1931-07-21

[Stage Direction]
Mr. F. W. TURNBULL (Regina) moved concurrence in the second report of the select standing committee on industrial and international relations.
Mr. MACKENZIE KING:: Would my hon. friend mind informing us just what the recommendations are?


Mr. TURNBULL:: The report of the committee appears in the votes and proceedings. Briefly, the committee did not agree that there was any money spent in Canada on war, that the expenditures of the Department of National Defence were not war expenditures. Secondly, the committee was of the opinion that professorships and scholarships were not practicable to establish, first by reason of the expense entailed, and second by reason of difficulties of legislative jurisdiction as between the provinces and the Dominion. The third recommendation of the committee is that books on inter-imperial and international relations should be added from time to time to the library in the Department of External Affairs, and the fourth recommendation commends the League of Nations Society in Canada to members of parliament and to the people of Canada generally, and suggests continued support thereof.


Miss AGNES MACPHAIL (Southeast Grey):: I do not agree, Mr. Speaker, with the first two recommendations of the committee.
I do not agree with the statement of the committee that expenditure for national defence and cadet training is not money spent on war, because I think that defence when there is no war is really war in an inactive period or a native war. I do not agree with those two recommendations, and I shall say no more about them.
The committee also is of the opinion that scholarships and chairs on international relationships are not feasible partly because of the expense necessary for the establishment of the chairs, and partly by reason of the question of legislative jurisdiction as between the provinces and the Dominion. If scholarships and a chair in even one university would do anything at all to prevent war, I think we could very well afford it because we have spent huge sums and are still spending very considerable sums on defence. I do not agree that we cannot afford to spend the money necessary for the establishment of international professorships and scholarships. The other reason against such establishment given by the committee is the constitutional difficulties in the way. So long as we have a Royal Military college the money for which is voted by this parliament, the college being under federal jurisdiction, so long as the federal parliament is voting sums of money for technical education and cadet training or military education in schools, I do not and will not agree that there is a constitutional difficulty. Besides that we have the Minister of Justice in the late government (Mr. Lapointe) and the Minister of Justice (Mr. Guthrie) in this government, as well as eminent professors of international law at McGill and Toronto universities, all saying that the constitutional difficulty can be got around. I think, therefore, we can conclude that whatever the reason is that we do not go forward with scholarships at the moment, it is not the reason given in the report. My opinion is that we are not interested enough, and the moment that we are, we shall find ways of spending money for scholarships on international relations.
The third recommendation of the committee deals with the extension of the library of the Department of External Affairs and the making of that library available to research students. That recommendation is an admirable one, and I think it may be the beginning of a sort of summer school to which students ol this particular subject can come and study. It may be that in the near future they may have the help of a librarian or professor, or someone who knows the work there.

Industrial Relations Report

The fourth clause of the committee's report is a pious wish for the success of the League of Nations Society in Canada. That is possibly better than nothing, but I am not so sure that it is much better than nothing, though I agree with it as far as it goes. That is all I care to say at the moment.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: 
[Stage Direction]
Motion agreed to.

Railways and Shipping Report


[Stage Direction]
Hon. J. D. CHAPLIN (Lincoln) moved for concurrence in the third and final report of the select standing committee on railways and shipping, owned, operated and controlled by the government.
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, before this document is relegated to the limbo of things futile I should like to say a few words about its subject matter. The Canadian government is engaged in a rather large way in the business of transportation both on land and sea. On land the Canadian National Railways own and operate 23,668 miles of first track steam mileage in which are included 3,342 miles of eastern lines. Eastern lines are defined by the Maritime Freight Rates Act of 1927 as those lines lying east of Levis, Quebec. From July 1, 1927, the rates on those lines have been reduced by 20 per cent, and the government has made up the difference. The Canadian National Railways also operate 187 miles of electric lines. At sea they operate a coastal service on the Pacific coast of six vessels; three of them in the triangular service between Vancouver, Victoria and Seattle; two other ships are in the island service; two ships, the Dalhousie City and the Northumberland, on lake Ontario are operated under the name of the Niagara, St. Catharines and Toronto Navigation Company. They operate also two vessels plying between Chicago and Depot Harbour, a car ferry between Chicago and Milwaukee, a car ferry between Piotou and Mulgrave and two car ferries between Borden and Tormentine. The Canadian Government Merchant Marine owns a fleet of thirty vessels; a few years ago there were 60 vessels. The total tonnage at the present time is 239,170 tons. The Canadian National (West Indies) Steamships Limited operate twelve ships between Canada and the West Indies with a total tonnage of 60,592 tons. The government owns and will soon operate the Hudson Bay railway with a mileage of 510 miles.
My purpose in reciting these facts is to acquaint the country with this great enterprise and its cost during the last twelve years. The amounts which I shall give are disbursements which have been made either in cash or credit by the Canadian people since April 1, 1919. I may say that at the moment those disbursements amount to $1,663,675,517.61. I have before me the details of this sum. In cash we advanced to the Canadian National Railways between April 1, 1919, and March 31, 1923,
$389,743,789.34. From April 1, 1923, to December 31, 1930, we advanced $57,482,652.91, making a total of $447,226,442.25. We guaranteed the bonds of the Canadian National Railways to the extent of $569,609,027. Included in that amount are $77,000,000 of retirements. In addition to this new capital we have secured to the railways $216,207,141.67, by guaranteeing the interest in perpetuity on the Grand Trunk railway guaranteed and debenture stock. Moreover we have guaranteed as to capital and interest Canadian National Railways debenture stock, of which there now remains outstanding $30,559,114. There has also been purchased equipment, for which equipment trust notes have been issued and remain outstanding to the amount of $94,680,000. These notes are not guaranteed, but the conditions under which they were issued make the country entirely responsible for them if the railways continue to operate. Under the Maritime Freight Rates Act there has been paid to the Canadian National Railways $7,897,360. The requirements of the Canadian National Railways for deficits, acquisitions and betterments for the present, year are $120,000,000. I wish to say on that score that the amount estimated was $104,000,000. It was admitted, however, by the railway management when before the committee that although the estimates were prepared in April they were already $13,000,000 short. I think in view of present conditions it is a conservative estimate to place those requirements for the present year at $120,000,000. Furthermore we are pledged for $48,250,000 after this year's program of construction is completed; that includes branch lines, terminals at Montreal and the hotels at Saskatoon, Jasper and Vancouver.
With regard to the Canadian Government Merchant Marine, we were told that if this business were wound up to-day it would have cost the people of Canada $81,222,769.90, without allowing anything for interest. The 'deficit on the Canadian Government Merchant Marine, if we assume that it will be this year what it was last year, will be $588,500. We invested in the Canadian National (West Indies) Steamship Company $9,804,715. The deficit on that service last year was $523,136.98, and it is fair to assume it will not be less this year. This makes no allowance for interest.
Our investment in the Hudson Bay railway is something like $45,000,000, but since 1919 we have put into the Hudson Bay railway and terminals $31,756,417.
Mr. SPENCER:: Does the hon. member think the last item should be debited against the Canadian National Railways?

Railways and Shipping Report


Mr. HACKETT:: If the hon. gentleman
were listening he would not ask the question. There also has been spent on the ear ferry at Prince Edward Island $2,500,000. Under the Maritime Freight Rates Act there has also been paid $2,922,891 to railways other than the Canadian National. These different items make a total of $166,367,551,761.
Now, Mr. Speaker, I do not think these figures can be controverted; in fact I have culled them from the records of the company and of the department. But it is one thing to hear and quite another thing to comprehend them. We all know that there comes a time when language utterly fails us. We know that the symbols of speech when used to express either facts or phenomena that are beyond our personal experience do not convey very much to us. It will be recalled that after the Franco-Prussian war when France, the richest nation of Europe, was condemned to pay to Germany $1,000,000,000, or 5,000,000,000 francs, it did not mean very much to anybody, because 5,000,000,000, or even 1,000,000 francs, was so far beyond the experience of the, ordinary individual that it conveyed no definite idea. But when the gold began to move from France to Germany in carload lots, then the people understood what it meant, a carload was something within their grasp; then they realized the enormous indemnity which their country was called upon to pay.
This is the difficulty which confronts one when he attempts to explain something that is beyond the experience of his audience; it is the difficulty of the schoolmaster; it is particularly the difficulty of the clergyman. Who has not listened to laboured efforts on the part of clergymen attempting to describe the celestial sphere, or the beatific vision, or the deity or something else that has never been heard or seen? I recall once hearing a clergyman say in an attempt to describe the endlessness of eternity, that if a mountain which rose high above the plain were worn down level with it by the brush of a swallow's wing which passed over it once in a thousand years, then eternity would only have begun.
I think the Canadian people find themselves in a somewhat similar difficulty when attempting to comprehend, to understand, to grasp the full meaning of the indebtedness that has been placed upon them in the last twelve years. When one is confronted by this difficulty he resorts to indirect and possibly to inadequate means; he resorts to comparison, to anything that may illustrate, even indirectly, the point which he is trying to make. With that end in view may I point

out that in the first forty years of confederation we added to our national debt at the rate of only $7,000,000 a year, so that on the fortieth anniversary of confederation we had added but $280,000,000 odd to the original obligation. Yet during the last thirteen years we have added to our national liabilities something like $130,000,000 a year for the purposes of transportation alone. For the last year of which the record has been completed the total expenditure of the government of Canada for all services was but $383,000,000, including something over $25,000,000 of capital expenditures. Yet the Canadian National Railways alone-and I may say to the hon. member for Battle River (Mr. Spencer) that a few moments ago I was not speaking exclusively of the Canadian National Railways, I was speaking of the venture in transportation on land and on sea, of the Canadian government-yet the Canadian National Railways alone spent last year, not $380,000,000 which the nation spent to carry on its work, but $421,071,409. The total pay-roll of the government of Canada in all services was but $90,808,425.71, whereas the Canadian National Railways paid out in Canada alone $159,675,000 for wages. The total number of employees of the Canadian government last year was 44,000, of the Canadian National Railways 100,678. The carrying charges in the form of interest on the funded debt due from the Canadian National Railways to the public at the end of this year will be $60,000,000, and in 1919 it was but an insignificant figure. On the eve of the war the total expenditure of the government reached the unprecedented figure of $144,000,000 a year. Yet the railways required from this country in new capital in 1929, $144,670,459 and $148,000,000 in 1930. I have cited these figures not for the purpose of arguing that any or all of these amounts have been improperly spent. I am attempting merely to make the point that the business of transportation as carried on by the Canadian National Railways is a far greater business in dollars and cents, in enterprise, in salary and in number of employees than is the business of administering Canada itself. And what precautions have we taken, as a people and as a parliament, that this administration be carried on as it should be? When moneys are spent by governments they are very carefully scrutinized; estimates come before the committee of the whole and sometimes hours are spent in discussing just how a few hundred dollars should be spent. Very frequently one avails himself of that opportunity to discuss how a few hundred dollars have been spent. When ways and means reso-

Railways and Shipping Report
lutions come before parliament they are debated very carefully, yet when we called into existence the Canadian National Railways the very first thing we did was to kill the watch dog. By the statute which brought the Canadian National into existence we eliminated any interference or supervision by the auditor general, who is sent into every department of government to scrutinize, to check up and to certify as to the exactitude and propriety of every cent of expenditure. Yet when it came to the Canadian National Railways; in which we have billions of dollars invested, we utterly failed to exercise the most elementary prudence.
When we created this vast corporation, which constitutes the greatest mass of property brought under centralized control in Canada, and one of the greatest masses of property subject to unified control in the world, what precautions did we take? We put it into the hands of a manager, and over that manager we put a board of directors. Who constitute that board of directors? Honest gentlemen? That is conceded. Honourable gentlemen? Oh, yes. Good railway men? I am not certain how many of them know a hay rake from a hand car. What qualifications have they for the high office which they hold? There may be some exceptions but many of them have not, either by experience, by training or by aptitude the necessary capacity or opportunity to protect the country's purse. In my humble estimation if there is one thing more futile than the board of directors of the Canadian National Railways-more futile, be it understood, for the purpose for which directors are supposed to exist, which is to direct, to control, to supervise and to safeguard the interests of the shareholders, who are the people of Canada-it is this select committee on railways and shipping which, in a few short sittings, is supposed to check up the millions of dollars annually spent and make a report on the actions of the management and the board. If it were not so tragic it would be amusing. That a people who pride themselves on their enterprise and who have taken their place in the sun should, in a matter of business, be so absolutely lacking in the elements of common sense is 'beyond comprehension.


Mr. BEAUBIEN:: May I ask the hon.
gentleman a question? Was he restricted in any way before that special committee, either in asking questions or in making any inquiry he desired to make, even though he was not a member of the committee?


John Thomas Hackett: We have gone on with this noble experiment, as it has been called
by some of its protagonists, for nearly thirteen years, and I submit that there are two or three facts which are absolutely incontrovertible. The first fact is that there is not in Canada sufficient business to maintain these railways in the state of efficiency in which they are operated at the present time. The second is that we cannot go on paying into the coffers of this company, to make up deficits, to acquire betterments and build extensions, a hundred to a hundred and fifty million dollars a year. The third is that the management has failed in the task which was allotted to it. The management was set up for what purpose? It came here to solve our railway problem. Has it done so?


An hon. MEMBER:: Yes.


John Thomas Hackett: Yes? Any hon. gentleman who thinks our railway problem has been solved may select for himself a place in either category, that of the innocent or the ignorant. Any man who has seen our debt increased by $1,600,000,000 in the last twelve or thirteen years; any man who has seen the dead weight imposed upon the people increased to $60,000,000 a year in the payment of interest on funded debt alone and who thinks a solution has been found does not commend himself, I submit, to the good judgment of the people of the country.
I admit that the service provided by these railways is good; I admit that the personnel, the equipment and the road bed have all been carried to a high point of efficiency. But I consider that the capital expenditures and some of the administrative charges have been injudicious, lavish and incurred without any regard to our needs or our capacity to pay. Show me a single venture in the Canadian National enterprise that has succeeded according to the rule of profit and loss. There has not been a single venture, be it the hotels, the triangular or the coastal service on the Pacific, the Canadian Government merchant marine, or the Canadian National West Indies service, that has yielded one cent of profit.
I know that my hon. friend who sits opposite, the hon. member for North Waterloo (Mr. Euler), has said forsooth that public ownership of public utilities has a greater and higher purpose than that of profit: it is service, and service at cost. I ask, at what cost? The hon. gentleman possesses a serenity which I admire; but he is also capable of talking with his tongue in his cheek; when he asserted the other day that he wanted service at cost, and then proceeded to throw the cost out of the window-

Railways and Shipping Report


Mr. SPEAKER:: I do not think the hon. member is justified in making such a remark with reference to the hon. member for North Waterloo-


An hon. MEMBER:: Let him go on.


Pierre Édouard Blondin: -and I must ask him to withdraw the statement that the hon. member "is capable of talking with his tongue in his cheek."


John Thomas Hackett: I withdraw anything I
have said that may be thought to be offensive.


Mr. BRADETTE:: Let him go the limit.


John Thomas Hackett: An amount of $604,000,000 in cash was put into this enterprise, all with the exception of $157,000,000 after the bankruptcy, every dollar of which was used by the company; and the hon. gentleman has argued that this should not form a part of the capital of the railways.
Now what is going to be done? The management has offered this solution: it suggests that we scrap the merchant marine. I have no objection to that, it is probably unfortunate for the taxpayer that this course was not pursued some years ago. Then the suggestion is made with regard to the railway itself, that we appoint a commission to investigate the condition of transportation in Canada. I take that to mean, Mr. Speaker, that the management feels that its effort of the last eight years has been unproductive and that it is incapable of finding a solution to our problem. It means that if it means anything.
I am not sure that it was possible to find a solution in the circumstances in which the management found itself. Commissions in the past have been a haven for those who were perplexed, and have furnished fodder for pigeon holes. However, commissions, like governments, are good, bad or indifferent as the men who comprise them are competent or otherwise. If a commission of men, judiciously selected and competent, cared to undertake the solution of this problem, I daresay it might yield to their treatment. I consider that the government is better able than any commission to deal with this situation; it is more capable of dealing with it, especially from the financial point of view. There is a limit quite regardless of what may have happened in the last thirteen years to the credit of the country. It is necessary, when we decide upon the future policy of this transportation system, that we realize that our treasury is not inexhaustible. I believe that the government, with such assistance

as it can commandeer from the railways, and possibly from some outside sources, is in a better position than any other body of men to deal with this problem promptly and effectively.


Mr. POULIOT:: What outside sources?
Mr. HAOKiETT: Riviere du Loup. But while we are dealing with this question, it seems to me that there are some aspects of it which are more urgent than others. In the first place, whatever may have been the success of the management in its administration of the properties there is one field in which it is absolutely supreme. It has outshone all its rivals in the gentle art of publicity. The Canadian National Railways have monopolized the agencies for disseminating news. They have their own publications which in no way minimize either the virtue or the achievements of those who form part of that organization.


An hon. MEMBER:: What is wrong with that?


John Thomas Hackett: They control the radio service; they have a telegraph service; and they have so demeaned themselves towards the press of the country that, with a few rare exceptions, any copy which is not laudatory of the Canadian National is not good and fit copy to go to the public of Canada. I say, Mr. Speaker, that so long as this method obtains, this method of suppression which withholds news and which prevents public opinion from being formed, there hangs over the Canadian National system and over this country a peril which shortly will do it great harm. I submit, Mr. Speaker, that the great public of the country should be acquainted with the Railway situation. They should be acquainted with all its details; the people whose road this is-an institution which is of the people and for the people-should be thoroughly known to the public in all of its activities.
Another aspect of the situation which in my view requires immediate attention is the curtailment of all non-productive expenditures. I am of those who believe that steam traction ultimately will come back into its own, but at the present time it is challenged as it never has been challenged before. It is challenged on land by the auto truck and by the passenger automobile. It is challenged by the ocean; the Panama canal has done much to minimize the transcontinental movement of freight. The Hudson Bay railway was built for that very purpose. It is challenged by the deep waterways, that projected system of transportation

Railways and Shipping Report
which has emerged from the realm of theoretical discussion and is rapidly becoming one of practical politics. If it becomes a reality, it must of necessity take much freight from the railways of Canada. It is even challenged from the air. Until we know what success awaits our steam roads, until we know they are going to withstand these challenges, and resist the inroads which are being made on their earnings, it behooves us to go slowly and discontinue these large capital expenditures, it behooves us to exercise some element of control. Whether this control can be exercised by appointing directors who know something about railroading, men who can give their full time to this work and who will not be selected because of some accident of political stripe or residence, men who will know something about the problems to be solved and who will be able to render useful service, or by naming some official of the government to direct and check expenditures, I know not, but it is abundantly apparent from the events of the last few months that such an element of control is needed.
I suggest that these publicly owned roads be made to pay their way and that future deficits be paid out of taxes. It is only by this means that the public will have an opportunity of becoming acquainted with these roads and knowing whether or not the benefits they confer are worth the price which they cost. We have been charging deficits to capital account and thus saddling the future with a heavy burden. The full cost of railway transport must be paid either by the classes served, by the taxpayers of the time, or, with compound interest, by posterity. To spread this cost over a long period in the name of constructive benevolence is to dull the instrument of financial criticism by which all well-ordered communities locate and analyze their financial weaknesses. Worse than that, Mr. Speaker, it is a direct invitation to posterity to indulge in that all-shattering denial- repudiation. Something should be done and done now. Every way we have turned during the last six months in an effort to curtail expenditure we have been told that we were too late. We were too late because a contract had been signed here, a sod turned there, or a statute passed here. The mocking spectre of "Too late'-' has dogged our steps for the last six months. I ask that something be done now to preclude further commitments before it is too late, not only for the roads but for Canada.


Mr. EULER:: Mr. Speaker-


Mr. DENIS:: Mr. Speaker, I have a question to ask.


Pierre Édouard Blondin: The hon. member for North Waterloo (Mr. Euler) has the floor.


Joseph-Arthur Denis: I desired only to ask a
question.


Pierre Édouard Blondin: The hon. member for Stanstead (Mr. Hackett) has been speaking for forty minutes, and the hon. member should have asked his question during that period.


Joseph-Arthur Denis: Would the hon. member allow me to ask him whether the Canadian Pacific Railway would be willing to purchase the Canadian National Railways, at its actual value; moreover, would the hon. member accept the presidency of the Board of Directors of the Canadian National Railways, at a lower salary than that of Sir Henry Thornton?


John Thomas Hackett: As regards the Canadian Pacifio Railway's intentions, I am unable to give any information, so far as the second question, it is not a serious one-
An hon. MEMBER (Translation): You must consider it.


John Thomas Hackett: -and I prefer not to answer it.


William Daum Euler: Mr. Speaker, I fear I am not at all qualified to follow the hon. member for Stanstead (Mr. Hackett) in the melodramatic type of eloquence which he has employed; being but a practical man I cannot soar into the heights of imagination and eloquence to which he has resorted. The extravagant statements- I say this advisedly and I think I am within the rules of order-which he made, especially with regard to the attitude taken by myself, cannot do me any particular harm and I am sure they do not do his cause any particular good. When he refers to me as speaking on a previous occasion with my tongue in my cheek, that does not offend me particularly, although I might say that the same might not be true of the hon. member. I was just wondering whether it is the hon. member's own tongue that speaks or whether it is the tongue of somebody else.


