1933-03-10

[Stage Direction]
Bill No. 42, respecting the Algoma Central and Hudson Bay Railway Company.-Mr. Bradette.
CANADIAN NATIQNAL-CAiNADIAN PACIFIC RAILWAY BILL
The house resumed from Thursday, March 9, consideration of the motion of Hon. R. J. Manion for the second reading of Bill No. 37, respecting the Canadian National Railways

C.N.R.-C.P.R. Bill-Mr. Malcolm
and to provide for cooperation with the Canadian Pacific railway system, and for other purposes, and the amendment thereto of Mr. Mackenzie King.
Hon. JAMES MALCOLM (North Bruce):: Mr. Speaker, in resuming the debate on Bill No. 37, I should like to take this opportunity of complimenting the Minister of Railways and Canals (Mr. Manion) on the very fair presentation of the case which he made for the legislation being submitted. I should like also to thank the Prime Minister for the speech which he made yesterday inasmuch as it undoubtedly made clear to the minds of most of the members of the house what he considered to be the need for the legislation, based on his opinion of the situation with regard to our nationally owned railway system.
I further feel indebted to the hon. member for Hants-Kings (Mr. Ilsley) for some remarks which he made in his very admirable speech last evening when he referred to some statements that had been made by the Prime Minister with regard to the very able men who had sat on the Duff commission and to the ability of the members of the Senate who had passed on this legislation. I am thoroughly in accord with the member for Hants-Kings. I do not think that any man who sat on the Duff commission, regardless of what his ability or previous experience may have been, has any more knowledge or any more conception of the railway situation as it applies in this dominion than have most of the members of this house. The Prime Minister himself, as he said in his remarks yesterday, has carefully watched the growth of the different railway systems in Canada, and I think I can say with many other members of the house that we also, just as well as any man who sat on the Duff commission, have watched the growth of these systems and have seen the moneys that were granted by parliament spent to build up private systems, and have later seen those private systems collapse and the roads taken over under state ownership. Not only that, but I consider that hon. members of this house have a better knowledge of the requirements of the Dominion of Canada and a fuller appreciation of what our railway system means to the national life of this country than any men who could possibly be appointed to any royal commission who have not been engaged in public life for the long periods of time that some members of this house have. I therefore submit quite respectfully to the Prime Minister that this legislation having been introduced by the Minister of Railways in a most non-partisan address,
inviting on behalf of the government a discussion of the legislation, that it is our duty to present to the Minister of Railways and to the government the views that we hold with regard to the railway situation in Canada, and to suggest amendments which we, the members of this house representing the people of Canada who are the shareholders of this road, think are in the interests of Canada and the shareholders and to the advantage of future generations.
Mr. Speaker, if I might be permitted briefly to refer to the railway situation in Canada I should like to preface my remarks by saying everyone realizes that in new countries railway construction is usually in advance of requirements. In no country has this been more true than in Canada. We have only to turn the pages of Hansard for the period following the building'of the Canadian Pacific railway to find many evidences, from those of little faith at that time, that the railway could not be made a success. True, the Canadian Pacific Railway passed through many years when the earnings did not justify the faith of the original builders, but eventually that faith was justified and the Canadian Pacific railway became great and prosperous. During the years between 1896 and 1911, due to an expansive policy of immigration, Canada grew and prospered. And the men of those years had just as much faith in our dominion as had Sir John A. Macdonald and the builders of the Canadian Pacific railway.
What the Prime Minister said yesterday may be quite true; looking at events from the vantage point of 1933 it is quite justifiable to criticize what happened between 1896 and 1911. But we all admit that hindsight is much better than foresight. In fact, if our foresight was as good as our hindsight we would not have to work; we could make all our money at the race track. Between 1896 and 1911 Canada enjoyed a period of expansion, and hon. members on both sides of this House of Commons were entirely in agreement with the expansive program carried on in those years. When Sir Robert Borden took office in 1911 no man foresaw or foreshadowed in this house the disastrous events that were to occur between 1914 and 1918, or the catastrophe which in those years upset the calculations of the legislators of earlier days, and retarded the growth of Canada to an extent which no one can calculate. Therefore I say any remarks critical of previous legislators, or their plan for serving Canada with railways, are not founded upon fact. They are not fair criticisms, because the intervention of the war utterly destroyed the calculations made previous to that time.
2890	COMMONS
C.N.R.-C.P.R. Bill-Mr. Malcolm
If on this continent we had not built railways for the pioneers I doubt very much if we would be a country of 10,000,000 people. If we had not built our railways in order to take our pioneers into those vast open spaces I doubt very much if Canada would be the prosperous country it is to-day. Possibly we might write off to national expansion and promotion, and the development of Canada, some of the moneys which undoubtedly we lost on railway construction. I do not feel nearly as much alarmed as did the Prime Minister in his speech yesterday concerning the financial situation in which we find ourselves to-day. Hon. gentlemen who sat in this chamber in 1922 following the close of the war, will recall that the picture at that time was not very much better than it is to-day. We were faced with a $60,000,000 operating deficit on the Canadian National Railways, when we took into account the interest we owed to the outside bondholders. We were owners of a system which the Right Hon. Mr. Meighen had tried to coordinate in 1917, and which coordination was only completed in 1923. The system was run down. Without going into detail, with which the Prime Minister dealt so ably yesterday, may I say that it was a disjointed system, and it was not in good shape. The question arose in this house whether or not the system should at that time have been sold to the Canadian Pacific Railway for the sum of one dollar, to relieve the future taxpayers of Canada. However the houses of parliament decided otherwise, and a management which had before it a tremendous task was put in control of the railway. I am going to say that I believe, in future years in the light of better perspective, men will have an entirely different view concerning what Sir Henry Thornton did for the national system during the time he was president. I shall prove my statement and my opinion by utterances from hon. gentlemen opposite during the years Sir Henry Thornton held office.
What happened between the years 1922 and 1930 concerning the operation of the national railway system? No one will deny that the system was coordinated; no one will deny that the trackage was tremendously improved; no one will deny that -new equipment was purchased, both rolling stock and other types of equipment,-all of which brought the railway to the forefront of railway systems on the North American continent. If one wants proof of that he has but to look up the references made with regard to the two Canadian systems by American railwaymen. Indeed, it is true that the state of efficiency into which
TMr. Malcolm.]
the national system and the Canadian Pacific had got themselves by 1929 was the envy of most transportation systems on this continent. What I say with regard to the management of the Canadian National Railways, to which in a moment I shall refer, was just as true with regard to the management of the Cana-[DOT] dian Pacific. During that time not only was the system coordinated, the trackage improved and new equipment purchased, but for the sake of the greatest industry in our country, namely the wheat industry, we restored the old Crowsnest pass freight rates, giving lower rates on grain. During the years from 1926 to 1932, as shown in the Duff report, we managed not only to pay operating expenses, but to contribute the sum of $210,000,000 towards the payment of interest to outside shareholders.
Let me say that in view of an accomplishment of that kind, I do not blame the Minister of Justice (Mr. Guthrie), who was then in opposition and speaking in the budget debate, for claiming that no party had any right to take credit for the successes prevalent at that time. I think the Minister of Justice was quite within his rights in stating that the success was due to the good offices of the management of the road, and Sir Henry Thornton and his officers and loyal staff should be given full credit. I do not think the Minister of Justice would want to retract the statement he made on that occasion. Therefore I do not believe anyone can say there was not reasonably efficient management of the national system during those years.
In the Duff report at pages 15 and 19 are given certain figures which I think hon. members should take into account when comparing the efficiency of the national system with that of the Canadian Pacific during the years of prosperity and ample tonnage. The figures showing mileage of the two systems indicate that that of the Canadian National railways was 23.8S0, while that of the Canadian Pacific railway was 16,886. Of the total railway mileage in Canada the national system had 58 per cent and the Canadian Pacific 42 per cent. There is a direct relationship between mileage and capital expenditures. How do they compare? The capital expenditures on the Canadian National system are given as $456,345,456, whereas those on the Canadian Pacific are only $348,776,855. Or, of the total capital expenditures on the railways from the years 1923 to 1931, inclusive, the Canadian National expenditures were 57 per cent and those of the Canadian Pacific 43 per cent. So we see how closely the capital expenditure compared with the actual mileage. On operating expenditure found at page 15 .of the Duff re-

C.N.R.-CP.R. Bill-Mr. Malcolm
port, that of the Canadian National in these years amounted to 58 per cent of the total railway operating revenue in Canada, and that of the Canadian Pacific to 42 per cent, exactly the same percentage as obtained in mileage. In otheT words these two roads ran side by side with their total mileage in capital expenditure compared with operating expenditure.
But let us come to the all important question of revenue. On page 15 of the Duff report you have the figures. The total operating revenue of the railways in Canada was divided, Canadian National 57 per cent, Canadian Pacific 43 per cent, exactly the same ratio as the capital expenditure, and only one per cent difference from the mileage. Does not that prove that during that period when tonnage was ample, when the Canadian Pacific and the Canadian National both were building up power, equipment and rolling stock, and rock ballasting their roads, they ran hand in hand on expenditure; therefore, any credit or criticism applicable to one road is also applicable to the other.
My remarks in that regard are made for a certain reason. The Minister of Railways in his speech a few days ago gave the decline in the revenue of the publicly owned system as being from 8394,000,000 to, I think, $162,000,000, if I remember rightly.


Mr. MANION:: To 8161,000,000.


