceeding to instal plants. The plans are later described as what? As looking for the installation of approximately 1,000,000 additional horsepower. This is what they say:
Provision is made in the plans and considerable work is now being done with a view to installing further units, if additional water becomes available.
I think nobody reading that would for one moment draw any other conclusion than that the promoters are authorized to develop
1,000,000 horse-power additional to the 500,000 horse-power under the authorization of the Dominion government, which authorization was given by the approval of plans which will develop more than 500,000 horse-power and can be adapted to develop 1,500,000 horsepower.

Beauharnois Corporation-Mr. Geary


Robert James Manion: And they have sold their
stock on that basis.


George Reginald Geary: That is what 'the government has let itself in for. At that point I would ask the government seriously to consider whether it is not now in the position of lending itself to the schemes of these promoters. Referring for the moment to the liquor export bill, which comes to my mind, and setting aside the rather high-sounding platitudes and extraordinary expressions of fear of international trouble, there was one thing that justified that legislation-that this country should preserve its self-respect and should not be tangled up with rum runners or law breakers. That is a good principle. If that principle, then adopted by the government, was good in regard to rum runners and gentry of that sort, I submit that it is equally fitting of application to the gentlemen who are promoting this project and are taking money from the public in connection with it.
My hon. friend proceeds to state that there is no objection to the conditions. I do not now take any definite and specific objection to them, but at the time I was dissatisfied with them. However, I have not had an opportunity to examine in detail the conditions, although I think strong objection might very well be taken to some of them.
I pass now to the report of the joint commission. In the section which the minister read one thing stands out that cannot be controverted, that the spot where navigation development was to join power development should not be to the south of the river where the present Beauharnois development is. There is no question about that. The Beau-harnois proposition assumes to be a combination of power and navigation development. My hon. friend can get no comfort from what he read, for the joint board is entirely against the present location. True, the majority of the Canadian members-two out of three, but they were opposed by the other Canadian member, and all the American members-did say that if you introduced a simple navigation scheme on one side and a power scheme on another, it might be a good place for the navigation scheme to be along the lines of this Beauharnois development, while the power scheme would be carried out more advantageously further to the north.


John Campbell Elliott: I am quite satisfied my
hon. friend is not intentionally losing sight of the fact that this was introduced as a power scheme, not as a joint scheme.


George Reginald Geary: Yes, it gets its sanction in
the minds of the ministry from the fact that it is joined together as a power scheme and 2419-152
a navigation scheme and would lessen the cost for the development of the navigation end. But the joint commission reported unanimously that if you are going to bring the two together then the south shore is not the place, it should be on the north side. The commission reported further, and it seemed to me a sound conclusion, that the reason they objected to this was that navigation, with the potentialities of traffic on that river, can never be satisfactorily carried on on the site of the Beauharnois development; that is the opinion of the minority of the Canadian and of all the American representatives on the board. Confronted with that, I do suggest to the minister that the government had no right to appoint another committee, and in effect override, or at least ignore, the report of the joint board of engineers, which had been a matter of such profound study and had been accepted by another body appointed by the government known as the national advisory committee. Faced with that difficulty, Mr. Speaker, the government should not have relied upon a committee appointed on the spot to bring in a report but should have gone back to the national advisory committee, even to the joint engineering board and asked them:	What have you to say about the
present proposal which we are considering?
My friend said there is not in existence an agreement for granting further power rights. It has been pointed out very plainly that in the prospectus it is intimated that if there is not an agreement in existence there is at least a very fair possibility of getting the additional water from the two governments, and I think my hon. friends opposite should take note of that. It is enough to put them on inquiry as to what these promoters are doing and what sort of inducements they are offering to the public to buy their stock.
Now, Mr. Speaker, I should like to say a word or two about the capitalization of the power corporation. I do not intend to go over all the ground covered by those who have preceded me. It originated in a very small way by certain gentlemen owning this small development. Then in some way Mr. Sweezey got it into his own hands and afterwards into the hands of his syndicate. Having got in touch with the Beauharnois corporation-which was not difficult seeing that he made it-he said to them:	I will hand you
these rights. What did he get for them? He got $4,750,000, plus a sum sufficient to wind up his syndicate, plus a sum sufficient to pay off the original owners. Of that $4,750,000 in cash he agreed to use $1,000,000 to pay for
1,000,000 shares in the Beauharnois Power Corporation Limited at $1 per share. It was

2402	COMMONS
Beauhamois Corporation-Mr. Geary
a pretty tidy piece of work up to this point. He had in his pocket $3,750,000 in cash and the 1,000,000 shares for which he had paid, and there were no liabilities, the property was all paid for. But that was not sufficient. A subsequent transaction was entered into and that is where purchasers come in composed of Newman, Sweezey & Company, Limited and the Dominion Securities Corporation, Limited. These purchasers took over from the Beauharnois corporation $30,000000 worth of bonds. Those bonds have been issued to the public at par, plus interest. But Mr. Sweezey and his friends did not pay par to the corporation for them, they paid $27,000,000 and got $30,000,000 of bonds. But that was not enough. They said: We must have a stock bonus when we offer this to the public, and we will take 770,000 shares of class A stock, in addition. So having sold $27,000,000 worth of bonds at par, and given
135,000	shares class A common as a bonus, they had $3,000,000 worth of bonds left, which were as good as cash, for there was a public demand for them; they had cash $3,750,000; they had 1,000,000 class A shares from the earlier transaction and from the latter transaction 635,000 class A shares, all fully paid for so far as we can tell. As a result they have in their pockets $3,750,000 cash, and 1,635,000 class A common shares, practically the whole issue of class A stock which their own agents and friends hold out to the public as worth $60 a share, or $98,000,000, and besides all this, $3,000,000 in bonds. They have done very well, and to this date they have got away with it, I do not know that after this there is anything in the nature of financing that cannot be accomplished in this country. Those interested at this point fell out among themselves. One group objected and got out; they are reported to have taken with them $3,500,000. It was so bad that in St. James street, that financial centre, the whole scheme, except to those who were in it for the dollars and cents, simply stank. Even big financiers who make it a business to float these propositions but who were outside of this scheme, had no hesitation in saying that it was a very bad affair.


John Campbell Elliott: Is not the argument of
my hon. friend that the rental for these waters which is being received by the province of Quebec should have been greater, assuming that the project will turn out at all as indicated in the prospectus issued by the promoters? My hon. friend will bear in mind that the rental is being received under lease granted by the province of Quebec.


George Reginald Geary: I was not saying that, nor
was it in my mind, but I shall try to answer the hon. gentleman. My contention is that this project is so bad on the face of it that inquiry should be made. The government has lent itself to the scheme, and the government should feel that it is incumbent upon it to take some steps for the protection of the public. If the investigations disclose that these statements are true, the government should without further delay cancel all rights, and lessen the possibility of further harm. The Prime Minister has said that there would be no difficulty in taking that course. When last year a motion was made by my hon. friend from Toronto Northwest (Mr. Church) to add to the Navigable Waters Act a provision stating that these matters should not be dealt with by the governor in council, but should go before parliament, my right hon. friend did not hesitate to say that no matter what money had been gathered in and no matter how far the industry had progressed it was quite competent to parliament to annul the whole thing. Equally is it competent to council to cancel an order in council.
To deviate for one moment, this matter should never have been dealt with by order in council. At the time of the order in council the House of Commons was in session, and in my opinion its issue constitutes an abuse of authority of the sort that my hon. friends were in other days ready to condemn. It seems to me that this point is worthy of attention, because in this very act-the Navigable Waters Protection Act-it is contemplated that the order in council shall not be final; there is provision in the act for its annulment. It is quite evident that it is contemplated in the act that an order in council thereunder might be annulled by parliament, and having before them the provision in the act, and considering the magnitude of the interests involved, and the important questions arising, the government might very well have relied upon the implication contained in the act and brought the matter into the house. I agree that it is difficult for the House of Commons to discuss engineering plans, but they may be settled elsewhere. This was not, however, a question of plans; it was a question of interfering with water rights or accepting the demands or contentions of provinces as to water rights. The questions that arose were questions of principle. There was the objection, for instance, which one can read from

Beauharnois Corporation-Mr. Church
the reports, that the building of this particular plant would interfere with the official reports and plans for the whole waterway development of the St. Lawrence.


Mr. CANNON:: Would my hon. friend
suggest that until this question of the respective rights of the Dominion and the provinces in respect to hydro-electric development is settled, all these developments are to be suspended and the Dominion should refuse to grant the approval of plans in Quebec and Ontario?


George Reginald Geary: Yes. I see no reason why
private power developments should have the right of way over the publicly owned development of a great waterway. These should have stood until all legal questions were settled, and until the whole question of the St. Lawrence was settled. There was no need for haste; for it was in the year 1913 that Mr. Sweezey wrote a letter to Sir Max Aitken advancing this proposition. It could stand easily for another year.


Lucien Cannon: The Quebec government has a system quite different from that of the province of Ontario.


George Reginald Geary: I recognize that to the full. No doubt the province of Quebec is opposed to public ownership of public utilities and prefers private ownership. As far as that is concerned it is entitled to take whichever view it chooses. The view of the province of Quebec does not prevail in the province of Ontario and in the western provinces where the people stand by public ownership. It seems to me that owing to the important nature of this matter the government should have had in mind the opposition of these latter provinces when it was discussing the action it proposed to take. The question whether or not we in Ontario or the people of Quebec are right in regard to public ownership of this particular water power might have been settled by an appeal to the privy council.
I do not wish to go into these matters in great detail but I do say that the financial end of the project deserves scrutiny by the government, because the government has wittingly or unwittingly lent itself to the schemes. The question of waterways is one that deserves full consideration. I claim that the air should be cleared and that this order in council should be cancelled so that all these matters can be settled by the House of Commons. These matters ought to be before us for discussion and the plans should be settled upon in the ordinary administrative fashion. There are important
features of this matter in connection with which the government appear to have made mistakes, and I feel sure that when the government reconsiders the matter they will find that to have been the case. I believe if they give it proper consideration they will cancel the order in council.
If I were to continue I am afraid I would only repeat myself; I think I have given my reasons for agreeing with the views presented in so admirable a fashion by my hon. friends to my left.
Mr. T.L.CHURCH (Toronto Northwest): The responsibility for this great contract under our system of responsible government rests upon the government of the day, under the Navigable Waters Protection Act. I am surprised that the gentlemen sitting to my left have come forward in the dying hours of the session and have made the question of waterpower rights in the St. Lawrence a political football. The hon. gentleman gave me no help the year before last, last year or this year, When I brought in a bill which would have cancelled this permit by transferring the powers of the minister to parliament. I could not get five Progressives to rise with me to bring about a division on the matter on March 3 last. That is .the kind of lack of help I do not like, yet hon. gentlemen call themselves a public ownership party. They are not the only public ownership party; they never have shown it in this house, in Manitoba, or in Alberta, and last but not least .they did not show it under Mr. Dunning in Saskatchewan.
This contract is probably the greatest outrage perpetrated in Canada since confederation. We should stop handing out the water-powers of this country to every Tom, Dick or Harry who comes along calling himself a capitalist. The waters in question pass the doors of Ontario first as I pointed out before, on the way down to the province of Quebec. During the sessions from 1920 to 1922 the Hydro-Electric Power Commission of Ontario had an application before the government to develop power at Morri^burg, just a few miles west of here. There were some legal matters involved and it probably raised an international problem, but in view of the stand of the state of New York an arrangement could have no doubt been made. That application was held up by the Liberal government and finally refused by the minister, at that time the hon. member for Kootenay. About a year later a bill was introduced in this house, the predecessor of this Beauharnois bill, known as the Great Lakes Beauharnois bill. That bill was introduced by the then hon. member for Joliette, a gentleman who
2404	COMMONS
Beauhamois Corporation-Mr. Church
now 'has gone to the superior court of Quebec, Judge Denis. Then the Beauhamois application came on and a file of correspondence of the department was brought down in the house, from which the hon. member for Acadia and the hon. member for Bow River have read somewhat on the engineering and power side.
It is known in every banking house in Canada and the United States that these people have permission to in the end eventually develop 2,000,000 horse-power on the St. Lawrence. Talk abouit responsible government; if an investigation were held into this thing it would show that this government has given Mr. Sweezey and his colleagues power to develop electricity from the full flow of the river, and the sovereign rights of the province of Ontario to the waters farther west on the river, have been destroyed. The Progressive party never said a word about that last session or on March 3 when I had the matter up. I introduced a bill, which I will read to the house, designed to cancel this permit, and if I had not fallen ill probably this debate would have taken place over a year ago. This bill proposed to repeal order in council 422, dated March 8, 1929, and all subsequent orders in council and, mark you, there have been four orders in council granted. Under the first, order in council 422, permission to develop 40,000 horse-power was granted. Under the first section of the order in council, at the expiration of one year,
100.000	horse-power was to be developed; at the expiration of the sixth year 200,000 horsepower; ait the expiration of the seventh year
300.000	horse-power, and at the expiration of the tenth year 500,000 horse-power. Then some question arose as to the power of this parliament to grant the application before the minister, and he did noit sit on the case himself. I would not like to say the government did not consider him strong enough, because I have great respect for his ability, but it was an extraordinary coincidence that when the hearing was brought on and the Beauhamois people were present, on the right of the Minister of Public Works was the Minister of the Interior, the gentleman who was mainly responsible for the disaster which occurred in connection with the Seven Sisters Falls. On his left was the general organizer for the province of Quebec, the Minister of Marine and Fisheries, a friend of the power applicants, who was all ready to prompt the Minister of Public Works in case he needed any political advice as to what should be done.
Is it a matter of surprise, Mr. Speaker, that the people of this country are beginning to

wonder what kind of country we are living in and what kind of parliament this is? Now in the dying days of this session members of the Progressive party bring up this motion. 1 look upon it as being very largely for their own political purposes so far as they are concerned. I have doubted their sincerity for many months past in connection with this problem, because when I brought up this bill to rescind this order in council and all subsequent orders in council, I received no help whatever from them. They talk about the Conservative party and want to know where we stand. The Conservative party is the only public ownership party in Canada today. This party was responsible for taking over the national railways; Sir Adam Beck and Sir James Whitney began the hydroelectric system in Ontario, and in this house last session the leader of this party encouraged me to go on with the debate when I brought in this bill to transfer power to grant such applications from the Minister of Public Works to parliament.
I am sorry for the minister; I do not think any minister should be asked to take the responsibility which the very kind hearted young minister must take in this case. However, I must say that I proposed to relieve him of this responsibility when I brought in my bill. I had deep sympathy for the young minister at the time the hearing took place, and shortly afterwards a bill was introduced in this house to transfer the power of granting such applications from the minister to parliament. The leader of this party in the house had encouraged me for a month to go on with this bill, and there was a division taken on it. The yeas numbered 72 and the nays 85, and there were several points of order taken in respect to the bill. During that debate I urged, as I urged on March 3 of this year, that this abnoxious contract should be cancelled on the grounds of public policy and that all orders in council, not only order in council 422 but order in council 1122 dated June 27, 1929; order in council 1081, dated June 22, 1929, and order in council 1244, dated July 19, 1929 as well, and all subsequent orders in council should be cancelled.
You will notice that hon. gentlemen to my left read from different financial statements, and I am sorry they did not act along this line some time ago. Hon. gentlemen will notice that so far only Canadian financial statements have been read. A lot of the bonds and securities of this country have been underwritten by the great super-power trust which flourishes at New York and Washington.