An hon. MEMBER:: That is pretty unfair.
. Mr. EULER:	I am just giving back a
little of that given to me by the hon. member. The speech made by the hon. member on the address in reply to the speech from the throne has been practically repeated today, and for that reason I do not intend to take up the time of the house in replying because to do so would necessitate my using practically the same language as I did when speaking on the budget when replying to him. In fact, I had not intended to speak at all.
Railways and Shipping Report

The report has been presented and it is stated to be a unanimous report and I am willing to accept it as such. In some respects the report was not exactly as I would have desired, but no legislation, committee work and so forth can be carried on entirely unanimously. We must give and take and so far as I am concerned there was a bit of compromise in that report. I did not desire to create friction and for that reason I was quite willing to allow it to be presented as a unanimous report.
I am at a loss to understand just what motive-I have no desire to impute wrongful motives-is behind the hon. member's speech. It is not a speech friendly to the Canadian National Railways, and I do not think my hon. friend would contend that it is that sort of a speech. I am at a loss to know just what good will be done by this speech. I intend to deal with only a few criticisms made by my hon. friend. I will not take up the financial structure of the railways, as this matter has been discussed and the charges of extravagance made by my hon. friend have been answered.
The hon. member for Stanstead was a welcome visitor at the sessions of the committee, and in fact I think he took just as much part in its deliberations as if he had been a member. I make no complaint in that regard, but the hon. member had every opportunity and seemed to avail himself of those opportunities to make the criticisms he has made to-day. As I followed the hon. member, his one criticism was that there was no audit made of the transactions of' the board.


John Thomas Hackett: I did not intend to convey that impression.


William Daum Euler: I gathered that the hon.
member contended that there was not a sufficient audit made of the expenditures.


John Thomas Hackett: Sufficient control.


William Daum Euler: I will accept that. As is
well known, the Minister of Railways and Canals (Mr. Manion) has authority under the act to send in an auditor at his pleasure.
The hon. member says that the board is practically a useless body-I am giving the spirit of his remarks-and if its uselessness could be excelled it would be by the committee which has made this report. I will not say a great deal about that statement because I was a member of that committee. I will not say much about that board because it is a creature of the present government and in so far as the hon. member

criticizes the personnel of the board, he is criticizing the government which he supports. I would say in passing-and the matter was discussed in committee-that I believe it would be possible to appoint a board which would be more efficient than the present board or the one constituted before the present one. Perhaps I am speaking of an ideal impossible of attainment, but if it were possible to appoint a board of directors of the Canadian National Railways, having only one qualification in view, namely that of fitness for the position and no regard whatever for political leanings, we would be going a long way in the right direction.


Mr. STEVENS:: What about geography?


William Daum Euler: My right hon. friend brings
up the matter of geography. I think he might find that even in the province of British Columbia there are men who would be absolutely competent and well qualified to serve as members of the board. May I say quite sincerely that if I were so fortunate, or so unfortunate as to have to attend to the appointment of members of the board of the Canadian National Railways I would not make my choice with any view to provincial allotment at all. I would try to obtain five, six, or eight, or whatever the proper number may be, men qualified for the work they would have to do. I would say further that we cannot expect the members of that board to give a considerable part of their time to the work of the board for the miserable pittance of $2,000 a year. True, there may be many men in Canada who possess a great degree of public spirit and are willing to give up their time and services for the public good. As a general rule however a man will generally do what he is paid to do. I make the suggestion, even if in a measure it may be a criticism of past governments, that in the appointment of members to the board of the Canadian National Railways consideration be given only to one matter, namely qualification for the work. There should be higher salaries paid so that it may be worth while for men to give their time and attention to the work of the board. So that we would not lose the benefit of the experience of men who have attained knowledge and ability in the management of the railways, it might be well if the terms of office did not terminate at the same time. Members might be appointed for two or three years, or five years, and at intervals as some members retire from the board some experienced men would remain so as to eliminate the possibility of

Railways and Shipping Report
an entirely new board, none of the members of which would be familiar with railway practice.
That is a responsibility of the present government, and I should like to remind my hon. friend from Stanstead (Mr. Haekett) of that fact. He made one or two further criticisms, and another one which I shall leave to the last. He blamed the management, and in that connection I am not going to speak at length. I know there have been many rumours and charges about which I am going to say nothing. I believe the report of the committee might be accepted by parliament as speaking for itself. There have been charges of extravagance; something has been said about the building of hotels, and so on. If I so desired I could make comparisons, but I do not intend to enter into that phase of the discussion at all because, as I say, comparisons are odious and would lead only to discussions of no practical value. If there is extravagance I would say that it is a matter entirely within the control of the present government and the board appointed by it. If there is one statement I might make-and I do not wish my remarks to be construed as a criticism of the committee-if there is one thing in connection with which we may have gone a little farther afield than at times I thought we should go, it is that to some extent we were trying to do the work which properly belongs to the board of directors enjoying the confidence of this government.
Then my hon. friend made a further significant statement. He said that there is not enough business for the two railways. Perhaps he is right, but I wonder what inference he wishes the house to draw from that remark. When he makes that statement I think it is due to hon. members that he tell what the remedy should be. He says the railway has not been placed on its feet. I would say to him1-and this statement applies to both railways, which are in the same position, although he has seen fit to criticize one and not the other-that those railways are bound by the laws of Canada to charge certain freight and passenger rates. I believe I am stating a fact when I say that if the freight rates in Canada had been as high as they are in the United1 States the Canadian National Railways would not be registering deficits but would be showing profits. Those lower rates have been for the good of the Canadian people; we have enjoyed lower rates in Canada, although we live in a less thickly populated country than do our neighbours to the south.
I have nothing further to say except that I think my hon. friend from Stanstead did not complete his speech. From beginning to end his words have been full of criticism, and I wonder what good they will do. I do not believe his speech will have a great deal of effect in destroying the confidence of the Canadian people in their National railway system. He has made the statement that the Canadian National Railways control the press -a statement which I regard as an insult to the responsible and respectable press of this country. I do not believe his statement that the Canadian National Railways control the press is founded on fact. I do not believe however that his criticism will have any greater tangible result than had the flight of the swallow against the mountain, of which he spoke. If there is anything in my hon. friend's statement that there is not enough business for the two railway campanies, which railway does he wish to survive. If my hon. friend and the people of Quebec do not know it, I think I am speaking for the people of the province of Ontario and the members on both sides of this house from that province when I say that we have a real confidence and belief in the principle of public ownership so far as the Canadian National railways are concerned.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker one day the member for Temiscouata asked the Minister of Railways:
Is the minister _ aware that the station at Riviere du Lr>np is in a deplorable condition aud entirely unsuited to the requirements of the officials compelled to remain there?
The minister answered:
The minister is aware that the station is requiring certain repairs. Plans are prepared, and it is proposed to proceed with the work of improvement.
This answer was given by Mr. Blair, the then Minister of Railways and Canals, to a question put by my predecessor, the late Mr, Gauvreau, on February 26, 1900, at page 1006 of Hansard. The station was remodelled and enlarged in 1900, and for thirty-one years there have been no repairs.
Photographs were taken and shown to hon. members on June 10, 1931. It was impossible to take photographs of the inside of the station because of the extreme darkness. That very respectable Conservative paper the Toronto Mail and Empire contained the following statement on June 11:
The photographs were taken with a view to showing proof of Mr. Pouliot's complaints. On the set filed with the clerk, he has marked out what he terms the rats' entrance to the station, the manner in which the roof is warped and the ease with which rain water can-and does, be says-flood the station cellar every time RivieTe du Loup has one of its frequent storms.

Railways and Shipping Report
I wish to thank my hon. friend from York-Sunbury (Mr. Hanson) for the following statement which he made in the railways and shipping committee on June 17:
I hare often had to get out at Riviere du Loup in the middle of the night. I have a great deal of sympathy for Mr. Pouliot.
My colleague from Hull (Mr. Fournier) told me that not long ago he visited Riviere du Loup by motor car, and while there he heard a noise on the top of the car. At first he did not know what the trouble was, but eventually learned that the shingles from Riviere du Loup station were dropping on the top of his car.
When the Prime Minister came to Riviere du Loup on July 15, there was a shower, and while standing on the covered platform shaking hands with his friends one of his associates had to hold an umbrella over his head so that he would not be injured by the rain. When His Excellency came to Riviere du Loup, they tried to raise the flag on the station flag-pole, but unfortunately as the pole was broken the flag seemed to be hanging half mast.
Let me now answer some of the objections that have been made by my hon. friend the Minister of Railways (Mr. Manion). On March 31, 1931, he said on page 484 of Hansard:
This station was dealt with as were other matters in the constituencies of other hon. members on both sides of the house, as a building program which could not be gone on with , because of the decreased earnings of the Canadian National Railways and because of the large amount of money which this government had to raise for the purposes of the railway.
The same statement was repeated on May 12, 1931. Besides what has been paid for the Montreal terminals in 1930-31, parilament has voted $131,510,400 for capital expenditure of the Canadian National Railways. From September 16 to December 2, 1930, $1,296,483.34 had been approved for new stations by this government. That is 15 times more than $83,271, which was the amount of the lowest tender. The difference between the appropriation and the lowest tender, $6,135, was 94 times or $575,348.34 less than the amount approved by this government for stations not in the Canadian National Railways budget. (Reference No. 314; Hansard, June 25 and June 29).
The second objection of the Minister of Railways was this, at page 1536 of Hansard of May 12, 1931:
My hon. friend seems to have the impression that the station at Riviere du Loup is the only station or the only railway building of any kind which was not built as originally proposed. Such, however, is not the ease.

Of six new stations included in the approved Canadian National Railways 1930-31 budget, it is the only one the construction of which the Department of Railways has refused to sanction, although the same department afterwards approved the construction or completion of five new stations not originally in the approved Canadian National Railways budget. (Reference No. 314, page 4).
The third objection of the Minister of Railways was this. He said, on April 15, 1931, on page 618 of Hansard:
What condition was that cellar in during the five years of the Liberal regime when my hon. friend was sitting behind the cabinet? Why did not my hon. friend have things fixed up during that five years?
In 1925, the first year I was elected, I sent a memorandum to Sir Henry Thornton asking for the building of that station, and I renewed my request every year, but each year Mr Appleton, the general manager at Moncton, replied that the management had to cut expenditures. In 1928 I succeeded in having an amendment made to the law in order to put the old government railways, especially the Intercolonial, under the control of the Board of Railway Commissioners. That is reported in Hansard of April 12, 1928, and of April 23, 1931, at pages 996 and 997. I wish again to thank Hon. Mr. Dunning for the change he made in that respect.
In December, 1928, the Riviere du Loup station was inspected by the provincial board of health, and their report will be found in Hansard of March 31 and of April 15 of this year. The recommendation of the board of health was endorsed in April, 1929, by the chamber of commerce and the city council of Riviere du Loup, as will be found in Hansard of April 15, 1931, at page 614*
On May 1, 1929, Mr. Appleton wrote to the secretary of the chamber of commerce to tell him that it was agreed that the Canadian National Railways would put an item in their budget of 1930 for building a station at Riviere du Loup. In May of 1930 an appropriation of $77,136 was voted in that commotion. That will be found in return 313, and in Hansard of September 19, 1930. Tenders were called for in July, 1930, and I quote from the instructions given in connection with the tendering for the station building at Riviere du Loup, as will be found in reference 425, Hansard, June 22, 1931:
The work covered by this contract shall be commenced immediately the contract is awarded, and all the work shall be fully completed not later than February 28, 1931.

Railways and Shipping Report
On April 23, 1931, I told the Minister of Railways:
If my hon. friend the Minister of Railways were the cleverest lawyer in Canada; if he were as good a lawyer as he is a doctor, I should nevertheless say to him that he has a very bad case.
I was referring to his defence of the decision that had been made.
On April 23 of this year, at page 932 of Hansard, the Minister of Railways said:
So far as I know there is no political patronage in regard to the Canadian National Railways.
I will tell the minister what happened in his absence and in the absence of the Prime Minister. I will give the details of the killing of the proposal to build a station at Riviere du Loup, which is just as interesting as a murder case. At a banquet which took place at Riviere du Loup on December 29, I said:
I am credibly informed that the defeated Tory candidate was in Ottawa on the day when the Department of Railways refused to sanction the construction of the new station at Riviere du Loup. He must have seen the Acting Minister of Railways (Sir George Perley) or communicated directly or indirectly with that department through the Minister of Marine. Either he did not have enough influence to force the minister to reconsider his decision, or he has instigated it. In the first case he is a useless being; in the second case, he is a noxious being.
On January 8, 1931, his companion, Mr. Leo Berube, stated publicly -that I should either prove that statement or retract it. Mr. Berube is a lawyer of note, although he has -been successively defeated in both the counties of Temiscouata and Kamouraska. He took the stand that the Temiscouata Tories were above reproach. I felt sure that I should be allowed at least to see Mr. Dube's correspondence with the Canadian National Railways and the government, and my surprise was indeed great when it was refused me because Mr. Dube was one of those who said that I should either prove or retract my statement. Instead of giving me a chance to get my evidence, he had that correspondence concealed by marking it personal. Is that good sportsmanship?
Now I come to the personal, private and confidential correspondence. On May 7, June 1 and June 16 I was refused the tabling of the correspondence between Mr. Dube and the Canadian National Railways. On June 5 and June 9 the Minister of Railways and the chairman of the railways and shipping committee told me that the answers to my questions would be given in the House of Commons. That will be found in the report of the railways and shipping committee at
pages 5 and 25. On June 10, 1901, at page 2481 of Hansard, the Prime Minister said:
As the matter to which my hon. friend re ferred originated last year, i-t might be considered by the special committee.
The hon. member for Rimouski (Sir Eugene Fiset) replied:
The chairman of the committee has already ruled that as those questions are on the order paper they cannot be discussed in committee.
I observe by reference No. 355 that the Deputy Minister of Railways wrote to the under Secretary of State on June 8, 1901, as follows:
As the correspondence received from Mayor Dube is marked personal it is not brought down.
I personally objected to the non-production of the personal correspondence of that gentleman with the government. Why did he mark personal even letters that had been partly published in the press? In order to learn why, I had to ask numerous questions. With reference to no member of this house, may I be allowed to quote Job, chapter 34, verse 21:
There is no darkness, nor shadow of death, where the workers of iniquity may hide themselves.
The production of that correspondence would have saved lots of time. On August 23 Mr. Dube wrote to Mr. Appleton that the contract should be given to the local contractors, etcetera. That "etcetera" means a lot. There were two tenderers. Dumont & Damours, and Jos. Collin. On March 26 he wires to Mr. Dupre:
Dumont and Damours are Pouliot's strongest followers and friends.
That is in reference number 352. There was only another tender from Riviere du Loup, the tender by Mr. Jos. Collin.
On August 30th he wrote to Mr. Appleton asking for the name of the contractor to get in touch with him.


An hon. MEMBER:: Who is that?


Jean-François Pouliot: Mr. Jos. Collin, a good
Tory from my county. He is advised that the tenders have been sent to Montreal for final decision. Then he is not any more successful in writing to the Minister of Railways (Mr. Manion), who had declared in the house it was not in the interest of the country nor of the railway to divulge the amount of each tender, and apparently he has not further satisfied his morbid curiosity. I congratulate the Minister of Railways on his discretion in that respect.
Railways and Shipping Report

On September 4, last year, that gentleman wrote to the Solicitor General:
I will perhaps go to Ottawa during the last week of the special session.
He waited until the Minister of Railways left for Churchill before he came here, for the reason which I have just given.
At what date did Mr. Dube come to Ottawa? According to Hansard of May 28, pages 2040 and 2041.
The Minister of Railways left for Fort Churchill Wednesday, October 1st, returned to Ottawa Saturday, October 11.
In Le Saint Laurent of November 27 the gentleman in question said that while in Ottawa he had had an interview with the Postmaster General, the Minister of Marine and the Minister of Public Works. On the fifteenth of this month the hon. Minister of Marine wrote me as follows-I translate 'his letter for the benefit of the house:
Mr. Dubd reminded me that in effect he had come to Ottawa in the company of Mr. Berube and that these two gentlemen met me, October 6, a Monday, on the train between Montreal and Ottawa. I remember the occasion well.	.	..	,
In our conversation on the tram we discussed general topics. There even may have been mention made of the Riviere du Loup station but not in a way to change what Mr. Dube wrote me on October 2nd. I did not see Mr. Dube and Mr. Berube again-during their stay in Ottawa.
On October 2nd Mr. Dube wrote the Minister of Marine insisting on a new building. He was then favourable to the proposal provided that Mr. Collin was the contractor. The Minister of Marine was at his office in Ottawa on October 6 as will be seen on page 3561 . of Hansard of July 9. Then Messrs. Dube and Berube came with him on the noon train to Ottawa.
What was their purpose in coming here? On August 20 Mr. Dube wrote the Board of Railway Commissioners:
We are very anxious that this station shall be constructed immediately.
The same day he wrote to the Minister of Labour (Senator Robertson):
Authorization shall be given at once to Canadian National Railways to award contract as soon as possible in order that the work should be started without delay.
And naturally he was recommending a local contractor. He sent a copy of that letter to the Prime Minister, the Postmaster General, the Minister of Marine and the Solicitor General. On September 12 he wrote to the Prime Minister:
The contract shall be awarded without delay.
Collin! Collin 1


An hon. MEMBER:: Who is Mr. Collin?
[Mr. Pouliot.1


Jean-François Pouliot: Mr. Collin is the gentleman who did not get the contract, and because he did not get the contract the station was not built. On October 2nd he wrote to the Minister of Marine:
Nothing shall delay the starting of the work.
On October 4th he wrote to Sir Henry Thornton:
Do all you can to rush that construction.
The travellers suffered a sunstroke on the way to Damascus. Before October 6, everything was going well. On August 9th the Board of Railway Commissioners had issued order No. 45205, reference No. 296, approving plans for the building of the new station. Proposed contracts were forwarded for the consideration of the department after they had been recommended' by the board of directors or by the executive committee of the board of directors. My reference is Hansard of June 22, 1931. What was the resolution? There was a meeting of the executive committee of the Canadian National Railways at Montreal on September 2, 1930. Let me quote:
Submitted to the meeting a memorandum dated August 29 from Mr. Hungerford recommending that a contract be placed with the Stewart Construction Company Limited of Sherbrooke for $83,271-the lowest tenderer-for the construction of station building at Riviere du Loup.
It was unanimously recommended that such a contract be made.
It was declared that the immediate carrying out of the above resolution is required. (Reference No. 449.)
Messrs. Dumont and Damours were not recommended, but an outside firm at Sherbrooke-the same firm that two days later was awarded the contract for the station at Levis. This resolution recommending acceptance was forwarded on September 4th by Mr. Fair-weather to the Department of Railways and Canals.
Speaking at Brandon, Manitoba, in June, 1930, the present Prime Minister is reported in the Winnipeg Evening Tribune of June 23, 1930, as follows:
I want to say that the Conservatives in power will give the Canadian National management a stronger support and a more disinterested support than they have had under the King administration. There will be less log-rolling and interference. The management will be better able to carry out their policies without politicians butting in and trying to stop them.
Everything was O.K. The only thing the travellers had to do was to stay at home to assure the building of a new station at Riviere du Loup, because the plan had been approved by the railway board and the accept-

Railways and Shipping Report
ance of the lowest tender had been recommended by the board of directors; and as the policy of the right hon. Prime Minister was not to interfere with the management of the railway, the station was to be built.
The absent are not always wrong, and I am not putting the blame on the right hon. Prime Minister nor on the Solicitor General because at that time they were at the Imperial conference; the Secretary of State was in Berlin, Germany; the Postmaster General says he has no correspondence in that regard; the Minister of Marine in the letter of July 15 says he did not meet those travellers during their stay in Ottawa; my hon. friend the Minister of Railways was in Churchill. But there was one minister in Ottawa from the province of Quebec-the Acting Prime Minister, who on the 8th of this month said-I am quoting from Hansard, page 3505:
I was not absent from Ottawa a single day during the time the Prime Minister was away from Ottawa last autumn.
Now we come to the second part. While the delegation was in Ottawa on October 6, the matter was before council, although the Minister of Railways was absent from October 1 to 11, as we have seen. In Hansard of May 12, 1931, at page 1538, the Minister of Railways said:
The hon. gentleman has pointed out in this house on a number of occasions that I was up at Fort Churchill when the matter went through council.
In Hansard of June 22, at page 2865, will be found the following:
The matter was still before council when the Minister of Railways and Canals left for Fort Churchill.
According to reference No. 303:
No record can be found of such order in council as referred to by the Minister of Railways and Canals on May 12, 1931, relating to the proposal to build a new station at Riviere du Loup.
On July 16 I put this question on the order
paper:
Was the proposal to build a new railway station at Riviere du Loup put before council?
To which the Prime Minister said:
Mr. Speaker, it has been held that this is an improper question.
Thereupon the Speaker declared the question out of order. The matter was important enough to be submitted to council. Therefore could it be decided otherwise than by order in council? On September 24, Mr. Berube, one of the travellers, wrote to my friend from Dorchester, (Mr. Gagnon):
We must act quickly-II faut faire vite!
On the same day that the travellers arrived in Ottawa the secretary of the Department of Railways and Canals wrote to the Canadian National Railways to the effect that the department had refused to sanction the building of the station. Mr. Pugsley wrote to Mr. Fairweather on October 6:
I am to advise that it has been decided by the department-
I ask hon. members to note those words "by the department."
-not to award a contract for the construction of the proposed new station at Riviere du Loup, but to make repairs, etc.
That is reference No. 295. On October 6 the secretary of the Department of Railways and Canals, "acting upon instructions of the acting deputy minister," notified the Canadian National Railways by letter that the department had refused to sanction the construction of a new station at Riviere du Loup. That is reference No. 315, and Hansard, May 28, 19811. Before leaving for Churchill the Minister of Railways said the matter was still before council and that he did not communicate with anyone during his trip. This will be found at page 3048 of the French Hansard of June 22 and Hansard of May 28, He was accompanied by the deputy minister. It is strange that the acting deputy minister takes, proprio motu, such a step. Is it possible that a matter submitted to council was decided not by council not by the minister in charge, not by the deputy minister, but by the acting deputy minister? On June 22, I asked this question:
Under the authority of what minister, acting minister or person did the Department of Railways and Canals make a decision ....
The minister said he did not think the question was proper, and it was dropped.
What was the meaning of the refusal of October 6? On October 6 the plans had been approved by the Board of Railway Commissioners and the directors of the Canadian National had unanimously recommended the acceptance of the tender, in accordance with Mr. Hungerford's memorandum. On April 23 the minister said "the directors of the railway work in association with the management." Did the management decide to change their views? In reference No. 314 we find the following:
The Riviere du Loup station is the only one that the department refused to sanction the construction of as, it was alleged, there was no necessity for constructing a new station as with proper repairs, additions and improvements the existing accommodation could be made satisfactory.