James Malcolm: I would ask hon. gentlemen in this house who have been associated with business and financial enterprises if there is anything unusual about the decline that the Minister of Railways is called upon to face. Is it not just about comparable to the decline in other business on this continent? Is the railway problem in these times of international stress any more difficult to solve than the problem that faces the pulp and paper industry, the lumber industry, the coal mining industry or manufacturing industry? I think not. The problem which we as guardians of the national railway and representatives of the people who own it have to face is just the same problem which every board of directors and every manager of business is called upon to face to-day. I do not think that it is a much worse problem than faced us in 1922. In 1922 we w'ere facing the destruction of our previous hopes caused by the great war. In 1933 we are facing the difficulties which have arisen not through any action of hon. gentlemen present, not through any action of the people of Canada, but through the breakdown of the economic system of the world. For my part I prefer to look at this national problem in the same way as I look at a business problem
when I sit with my associates in business trying to solve the problems which come before us.
There was an interesting statement made by the minister with regard to the economies which have been effected. The minister said that S40,000,000 had been saved by efficient management on the Canadian National system during the past year. I want to say to the minister that for whatever part he had in that I congratulate him. I want to congratulate the management of the Canadian National system on being able to meet the conditions with which they are faced by so reducing expenditure as to save this amount of money. But in fairness I want to say to my friend the minister that he is hardly right in saying that had these economies been effected in 1928 we could have paid
840.000,000 on the interest on our obligations to the bondholders.


Robert James Manion: Mr. Speaker, I did not
make any such statement.


James Malcolm: I am glad the minister
did not. I understood that he said if the same efficiency had obtained in 1928 as to-day that would have been the result.


Robert James Manion: I know my hon. friend
does not wish to mislead. I quoted Mr. Hun-gerford as saying that if the same economies were in force and with the same amount of business as in 1928 it would have increased the net earnings by $19,000,000.


James Malcolm: With regard to that I
want to say that the expenditures of 1928 were predicated upon the demands of the public for service. They were predicated on the demands of members of this house for branch lines. Can we not recall the brilliant speech made by a member of the Senate who was then a member of the House of Commons in which he advocated a very extensive and very expensive immigration project for the Peace River district. Opinion in this house was divided, but mostly supported the then member for North Vancouver in his desire to improve the conditions in Canada by an extensive immigration policy to fill up the Peace River country. I remember at that very time Sir Henry Thornton made the statement that we should go slowly. He said, there is a limit to what the national railway can carry, and the Peace River railway may be the last straw that will break the camel's back. Whatever we may say about the extension of branch lines in the dominion during the prosperous years up to 1929, I think it is only fair for hon. gentlemen to admit that we were all looking at things through very rosy glasses, and regardless of political affiliations we in

CJV.R.-CR.R. Bill-Mr. Malcolm
this house were all anxious to see the Canadian Pacific and the Canadian National give the very best service possible, in fact we were demanding super service, we were demanding branch lines which in the light of recent events were probably not at all justifiable, but which did look to hon. members then to be quite worthy of consideration. I do not think it is fair to criticize former parliaments for their optimism at that time. No member of this parliament who sat in the last parliament ever anticipated to the slightest extent the economic collapse which has fallen upon us in the last four years. Does anyone here recall a single speech of warning in this house in the years 1928 or 1929 by which we were told that we were going to have the greatest economic collapse that the history of the world has ever recorded? I think not. So in dealing with what we did in previous years I do not think anything is gained by crying over spilt milk. We are just in the position to-day that other business men are, we are faced with a problem and that problem must be solved. The Minister of Railways has introduced a bill to that end. Members of this house are entitled, indeed it is their duty, to express their opinions as to the best method of solution in the light of existing circumstances and not in the light of recriminations for anything that past parliaments have done.
May I say with regard to the expenditures which were made during the period of prosperity, that we are benefiting by those expenditures now to an extent of which we little dream? We could not save money to-day on the Canadian Pacific or the Canadian National if we had not built our rock ballasted roadbeds up to their present fine condition. We could not save money on power if that power had not already been provided on both systems, if the equipment was not in good shape for many years to come. We are now relying on the fat that was built up during those years on both railway systems. We can now economize and benefit from the expenditures of former years, until things revive.
There has been a great deal of criticism to the publicity of both railway systems. But hon. gentlemen who have had some experience with advertising, know perfectly well that advertising has a continuous value, indeed, it has a cumulative value, and the prestige which the Canadian Pacific has built up for itself throughout the nations of the world, and so largely in Europe, is not going to pass in a day. If a man is a good advertiser, he probably has to continue it to some extent, but he can easily curtail his advertising in times of stress and reap the profits of previous publicity which brought his goods or his system into the public view. So I think the expendi-

tures made by the old administration, Sir Henry Thornton and his board of directors, are of distinct value to us at the present time in effecting economies which never could have been effected if the roadbeds had not been built up and the equipment had not been purchased.
I have read the Duff report with considerable care, Mr. Speaker, and I am disappointed in one feature of that report. It makes a most careful analysis of the financial situation of these roads; it deals with many phases of transportation, but I think it fails in one respect. It does not provide what the Minister of Railways referred to in his speech the other day; it does not give any assistance by telling the railways or telling us as trustees of the Canadian National Railways, how the railway systems in Canada are going to secure more tonnage. It is on more tonnage that the systems must rely for any future prosperity. I think perhaps hon. members are quite fed up on discussions with regard to the problem of motor car transportation as it affects the earnings of the railway system, but may I respectfully submit a thought which I think has been overlooked in this regard. The minister pointed out that from 1923 to 1932 the number of motor cars in Canada had increased from, I think he said, a half million to a million, and that during the same period the decline in passenger traffic on the railway systems was equal to the increase in motor car traffic. In other words, the passenger revenue declined by about half. Based on that statement of fact one would be inclined to say that motor car traffic injured the railways of Canada to the extent of about half their passenger traffic, but is that true? I do not think it is. When one begins to consider what the motor car industry has meant to the railways of Canada in the tremendous tonnage they have carried for the motor car industry'one hesitates to say that this industry has been such a detriment to the railway systems. When one considers the tens of thousands of car-loads of road material, cement, asphalt, crushed stone and so forth that have been transported in Canada for the construction of good roads, entirely due to the advent of the motor car, one must realize the tremendous tonnage that has accrued to the railway systems of North America due to the very fact that roads had to be built for these cars to run on. I have discussed this problem with two or three very good railway economists in the United States, one of whom informed me that he did not know of a man on the North American continent who had made a satisfactory calculation to prove exactly what motor transportation had cost

CJV.R.-C.P.R. Bill-Mr. Malcolm
the railway systems if, indeed, it had meant any cost at all in total earnings.
I do submit, however, that our railways are open to some criticism. I believe the operators of all railways in North America have been so busy watching their opponents that they did not consider what might result if only they thought of themselves as transportation men rather than as railroad men. Today they see it; to-day we have the advent of the single unit, gasoline-propelled car in Germany. It is now coming into use in the United States, and I believe two or three of these cars are being built for use in Canada. By this means a good service may be rendered on branch lines without the expensive rolling stock or the heavy operating crew needed on a steam train of three or four cars. If ten years ago the railway companies had seen, as they see to-day, the possibility of using motor transportation on their own rails I believe much of the expense of maintaining heavy services on branch 'lines could have been avoided. In the second place, had the railways realized that they were the transportation principals of this dominion and that anything that had to do with transportation was in their field probably ten years ago they would have done what they are now doing under necessity; namely making use of the trucking system in order to feed their terminals and division points.
I enjoyed listening to the remarks of the minister because of one particular point stressed, namely, that the decrease in railway operation had lessened the consumption in coal, I think he said, from 59,000,000 tons to
29,000,000 tons.


Robert James Manion: Dollars.


James Malcolm: Yes, dollars, and the minister went on to say that this had a very serious effect upon the earnings of the coal miners of Canada. That only shows, as the minister pointed out, .the far reaching effect of anything that is detrimental to our transportation sys-stem. When the minister said that an additional 50 per cent tonnage would solve our problems I just wondered to myself why any man in the transportation business, a business whose very life blood is the movement of commodities, should support any policy which has to do in any way with the restriction of trade and the movement of commodities. To-day we have this situation, Mr. Speaker, that many commodities are being diverted into other channels. Recently I asked a question of the Minister of National Revenue (Mr. Ryckman) with regard to the shipment of silk from Japan through the Panama canal. I was informed that it was cheaper for the Toronto raw silk user to buy his silk in New
York rather than in Tokyo, because of some ruling with regard to exchange. There is a case in point. I know that the movement of silk from the port of Vancouver across the continent was one of the most profitable operations carried on by the railways. Silk tonnage was almost better than passenger traffic; silk trains were given precedence over passenger trains. I think everything the minister can do should be done in order to increase tonnage, because tonnage is the life blood of the railways and is the one thing that will bring them back to prosperity. Therefore I say that the success of the railways, which as the minister has pointed out affects so many other lines, is entirely tied up with the fiscal policy of this dominion. We cannot divorce the two problems. If in this house we consider the movement of tonnage over our railways when we are framing our tariffs we will do as much to relieve unemployment and lessen the financial burden of this country as we can do in any other way.
I should like to make an observation now on the principle of this bill, which is one of central control. I have been wondering during the past two or three months whether or not central control is the answer to our problem. Personally I do not think it is. Could we solve our lumber problem by creating a dictator over our lumber mills? Could we solve 'our wheat problem by merging our wheat growing areas in the west into collective farming areas, thereby destroying the rights and liberties of the individual by making one great productive system? I do not think we could. Could the pulp industry be rejuvenated by compelling the amalgamation of all the pulp mills in Canada? I think not. The farming industry will be rejuvenated when we have a broader market, when the nations of Europe are prepared to buy more of our wheat at better prices. The lumber business in this country will be revived when we begin to have faith that Canada is not down and out, and start some substantial construction. The pulp and paper industry will be revived when conditions improve in the United States and a better market for newsprint is found with the large United States newspapers. Nothing but increased business, Mr. Speaker, is going to revive these businesses which are not doing well to-day. I do not believe centralization of authority or the amalgamation of businesses is the answer. In fact the view is largely held by many of the best business economists in the United States that much of our trouble has come from the worship of bigness. We have thought that if a thing was big it must be good, but to-day the trend is more towards decentralization than towards further amal-
2894	COMMONS
C.N.R.-C.P.R. Bill-Mr. Malcolm
gamations. One must realize that there is a limit to the capacity of man's mind, and that tremendous corporations can be administered only by system. A system that is devised to operate a very large business must be predicated upon a certatin set of conditions. If it is to work it must be planned for a given set of conditions, and when, owing to a great war or owing to an economic crash such as we have had, the conditions are entirely altered, then the system fails just as completely as anything has ever failed in the history of the world. Then we have to call in the genius of some one man to set right the conditions under which the system can operate, because it failed to operate under the changed conditions.
I believe, Mr. Speaker, that there is much to be said for decentralization. I think that one of the biggest problems that will face the Prime Minister if this legislation goes through is to find a superman who will be capable of handling the system alone. We in this house are handing over to one man complete control of a system which owes the public $1,300,000,000. It is the greatest single asset of this dominion.