Beauharnois Corporation-Mr. Church
1 have been reading the evidence taken in connection with this notorious American power trust at Washington during the past three years before the United States trade commission, which shows that papers were being bought up and the private bills committee was being corrupted by these people, the electricity ring in the United States, with headquarters at Washington. That ring reaches up to the 49th parallel along the Canadian border, right up to the state of Maine, and now they are in Canada and no one knows what they are doing. The evidence is contained in a book of about 300 pages, and at the hearing the most brilliant counsel in the United States were present representing both sides at Washington. It was shown that these people have corrupted the United States and have seized the water-powers from the people of that great country. Now they are crossing into Canada, as I said on March 3 of this year.
As far as this party is concerned, it took this stand last year in connection with the second reading of this bill. The leader of the opposition was most enthusiastic and encouraged me to go on with my bill, and he always has been enthusiastic with regard to the conservation of the water powers for the people of Canada. He showed it last year in connection with the Seven Sisters debate, when he gave the Progressives very good support in the house. It is all very well to say that 2,000,000 horse power has not been guaranteed, but it is somewhere among the papers brought down. Possibly I have not looked for it carefully enough but every banker knows it is true. Somewhere among these papers will be found a guarantee for
2.000.	000 horse power.
We know the interest which the Financial Times and the Financial Post have in this thing; they have been corporation papers for years and no one expects any assistance from them. The American papers go much farther than do the Canadian publications. Go down to Wall street and read the American papers; go into one of the bankers' offices and you will find the prospectuses showing a contract signed, sealed and delivered by the hon. gentleman across the house has been granted for 2,000,000 horse power. Order in council 422 allows for a stepping up in the development from 100,000 to 200,000 to 300,000 to
500.000.	Only last July they were given an additional handout of 160,000 horse power. There is not much farther to go, but they will continue on their way. Once they have got their hands into the treasury they are going to go ahead and get everything they can out of the St. Lawrence waterway from the present
government. The papers of Ontario have been talking about a little grab which has taken place in Toronto, but this grab is so big the papers cannot understand it and I know of only three papers which have opposed it.
I am not surprised at the policy of the hon. gentlemen opposite, because so long as there is responsible government in this countrj someone has to take responsibility. That responsibility is placed upon this government just on the eve of an election. This company is to be allowed to develop 500.000 horse power within five years. As I said last year when my bill was defeated: Goodbye to the St. Lawrence waterway forever.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Thomas Langton Church: Mr. Speaker, the whole
canal policy of this country has been upset by this particular contract. In 1854 the people of Canada took over the canals as a public undertaking, as part of the transportation system, and several hundred millions of dollars have been expended on those canals. That policy has been in existence from 1854 to the date of the passing of this contract, when along comes the present government and by this particular contract upsets all the settled canal policy of Canada. It gives this company power to build a canal, although by the agreement, which is a most improvident one, the government has to build the locks. The canal feature of the contract is just the joker in the deal. This is a power deal, purely and simply. The navigation part is a myth. It is to hot to read the whole voluminous record, but if hon. members will read it they will see that the contract is improvident. I doubt if it would pass a village council, let alone the committee of three members of the cabinet that sat on the case.
Let us take, for instance, the Borden administration in 1911 when the IVelland canal prosposition came up. What would the people of Canada have thought of the Borden administration if they had given Mackenzie and Mann power to build the Welland ship canal in exchange for the power in the said works. What would the country think of a steal like that in the Niagara district? Yet the present government has done this in Quebec with respect to the St. Lawrence. As I said last year, what this legislature needs is a chief bouncer. I see some gentlemen of this company walking through these halls to-night; these high "C" finance gentlemen are around
2406	COMMONS
Beauhamois Corporation-Mr. Church
these halls to-night. Whom can they influence, where do they get their pull, I do not know. They have changed their politics; they are all a bunch of turncoats. They are for one party to-day and for another to-morrow. They are just a lot of hungry political vultures, grabbing the water powers of the country from the people. In my humble view, no government can stand against the opposition of public opinion that, in the next election, that will be expressed in the ballot box in central Canada in regard to this particular nefarious deal once the people see the nature of it and what sacrifice of their interests now and in the future is involved, are fully appreciated by the people. It is one of the most iniquitous agreements that I have ever read.
Private capital should have been more progressive in past years in regard to the St. Lawrence. In this age of power development, little foresight is needed to realize the immense value of the water powers of the S't. Lawrence. This is a grant of millions of dollars made directly by the present government, without our consent and at the expense of the people, to this monopoly. Wait till you see the rates. Generations yet unborn will suffer in their industrial, economic and domestic life. We are mortgaging the labour of future generations on the St. Lawrence for the benefit of a few power grabbers of the public domain, and this is being done over the heads of the people's representatives in parliament.
Where democracy is landing in Canada, I do not know. Where is Liberalism, and where are the principles of so-called twentieth-century Liberalism? They have been scattered to the four winds of heaven. There is more Liberalism expressed in the speeches of the hon. member for Acadia (Mr. Gardiner) and the hon. member for Bow River (Mr. Garland) than in those of hon. gentlemen opposite. Talk about the day of the Family Compact! In 1837 the Family Compact was as nothing to this family compact of Sweezey, Gundy and all the rest of them, limited and unlimited. They say that the Gaul of Caesar's Commentaries was divided into three parts; the gall of this man Sweezey and his crowd is so great it is incapable of division. This was the gentlman who went up to Hamilton a month ago to speak on the St. Lawrence question. He shed buckets of tears for the poor people of this country when he raised the United States bogey of an alternative all-Canadian canal. They need an alternative canal as much as half a dozen parliament buildings are required at Ottawa for the House of Commons to meet in. This Mr. Sweezey raised the American bogey regarding that 
canal, while he is really in league with Wall street and five American millionaires to grab this water-power and make millions for himself. He is building a big baronial castle on the banks of the St. Lawrence the like of which has never been seen in the old country, and from the tower of which he can gaze over the St. Lawrence and say, "I am monarch of all I survey." That is what takes place under this government, but I say that no government can last when public opinion in the central provinces of Canada asserts itself.
While I would like to have seen my good friends to my left a little more active a little while ago, I think that they have done good work in bringing this matter to the attention of the country. It may look a little political on their part just now, but it is pretty near time that the representatives of public rights and those who want to protect the water-powers of this country got into politics and asserted themselves, or soon there will be nothing left to give away. Mr. Backus grabbed off a whole principality for himself back of the Rainy river. He could not wait. The Seven Sisters falls crowd could not wait. The Winnipeg Electric could not wait. They corrupted the electors in the province of Manitoba in that iniquitous deal. Then there was the Gatineau deal, and now this Beauharnois, the worst of the whole lot. In my humble opinion there will be a rude awakening for the government when this country to-morrow awakens and is alive to the enormity of this deal. Parliament is being made to look ridiculous. We could not get five members to stand up and call for a vote on this question a little while ago.
The Prime Minister of this country is very fond of talking of five cent policies for the unemployed in this country. He did not talk in terms of five cents to the unemployed Mr. Sweezey and Mr. Gundy and all the rest of these power barons. Oh no; he converted them into multimillionaires. Five cents for the unemployed working man, and millions for the unemployed Mr. Sweezey and all the rest of them. That kind of policy might have been all right thirty years ago. It might have been all right then to turn over our water powers to private capitalists; but that policy was repudiated in Ontario long ago. The government of this country and its Beauhamois friends, Sweezey, Gundy and Company, will have the battle of their lives in their life work to alienate 'the sovereign rights of the people on the St. Lawrence. The water powers of the St. Lawrence are the property of the people. That question was fought out years ago, and it was established as a fact

that the water powers are the property of the people. There can be no quarter given to those who are departing from that basic principle. In the years to come this project is going to be an encumbrance and a drag on every man, woman and child in this country. A ransom will have to be paid by way of royalties on the capitalization of .this company, fixed at the highest possible figure; industry and labour in this country will be crippled, as well as agriculture, and our water powers will become part of a super-power trust in the United States.
I have found that objection to my newspaper bill came in part from the electrical trust in this country from some of these people interested in the development on the St. Lawrence. We should have turned these people out of the parliament buildings years ago. We should have had a chief bouncer to turn them out five or six years ago. Some time ago I put a question on the order paper asking the names of the president and directors of the Beauharnois Company, and the answer I got was, "No information." Fancy, no information as to who the party of the first part was.
The order in council was ultra vires because it interfered with the level of the water from the great lakes to the sea. This country settled its canal policy years ago. So this, Mr. Speaker, is what is called twentieth century Liberalism! To-morrow there will be a rude awakening for this so-called twentieth century Liberalism in the central provinces of Canada.
When the application of the Beauharnois people came before the government, it was heard by three ministers. There was the Minister of Public Works (Mr. Elliott), flanked on the right by the Minister of the Interior (Mr. Stewart), and on the left by the Minister of Marine and Fisheries (Mr. Cardin). Objections were made by the shipping federation of Canada as to the levels of the lakes. They said that they could not navigate the channel if this canal was built. But the Minister of Marine and Fisheries would not listen to Lally McCarthy, K.C., when he showed how this canal would affect the levels of the St. Lawrence waterway.
Section 12 of the Navigable Waters Protection Act provides:
Parliament may, at any time, annul or vary any order of the governor in council made under this part.
Any action of parliament in that behalf shall not be deemed an infringement of the rights of the local authority, company or person concerned.
22, 1930	-
Beauharnois Corporation-Mr. Church
At page 164 of the evidence the parties are set out. At page 173 Mr. Holgate, the civil engineer admits that the remedial works may fall down. A lot of weirs have been erected along this artificial canal against the advice of their own engineers. Capable engineers have said that the artificial work was not sufficient. At page 176 of the evidence, Captain Ouellette said that the creation of the dams was going to create cross currents to such an extent that it would be impossible to get in with present day boats, that the depth was not sufficient. They excavated an artificial waterway, supplementary to and apart from the present channel, whereby a new outlet would be created for passing the waters of the St. Lawrence river from lake St. Francis to lake St. Louis.
This matter was referred to the Department of Justice. The question was asked:	"Is
there any power in the department to authorize the diversion of 40,000 cubic feet per second?" The answer was "No". I contend, Mr. Speaker, that it was a breach of the Washington Treaty of 1871 and of the Boundaiy Waterways Act and that if the matter was never taken to the International Joint Commission the whole thing could be set aside, because it is a breach of the Washington treaty; it is a breach of the Boundary Waterways treaty and of many other treaties with the United States, under which the United States are guaranteed an uninterrupted flow of water from the head of the lakes to the sea. There is no authority, federal or provincial, for diverting that water if it is going to interfere with navigation. As I said, the Justice department was appealed to, and to the question, "Is there any power in the department to authorize the diversion of
40.000	cubic feet per second?" they answered, "no". They quoted article 26 of the Washington treaty of May 1871, that the river shall be free and open for navigation purposes.
What about the rights of the United State.' and the rights of those provinces higher up the lakes? It is not Ontario and Quebec alone that enters into this problem, but the other provinces at the head of the lakes and the United States who are entitled to a free flow. The whole agreement is an improvident one, and it is full of jokers from beginning to end. The Beauharnois company has gathered in another 160,000 horse power of the St. Lawrence total by an arrangement with the Montreal Cotton Company. Also it is freely predicted that the Holt interests at Cedar Rapids will be the next to be absorbed by Beauharnois. And all this can only mean one thing. That is that there is to be no com-
2408	COMMONS
Beauharnois Corporation-Mr. Church
petition between rival power companies in Quebec. The battle for St. Lawrence power at Ottawa last winter looks more and more like a sham fight. Also cheap power for Quebec looks more and more like a myth. The Quebec government with the aid of the King government sold the heritage of the people of Quebec for a mess of pottage represented by $1 per horsepower. And the millionaires of St. James street will wax fatter and fatter on the profits of electricity that should have been developed for the benefit of all the people. Two or three weeks ago the Prime Minister said he would tell us in two weeks what would become of the proposed deepening of the St. Lawrence waterway. There is no necessity for him to tell us; we know good and plenty what will become of that project. This particular government, I say, is responsible for the present unsatisfactory condition of affairs. The member for Bow River spoke in his able and forceful speech of the misleading statements in the prospectuses. Of course they are misleading, and those who prepared and published them should be proceeded against under the criminal code. Section 414 of the code provides:
Every one is guilty of an indictable offence ana liable to five years' imprisonment who, being a promoter, director, public officer or manager of any body corporate or public company, either existing or intended to be formed, makes, circulates, or publishes, or concurs in making, circulating or publishing any prospectus, statement or account which he knows to be false m any material particular, with intent to induce persons whether ascertained or not to become shareholders or partners, or with intent to deceive or defraud the members, shareholders or creditors, or any of them, whether ascertained or not, of such body corporate or public company, or with intent to induce anv person to entrust or advance any property to such body corporate or public company, or to enter into any security for the benefit'thereof.
In Rex v. Gillespie, it was ruled that:
In considering the charge against the president of an incorporated company for publishing a false statement under code, section 414, judicial notice will be taken of the statutes of another province under which the company was incorporated, requiring the president to be chosen from the directors; and a warrant of commitment against the president, as such, after vroot , malmer of incorporation, need not allege that he was a director.
So both the province and the Dominion have jurisdiction in this respect over prospectuses. Whether the justice department will prosecute -well, you know who is running the government of this country. This government today is nothing but a government of big interests and appetites. When I see those gentlemen walking around arm in arm with the leading members on the other side of the
[Mr. Church. 1
house, I have very little hope that the interests of the people will receive much attention.
As to the engineering side of this project, the mover and the seconder of this motion have read from the report contained in the return which was brought down last session at my request. They have picked out a few of the good points in that report, but they in their time limit have touched only the fringe of the subject. There is going to be a rude awakening shortly for the government and for these interests. Some of these people are seeking financial aid across the border with their Wall street allies. I have the evidence taken before the federal trade commission of the United States which investigated the power trusts over there. This commission has control over power and gas utilities in that country. The evidence shows that those American power trusts have agents walking the floors of congress and of all the state legislatures. They have bought papers and spent millions. Our power magnates are just as busy in our legislatures. Is it any wonder that the people of this country are going to wake up when they see the Tvay their water powers are being handed over for private greed and gain? This government has not five cents for the unemployed to feed their starving women and children, but to the unemployed of the Sweezey class they hand over millions of dollars. The member for Bow River estimated that Mr. Frank Jones, who was the chief mover in getting approval of the company's plans by the federal cabinet, made 82,500,000 out of his share in the project. Well, I have been reading some of the leading financial papers of the United States and of Wall street and their writers say that he made from $4,500,000 to $6,000,000 out of the sale of his permit interests. That was what the permit from the hon. Minister of Public Works and the government was worth to Mr. Jones. A new company was formed. As the hon. member for Bow River said this afternoon they amalgamated all the subsidiary companies and the prospectus says untruthfully that they secured water rights on the St. Lawrence capable of developing 2,000,000 horsepower. If there is any concern for public rights in the Department of Justice they will see that the criminal code is enforced against those responsible for issuing the false statements contained in these many prospectuses. The Minister of Justice still allows two innocent young men of Ottawa to remain in Kingston penitentiary, even after the Attorney General of this province and the local crown attorney declared they were innocent, and a mistake made, and that they have not heard a word from the Justice department. Why

Beauharnois Corporation-Mr. Woodsworth
are those innocent men allowed to languish in prison? Why treat the poor one way and the millionaires another? To-day there is a power family compact. Talk about twentieth century Liberalism! Well, the public will soon have something to say about this "twentieth century Liberalism."
The shipping federation representing those interested in the operation of ocean steamers objected to the Beauharnois plan for the reason that the project would change the levels of the river and would interfere with the flow of water to the port of Montreal. It is pretty easy to see how the departmental engineers can change their opinions. When Sir Adam Beck applied for permission to build a dam at Morrisburg these very same engineers said that it would lower the levels and interfere with the port of Montreal so seriously as to prevent the proper operation of shipping. But when they were confronted with the Beauharnois application they turned a complete somersault and said it would not affect the port of Montreal in any way. Last session I was told by my leader that I had a free hand to introduce my bill to transfer the power of approval of such projects from the minister to parliament, but unfortunately I was ill towards the end of the session and could not proceed with that measure. We made another attempt on March last but were not able to bring the question to a vote. Last year, headed by the leader of the opposition, sixty-seven voted in favour of the second reading and seventy-two against.
This contract is so obnoxious that there has been nothing like it since confederation. Today parliament is a mere cipher and we might as well go home. No matter how we may protest, the government can give away the whole of the St. Lawrence water powers to a few favourites and thus make them millionaires overnight. Is it any wonder that the people of this country are disgusted and that they are becoming alarmed at the way these water powers are being alienated to benefit a lot of millionaires? The question of federal and provincial jurisdiction over the St. Lawrence waterways was referred to the supreme court last year, but it was all a sham battle. Was the Beauharnois question referred to the supreme court? Of course not, the Sweezey company could not wait.