Railways and Shipping Report
On June 29 I asked if someone had reported after September 4, 1930, that it would be improper to build a new station. The answer was: Reference No. 314 contains no reference to any such report. See Hansard of June 29, page 3134. The first report from the railway is dated December 9, 1930; it is a letter from the assistant chief engineer to Mr. Alastair Fraser as follows:
It is quite correct that the railway called for tenders for a new station at Riviere du Loup, but these were entirely too high and it has therefore been decided to thoroughly renovate the present structure in order to meet the requirements of the travelling public.
It was written two months after the decision was made on October 6. The whole amount of each section of vote No. 323, 1930, totalling $51,600,0000 was not spent until three months later on December 31, 1930 (Reference No. 322); it was not spent on October 6. The assistant chief engineer says the tenders were too high. The lowest tender was nearly $7,000 less than the engineer's estimate, while at Levis a contract was approved having to do with a tender which was more than $6,000 over the engineer's estimate.
At last the cat comes out of the bag. Who made a decision so absurd and so diametrically opposed to the policy preached by the Prime Minister at Brandon? Was it an architect, an engineer or at least a foreman? No, it was the boss, the acting Prime Minister. The following appears at page 3561 of Hansard under date of July 9:
Mr. Pouliot: Who was the minister or the acting minister in charge of the Department of Railways and Canals on October 4, 1930?
Mr. Manion: The acting Prime Minister.
Between October 1 and October 7 there was no aeting_ minister in charge of the Department of Railways, but the acting Prime Minister could act for any minister, at any time, during the absence of the minister, without an order in council being required.
That is in Hansard for June 22, of this year. I asked if the same thing had been done by the same hon. gentleman (Sir George Perley) in other departments, but the question was ruled out of order. I asked how many times the same gentleman had been appointed acting minister, and that question was also ruled out of order.
In Hansard for June 22 I find the following:
Proposed contracts are forwarded for consideration of the department after they have been recommended by the board of directors or by the executive committee of the board of directors.
Tenders were received at Moncton on August 26, and were submitted by the company to the department, the approval of the

department being required because such construction involved a capital expenditure by the Canadian government railways. That is from reference No. 3il7.
Now I should like to discuss the illegality of such unwarranted intrusion by the acting Prime Minister. According to Halsbury, seventh volume, page 46, the Prime Minister acts as the medium of communication between the cabinet and the crown. This means no administrative duties. He is the first amongst equals. In the revised statutes of 1927, chapter 1, section 31 (f) I find the following:
If a power is conferred or a duty imposed on the holder of any office as such, the power may be exereised and the duty shall be performed by the holder for the time being of the office.
Subsection (ll) of the same chapter reads:
Words directing or empowering a minister of the crown to do any act or thing, or otherwise applying to him by his name of office, include a minister acting for, or, if the office is vacant, in the place of such minister, under the authority of an order in council, and also his successors in such office, and his or their lawful deputy.
Chapter 171, section 3, of the revised
statutes of 1027 is as follows:
There shall be a department of the government of Canada which shall be called the Department of Railways and Canals, over which the Minister of Railways and Canals for the time being, appointed by commission under the great seal of Canada, shall preside.
(2) The minister shall have the management and direction of the department, and shall hold office during pleasure.
Section 7 of the same chapter is as follows:
The minister shall have the management, charge and direction of all government railways and canals.
The day after October 6 the acting Prime Minister was appointed by order in council P.C. 2349 as acting Minister of Railways and Canals, and acted as such from October 7 to October 11. Perhaps this was done because the banks refused to finance any corporation which had a contract unless the gentleman who had to approve same was appointed acting minister of that department. In the meantime he submitted to council only one order. On October 8, 1930, P.C. 2370 was passed having to do with orders for additions to the station at Levis. See Hansard, June 1, page 2197. Then, at page 482 of Hansard for March 31, of this year I asked the following question:
Mr. Pouliot: Was he appointed acting Minister of Railways and Canals in order to refuse to sanction the construction work at Riviere du Loup?
Mr. Manion:	Certainly not.

Railways and Shipping Report
This is no joke; if an order in council was necessary for the station at Levis how could the acting Prime Minister decide the case of Riviere du Loup in the absence of the minister, and without consulting him? The acting Prime Minister was not in charge of the department, according to the law of the land. The person who was in charge of the department was the Minister of Railways; he was not in Ottawa but he was in charge of the office, and the action of the acting Prime Minister was an unwarranted intrusion. May I repeat here what I have already said this session, that the right hon. Prime Minister and the Minister of Railways never would have done such a thing or made such a decision, if they had been here at the time.
Let me add that the Prime Minister has only the right of supervision over departments, and I contend that that decision of the acting Prime Minister was illegal and void. The province of Quebec has been kind to my hon. friend (Sir George Perley); he has been elected six times in Argenteuil and I regret that in the sunset of his life he has done such injury to a little town of the province which has done so well for him.
On May 22 the minister of railways said:
I do not intend to be bulldozed by the hon. member.
He forgot that the word "bulldoze", according to Webster, means the intimidation of negro voters in Louisiana. Was there a negro in the wood-pile? No contractor but Collin was to be allowed to build the station. His tender was for $44,864 more than the appropriation, for $38,729 more than the lowest tender and for $31,766 more than the railway estimate. He was "the local contractor" who had been recommended so often by Mr. Dube to the Canadian National and to the government. On October 11, Mr. C. E. Dube sent to the deputy minister of railways a copy of the letter which every contractor tendering on the Riviere du Loup station received. The letter was dated October 7 and was addressed to " Mr. Jos	general contractor, Riviere du
Loup station." The Canadian National were returning his deposit cheque for $2,500 and his employers' liability bond amounting to $10,000. (Reference No. 300). It would be highly interesting to know who were Collin's bondsmen, but at any rate, according to reference No. 466, the bond was returned to Mr. Collin on October 7 last. This person was the highest tenderer, he was guaranteed by bondsmen and Mr. Dube and Mr. Berube argued his case here, but it was impossible
even for the Acting Prime Minister to recommend the acceptance of such an extravagant tender. The conclusion was reached, however, that the station should not be built by anyone else, because the profiteers could not have their chance.
According to reference 314, a decision was arrived at on October 4. I had asked whether on that date any letter, memorandum, note or other document had1 been sent by or had emanated from the member for Argenteuil, in the absence of the Minister of Railways, to the acting deputy minister or to the secretary of the Department of Railways and Canals, with reference to awarding the contract for the construction of the proposed new station at Riviere du Loup. This will be found in Hansard of June 29, 1931, at page 3135. The answer was that there was no such document. On July 8 the right hon. member for Argenteuil said: "I do not keep a diary." On July 13 I inquired whether there had been a sitting of the council on October 4, and the Prime Minister Objected to the question. On July 15 the question was ruled out of order. The 4th was a Saturday and the 6th a Monday, and it is improbable that there was a sitting of council on either of those days. No record can ibe found of such an order in council as referred to by the Minister of Railways in Hansard of May 12, 1931. relating to the proposal to build a new station. (Reference No. 303). There is no written evidence to prove that the decision was made on October 4. Is there not a clerical error in this? It reminds me of the old puzzle: What looks like an egg, is round, like an egg, has a yolk and a shell, and barks? The fellow to whom this puzzle was put replied, of course, "I don't know"; whereupon the answer came, "Why-, it is an egg." The other fellow objected that an egg does not bark and the man who proposed the puzzle explained that that was added to make the puzzle more difficult.
May I say that Mr. Dube and Mr. Berube were still in Ottawa on October 7, when the tenders and deposit cheques were returned. On January 8 Mr. Dube published a letter bearing no date and with the signature of the then Acting Prime Minister, in which it was stated that the writer had not met him for six months. When I asked for the date of the letter the question was ruled out of order. The same ruling was made on July 15, with regard to the request for the production <k the entire correspondence between these two parties.
After the delegation had come here the sum of $475,000 was included in the unemployment scheme for a station at Saint John, New
39y4

Railways and Shipping Report
Brunswick, and the gentleman of whom I spoke said that, as he had not been elected, he had no promise to fulfil, although his correspondence had been referred by the private secretary of the Prime Minister to the Minister of Labour.
There were protests from the chamber of commerce of Riviere du Loup on November 27, as well as from the board of health. These references can be found in Hansard of March 31 and May 22. On March 27, according to a return, reference 4676, which can be found in Hansard of April 15, the railway board reported to the effect that they had rescinded their first order, approving only the plans for repairs. This is the only matter in respect to which I think the Minister of Railways is at fault, for it could not have been decided without his knowledge. I regret this, inasmuch as I do not blame him for some venial sins of inaccuracy. On May 22, at page 1906, the minister said:
If the government requests the Board of Railway Commissioners to give Montreal and other interested districts an opportunity to appear in this matter, the Board of Railway Commissioners would hardly dare take any other course.
The present budget of the Canadian National Railways includes $15,000 for repairs. This is absolutely inadequate, because specifications attached to the approved plan of repairs do not comply with the recommendations of the board of health, nor do they contain any provisions for the building of a cellar, the solidifying of the foundations, and the making of a new roof. There was a new protest by the city of Riviere du Loup, on April 13, as will be seen in Hansard of April 23, page 914, Mr. G. Spencer, chief operating officer of the railway board, reported on March 23,1931, that the matter of a new station might reasonably be deferred for the present. But he cannot state that a new station is not necessary.
When discussing generalities, Mr. Speaker, one seldom comes to a definite conclusion. I have studied a concrete case to learn what had been the relations of the government with the Canadian National Railways in the absence of the Prime Minister and the minister in charge. I regret very much not to have been as pleasant to the acting Prime Minister as was the South American brass band. On May 23, 1931, the correspondent of the Montreal Star wrote:
In tribute to Mr. Pouliot it should be recognized that, while his persistence may not have succeeded in convincing parliament that the Riviere du Loup station is a national issue, it has resulted in directing attention to other important matters to which the discussion has led.

I suggest to the government that they should cover the illegality of the decision of October 6, 1980, by removing the injustice which has been done to a small centre in the province of Quebec. If not, I will come back again session after session, and when I am asked whether I am downhearted, my answer will be, no.


Sir GEORGE PERLEY (Angenteuil):: I wish to congratulate the hon. member for Temiscouata (Mr. Pouliot) on having occupied a great deal of the time of the house in discussing Riviere du Loup station. I shall not comment at any length on his remarks, because I am sure that there is not a member who is not absolutely tired of the hon. gentleman's discussion of this subject. If I had not always found him so genial I should think he was really in earnest in his tirade against me to-day; but my own impression is that he simply wishes to get the matter on record for political purposes.


Jean-François Pouliot: No, no.


George Halsey Perley: He has made a great mystery of the matter-


Jean-François Pouliot: The mystery was yours.


George Halsey Perley: I did not interrupt the hon. gentleman when he was speaking and I would ask him to show me the same courtesy. Now, he has accused me of unwarranted intrusion in regard to this decision about the Riviere du Loup station. I resent that imputation as strongly as I possibly can. I do not think I have ever been known, either in this house or outside, to have intruded into anything with which I had no concern.
This matter which he has discussed at such length is very simple and plain. Hon. gentlemen who are privy councillors know that members of the government frequently have meetings at which no orders in council are passed, but at which various matters of interest at the time are discussed by everyone present with a view to arriving at the best decision in the public interest. This question of the Riviere du Loup station was brought up in that way before the Minister of Railways left for Churchill. At the same time we had before us other proposals for expenditures by the Canadian National Railways, and in regard to a number of these, including the Riviere du Loup station, it was decided that it was unwise to proceed at that time. For that reason no recommendation to council, as far as I know, was ever brought in. But it was decided after discussion among ourselves that it was not advisable to authorize

Railways and Shipping Report
the construction at that time; so that all that happened was that there was no order in council to confirm the proposal of the directors of the Canadian National Railways in regard to the building of this station.
I am quite prepared, as I always am, ta take my share of any criticism, and if necessary a little more than my share. In this instance, however, the action taken was that of the members of the government who were present in Ottawa at that time, including the Minister of Railways and myself and others who were there on that occasion. We took the responsibility as a government.


James Shaver Woodsworth: I do not know whether it is possible to get back from Riviere du Loup station to the discussion of the general principles contained in the report which is before us. The hon. member for Stanstead (Mr. Hackett) gave us the impression that he had made his speech because he wished us to love and not to despise our own railroad. If the hon. member was sincere in that desire it seems to me that he took a very strange way of trying to effect the result. It appears to me that his criticism was most unfair. He took this great public enterprise, the Canadian National Railways, and denounced many of its departments and activities without making any comparison with similar departments and activities of its private competitor. I do not know that any blame can be attached to the Canadian National because it has its own publications. As a matter of fact the Canadian Pacific has its own publications which are very carefully edited and distributed. I do not know that any particular blame can be placed upon, the Canadian National for having its own telegraph system; the private road has its own telegraph system. I do not know that there is anything reprehensible in the Canadian National operating its own radio. As far as the question of hotels is concerned, it may be that it has built too largely and has catered to a certain element in the community more than it should have, but if it has done that it is because of the influence of big business in t'he sphere of private competition. If the hon. member had really intended that we should come to love our own national system he would have offered some constructive criticisms by which we could improve the present method of carrying on the work of the road.
The hon. member criticized the scrutiny made by a committee of this house of the estimates of the Canadian National Railways. It seems to me that the work of this committee is one of the finest pieces of work done
by the house. I was very much interested a few years ago when the government went so far as to set up a committee of this character. It seems to me that we would be well advised to have similar committees discussing the estimates of the other departments. If the estimates of the Canadian National Railways were discussed in the committee of the whole as are the estimates of the other departments, we would be here until next fall. I think it is an excellent idea that hon. members should be given an opportunity to meet the president and higher officials and discuss in detail the expenditures and policies of the company.
We all recognize that public ownership on a scale such as we have in the Canadian National Railways is altogether new in the history of our country. A fair trial should be given to this organization. What does the hon. member for Stanstead propose as an alternative to existing arrangements? Would he bring back the old patronage system which existed in the days of the Intercolonial railway? I do not think any hon. member would seriously consider that that is the best way to conduct our business. Does the hon. member mean that we should turn over our own road to a private corporation? If he does, why does not he come out and say so instead of trying to persuade this house that he is trying to get us to love our own road? If I have any criticism to make of the Canadian National road and its management, it is that we copy too closely the methods in vogue in private corporations. It is well known that we took over private companies which had become bankrupt. If we had built from the ground up things might have been different, but we all know that it was to save what was left from private enterprise in which there had been multiplications of all sorts that the Canadian National was organized, and gradually developed into the present system.
The hon. member for Stanstead states that those charged with the management of the road know nothing about railroads, they would not know a hay rake from a handcar. That may be a catchy phrase which may be picked up by the press but-


Mr. HANBURY:: The hon. member was
speaking about the directors, not the management.


James Shaver Woodsworth: Yes. The hon.
member stated that they did not know anything about railroading, that they would not know a hay rake from a handcar. I suggest that that is not constructive criticism. If the board of directors is not what it should be, let us have a change. We had one change not so long ago; if desirable, let us have



Railways and Shipping Report
another. It has been thought best that men should be brought in from different professions and businesses and from different geographical points; if that is not a good policy, let us alter our policy. This matter is in the hands of the government. One wonders why a government which has discouraged any adverse criticism from the back benches permits an assault to be made upon the Canadian National Railways by a back bencher. I hope the government is not sympathetic with the viewpoint expressed by the hon. member for Stanstead.


Mr. MANION:: I would suggest to my
hon. friend that the hon. member for Stanstead has as much right to speak in the house as he has.


James Shaver Woodsworth: I admit that.


Mr. QUINN:: The hon. member is the
champion of free speech.


James Shaver Woodsworth: I should be very
glad to think that the hon. member for Stanstead is on his own and is defying the government. I should be glad to find that that is the case, but my contention is that in a great many instances the supporters of the government do not get up and criticize the policies of the government.


Felix Patrick Quinn: We can if we want to.


James Shaver Woodsworth: But you do not.


Felix Patrick Quinn: We can do that when it is
necessary, but in this case it is not necessary.


James Shaver Woodsworth: It seems to be
necessary in this case.


An hon. MEMBER:: The hon. member
makes a speech every day, that is enough.


James Shaver Woodsworth: The hon. member
for Stanstead would have us believe that the Canadian National had a strangle hold on the press of this country. I do not think that suggestion can be taken very seriously especially when one considers the number of newspapers denouncing the Canadian National Railways. Evidently some papers have not come under the control of the Canadian National.
The hon. member pointed out a fact which I think is evident to everyone, that there is not sufficient business to maintain the road up to its present standard. That is equally true in the case of the Canadian Pacific Railway, but it was not pointed out that in either case the charges must be borne by the people of this country. The idea is so often expressed that it is only in the case of the Canadian National that the taxpayer has to pay when, as a matter of fact, it is equally
(Mr. Woodsworth.]
true of the Canadian Pacific. That railway managed to store away large reserves, some of them hidden, and now in a time of crisis they bring forth those reserves in order to continue partly to pay their regular dividends. That may be legitimate business, but none the less those dividends are being taken out of the pockets of the people who use the railroad. It is a charge on the industry of this country. It is all very well to say that the railroads should pay their way, but they have never done so. If the Canadian Pacific had been left to finance and push through its road, I do not suppose it ever would have been pushed through to completion. We know that enormous grants in land and money were made to the Canadian Pacific, and we know that at that time there was a Pacific scandal comparable to the Beauharnois scandal of the present day. We are inclined to pass over these things because they are so far in the past.


An hon. MEMBER:: It does not compare with the present scandal.


James Shaver Woodsworth: It was serious
enough in those days. I do not minimize the seriousness of the present scandal; they are both bad. When we say that our railroad should pay its way we forget that in the earlier stages the Canadian Pacific did not pay its way. It is paying its way to-day because of the high freight rates which were charged. If it is desired that the Canadian National should pay its way, the only fair thing to do is to cut down the enormous capitalization which bears no relation whatever to the physical assets. If we would cut out that part of the capitalization that represents the graft which occurred in the earlier days, perhaps the Canadian National would come nearer to paying its way.
Mention was made, for example, of the enormous load that we carry in the Canadian Government Merchant Marine. This is one unit of the system which undoubtedly has led to very heavy losses. The report of the committee states:
In this respect we wish to point out that the total original cost of this enterprise, which was undertaken solely as the result of the exigencies of the war, was approximately $80,000,000.
In addition to that, throughout the whole period a deficit of over $57,000,000 has accumulated, and this does not include the depreciation on the present boats, which amounts to $17,000,000. I think the members of the committee are to be commended because of so definitely placing this responsibility where it really lies. This big expendi-

Railways and Shipping Report
ture was undertaken, in the words of the committee, solely as a result of the exigencies of the war. That item should be put in as part of the war expenditure. It should never have been included as a part of the cost of the public services of this country. So again it seems to me that a good deal of criticism is beside the mark when we consider the actual facts underlying the development of the Canadian National railway system.


Mr. CHAPLIN:: None of that is chargeable to the Canadian National Railway.


James Shaver Woodsworth: No, but it was
criticized by the hon. member for Stanstead when he was criticizing the publicly owned services. Most of the criticism I think does not bear fairly on the principle of public ownership. It may be that much is to be desired in the management of the Canadian National. Undoubtedly the report reveals that. The recommendations of the committee advocate some very great changes. It seems to me that this is a frank recognition that there is much improvement to be desired in the management of the Canadian National Railway as we have had it in the past. There is one thing that has not been mentioned by way of criticism, on which I venture to interject a few words at this point. I have never liked the idea that the president of the Canadian National Railway, Sir Henry Thornton, should become a bank director, a director of the Royal bank. I know that some differ from me in that regard and consider such a move as essential to the successful carrying on of the road.


Felix Patrick Quinn: He is financially qualified, is he not?