Mr. CHAPLIN:: There is no equity for
it.


James Malcolm: My hon. friend says that there is no equity. I differ "from the hon. member for Lincoln; I will tell him that there is very little equity in any business at the present time. Earning power, as my hon. friend knorvs very well, is after all the best basis of equity.


Mr. McGIBBON:: They are in the red ink from an operating standpoint.


James Malcolm: If the railways are in
the red ink from an operating standpoint they have plenty of company at the present time in other businesses.


Peter McGibbon: That does not make it better.


James Malcolm: Of course not; but the
fact remains that the Prime Minister will be faced with considerable difficulty in finding a man big enough to administer the system; a man who will deal adequately with a system comprising over 30,000 miles of trackage and the number of employees engaged by this railroad will have to be a superman. I say without fear of contradiction from anyone in this house that there is one thing that has impressed itself on the minds of the people of the North American continent, not only the people in Canada but the people in the United States, and that is that the

so-called idols of the years 1927 and 1928 have pretty well proven that they have feet of clay, and that has been particularly true throughout this financial crisis. It has been true of the management of most big companies. I for one have ceased to believe very much in supermen. I believe more in the collective wisdom of a group of men such as I have the pleasure of speaking with this afternoon.
We are planning for a board to economically administer our railway system; yet at the same time we know perfectly well that we are also planning to set up a waterway, state-owned, to compete with that road on one side, and to build highways to compete with it on the other. If we have transportation over a free waterway and transportation over free highways, it seems to me that we are very blind if we think that the Canadian National Railways and the Canadian Pacific are not faced with serious financial problems.
I cannot quite understand the Prime Minister's lack of courage in the matter of rail transportation; he is extremely alarmed about the financial position of the national railways. He said yesterday that the situation was as serious as it could well be, or words to that effect; yet the right hon. gentleman has courage enough to obligate this country, or the taxpayers of future generations, to the extent of hundreds of millions of dollars in the construction of a transcontinental highway and the St. Lawrence waterway. His policies are very inconsistent, for these various means of transportation are going to be in direct competition. I do not think that the railways have failed so utterly as some people seem to think. The Minister of Railways (Mr. Manion) said the other day that economies amounting to $40,000,000 had been effected. This is amazing; it is a very good showing. Mr. Beatty made the statement that amalgamation rvould save $75,000,000. I say to the Minister of Railways that he has saved more than his half already we may now expect Mr. Beatty to save the remaining $35,000,000.
There was one other remark, the Prime Minister made yesterday with which I want to take exception, and it is practically the one difference I have with this legislation. The Prime Minister made the statement that this measure is virtually placing the national railways under a receivership. He said that if it were a private business it would be in liquidation-that it was practically insolvent. Possibly it is, viewed in the light of to-day's values. I do not differ a particle from my hon. friend from Lincoln when he says that to-day's value is not equal to the bonds that

C.NJI.-C.P.R. Bill-Mr. Malcolm
are outstanding. It certainly is not there viewed in the light of to-day's values.


James Dew Chaplin: I did not say that.


James Malcolm: Well, comparatively. I
believe there is every reason to say that if the national railways were a private concern and owed $1,300,000,000 to bondholders the
bondholders would feel that it was about time they were taking some action to secure their investment. But, Mr. Speaker, what is a receivership for? As every hon. gentleman knows, a receiver is appointed for one of two purposes: either to liquidate the property or to operate it until it is in a sufficiently successful position to be handed back to the shareholders. But that is not what this legislation provides. This legislation provides that the receivers, whom the Prime Minister describes as trustees in lieu of receivership, are to be appointed permanently. They are not being appointed to deal with the emergency that exists. My one objection to the legislation' is the permanence of the trustees. The Prime Minister says that they are to be appointed like judges. May I point out however that they are not judges. Judges are appointed to administer the laws enacted by this parliament; these men are being appointed as business managers to spend the money of the country in the administration of the country's greatest national institution.


Mr. MACKENZIE KING:: They are a
law unto themselves.


James Malcolm: Can these trustees tell
what conditions will be facing the world in the next twelve months? Certainly the Prime Minister and his Minister of Finance would be very glad to know what those conditions will be, but there is one tiling that we do know, and that is that there are going to be some very radical changes in the financial structure of North America in the next twelve months; and if there is in the United States that inflation of currency which has been predicted, then the load of the national railways in meeting its obligations in New York will be materially lightened. The whole structure may change. I am not without hope for the man who has obligations. Inflation of American currency to the extent of twenty-five per cent would make a very great difference in the problem of the Canadian National Railways in paying its commitments to New York bondholders.
One aspect of this dictatorship which I do not like. The autocratic control given to one man in this board is to me repulsive.


Mr. SPEAKER:: The hon. gentleman has
spoken for forty minutes.


James Malcolm: I am sorry.


Pierre Édouard Blondin: Before the debate proceeds further I will deal with the amendment. Mr. Manion, seconded by Mr. Stevens, moves:
That Bill No. 37 (letter A of the Senate) intituled: "An Act Respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific railway system, and for other purposes," be read the second time.
Mr. Mackenzie King moves in amendment thereto:
That all the words after "that" to the end of the question he left out in order to insert the following instead thereof:	"the second
reading of this bill be postponed until this house have declared that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific company; or to divest parliament of its rights; or to take from the House of Commons its primary duty to control expenditures of public moneys and the taxes required to meet the same; and that the provisions of said bill shall be read in the light of this declaration, and be construed so as to conform therewith, and that in so far as any of its provisions may be inconsistent therewith they shall be amended accordingly,
and that the adoption of this amendment by this house shall constitute the declaration of its intention and purposes as set forth herein."
There is in our journals one precedent of an amendment moved on the second reading of a bill which proposed that "further consideration of the bill be deferred until the tariff bill has been disposed of." It was a declaration of principle covering not only the second reading but also the third reading and the final adoption of the bill. It was moved as a disapproval of the measure. The present amendment is different inasmuch as it proposes a postponement of the second reading pending a definite declaration of the house. It does not purport to be adverse to the bill but it makes suggestions for adding to its provisions by amendments which can be moved only after the adoption of the second reading. May at page 390 says:
It is competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill to move as an amendment to the question a resolution declaratory of some principle adverse to or differing from the principles, policy or provisions of the bill.
As this amendment has not the effect of disagreeing with the principle of the bill, it does not come within the class of amendment referred to by May. The allegation that nothing in the bill should be taken to divest parliament of its rights or to take

C.N.R.-C.P.R. Bill-Division
from the house its primary duty to control expenditures is a declaration of general principles which can be moved as a reason for not agreeing to the second reading of a bill dealing with the constitutional rights of parliament, but which is beyond the scope of, and therefore irrelevant to the present bill. May says at page 391 that the principle of relevancy in an amendment governs every such proposed resolution. At page 391 May says further:
Such an amendment may not deal with the provisions of the bill upon which it is moved nor anticipate amendments thereto which may be moved in committee.
The words "nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific company" anticipates an amendment which may be moved in committee. The proposition that the bill shall be read in the light of certain declarations and be construed in a certain manner and that its provisions shall be amended accordingly is in the nature of an instruction to the committee which cannot be moved as an amendment to the second reading. For these reasons, the amendment is out of order.
I refer the house to May, 13th edition, page 391; Bourinot, page 509 and Redlich, volume III, page 89.


William Lyon Mackenzie King: No point of
order has been raised in this matter. Your Honour has taken it upon yourself to give a ruling without any hon. member having an opportunity-


Mr. BENNETT:: I raised a point of order.


William Lyon Mackenzie King: My right hon. friend did not, he said, he would reserve the question as to whether or not the amendment was out of order. The manner in which Your Honour has now given your ruling precludes us from debating the subject and the only alternative left is to challenge Your Honour's ruling. I respectfully beg, Mr. Speaker, to appeal from your ruling.


Pierre Édouard Blondin: I conceive it to be the
duty of the Speaker to intervene without any objection being taken when he feels that any proceedings before the house are out of order. I have given this amendment very serious consideration. The ruling is that the amendment of Mr. Mackenzie King is out of order, and Mr. Mackenzie King appeals from the said ruling.


Mr. MURPHY:: I was paired with the
hon. member for West Edmonton (Mr. Stewart). Had I voted I would have voted to sustain the ruling of the chair.


Mr. CANTLEY:: I was paired with the
hon. member for Richelieu (Mr. Cardin). Had I voted I would have voted to sustain the ruling of the chair.