Mr. DEPUTY SPEAKER:: The hon.
gentleman's time has expired.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I could have
wished that this subject had come up earlier in the session. However, much of the information that has been placed before the house
to-day has been available only in recent weeks. I know some of us may lay ourselves open to the charge of attempting to make preelection capital out of this question, but I suppose that we shall have to run that risk, for it seems to me to be of such great importance that it cannot be ignored, even though we are within a few days of prorogation.
The member for Toronto Northwest (Mr. Church) accused some of us in this corner of the house of not being interested in public ownership. May I remind the hon. gentleman that last year within a very few days of the opening of parliament my colleague from North Winnipeg (Mr. Heaps) made an inquiry concerning the St. Lawrence waterway. It is recorded in Hansard of 1929, page 80, as follows :
Mr. Heaps:	Will the government, before
issuing permit or licence for the canalization or water-power development on the St. Lawrence river submit same for the consideration of the house ?
Mr. Mackenzie King:	The Navigable Waters
Protection Act provides that no works may be constructed in navigable waters unless the site has been approved by the governor in council or unless such work is constructed in accordance with plans and regulations approved or made by the governor in council. In the case of any application for the construction of works in the St. Lawrence river, coming within the scope of the act in question, it is the intention of the government to follow the procedure in force hitherto, as prescribed in that act.
That procedure was not at all satisfactory to those of us who believed alike in the policy of government ownership and the control by parliament of important matters of this character. For that reason, on February 25, 1929 I introduced a motion to this effect:
That in the opinion of this house no disposition of the natural resources under the control of the federal government shall be effective until ratified by parliament.
Hon. members in the house may recall that that motion precipitated a debate which lasted for a week. I do not think it can be said that we in this corner of the house have neglected to direct the attention of the country to the situation which exists. Last year in Winnipeg we lost the Seven Sisters falls; this year we have apparently lost the St. Lawrence river, and hon. members will realize that the loss of the St. Lawrence river is a much bigger thing than the mere Beauharnois development. I take it that this development meant a surrender of Dominion rights. I am not proposing to discuss the constitutional question of jurisdiction as between the Dominion and the provinces, but I say that the St. Lawrence river is in an altogether different class from the ordinary Canadian river. It is not a
2410	COMMONS
Beauhnmois C orporation-Mr. Woodsworth
provincial stream; it is not merely a Dominion stream but it is international. It is one of the important links in the Great Lakes-St. Lawrence system, and each part of t'he river should be treated as a part of the whole system. For example, the United States has treaty rights permitting free navigation. I submit to the house that power and navigation developments are inseparable, and it has been an exceedingly narrow reading of the British North America Aet which has permitted the government to turn over to one province certain valuable power rights on the St. Lawrence. This government and other governments haive not always read the British North America Act in quite such a narrow fashion. Take, for example, the Montreal harbour commission. I am told that that commission operates under the Dominion government; it maintains cold storage plants and a great variety of concerns which might conceivably be understood to be provincial in character. On Saturday the prime minister is to open formally the harbour bridge. I am only a layman and I do not pretend to understand the intricacies of the law, but if the Montreal harbour commission can build a bridge from shore to shore across the St. Lawrence river I cannot see why we should say that the development of power must of necessity be entirely provincial in character. There is very little doubt that the action taken in developing the Beauharnois system is blocking the general scheme of navigation which should involve the whole of the St. Lawrence.
Within the last few months some very interesting articles written by Mr. Harry Sifton have appeared in some of the Toronto papers. In those articles he pointed out very clearly that the power development ought to bear the cost of canalization. I do not want to argue the point, but to my mind it is obvious that his contention is correct. If we allow power to be developed in the haphazard fashion we are doing at the present time, it will be impossible later on for the Dominion government to shoulder the heavy burden of putting through the canal. The canal could be constructed at very little cost to the Dominion government.
The serious charge has been made by the members for Acadia (Mr. Gardiner) and Bow River (Mr. Garland) that the government is lending itself to a colossal " grab." I do not think the expression used by the hon. gentleman is too strong. Simply by acquiescing in this kind of thing and by having passed an order in council which has been the foundation upon which these transactions have been based, the government has been lending itself to a colossal grab-unless indeed the govern-

ment should now take prompt action to cancel the agreements contained in the order in council. In my opinion the Minister of Public Works (Mr. Elliott) gave a very disappointing answer, and he took an extremely narrow and purely departmental view. He did not touch at all the charges urged by hon. members in this corner but stated that the province of Quebec had the right to grant a charter. I do not know why the hon. gentleman undertook to decide a question which has been before the courts and upon which there has been no final decision. We all know that the province of Quebec claims the right to issue charters, but as the member for South Toronto (Mr. Geary) very clearly stated this afternoon, we should have had a final decision from the highest judicial body and should not have allowed the matter to be settled by order in council. The minister stated that the government had adopted the policy which the majority of the joint engineering board had advocated. I do not think that the hon. gentleman was quite ingenuous because if hon. members will read the report they will find section 162 as follows:
The board finds that it is practicable and advantageous to combine the improvement for navigation in this section with the development of power on a progressive program of construction of power plants, only the first part of the power development being undertaken in conjunction with the works required to carry navigation through the section.
It was only in case it was found impossible to carry on such cooperation that another arrangement was suggested and that the majority of the Canadian section suggested that this route would be possible for navigation purposes. I think therefore that consciously or unconsciously the minister was rather misleading when he made his statement.
I do not think we should consider this particular transaction as being of a nature distinct from other similar transactions which are taking place all over this North American continent. I have before me an issue of Labour under date of May 20, 1930. This paper is published in Washington. There is a cartoon here which shows a portly old gentleman labelled " The Power Trust " holding a sort of coffee mill labelled "The Holding Companies " and into this mill he is pouring a stream of water which flows out in a stream of gold dollars. The caption is " Turning water into gold " and the cartoon illustrates a speech made last week by Senator George W. Norris in the United States Senate. Mr. Norris said:
Chemists in the past have been working for years and years. ... to devise a method by

Beauharnois Corporation-Mr. Woodsworth
which they could make gold, synthetic gold. These power trust officials have beaten the chemists to it. They have made hundreds of millions of gold out of water-nothing but water. It does not even need to be clean water; it is usually muddy, dirty water, but they are making gold out of water daily; and the consumers of light and power, the little fellow who reads his newspaper by electric light, the woman who uses electricity to wash clothes, the big manufacturer who consumes hundreds of thousands of horse-power in making things that the American people use, the miner who operates the coal mines-all of them are contributing their part to the great operation of the power trust of converting water into pure, yellow gold; and we sit idly by.
Then Senator Norris goes on bo refer to conditions in Canada, he says:
Partly as a result of the wisdom of the Canadian government-
I am afraid he should have said the wisdom of the Ontario government.


Mr. BRADETTE:: Not in all cases.


James Shaver Woodsworth: Possibly not.
Partly as a result of the wisdom of the Canadian government in its handling of power matters, the Canadian manufacturer gets his power at approximately one-half of what the American manufacturer on this side of the river has to pay for power.
And again:
In 1925, power in the United States, I mean industrial power, cost 11.5 mills per kilowatt hour. During that same year the manufacturers of Ontario, Canada, paid 6.1 mills. In 1928, it cost 13.4 mills in the United States, and only 6 mills in Ontario, or considerably less than half the cost in the United States.
That is in Ontario only, and under public ownership. Unfortunately, although we have begun so well, we are permitting the greatest water-powers in the eastern part of this country to pass into private ownership. There is the difficulty, and it is for this reason that I feel we cannot allow such a matter as this to pass unchallenged.
I think the hon. member for Bow River has shown very clearly that there has been essentially a violation of the order in council. That order in council states very clearly that only a small portion of water is to be diverted. Undoubtedly the company is making plans for the diversion of a much larger amount; they hope ultimately to get the whole river, as has been stated already. I want to read their prospectus again; I do not think it can be read too frequently or emphasized too strongly. In the prospectus signed by R. O. Sweezey, the following statement is made:
In view of the above provision is made in the plans and considerable work is now being done with a view to installing further units if additional water becomes available.
I may say also what I do not think has been pointed out already, that they are even now taking steps to secure supplies of water beyond their 40,000 cubic feet per second. In their prospectus, they say:
In addition to the above water-power rights the Beauharnois Light, Heat and Power Company has entered into a contract with the Montreal Cotton Company providing for the acquisition of the latter's rights to divert water for power purposes from the St. Lawrence river at lake St. Francis.
I submit, Mr. Speaker, that the purchase by the company of the right of the Montreal Cotton Company to divert water is in itself a definance of the lease and of the order in council. In addition, it had already been represented and the fact is that 40,000 cubic feet will produce 500,000 horse-power. The statement that the Montreal Cotton Company's water combined with the company's water will produce 500,000 horse-power is not in accordance with the facts, and the truth of the matter is that both waters will produce a great deal more power than the above. In fact, in the Financial Post of February 27, 1930, it is stated that the company will be able to develop 112,000 horse-power with the Montreal Cotton Company's water, although the report of the joint board indicates that only 10,000 horse-power can be so developed. The company, therefore, is guilty of two offences in acquiring the Montreal Cotton Company's water and in advertising thus; first, a breach of the terms of its lease and of the terms and spirit of the order in council, and second, misrepresenting the facts with reference to the amount of power from the above sources.
We have had so many figures given to-day that I fancy the ordinary man is somewhat confused. I do not intend to add very many more, but I should like to ask what is the value of this colossal capitalization that has been built up. It has been estimated, according to figures given by Robert Dodd and Company, that altogether there is a capitalization of some $380,200,000; that is, when the company gets actually into operation, in the course of a few years, interest and dividends will have to be paid on that huge amount. That sum appears to be required in order to build a project which will cost the net sum of $50,000,000, and the total expenditures which have been made in acquiring a property whose value would amount to only $1,280,000.
Surely the government has a responsibility in a matter of this kind. If a boy steals a bottle of milk worth 10 cents from a door
2412	COMMONS
Beauharnois Corporation-Mr. Woodsworth
step, he is sent to gaol; if some small robbery takes place in connection with any of our stores, we sometimes send young offenders to gaol for one, two or three years,, yet here are men making millions upon millions out of this country and apparently nothing is to be done about it. The Minister of Public Works simply folds his hands and says, "Well what can we do"? Surely, if the government of this country is worth anything it is here to protect the people against the big robbers as well as against the small robbers. If we have to pay interest and dividends on this huge capitalization; if we and our children after us are to be enslaved in this way, surely it is time the people realize the actual situation.
There are certain political aspects of this case which I confess I think require explanation. The letter from Mr. R. 0. Sweezey to J. Alderic Raymond has been read already, but I should like to refer to one or two sections of this letter. The first section points out the necessity of acquiring the Robert rights, and section 4 of the letter reads as follows:
It will probably be advisable to enlist the participation of certain United States interests.
I should like to know what interests have been enlisted.


Edward Joseph Garland: And why?


James Shaver Woodsworth: I think we ought to know why, and I think we ought to know how.


Mr. IRVINE:: And for how much.


James Shaver Woodsworth: There are a number of questions which suggest themselves. I do not think that Mr. Sweezey, in starting a program of this kind, had any doubt as to how he was going to carry it through. The least this government could do is to make an investiga lion as to what United States interests are behind this concern. I am very sure that if there are no United States interests behind it at the present time, it will not be very long before that condition exists. A super-power trust exists on the other side of the line and this is extending itself in every direction. The American newspapers for the last year or so have been filled with revelations as to what is happening in regard to this matter. Before reading clause 3, I will read the preceding phrase, in order to link up. It is as follows:
To place ourselves in possession of all the rights essential to this undertaking, we should pursue the following course:
3. Enlist with our syndicate two or three individuals, who in addition to providing some cash as their fair share, can assist us in getting

our rights extended or enlarged so as to develop the entire available flow of the St. Lawrence at this point. As the whole situation is entirely within the province of Quebec, our influence has to be exerted only in Canadian political circles -that is at Ottawa and at Quebec.
How has that influence been exerted at Ottawa and at Quebec? It is quite evident that powerful interests have been exerted or the corporation would not have secured these rights. It was quite evident a year ago that powerful interests were exerted in connection with the Seven Sisters falls, both at Ottawa and at Winnipeg. I think this house is entitled to know what interests are now at work at Ottawa.
The company was incorporated with a dummy board of directors.


William Irvine: Who were they?


James Shaver Woodsworth: It might be worth while taking a few minutes to show just who were the provisional directors of this corporation. They were as follows:
Osmond F. Howe, barrister-at-law, Trust building, Ottawa, Ont.
Duncan K. MacTavish, barrister-at-law, Citizen building, Ottawa, Ont.
Belle Fraser, stenographer, Ottawa Electric building. Ottawa, Ont.
Lyla Brennan, stenographer, Ottawa Electric building, Ottawa, Ont.
Edythe H. O'Malley, stenographer, 115 Siparks street, Ottawa, Ont.
Bessie Conniffe, stenographer, 115 Sparks street, Ottawa, Ont..
Lillian Dell, stenographer, Trusts building, Ottawa, Ont.
Elsie M. Burritt, stenographer, Ottawa Electric building, Ottawa, Ont.
Gwen Gunderson, stenographer, Trusts building. Ottawa, Ont.
Kathleen Havey, stenographer, Ottawa Electric building. Ottawra, Ont.
M. H. Kelly, stenographer, Ottawa Electric building, Ottawa, Ont.
Those were the provisional directors of this great corporation.


William Irvine: Did they get anything out of it?


James Shaver Woodsworth: Of course it is not unusual to have a dummy board of directors, but the layman sometimes wonders why it is necessary. Why was it necessary for a lawyer of the standing of Mr. Geoffrion to come all the way from Montreal to have the company incorporated by Messrs. McGiverin, Haydon and Ebbs? These are questions which should be answered.
The personnel of the board of directors has already been given to the house, but I notice included in that board the name of G. H. Montgomery. It is rather curious that in opposing the application of the company made before the Quebec legislature, the report

Beauharnois Corporation-Mr. Woodsworth
of the proceedings before the private bills committee at Quebec on February 29, 1923, shows Mr. Montgomery as saying:
Last year when we came down here there was not even a plan before the house, the idea was to grab the rights that had apparently been worked out in one or two of those commissions for private interests.
And so on. Shortly after Mr. Montgomery appears as one of the directors of a corporation described by him as not being in the best interests of the companies he represented or of the province. Apparently one way of getting on the directorate of a big corporation is to attack that corporation hard enough.


An hon. MEMBER:: Better be careful.