James Shaver Woodsworth: Possibly, and there may be certain advantages about it, but there are also serious liabilities, and with a road that is government-owned I do not think it is well for us to ally ourselves with a particular financial group in this country. If is too dangerous.
After reading the report and hearing something of the discussion, it seems to me that one of our chief difficulties lies in this, that because of the competition of the government road with the private road a great many expenditures have been forced upon the public road. Then, again, there is another reason for this large expenditure. I think that to too large an extent the public-owned road has been copying the practices that are prevalent among private corporations. That is undoubtedly true, so that if there is criticism along that line it applies equally, if not more so, to most of our private corporations.
I note that among the recommendations of the committee there is one that, where possible, we should reduce the expenditure on operation and maintenance. We will all agree with that, stated in such general terms, but I hope the committee did not have in mind a reduction in wages; that is the wrong end at which to begin. All our economists to-day are telling us that one of the difficulties in our modern economic structure is that we have given too little in the way of wages and services, and allowed too much in the form of capital expenditure.


Mr. ARTHURS:: Does the hon. member
refer to wages or salaries?


James Shaver Woodsworth: I would include
both. As a general principle I say that too little has been given in that form. The hon. gentleman has referred to salaries. He has anticipated what I wanted to say. It seems to me that there is altogether too great a discrepancy between the higher paid and the lower paid, and if we are going to have a reduction of wages and salaries I say let us begin at the top and let the percentage cut be bigger at the top.


James Dew Chaplin: If the hon. member will
examine the report, he will find that special reference was made to salaries, and nothing was said about wages at all.


James Shaver Woodsworth: Quite so.


James Dew Chaplin: But we did say specifically that salaries should be reduced. Surely that covers the ground.


James Shaver Woodsworth: I am quite in sympathy with that recommendation.


Mr. SHORT:: Then why bring in the question of wages at all? It was not referred to.


James Shaver Woodsworth: I am bringing it
in simply because it was not referred to. It might well have been referred to, with a suggestion that wages should not be cut.


James Dew Chaplin: There was no intimation of cutting wages.


James Shaver Woodsworth: I know there was
none, but there has been a pretty general drive to cut wages, and I think the Canadian National Railways have maintained an excellent attitude in that regard. It has reduced wages to a very small extent, and it has not cut off its employees to nearly like the same extent as the privately owned road. On the part of some that policy has been the ground of criticism against the Canadian National Railway.
In reviewing this report may I urge then that while in a general way we ought to try

Railways and Shipping Report
to reduce expenditures, we ought not to permit a reduction of wages. The chairman of the committee has referred to the special section dealing with salaries. Perhaps I might be permitted to read that:
In view of the decreased revenues of the company, and the economies being made in other branches of the service, your committee are of opinion that the executive committee of the board of directors should immediately consider the whole question of salaries, allowances, disbursements, pensions and retirement provisions for executive officers and officials of the company receiving salaries of $5,000 and over, in order that every reasonable and proper economy should be effected.
I agree absolutely with that clause in the committee's report.


Mr. McGIBBON:: Are there any clauses
the hon. member does not agree with?


James Shaver Woodsworth: I was mentioning
just now what I thought was one omission. There are two clauses to which I should like to call attention, if only to underline them. Some of us from the west, and I should like to speak for some of the members from the west as the hon. member for North Waterloo (Mr. Euler) has spoken for some of the people in Ontario, feel very strongly on this matter of public ownership. Some of us do feel that there has been some slackness in the expenditures of the Canadian National. Some of us feel that there have been expenditures which were not justified, although in faimes3 it may be said that comparatively only a short time ago we were passing through almost boom times when no expenditure was considered too great. There were these large expenditures on hotels, and so forth, which in my judgment were quite unjustified, and which catered to one particular section of the community rather than to the masses of the people. There are two brief sections in the report which I have marked. One reads:
Your committee while of opinion that many of the salaries are much too generous, and in some instances excessive, accede to the expressed wish of the president that the list be not published for the reasons given by him.
If I understand it aright, the reason for not publishing the list is the reason usually advanced by private companies, that it is a matter of private business and ought not to be given out to the general public. Now, as most hon. members know, I am decidedly in favour of publicity in such matters; I do not think that publicity is dangerous. I can quite well see, however, the difficulties in this particular matter because we are dealing only with our own road. It might very well be that with no basis for comparison the mere publication of certain figures might be mis-

understood or misinterpreted. I can understand the viewpoint which was held by a considerable number of members in committee. I cannot however see why the time should not come when the higher salaries in the Canadian Pacific Railway ought not to be published just as much as those in the Canadian National Railway. After all when a road receives so much from the public as does the Canadian Pacific Railway, when it can go to the railway board and ask that freight rates be maintained in order that it may keep up its dividends, I say that the details of the business of the road should no longer be private. There is no good reason why the larger salaries on the Canadian Pacific Railway should not be published side by side with those of the Canadian National Railways.
Then there is the further sentence:
Your committee strongly condemn the practice which has grown up under which the Canadian National Railways are chargeable with large amounts for payment of the social entertainment and other activities of officials on other than official business.
Again let me say that in that regard I should like to endorse the findings of the committee. It seems to me that the practice described in the sentence I have just read is most reprehensible. We are all aware that practices of that sort are commonly indulged in by other great corporations, and the excuse is often made that under our present competitive system unless our road did that sort of thing it might lose business. I do not know if that argument is sound but I do know it is often advanced as one reason why our road in competition with others should resort to such practices. Be that as it may, since the road is government owned, surely scrutiny cannot be too careful or detailed.
I should like to express my hearty concurrence in the recommendations by the committee. My hope is that we may lop off those things which are inimical to the best interests of the road. If housecleaning has to be done, we will have to do that housecleaning, but we must not endanger the general principle underlying the great public utilities of which we are justly proud.


Right Hon. R. B. BENNETT (Prime Minister) :: The observations of the hon. member for Stanstead (Mr. Hackett), to which the house listened this afternoon, reflect only his own personal views. It is the privilege, I take it, of any hon. member when the report of a committee is presented to make such observations as he may desire to make concerning any particular public matter.

Railways and Shipping Report
In conformity with that practice the hon member for Stanstead has expressed hig opinions. They were stated in terms which represented his own views, and his own views only so far as this government is concerned, with respect to the matters about which he spoke.
I do not purpose to discuss the report or to say more than this, that since I have had the responsibilities of office no matter has given me more concern or pressed more heavily upon me than has the railway situation in Canada. I do think, as I have so frequently said, that it is time hon. members studied the situation in all its ramifications; for we are a people only 10,000,000 in number with railway facilities far beyond our requirements. We have an enterprise owned by the people of Canada who acquired if under circumstances to which I shall not refer this afternoon. In competition with a privately owned road they have endeavoured to maintain that railway system. They have placed money into its operation with great freedom and willingness; they have backed it with a courage and determination which I think at least has satisfied those who had to administer the railroad that nothing any government has done in this country has stood in the way of every reasonable effort being made to advance the fortunes of the railroad When the opportunity comes to discuss the affairs of the railway company I am sorry to find that there is a group which thinks that any criticism constitutes adverse criticism of the ownership of the road. That has not been so. Surely, however, for the same reasons that hon. members criticize expenditures by departments and estimates submitted by ministers, in the very nature of things there should be free criticism with respect to every matter connected with the administration of our own property. If the hon. member for Stanstead expressed his personal views I can only say that he has not expressed the views of the government or those I hold personally. For instance, the board of directors may be all that he says they are. For my part I think they are a reasonable crosssection of the Dominion of Canada, and that in every reasonable way, taking them man for man, they represent the whole of Canada. They are men from every walk of life, men experienced in corporate management, professional men or farmers. If one were to take the trouble to analyze their records he would find that those directors represent in a general way the people of Canada.
Traffic conditions are bad-very bad. Those conditions however are not confined to
our own road but exist as well in respect to other roads. It is unfortunate that the mere discussion of a situation should resolve itself into recriminations between individuals. I think the hon. member for North Waterloo (Mr. Euler) was correct when he said that the report of the committee represents a compromise of conflicting opinions. The fact that it was unanimous was to me a matter of great personal gratification, because I had followed the proceedings of the committeo only in a casual way, and when I saw that a unanimous opinion had been arrived at 1. thought the members of the committee were to be congratulated, and the country was to be congratulated upon the fact that it was possible for the committee to arrive at a unanimous opinion. In fact what has been said to-day has only strengthened my personal views.
I think if the house will take the trouble to analyze what has been done since the present government came into office and the effort it has made to maintain the integrity of the property consistently with the obligations which in the end must be borne by the Canadian people, hon. members will be satisfied that no step has been taken other than for the purpose of advancing its well being and proper management. It does not follow, however, that in so doing, hon. members will agree wrholly with everything that has been done; for certainly there are many hon. members who will join in the criticisms urged in the report with respect to those three steamships on the Pacific coast. The answer is, however, that this parliament agreed to their operation. It is much to be regretted that we have those three vessels losing such tremendous sums of money and serving no useful purpose. My only difficulty has been to understand how it was possible that they should have been constructed. They are there, however, and we have to deal with the situation as it exists.
I fancy the hon. member for North Waterloo realizes that criticism of that nature is sound and constructive. At the same time there is some force in what was said by the hon. member for Stanstead, that it is pathetic to think we must always be too late. All the thinking in the world will not unscramble that situation. It is there, and our business is to try to meet it. I put it to the members of this house fairly that it is rather an intolerable burden, isn't it, when in addition to trying to provide for the financial situation of the country you have to carry a load with respect to the railways, and find yourself saddled from month to month and from day

Railways and Shipping Report
to day with enormous deficits with respect to the operation of something which a committee of the house think never should have had being? That is a reflection upon all of us, upon this parliament and every hon. member who was in it when the arrangements were made, and upon every government which has had to do with it. There is no doubt that thoughtful people are beginning to realize that fact and to ask questions about it. I realize that in the very nature of things you must expect mistakes to be made; 86,000,000 or $7,000,000 is a big mistake and it takes a lot of money, it takes an enormous amount of traffic to pay the interest on it. When you realize that the boats are not earning their operating costs, not enough to pay for the fuel, the oil, the wages of the crew and the upkeep, it becomes a serious matter. If criticism of that kind is made in a committee of this house-as it was-and that committee arrives at a unanimous opinion -as it did-I think the committee is to be commended for the action it has taken.
I did not intend to make such a lengthy statement because I am not going to discuss the merits or the demerits of the many matters referred to this afternoon. It suffices for my purposes that a committee of this house, representing all parties, having considered thoughtfully and carefully-in so far as it is possible in a limited time thoughtfully and carefully to consider an undertaking of such magnitude with activities which extend not only throughout every province but also into several of the states of the American union- having so considered these matters, have arrived at a report which is unanimous, and I hope it will be unanimously adopted by the house. For no change in policy can ever take place in respect to this publicly owned property unless the people of Canada, speaking through this parliament, so determine, and there has been no evidence of that so far as I have seen.
But I should like to remind those who, like the hon. gentleman who has just taken his seat (Mr. Woodsworth), talk strongly about a certain policy with respect to the ownership of property, that they must never forget that the true test which in the end will determine the success or failure of the venture is the efficiency and effectiveness of the management; and unless we can get the same efficiency and effectiveness in the management of our own property that private enterprises command in theirs, we cannot succeed. The hon. member for North Waterloo put that very fairly the other day, it struck me. I think that is true. We must get it in our minds that the stake we are playing for is 
really the success or failure of the great undertaking upon which the Canadian people embarked some years ago, and which succeeding governments have been endeavouring to maintain in a successful manner. If there are differences of viewpoint by successive administrations, I am sure the common sense of the Canadian people will realize that it is not because one party is viewing the undertaking from one angle and another from another; but that the method of approach as to efficiency and economy on the one hand differs from the method of approach as to efficiency and economy on the other hand. That this house must exercise increasing control with respect to expenditures is only axiomatic when you come to contemplate what vast sums are involved, and how they concern every taxpayer in this Dominion. The success of the whole venture rests upon the efficiency of its management; and the efficiency of its management is reflected by the attitude of this parliament, whose members represent the shareholders; for it is an unfortunate fact-I directed the attention of this house to it many years ago-that the only place where the shareholders of this great enterprise can make themselves vocal is in this chamber. That is, we, two hundred and forty-five members, are the shareholders' spokesmen, their proxies and representatives, at the only form of annual meeting that counts so far as this enterprise is concerned. If, seized of that sense of responsibility, we approach the matter from that angle, I think we shall appreciate that the committee did attempt to reconcile divers opinions and opposing views with the purpose of arriving at constructive suggestions and recommendations, and then present a unanimous report. In that sense I think it is an achievement of which the committee can well be proud, and I commend the report to the consideration of every member. But I would not deny to any member on this side or the other the right to express any opinion he feels, 'but I should like it clearly understood that in so doing he represents his own opinion and not the opinion of myself or of any member of this administration.


William Lyon Mackenzie King: Perhaps my
hon. friend from Bow River (Mr. Garland) would permit me to follow the Prime Minister?


Mr. GARLAND (Bow River):: Mr Speaker, I shall be very glad to do so if the house will rise at six o'clock, for I wish to make some extended remarks on the hoped-for work of the Canadian National Railways.

Railways and Shipping Report


William Lyon Mackenzie King: I thank my
hon. friend. I have but a few remarks to make. The Prime Minister has referred to the anxiety he has experienced since coming into office with respect to this great railway problem. I am sure he could not feel that his anxiety on that score was any greater than was my own at the time, nearly ten years ago, when the Liberal administration assumed office and was confronted with the railway problem that existed at that time. There were then three different railroads or systems, each of which was in considerable difficulties, but all of which have since been combined into the one great Canadian National Railway system. We found that the Grand Trunk Railway system, because of its being in a state of bankruptcy, had been taken over as a government railway by the preceding administration. It was under its old management and control. We found the Canadian Northern Railway, then a part of the government railway system, also under separate management. We found the Grand Trunk Pacific Railway, also a part of the government railway system, in the hands of a receiver. The task which confronted the then administration was to bring those three systems-including the old Intercolonial- into one great national system, to find a president who would be a competent executive, and to arrange for a board of directors.
The problem, in a word, was a choice between a monopoly on the one hand or government ownership competing with private ownership on the other. That was the alternative which had to be faced at the outset-whether we should seek to bring about a combination of all the railways in Canada in one great monopoly, and whether that monopoly should be privately owned or government owned. To the government of the day it seemed that the wisest course was to avoid monopoly and to have competition between the privately owned company and the publicly owned company; we believed that as a matter of fact competition would be good for both, that government ownership would have its best trial were it placed in a position of competition with an efficiently run, privately owned system, and that a privately owned system such as the Canadian Pacific Railway would find itself also aided through the force of competition with an efficiently run government owned system.
The decision being to establish of the three * railway systems first mentioned a government owned railway system, the next problem to be considered was whether that system should be run by the government under political influence or control, or whether it should as
far as possible be removed from such influence and control. The decision reached was to remove the system from government control just as far as was consistent with the circumstances mentioned by my right hon. friend, namely that the people of the country themselves were the shareholders of the system. In establishing the government owned system the object of the government was to give government ownership a fair trial. That was the way in which the policy of the government of the day was presented to the country, and we felt that it would not have a fair trial if there were government interference in the management of the road.
Once it had made up its mind as to the policy to be pursued, the government sought to secure as president and executive head of the new system the best executive that it might be possible to find. It took some little time to discover a competent executive head, but I venture to say that the people of Canada to-day will agree that, having searched a great part of the world as we did, had we searched the world over we could not have found anyone who, in the period of years which has since elapsed, would have given more satisfaction than Sir Henry Thornton has given in the management of the affairs of the road. With Sir Henry Thornton we associated a board of directors, and in order that the system might be free from government control the president and board of directors were given to understand that it was their business to run the Canadian National Railways just as Mr. Beatty and his directors ran the Canadian Pacific Railway. That was the ground on which the position was accepted by Sir Henry and it was the declared policy of the government, the purpose being, as I have said, to give government ownership the fairest trial possible, altogether free from political interference.
Now may I say that it was not without some misgivings that the government entrusted to any group the complete management and control of this great system, misgivings as to the expenditures which might be made, and as to the improvements, extensions and the like which might be requested. There was the further difficulty with respect to any program of railway construction and the like, that not only did the board have to determine its own policy but the administration of the day had to be relied upon to get that policy through this parliament. On more than one occasion, as hon. gentlemen will remember, the board did submit to parliament a plan which they believed to be necessary and which they thought would be most

Railways and Shipping Report
effective. There was for instance the branch line program, which we succeeded in passing through this house but which was defeated in another house. Thereby the railway was prevented from carrying out, at the time thought most desirable, some of the improvements and extensions which the management believed would have advanced the System.
The point I wish to make at the moment is that the government gave to the president and board of directors a free hand; we sought to keep them free from any attempt at political control, and I have yet to hear mention of any influence the government of the day sought to bring to bear upon Sir Henry Thornton and his board of directors other than that of restriction with respect to some of the expenditures they wished to make. It may be, as my right hon. friend has said, that some expenditures have been indulged in that could have been prevented. Some things may have gone a little further than might have been the case if this house had been controlling affairs. No matter who might have been in control there would have been room for criticism. The main point is that the railways have had a chance under government ownership, free from political control, and now we have before us an object lesson as to the possibilities of government ownership on a large scale, as contrasted with the possibilities of private ownership.
May I say that with the greater part of what my right hon. friend has said this afternoon in relation to the report now before the house I am in entire agreement. Personally I am pleased that the committee have found it possible to make a unanimous report; personally I do not regret any criticism which they may have made of what seemed to them extravagance, or of what they have felt to be necessary in the way of cutting down certain expenditures. I know that personally so far as the merchant marine was concerned, I often felt it was very questionable whether those ships should be continued in service year after year at a loss. But it was pointed out to the administration that the Canadian Pacific Railway had vessels afloat which connected its land transportation system with other countries by water routes, and that for the Canadian National Railways to be denied a similar right would be to restrict and handicap that line to the benefit of its great competitor. Arguments of the kind prevailed. If the committee have come to
(Mr. Mackenzie King.]
the conclusion, after the experiment has been tried and it has been made apparent that in these particulars the cost is too great, that it will be the part of wisdom to discontinue these services, personally I am inclined to feel that they have given the matter very careful and full consideration, and that their report in that regard should be adopted. As the Prime Minister has said, the committee have gone into the matter in a more detailed manner than is possible in this house at this time. Studying the report as I have, in the light of such knowledge as I have gained in watching the developments of the last ten years, I am inclined to feel that the note of caution which the committee have sounded to the Canadian National Railways, in the matter of limiting its outlays, is very wise. In saying this, I should also say that had there been any attempt on the part of the administration of that day to interfere with the views of the president, and board of directors as to what was most in the interests of the road, the criticism at the time, or today would not have been directed against the Canadian National Railways, but would have been levelled very directly at the late government for having interfered with a government owned system.


Edward Joseph Garland: Mr. Speaker, as it will not be possible for me to conclude my remarks before six o'clock I would ask you to call it six o'clock now.


Some hon. MEMBERS:: Go ahead.


Edward Joseph Garland: I regret that hon. gentlemen opposite do not see fit to grant me a courtesy which on many occasions we have granted hon. gentlemen opposite. If they insist on my proceeding at this untimely hour of course I must bow to their decision in the matter.


William Lyon Mackenzie King: I suggest that my hon. friend was courteous enough to allow me to follow the Prime Minister, and probably it was in his mind that the house would grant him the courtesy of beginning his remarks after recess if that were necessary.


Richard Bedford Bennett: It is not usual to call it
six o'clock at 5.45, but if it is the will of the . house there is no reason why it should not be done.
At six o'clock the house took recess.

Loan and Finance Corporation
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The house resumed from Friday, July 17, the debate on the motion of Mr. Lawson for the consideration of Bill No. 118, to incorporate Service Loan and Finance Corporation.
Mr. J. E. LAWSON (West York):: There seem to have been more misstatements with respect to this bill than there have been with regard to any other bill that has been before this house since I have been here.


Mr. BROWN:: Mr. Speaker, is the hon.
member closing the debate?


Pierre Édouard Blondin: I take it he is. If any other hon. members wish to speak they should do so now.