Mr. GERSHAW:: I was paired with the
hon. member for London (Mr. White). Had I voted I would have voted against the ruling of the chair.


Mr. SMITH (Cumberland):: I was paired
with the hon. member for Antigonish-Guys-borough (Mr. Duff). Had I voted I would have voted to sustain the ruling of the chair.


Mr. ELLIOTT:: I was paired with the hon. member for South Waterloo (Mr. Edwards). Had I voted I would have voted against the ruling of the chair.


Mr. RALSTON:: 
Mr. BAKER:: I was paired with the hon.
member for Prescott (Mr. Bertrand). Had I voted I would have voted to sustain the ruling of the chair.


Mr. MacDONALD (Cape Breton South):: I was paired with the hon. member for Colchester (Mr. Urquhart). Had I voted I would have voted to sustain the ruling of the chair.


Mr. MacLEAN:: I was paired with the
hon. member for Royal (Mr. Jones). Had I voted I would have voted against the ruling of the chair.


Mr. VENIOT:: I was paired with the hon. member for York-Sunbury (Mr. Hanson). Had I voted I would have voted against the ruling of the chair.


Mr. BELL (St. Antoine):: I was paired
with the hon. member for Beauharnois (Mr. Raymond). Had I voted I would have voted to sustain the ruling of the chair.


Mr. POULIOT:: I was paired with the
hon. member for North York (Mr. Lennox). Had I voted I would have voted against the ruling of the chair.


Mr. GOLDING:: I was paired with the
hon. member for Lanark (Mr. Thompson). Had I voted I would have voted against the ruling of the chair.


Mr. HURTUBISE:: I was paired with the hon. member for North Renfrew (Mr. Cot-nam). Had I voted I would have voted against the ruling of the chair.
2898	COMMONS
C .N .R -C .P R. Bill-Mr. Malcolm


Mr. SAUVE (Translation):: I was paired
with the hon. member for L'Assomption-Mont-calm (Mr. Seguin). Had I voted I would have voted to sustain the ruling of the chair.


Mr. DUPRE (Translation):: I was paired
with the hon. member for Joliette (Mr. Fer-land). Had I voted I would have voted to sustain the ruling of the chair.


Mr. BOUCHARD (Translation):: I was
paired with the hon. member for Welland (Mr. Pettit). Had I voted I would have voted against the ruling of the chair.
Mr.'PERRAS (Translation): I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted I would have voted against the ruling of the chair.


Mr. DUGUAY (Translation):: I was paired with the hon. member for Bagot (Mr. Du-maine). Had I voted I would have voted to sustain the ruling of the chair.


Pierre Édouard Blondin: The question is on the main motion.


James Malcolm: Speaking on the main motion, I should like to conclude the remarks I made on the amendment. At the expiration of my forty minutes when speaking on the amendment, I had just said that I did not like the legislation as presented to the house by the minister. 1 had endeavoured to point out to members of the house that the conditions which obtain in Canada with relation to the Canadian National Railways and the Canadian Pacific Railway are not greatly different from those which obtain in most businesses in this dominion, and that in my opinion at least those conditions have no permanence, but that better days will, come when entirely different conditions will prevail in this dominion.
I am afraid that the Prime Minister and those in charge of the drafting of this legislation have set the Minister of Railways the problem of putting through legislation which is based on either one or two principles, or both of them. The legislation is based either on a desire for autocracy in administering our great national railway enterprise, or it is based on a feeling of despair that the present situation cannot be improved except by very drastic legislation and drastic control. I do not assume, as this legislation does, that the present conditions will always obtain, and that we shall always be in the financial stress which we are experiencing to-day. To assume that would be a contradiction of the Prime Minister's own faith in this country as expressed in words so many times. It would

also be a contradiction of his faith in the future of this country as expressed in the agreement which he has made with the neighbouring republic for the construction of the St. Lawrence waterways. This legislation has some virtue. If it were being adopted, as methods are being adopted by private interests, to deal with an existing emergency situation, I do not believe I should have any disagreement whatever with the legislation.


Mr. MORAND:: Does the hon. member
think the situation is due entirely to an emergency, or is some of it permanent?


James Malcolm: I do not differ at all
from those who hold that the situation is due to a set of world conditions in which probably we have played our part. If my hon. friend wants to know what I think about it, I do not mind telling him and the house, frankly. We ran into one war, a physical war, which certainly put the financial situation in the world in a complete mess. From the termination of that war until 1930 we ran into a second war when every country in the world competed in raising tariffs, causing a worse economic mess. I am not blaming the Canadian people any more than peoples in other parts of the world, but I must say that if we do not watch ourselves we will be facing a third war, a war of inflation, where nations will be trying to find out who can make money the cheapest.
If this legislation were of a compulsory nature for a period of from three to five years, I would support it. The parliaments of the future, 'considering the success or failure of the experiment and predicated upon the exigencies and the circumstances then obtaining, could decide whether or not they would continue this form of autocracy or whether they would give back more power to the members of this House of Commons. The Prime Minister said that the refusal to vote money was within our power. I believe he knows perfectly well, that the refusal to vote money gives us no power in this chamber at all. The only money the national system has to ask us for is the interest on the bonds due to outside bondholders. Should we refuse to pay that interest the bondholders would immediately act, and we would have to pay it. Under the present legislation, there is being taken away from the minister the slightest vestige of control he might have over the head of the system. He may spend all the revenues exactly the same as the old board did. And I am not saying the authority we granted the old board was right at all; I think it had too much authority. I

C .N .R-C .P .R. Bill-Mr. Malcolm
submit many hon. members of the house who criticized the authority we gave that board were right in their criticism. The old board could spend every dollar for revenue, and this house of parliament had no control. Many people believe that by taking a great public enterprise out of the control of parliament and putting it under a board, the difficulties will be met. I am from the province of Ontario, and I state fearlessly that the hydro electric system of that province was efficiently administered when the administration was conducted by Sir Adam Beck. It was ably administered in those days. But it is only a few years ago that absolute control of expenditures of the hydro electric, by way of making contracts for future power commitments, put the hydro electric under obligations which I do not believe would have been incurred if the legislature of Ontario had had complete control.
I do not believe we will secure any superman who has any more brains than members of the House of Commons, and that is why I am only willing to support the legislation as an experiment. The Prime Minister has said the legislation is drastic, that it is in the form of a surgical operation, and that generally in the case of a deep-seated trouble surgery must be resorted to. In that regard I do not think the Prime Minister's simile is as apt as the similes he usually uses. My opinion is that he is not treating a patient by surgical operation, but he is putting him under perpetual treatment in some institution from which he cannot escape. After a surgical operation the good doctor cures his patient and hands him back to his family. But when we put a man under perpetual treatment, or under the care of a custodian from whom he cannot be taken, his family will never see him again. I want to say to the Minister of Railways, in all kindness, that I do not believe this legislation is fair to him or to the Dominion of Canada. To meet a temporary condition, I am in favour of a surgical operation; by way of setting up an automatic board for a given period of from three to five years. If that experiment works, if this receiver or trustee the Prime Minister speaks about-where he will get such a man, heaven knows-if this man makes a success of the system I think the shareholders of the Canadian Pacific Railway have a right to have their system handed back to them, and the parliament and people of Canada have a right to have their system returned to them.
This legislation should not be predicated upon the assumption that troubled times are going to continue. Many of us have enjoyed the privileges of this house for varying periods, 53719-184
some of us may be elected again. But, in the passage of time, many of us will not be in this house ten years hence. New men will be elected. We should base our legislation not upon emergencies which arise, but upon faith in the dominion. It seems to me that when we assume we are in a national crisis and that we are not going to get out, we are giving scant leadership to the people of Canada. It is said on every hand that if only we could establish faith on the North American continent there would be a wonderful revival of business. I say to the Prime Minister and to hon. members opposite and on this side of the house, without fear of successful contradiction, that if we needed caution when we were prosperous and are now criticizing ourselves because we were not cautious, for heaven's sake let us have courage now, and not criticize ourselves five years hence for not having courage.
This system is not in the doldrums; it does not need to be put under communistic or autocratic control. The Canadian Pacific Railway system is not in the doldrums. It is facing a crisis due to lack of tonnage and transportation of all kinds. These things will right themselves. I have no brief for the Canadian Pacific, but I have a brief for the people who own it. After all, it is their system, and I do not believe this parliament should take the system of the Canadian Pacific and the system owned by the people of Canada and place them under a bureaucracy permanent in its nature, and which nothing but a complete vote of the House of Commons and the Senate can possibly alter. I say to the government and to the Minister of Railways that so far as I am concerned the principal change I want in the legislation is to change the permanence of the appointments to the board. I do not oppose an arbitral tribunal as a temporary expedient to deal with circumstances existing to-day, but I do say we are not playing fair with the Minister of Railways, we are not playing fair with the stockholders of the Canadian Pacific or with the parliament of Canada when we take these two great systems and put them under arbitrary control, making the two of them forever subservient to the decisions of one man as to what shall be done with the invested capital.


James Layton Ralston: And self-perpetuating.


James Malcolm: The self-perpetuating
feature, Mr. Speaker, is my principal objection to the legislation. I believe if the minister and the government could see their way clear to enact this legislation as an experiment, they would be much better advised.



C.N.R.-C.P.R. Bill-Mr. Arthurs


Mr. GUTHRIE:: On the point of order,
Mr. Speaker, I did not like to interrupt my hon. friend, because we on this side of the house always like to hear him, but I submit he was out of order in again addressing the house. The amendment, or so-called amendment, which was ruled out of order was never put to the house by you, Mr. Speaker.


Some hon. MEMBERS:: Yes, it was.