Mr. CHAPLIN:: What have you got in your mind?


James Shaver Woodsworth: This is not a bid for a position on the directorate. Another name appearing in that list is that of the Hon. W. L. McDougald. I think we all know the name of Senator McDougald.


Miss MACPHAIL:: He is the power behind the throne.


James Shaver Woodsworth: The Hon. Mr. McDougald was a member of the national advisory committee, to which the Minister of Public Works has referred. As the minister was not able to give us that information, I think it would be well to put on record the members of that committee. They were as follows:
Hon. G. P. Graham, chairman.
Thomas Ahearn, Ottawa.
Hon. W. E. Foster, St. John.
Beaudry Leman, Montreal.
Edward D. Martin, Winnipeg.
Doctor W. L. McDougald, Montreal.
Hon. Sir Clifford Sifton, K.C., Toronto. Major-General John W. Stewart, Vancouver. Hon. Adelard Turgeon, Quebec.


William Irvine: Does that include political influence?


James Shaver Woodsworth: Mr. McDougald
had something to say last year regarding the St. Lawrence waterway. In speaking to the Senate on April 19, 1928, as reported at page 236 of the Senate Hansard, Mr. McDougald said:
Honourable gentlemen, I desire to make a statement on a question of privilege, and to give an absolute denial to certain newspaper implications reflecting on my honour and integrity, both as a member of this honourable body and as a private citizen.
He made reference to certain editorials which had appeared in the Toronto Globe, and continued:
I am concerned, however, only in giving an immediate, unequivocal and absolute denial to the implication of the Globe despatch that I am connected with the Beauharnois Power Company.
He may not have been connected with the Beauharnois Power Company at that time, but to-day he is one of the directors. I notice that the following appears in the prospectus sent out by Mr. Sweezey:
Management preferred shares (no par value),
3 shares.
The management preferred shares above mentioned confer on the holders the exclusive rights for a period of ten years from September 17, 1929, to elect and remove the directors of the corporation and otherwise confer in respect thereof the same rights na if each management preferred share were a class A common share. The management preferred shares at the end of the ten-year period will automatically be converted into class A common shares, but, with the consent of all the holders thereof, may be so converted prior to that time. These shares have been provided to ensure continuity of direction and policy during the important initial period covering the construction and early operation of the development of Beauharnois Light, Heat and Power Company, and will be held between Hon. W. L. McDougald, M.D.; R O. Sweezey, Esq.; and A. F. White, Esq.
We have the extraordinary spectacle of Doctor McDougald, a member of that national advisory committee, denying that he had anything to do with this corporation, and to-day he is a member of the directorate and one of three who hold these management preferred shares which give them absolute control for the next ten years.
There is just one other matter that I really should not pass by, although it may not be of great public importance, but I notice among the engineers of this new corporation, the name of Thomas H. Hogg, Esquire, of Toronto. I suppose an engineer has the right to find his work wherever he can, but a year or so ago Doctor Hogg was employed by the Manitoba government to give expert advice with regard to the desirability of handing over the Seven Sisters falls, and he then appeared as having been lent by the Hydro-electric Commission of Ontario, a public body. Now he is apparently the engineer in connection with this private concern.
I do not intend to weary the house by going into any further figures or statements in regard to this matter. I want to ask the simple question: In view of the facts that have been brought out this afternoon-and I think most of them are indisputable-what does the government propose to do? That is what we are all interested in. We are not here-at least I am not-to make definite charges, but I am here to give wider publicity to some of
2414	COMMONS
Beauharnois Corporation-Mr. Woodsworth
the facts which have been before the public now for some weeks in these prospectuses and in the statements that have been issued by these investment companies. It seems to me that now that the facts are known to the public, it is for the government to act. I do not think they can evade their responsibility by simply asserting that this is a Quebec matter. It is not a Quebec matter; it is a Dominion matter. It is a Dominion matter because the order in council, without which this company could not have been organized, was passed by the Dominion government and the government has it entirely in its own power to cancel that order in council.
Only last year when some of us were urging that these properties should not pass irrevocably out of the hands of the country without parliament being asked to make a pronouncement, the Prime Minister told us that under the Navigable Waters Protection Act the power to cancel was already in the hands of the government. That power being in the hands of the government, surely we have brought sufficient evidence before the government to warrant a revocation of that order in council. Further, I would pass on the suggestion which came from the hon. member for Bow River. In a matter of as great concern as this, we ought to have an investigation by the Department of Justice. I do not mean a narrow, departmental investigation; the Department of Justice should take the initiative in making such an investigation as would convince the general public that their interests are to be safeguarded in the future and as would prevent a corporation of this kind fastening itself upon not only this generation but generations to come.
Turning water into gold! You talk about morality; you try to impress morality upon our young people throughout the country; but how are we to have either personal or national morality if a few individuals are in this way to be permitted with impunity to make their millions out of their fellow citizens?


Edmond Baird Ryckman: Mr. Speaker, I believe I am as anxious as any other hon. member to see the early prorogation of parliament and an opportunity to try our fortunes at the polls. I cannot, however, let this occasion pass. I do not think I shall traverse any ground already covered in this debate, but there are two considerations which drive me to my feet.
In the first place, I do not believe the Minister of Public Works (Mr. Elliott) made a fair presentation of the case this afternoon.
I know there are within his knowledge certain facts which should have led him to say some-

thing other than he did. I took down his words, and the effect of them was that he was approached by the Beauharnois Light, Heat and Power Company with a lease of such rights as are owned by the province of Quebec. That is one statement which, after the word " lease " will appear in Hansard to-morrow. Another was that they were dealing with water power rights which the province of Quebec have the right to grant. Then he wound up by telling the hon. member for Bow River (Mr. Garland) that he was in the wrong tribunal. He did not attempt to answer the case; in fact I would say he rather admitted it. That is one reason why I am driven to my feet. I am prepared for any change of base or front on the part of the government, but I am not going to let that change take place unless I have a chance, if I believe public honour and the interest of the people are involved, of saying that what is done is contrary to what is right, contrary to what a government should do.
Listen to this: for two weeks in October, 1928, I sat in the Supreme Court of Canada, day in and day out, as many other counsel did, I with two other counsel, representing British Columbia, the government represented by more than half a dozen counsel, and every province in Canada represented. What was the occasion? It was what was known as the waterways and water powers reference. It was action on the part of this government. They asked the Supreme Court of Canada, by answering certain questions to tell them who owned the water powers, who had the right to the property in the water of the rivers and streams of this country. Shortly stated, that is what the supreme court was asked to do. The government was represented by a number of very distinguished counsel who said over and over again-and this is in the notes which I have; I have not had an opportunity to refer to them, because I did not know until this afternoon that this debate was coming up-that they were instructed by the Attorney General for Canada-they did not say the Minister of Justice-to contend that His Majesty in the right of the Dominion held the propery in and control of all the waters in all the navigable rivers and streams of this country, and further, mark you, that the Dominion of Canada owned all the power that could be developed from those waters. Therefore, all the Beauharnois Company had or could get or has now is the property of the Dominion government.
We cannot go into the legal argument, but there is in connection with it a point that is so important I know it will be appreciated by

Beauhamois Corporation-Mr. R yen man
some. The chief point in this two weeks' session was: Is there or is there not a public right of navigation? Every province but one declared that there was not a public right of navigation. The contention of the counsel of this government was that if there was a public right of navigation then under the British North America Act, section 91, supplemented by section 92, it followed beyond any contradiction that the Dominion of Canada owned the water powers and had the property in the water in the rivers and streams of 'Canada.
The case of the provinces-I am speaking generally-was weakened by one fact. The eminent counsel for Quebec, the late Eugene Lafleur and Mr. Geoffrion, said that they could not contend that there was not a public right of navigation in the province of Quebec. Therefore, if the contention of the government's counsel was right, there was, following a public right of navigation in the province of Quebec, the ownership and control of all the water powers in the province of Quebec by the Dominion of Canada. Therefore, when the Minister of Public Works says that he was approached with a lease given by the province of Quebec, which purported to deal with these water powers, I ask him and the Prime Minister (Mr. Mackenzie King), when did they surrender this important ground? There was no other ground. When did they surrender this ground which took them to the supreme court asking for a decision of the court as to who was entitled to the water powers and the electrical energy developed therefrom in the Dominion of Canada? That was the whole case; there is no question about it.
As has been stated, the questions submitted to the supreme court were not answered. If the question of a public right of navigation had been admitted by all the provinces, I believe that the supreme court would have answered the questions. Those who will take the trouble to read the reasons for judgment given by the justices of the supreme court will readily see that there was much to be said on behalf of the government of the Dominion of Canada owning all the water powers that could 'be developed upon any navigable stream in this Dominion.
This order in council, Mr. Speaker, is a wonderful document. Remember, it was drawn up after this hearing before the supreme court. Its drafting is artistic; there is no doubt about that. On page 6 of the order in council, with the margical note "Reference to supreme court" it says:
That in view of the combination of the two questions of power and navigation, it was
deemed advisable to refer to the Supreme Court of Canada, a series of questions to the end of determining the respective rights of the Dominion and provincial governments in the development of power. The supreme court has recently submitted the result of its consideration of the various questions asked. The conclusions of the court do not furnish sufficient ground to establish a well defined line of action with respect to power but as the question of fully protecting navigation is the dominant issue so far as the Dominion government is concerned, it is found that favourable consideration may be given to the proposal of the Beau-harnois Light, Heat and Power Company, which, with certain modifications, may be utilized for the requirements of navigation in that stretch of the river.
There was not one counsel, Mr. Speaker, who was bold enough to get up and even murmur during all the course of that hearing that there was any claim that the navigation of navigable waters could be interfered with by any province. That is altogether aside from the question, and whoever drew up that *order in council ought to have known it. But 'it does say, as will! be noted, that there was involved the question of the ownership of power. I have forgotten just when the judgment was delivered, but the hearing was in October, 1928, and judgment was given about six weeks or two months afterwards.
What I wish to refer to next is the debate that was held in this house on February 19, 1929, when the government was asked not to pass this order in council in favour of the Beauhamois Company. One would think, after hearing that this Beauhamois power was such a valuable asset-its value was scaled up this afternoon to $308,000,000-that a government that was anxious to keep for the people of Canada all that they were entitled to would have done something to have this question of ownership settled. Beauhamois power is only one power. There are thousands in this country, all valuable. The Dominion government took care to go to the courts with counsel. A return was made as to the cost, and while I do not remember the exact figures, I am sure that the hearing cost $100,000. Add that to the $308,000,000. Remember that every province in the Dominion of Canada was represented by one or more counsel, and that two weeks were occupied in the hearing of this case. The judges could not answer the questions submitted because, they said, some of them were not properly framed. I do not suggest that they were deliberately not properly framed. It was known that this application of the Beauhir-nois Company was before the government, what would be the natural thing for any business man to do under those circumstances, where hundreds of millions o( dollars wp-.e
2416	COMMONS
Beauhamois Corporation-Mr. Ryckman
involved, and that is no exaggerated statement? Would not eare have been taken to ascertain who owned the water-powers, and who was entitled to the money that might come from their development, who was going to enjoy such a splendid property producing such magnificent services. Would that not have been the natural thing to do? But it was not done.
I come now to the 8th day of March. We find that while this matter was still in suspense and undecided, while nothing had occurred to weaken the government's case, but rather i.he opposite, while the government certainly had a case that should be decided on its merits, this important order in council was passed in favour of the Beauhamois company.
The government, Mr. Speaker, has failed in its duty, and I say that that admits of no contradiction. If this Dominion of Canada in its right as against the provinces is entitled to untold millions of property, then that question should be decided. As I said, the hearing before the supreme court took place in the month of October, 1928. No further step in relation to deciding who owns this water-power has been taken by the government now in office. It should have been taken; it must be taken. Speaking wholly for myself, I say that after this next election, of my own motion I am going to ask the leader of my party to see that the question is determined whether the Dominion of Canada, which we all represent, is entitled to this property worth millions of dollars, or whether it can be given away by those who do not own it.
In conclusion, I desire to say that I think it very strange that there is no representative Tory in this Beauhamois group. Do not imagine that it is on that score that complaint comes. They were assisted in every way. The Minister of Public Works said: We had nothing to do but to accept this lease which was made by a lessor who might not have had the power to grant it. I say, Mr. Speaker, yes, the government did have something to do. At a private sitting in with these people you gave them the land for their locks and all their appurtenant works; you made it nice and easy for them. The whole thing was on the skidway in favour of these men and against the interests of this country, and the government saw that it was done.
Let me refer to the debate which took place last session. It will foe found on page 786 of Hansard of March 8, 1929. The Minister of Public Works then said something different from what he says to-day.


Edward Joseph Garland: There was no debate then; it was simply a statement by the minister.


Edmond Baird Ryckman: Well, it is on page 786 of Hansard, the bottom of the second column:
From the foregoing it will be apparent that m granting its approval under the Navigable Waters Protection Act, of the plans and site of the Beauhamois Light, Heat and Power Company, the department has fully and adequately protected the public interest both with respect to conditions as at present existing and as regards all possible future development of a greater St. Lawrence shipway.
Let any hon. member review the situation. Look to what lengths the government went to have this disputed question heard by the highest court in the land. Look at what the government has done since-nothing at all except to give every benefit to the Beauhar-nois Light, Heat and Power Company, and all those who have been able to stick their nose in the trough.


William Lyon Mackenzie King: Before my
hon. friend sits down may I ask him if he could tell us what the contention of the province of Ontario and the province of Quebec is as to the ownership of the water powers in the St. Lawrence?


Edmond Baird Ryckman: I can certainly answer that question. The contention of both provinces was that they owned the water powers. But it was not so found by the judges of the supreme court. If I read the reasons for judgment correctly the court finds much to support a claim on behalf of this Dominion -His Majesty in the right of the Dominion -that the water powers, the property in the water, belongs to or may be appropriated by the Dominion.


William Lyon Mackenzie King: My hon. friend has referred to the decision of the supreme court. Would he say that the premier of Ontario does not contend that the water powers belong to the province of Ontario and that the decision of the court entitles him so to believe? And is that not also the position taken by the premier of Quebec?


Edmond Baird Ryckman: I cannot speak for the premier of Quebec, nor can I speak for the premier of Ontario. But it would be a very strange thing if the premier of Ontario did not contend in the interests of his government what you are not doing in the interests of your government. Your government contended that the property in the water powers was vested in the Dominion, and although the hearing lasted for two weeks there was nothing admitted by government counsel to discolour your claim.

Beauhamois Corporation-Mr. Bennett


Rodolphe Lemieux: Is the house ready for the question?