Mr. MICHAEL LUCHKOVICH (Vegre-ville):: I am very sorry that the hon. member for West York (Mr. Lawson) had not the opportunity of explaining this bill, which I think needs a good deal of explaining. Possibly after he had explained the bill I might have changed my opinion with respect to the way I would vote on it should the question come up for a vote to-day. An hon. member, in expressing his opinion on this bill which is now before the house, spoke to me privately of the odious odour cast off by a vicious rodent which he thought was hidden somewhere among its objectionable sections. I asked him what he thought of the principle of the bill and his answer was, " Principle? There is no principle in this bill; but I smell a rat and I think it should be destroyed."
Now, Mr. Speaker, I do not know what rats smell like, nor should I care to smell one even if I did suddenly discover its presence in this bill. So far as I am concerned, rats, A1 Capone and exorbitant money lenders all smell alike. There is, however, one service which the rat could perform by virtue of its presence in this bill: it could chew the bill up holus bolus, preamble, principle, sections and all, and then make a hasty retreat from this house down Parliament hill, ending its own hideous life as well as the life of the bill at the bottom of the Ottawa river. I think that by this time I have made myself quite plain where I stand on the bill.
Now I have said that I am not aware of the presence of any rat, nor have my nostrils communicated to my mind any inkling of the nature of the beast. But I do see in my mind's eye drops of blood trickling from a
pound of flesh held aloft in the hands of those people who would profit by this bill should hon. members present to-day allow it to pass this house. I do not smell a rat, but I do see clots of blood and pieces of flesh smeared and dangling everywhere, the nauseous odour of which even now emanates so strongly from the bill that has been sponsored by the hon. member for West York.
The bill, on the face of it, looks innocent enough; but it is said' that the devil is not so bad to look upon if he has a definite place to go and is dressed up in his holiday clothes. The sponsor of this bill would have us believe that the trouble with those who oppose it is that they do not understand it. That is exactly what the woman said when she could not get along with her supposedly worse half -"my husband does not understand me." The hon. member for West York would also have us believe that the bill calls for a paltry seven per cent. That looks lean enough at first sight, but there is more than seven per cent in the bill. To tell the truth, I do not like the bill's hungry look. It looks too ominous to me. It is not so much what this bill says as what it leaves unsaid. The bill does not say, for instance, that a possible seventeen per cent might be charged, but we have the word of the superintendent of insurance as to that potentiality.
May I for a moment digress to ask who the sponsor of the bill may be. I am informed that he is one of nature's noblemen from West York. Look at his kind and genial face, the intelligent features, the broad and noble brow, the light and graceful figure. Can it be that the hon. member who sits over yonder, who has been destined to sit with the mighty, would lend the powers of his intellect to a scrap of paper that is not worth his fettle and that has neither truth nor poetry m it? Is it possible, Mr. Speaker, that the hon. member for West York does not realize the real import of the bill?
I am still very sorry that the hon. member had no opportunity to give us any further explanation that he might have with respect to the sections of this bill. It is therefore with reluctance in my mind and with alacrity in my heart that I am forced to admit that another promising young member of this house has gone astray. If the hon. member for West York has not yet seen the error of his ways, I would beseech him to repent before it is too late; and if he has any tears to shed I hope he prepares to shed them now. For what the hon. member for West York is doing by sponsoring this bill is virtually putting himself in the place of the rest of

Loan and Finance Corporation
the would-ibe Shyloeks behind it who are seeking to obtain the sanction and authority of law, and who, having obtained it must now needs whet their knives to cut the forfeiture from the inevitable bankrupts that would be Tendered thereby.
I invite hon. members again to turn their gaze to yonder end of the chamber, in the direction of yonder sponsor of the bill, and try to conjure in their minds a picture of said member whetting his knife on the sole of his shoe and testing its sharpness with one of his long scraggly hairs. Like myself I think you -would find it very hard to visualize the dapper young man from West York in any other shape or form than can be seen right now with the naked eye. However, wittingly or unwittingly his support of this bill clothes him with a character which he does not and should not possess. This bill is like the Irishman, it does not know when it is licked. It has been beaten to death and thrown out of the select standing committee on banking and commerce and now it is sneaking back into this chamber virtually asking hon. members to subject it to another annihilation. I wonder whether this bill has as many lives as a cat? If I knew that it had more I would be constrained to speak a little bit longer than I originally intended. It has been killed already but thanks to the serum injected into it by its sponsor, it has come back to life again. It is like the bad penny, always turning up.
It is like the notorious gentleman across the line, A1 Capone, full of scars and other bad features, seeking the protection of law in order to carry on his nefarious work. A1 Capone got rid of his enemies by mowing them down with machine guns. By means of powder, lead and gim, Capone rid himself of One-Eyed Ike, the killer, Snaky Joe the blackmailer and Bugs Moran the would-be bootlegger king. If I have not named the gentlemen correctly I hope some hon. member will put me right because I am not an authority on these matters. However, suffice it to say, that they were done away with because they stood in the way of Capone's ascension to power as chief cook and bottle *washer in his own neck of the woods. Likewise Bill No. 118 does not intend to tolerate any rivals because in paragraph (b) of subsection 1 of section 5 we read the following:
The company may throughout Canada-[DOT]
(b) notwithstanding anything contained in the Interest Act, or in the Money Lenders Act, or in paragraph (c) of section sixty-three of the Loan Companies Act-
(i)	lend money secured by assignment of choses-in-action. chattel mortgages or such other

evidence of indebtedness as the company may require, and may charge interest thereon at the rate of not more than seven per centum per annum, and may on all loans deduct the interest in advance and provide for repayments in weekly, monthly or other uniform repayments: Provided that the borrower shall have the right to repay the loan at any time before the due date, and, on such repayment being made, to receive a refund of such portion of the interest paid in advance as has not been earned, except a sum equal to the interest for three months,
(ii) charge, in addition to interest as aforesaid, for all expenses which have been necessarily and in good faith incurred by the company in making or renewing a loan authorized by the next preceding subparagraph (i), including all expenses for inquiry and investigation into the character and circumstances of the borrower, his endorsers, co-makers or sureties, for taxes, correspondence and professional advice, and for all necessary documents and papers, two per centum upon the principal sum loaned,
This bill would first get rid of its enemies. Enemy No. 1 is the Interest Act; enemy No.
2	is the Money Lenders Act, and enemy No.
3	is the Loan Companies Act. In justice to this bill it must be said that it does not murder these acts, it merely ignores them contemptuously. A1 Capone puts his enemies on the spot and then snuffs them out forever more; this bill just takes them off the spot and renders them impotent. It adds insult to injury by saying to the aforementioned acts: You're only a trio of palookas, deadbeats and has-beens who do not mean a thing in my life. To all this the hon. member for West York chants "Amen." After taking it3 enemies, as it were, for a ride, the bill then goes on to state how it is going to hold up the public. It starts out innocently enough with the statement that all that will be asked is a measly seven per cent, but as we go on we see the said sum swelling up like the pumped fiat tire of a tourist's bus. This bill has contracted another old Capone custom, that of collecting toll. It has contracted the disease of the gimmes; it has "gimme this," "gimme that" and "gimme the other thing."


Mr. FACTOR:: I rise to a point of order. I submit that the hon. member has no right to compare legislation sponsored by another hon. member to the methods used by A1 Capone.


Pierre Édouard Blondin: The house has no information as to what A1 Capone is.


Michael Luchkovich: I am merely trying to convey to the house the nefarious character of the legislation we are asked to pass. The veason I have compared it to A1 Capone is

Loan and Finance Corporation
because he is the best parallel of which I know. I have just as little use for A1 Capone as has the hon. gentleman who just interrupted me. 1 have said that this bill has contracted the disease of the gimmes. In other words it would do exactly what A! Capone is doing in Chicago. The charges permitted by this bill seem to be unlimited. I might point out that the company behind this bill is operating already under a provincial charter but it wants to extend its tentacles to the rest of Canada. That is just another old Capone custom; he, not being satisfied with his native haunts of Cicero, must extend his operations to the other wards of Chicago. The seven per cent mentioned in this bill is too much like the old ditty of the spider and the fly to be genuine. The company, being the spider, virtually says to the people, who are flies, what is exemplified by the following verse:
Will you walk into my parlour Said the spider to the fly,
'Tis the prettiest little parlour That ever you did spy.
My advice to the people of Canada and to hon. members of this house is:
But if the fly is wise He never would go in;
He would know very well There was nothing there for him.
That just about expresses my opinion with respect to the bill that is now before the house. Another hon. member on Friday last said that this company would lend only to endorsers and that the main security on which it would lend money was simply that of two co-signers. But how about section 5 of the bill which reads:
The company may throughout Canada:-
(a) buy, sell, deal in and lend money on the security of conditional sales agreements, lien notes, hire purchase agreements, chattel mortgages, trade paper, bills of lading, warehouse receipts, bills of exchange and choses-in-action; and may receive and accept from the makers, vendors or transferors thereof guarantees or other security for the performance and payment thereof and may enforce such guarantees and realize on such security;
Does that section which I have just read justify the supposed innocence which the hon. member for West York, the hon. member for Souris (Mr. Willis), and some other hon. members who spoke on Friday night would attribute to this bill? Not if the inevitable word means anything.
This bill has already been killed in the banking and commerce committee. It now comes stalking back into this chamber like a ghost to haunt hon. members and to call forth nightmares in what otherwise would have been their more or less peaceful sleep.
I repeat, I do not like this bill's lean and hungry look. I like neither its principle nor its provisions. Furthermore, I do not think this is an opportune time to pass a bill of this kind. When the majority of the people of Canada are clamouring for cheaper credit, for the nationalization of our banks, for an equalization of agriculture with other industries, for the suspension of the redemption of Dominion notes in gold, for the depreciation of our currency, and consequently for increased purchasing power, it seems to me that it is the height of audacity to ask parliament at this time to pass legislation the only result of which can be to fatten the pocketbooks of a small group of shareholders at the expense of a duped and unsuspecting public. It is said that these three acts, the Interest Act, the Moneylenders Act, and the Loan Companies Act, are somewhat in the nature of a financial bible. We will call the Interest Act the Bible, the Money Lenders Act the Koran, and the Loan Companies Act the Talmud. Surely nobody but the devil would like to get rid of three such books as those, and I think it is very devilish for this act to try to get rid of such noble acts as we have passed in parliament in times gone by. At a time like this, the house should not countenance a bill of this nature. It is not so long ago that one of the ablest men in the House of Commons, a very brilliant minister on the other side of the house, had a great deal to say about credit. I quoted from a report in one of the newspapers:
In the meantime Hon. Robert Weir, federal minister of agriculture, has been engaging with the banks in a debate over credits to farmers who have still substantial equities in their farms, own stock and implements and buildings, but who have because of low prices run out of ready cash for winter supplies and spring operations. The strength of Mr. Weir's position is that he was recently out west and while there was given authenticated cases of refusal by banks to loan money even where the security was of a high type.
The banks have answered him by challenging him to produce the evidence of what he alleged, but that does not embarrass Mr. Weir, because he has the goods in his office here.
I wish he would show the goods to the hon. member for West York:
He is taking his time in answering the banks because he has been invited to speak in Montreal to the Canadian Club next Monday on the western situation, and to the business men of that city he will quote verse and chapter to prove his assertions.
I hope he will quote verse and chapter also to the hon. member for West York:
Mr. Weir's object is not that of developing sectional feeling or of castigating the banks, but of taking away a weapon which he feels may otherwise become a powerful one in the

Loan and Finance Corporation
hands of professional western agitators, w'ho are making hay while the sun of prosperity is in temporary eclipse. The federal minister is determined to see that the western farmer who is reasonably entitled to help gets it, and has warned that if tile banks will not provide such assistance, someone else will.
Does that, jibe with what the hon. member for West York would have us believe to-day in respect of the bill now under consideration? I do not think it does. I think that he could take a good lead from one of the most billiant ministers on the other side of the house.
I wish to quote from another newspaper about what happened to a fanner out west, because I think it is relevant to the question under consideration, and I wonder how this bill would help a farmer such as the one I am going to read about. I believe that hon. members are already acquainted with this story, but it is so powerful in its influence upon the argument I am advancing that I cannot refrain from quoting it again:
The story concerns a farmer in the Vegre-ville district of northern Alberta, who was required to make immediate delivery of certain grain which had been assigned to the bank as security for a past-due note. Obedient to the banker's instructions, the farmer forthwith hauled the first load to the elevator, but it was pronounced of low grade and rejected on account of its moisture condition.
The farmer was in a quandary both as to what he should do about his rejected grain and his past-due note, when suddenly an inspiration struck him. He had assigned the grain to the bank. The bank had demanded settlement of his note and, since the elevator had refused to accept the grain for storage, the logioal thing to do was to deliver it to Hie bank.
Accordingly he drove over to the bank, backed up to the rear door, and before police arrived he had succeeded in shovelling the bulk of the grain in on the bank floor. He still has the past-due note and is $25 poorer, this being tile penalty exacted for illegal tender.
There is a sequel, however, even to this. Having reloaded the grain, Mr. Farmer was still at a loss as to how he should dispose of it. This problem he solved by dumping it by the roadside as he proceeded back to his farm. Thus the episode would have closed, but for the fact that a neighbour's horse spied the wheat, ate it. swelled up and died. Now the liero of the story faces a suit for damages.
I wonder to what extent a farmer in that situation would be benefited by the bill now before us? It is hard enough to-day for any farmer in the west, to get a loan from a mortgage company or bank, let alone a company like this which is going to charge, not 7, but 17 per cent, according to the evidence of the superintendent of insurance before the banking and commerce committee. I think hon. members would like also to know the view of the farmers with respect to the matter

of credit. Let me read from a resolution passed in the city of Calgary on July 23, 1931:
That we as delegates assembled recognizing the inadequacy of the existent credit system in meeting present economic stringency and believing that adequate distribution of credit is absolutely essential to the carrying on of the agricultural industry recommends:
(1)	That this organization continue to advocate at all times the complete nationalization of our credit system.
(2)	That as an immediate measure the federal government take steps to organize a federal reserve bank of issue and discount which bank shall be entirely under government control and shall provide credit at a reasonable rate of interest for all necessary productive and commercial enterprises.
We are convinced that the above proposal is imperative in order to get away from the present intolerable position in which the credit requirements of the public in general are sacrificed to the professed necessity of the charter banks to protect to the utmost their savings deposits.
(3)	We specifically recommend that the directors of the wheat pool should thoroughly canvass the possibility of their financing the marketing of their grain through utilization and extension of our present finance act.
A further resolution was passed relevant to the matter of interest:
Interest: In view of the present prices of farm products this convention recognizes that the accumulation of interest at the rates charged by many credit organizations constitute an intolerable burden and will greatly delay the return of agriculture to normal conditions and urges
(1)	That the federal government by appropriate legislation definitely fix a maximum legal rate of interest which may be collected in any proceedings with adequate penalties for non-compliance.
(2)	That as soon after this convention as possible the executive confer with the various organizations of creditor interests with a view to effecting voluntary reductions or remission of interest rates on overdue accounts.
(3)	That in the event of the failure of these negotiations the government concerned be urged to pass such measures as may be necessary to meet this situation by way of compulsory adjustment.
(4)	That this convention protest against the prevailing practice of the charter bank charging higher rate of interest for doing business in western Canada than in eastern Canada, and that every effort be taken by the organization both by conference with the banks and by recommendations to the government to remove this inequality.
Notwithstanding this resolution, if the bill now before us were allowed to pass the company would be in a position to extend its tentacles out of the poorer sections of Alberta.


Some hon. MEMBERS:: Carried.


Michael Luchkovich: Not yet. This bill
is a hold-up bill. It starts out in true A1 Capone fashion by trying to shelve three

Loan and Finance Corporation
legislative measures which might stand in its way, and then there is set forth a well laid plan to fleece the Canadian public. I do not think the house would be well advised to emulate any of the methods of A1 Capone. There is one ruse however that we might be justified in adopting, and that would forever react to the credit of this house, namely to put Bill No. 118 on the spot and kill it deader than a door nail.
I move Mr. Speaker, seconded by the hon. member for Wetaskiwin (Mr. Irvine):
That the motion be amended by deleting all the words after the word "be" and substituting the following "referred to the committee of the whole."


James Earl Lawson: Mr. Speaker, in spite of the fact that apparently the hon. member for Yegreville (Mr. Luchko-vich) intended to compliment me upon my intellectual powers I regret that I am not sufficiently nimble witted to follow through the maze of his mixed metaphors the ideas which in the main he was endeavouring to express in connection with the bill.
I shall not ask the house to consider the bill either from the standpoint of my intellect or my personal appearance but rather on the merits of the bill itself. I had endeavoured to avoid taking up the time of the house in a discussion of the bill by moving that it be recommitted to the select standing committee on banking and commerce where I think its provisions might have been more properly and readily discussed than in the house. But as my hon. friends either by the use of vituperous language or strong statements and allegations have seen fit to cause a discussion in the house on the bill I crave the indulgence of hon. members for a few moments in order that I may lay before them what I conceive to be the intention and purposes of the proposed legislation.
In so doing may I at the outset ask hon. members to bear in mind that the bill now before them is in terms almost identical with those of two or three bills of incorporation which were previously passed by this parliament. In one case legislation was passed in the year 1928 and an amendment passed thereto in the following year to increase the rate of interest that particular company was entitled to charge.


Henry Elvins Spencer: Shame.


James Earl Lawson: I cannot hear my hon.
friend. Before proceeding to deal with the actual terms of the bill, in view of the gratuitously insulting remark offered me by the hon. member for Winnipeg North Centre (Mr. Woodsworth) I feel constrained to advise hon.
members of this house that I have not any interest of any nature or kind, professional or financial, in this bill. I sponsored the bill merely at the request of a fellow practitioner, the Ottawa agent of the solicitor for this particular company. That, Mr. Speaker, is the only connection I have with the bill.
To illustrate to this house the . extent to which some hon. gentlemen have gone in opposing the bill, I would ask hon. members to recall the argument made the other night by the hon. member for Comox-Alberni (Mr. Neill). He dilated at great length upon section 8 and endeavoured to make it appear that because the section provided that certain sections of the Loan Companies Act were not applicable to this company, therefore this company was being given some special pivilege or special concession. Nothing could be more misleading. Do not misunderstand me. I do not allege that the hon. gentleman deliberately misled the house; I think rather his statement was made in ignorance of the Loan Companies Act, because every single section of that act which by section 8 of this bill is not made applicable to this particular company confers some special privileges upon companies to whom that act applies. And so the effect of section 8 is not to amplify the powers of this particular company, but to take from it some of the powers which may be exercised by any loan company.


Mr. NEILL:: Does that apply to the other acts that I also mentioned, a large number of the sections of which are eliminated?


James Earl Lawson: I will deal with them in a moment; I am taking one part of his speech at a time. Then my hon. friend from Battle River (Mr. Spencer) had a special theme for the speech which he delivered in opposition to the bill. I ask hon. members to recall the number of times that that hon. gentleman has stood in his place and related to those of us who were within hearing the terrrible atrocities that were being perpetrated by the banks upon the farmers of western Canada. How well do we recollect his telling us that in spite of the ample security which his constituents had to offer, the banks would not make them loans. How often have I lent a sympathetic ear to him and to his colleagues in their appeal for the establishment of an intermediate credit institution because the banks were utterly failing to meet the credit situation in this country, particularly in the western provinces. In view of these statements made by the hon. member, I would ask the house to listen to

Loan and Finance Corporation
this gem which fell from his lips the other night as the theme of his speech, when he said:
If anyone wanting to borrow money has any security at all to offer and is a good risk, our present banking facilities are available.
Then my hon. friend from Wetaskiwin (Mr. Irvine) appeared to work himself into a state of frenzy over the fact that although this bill provides that notwithstanding anything contained in the Interest Act, or in the Money Lenders Act, or in paragraph (c) of the. Loan Companies Act, and that in certain hypothetical circumstances which were stated to the superintendent of insurance, he answered to the effect that in such a hypothetical case, but one not likely to occur in actual practice, it would be possible for the total charges for interest, services, collections, and so on, in the event of the debtor defaulting, to amount to the equivalent of 17 per cent interest. Let me ask my hon. friend if he has read the provisions of the Interest Act? I would call his attention to section 2:
Except as otherwise provided by this or by any other act of the parliament of Canada, any person may stipulate for, allow and exact on any contract .or agreement whatsoever any rate of interest or of discount which is agreed upon.
That is one of the provisions which would be beneficial to this company if it had as its objective the exacting of usurious rates as alleged by my hon. friend. But that power is taken away from the company by this bill.
Now, Mr. Speaker, let me be very frank and say to the house that this bill has as its objects of incorporation: (1) to permit the acquisition by this dominion company, what is in effect an amalgamation, of two provincial corporations now carrying on business in the province of Ontario; (2) to overcome the provision of the Money Lenders Act which stipulates that on loans of less than $500 a certain limitation is put upon the charges wihch may be imposed for interest, and so on. I make that statement very frankly. This bill proposes that in substitution for that provision there shall be imposed upon this company the several limitations which are set out in the bill, including government inspection of its operations by the superintendent of insurance. May I ask hon. members to bear in mind that, subject to the provision of the Money Lenders Act which I have outlined, individuals may on loans in excess of S500 charge any rate of interest that they may desire provided it is stipulated in writing; but by this bill this company is restrained from exercising that privilege. By the way, that provision in the Interest Act has no relation to real estate mortgages.

Again I come back to another point raised by my hon. friend from Comox-Alberni. He seemed to think that it was a terribly iniquitous thing that the rate of interest prescribed by this bill should be allowed by way of discount on the amount loaned. May I point out to him that for years and years and years money has been borrowed and loaned on second mortgages, and many of us- including myself-have been glad to borrow money on second mortgage and accept from 20 to 25 per cent less than the face value of the mortgage, repaying the principal by quarterly instalments spread over a period of five years, and paying interest, not upon the actual amount advanced but upon the amount specified in the mortgage deed. There has not been any great howl or any loud complaint, so far as I have heard, from those who have raised money by way of second mortgage, or from those builders who discount their second mortgages in order to get capital with which to continue their operations.
In conclusion, Mr. Speaker, may I point out that this bill is in almost the exact terms of bills incorporating other companies. If my hon. friends feel that there are not sufficient safeguards in the bill to protect the interests of the public who may wish to deal with this company surely the proper course is to raise these objections before the banking and commerce committee; let us amend the bill so that it will protect the public, if protection is required, and do not let us capriciously refuse this company incorporation.
My hon. friends have made a great deal of the fact that before the banking and commerce committee the superintendent of insurance said, in reply to a hypothetical question, that it might be possible for this company to collect an amount which would be equivalent to 16 per cent or 17 per cent interest. I think in fairness to this house those hon. gentlemen should have advised the house that the superintendent of insurance approved of this bill; that the superintendent of insurance advised the committee that two similar companies were already operating, that his inspection of one company disclosed that it had on loan some $600,000 but up to date had not paid one cent of profit to the shareholders, because none was available; that the superintendent of insurance said that from his inspection he found everything in order and that the department had not received a single complaint from any person.
I am quite free to confess that there may be those holding the view that it is not in the public interest to encourage the borrowing of

Privilege-Mr. Neill
money by those who have not such securities to offer as would be accepted by banks or loan companies, but it must be remembered that, under the Loan Companies Act, loan companies can loan only up to sixty per cent of the value of the security offered. To those hon. members who hold this view I do not attempt to advance an argument in favour of this bill, except to say this: If other similar companies are in operation; if they have been successful in meeting a public need; if there has not been public complaint, why discriminate against this particular bill?