Hugh Guthrie: If so, it was subsequently ruled out of order and became as nothing, consequently my hon. friend, I submit, had no right to speak again, though we took no objection on this side of the house.


Mr. CASGRAIN:: I had the honour of
consulting Mr. Speaker, and he said it was in order.


Pierre Édouard Blondin: I do not know that under the circumstances it is necessary to give a ruling, but my recollection is that I did put the amendment to the house last evening. Whether it was subsequently ruled out of order or not, it was for the time being before the house. I understood the hon. member for North Bruce (Mr. Malcolm) to be addressing himself to the question before the house, which was the amendment, and that having been removed it was open to him to speak to the main question.


Hugh Guthrie: Well, I just draw it to
your attention.


James Malcolm: I did not think I was
out of order, because the whip on this side informed me that the hon. member for Parry Sound (Mr. Arthurs) was quite willing that I should go on. In any event I thank the members of the house for their very courteous hearing.


Mr. JAMES ARTHURS (Parry Sound):: The hon. member for North Bruce will pardon me if I do not follow him through all his very strenuous effort to gloss over, shall I say, or to defend the action of the government of which he was a member. The hon. gentleman spent about thirty minutes of his first speech in defending the actions of the late government as far as the Canadian National is concerned, and spent about five minutes in attacking the financial policy of this government. Outside of that, I have not observed anything very constructive in what he said, no matter how eloquently and brilliantly his speech was delivered.
I would like to say that the people of this country at the present time are watching very closely this legislation, and the action of this house. And it is perfectly right that they should. In the first place the citizens of Can-

ada are interested in the matter as taxpayers of this country. They are the people who in the past have paid and who in the future must pay the bills or deficits of the Canadian National Railways. Then we must consider that they are also the shareholders of this railway system, and if the road succeeds they hope in the future, and I believe have reason to hope, that they will ultimately get back some return for the money which has been spent, perhaps recklessly, upon the system. There is another reason why they should be interested which I do not think has been brought forward in this house as prominently as it should be, namely that the people of Canada are the customers of both these railroads. The people of this country are entitled to value for the expenditures they make, whether for passenger service or freight service or anything else. Then another class of men interested in this legislation is the men who are at the present time employed by either of the great railroads, or those who have been for some time out of work on account of the cessation of such employment. All these should be considered in this connection.
In times of depression people are always looking around for some one or some thing to blame. In this particular case the blame has been largely placed upon the railroads. I agree entirely with the previous speaker, the hon. member for North Bruce, that our railways have not lost business in as large a proportion as many other trades. It is true our railway business has fallen from
8477,000,000 per year to 8260,000,000 per year in three years, but I would like to inquire what business has not fallen off more than that. Especially the external trade both of this country and every other civilized country has fallen in a much greater proportion. The previous speaker instanced the pulp and paper industry. Before the depression it was a good industry, distributed over the country at various places, and making money. Unfortunately like our railways it was exploited, we had mergers, plants were purchased by the syndicate and closed, far larger plants were built than were required at that time or than will be required for many years to come, and as a result the investing public in Canada lost hundreds of millions in that enterprise. Take the steel industry or the lumber industry, you find that in those trades there is less than 15 per cent of the business there was in the boom time, whereas the railways still have 54 per cent.
I might state, from a non-political viewpoint, the situation as it appears to me. Previous to the amalgamation of the roads in the national system, I was a member of

C JV R -C .P.R. Bill-Mr. Arthurs
this house. I remember well previous to the war we were forced to find scores of millions of dollars almost every year, if not every year, to keep two of the railroads afloat, I refer to the Grand Trunk and Canadian Northern. Very large amounts, my recollection is about 830,000,000 a year, were being voted by parliament as loans, never repaid, to these two roads in order to keep them afloat. This went on during the war, until as has been pointed out very ably by the Minister of Railways and the Prime Minister, these investments became larger and eventually we were forced to take over the roads. And this expenditure has gone on ever since. I am not talking politically when I say that during the last ten years very large amounts of money have been expended upon this system, which were unwisely spent, very unwisely spent. As a result the interest charges have been mounting from year to year, and you have the present situation. Personally I believe it is only a question of time, we hope a short time, until this road will be in a very different position. There is no doubt we have a good railroad, there is no doubt that even in less than normally prosperous times the road would pay, and the people of Canada instead of going into their pockets to pay deficits would have some little surplus. There is no question in my mind that that will be true in time to come.
Some people believe, and the view has been strongly urged in some sections of the press, that there should be a recapitalization of this railway. I submit that this would make practically no difference to the public. It makes no difference to us as Canadians whether the capitalization of this road is 81 or $1,000,000 or $1,000,000,000. We are the sole stockholders; the benefits, if any, and the trouble, if any, will be ours in any event. For bookkeeping purposes probably it is desirable to fix some capitalization, but it would have no effect on present circumstances.
As I said, we know that during the past years there has been extravagance, both on the-Canadian Pacific and the Canadian National. Wages reached a veTy high level, salaries were high, we know that in the case of the Canadian National there were a score of men who received a greater salary than the Prime Minister of Canada, and some of them a larger salary than the President of the United States of America. Those were the circumstances. Then, as I said before, we had the hotels, the steamship lines and the large terminals which were not necesasry either then or now.
Lately, Mr. Speaker, the cry has changed; both the railways and the public demand 53719-1845
economy. I should like to point out that the first economy practised was one which was highly undesirable in many ways; it was the cutting down of railway services even before the last crash. Then we had the cutting down of wages, which was opposed by many people, and perhaps it was unfortunate that the railways should have been among the first to take that action. The next step was the dismissal of many men, and I believe that in many cases the number of employees was reduced unnecessarily. No one can convince me that two section men can do as much work as four meq, or that two men can look after seven miles of track as well as four men could look after five miles. Before the reduction in staff we had four section men to every four or five miles of track, on the average. First that number was reduced to three and ultimately to two. As a result we have thousands of men out of employment and we are gradually losing the permanent effectiveness of our railways. That was what occurred during the war. We did not have enough men to keep our tracks in good shape; as a consequence the ties over whole sections of the road became rotten, and ultimately they had to be replaced at a cost of millions of dollars. The roads are alike in this regard. I should like to point out that when trade revives and traffic increases we should not expect these expenses to be kept down. Twenty trains cannot be run with ten crews. These railwaymen will be reemployed as traffic increases, and the same is true of the men who look after the maintenance of the road-beds, the men in the shops and so on. We hope the expenses of the railways will be heavier to-morrow than they are to-day and still heavier next year, because that will show that business is reviving and traffic increasing.
I think it would be very desirable to impress upon these trustees not only the necessity for making every possible saving- and no doubt a great deal can be done in that way-but also that this saving should not be made at the expense of the working men to a greater extent than is necessary, because I believe it is well to keep these men at hand.


Mr. NEILL:: May I interrupt? If we pass this legislation it will be impossible to impress anything on the trustees; they will be entirely independent.


James Arthurs: That is my hon. friend's opinion, but I think probably they will be human, and if matters are represented to them in a proper way I think action will be taken.

C.N.R,-C.P.R. Bill-Mr. Arthurs
Now I should like to say a word or two with regard to the amalgamation of these roads. In common with most hon. members who have spoken during this debate I am entirely opposed to any amalgamation. I am opposed also to unification of any kind. In my own mind I am quite satisfied that there is no demand for amalgamation by the people of Canada; on the other hand I believe they are quite opposed to it. I am even more sure that it is opposed by the employees of both railways, from the men in charge at the top down to the men who work along the tracks. I should like to read just a few words from the evidence given before the commission by Mr. Hunger-ford, the present head of the Canadian National Railways, who has been a railway man for over forty-five years. In reply to a question by Lord Ashfield, Mr. Hungerford said:
... I think it is in the general interest, in view of the fact that these two railways exist at the present time, that they should be continued as separate institutions and allowed to compete, one with the other, with a certain measure of restriction against unreasonable development, but still maintaining the principle of competition.
Later on, speaking of the appointment of the trustees, he said:	.
. . . the appointment of somebody-or at least some commission being endowed with power more or less to supervise and to prevent ridiculous developments.
Evidently he believed there had been ridiculous developments in the past. Later on he said:
I believe a very large proportion of all the real economies that can be secured at all can be secured under separate operation; and the comparatively slight difference between the degree of economy that can be secured from separate operation as compared with that under amalgamation would be more than offset by the obvious disadvantages of amalgamation which I have referred to.
Now I should like to say a few words with regard to the question I raised in my opening remarks; I should like to speak on behalf of the customers of these roads. It is very easy for a man to get up in this house and say there .are six or eight trains daily between Ottawa and Montreal and to say they are necessary because two are transcontinental trains, two are express trains and the other two stop just here and there, that they take different routes and so on. I know of a case in the province of Ontario where there was good railway service for many years, with an express and a local train each day. Now they have a train twice a week, consisting of one

car attached to a way freight. I imagine this car has been in the service for from fifty to a hundred years, at least. It has no lighting system except oil lamps, just enough to let you know daylight from dark; it has no heating system but an old stove in the centre, and you have to keep your overcoat on if it is at all chilly.


Mr. YOUNG:: Is it full of passengers?