Richard Bedford Bennett: Mr. Speaker, this house has
been listening to what by all odds is one of the most important discussions of this session. The statements made this afternoon by the hon. member for Acadia (Mr. Gardiner) and the hon. member for Bow River (Mr. Garland) were so lucid and the national aspect so apparent that I feel every member must regard this question no longer as one purely of local concern but one that touches the whole conduct of business in this Dominion.
I do not think observations need be lengthy. There was incorporated in the province of Quebec a company known as the Beauhamois Light, Heat and Power Company. It had the right to divert 40,000 cubic feet of water per second from the St. Lawrence river. A very distinguished engineer conceived the happy thought of developing power in the river. He wrote a letter to a friend of his and pointed out that the way in which this could be done was to secure the support of capitalists, and likewise political influence. That letter was read this afternoon. He proceeded to carry into effect his purpose and he succeeded. For those who succeed in the efforts which they honestly make I think no one has a word of condemnation. The public interest becomes important only when private enterprise touches the public in the way that light, heat and power touches them; and it becomes of transcendent importance that every step that can be taken to protect the public interest should be taken.
This government, in its executive capacity, was called upon to determine, through the Minister of Public Works (Mr. Elliott), whether or not permission should be given to divert the water from the river and lake through a canal to another lake. A hearing was arranged and permission was granted. But before the permission was finally granted, the application was amended, and the permission was given to divert only 40,000 cubic feet of water a second , from the river through a canal which was to be constructed by the applicant company. The applicant company was the Beauhamois Light, Heat and Power Company, incorporated, as I have said, by the Quebec legislature, and under our law as it stood at that time it was essential that permission should be given by the government of Canada to enable the works to be constructed.
The province of Quebec claims to own the water over the bed of the river, it being in that province, and it bases its claim upon reasons which were presented in the reference to the Supreme Court of Canada and which 2419-153
have always been presented in that sense by the provinces, as the Prime Minister (Mr. Mackenzie King) has indicated. The Dominion of Canada, without having the question finally determined by the court of last resort, or propounding questions that in my judgment would make an answer possible, proceeded to grant the authorization. That authorization was granted upon conditions. This therefore implies that the government realized that it had the right to impose conditions upon the grant of the authorization. The conditions it did impose are set out in the order in council. That was done by the federal government acting in its executive capacity.
We thus have the Beauhamois Light, Heat and Power Company acquired by the engineer, who commenced operations as indicated, with the assistance of capitalists and politicians whose influence he thought powerful enough to aid him in carrying forward his work. That, at least, is his statement of the matter. He did not then proceed to sell the securities of that corporation; and here is where the federal parliament becomes responsible. The Secretary of State granted letters of incorporation to the Beauhamois Power Corporation Limited-not to the Beauhamois Light, Heat and Power Company Limited, that had the licence from the province of Quebec. It was not that company that sold its securities, it was the company created through the instrumentality of the Companies Act passed by this parliament. That company came into being for the purpose of acquiring the shares in the Beauhar-nois Light, Heat and Power Company Limited and its subsidiary and allied organizations. That company, the Beauhamois Power Corporation Limited, had, of course, to comply with certain provisions of the Companies Act. Hon. gentlemen read this afternoon the statement filed in lieu of prospectus by the ten students at law and lawyers in Ottawa who had no interest in the transaction and who were acting through Ottawa solicitors headed by Senator Haydon. The principal political figure in the company at present is Senator McDougald, who is chairman of the Montreal harbour commission and one of the three managers of the Power Company, according to the prospectus, for a term of ten years.
The company came into being under circumstances to which I have referred. It therefore owes its origin to a Dominion act, and the question before us at the present time is: What safeguards have we, as a parliament, imposed on behalf of the investing and consuming public with respect to this corporation

2418	COMMONS
Beauhamois Corporation-Mr. Bennett
and others of the same character? I recall a question which was being discussed when I first came to this parliament. The question before us at that time had reference not to a power company but to the question of capitalization of companies. The labourer is worthy of his hire; the engineer with courage, vision and foresight who foresees great possibilities is entitled to just compensation for his efforts. When the public subscribes money to make possible the development of a great enterprise it is very often given an interest in the common shares of the corporation in order to make the proposition sufficiently attractive to induce them to advance their money so as to carry on the undertaking. The next question is: To what extent should those who promote the undertaking and foresee its possibilities be compensated for their foresight, their knowledge and their effort? That question has not yet been answered. It is now more than fifteen years since I stated my views in the House of Commons that something should be done by parliament to indicate the extent to which the free distribution of shares to promoters should take place, and thereafter become the basis upon which rates for a public necessity such as electric current are established. There can be nothing more important; it is important in Manitoba; it is important in Alberta; it is important in British Columbia, and it is important in these great central provinces. There can be no doubt as to the right of the promoter to just compensation for his efforts. But what is just compensation; what is fair compensation; what is a just recognition of the services rendered by the promoter? Mark you, the promoter renders a distinct service; he has had vision and foresight, courage and enterprise, and it has been through his persuasive powers that others have been induced to enter into the undertaking and to provide capital so that it may flourish and develop into a great and powerful undertaking. But, there must be a limit to it, and when that limit may be controlled and is not controlled I attach the responsibility to the government. When the government of this country had the opportunity to exercise control; when they granted permission to this corporation to carry on its operations-for, mark you, it could not function for one day and could not market a kilowatt of power without approval by the government of its plans to divert water from the lakes and stream above to the lakes and stream below- it should have exercised that control. In the face of the story we heard to-day the present situation constitutes an outrageous proposition. In my professional career I have had to fMr. Bejinett.]	*
do with a great many such enterprises, and I have an idea of what would be just compensation for men who promote, foresee and have vision. When it comes to talking in terms such as we heard this afternoon, will any member of the house say that the consuming public is getting a fair deal? Is the consuming public getting a fair chance to have the rates controlled and the prices fixed for power which is absolutely essential to the development of the country? In the light of what was stated this afternoon, will any member stand in his place and say that the promoter's compensation is just when we begin to talk about a hundred million dollars? It staggers our imagination.
I must confess I had no conception that these figures ran into the millions that they do until I heard the hon. gentlemen make statements this afternoon, and I took the trouble to investigate some of those statements. I find the situation to be simply this, that the gentleman who was the president of the enterprise at the time of the application to this government is no longer the president. He retired, and at the time of his retirement it was openly stated in the public press that he offered to buy or sell, and that he sold his interest in the company for upwards of 83,500,000. He thought that the public were being asked to pay too much to the promoters. I ask the government: What steps were taken to provide for the regulation of rates; what steps were taken to provide against the overcapitalization of this enterprise? I read and re-read the conditions imposed by this government. And what conditions did the government impose: (a) for the regulation of rates; and (b) over the capitalization of the enterprise? None. And so with unrestrained activity this corporation, with the sanction of the government through the offices of the Secretary of State, with three management shares, for a period of ten years is under the control of three men, one of whom is a member of the Montreal harbour commission, and no restrictions, restraints or conditions are imposed by the government of Canada upon the exercise of powers which touch vitally the lives of hundreds of thousands, perhaps millions of people. I wonder if hon. gentlemen realise what it means when they talk about 2,000,000 horse power. Do hon. gentlemen appreciate or understand what the development of this great valley means in industrial life? It means the bulding u,p of great industries and the creating and promoting of Canadian life. This country can become one of the greatest countries on the face of the globe if we but utilise the vast resources we have at hand. I fancy,

Beauharnois Corporation-Mr. Bennett
however, that there will not be a Canadian who when reading the story placed on Hansard this afternoon will not regard such action as described a menace to the industrial and economic development of Canada. I make that statement in all sincerity, because I have made it my business to look into the relation between electric power and development. I have studied it. I would ask hon. members to notice the United States across the line; take note of the power they have at Niagara, and compare that power and its possibilities of development with the possibilities which exist in Great Britain. Instead of the British industrialist being able to have an electric motor attached to every shaft in his factory as is the case in the United States, he has to depend upon steam for the development of power. In Great Britain the water power is very limited; there is practically no hydroelectric energy, and they have not yet solved the problem of cheap power as we understand it here. Within a radius of a few hundred miles of the city of Buffalo, 500,000 horse power is available. Go into the modem plant and see there the electric motor attached to every machine; with a twist of the wrist the machine stops, and with another twist it starts. There is no question but that there is a great loss of energy involved in the use of steam power. In this country we are able to utilise the great forces of nature to the maximum and in this way we can produce power cheaply.
But what position are we in? The power that once belonged to Canada and to all the people-and I have a very strong conviction when I use those words-has now passed irrevocably out of our hands. The price at which that power is to be sold for Canadian development is to be passed upon by three managers for the next ten years. That is what it means.
Let us look at this thing fairly. There are the names of the persons concerned; some of them are friends of mine. Does that deter me from the discharge of my public duty here? It does not. My public duty here is to point out just what I aim pointing out to this country, that the power development of the great natural resources of power and energy that infuse life into factories and make them efficient instruments for the purpose of making this country great, can come about only by a realization that this development must be under terms and conditions that enable such power to be available to the Canadian people on the cheapest possible terms. These resources are held by us from Providence in trust, not for the few but for all; they are held in trust for the Canadian people and not for the few. I am the last 2419-153^
man who would deny to the man with enterprise, initiative and courage just compensation for his efforts, but I ask any hon. gentleman sitting opposite, whether he be a capitalist or otherwise, to read the figures given this afternoon and say whether this country of ours has had a fair deal. We are the beneficiaries; the crown in the right of the Dominion has been the trustee; they and they only could grant the permission, and when they granted that permission did they impose a single restriction or condition that would secure to posterity and to this generation as well the use of that great natural power given to us by Providence, the extent and value of which is such that it should make Canada equal any nation in the world?
That is the question. When we talk as we have been talking about the necessity for protection and why it is necessary to put ourselves on terms of even and fair competition with those who are carrying on mass production in other countries we must remember that one of the most valuable factors, namely the great hydro-electric possibilities of Canada, is now passing out of our hands and cheap production is then rendered less and less possible. I say, sir, that while I sat in my place and listened, as I did this afternoon for the first time, to those speakers and remembered what I have read as to the prices at which securities upon the stock exchanges are being sold, I realized that in its possibilities this was one of the most gigantic enterprises this country has ever had to consider, and the question is well worthy of the consideration of parliament even if it were the day before dissolution.. I am only sorry that it should not have been considered before this. I have been recreant to my duty in that it has not been so considered, and after all I heard during this discussion this afternoon I realized that fact.
I do think, and I say it to the Prime Minister, that this matter should be the subject of judicial inquiry. It should be inquired into; there have been statements made which necessitate that procedure being adopted, why should $3,500,000 be spent for little or nothing? What is the reason for this vast financial scheme? Why, there are now several thousand shares apparently available for sale on the market at $15 per share which, in itself as you will observe, involves a vast sum of money. What is the reason for these things being done without our having some knowledge of just what Mr. Sweezey meant when he pointed out what had to be done in order to secure the results which he has attained? Why was the opinion of the engineers disregarded; why is it that to-day we
2420	COMMONS
Beauhamois Corporation-Mr. Bennett
find, when we are on the eve of great developments in this country, that the very same engineer travels up to Hamilton and makes a statement that is consistent only with the minority view adopted in this particular case?
Then there is another matter. In western Canada the ramifications of this undertaking have been felt. I ask the Minister of Railways and Canals: What about the foreign press; who controls it? I ask him that question.


Mr. CRERAR:: All I can say, Mr. Speaker, is that I do not control it.


Richard Bedford Bennett: I did not say the hon.
member did control it. I asked him who did; I asked him why Senator McDougald travelled out there.	*


Thomas Alexander Crerar: I can say to my hon.
friend that I do not know who controls it.


Richard Bedford Bennett: Of course I accept my
hon. friend's statement as to that, but apparently those near to him have seen to it that he does not know. Why the sudden change in policy in that press? Who controls it to-day? Who was sent out there by the interests in Montreal to make the transfer? Let us have that question investigated and answered also. All I can say, sir, is that while there is no opportunity here this day, in this house, to make this investigation, there will come a time when this matter will be investigated and made known to the Canadian people. That is as certain as anything in the world.
Go to the United States and watch what they are doing there. We talk about our institutions: the United States Senate lays bare everything. What are we doing in this country? We are pussyfooting about matters of this kind, because men think that your friend or my friend may be associated with this matter, and we have not the courage to stand up and talk about it. Well, sir, I value my position in public life, but I would rather be relegated to private life and be there forever than remain silent on an occasion of this kind.
That is what I have to say; let there be no misunderstanding about it. It may mean that I will be subjected to the threats of the great financial powers that are behind this venture. I snap my fingers; that is my answer, and I want the Minister of Railways to go out and investigate and answer to the people of western Canada as to who is responsible for the transfer and sale of the foreign press, so-called, in the city of Winnipeg. Let him go out there and see who is

responsible for the references made in these papers now. Bring them home. We know where they stood when the Seven Sisters matter was up. Go find where they are now. There was bound to come a time in the history of this country when we would have what they call a "show down", and now the time has come.
I confess, Mr. Speaker, when I contemplate this matter and when I regard all that is involved in it, not to thousands but to millions of people who some day will fill this great valley around the St. Lawrence, which might become one of the greatest industrial centres in America-the Ruhr of Canada; when I contemplate what those figures meant this afternoon, my feeling of resentment gets the better of me. I ask hon. gentlemen if this thing is to be tolerated. It rests with us, with each of us, to say whether or not it shall be tolerated, and I believe that in the end the common sense of the Canadian people will prevail and that, great and powerful though the promoters have been, they are .not sufficiently powerful to control the common sense of the people of Canada.


Lucien Cannon: Mir. Speaker, I do not wish to adopt the tone of the hon. leader of the opposition (Mr. Bennett) ; I will discuss this matter in a very cool and, as much as possible, legal manner. One would be rather surprised, having listened to the very warm statement of the leader of the opposition as to our trusteeship in the natural resources of Canada, to recall that when the hon. gentleman had executive responsibility for a short time in 1926, one of the main things to which my hon. friend and his then associates directed their attention was to give away the Carillon power, by order in council.


Richard Bedford Bennett: I think the hon. gentleman is not quite right.


Some hon. MEMBERS:: Order.


Lucien Cannon: What about the high moral ground taken to-night by my hon. friend?


Richard Bedford Bennett: That is hardly correct;
that is not a correct statement, as the documents will show.


Lucien Cannon: I know whereof I speak,
anid I may say to the house that one of the few things the shadow government did-the shadow government of which the hon. leader of the opposition was one of the main ornaments-was to give away the Carillon power site. Evidently gentlemen on the other side have decided to play a game of bluff in connection with this matter. Well, let us call

Beauhamois Corporation-Mr. Cannon
their bluff and examine the question as it should be examined. If the hon. gentleman was serious and in earnest, if he really wanted this order in council cancelled, he is enough of a lawyer to know that the proper procedure is not the one suggested this afternoon.


Richard Bedford Bennett: I did not suggest cancellation.


Lucien Cannon: He knows there is another procedure to be adopted.


Richard Bedford Bennett: I did not suggest the
cancellation.


Lucien Cannon: If my hon. friend did not [DOT]suggest cancellation, then he does not agree with the other speakers who preceded him.


Richard Bedford Bennett: There was not a word
said by me about cancellation.


Lucien Cannon: If he does not want cancellation, then what was he talking about a minute ago?


Mr BENNETT:: I am glad the hon.
gentleman has mentioned this matter. I am enough of a lawyer to know that there could not be a cancellation of that agreement because third parties have acquired rights under it, and bonds have been sold. I did not suggest that, but I did suggest that an inquiry should be made.


Lucien Cannon: My hon. friend, having
said that this was a tremendous scandal, having expressed his indignation, now says that things have to remain the way they are. That goes to show how much in earnest the hon. gentleman was.


Richard Bedford Bennett: The hon. minister will
have to do a lot better than that.


Lucien Cannon: The hon. member for
East Toronto (Mr. Ryckman) mentioned the reference made to the supreme court, and told us about what had taken place during the fifteen days. I do not intend to go into detail, but I may say that the questions put to the court in connection with this reference had been agreed to after several conferences by counsel for both the Dominion and the provinces.


Edmond Baird Ryckman: That statement is not
correct.


Some hon. MEMBERS:: Order.


Edmond Baird Ryckman: I have the right to
[DOT]correct the Solicitor General. I think he will concede that objection was taken to the questions, and those objections are on record.