Mr. H. A. MULLINS (Marquette):: As a member of the banking and commerce committee I am somewhat surprised to see this bill coming before the house. I thought it was killed for all time; if it is not it ought to be. We on the western prairies do not want a bill of this kind; we are looking for cheaper money. This bill bears every resemblance to a sign I have seen hanging in front of some offices in the larger cities, consisting of three brass (balls. The farmers of western Canada do not want to pay 17 per cent; they do not want to have chattel mortgages or other indebtedness, and I cannot understand the hon. member sponsoring a bill of this kind. I wonder why the hon. member did not state what would be the fee for drawing the documents in connection with the loan of money.


James Earl Lawson: I can give my hon. friend that information now. The fee is limited to $10 by the bill.


Henry Alfred Mullins: I do not know what the limit would be going in, but I remember that in the old days it was plenty coming out. I remember in the pioneer days paying 20 per cent for the loan of money from the same sort of outfit, and we struggled and worked to get out of the clutches of those people We will not have them back on the prairies if I have any say as a member of parliament.
I am not going to take up very much of the time of the house. I would not like to couple up this bill with A1 Capone; I do not know anything about him, but I will say I am absolutely opposed to this legislation in any shape or form. On the prairies we want a lower rate of interest, and we do not want any organization established by this side of the house which will extract any such interest rates from the people of Canada. We want money at the lowest rate possible from banks and mortgage companies.


Mr. WILLIAM IRVINE (Wetaskiwin):: I was very glad indeed to hear the statement of the hon. member for West York (Mr. Lawson) to-night, although I am sure it was not necessary for him to explain to the house that he had no personal interest in the bill. I am quite sure we all know that he is only performing his duty as a member of this house in bringing forward this measure for consideration; there is no question of anything else in my mind.
I would submit, however, that he has failed to give a really sound reason why this bill should be recommitted. In the select standing committee very careful consideration was given this measure; we had all the provisions explained in detail, and my hon. friend did not throw any additional light on the bill by his remarks to-night. He told us we should send this bill back to the committee, but he did not say on what grounds that should be done. Does he mean to infer that the consideration given this bill previously was not careful consideration? Does he mean to suggest that the committee was remiss in its duty, that it did not go into all the details, that it did not understand the principle involved in the bill? Or does he mean to suggest that if he had been present he could have thrown more light on the matter and presented the bill in better form and in a more eloquent way? He did not even say that; if he had made that argument at least it would have been one reason why we should recommit the bill, but there is no suggestion of any amendment to the bill; there is no charge that we failed to consider it adequately; there is no argument offered why it should go back. We are only told that my hon. friend would like it to go back. I should very much like to please him; he is very genial and is an excellent colleague in this house, but I should like some reason for an action of this kind. While I appreciate the splendid presentation he made to-night; while I appreciate his erudition and knowledge of the laws which are involved, I was disappointed in that he failed to give us a real reason why we should recommit the bill.


Pierre Édouard Blondin: The hour for the consideration of private and public bills having expired, the house wall revert to consideration of the motion for the adoption of the report of the select standing committee on railways and shipping owned, operated and controlled by the government.



PRIVILEGE-MR. NEILL

Alan Webster Neill: I
rise to a question of privilege before we proceed with the discussion; I think a matter of privilege is always in order. Yesterday
Privilege-Mr. Neill

afternoon I made a statement in this house which was later contradicted by the right hon. Prime Minister (Mr. Bennett). I have in my hand proof that I was right, and I wish to clear up the matter now. I will require to read only a couple of sentences. At page 3947 of Hansard, I said:
I am rather surprised that the Prime Minister has announced what really is a very important departure of policy at this late stage, and in a rather casual way, connected with a bill that does not immediately refer to that matter.
I was referring, of course, to the suggestion of a contributory system of old age pensions. At page 3949, the Prime Minister said:
The hon. member for Comox-Alberni (Mr. Neill), for some reason best known to himself, said that in my remarks to-day I had proposed a policy. I did not do that, nor had I any intention of so doing. I said to him and to the committee that when the Old Age Pensions Act was being considered we had discussed the luestion of a contributory system.
Later on he said:
I said this without in any sense indicating that it could be treated as a policy.
At that very moment the Prime Minister held in his hand Bill 136, to amend the Old Age Pensions Act, the preamble of which contains the following language:
And whereas it is desirable that a system of old age pensions should be established on a contributory basis as a national undertaking-
If that is not a definite and new policy I do not know what it is.


Richard Bedford Bennett: Preambles to bills are
not policies; surely the hon. member knows that. This is not a matter of privilege at all.



RAILWAYS AND SHIPPING

[Stage Direction]
The house resumed consideration of the motion of Mr. Chaplin for concurrence in the third and final report of the select standing committee on railways and shipping, owned, operated and controlled by the government.
Edward Joseph Garland: I
feel I cannot allow this opportunity to pass without once more making a plea to the now quite genial Minister of Railways (Mr. Manion) and the often genial Prime Minister (Mr. Bennett) for the construction of the Peace River outlet at the earliest possible moment. It may not be amiss at this stage briefly to review the history of this proposal.
It is some seventeen years since the agitation began for a Peace River outlet. Nine years ago in this house, and again in 1923, the hon. member for Peace River (Mr. Kennedy) moved resolutions asking for the con-

struction of the outlet. The persistent efforts of the settlers in that territory were apparently without avail. In both years, 1922 and 1923, the pioneers of that country sent down to Ottawa at their own expense delegations to interview the then government. Nothing was done. As a result of the agitation by my hon. friend from Peace River the house in
1922 voted the sum of $50,000 for a reconnaissance survey. This sum of money was, of course, wholly inadequate to undertake any comprehensive survey of the passes out of the Peace River district to Vancouver, and in
1923	it was found necessary to vote a further
sum of $75,000. With this vote a fairly complete survey was made of a route between Aggie, on the Edmonton Dunvegan line, about 200 miles northwest of Edmonton, and Obed, a point 200 miles west of Edmonton. Following this, and early in 1924, a meeting was held at the office of the then Minister of Railways, the Hon. George P. Graham, to discuss the whole question. There were present at that meeting the following gentlemen:	Sir Henry Thornton, Mr. E.
W. Beatty, president of the Canadian Pacific Railway, the Hon. Herbert Greenfield, then premier of Alberta, the Hon. Vernon Smith, Minister of Railways and Telephones in the Alberta government, Mr. W. F. Maclean, M.P., Conservative member for Toronto, Mr. D. M. Kennedy, M.P., and the Hon. John Oliver, premier of British Columbia. As a result of that meeting it was agreed that the two railways, the Canadian National and the Canadian Pacific, should get together and undertake an examination into the available routes out of the Peace. This was done, and the report made to the Minister of Railways was tabled in the house in 1926. This report, an important one at that stage, was signed by five engineers, two of them representing the Canadian National Railways and three representing the Canadan Pacific. The report recommended the Obed route as the best, after an examination of the Peace pass, the Pine pass, and the Monkman pass routes. In the year 1924 the Prime Minister, the present leader of the opposition (Mr. Mackenzie King), made a tour of western Canada.


Robert James Manion: Where was that meeting held?


Edward Joseph Garland: In the office of the Minister of Railways. In 1924 the then Prime Minister made a tour of western Canada, and speaking in the Presbyterian church in Edmonton-an estimable place in which to make definite promises-he pledged himself in

Railways and Shipping Report
such a decided way that headlines appeared in the following day's paper like these:
King pledges self to the Peace River cause. Premier promises outlet to Pacific just as soon as humanly possible. Railway will be built, declares Prime Minister at a mass meeting here. Government has but minority in Commons; says times are now difficult and everybody must have a little patience, but Liberal party is not falling down on any of its pledges.
I do not wish unnecessarily to remind lion, gentlemen of promises they have made, but I want to place before the house the fact that both political parties in this country are definitely and irrevocably pledged to the construction of the Peace River outlet. That is my sole object in referring to this promise. I quote from the speech made by the then Prime Minister:
There is to the north of this city a great tract of land that is crying out for development. The Peace River country is amongst the richest in Canada

That statement has been more than borne out by the experience of the years that have passed.
-but before the proper development of that country can take place an outlet to the Pacific coast is an absolute necessity. I pledge myself-
That reminds me of the manner in which the pledges of the present Prime Minister were made.
I pledge myself that as soon as it is humanly possible the great Peace River country will be given that measure of railway relief that will bring to the pioneers of that country the outlet they have been so long denied, and will open up the country for prospective settlers. I must, however, sound the same note to you here as I did to the citizens of Saskatoon. The times that we are passing through are very difficult, and I would ask you to have a little patience, and in as short a time as possible a railway outlet will be provided for Peace River and northern Alberta districts that will open up an era of prosperity for that province which will not be equalled by any other province in Canada.
At this stage I submit this thought, which I will develop later, that the time to undertake great public projects of this kind is not in a period of prosperity but in a time of adversity. At that time we were passing through one of those minor depressions, and the Prime Minister of the day used that depression as an excuse for avoiding the work. The country steadily emerged from that period of depression into what was described by the Liberal party then, as it has been described since, as the greatest era of prosperity that Canada had ever seen. The Minister of Finance of the late government was wont to talk in this house fervently of the buoyant
revenues of the country, of our expanding foreign trade, of the tremendous development of transportation, of the increased production of goods in Canada. Yet no Peace River outlet was constructed. It could not be constructed in bad times, it was said, and it was not constructed in a prosperous period.
Now, that I may link up the other part of the project with this, may I submit to the house a statement made by the Right Hon. Arthur Meighen in parliament, following that declaration of the present leader of the opposition. On October 1, Mr. Meighen, speaking also in Edmonton, said:
I have always urged that the north country should have railway relief. I cannot be accused of making futile promises such as the Hon. Mackenzie King promised in the speech from the throne at the opening of the last session of parliament when he stated that he was going to give railway relief to the north country, and nothing has been done.
No; but if Mr. Meighen and his party were elected it was to be one of their first undertakings. The report of the five engineers to which I referred a moment ago was tabled in the house in 1926. As hon. members will recollect, 1926 was the year of that hectic and stormy session when no one knew what the government to-morrow was likely to be. It was the hectic session of the Customs scandal, during which two governments went down to defeat. During that session a proposal was made in the house, though never acted upon, that instead of constructing an outlet, a rate ought to be struck on the basis of mileage- the mileage of a direct outlet instead of the actual mileage by Edmonton. Nothing, however, was done in this connection. In the following session of 1927, the hon. member for Peace River moved the following motion:
That, in the opinion of this house, the time has arrived for the commencement forthwith and the completion in the near future of a direct railway outlet from the Peace River country to the Pacific coast.
That motion, which was in keeping with the definite pledges made by both the Liberal and Conservative parties of that day, was resisted in this house. Hon. Mr. Dunning, then Minister of Railways and Canals, objected to it and it was referred to the committee on railways and canals, along with the report of the five engineers. During the investigation held before that committee it was found on examination of the report that the Obed route was the only route of the four routes possible of which a complete survey had been undertaken and that the reports in connection with the Peace and Monkman passes



Railways and Shipping Report
were mere guesswork. The committee then brought in what amounted to an innocuous recommendation to the effect that a continuous study of the development of the Peace River district and the outlets should be carried on. To the motion for concurrence in that report the hon. member for Peace River moved an amendment calling for an immediate and complete survey of those passes which had not yet been surveyed, namely, the Peace, the Monkman and the Pine passes. The vote on the amendment was 87 for and 97 against. The then Minister of Railways promised that in any case the government would ask the Canadian National Railways to complete the surveys to a stage where they would have sufficient information to be able to say, when it was determined to build the line: This is the territory through which it should pass.
Mr. Murray Hill, of the Canadian National Railways, was sent out through the mountains in 1928. He made a complete survey of the approach to the Peace pass from the north side of the Peace river and between the Peace river and Dunvegan. Mr. Murray Hill who is an estimable engineer possessing quite a reputation reported definitely against the Peace pass route and recommended that further surveys be undertaken to show how impossible that route was. It happens that the crossing at Beatton river and the approach to the canyon at Hudson's Hope along the banks of the Peace river is made at a point where there are exceedingly steep banks which slide during times of rain. At this point I would like to direct attention to the last paragraph of Mr. Murray Hill's report, which reads as follows:
The Peace pass seems to be the most favoured. To my knowledge, there have not been any lines run through this route, either on the north or south side of the Peace river. I would therefore suggest that these surveys be made in order that definite information may be available to show the difficulties in construction and operation of lines over these routes. The Obed route, from information available, is unquestionably the best Pacific outlet for the Peace River country as a whole. It is, however, unpopular with certain sections of the country. Actual surveys have been made over this route and also the Pine pass route. In order that a correct comparison may be made between all routes, surveys must be made over the other two, viz: Monkman pass and Peace pass routes.


Robert James Manion: Who was that?


Edward Joseph Garland: Mr. Murray Hill of the Canadian National Railways. Up to this Stage the principal objection to the construction of the outlet seems to have been that there was not sufficient information avail-

able to justify the selection of any definite pass through which the line should run. During the debates in this house it became apparent that both the government and the railways were reluctant to undertake the construction of this outlet because of the position in which they found the northern railways of the province of Alberta. This was apparently the chief stumbling block in the way of definite and immediate action. Both Alberta and British Columbia were directly interested. British 'Columbia owned the famous Pacific Great Eastern Railway and whatever route might be selected might affect the business of that line as well has have an effect upon the political and economic life of the province. That province as well as Alberta was directly interested in whatever route might be selected. The objection in connection with the ownership and operation of the railways in northern Alberta has now been removed.
Before I continue may I mention that the Minister of Railways of that day, the Hon. Mr. Dunning, referred to the Alberta railways and the Pacific Great Eastern railway as being white elephants and suggested that one of the reasons for difficulty in settling this matter was that the premiers of Alberta and British Columbia were doing theiir best to slough off these white elephants on the Canadian National Railways. Mr. Dunning, on one occasion, called attention to the fact that the provinces were unable to pay the cost of operation of their railways. I am afraid that Mr. Dunning was sadly mistaken in his facts, because the first year of operation by the province of the Edmonton, Dunvegan and British Columbia Railway showed an operating surplus of $300,000, while the second year s operation showed a surplus of $800,000, sufficient to pay the fixed charges on the replacement value of the railway.


Robert James Manion: What year was that?


Edward Joseph Garland: I am not
certain of the exact year, but I think it was 1928.


Robert James Manion: Did that amount not include a certain amount paid by the two railways?


Edward Joseph Garland: The report of the Department of Railways and Telephones of our province is as I have stated, that the operating surplus for 1928 was about $800,000, which would cover the fixed charges on the replacement value of the line. The government and people of Alberta were positively astounded at the successful outcome of government ownership.

Railways and Shipping Report
Mr. MA.NION:	Last year the operating
surplus included an amount of about SI,000,000, or perhaps $2,000,000, which had been paid in by the two railways and which was taken in as operating revenue.


Edward Joseph Garland: I am speaking of the period when these lines were operated by the provincial government and not by the two railways.
We now reach the stage where the second objection to the construction of the Peace river outlet had been removed. The railways were sold to the Canadian Pacific Railway Company for $26,000,000, on the understanding that up until December 31, 1928, an offer would be open to the Canadian National Railways to share fifty-fifty in the purchase of these lines. This offer was accepted and to-day the 'lines in northern Alberta are operated jointly by the Canadian Pacific and Canadian National railways.
Previous to 1927 the Edmonton, Dunvegan and British Columbia Railway had been operated by the Canadian Pacific Railway. I am afraid that the showings reported by the Canadian Pacific Railway were not a3 favourable as those shown when the lines were operated by the government. In spite of this fact, both the Canadian Pacific and the Canadian National attempted to secure a lease of the roads for five or ten years. For reasons best known to the province of Alberta, this lease was refused and the lines were operated by the government, and then the classic agreement was made with the Canadian National Railways. I mention this only in order to introduce this statement:	It was during the negotiations for
the transfer of these northern lines that Sir Henry Thornton in a letter to Premier Greenfield of Alberta stated that he would be prepared to recommend the construction of this outlet to the Pacific coast when the Peace River district had developed an export of grain amounting to ten million bushels a year, or equivalent tonnage, for three years. I now wish to give to the house information as to the tonnage shipped out of that district.


Mr. STEWART (Edmonton):: It was a
straight offer-when ten million bushels of grain had been produced.


Edward Joseph Garland: Or equivalent tonnage.


Charles A. Stewart: There was
no mention of that; it was ten million bushels of grain.


Edward Joseph Garland: I think the hon. gentleman is mistaken.
22110-255J


Charles A. Stewart: No; I have seen the letter.	[DOT]


Edward Joseph Garland: So did we
see the letter. Mr. Greenfield, as premier, had it at the time. But it does not matter which of us is correct because the fact is that that district has exceeded the requirements of Sir Henry Thornton as set forth in his letter, whether he said ten million bushels or equivalent tonnage. It is intensely interesting to notice the growth of the development of that territory. In 1925 they shipped out 89,000 tons of grain or 5,300,000 bushels; in 1926, 6,000,000 bushels; 1927, 6,331,765 bushels; in 1928, 11,506,000 bushels; 1929, 7,323,000 bushels; 1930, 11,050,000 bushels; 1931, up to April 30, 10,067,000 bushels. It therefore must be clear to anybody who examines the facts that the requirements set up by Sir Henry Thornton have been more than met and that the tonnage of that district fully justifies the construction of this line. This year, may I remind the house, in all western Canada, covered as it is almost like a blanket with depression, the one really bright spot is the Peace River territory, There the prospects for a crop are still good. The prospects are that the tonnage there this year will equal if not exceed last year's tonnage, but that will depend, of course, upon weather conditions from now on.
This northern district in our province has shown a better return in railway revenue during the last few years than any other district I know of in all of Canada. In 1929 the Northern Alberta Railways showed operating revenues of $2,232,156, and in 1930, $2,253,737. The net revenues will perhaps be more interesting and comprehensive. The net revenue in 1929 was over three-quarters of a million dollars, $795,000, and in 1930, $301,000. In that year hon. members will recall we had a small crop over quite an extensive area in the west.
In the following session of 1930 the hon. member for Peace River (Mr. Kennedy) endeavoured to secure the ear of the house for the construction of the outlet and moved a motion on going into supply-a want of confidence motion it has sometimes been described. On that occasion the government accepted the motion, and, as was pointed out, technically defeated themselves. In the course of that debate the then Prime Minister, now the leader of the opposition, said on May 5, 1930, as reported in Hansard of that date at page 1809:
We all-

Railways and Shipping Report
He was referring to the Minister of Finance, the Minister of Railways and himself:
-have impressed upon the presidents of these systems that it is the desire of the government to have this matter expedited and the surveys completed, that it is our view that at an early date agreements should be arrived at by the two companies as to the route which they will jointly recommend

Notice what follows:
-and that failing agreement by them the government itself will undertake to make a decision.
That is a definite pledge given by the former leader of this house. Again on May 28, 1930, in the debate that ensued, the then Prime Minister made the following statement:
Now, Mr. Speaker, may I repeat what I said the other evening, that in the opinion of the government it ought to be possible-
May I direct the attention of the Minister of Railways to these words:
-for these companies to agree upon a route within six months-
That statement was made on May 28, 1930: [DOT]-and to have work begun within a year.
One year and two months have elapsed:

on a railway which will afford an outlet from the Peace River district to the Pacific. I will say that if they do not make a beginning within a year and the present administration should be in office at the end of that period, we will undertake to find a way or make it for the beginning of the construction of a railway line from the Peace River district to connect with the Pacific via some other railway line or otherwise.
Under these circumstances perhaps my hon. friend will feel that it is unnecessary to press his amendment any further. I said that the government would accept his amendment.
There is the intimation of a man who, I presume, had studied closely all the negotiations and all the preliminary procedure right up to the time he made that statement. He definitely pledged in this house, first of all, that in his opinion the two railways would come to an agreement within six months, that if they did not he would undertake to find a way either to make them come to an agreement or to construct the line.
May I point out that we have removed the difficulty with regard to the railways in northern Alberta? That difficulty being solved, we now come to the solution of the next difficulty. The surveys then to be undertaken have been made. The Canadian Pacific Railway has made surveys and a report has been prepared. A copy of this report is now in the hands of the Minister of Railways. The Minister of Railways has not
(Mr. E. J. Garland.]
yet, in spite of repeated requests by the hon. member for Peace River, tabled the report in the house. He may have good reasons for that.


Robert James Manion: I have not the permission of the Canadian Pacific Railway to do so.