James Arthurs: I guess there are some.
The point is that these passengers must pay exactly the same rate for tickets that is paid by the man who travels between Ottawa and Montreal. On the one hand, however, you have the very best accommodation and the most up-to-date rolling-stock, while on the other hand the accommodation is practically non-existent. I quite agree that in some cases we have had greater Eervice than was required, but in many cases they have gone too far in their desire for economy. You cannot blame these men if, when they have a chance to ride on a bus, they inevitably do so in preference to the railway. The same thing is true with regard to short freight hauls. I have been in business for many years. Even in the old days when we had a good way freight service it took from two to three days to get a parcel of goods from a place perhaps twenty miles away. I see no reason why the railways could not give us decent accommodation, perhaps by attaching one or two freight cars to a passenger train. In that way they would keep in with their customers and would do something at least to check the inroads of the motor trucks.
I am entirely in favour of this bill, Mr. Speaker, but I do think one or two amendments might well be made. Later on when the bill is in committee I will direct attention to one or two improvements I think might be made in the bill whereby these trustees shall not have the power either to tear up any branch or to lease any part of the Canadian National Railways for over five years without the consent of parliament. I think that is a very necessary clause to insert in the bill. We have roads right in Ontario, the old Great Western, a part of the Grand Trunk railway, which is practically owned by them under a ninety-nine year lease, and there are many other roads throughout the continent of America w'hich are practically in the same condition, and I do not believe that any men, one, three or twenty, should have the power to sell the assets of the Dominion of Canada without the consent of parliament. There is another thing to which I would direct attention. In the

C.N.R.-C.P.R. Bill-Mr. Motherwell
case of any dispute coming before the tribunal, in which the public are interested, as manifestly they will be in some of these cases, they should have the right to appear before the tribunal and state their case.
With these two exceptions I am in favour of the bill and I will certainly vote for the second reading.


Hon. W. R. MOTHERWELL (Melville):: The excellent example in moderation given this afternoon by the hon. member for North Bruce (Mr. Malcolm), and the equally excellent example set the other day by my right hon. leader (Mr. Mackenzie King) and, previously, by the Minister of Railways (Mr. Manion), I will endeavour to follow in discussing the bill now before the house. I will try to be as moderate and temperate as may be consistent with bringing out the facts as I see them. I am sure the Minister of Railways will sympathize with me if I do not attain to that high eminence reached by the hon. gentlemen to whom I have referred, because it must have taken one of them-the Minister of Railways-at least an effort to reach that commendable height.
Let me say at the outset that I do not like this bill. The more I think of it the less I think of it, and that is not meant to be a paradox at all. I should like to support it though, just the same as I should like to have supported the Anglo-Canadian agreement; but I cannot do so. There is one good feature about it which I would mention, and that is the reduction of the board of directors to three-call them what you like, trustees, directors or anything else. There was never one appointed from Saskatchewan or Alberta on the old board, and I think we should be given some credit for not- having made the board nineteen instead of seventeen. There was a weakness in too large a board, and there is almost as great a weakness in one that is too small. As someone put it, out of seventeen men you might find three who were all right, but it you got three dubs or violent antipublic ownership men to start with our position would be rather unenviable. If you could get one man to perform the duties of the office, a man in whom all the people of Canada had confidence, it might be better still than having three; it would be a shorter cut anyway. However, no such super-individual exists that I know of. I have no faith in all this talk about super-men; to use an old expression, there ain't no such crittur. I have no objection to three; I think it is a move in the right direction. Apart from these preliminary remarks, Mr. Speaker, I am afraid
that my encomiums on behalf of the bill will be very limited.
As regards the Duff commission, that was a good move; it was an evidence that both the great presidents realized that there was something ahead which they had to prepare for. Naturally Sir Henry Thornton and Mr. Beatty would know more about the financial situation of the railways than we do, and in anticipation of the worst happening they were both favourable to a commission being appointed to investigate all phases of the situation in the hope of bringing about reductions in operating costs and so on, in the light of rapidly disappearing tonnage. I think that was all right. No doubt the first object of the commission was to set forth the situation as they saw it in their, report, and in the second place I do not doubt that they entertained the hope that a certain educational value would be derived from the investigation, whereby the people of Canada might be guided to an acceptance of the best possible solution and one which would justify the investigation. A commission of any kind, even if its object is only to bring out the facts with a view to guiding the people along the best path, is worth while. The people of this country, however-and I suppose the same thing is true of other countries-will not take kindly to too much guidance, and when there is cause for suspicion they refuse to be guided at all. All the pamphleteering and all the after dinner speechmaking and such like seemed to tend to some form of amalgamation or joint operation, and the people of Canada were so irrevocably opposed to amalgamation that they did not take some features of the Duff commission very seriously, although the advice and information given by the commission were well meant. If we do not travel along the direction of the Duff commission they must not think it is a reflection on them. They did good service, as they saw the railway situation, and I have no reason to doubt their bona fides. Nor is any opposition to this bill to be regarded as a reflection on the Senate. We have often disagreed with the Senate before, and it seems to have been coming to life recently. I believe there is another bill under consideration there, a bill of some nine hundred sections, and I can only express the hope that they do not throw it at us this session.
There seems to be a disposition in some quarters to make a sort of goat of Sir Henry Thornton and a martyr of the Canadian Pacific. There is no necessity for anyone taking either of these extreme positions. Some people are blaming the Canadian Na-

C.N.R.-C.P.R. Bill-Mr. Motherwell
tional Railways for almost everything; yet that railway system is in a better position relatively than most of us sitting in this chamber compared to what we were three or four years ago. I question whether the status of the Canadian National is not better relatively than that of the Canadian Pacific today. I am an admirer of the Canadian Pacific Railway; I think it is the best-managed and equipped privately operated road in the world. I never had a dollar's worth of stock in this great railway enterprise, although I have often wished I had, so that anything I might say in the way of criticism of that system should not be regarded as being prejudiced one way or the other. I have great faith in its ability to come back if there is nothing inserted in this bill to hinder it. What I object to very much, however, is the practice of singling out the Canadian National system as if it were the chief sinner and making it carry all the sins of the many. And that is what is being done. Nothing is said about there being too many cotton mills in Canada; too many paper mills; too many mines; too many motor car factories, although a great many such concerns are closed down; too many agricultural implement manufacturers, notwithstanding that many warehouses and shops are largely closed. And, by the way, no one talks about too many branch banks, a number of which have for lack of business been closed, to the great inconvenience, it is true, of those who were locally served, while some bank managers are operating two or three banks running along a line of railway. Nothing is said about all these but we hear a good deal about the Canadian National Railways having built too many hotels and branch lines. The commission even thought that it was bedevilled by local public opinion and pressure. But how are you to smother public opinion and the right of communities to be heard on railway and other matters?
Let me refer for a moment to branch lines. I do not believe that this country is overbuilt with branch lines. I am one who suffered for twenty years for the want of a branch line, and when I came to this parliament one of the first objects to which I dedicated myself was to help those who were situated as I had been for some twenty years and to tiy to get them the branch line service they so badly needed. I did not confine my efforts to the Canadian National. Before I entered any legislature I spent much time with my neighbours trying to prevail upon the Canadian Pacific to provide a branch line for our district. This was long before I was ever heard of outside of my own community.

I well remember that noble old railway friend, the late Sir William Whyte, the greatest railway friend the farmers of the west ever had, Whyte by name -and white by nature. We went to him and placed our case before him knowing that if there were any good in it, and traffic present and prospective permitted it, he would do everything possible to meet our wishes. Are we to be denied that right? Are we going to shut up the Canadian National in a hermetically sealed box where no one can see it or appeal to it? The men who are operating this railroad should be strong enough to resist pressure not warranted by the facts or the traffic or the particular request made. We cannot put anyone or any great public service in seclusion and have it be of proper service to the country. We have to be a part of the world if we are going to be of full usefulness to it.
People are harping about too many branch lines, but I want to say that I struck out in 1882, four hundred miles ahead of any railway. There was not a foot of railway line west of Portage la Prairie when I struck out with a yoke of oxen towards the setting sun for four hundred miles. We had the main line, of course, that fall, but we had to wait twenty years before we got our branch line. How much longer should I have waited before making representations for a branch line? Should I have been so modest as not to look at a railway magnate? I found them to be quite approachable when I did become acquainted with them. That applies not only to Sir William Whyte but to many other officers of the Canadian Pacific Railway. I found them to be rational and reasonable men, and the same applies to the officers of the Canadian National. All this balderdash which we hear about the evil of community pressure is simply the bunkum of people who have not suffered as I and thousands of others have suffered on the prairies and elsewhere. Many of these frontier people are still waiting for branch lines. If I am spared long enough I intend to do my utmost to help the man on the frontier, the man who has blazed the trail for those who will follow. Does not all Canada, does not Australia, does not South Africa owe its development to the pathfinders and the trail blazers who went to the frontiers to build homes? These men are worthy of the very best of attention and service.
We will pass on to some other fallacies. Sir Henry Thornton's name has been mentioned as one to be honoured. The hon. member for East Hamilton (Mr. Mitchell) said that the time would come when he would be honoured,

C.N.R.-C.P.R. Bill-Mr. Motherwell
and the hon. member for North Bruce said that doubtless he was honoured now. I do not know what others are going to say, but the way Sir Henry has been treated reminds me of Mark Antony's speech when Julius Caesar was murdered by Brutus and a few others like him. Yesterday Sir Henry was sought after by the foremost men of the land, he was welcomed in any company; to-day " there are none so poor to do him reverence." Yesterday he was sought as the guest speaker for the finest banquet of the land; to-day he and the National railway are looked upon by too many as " the old man of the sea." Yesterday the Minister of Justice (Mr. Guthrie) was wanting to claim the Canadian National as his own baby; to-day the evidence is not lacking that the government would like to get rid of the Canadian National as expeditiously as they got rid of its head.


Peter McGibbon: We have $922,000,000
more debt than you had.