Lucien Cannon: Objections were taken, but 'the questions were finally settled upon after
several conferences, the last of which was held in my own office, presided over by myself, so I must know what I am talking about. The matter before the court was not a question as to the ownership of the bed of rivers or the ownership of the ordinary water-powers on navigable rivers within a province, but dealt mostly with the ownership of power developed as a result of navigation works undertaken by the Dominion government. That question has not been settled by the court, but my hon. friend is now contending that in so far as the water-powers of Ontario and Quebec are concerned, on the St. Lawrence or on other navigable rivers, those provinces are to be placed in a position of inferiority to the other provinces of this Dominion. Are not these two central provinces entitled to their natural resources as are Nova Scotia, New Brunswick, Prince Edward Island and the western provinces?


Edward Joseph Garland: The comparison made by the hon. Solicitor General is not a fair one; this is an international stream, not a national one.


Lucien Cannon: Can we contend that the
St. Lawrence river, in so far as the Canadian 'section is concerned, is to be considered as 'international, and are we to cede our interests 'in it and say that we cannot dead with that section of the St. Lawrence without consulting the American government or the American people?


An hon. MEMBER:: Never.


Lucien Cannon: I am not in favour of
that. The Canadian section is Canadian and should be dealt with by Canadians in the interests of Canada. I will not agree with the theory advanced this afternoon by the hon. member for Toronto that because of treaties passed one hundred years ago, which gave to Americans the right of free navigation on the St. Lawrence river, we have to consult 'them when we want to deal with the Canadian 'section of our principal river.


Edmond Baird Ryckman: I advanced no such theory.


Lucien Cannon: I think the people of
Canada will be behind me and not behind the hon. member for Toronto in this connection.
The Beauhamois company is not the only one exploiting power in Canada-there are many others. The provinces of Ontario and Quebec claim that the water-powers within their boundaries are part of their natural resources, and the provincial governments claim the right to dispose of them. Are we
2422	COMMONS
Beauharnois Corporation-Mr. Cannon
as a Dominon government going into the power business to compete with the provincial governments? I think that would be a very dangerous policy to adopt. If we are going to leave to the provinces in the future as we have done in the past, the disposal of their natural resources, are we going to dictate to them whether those resources should be handled by public or by private ownership?


Edmond Baird Ryckman: You went to the
supreme court to have it decided that you could.


Lucien Cannon: That is another matter. Are we as a parliament going to tell the province of Ontario that tire public ownership is bad and that private ownership should be adopted? Are we, on the other hand, going to turn around and tell the province of Quebec that public ownership is preferable to private ownership and that, therefore, they must change the whole basis of their hydroelectric development? The thing is absurd


Richard Bedford Bennett: No one has suggested
that.


Lucien Cannon: If no one has suggested
that, then why talk about our common heritage having been given away?


Richard Bedford Bennett: The answer is simple.


Lucien Cannon: The Quebec government has granted this lease, as it has granted other similar leases, and has adapted, whether rightly or wrongly, a policy of private ownership as being the proper way to develop power. Are we going to wipe out provincial autonomy? Canada is composed of nine provinces; there is a federal government and there are nine provincial governments-are those provincial governments to be recognized or are they as entities to be wiped out? If they are to be wiped out, very good, but if they are to be recognized, provincial autonomy has to be recognized in every branch and in every part of Canada, in the west, in the east and in the central portions.


William Irvine: What would have happened had the order in council not been granted?


Lucien Cannon: My hon. friend has asked a very pertinent question. The rights exercised by the province of Quebec in connection with the Beauharnois company are subject to and restricted by the paramount right of Canada as to navigation. Whenever power is to be developed by a province, either through a hydro commission or through a private company, that development cannot take place unless and until the Dominion government is satisfied that the interests of navigation are protected. In the order in council [Mr Cannon.J
which was passed conditions were laid down to protect navigation on the St. Lawrence, not only for the present but in the future. We have never done anything more than that. If we are going to change the law, very well, but so long as the law remains as it is to-day, we cannot do anything more than that.
The hon. gentleman mentioned the finances of this company and spoke of fraud and fake representations. I am not here to defend that particular financial group; if they have done anything wrong, leit them be punished. However, I think every hon. member of this house knows that the administration of justice in Canada is in the hands of the attorneys general of the different provinces. If these people have committed fraud, it is for the Attorney General of Ontario or the Attorney General of Quebec to prosecute. That is another well recognized principle of constitutional administration. It is very well for the hon. gentleman to talk about a gigantic swindle; to talk about unfair rights; to talk about the public being crushed. If that were so, could the leader of the opposition explain why so astute a gentleman as Mr. Ferguson, premier of Ontario, would make a deal with those people for power for his province?


Richard Bedford Bennett: He cannot get it anywhere else.


Lucien Cannon: If what the leader of the opposition said were true, how could Mr. Ferguson make a deal for 250,000 horsepower with this syndicate?


Edward Joseph Garland: To help the consumer by financing it.


Lucien Cannon: But if the rates were so high, if people were to be crushed, how could Mr. Ferguson, who has public ownership in Ontario, be able to buy from a privately owned company power at a rate which would emable him to sell that power in Ontario? The whole thing is ridiculous when you come to think of it.
This is my last word. The leader of the opposition is more familiar with the financial world than I am, unfortunately for myself, I shall admit; but when I was listening this afternoon to the hon. member for Bow River (Mr. Garland) giving the names of the financial firms which were interested in this Beauharnois issue, I said to myself: Since when have these people become dishonoured? They are the leaders of our financial world. Since when have they become thieves? Since when have they done things by reason of which tlie Canadian people should withdraw

Questions
their confidence and trust in them? They are the leading financial houses of Toronto, Montreal and all our other great centres. Will the hon. gentleman dare say those people are not honest? I know he will not.


Richard Bedford Bennett: I did not.


Lucien Cannon: And the hon. member would not.


Samuel William Jacobs: It would be dangerous to do so.


Richard Bedford Bennett: Not one bit. I am not afraid of the danger.


Edward Joseph Garland: The hon gentleman will remember that we gave the same trust and held the same opinion of honesty with regard to some of the other brokerage houses in the country.


Lucien Cannon: This is not a brokerage house. These are people who have been dealing with the Canadian public for years. It is easy to rise in one's place in the house and try to throw suspicion, but we must have something more serious than that before cancelling an agreement of this kind.
Mr. RY'CKMAN: These honourable people, against whom I shall not say a word, state that the hon. member's government has given them 2,000,000 horsepower.


Lucien Cannon: They do not say that.


Edmond Baird Ryckman: Yes, they do.


Lucien Cannon: They do not say it and they cannot say it. They say they hope they may get it, but we have to stand by what we have done and not by what people say we might do. What we did was to protect the interests of navigation; we refused to give the complete flow of the St. Lawrence when they asked for it, and what we shall do after the election, because again we shall have the executive authority, will be to protect the interests of navigation.


William Irvine: Would the hon. member explain the purpose of the joint commission that was appointed to investigate the whole power question on this river and the reason
for the government's disregard of the recommendations of that commission, because the charge was made that they disregarded them?


Lucien Cannon: First of all, this being a technical question, I do not know that I can answer my hon. friend very well; but as to the other part of his question, when he speaks
about disregarding recommendations, I may say that we did not disregard them; on the contrary we adopted the plan in favour of which the majority of .the Canadian engineers stood.


Edward Joseph Garland: What about the joint board?


Lucien Cannon: I am talking about Canadians dealing with Canadian affairs.


Rodolphe Lemieux: Is it the pleasure of the house that the hon. gentleman shall have leave to withdraw his motion?
Motion (Mr. Gardiner) withdrawn. QUESTIONS
(Questions answered orally are indicated by an asterisk.)



EGG GRADING REGULATIONS

Mr. ROWE:: ,
1.	Have any charges been laid against one Wesley Hamilton of Chesterville, Ontario, for infractions of the regulations respecting the grading of eggs?
2.	Did the said charges come to trial?
3.	If not, on whose instructions were the said charges withdrawn?
4.	Why were the said charges withdrawn?


Mr. MOTHERWELL:: 1.	Yes, one-the purchasing of eggs at a fiat rate in lots of fifteen dozen.
2.	No.
3.	Deputy minister.
4.	The regulations provide that clause 10 (1), the return of the graded payment, shall not apply when producers market their eggs in less than fifteen dozen in any one day.
The charge was withdrawn because it was not deemed advisable to press the charge on a technicality (that is the buying of one egg more at a time, without grading, than the law actually permits), Mr. Hamilton advising that he misunderstood the regulations in the belief that the purchase of an even fifteen dozen was within the law.



PATROL BOAT PHALAROPE

Mr. GRIMMER:: 1.	Were any repairs made to fishing patrol boat, Phalarope, in the year 1929?
2.	If so, who made the repairs, and what was the total cost?
3.	What was the nature of the said repairs:
(a)	to the hull; (b) to the machinery?
4.	Was a new engine or other machinery installed?
5.	If so, what was the cost of installation?
6.	Were tenders called for the new engine?
7.	If not, why were tenders not called for?
Questions


Mr. CARDIN:: 1.	Yes. New engine installed.
2.	Installation of engine by Saint John Dry Dock and Ship Building Company, Saint John, N3. Cost $2,195. Engine purchased from Canadian Fairbanks Morse Company, Saint John, N.B. Cost $5,265. Total cost, $7,460.
3.	Answered by No. 1.
4.	Answered by No. 1.
5.	Answered by No. 2.
6.	Yes.
7.	Answered by No. 6.



GRANDE ANSE-ARICHAT MAIL CONTRACT

Mr. MACDONALD (Richmond-West Cape Breton):: 1.	How many tenders were received by the Post Office Department regarding mail contract, Grand A use to Arichat?
2.	What are the names of the respective tenderers?
3.	What was the amount of each tender?
4.	What are the securities of the successful tenderer ?
5.	Why was the old contractor, Nicholas Poirier, not given a chance to renew his contract?
6.	Were the tenders closed on January 17th, and the contracts not awarded until March 20th?
7.	If so, what was the reason of the delay?
8.	Will the government table all correspondence, letters, telegrams, etc., in reference to the
above contract?


Mr. VENIOT:: 1. 8.
2 and 3.
Charles Linden	$ 1,270
Jeffrey H. Poirier	 1,270
Nicholas T. Poirier	 1,325
George Landry	 1,400
Alex. Marchand	 1,500
Amedee Emile Poan	 1,790
Arthur Hureau	 1,900
W. J. Doiron (late)	 1,565
4.	Allen Morrison and Alfred Linden
5.	Department decided to invite tenders.
6 and 7. Tenders closed on 17th January
and contract awarded on 11th March, 1930.
8.	Yes. These documents will be laid on the table as soon as they can be prepared.



WAYS AND MEANS


[Stage Direction]
The house in committee of w'ays and means, Mr. Johnston in the chair.
Customs tariff-388d. Iron or steel angles, beams, channels, columns, girders, joists, piling, tees, zees, and other shapes or sections, punched, drilled or further manufactured than hot rolled or cast, n.o.p.: British preferential tariff, 10 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
John Frederick Johnston: When the committee
rose last night, we w4 5 * 7 8ere considering item 388(d).
Hon. CHARLES A. DUNNING (Minister of Finance):	I would like the Minister of
Railways to move for me an amendment that the British preference rate be 15 per cent instead of 10 per cent. This is the wide n.o.p. item of finished construction steel and it includes a very extensive range of articles.


Richard Bedford Bennett: Was this change recommended by the Tariff Advisory Board?


Mr. DUNNING:: Yes.


James Dew Chaplin: What are the importations?


Charles Avery Dunning: The importations were
$165,000, of which $60,000 came from the United States.
Item as amended agreed to.
Customs tariff-389. Provided: That upon any article or commodity enumerated in tariff items 377, 377a, 378a, 378b, 378c, 388a, 388b and 388c of this schedule, not being of greater value than Gi cents per pound, there shall be levied, collected and paid, under regulations prescribed by the minister, in addition to the rates of customs duties enumerated in such said tariff items, an ad valorem surtax of five per centum when any such said article or commodity contains:
(a)	Vanadium, 0.15 per centum or more, by weight.
(b)	Molybdenum, 0.15 per centum or more, by weight.
(c)	Nickel,	0.4	per	centum	or	more,	by
weight.
(d)	Chromium, 0.4 per centum or more, by weight.
(e)	Tungsten, 0.4 per centum or more, by weight.
(f)	Cobalt,	0.4	per	centum	or	more,	by
weight.
(g)	Manganese, 1.0 per centum or more, by weight.
(h)	Silicon,	1.0	per	centum	or	more,	by
weight.
(i)	Any other element, not being iron or carbon, in excess of .5 per centum by weight.


James Dew Chaplin: What are the importations under this item?


Charles Avery Dunning: This is a provision to
enable us to take into account the various alloy contents of the different kinds of steel. We are providing for a surtax based on the alloy content. The values of these alloys vary considerably, and some means was required to differentiate between them. This item is a development of the former item 385, chrome steel, which carried rates of 10, 12J and 15 per cent. As a result of the improvements effected in the manufacture of iron and steel, chromium steel is not now much used. A

Ways and Means-Customs Tariff
great many other alloys are now being used. The old tariff did not cover the modern developments which have brought other steel alloys into use. In order to deal with the different varieties of alloys, it is proposed to impose this surtax based upon the percentage by weight of the various alloys-vanadium, molybdenum, nickel, chromium, tungsten, cobalt, manganese, and silicon. The steel industry in general and all those interested are in agreement with the proposal.


James Dew Chaplin: If chromium, tungsten and manganese are used in one alloy, will the same duty apply, or are there different duties?


Charles Avery Dunning: The tax will be chargeable on the amount of each. If there is 0-15 per cent or more of vanadium and 0-4 of molybdenum, there will have to be a combination of the two.


James Dew Chaplin: How is the department
to check up on a thing of that kind? Will there have to be an analysis of each piece of steel that comes in? I ask the question only for the information of the trade.


Charles Avery Dunning: My hon. friend understands that the application of the proviso is restricted to materials of the value of 6i cents per pound or less. It will at the commencement be necessary to proceed upon the basis of declaration until there can be evolved for administrative purposes the means of determining the amount of these various materials in each alloy. So far as the industry is concerned, they have all undertaken to cooperate in the fullest possible degree in providing the necessary information to enable the department to function under this provision.


James Dew Chaplin: That is all right enough
for articles made in this country, but I am speaking of importations; how are you going to handle them?


Charles Avery Dunning: Upon the basis of information supplied by the industry in this country.


James Dew Chaplin: Surely not on the basis
of information supplied by the industry in this country?


Charles Avery Dunning: Yes, as to the methods
of ascertaining or checking the declarations made by the importer.


James Dew Chaplin: If I import steel from
Pittsburgh containing a certain percentage of manganese, chromium and tungsten, have I to be subjected to the industry in this country telling-


Charles Avery Dunning: No, no.


James Dew Chaplin: What I want to know is how is the customs department going to handle it?


Mr. CANTLEY:: It is absolutely impossible for the minister or any officer in the Department of Customs to put this provision into effect. It cannot be done. I would point out to the minister one thing. He referred to the old item of chrome steel. That item has been on the statute book for more than forty years. What was it? It was a mixture of chromium and steel rolled into plate for burglar proof safes and prison vault doors. It has not been used for twenty-five years. It was produced by only one concern at Brooklyn, New York, and has not been made for many years. It is impossible for the minister to put this provision into effect. Suppose I bring in an alloy steel with a certain proportion of chromium, nickel and tungsten, which is not unusual. How are you going to determine the proportion of each material entering into that alloy steel? The minister says by declaration. Will he allow me to import other materials and simply make a declaration as to their contents? Here we have something that has been produced by that blessed institution which bears the name of the tariff board.


Charles Avery Dunning: No, it has been unanimously agreed to by the steel industry.


Thomas Cantley: That story won't go.