Edward Joseph Garland: Then may I say that the minister can readily find means to induce the Canadian Pacific Railway to give permission for the tabling of that report? If the minister is serious about this thing he can go to the Canadian Pacific Railway and tell them that public interest in the circumstances demands that he present that report to parliament. All of that western country is waiting for it. They have been promised the railway by both parties, and it is effrontery, it is absolutely unfair to withhold the report and action upon it. I have no doubt myself that the report of the Canadian Pacific Railway will recommend construction along the Obed route. But that is better known to the minister. It is immaterial what the route is, so long as the report recommends the construction of the line through a certain definite pass.
The Minister of Railways has stated that the government has studied the matter. He has gone further. He has been guilty of a heresy. I understand that one of the bitterest criticisms of the Liberal party in office was that they lacked decision, that they were always going into conference about something or other. Now the minister's excuse for not dealing with this matter, apart from the fact that he has not yet received permission from the Canadian Pacific Railway to table the report, is that he is waiting for a conference between Sir Henry Thornton and Mr. Beatty. It seems that Mr. Beatty was ready at one time but Sir Henry Thornton was busy with the committee.


Robert James Manion: We have had the conference.


Edward Joseph Garland: Splendid.
That is one more difficulty out of the way. The Peace River outlet was one of the most prominent issues in western Canada in the last election. Supporters of the Liberal administration quoted the then Prime Minister's statement with regard to the outlet time and time again from every platform as a definite indication of the coming rapid construction of the line. The Conservative party was but little more cautious, because the Prime Minister, speaking at Winnipeg, pledged that one of his cures for unemployment would be the development of transport northward to

Railways and Shipping Report
Hudson hay and westward to the Pacific by way of the Peace river. Again, the Conservative convention in Winnipeg made the construction of the outlet one of its major planks.
We pledge ourselves to the improvement of the whole scheme of Canadian transportation northward by the completion of the Hudson bay route, and the construction of such branches as may be necessary to render it most readily available to every part of Canada; to the Pacific slope by a Peace river outlet, and east and west by the development of the St. Lawrence waterways, and we pledge ourselves to aid existing traffic channels and to increase port facilities ....
And so on. No longer, Mr. Speaker, is delay justifiable in connection with this outlet. I make that statement for the reason I have already given, namely that the obstacles which weTe placed in the way of construction are now removed. We have had surveys. I venture to say that no railway line projected anywhere in Canada has had a more complete survey than this one will have had by the time it is constructed. The other difficulty with regard to the Alberta Northern railways is removed by the joint ownership of the Canadian Pacific and the Canadian National. All that remains is for the Canadian National Railways and the Canadian Pacific Railway to get together and agree upon a route upon which the line should be constructed. In order to do that it will be necessary for this government to undertake the necessary expenditures in connection with the share to be shouldered by the Canadian National.


Robert James Manion: My hon. friend implies that the Canadian Pacific Railway is ready to build half of it-is that correct?


Edward Joseph Garland: I venture to say they ought to be, and if they are not I will give ample reasons why this government should be ready to advance as a loan the moneys necessary to construct their share o>f the road. Up in that great territory there is a magnet drawing the poor unfortunates who are left destitute on the dried out prairies of southern Saskatchewan and Alberta. In this month of July arrangements have been made for the transportation of a great many settlers from the southern portion of the prairie provinces into the Peace River district. Those men are not drifting into the cities and joining the ranks of the unemployed so that they may eventually become charges upon the state. They are doing their best to make another start. The persistence of such people has helped to make Canada what it is, and their action would justify this government undertaking to give them some assistance Iby the construction of the outlet. May I submit to my hon. friends opposite, and to the hon. member who has just made an unintelligent and impertinent noise-I have already made this statement and I wish to repeat it-that the northern railways are the only great sections of the lines in Canada where during the years 1929 and 1930 the gross earnings have not seriously declined. I repeat that if the 1931 crop comes up to the estimates made by the bureau of statistics and by those who reside in the territory in question there will not be any serious loss in this year's movement of grains and commodities from that territory. The settlers up there however are labouring under a serious handicap. They went in with courage in their hearts to tear out a home from the wilderness. They have been fighting for from seventeen to twenty years under a freight handicap the seriousness of which few people in eastern Canada can appreciate. The cost of moving their grain to Vancouver via Edmonton is 5, 6 or 7 cents higher than the cost of moving it from Edmonton to Vancouver. Yet a line of railway could be constructed which would put those people in as close proximity to Vancouver as the people in Edmonton are to-day. The line would have the effect of building up a great territory and would give those people heart and head to keep on fighting to build up their country.
May I point out that the money will be spent anyway, because money must be spent to relieve unemployment in Canada. Why dole it out to single men or unfortunate married men through relief measures when useful work can be provided? Here is an opportunity. Turn all the unemployed in the country to the task of constructing a useful financial asset, one which will be of great benefit to the western section of Canada. Such a line would be beneficial to the province of British Columbia as much as to the province of Alberta. No better suggestion could be advanced than that in this great day of need on the part of hundreds of thousands of people throughout Canada a few thousand could be used to undertake forthwith the construction of this line. Time would be required for its completion. I hope however that the present government will not wait until the dying days of their regime four years hence to make more promises such as the Prime Minister has made and such as were outlined in the Conservative platform at the Winnipeg convention. Here is the chance for the present administration to justify its existence and formulate a real, constructive government policy in connection with this matter.

Railways and Shipping Report
Had I the time I could give to the house the recommendations of a body of men well known to my hon. friends opposite, men who certainly could not be charged with being radicals, men who constituted the royal commission in the province of Ontario which in the year 1916 considered the question of unemployment. The list is headed by Sir John Willison, Most Reverend Neil McNeil, D. D, Venerable Archdeacon Henry J. Cody, Reverend Daniel Strachan, D.D., W. K., Mc-Naught, C.M.G., Joseph Gibbons, G. Frank Beer, Professor A. T. DeLury, Gilbert E. Jackson, W. P. Gundy, and another. There, Mr. Speaker, is an aggregation of Conservative men, men who have the training and ability to study such problems, and who at that time directed their attention to unemployment. What did they say? They recommended distinctly that plans should be undertaken to provide for the construction of public works during times of depression. They recommended clearly and by terms which cannot be controverted that the time to plan was in good years and the time to spend was in bad years.
This government, and this government alone of all who hold office in Canada, can borrow money at the cheapest possible rates. They can readily secure funds. Surely the credit of Canada can well be used to support the settlers in the Peace river district. I have no more time at my disposal, but I hope others will further develop the matter. In closing, however, I should say to the Minister of Railways and Canals that the old obstacles which were brought up again and again appear to be removed. The time is ripe for construction. Ample work would be provided for many hundreds of men and at the present time construction work could be done more cheaply than it may be done in many years to come.
Hon. R. J. MANION (Minister of Railways and Canals) r I have been listening this afternoon and this evening to the debate on the motion of the hon. member for Lincoln (Mr. Chaplin) for concurrence in the report of the railways and shipping committee. At this late hour I have no intention of taking up much of the time of the house. Not only is the hour late but we have reached a late stage in the session; therefore my remarks will be brief.
As I listened to the debate this afternoon the one point which struck me was that it has been of the finest type. Throughout the whole debate there has been practically no political controversy; the whole discussion has been on a high plane, and I feel that the

house deserves some credit. Following the Prime Minister (Mr. Bennett) the right hon. leader of the opposition (Mr. Mackenzie King) so far as I could see adopted a similar attitude in every respect. The use of three expressions struck me particularly. He said that when they came into power they desired that the government railways should be given a fair chance, that the management and directorate should be given a free hand, and that politics should not be permitted to enter into such management. I have no thought of injecting into a debate which has been of so pleasant a character anything of a controversial nature, and in regard to those expressions by the right hon. leader of the opposition I could say only that they are ideals which all true Canadians should have m dealing with the Canadian National Railways. I think therefore all hon. members can agree with the ideals and principles upheld by him this afternoon. We can agree that so far as the management of the Canadian National Railways, and, for that matter, any other Canadian railways, is concerned, politics ought to be taboo.
When we realize that to-day we have in the Canadian National Railways a responsibility amounting to over $2,200,000,000 made up of loans, interest, appropriations, and guarantees we realize that the railways are of such vital importance to us and we realize why hon. members are justified in debating the matter in a non-controversial and nonpolitical way; because actually I think our whole economic structure depends upon the successful solution of the railway problems of Canada.
The discussion to-day was on the report of the special railway committee, a report which was brought into this house unanimously by the members of the committee in the absence of only one of those originally appointed. May I at this moment do what I fear no one else has done-although I have no doubt it was an oversight-congratulate the chairman of that committee, the hon. member for Lincoln (Mr. Chaplin), on the excellent work which he did, particularly in bringing down a unanimous report with the constructive criticisms contained therein.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: I am glad to hear applause from the other side, because I know hon. members opposite agree with the report, as of course do our friends on this side. It was not an easy matter for the hon. member for Lincoln to bring about that happy result. I was present at most of the meetings. He had to hold a number of meetings, he had to submit various reports to the members,

Railways and Shipping Report
and, as the hon. member for North Waterloo (Mr. Euler) pointed out this afternoon, there are suggestions in this report that had to be accepted in a spirit of compromise. But after all, the spirit of our democratic institutions is a spirit of compromise; for I do not suppose you could get twenty-two members of this house to agree on the same ideas or the same ideals. So it is all the more to the credit of the hon. member for Lincoln that he finally succeeded in getting twenty-one members of the committee to sign the report and to agree on the constructive criticisms embodied therein. While listening to the debate this evening I looked over the membership of the committee and find that ten of them are from the opposite side of the house and eleven from this side, which indicates a very good division of the committee from the political standpoint, and emphasizes the excellent work which was done by the chairman in bringing about that unanimity of view. All opinions were expressed, because I have no doubt that while my hon. friend from North Waterloo-who has been in this house about the same number of years as I have- has been a persistent and consistent champion of public ownership, there are other members of the committee who have been just as strong in favour of private ownership. All parties were represented:	the
Liberal party, the Conservative party, the Progressive party and the Labour party in the person of the member for North Winnipeg (Mr. Heaps).
This afternoon not only the right hon. leader of the opposition (Mr. Mackenzie King) and my right hon. friend the leader of the government (Mr. Bennett), but my hon. friend from North Waterloo (Mr. Euler) and my hon. friend from Winnipeg North Centre (Mr. Woodsworth), who was not a member of the committee-all of those and others as well supported in a general way, in fact almost in toto, the report. I was particularly glad to have the support of the hon. member for Winnipeg North Centre because after all-and I say this in no spirit of criticism- he does not too often agree with other members on questions of this sort, and I think his endorsation of the report was perhaps the best praise that could be bestowed upon it.
My hon. friend from Stanstead (Mr. Hackett) took an attitude with regard to the report which I think was hardly justified. He stated, in effect, that the report was futile and that the committee also was futile. I do not agree with his criticism. For the first time so far as I can remember in the history of these committees this year's
committee brought in a report which, although critical, is constructively critical, and instead of merely handing back the accounts as submitted to them, the committee has suggested useful changes that might be made by the management of the railroad in order the better to establish the system on a basis of economic success.
May I say in this regard that while the discussion was proceeding this afternoon one of these suggestions was put into effect by the directors themselves. The directors hold their meetings on the third Tuesday of every month, and at their meeting to-day in the city of Montreal I was informed they were going to discuss and deal with this report. While this debate has been in progress I have received a telegram from Sir Henry Thornton which may be of interest to the house. He wires:
That the board this afternoon passed the following resolution:
Resolved that all officers and employees, excepting those whose rates of pay and working conditions are governed by scheduled agreements, earning in excess of $3,600 per annum shall be reduced by 10 per cent for a period of 10 months from the first of August, 1931. At the expiration of this period the deductions herein included shall be restored unless the board otherwise orders.
Be it further resolved that no salary in excess of $3,600 per annum shall by virtue of such deduction be reduced below $3,600.
That action is along the lines of the course taken by the Canadian Pacific Railway management a couple of months ago when they reduced the salaries of their executives by 10 per cent. I do not know how far down the line they went; perhaps the reductions went further than those mentioned in this telegram, but at any rate it was stated that by this means the Canadian Pacific Railway would save some millions of dollars. That action this afternoon by the board of directors of the Canadian National Railways seems at least suggestive in view of the clauses of the report which I shall now read. I hold in my hand Votes and Proceedings for last Thursday, in which the report of the special committee was printed. These are the three clauses which I desire to quote:
Certain questions relating to the salaries and emoluments paid to executive officers of the company were asked by members of the committee, and were by resolution of the committee submitted to a subcommittee for consideration.	.
Your committee while of opinion that many of the salaries are much too generous, and in some instances excessive, accede to the expressed wish of the president that the list be not published for the reasons given by him.

Railways and Shipping Report
A little further down in the report will be found the following:
In view of the decreased revenues of the company, and the economies being made in other branches of the service, your committee are of opinion that the executive committee of the board of directors should immediately consider the whole question of salaries, allowances, disbursements, pensions and retirement provisions for executive officers and officials of the company, receiving salaries of $5,000 and over in order that every reasonable and proper economy should be effected.
So that the board of directors this afternoon went a step further even than the committee had requested them to go.
May I say to my hon. friend from Winnipeg North Centre, who spoke this afternoon commending in a general way the whole report, that this does not affect the wages of those of whom he spoke. This affects the executive officers, from my reading of Sir Henry Thornton's telegram; it does not affect the ordinary wage earner, the day labourer, the piece job man or the running trades; it does not affect the ordinary workingman on the road up, we will say, to conductors, brake-men, engineers, and so on. I doubt if it at all affects the operating staff of the road, but rather the executive staff as was suggested by the committee which dealt with this matter. So it appears to me as though that committee, if it did not inspire the action of the board of directors, at least supported it inasmuch as it antedated their action by a few days.
So I repeat that to my mind this is a very useful report in its constructive criticisms and suggestions with regard to the national road. I say this in no spirit of criticism, but I think perhaps it is a pity that in past years the committee did not act in a similar way and offer constructive criticisms. I am indirectly criticizing myself, because for some years, at least, while sitting on the opposition side of the house I was a member of that committee. I think this report generally is constructive; it is not perfect, but it is a real effort to be helpful in the work of the road.
Now for a moment or two I wish to deal with some of the remarks of my hon. friend from North Waterloo, particularly his remarks with regard to the board of directors. Again without desiring to cast reflections may I say that I believe the present board of directors is the best board the Canadian National Railways ever had. Perhaps it is natural that I should make that statement because this government appointed them, but at the same time I believe more than the usual care was taken in these appointments. My hon. friend from North

Waterloo took the attitude, which is taken by many others, that there should be no politics in the appointment of such a board as this. Of course there are arguments against appointments of that kind being political, but so long as we have party government in this country, just so long will the party in power naturally lean towards people who are friendly to it in making appointments of any kind. I think that is no reflection on party government. Not only that, but if my hon. friend from North Waterloo could see some of the letters I received after this directorate were appointed he would not think they were all friends of ours, because there were some very severe criticisms in regard to the political leanings of some of the men who were appointed.


William Daum Euler: I suppose there were a great many applicants?


Robert James Manion: Yes, but I am speaking of political criticisms by our friends, some of whom thought we did not pick Conservatives for these positions. But may I say that I do not believe the political affiliations of any member of that board, whether appointed by the Liberals or by the Conservatives, necessarily need lessen the ability of the board, because after all there are outstanding business men in this country who are of Liberal persuasion, as there are outstanding business men who are of Conservative persuasion. It is not difficult, in view of that fact, to choose a good group, as we have done. I do not believe in playing about with words; I will admit that they were largely of our political persuasion, but I still maintain that they are an outstanding group of men.
I will grant this: Probably a smaller board might give better and more efficient management to the railway. Yet this is a government railway, and the difficulty in creating a small board is that you get complaints from all over the country. When my hon. friends were in power I am sure when they made similar appointments they came up against the same type of criticism we have received since those appointments were made. Any appointments to a government institution as this road is to a certain extent though handled by the management, since it is dependent upon the government for the money it may need-will bring about the same criticism. So long as this is a government road we will get demands from different portions of the country that they be represented, and from different classes in the country that they be represented. For example, when hon.

Railways and Shipping Report
gentlemen opposite were in power, they appointed Tom Moore as representing Labour. We replaced him and a number of others who were formerly on the board.


William Daum Euler: You did not replace him; you reappointed him.


Robert James Manion: I meant to say we reappointed him to the board. We have had demands from the agricultural sections of the country; I have received many personally; some were read by my hon. friend from South Perth (Mr. Sanderson) some time ago, and others have been forwarded by supporters of the party on this side of the house, asking that agriculture be represented in the same way. So long as we have this road as more or less of a government institution we will have these demands that certain portions or certain classes of the country be represented. That is an advantage which a company such as the Canadian Pacific Railway has over a government institution such as the Canadian National Railways. They are not forced to consider the geography of the country, as my hon. friend the Minister of Trade and Commerce (Mr. Stevens) put it; they are not forced to consider different classes. They are in the position-the happy position, if you like-of being able to appoint those men whom they see fit to appoint from a straight business and executive standpoint. While I was sitting here I looked up the board of directors of the Canadian Pacific Railway; I had it in mind, and just checked it up. I find that they have exactly the same number of directors on the board; they have seventeen, and of those directors nine come from Montreal, two from London, one from New York-and what complaints we would receive if we should appoint a New York director on the Canadian National-one from Brantford, one from Oshawa, one from Winnipeg, one from Vancouver, and one from Toronto. Only four provinces are represented on that board, but the Canadian Pacific Railway have that advantage in that they are not forced to satisfy the different geographical or political sections of this country as a government road is forced to do to a certain extent.
Let me give an illustration of what I have been saying. When we appointed this board the provinces of Saskatchewan and Alberta were not represented-and were not represented on the previous board-and we had the very strongest protests conceivable from those provinces because of that fact. I presume the same thing occurred when hon. gentlemen opposite were in office. In a short time we
intend to appoint two directors from those provinces, so that every province will be represented.
It may be of interest to the house to know the size of the boards of directors of some important companies in Canada. None of them is small. The directors of the Bank of Montreal number 21; of the Bank of Nova Scotia, 20; of the Bank of Commerce, 37, and of the Royal bank, 28. Of course many of those boards were enlarged because of the amalgamation of different banks, but the fact remains that these companies have large directorates. There are 17 directors of the Sun Life Assurance Company; of International Nickle-and I presume a great many hon. members here remember International Nickle -there are 25 directors, and the board of directors of the Bell Telephone Company consists of 15. So it will be apparent that very few of the large companies have a smaller number of directors than the Canadian National Railways.
I will admit, however, that I agree with the hon. member for North Waterloo; probably if we could pick four or five strong men as directors, more efficiency might result. They would have to be situated close to Montreal, at least within a night's run; they would have to be big, powerful men, independent of any smaller considerations, men who would give their very best to making the Canadian National Railways a success from a business standpoint. I believe if you could pick five men like that and give them a better salary, such as has been suggested, and generally put the road in their hands probably you would get better management than you can get from a directorate scattered from the Atlantic to the Pacific, which cannot meet more than once a month. Men in Prince Edward Island, in Vancouver or Victoria, in Calgary or in other places widely separated cannot get east or west to the centre where the meeting is held more often than once a month. That is one of the penalties we pay for having a democracy. No doubt democracy is the best form of government we have eo far encountered, but it has its faults. This is one of the reasons why we have so many political demands upon the railway and so many protests against any change made in the interests of economy. This very morning I think I received half a dozen letters from various sections of the country protesting against some act of the management of the road, of which I knew nothing, some economy which is being practised and which the

Railways and Shipping Report
management feels must be carried out because of the reduced earnings of the railway.
It may be interesting to the house to know as it is only right the house should know, that the gross earnings of the national railways for the first six months of this year are down some $22,000,000 as compared with the same six months in 1930. In 1930 the total year's earnings were down $46,000,000 as compared with 1929. In view of those figures, and in view of the fact that last year the government of Canada had to meet interest to the public amounting to nearly $30,000,000, which the railways had not earned and which therefore had to be paid on behalf of the people, it is, I think, realizable that the Canadian National Railways and the Canadian Pacific Railway-because that railway also has been affected-must of necessity economize. It is not quite fair, therefore, on the part of people in various sections of Canada to take the attitude that economies may be made, but not in their particular districts. And that, I am afraid, is the attitude which is taken in every part of the Dominion whenever any slight change is made by the Canadian National Railways or the Canadian Pacific- for I get protests sometimes in regard to the economies practised by the Canadian Pacific as well. I do not think it is reasonable, in view of the situation as I have indicated it, that people should protest as vociferously as they do.
My remarks so far have been quite general, and I wish now to discuss one or two particular questions. Let me for a moment or two consider the Peace River outlet. Before I take up that question, however, I think it might be well for me to reply briefly to the remarks of the hon. member for Temiscouata (Mr. Pouliot), who again this afternoon took up the time of the house with reference to the Riviere du Loup station. I do not intend to delay the house discussing that particular subject, because in my opinion the hon. member has already taken up too much of the time of the house in that regard. He has been very persistent, I will not say obstinate, in his presentation of the case, and as a result of his efforts he has obtained altogether 135 or 140 returns. That, I think, is a record in the whole history of parliamentary institutions in Canada, though I fancy it is a rather doubtful record. Now, in justice to the government, I would point out that last year the Canadian National Railways planned $8,000,000 worth of additions and betterments which were not carried out, so that Riviere du Loup constituted but one-hundredth part of the additions and better-

ments which had been contemplated but could not be realized. The Canadian National Railways took the attitude, with respect to most of these additions and improvements, that in view of the decreased earnings of the system such undertakings must be restricted. I agree with my right hon. friend from Argenteuil (Sir George Perley), who in reply to the member for Temiscouata, spoke this afternoon, and I accept entirely the statement that this was a government re-sponsiblity. No hon. member has any right whatever to lay any undue blame upon him, as the hon. member for Temiscouata has done, because he was but one member of the government. I take my full share of responsibility for the action taken in regard to this matter, and I submit that it is not fair that my colleague from Argenteuil should be blamed, if there is to be any blame at all, more than the rest of the government. The responsibility for not passing the order in council was that of the government as a whole. I may say to the hon. member for Temiscouata, however, what he already knows and what has been already stated, that the Riviere du Loup station is being treated fairly well this year by the Canadian National Railways, because there is in the estimates a vote of $15,000 for repairs; and I hope that this $15,000 will at least put the station in fair shape so that we shall not be held up during another session to the extent that we have been this year.
In regard to the Peace River outlet, the hon. member for Bow River (Mr. Garland) made a vigorous speech in behalf of this cause. I have sat in the house a few years and I have heard eloquent speeches made by the hon. member for Peace River (Mr. Kennedy), by the hon. member for Cariboo (Mr. Fraser), and by the hon. member for Bow River. These three gentlemen-I will not particularize-have been strong and persistent advocates of an outlet to be built from the Peace River territory. I do not mind telling them frankly that I sympathize with them in this regard, although, so far as I remember, I have never made a speech anywhere dealing with this subject. I have not made any promises on the matter. But having lived all my younger days in a pioneer section of the country, in northern Ontario, where transportation was not easy and where we were largely isolated from other parts of Canada, I can sympathize with these hon. gentlemen who feel so strongly on the need for an outlet from that vast territory. May I point out, however, that the solution is not quite so easy as was suggested by my hon.