William Richard Motherwell: My hon. friend
was quite moderate in his speech and he should let me try to be the same.
It is pretty hard to touch new ground in discussing this bill as it has been mauled around so much, and quite properly so. My conception of the Canadian National is that it is the people's railway. No less an authority than the Prime Minister (Mr. Bennett) says that it is the bondholders' railway, but I should like to know when the foreclosure took place. As long as the interest is paid by the government, the mortgage cannot be foreclosed. I wonder what we would call this statement of the Prime Minister if we were not trying to be moderate? I have no name to suggest and I leave it to every hon. member to think out for himself.
I do not like the idea of these two dictatorial boards. If you get into trouble with one it will be like jumping from the frying pan into the fire to go to the other for redress. The arbitral board will consist of practically one man, the chairman of the board of Railway Commissioners. He may prove to be such a biased arbitrator that those who appear before the trustee board will never appear before the arbitral board. Imagine going with a dispute to a one-man biased board! I do not know the chairman personally, all I know is that he is not necessarily a railway authority. He will have to rely upon the evidence adduced before him by the two railways, who will have the best lawyers they can possibly obtain. His decisions must be based upon the evidence. I have been a magistrate a long time and I know that decisions must be given according to the evidence and the value that
can be placed upon such evidence. I pity anyone who is placed in the position of adjudicating upon a technical question about which he knows nothing. I do not know whether or not the present head of the railway commission is a practical railwayman, but if he is not there will not I think be many references made to that arbitral board.
Why do we object to the appointments to the trustee board being made by the government? With the appointment history of the party opposite we know that only such men as will carry out the will of the government will likely be appointed. That is possibly only natural. Certainly they will not be appointed to go contrary to the will of the government. What is the will of the government in connection with the Canadian National? Many hon. members present will remember the Prime Minister's first budget speech when he held forth with all the eloquence at his command upon the alleged terrible condition of the Canadian National. He grew quite red in the face, almost as red as a bubbly-jock, if the house knows what that is. He spoke with vehemence and almost with venom, and then pretended that his words were the words of a friend. I cannot imagine anyone speaking about an institution with which he was friendly and using the tone of voice the Prime Minister used at that time. Hon. members can read Hansard of that day-June 1, 1931. I do not take particular exception to the facts as recited, although it was assembled in the worst possible manner for the Canadian National Is that a friendly attitude? Not then nor since then have I heard any words from the Prime Minister which could be construed as being friendly to the Canadian National.
What about the branch line building programs for the Canadian National which the Liberal government brought down when We were sitting on the other side of the house? I draw the attention of the house particularly to the building program presented by the Hon. Mr. Dunning when he was Minister of Railways. No complaints were ever registered by the then opposition against the proposed expenditures; if there was any criticism against the programs of the Liberal government, especially during its later years, it was because we were not building more branch railway lines. It will be recalled that Mr. Dunning played a big part in controlling both railways in their attempt to build lines in Alberta and Saskatchewan which would be duplicating lines. The present government wants to absolve itself from all this responsible work by handing everything over to a board about which we do not know anything except that it will be appointees of a government in which

C.N.R.-C.P.R. Bill-Mr. Motherwell
there is little public confidence left. After these Liberal branch line railway programs were brought down and fully discussed and approved unanimously in this house, invariably in another place that we cannot name the bills were slaughtered without the slightest hesitation whatever in 1924 or 1925. I have travelled over the route of these proposed railways during the parliamentary recess and have seen them for myself. I motored for several hundreds of miles along the route of one in which I was not personally interested whatever except as a citizen of Saskatchewan, and at that time I was the only representative from Saskatchewan on the Liberal side of the house. But all that railway legislation was slaughtered in another place, and naturally that stirred my ire against that other place. It showed me not only where that other place stood but where the then leader of the opposition in this house stood, the gentleman who is now in that other place as the bull moose thereof. That is the reason, Mr. Speaker, we are afraid of this board, because the record of the Conservative party has always been against the National railways with one notable exception, and that is when they started first to take over the Canadian Northern and Grand Trunk Pacific, and they left the roads with two heads and two staffs quarrelling for preference. If anyone ever performed a superhuman task it was Sir Henry Thornton in bringing the two railways out of the miry clay in which they were foundering and setting them on a solid rock foundation looking to a better day, and he did introduce a better day for the National railways until the world calamity befell the National railways like it befell everything else. Why, Sir Henry Thornton was not long enough in the saddle to warm it before the then leader of the opposition (Mr. Meighen) had his harpoon into him up to the hilt. You remember, Mr. Speaker, what he said about the Scribe hotel in Paris, which afterwards turned out to be a good investment. The present leader of the government has nothing on the then leader of the opposition for scathing denunciation of the National railways, for there was nothing left unsaid against Sir Henry Thornton and the National railways, and this in spite of the fact that the then leader of the opposition had claimed the Canadian National Railways as his own infant at the outset, but denounced it when it seemed to be under a cloud.
What further reason have I for doubting the personnel of this board of trustees? The government has thought it wise to call them trustees, because they say the condition of 
the roads is tantamount to being in a receivership. How is that ever going to help the market for Canadian Pacific Railway shares? See the suggestion contained in that! It is not fair to the Canadian Pacific Railway. I have no interest in the Canadian Pacific Railway except that I am a great admirer of it. It is well said that a tree is known by its fruits, not by its blossoms and leaves, although both are necessary to fruition; and we must judge of the appointments that are about to be made by the government by the ones which it has made in the past. I know I am getting on delicate ground for a moderate address, and I will go easy. All I will ask the house to do is to recall some of the earlier major appointments by this government and the very last appointment. In view of those appointments, are we likely to consider that the government will set up an impartial trustee board? By their fruits ye shall know them, and we know their fruits, and we know the government, by this time, and that is the reason we are suspicious. Yes, I am suspicious. I am not so simple minded as to put all that uneviable record to one side and expect that everything is now going to be all right. It may be that we shall get a surprise when this board is appointed. Maybe it will be composed of three fair-minded, impartial men, whom all will approve, and just because there is about one chance in a thousand of that happening I am less severe at this time than I otherwise would be. I hope we shall get such a surprise. Assuming that we get such a board, the three best men available in Canada, without any prejudices at all, I do not ask that they must be predisposed towards the National railways, like some other hon. member has suggested. All I ask is that they be fair to the Canadian National Railways. But assuming that we get such a board, how much better is the situation going to be from the government's standpoint than obtains now with voluntary cooperation between the two roads?
This question of compulsory cooperation is one upon which people differ honestly. If I recollect aright, a number of the officials of the Canadian National Railways opposed strongly the idea of compulsory cooperation, on the ground that it was impossible, that the two words "compulsion" and "cooperation" were antagonistic to each other. The same question arose in connection with the wheat pools, where the first question that we came up against was whether we should have a compulsory or a voluntary pool. Compulsory cooperation? Well, Mr. Speaker, I have seen decisions of judges of the western courts that there was no such animal as com-

C.N.R.-C.P.R. Bill-Mr. Motherwell
pulsory cooperation, and that there could not be, that compulsion was antagonistic to the conception of cooperation, that they were not in any sense complementary to each other, but that one was the very antithesis of the other. That is the position that I have taken for twenty years, and it is the position that Saskatchewan and the west generally takes to-day. Compulsory cooperation would be a very dangerous experimental step to take and might have the very opposite effects from those hoped for.
I was delighted to hear the minister express his belief in a better day coming, and then he went on to say how finely our two railroads were getting along with voluntary cooperation, and what economies were being made. He said that he did not believe that there was a road on this continent which could make a better showing than these two railway systems in Canada had done in the matter of effecting economies during the last two or three years. Well, there are times when good enough should be left alone. It is not a very good slogan, in normal times, I admit, but just now it is a good slogan. I wonder, Mr. Speaker, if in your pioneer days you ever had the experience of driving oxen, or a horse and a mule, or a pony and a cow. Well, you have some ma'nouevring to get them to go together at all, and if you finally do get them to work together satisfactorily, just leave them that way and don't be monkeying with them any more. Here are two great rivals in the railway world, and if they are cooperating voluntarily and to , good purpose, my advice would be to just let them be until they show some evidence of not wanting to cooperate. Why are they cooperating? Wild horses could not keep them from cooperating now because adversity is driving them to it; their very life depends upon it; and as long as they are bringing about these economies by voluntary methods, I say it is much better to let them go along that way and wait until they show some disposition not to cooperate before we step in and try to compel them, a change that in my opinion might only be for the worse. It will not take long to find that out, but it will be quite a while before this depression is over and they cease cooperating by voluntary methods. Necessity, I repeat, will compel them to do so for several years, as well as public sentiment. Therefore I am absolutely opposed to this absurd idea of compulsory cooperation, particularly when it is admitted that no one can hope for anything better under compulsory cooperation than we are getting to-day under voluntary cooperation. Then why disturb the present relationship between the two railway systems? They are cooperating now voluntarily because it is mutually necessary and beneficial and they cannot afford to do otherwise. We find throughout Canada a replica of the same condition among our people. Men who years ago held old grudges, against other men are to-day shaking hands with each other, neighbouring with each other. They are saying, "If there is anything wrong with your binder come over to my junk pile and you may have anything you can root out of it." We are doing that for each other, to save buying repairs. So far as I know, that condition runs all through society to-day. It certainly obtains among the farmers, and we see it even between our competing railways although it is not quite so much in evidence.
Therefore I am opposed to all the features of the bill to which I have referred,-both boards and that feature concerning compulsory arbitration.


Robert James Manion: Outside of that you agree with it?
Mr. MOTHERWELL ? Yes, outside of that I agree. I tell you right now, my major regret in connection with this bill is that I have not a thousand votes to record against it.


Peter McGibbon: That hardly seems
enough.