James Dew Chaplin: If I import this steel, have I got to take information from somebody at Hamilton or down in Nova Scotia or up at the Soo?


Charles Avery Dunning: No.


James Dew Chaplin: Then who in the department will be able to tell anything about it?


Charles Avery Dunning: My hon. friend will see that this applies to ingots, blooms, slabs and billets, hot-rolled bars and rods, heavy structural shapes and shapes less than 35 pounds-


Thomas Cantley: To which item is the minister referring?


Charles Avery Dunning: To this item.


Thomas Cantley: I thought the minister
was referring to item 389.


Charles Avery Dunning: Yes, and 389 applies to the materials to which I have been referring, and the industry advised me that as to these six forms it could be definitely ascertained by the customs whether the declarations made by the importers were correct. I have to rely on technical advice in matters of alloy steels,

IFays and Means-Customs Tariff
and that is the advice I get from those who know most about it. My hon. friend says that this comes from the tariff board-yes, and was agreed to by those who understand this business and are engaged in it.


Thomas Cantley: There is only one way in which the minister can get information as to the amount of the various alloys the steel may contain and that is by taking drillings of each of the bars, billets or ingots as the case may be and submitting them to chemical analysis for a determination of the proportion of each.


Charles Avery Dunning: That may have to be done.


Thomas Cantley: It cannot well be done in general practice.


Charles Avery Dunning: Will my hon. friend
please explain to me why a provision of this kind in connection with alloy steel is included in almost every customs tariff in the world?


Thomas Cantley: No, I cannot, because the suggestion is not correct.


Mr. ROSS (Kingston):: Has the customs department expressed the opinion that this
is.	practicable?


Charles Avery Dunning: No difficulty has been raised by the customs in connection with it.


Arthur Edward Ross: That is not an
answer. Have they expressed the opinion that it is practicable?


Charles Avery Dunning: They have been over
all the items, this among the rest, and there has been no objection.


James Dew Chaplin: I happen to know something about this business, because I am importing some of these articles, and I want to know how it is going to be handled by the customs. Are you going to take the invoice and declaration of the mill at Pittsburgh? If so, that will simplify it; but if before I pass an entry I have to wait so that these things may be. tested, I want to know it.


Charles Avery Dunning: There is no question about
it.	My hon. friend has had experience with the customs in bringing articles in, and they will of course, accept his declaration. But if his declaration on examination should prove to be false-well, he knows what would happen.


James Dew Chaplin: Are the customs department going to establish an analysis branch?


Charles Avery Dunning: They may have to. That is already being done in some countries.


James Dew Chaplin: That is the only way in which you can do it if you are going into details of that kind.


Mr. WHITE (London):: The member for Lincoln asked a question a short time ago to which I do not think he received an answer. Suppose steel is imported having three of these elements in greater proportion than those mentioned, would the surtax be 15 per cent, or only 5?


Charles Avery Dunning: If it contained those
elements to the extent of the minimum percentage of each here set out, then that would be the case.


James Dew Chaplin: This is making a very high tariff. I think it is more than the steel people asked for.


Charles Avery Dunning: My hon. friend is not forgetting the limitation-not being of greater value than cents per pound?


James Dew Chaplin: I am not overlooking anything. It is a matter in which I am directly interested


Charles Avery Dunning: It makes a great deal of difference.


James Dew Chaplin: I know and the chances are it is not going to exceed 6^ cents per pound.


Charles Avery Dunning: In your case.


James Dew Chaplin: No, not in my case. I asked this question of the minister before, and he then did not give me the same answer that he is giving me now.


Charles Avery Dunning: What question?


James Dew Chaplin: If three of these elements were present in the steel in the proportions here set out, would the duty be the same or would there be three duties? For example, suppose tungsten and manganese were present, would there be two duties or one? Frequently those articles contain three of these elements; then would the duty be 15 per cent?


Charles Avery Dunning: I see my hon. friend's point now; I did not get it clearly before. My impression is-but I want to have time to go into it a little more carefully-that 5 per cent is the maximum. But reading the item in the light of what my hon. friend says, I do not think that is clear.


Richard Bedford Bennett: I agree.


Charles Avery Dunning: I am not sure; but as to the principle I have not any doubt.

Ways and Means-Customs Tariff


James Dew Chaplin: If the minister would find out and have it specified in the tariff we will know in future just what it is.


Charles Avery Dunning: Yes, we will let the item stand to clear up that point.


John Frederick Johnston: Item 389 stands.


Richard Bedford Bennett: I think the minister will find it desirable to know what the customs department ruling will be with respect to it.
I have followed this with some care because of a certain experience of a friend of mine some time ago with respect to a particular steel alloy into the composition of which certain elements entered. Certainly as it stands now the item is not at all clear. Is there any necessity of specifying the quantity of each of the elements? Why not say that alloy steel containing these elements at all should pay an extra surtax of 5 per cent?


Charles Avery Dunning: My hon. friend's mind
travels along as mine did when I first saw this item; but the difficulty is in the widely varying values of these alloys.


Richard Bedford Bennett: Yes.


Charles Avery Dunning: Some of them run as high as $30,000 to $40,000 per ton.


Richard Bedford Bennett: We do not import much
of that.


Charles Avery Dunning: I will let the item stand
and look into it further.
Item stands.
Customs tariff-390. Castings, of iron, malleable, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 274 per cent.


[Stage Direction]
Item agreed to.
Customs tariff-390a. Castings, of iron, nonmalleable, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 274 Per cent.
Item agreed to.
Customs tariff-390b.	Castings, of steel,
n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff,
274 per cent.
Item agreed to.
Customs tariff-391.	Castings, of iron or
steel:
(a)	Being ingot moulds for use in the production of steel:	British preferential tariff,
free: intermediate tariff, free; general tariff, free.
(b)	Being moulds, n.o.p.: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 10 per cent.
James Dew Chaplin: In this item you have
ingot moulds in (a) and in (b) moulds not otherwise provided for.


Charles Avery Dunning: That is intended to cover all moulds made of iron or steel irrespective of their intended use.


Thomas Cantley: What are they?


Charles Avery Dunning: They are provided for in the tariff at present, and I hesitated to cut them out, not knowing what industry might be affected.


James Dew Chaplin: Ingot moulds have always been free. These are moulds that we know nothing about.


Charles Avery Dunning: They are covered by
present item 456, and came in to the value of $304,000.


James Dew Chaplin: What country did they
come from?


Charles Avery Dunning: The United States.


[Stage Direction]
Item agreed to.
Customs tariff-392. Forgings, of iron or steel, in any degree of manufacture, n.o.p.: British preferential tariff, 20 per cent; intermediate tariff, 274 per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-393. Tires, of steel, in the rough, not drilled or machined in any manner, for railway vehicles, including locomotives and tenders: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 74 per cent.
Item agreed to.
Customs tariff-394. Axles and axle bars, n.o.p., and axle blanks, and parts thereof, of iron and steel:
(a)	For railway vehicles, including locomotives and tenders: British preferential tariff, 20 per cent; intermediate tariff, 274 Per cent; general tariff, 30 per cent.
(b)	For other vehicles, n.o.p.: British preferential tariff, 224 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
(c)	N.ojp.: British preferential tariff, 20 per cent; intermediate tariff, 274 per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-395. Sections, of iron or steel, not being ordinary square, flat or round bars, whether forged and punched or not, unfinished. when imported by manufacturers of hames for use exclusively in the manufacture of hames, in their own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
2428	COMMONS
Ways and Means-Customs Tariff
Customs tariff-395a. Blanks, of iron or steel, when imported by manufacturers of milling cutters for use exclusively in the manufacture of milling cutters, in their own factories, under regulations prescribed by the minister-: British preferential tariff, free; intermediate tariff, 12J per cent; general tariff, 12J per cent.
Item agreed to.
Customs tariff-396. Pipe, east, of iron or steel, valued at not more than five cents per pound, per ton: British preferential tariff, $5; intermediate tariff, $9; general tariff, $10.
Provided that, if any country imposes upon such goods produced in, and imported from, Canada rates of duty higher than are enumerated in this item, equivalent rates of duty shall be imposed on such goods entering Canada from such country.
John Franklin White: What were the
imports of this item?


Charles Avery Dunning: 
John Franklin White: Is it not the case that the proviso was inserted to prevent cast iron pipe coming from France?


Charles Avery Dunning: The French duty on cast iron pipe has recently been raised to as high as $18 a ton.


[Stage Direction]
Item agreed to.
Customs tariff-396a. Pipe, cast, of iron or steel, n.o.p.: British preferential tariff, 5 per cent: intermediate tariff, 7i per cent; general tariff, 10 per cent.
James Dew Chaplin: Why was this change
made from specific to ad valorem?


Charles Avery Dunning: It is a new item to cover pipe which is cast but of steel. Only within the past few weeks has cast steel pipe been drawn to the attention of the customs authorities as a commercial commodity, and as such pipe seems likely to become very commonly used, it has been deemed advisable to provide for it under this revision. A new item is necessary, as the former term "cast iron" could not accurately describe this article.


Thomas Cantley: What is this pipe used
for; where is it produced, and is it steel or iron pipe?


Charles Avery Dunning: It is cast steel pipe and 'has been entered in Canada for duty for the first time within the last few weeks, during the preparation of the budget. This is the first time that the customs department has heard of it.


Thomas Cantley: What is it used for?
Does it take the place of soil pipe?


Charles Avery Dunning: The sample which was
sent by the Department of National Revenue was of stainless steel, cast, and the analysis showed 18 per cent chromium, 8 per cent niickle and 74 per cent iron. This pipe, I understand, was valued at 50 to 60 cents per pound as compared with 2 cents per pound for cast iron pipe of the same diameter. That emphasized the necessity of making provision for it. I have no information as to what cast steed pipe is used for, but I have learned that already one Canadian firm is making cast iron pipe by a method similar to that followed in the making of cast steel pipe, by gas and oil in a dry sand mould, eentrifugally rotated. Such pipe is described as "sand-spun pipe". It is 'a recent development.


Thomas Cantley: I am familiar with spun
cast pipe, but the pipe in question contains a considerable proportion of chromium.


Charles Avery Dunning: Yes, it contains 18 per
cent chromium, 8 per cent nickel and 74 per cent iron.


Thomas Cantley: It must be a high priced pipe.


Charles Avery Dunning: It is.


Thomas Cantley: And it could be used
only for some purpose unknown to me and in small quantities. What is it used for?


Charles Avery Dunning: It was submitted to the customs for entry, and for the first time the distinction was noticed. There was a very wide difference in value between cast iron pipe and this article. Hence I ask parliament to make provision, seeing that an effort is being made to get it into the country, for a [DOT]classification that will enable the customs 'department to charge a duty proportionate to the value of the pipe.


Thomas Cantley: I am not finding fault,
'but I am seeking information because it is absolutely new to me. I am wondering for tvhat purposes this pipe can be used, and I tvas hopeful that the minister might be able to give some information.


Charles Avery Dunning: I am sorry I cannot.


Thomas Cantley: I suggest that the quantities imported for some time will be comparatively small.


Charles Avery Dunning: I would expect so.


[Stage Direction]
Item agreed to.
Customs tariff-397. Pipes and tubes, of wrought iron or steel, plain or coated:
(a) Welded or seamless, with plain or processed ends, not more than 10) inches in diameter, n.o.p: British preferential tariff, 15 per cent; intermediate tariff, 27J per cent; general tariff, 30 per cent.

Ways and Means-Customs Tariff
(b)	Welded or seamless, with plain or processed ends, more than 10J inches in diameter, n.o.p.: British preferential tariff, 10 per cent; intermediate tariff, 15 per cent; general tariff, 20 per cent.
(c)	Not joined, with plain ends, not more than 2J inches in diameter, n.o.p.: British preferential tariff, 5 per cent; intermediate tariff, 10 per cent; general tariff, 15 per cent.
(d)	No.p.: British preferential tariff, 15 per cent; intermediate tariff, 27i per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-398. Pipes and tubes, of steel, seamless, cold drawn, plain ends, valued at not less than 5 cents per pound, n.o.p.: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 5 per cent.
Item agreed to.
Customs tariff-399. Pipes, tubes and flues, of wrought iron or steel, not further manufactured than in straight lengths with plain, swelled or thickened ends, when imported by manufacturers for use exclusively in the manufacture or repair of pressure parts of boilers, pulp mill evaporators and vessels for the refining of oil. in their own factories, under regulations prescribed by the minister:	British
preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: I have an amendment to that item. There is no change in the rate but there is a change in the description owing to a possible misunderstanding of the wording.
I shall read the amendment.
Pipes, tubes and flues, of wrought iron or steel, not further manufactured than in straight lengths, with plain, swelled or thickened ends, when imported for use exclusively in the manufacture or repair of pressure parts of boilers, pulp mill digesters and vessels for the refining of oil. under regulations prescribed by the minister.
The difference is that the words "by manufacturers" are omitted in the amendment. Representations have been made to us by people who use these articles that this is a servicing proposition and that the manufacturers themselves do not import them; they could not carry the required range. These articles, however, are imported for them by the firms engaged in the business and! the words of the original item would not permit the importation under the rate by anybody else but manufacturers. The organization of the business is such that they are imported by service organizations which carry a large stock for the use of manufacturers.


Thomas Cantley: The fact is that boiler
tubes have been imported for years and years by the wholesale people who handle boiler plate and boiler tubing, and I presume they found some way to meet the situation referred to by the minister.
Mr. DUNNING; Previously they could meet it, but by the wording of the new item-


John Franklin White: I would like to
refer to this matter of boiler tubes, straight lengths only. Heretofore it has been possible to bring in bent tubes under the same item. There are many Sterling boilers with bent tubes in this country which come from the United States. They have bent tubes of many different types, with many different degrees of bend, and the owners of these boileTS will be under the necessity of paying 30 per cent duty or else getting them bent in Canada. The manufacturers of those boilers have the dies which are required for the bending of the tubes, and it strikes me that if bent tubes were allowed in it would be no hardship to anybody, and it would certainly be a relief to Canadian owners of bent-tube boilers.
Mr. DUNNING; It is a fairly big concession to allow them to have straight tubes free and bend them in their own plants.


John Franklin White: They have to
have special machinery for that kind of work. There are many kinds of water-type boilers with bent tubes, and there are many Sterling boilers in Canada. Boiler tubes have always been admitted free of duty. The only difference is that this is restricted to straight tubes whereas heretofore the bent ones were allowed in.


Charles Avery Dunning: It was discussed during
the hearing before the tariff board. My hon. friend can understand that there was opposition to this item from those who were engaged in making pipes; they wanted the item removed, and they considered that their industry should have some tariff protection.


John Franklin White: So far as I know, they have not yet been made in Canada.


Charles Avery Dunning: True, but the pipe people contended thait if they got a chance they could make them. They wanted this free item removed in order to give them a chance, and we are advised that they will make the pipe this year. It is another of those compromises between manufacturers, and I hope my hon. friend will accept it, because it would be difficult to widen it.


John Franklin White: There would be
no objection to putting a duty on tubes made in Canada, but in this case they are not yet made. I am referring only to special tubes which are bent to suiit certain particular types of boilers, and there are many of those boilers in use.
2430	COMMONS
Ways and Means-Customs Tariff


Thomas Cantley: I think the minister had better leave this item. I would suggest that it should read "thickened, with straight or bent ends". It will not make any difference if the item stands.


Charles Avery Dunning: When the industry has
agreed to compromise between the two classes of manufactures, I do not like to change the item which was so fully discussed between them.