Railways and Shipping Report
friend from Bow River in his otherwise excellent speech. The hon. gentleman spoke as though it were only a matter of the government stepping in and building this immense project. He spoke as though the two railways had come to a decision as to what they wanted and it would be a simple matter for the government to raise the $40,000,000 with which to construct the outlet forthwith. The fact of the matter is, the railways have not come to any decision. It is true that the route referred to by the hon. gentleman, the Aggie-Obed route, was one of the early suggestions of the Canadian National Railways But the Canadian Pacific Railway has submitted a report recently in which they take exception to that suggested route; they suggest a different one from the route proposed by the Canadian National Railways. And then there are other routes which have been proposed. For instance, there is the suggestion that the present route be maintained, bringing all grain from the Peace River section back towards Edmonton

a backhaul- and taking it towards Vancouver, leaving the route as at present, and putting lower rates into effect. Secondly, there is the Obed route, of which the hon. member for Bow River has spoken. Then there are the Monk-man pass and, the Pine pass, and the Peace pass routes. As a theorist I have studied the situation on the map, have looked into the various reports, and have endeavoured to familiarize myself with the subject. And in a general way I think I have done so. Moreover, I trust that during this summer I shall have the pleasure of a visit to the district. But I submit that it is only fair to say that before the government takes any action in the matter the railways themselves should at least agree to something definite. The hon. member spoke as if the Canadian Pacific Railway at least was ready to build one of these routes at once. I submit that it is not so. I had a conference only last Friday in my office with the heads of the two railways, and they did not propose to put up the money. I do not think I am betraying their confidence when I say that it is the opinion of the two railways at the present time that if this outlet is to be built it should be built by the Canadian government and not by either of the systems. Obviously, therefore, there are a number of questions to be settled before a final decision can be arrived at. Certainly I am of the opinion-and I am sure that in this regard the whole house will agree with me, including the hon. member for Peace River, the hon. member for Cariboo and the hon. member for Bow River-that
we should not undertake in this country the construction of very costly lines of railway which will duplicate the mistakes of the past, without a proper investigation into the whole situation and an endeavour to avoid any such condition. After all, it is far better to have the two railways agreed upon one specific route and to have the government cooperating with them. Surely it is better to have the whole plan carefully laid out than to take chances, undertaking the construction of a road which has not been decided upon by agreement-one railway engineer taking one view and another suggesting something different.
I am interested in the whole question; I am sympathetic to the idea. But at the present time I think it would be unfair to the people of the country at large, and unfair to that section itself, if my right hon. leader (Mr. Bennett) were asked to carry into effect some ill-conceived proposal. I submit that my hon. friends from that section of the country will have to have a little more patience. After all, this government has not yet been one year in power, and I am sure that whatever promises may have been made in this regard were certainly not made by my leader, nor were they made by any other member of this government, to the effect that this road would be built within one year. Nor was any such promise made with respect to any of the large projects which the government has been gradually taking up as time has passed.
May I, in closing, make this observation. Parliament realizes that the country to-day is faced with a serious railway problem. Everyone must admit, when you take into account the immense debt of the railways; the vast governmental guarantees; the fact that the interest to the public to-day is well over a million dollars a week, and that this year it looks as if the national railways have not much chance of paying very much of that $50,000,000 odd which is owing to the public- everyone must admit, I say, in view of these facts, that the situation demands general economy, because of its seriousness. That immense sum of money having to be paid by the people of Canada, this house realizes and I believe the people realize the seriousness of the transportation question. At the same time I do not think this matter is a hopeless one nor do I believe this is a time for panic. I believe in the motto which I suggested some time ago, I think in my remarks on the budget, that with care, caution and economy, with prudence and wise general management of the railways, the whole transportation system of

Railways and Shipping Report
our country will come back once again to a proper basis of progressive prosperity. Surely we Canadians are hopeful for the future of Canada. This country has not been ruined in a couple of years. We have our fields, our forests, our mines, our waterfalls and our virile people, and this country is going to come back into its own. The day for the people of Canada will return and with that day will return prosperity for both railway systems. Both roads will return again to a proper basis of economic progress, and the spirit which has been shown to-day in this house by every hon. member who has spoken is the spirit which will help to bring back prosperity, not only to Canada but to both the Canadian Pacific and Canadian National railways. They will both soon reach that position of progress and prosperity which we all desire to see them attain.


William Irvine: Mr. Speaker, I hope the house will bear with me for a few moments while I emphasize the points raised by the hon. member for Bow River (Mr. Garland). I do so not only because of the importance of the subject itself, but also because the hon. member for Peace River (Mr. Kennedy), who has been an ardent advocate of the Peace river outlet, is suffering from a bad throat and is unable to speak.
First, let me offer my congratulations to the hon. gentleman who acted as chairman of the railway committee. I am sure that all hon. members appreciate the great qualities he exercised in that capacity. I am glad to know that the report of the committee was adopted unanimously, and I anticipate that it will be concurred in unanimously by this house. My words will not be words of criticism of the Canadian National Railways, although there may be room for criticism, nor will they be words of praise.
I want to point out to the government the necessity of undertaking as speedily as possible the building of a Peace River outlet, and I want to emphasize in particular the economic aspect of that undertaking. The hon. member for Bow River has very ably outlined the history of the struggle of the people of the Peace River district for an outlet to the coast. That struggle has been carried on from 1917 up to the present day, during which period many people flocked into that section of the country in the hope and belief that a railroad would be built and that they would find an outlet for their products. It is now known that the tonnage of produce which could be shipped annually from that section of the country will far exceed the fMr. Manian.]
estimates made by leading railway men of this country as being necessary to warrant the building of a road. Moreover both railways have been making surveys during the last eight years, and practically every possible route has been surveyed. There is now in the hands of the government or available to it all the engineering data necessary to enable it to come to a conclusion as to which route should be selected.
While I did not expect that the minister would say that the Peace river outlet would be built, I did hope for a little more encouragement than he gave us in his remarks. We are glad to have the minister's sympathy; I know the people of the Peace River district, will be glad to have it; but they are looking for something more substantial. To express; it in another way, they are looking for sympathy expressed in material form, or materialized sympathy. If I understood the minister correctly, his chief objection to proceeding immediately with the development of this route was that there does not seem to be any agreement between the two railway companies as to which route should be selected. That disagreement might go on forever because these roads being in competition, no one can say how long it will take them to agree as to which route should be selected.


Robert James Manion: I should have stated that
the suggestion of the two roads was that engineers be appointed, one by each railway company and one by the government, to go into this question. That will probably be carried out in the near future.


William Irvine: That would seem to show
that some action has been taken to break the deadlock and there is hope that in the near future a definite decision will be arrived at as to which route should be adopted. Perhaps a little more progress has been made than was indicated by the speech of the minister. If that arrangement fails to accomplish anything then the government should not wait any longer for a decision to be made by the railway companies. Having, as I said, at its disposal all the data necessary to arrive at a conclusion it should put its own engineers on the job, decide which route should be built, and proceed to build it.
The need for an outlet is great. I do not think I need to recapitulate what the hon. member for Bow River has so eloquently presented to the house. There is no doubt about the fact that the people are there. In 1928 and 1929 there were homesteaded in this district a total of 1,760,000 acres, and to

Railways and Shipping Report
date about 5,000,000 acres have been taken up with approximately 1,000,000 acres under cultivation. With such a large portion of the population of Canada, if it is desired that it be expressed in that way, in dire need of facilities of this character, there can be no question about the necessity. It must be remembered that the opening up of this district, which is perhaps the most fertile in the Dominion of Canada, will mean virtually the opening up of a new continent.
It was said not so long ago by statesmen of this country that there were two great railway necessities, the Hudson Bay railway and the Peace River outlet. The Hudson Bay railway has been built, and without making any criticism of that road I have no hesitation in saying that the least important has been built first. I do not think there can be any question as to the relative importance of these two routes. All necessary surveys have been made and there should be no doubt as to which route should be chosen for a Peace River outlet. All the engineering information that is required is to hand. The only question is, when is the road to be built?
Let me point out that there is no political issue here, as I understand it, for both political leaders have declared themselves in unequivocal language as being in favour of the development of the Peace River country by providing it with adequate railway facilities. I refer hon. members to the statement of the right hon. leader of the opposition (Mr. Mackenzie King) when making his tour in the west as Prime Minister some time prior to the election of 1925. He had this to say in the city of Edmonton in respect of the Peace River outlet:
There is to the north of this city a great tract of land that is crying out for development.
Incidentally, it is still crying:
The Peace River country is amongst the richest in Canada, but before the proper development of that country can take place an outlet to the Pacific coast is an absolute necessity. I pledge myself that as soon as it is humanly possible the great Peace River country will be given that measure of railway relief that will bring to the pioneers of that country the outlet they have been so long denied, and will open up the eounrty for prospective settlers.
That was the statement of the right hon. leader of the opposition when he was Prime Minister. Let me now quote the declaration of the Conservatives in their great Winnipeg convention, which I presume was accepted by their leader and is accepted by the government to-day. Clause 5 of that declaration
says:
We pledge ourselves to the improvement of the whole scheme of Canadian transportation northward by the completion of the Hudson bay route, and the construction of such branches as may be necessary to render it most readily available to every part of Canada; to the Pacific slope by a Peace River outlet, and east and west by the development of the St. Lawrence waterways, and we pledge ourselves to aid existing traffic channels and to increase port facilities on the great lakes, Hudson bay and the Atlantic and Pacific oceans, and to the establishment of a national highway system.
Incidentally in that declaration mention is made of a number of other transportation facilities, but specific mention is made of the Peace River outlet. So I think we may take it that there is no political conflict in a party sense, but that both party leaders have declared themselves as being in favour of the Peace River outlet. With the great need for the building of that road, with the preparations that have been made during the last eight years by the railway companies in their survey work, and in view of the fact that both political leaders have declared themselves in favour of building the road, why are we not busy building it? I imagine the only answer that will be given will be that this is a time when we ought to be practising economy rather than spending money. All governments in all countries of the world have a tendency to take that attitude. It has been the general practice, I think, of all governments, that in periods of depression governments, naturally reflecting the depressed feelings of the population and fearing popular criticism if they enter upon what would be regarded under such circumstances as extravagant expenditures, have refrained as much as possible from making expenditures during such periods and have practised rigid economy. Not only does that increase the depression by withdrawing credit from circulation, but by intensifying the psychological effects it makes the people generally more afraid of launching out into new enterprises, and thus adds greatly to the difficulties which depressions always bring.
I want to submit to the hon. Minister of Railways and to his government, in view of the situation with which we are faced at the present moment, the advisability of taking into consideration the suggestion that I am now going to make. I suggest to the government fhat this is no time for the government to practise economy. I suggest on the contrary, that this is the psychological moment for the government of Canada to launch out into large expenditures. I suggest to the government that in doing so they should be thinking in


Wilfred Hanbury: Mr. Speaker, I wish to congratulate the Minister of Railways and Canals (Mr. Manion) upon his remarks in connection with the report of the committee. I can associate myself with practically all his statements, with the possible exception of his reference to the outlet from the Peace River district to the Pacific.
To sum up briefly, I wish to place myself on record as being in accord with the statements made by the hon. member for Bow River (Mr. Garland) concerning the Peace River outlet. In this connection the Minister of Railways said that it would be unfair to the people of Canada if at this time the government were to proceed with the construction, and for that reason he recorded his opposition. Although we have had surveys and re-surveys, examinations and re-examinations by engineers from the government and the various railways, he said that we were still in a position where in fairness to our people no definite decision could be made. Naturally Canadians want that route to be the most efficient possible of development. But I would also associate myself with the remarks of the previous speaker that the most important question before the people of Canada at this time is the question of unemployment. While it may be that in fairness to the people the route cannot be decided upon immediately, I say that in view of the economic situation and that the building of

Railways and Shipping Report
this railway would give employment to from 10,000 to 20,000 men for some months to [DOT]come, it is doubly unfortunate that the government are not prepared to say "Go ahead at once."
As to the report itself, first of all I wish to commend the chairman of the committee, the hon. member for Lincoln (Mr. Chaplin), for his patience, his tact, and his fairness to every member of the committee. That the report is to all practical purposes a unanimous report is due almost entirely to his fairness and his tact.


Some hon. MEMBERS:: Hear, hear.


Wilfred Hanbury: The hon. member for
Stanstead (Mr. Hackett) in speaking to this report this afternoon, placed a good deal of valuable information before the people of Canada. I feel he is to be highly commended by the house and by the country for trying to bring home to us some realization of the colossal undertaking and of the enormous sums of money involved in the operating losses of the Canadian National Railways and its subsidiary companies. To my mind a great deal of the responsibility for the present position of the system rests with past governments. The picture which I have of the Canadian National Railways is that the Canadian people invested approximately $2,000,000,000 in the undertaking, and then they searched the world over and found the man they thought best fitted to handle it. But to my mind they did not take sufficient safeguards to ensure that the funds of Canada were spent to the best advantage.


Some hon. MEMBERS:: Hear, hear.


Wilfred Hanbury: I have no desire to criticize the officers of the Canadian National Railways. I say that any man placed in a responsible position where he has large sums of money to disburse, and is not given constructive criticism from time to time and vatched at all times, will invariably tend to jecome extravagant. So I say in the present case any remarks I have to make are not in criticism of the officers of the Canadian National Railways, but rather of the method adopted by the people of Canada for watching the operation of such a large undertaking.
The member for Stanstead thought that the appointment of directors, the setting up of the committee, and the report of the committee itself were all absolutely futile. I would say that this system of endeavouring to watch our large railway investment is not the best system. I have already stated so this evening. But I do say in justice to the committee that each and every member was conscientious,

serious and not politically partisan; all were conscientiously endeavouring to do something that they felt was necessary. That they have done something constructive I am quite satisfied, because if they have done nothing else they have brought to the attention of this house, of the board of directors, and of the officials of the system the necessity of doing something radical, and doing it at once.
In the report it will be noticed that as a result of the recommendation made by the president it is suggested that a commission should be established to investigate the whole railway situation in Canada. In that respect I would point out to hon. members that the total cost of the operation of both the Canadian National railway and the Canadian Pacific rialway must eventually be borne by the people of Canada; that every dollar spent in operation must eventually come from the pockets of the people. To my mind we have in both of these railway companies some of the most able men in their profession; they are men of knowledge and of vision; and if they would sit down across the table and not play railway politics, they would soon iron out some of the difficulties that are facing us at this time.


Some hon. MEMBERS:: Hear, hear.


Wilfred Hanbury: I do not think it is necessary to have a commission to investigate our railway troubles. I believe if the Prime Minister or the Minister of Railways in no uncertain terms notified the presidents of these two railway companies that we expect their cooperation for the elimination of so much futile competition-to use the words of my hon. friend from Stanstead-so much expensive competition, and that they must get down to business, the people of Canada would very soon see some light in the railway situation. That is something for which the government must take responsibility. I do not believe that a commission as suggested would get results, but I do believe that the government through the Prime Minister or the Minister of Railways can get results by simply insisting that those results shall be obtained.
It has been suggested that higher freight rates in the past would have prevented some of these losses; it has also been suggested that higher freight rates in the future would convert some of the present losses into profits. I would point out to hon. members that if we are to have higher freight rates we shall have a higher cost of producing wheat, lumber, and every other commodity. Transportation is a portion of the cost of producing everything, and to the extent that we in-

Railways and Shipping Report
crease freight rates we increase our cost of production. The problem in connection with increased freight rates is whether the individual producer is to absorb the increase or whether the country as a whole shall do sc.
In connection with the large deficit on the operation of the Canadian National Railways during the past year, I think it is only fair to call the attention of the house to the fact that during the past twelve months or more the management have retained on the pay roll numbers of men who in view of the economic depression would have been discharged had the railway company not been a nationally-owned system. To what extent their retention has prevented a reduction of the pay roll I could not say, but it would be an enormous sum. It has been suggested that there is not enough traffic in Canada to justify and make profitable the operation of both these railways. In this connection I would point out to the house that the greatest returns to the railway companies were in those years when the external trade of Canada was greatest. During the internal development of Canada it is only reasonable to assume that the deficits of the future will be even larger than those of the past.
Very few suggestions have been made as to what steps are necessary in order to remedy the losses we are suffering, but it is obvious that we require either greater revenue or a lower cost of operation. In order to bring about either of these results government policy is necessary, probably as expressed through the board of directors of the Canadian National Railways. There has been some discussion as to the constitution of the board of directors, as to the number of directors and as to the salaries they receive, and I think the arguments as to why the number of directors should not be reduced are logical. I would suggest for consideration that the Canadian National Railways might very well have a committee of the directors-not a committee of the management-numbering four, five or six, so located that they could meet often and for as long as it might be necessary, and that on this committee should be placed the responsibility for the operation of the road. They could then work in conjunction with the general board of directors as it is constituted at the present time. If we are to overcome the loss in the operation of this railway it is necessary that we should eliminate useless competition, and that we should do away with some of the services which the country can most easily do without. It may be that we will have to increase rates; it may be that we will have to
reduce the cost of operation; it may be that this reduction in the cost of operation will mean not only the reduction in salaries which was announced by the Minister of Railways this evening but that the government will have to go as far as to take responsibility for further reductions in the operating costs. That is something for government policy. It may be that the government will have to reorganize the capitalization of the company, and it may come to the point where the government will have to consider whether or not there are sufficient people in Canada at this time to make possible the profitable operation of the Canadian National Railways, and whether or not they will have to give consideration again to an immigration policy.
In connection with the committee, of which I had the honour to be a member, I feel quite justified in complimenting Sir Henry Thornton and the management of the company on the large mass of detailed information which they were able to give. I would suggest to the government, at the same time, that in constituting this committee another year they should endeavour to see that the committee is placed in possession of information as complete as possible, as early in the session as is possible. I do not know that any good purpose would have been served this year if we had been given more information at an earlier date, but it would have done no harm and might have done some good. I feel sure that the management and officials of the Canadian National Railways are fully seized of the importance of reducing every possible expenditure at this time, and I repeat that I believe the committee can take some credit to itself for having impressed upon the management the importance of this action being taken.
Just for a moment or two I should like to refer to that part of the report which deals with the Canadian government merchant marine. The original cost was approximately $80,000,000; the book value at present is about $45,000,000 and depreciation already set up amounts to about $17,000,000, so there is a present valuation of the steamers operated by the Canadian government merchant marine of approximately $28,000,000. That is the book value. We are told that the actual value is from $2,000,000 to $2,500,000, so the Canadian people have absorbed the loss of the entire original investment, plus the amounts it has been necessary to vote from year to year.



SEYIS5D EDITION COMMONS

[Stage Direction]
Privilege-Mr. Mackenzie King
Last year the operating loss was less than $600,000. The suggestion has been made by the committee that the government should give serious consideration to the disposal of these vessels, and with that recommendation I am in agreement, with one qualification. I suggest to the Minister of Railways (Mr. Manion) and to the Minister of Trade and Commerce (Mr. Stevens) that the only justification for ever having had this service or for continuing it has been the development of the external trade of Canada. During the investigation we attempted to ascertain the value of the trade, both into and out of Canada, carried by those ships, but were unable to do so. I would suggest, therefore, that these ministers notify every board of trade in Canada and every user of these vessels that unless they can prove to the government that the people of Canada are justified in absorbing a loss of $600,000 a year, the service will be discontinued.
I am sorry, Mr. Speaker, that my time was so short, because there were several other remarks I should like to have made.
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, July 22, 1931.