Thomas Cantley: I am quite sure the
minister misapprehends the facts of the case. I would like to see boiler tubes made in this country, and I hope they will soon be made. Of course they wall not be made under an item such as this. The suggestion of the hon. member for London is worthy of consideration; if the tubes come in with thickened ends they might as well be bent to the shapes required. It refers to only the Sterling boiler; the Babcock boiler has a straight tube.


John Franklin White: The minister
[DOT]eferred to some discussion. Did not that discussion originate on the question whether or not we should have a duty on boiler tubing, and not as to whether they should be bent or straight?


Charles Avery Dunning: It arose out of that discussion, yes.


John Franklin White: As soon as they are made
in Canada, I shall have no objection to the imposition of a duty.


Charles Avery Dunning: The thickened ends are
a concession by those in the business to those who use the tubes.


John Franklin White: But the thickened ends are only one part of the manufactured article. The thickened ends will be for one type; the bent ones without thickened ends are for another type.


Charles Avery Dunning: I should like to meet my hon. friend, but I do not think I had better break away from the arrangement that was made. As far as the government is concerned, it is not sacrificing anything; it is merely holding the balance fairly between two different industries within the same group.


John Franklin White: This matter to
which I refer is only for repairs to boilers already installed. They have come in free of duty to start with, and if this matter of bent tubes is not adjusted we are up against a 30 per cent duty.


Charles Avery Dunning: There is no difficulty, as my hon. friend pointed out, in bending the tubes in Canada. Why should not that work be done here?


Thomas Cantley: Mr. Chairman, there is a
difficulty, and that is just what the minister unfortunately does not apprehend. I do not blame him for that; it is rather a technical matter. Ten times as much labour is involved in thickening the end as in bending the tube, but it is essential that the tube be bent to an exact arc of a circle, and that each tube be bent to the same arc.


Charles Avery Dunning: I suppose I will have
to take the responsibility with the industry if I yield to my hon. friend's request. The hon. member for London puts it so reasonably that I find it hard to refuse. Can he assure me that there will not be any difficulty if this request is granted?


John Franklin White: I do not see it.
Just to reassure the minister let me say that these tubes of which I am speaking are bent to a certain radius and for certain lengths and sizes of tubes. They are specialties as far as certain makes of boilers are concerned.


Charles Avery Dunning: Things appear so simple
when they are put up from one side; that is the difficulty.


John Franklin White: You are getting
the other side now.


Charles Avery Dunning: I am prepared to take
a chance. If I insert the words "in straight [DOT]lengths or bent" would that meet the situation?


John Franklin White: I think that would meet the need.


Charles Avery Dunning: Would it not meet my
hon. friend's point if the words "not further manufactured than in straight lengths" were cut out altogether? Then there would be no difficulty about it. There would be no restriction; it would then read "Pipes, tubes and flues of wrought iron or steel, with plain, swelled or thickened ends" and so on.
Mr. W'HITE (London): I think that would
meet the case.


Mr. LAPOINTE:: I move that the words
"not further manufactured than in straight lengths" be deleted.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-399a. Pipes and tubes, of wrought iron or steel, brass covered, not more than 3 inches in diameter, and brass trimmings, not polished, lacquered or otherwise manufactured, when imported by manufacturers of iron or brass bedsteads for use exclusively in the manufacture of iron or brass bedsteads, in their

Ways and Means-Customs Tariff
own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-400. Fittings, of iron or steel, of every description for iron or steel pipes and tubes:	British preferential tariff,
20 per cent; intermediate tariff, 27J per cent; general tariff, 30 per cent.
Item agreed to.
Cutoms tariff-401. Wire, of iron or steel:
(a)	Barbed fencing, coated or not: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(b)	Twisted, braided or stranded, including wire, rope or cable, coated or not, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 22J per cent; general tariff, 25 per cent.
(c)	Drawn flat or cold rolled flat after
drawing. coated or not. n.o.p., not more than .25 inch in width and les than .1875 inch in thickness: British preferential	tariff, 11	per
cent; intermediate tariff, 15 per cent; general tariff, 20 per cent.	-
(d)	Coated with zinc or spelter, curved or not, in coils, .144, .104, or .092 inch in diameter, with tolerance not to exceed .004 inch, and not for use in telegraph or telephone lines: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(e)	Coated with zinc or spelter, n.o.p.:
British preferential tariff, 10 per cent; intermediate tariff, 17£ per cent; general tariff, 20 per cent.	_
(f)	Single or several,	covered	with	any
material, including cable so covered; coated, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 30 per cent.
(g)	N.o.p.: British preferential tariff, 15 per cent: intermediate tariff, 17J per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-402. Woven or welded wire fencing, of iron or steel, from wire not more than .144 inch, and not less than .080 inch in diameter, with tolerance not to exceed .004 inch; wire fencing, of iron or steel, coated or not, n.o.p.:	British preferential tariff, free;
intermediate tariff, 12J per cent; general tariff, 15 per cent.
Item agreed to.
Customs tariff-402a. Woven or welded wire fencing, of iron or steel, coated or not, n.o.p.; wire cloth or wire netting, of iron or steel, coated or not: British preferential tariff, 15 per cent; intermediate tariff, 27| per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-403. Wire, or steel:
(a) Spring, not less than .40 per centum, by weight, of carbon. .128, .116, .104 and .092 inch in diameter, with tolerance not to exceed .003 inch, when imported by manufacturers of mattresses, cushions or upholstery for use exclusively in the manufacture of mattresses, cushions or upholstery, in their own factories,
under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 7J per cent.
Mr. STEWART (Leeds):: Mr. Chairman, I think the minister is well aware that representations have been made in reference to this item and in connection with another item relating to steel, item 415 (c), and I should like to ask him if careful consideration has been given to the representations contained in the brief which was submitted by an industry' in which I am interested because it is located in the constituency which I represent. I should like to ask also whether, after consideration, he does not think some change ought to be made. The effect of the changes in the tariff has been to place a duty on raw material which formerly was free and to reduce the amount of duty formerly imposed on the finished article which comes in to compete with the Canadian product. As I say, this matter was submitted to the officers of the department, and I think all the information which could be given was furnished them.
It appears that it is impossible to obtain the steel in question in Canada in the quality and sizes desired, as it is not made here. The use of English steel, if it could be obtained in satisfactory condition, would increase the stock carried here, because of the distance from which it has to be procured. Some difficulty has been experienced in the past in obtaining from England steel of uniform quality and finish to meet the requirements of this business, and therefore it has been necessary to purchase the steel in the United States. It has been shown that this firm has not been taking any advantage of the small protection which it enjoys; in fact it is selling its goods at less than the selling price of the American goods. The industry is not large; but in the town of Gananoque, in which it is situated, it is of some importance and employs 35 or 40 hands. It will have difficulty in continuing if these changes go through; therefore I would ask the minister if he cannot concede something in view of the very strong representations which have been made to his officers and to the tariff board in connection with these items.


Charles Avery Dunning: I have had my officers examine the representations of the corset industry with regard to the matter and I must say that I cannot see the difficutlies which they cite. The items affecting the corset industry number some 12 in the whole tariff, of which 10 are free; in fact 7 are free right across the board, and all that we are asking them to pay is 5 per cent under the general tariff on one item, 5 per cent on another and 7i per cent on a third. The rate of duty on their
2432	COMMONS
Ways and Means-Customs Tariff
finished article is 30 per cent, and so far as the industry as a whole is concerned it has 10 free items entering into a commodity which, when manufactured, has a 30 per cent tariff protection.
In regard to the point that the steel cannot be procured in Great Britain, that is a very great surprise to me, because the facts indicate that the finished product certainly can be secured there, and if the finished product can be secured there is no doubt that the steel which enters into it can be secured also, and in that case it would be free. It still remains free under the British preference. I have given sympathetic consideration to this matter but I am sorry to have to tell my hon. friend that I can see no reason for changing the item.


Hugh Alexander Stewart: What is the
object in putting a duty on material which formerly came in free?


Charles Avery Dunning: A matter of switching
business to the United Kingdom.


Hugh Alexander Stewart: What were the total imports last year of this material?


Charles Avery Dunning: The total imports were $29,000 worth.


Hugh Alexander Stewart: AH from the
United States?


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: The hope is
that the imposition of this duty will switch that business to the United Kingdom?


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: These people
have assured me that they have endeavoured to obtain this steel from England, but were unable to obtain it in a condition which would suit their special requirements. I should think that their experience would be better than the theory advanced by the minister that it can be procured. However, if the hon. minister is adamant, we will have to accept his decision and suffer the injury. We will have to take it as part of the game.


[Stage Direction]
Item agreed to.
Customs tariff-403 (b). Wire, of steel, flat or woven flat, in the coil, coated or not, .064 inch in thickness or thinner, with tolerance not to exceed .002 inch, when imported by manufacturers of corset clasps, steels, wires and dress stays for use exclusively in the manufacture of corset clasps, steels, wires and dress stays, in their own .factories under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 7J per cent.
John Frederick Johnston: Shall the item carry?
[Mr. Dunning.1


Thomas Cantley: Just a minute, hold your horses.


Some hon. MEMBERS:: Order.


Thomas Cantley: Will the minister be
good enough to explain the meaning of the word "single" in this item? It is a new term as applied to wire.


Charles Avery Dunning: We have not reached
that particular item. You told us too soon to hold our horses.


Thomas Cantley: It is impossible to tell what item we are on because the Chairman does not speak loudly enough for us to hear.


John Frederick Johnston: I think everyone hears.


[Stage Direction]
Item agreed to.
Customs tariff-463(c). Wire, of steel, valued at not less than 2f cents per pound, when imported by manufacturers of wire rope for use exclusively in the manufacture of wire rope, in their own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 7i per cent.
Item agreed to.
Customs tariff-463(d).	Wire, of steel,
single, not covered, in coils, for use exclusively in trolling in bona fide deep sea or inland commercial fishing operations: British preferential tariff, free; intermediate tariff, 7i per cent; general tariff, 10 per cent.
Thomas Cantley: What is the meaning of the word "single?"


Charles Avery Dunning: It means a single wire


Thomas Cantley: Why is it not used in regard to other wire? What is the specific meaning of the word as applied to this item?


Charles Avery Dunning: It means one wire.


Thomas Cantley: Why is it not used for
other wire except possibly barbed wire?


[Stage Direction]
Item agreed to.
Customs tariff-404. Springs, of iron or steel:
(a)	For the running and draft gear of railway vehicles, including locomotives and tenders: British preferential tariff, 20 per cent; intermediate tariff, 27J per cent; general tariff, 30 per cent.
(b)	For the running gear of other vehicles: British preferential tariff, 22J per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent..
Item agreed to.
Customs tariff-405. Springs, of iron or steel, when imported by manufacturers of surgical trusses for use exclusively in the manufacture of surgical trusses, in their own factories. under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.

Ways and Means-Customs Tariff
Customs tariff-405a.	Springs, o£ iron or
steel, when imported by manufacturers of clocks for use exclusively in the manufacture of clocks, in their own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-406.	Coil chain, coil chain
links, including repair links, and chain shackles, of iron or steel:	.
(a)	One and one-eighth inches in diameter
and over: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 5 per cent.	.	.
(b)	Less than one and one-eighth inches m
diameter:	British preferential tariff, 15 per
cent; intermediate tariff, 20 per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-407. Silent chain and finished roller chain, of iron or steel, of a class or kind not made in Canada, n.o.p., either chain of the type which operates over gears or sprockets with machine cut teeth: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 25 per cent.
Item agreed to.
Customs tariff-407a.	Chains of iron or
steel, n.o.p.: British preferential tariff, 20 per cent; intermediate tariff, 274 per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-408. Malleable sprocket chain and link belting chain, of iron or steel, when imported by manufacturers of agricultural implements for use exclusively in the manufacture of agricultural implements, in their own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: I have an amendment to offer to this item as follows:
That the words "including roller chain of all kinds for operating on steel sprockets or gears" be inserted after the word "steel."
There is a new item, number 407, which covers roller chain, and this amendment is to make it clear that roller chain for use in the manufacture of agricultural implements will come in under 408 and not under 407.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-409. Cream separators and steel bowls therefor: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-409a. Milking machines and attachments therefor; centrifugal machines for testing butterfat, milk or cream; pasteurizers for dairying purposes; complete parts of all the 2419-154
foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-409b. Cultivators, harrows, seed-drills, horse-rakes, horse-shoes, seufflers, manure spreaders, garden seeders, weeders, and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 74 per cent.
Item agreed to.
Customs tariff-409c. Ploughs; farm, field, lawn or garden rollers; soil packers; complete parts of all the foregoing: British preferential tariff, free: intermediate tariff, 10 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-409d.	Mowing machines,
harvesters, either self-binding or without binders, binding attachments, reapers, harvesters in combination with threshing machine separators including the motive power incorporated therein, and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 6 per cent; general tariff, 6 per cent.
Item agreed to.
Customs tariff-409e. Spraying and dusting machines and attachments therefor, including hand sprayers, for farm purposes only; fruit or vegetable grading machines and attachments therefor; apparatus specially designed for sterilizing bulbs; pressure testing apparatus for determining maturity of fruit; pruning hooks; pruning shears; and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
John Franklin White: I suppose the idea in putting these items on the free list is to induce importations from Great Britain?


Charles Avery Dunning: I am advised that in
some cases considerable business may develop, while in others there may not be quite so much.


John Franklin White: Many of these
items are on the free list already, but I find for the year ending March 31, 1929, we exported farm implements to the United Kingdom to the value of $448,000 and imported to the value of $141,000.


Charles Avery Dunning: The intent was to put
all these items on the free list as far as the British preference was concerned.


John Franklin White: I notice that the
lion, minister in his desire to induce business from Great Britain has not increased the duty against importations from the United States.


Charles Avery Dunning: Not in this case.


James Dew Chaplin: Not in any case.



Ways and Means-Customs Tariff


Mr. KENNEDY:: How does the hon. minister expect to develop trade in agricultural implements from Great Britain to Canada?


Charles Avery Dunning: In some of the items now being made free for the first time it is expected that business will develop.


[Stage Direction]
Item agreed to.
Customs tariff-409f.	Hay loaders, hay
tedders, potato planters, potato diggers, fodder or feed cutters, ensilage cutters, grain crushers and grain or hay grinders for farm purposes only, post hole diggers, snaths, stumping machines and all other agricultural implements or machinery, n.o.p., and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Charles Avery Dunning: I would move that the word "agricultural" be inserted before the word "machinery" in the sixth line.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-409g. Incubators for hatching eggs, brooders for rearing young fowd, and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-409h. Hay presses and complete parts thereof: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 15 per cent.
James Dew Chaplin: I suppose when we have allowed hay to come in free, we should allow the hay presses to come in free as well.


[Stage Direction]
Item agreed to.
Customs tariff-409i. Scythes, sickles or reaping hooks, hay or straw- knives, edging knives, hoes, pronged forks, rakes, n.o.p.: British preferential tariff free; intermediate tariff, 15 per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-409j. Fanning mills; pea-vmers; corn husking machines; threshing machine separators, including v-ind stackers, baggers, weighers and self-feeders therefor; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-409k. Windmills and complete parts thereof, not including shafting: British preferential tariff, free; intermediate tariff, 17J per cent; general tariff, 17£ per cent.
Item agreed to.
Customs	tariff-4091.	. Traction ditching
machines (not being ploughs) for use in ditching for tile drains on farms, valued by retail 
at place of production, when new, at not more than $3,500 each, and complete parts thereof: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Mr. FANSHER (Lambton):: I would like to know if any representations have been made to increase the limitation as to valuation of these machines. They are admitted free up to a valuation of S3,500, and the valuation permits the admission of the smaller makes for tile draining purposes.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Friday, May 23, 1930