William Richard Motherwell: I believe it will be a disturber of the peace. In respect of the people's railway we are abdicating in favour of two boards; thus betraying the trust reposed in us as the real trustees of this railway property. The whole country is being advertised as bankrupt, in order to justify this legislation, and as if this depression were to be permanent.
I have a few words to say concerning the surgical operation to which the Prime Minister referred. The hon. member for North Bruce said the Prime Minister's illustration was not very apt. According to the Prime Minister when a disease is deep seated, in order to get the cankers out by the roots the operation must be correspondingly deep. Well now, the government began its operation by taking Sir Henry's head off; what further necessity was there for sending him to a hospital. I think my own colleague's simile was a little out of line, because certainly when Sir Henry had his head off he did not need further hospital care. In my view that is the tragedy; don't make any mistake about it. If there ever was a superman on this North American continent, it was Sir Henry Thornton. I had not been in the 1921 election cam-

C.N.R.-C.P.R. Bill-Mr. Motherwell
paign very long before I found there were two classes of people on whom I had to keep my weather eye. I dare not discuss railway matters with either of them without getting into trouble with the other one. One was the Canadian Northern staff and the other was the Grand Trunk staff. That condition entirely disappeared long ago, thanks to the leadership and prestige of Sir Henry Thornton. If there is another man in Canada who could have done that, I don't know where he is. He did it in very short order, inside of three or four years. We make no apologies for the selection of Sir Henry Thornton; we were and still are proud of him. Why? Because he has shown the Canadian National Railways can be put on their feet; we have shown the way to do it. We responded to the demand for no political interference. In response to public appeal we exercised as little as possible interference, consistent with good business. But, do not make any mistake about it; in nearly every railway building program laid before the Liberal Minister of Railways something had to be cut out before the money was asked from parliament.
I make that statement because the Prime Minister indicated in one of his speeches- not the one he made yesterday-that there was not a capital outlay asked for by the Canadian National which was refused by the old government of that day. That Is not correct. Lots of them were cut out. There were many adjustments also in regard to the program of building lines that the public knew nothing about, and some the public did know something about. Supposing we get this super-board, what will be the result? Results will depend on the attitude the board adopts. Good results could come from a super-board such as the one suggested, if they are brought about by conciliation and not by compulsory measures. However that, I repeat, depends entirely on the personnel of the board.
Mr. Speaker, I ask the house to take it from me-I don't know whether they will or not- that in matters of administration by the board of stewards there are a hundred ways of throwing favours to the one railway and against the other. Indications are at present that freight is switching from the Canadian National to the Canadian Pacific. In that connection I should like the Minister of Railways to make an investigation so that he may make a statement thereon when we are discussing his estimates. I have been making some inquiries, and although I do not like to make definite statements, because my information may not be accurate, I have learned that whereas in 1930 the freight per mile

carried by the Canadian National System surpassed that carried by the Canadian Pacific, to-day the Canadian Pacific is very considerably ahead. The same applies to passenger traffic. Has that occurred by accident, or by design? That condition has arisen without a board.


Robert James Manion: If the hon. member will
permit me I should like to reply that I do not believe the Canadian Pacific is ahead of the Canadian National in regard to any type of traffic. The Canadian National has been handling the greater proportion of the traffic throughout, and is still handling about the same proportion.


William Richard Motherwell: I wish the minister would get the index figures.


Robert James Manion: I will.


William Richard Motherwell: I know business can be thrown one way or the other. Ministers and their friends and staffs can give a fair share of their personal travel to the Canadian National; that has been done. It could have been thrown the other way, if we had liked. The same applies to freight. There was one condition with which I was never quite satisfied when the late government held office, namely, the relative amount of cross-Canada mails carried by these two great transcontinental railways.


Robert James Manion: I have the figures now, if the hon. member would like to hear them.


William Richard Motherwell: It all depends on what time I have left to speak.


Robert James Manion: The figures bear out what I said, namely, that the Canadian National does the greater business.


William Richard Motherwell: I should like to
have it on Hansard, but I do not know how much time I have left.


Robert James Manion: I shall ask the Speaker to allow the hon. member as many more minutes as he wishes to have.


William Richard Motherwell: I have never had
that offered me before, so I acquiesce gladly.


Robert James Manion: The figures I have before me show the gross operating revenues for the Canadian National and Canadian Pacific railways, and are as follows:
Canadian Canadian Year-	National Pacific
1925	 $244,971,203 $201,176,745
1926	
266,187.825	217,359,6801927	
268,704,294	221,420,9161928	
304.591.268	251,567,0431929	
290,496,979	233,339,5141930	
250,368,998	196,211.6261931	
200,505,162	154,963,411
C.N.R,-C.P.R. Bill-Mr. Woodsworth
Unfortunately I have not the figures for the Canadian Pacific for 1932, but I am informed they are in the same proportion.


William Richard Motherwell: I thank the minister for the information he has given. However I hope he will not take exception when I state that on one hand his figures may mean a lot and on the other they may not mean very much. I think they have to be worked out on an index basis in order to get a real comparison. I was going to point out that there are so many ways of causing the Canadian National to go back and its rival to go forward, if this trustee board so desired. I think everyone will agree to that. It altogether depends upon their attitude. I am not suggesting that they should be ardent advocates of public ownership, all I suggest is that they should be fair to it, not be prejudiced against the national road nor the Canadian Pacific. Let us see what would happen. If my suspicions-they are suspicions only, if you like, but, as indicated already, mighty well founded-if my suspicions be justified, and if the national road goes back with regard to its relative passenger service or with regard to the volume of its relative freight service, it will go back and back and back until there is nothing but a decrepit emaciated skeleton of a railway left, and then no one will want it except at a song and the people of Canada in desperation may then want someone to take it off their hands on whatever terms are obtainable. I take the ground that no man and no government, much less this government, should put itself under suspicion as they have done in this bill. I used to think in my youth that I could take any course I liked, no matter how suspicious it looked, not caring for the opinion of my friends. But I have come to the conclusion that no man, especially no public man, can afford to do that. I would say to the government that no matter how great their leader-and he is a great man in many respects, except in the one respect of properly governing Canada; he is a great orator; he has the greatest power of invective I ever heard; it is good for us that we are getting thick in the skin or he would have it all off us-but I say that even he, and I feel sure he is an honourable man, cannot afford to put himself under the suspicion that he is under in my mind and in that of thousands of others in handing over our great railway property to these two unknown boards appointed by himself, to do with it practically as they please.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, my colleagues
have very well covered the ground from the labour standpoint. I agree with them that
provision for displaced employees should be the first charge on the savings resulting from the proposed change. I would further urge that this bill should go before the committee on railways and canals; it is an important bill, the details of which should have full consideration, fuller consideration than can possibly be given by the committee of the whole. It seems to me that there is no reason why we should simply take the conclusion of the Senate committee without ourselves giving ample opportunity for the very fullest discussion.
As we all know, the roads of this country were built to serve the people. I submit that the present legislation indicates that the people from now on are destined to serve the railroads. The railroads in Canada were built in the first place to make this dominion a possibility. We could not possibly have brought into one legislative unity a territory so vast as this without having good means of communication. Further than that, in the earlier days of the settlement of the west the railroads were undoubtedly built for colonization purposes. Large communities grew up alongside of these railroads, and I submit that the settlers must not be left stranded. We are asked to think of these railroads now entirely in terms of business, whereas they were constructed in the first place to serve the needs of the people, that is for the purposes other than strictly profit making.
This problem is being considered in isolation from other problems, but we cannot possibly solve the railroad problem in Canada apart from the solution of our other economic problems. It has been stated that the railroads are strangling business, are a heavy burden on the people of the country. I would point out that it might more truly be said that business-or the lack of business -is strangling the railroads. If the government would adopt policies which would lead to a larger amount of trade I think there is no doubt that to a considerable extent the railroad problem would be solved.
In this discussion, and in the report, attention is centred on the Canadian National Railways. The minister himself asserts that the Canadian National is directly our problem. May I suggest that the Canadian Pacific Railway is equally our problem; you cannot separate the one from the other. In either case it is the public that pays. May I call attention to the enormous amount that was spent by the Dominion of Canada on the Canadian Pacific railway? In a return brought down about two years ago it was indicated that the total outlay of the dominion on the

C.N.R.-C.P.R. Bill-Mr. Woodsworth
Canadian Pacific railway as far as the Department of Railways and Canals had record has been 888,822,471.70, and that in addition there is an item of $10,189,521 referred to by the bureau of statistics tabulated report for 1925 as having been paid to the Canadian Pacific Railway Company for lines relinquished. There is also the question of land grants, stated by the Dominion Bureau of Statistics to amount to 24,953,133 acres. In addition to that enormous advantages were gained by the Canadian Pacific Railway Company throughout the years in having their lands exempt from taxation, and also in the subsidies which have been given in various ways, such as mail contracts and so on, and the practical guarantee of high freight rates made possible through the. Board of Railway Commissioners. In all these ways the Canadian Pacific has received huge grants and an enormous amount of assistance from the Canadian people, and it seems most unfair that we should centre attention upon the one railroad called the Canadian National.
Take the question of extravagance. The Duff report at page 21 says that there was intense rivalry between the two systems in new territory. Again it says:
The development of this territory did not meet expectations, and the railways now find themselves with additional traffic mileage and an increased burden of capital charge.
Take the question of hotels. As at December 31, 1931, the Canadian National hotel investment was $31,828,234, whereas the Canadian Pacific hotel investment was $71,148,772, considerably over double. If there was extravagance on one road, there was also extravagance on the other, and as I have said, it is always the public that ultimately pays.
In his speech the Minister of Railways (Mr. Manion) eulogized the present board of directors, but he did not say why, if the board had done such excellent work, his bill should provide for the scrapping of the board and the setting up of an entirely new arrangement. He complimented the present management- on the decrease in operating costs, which in 1932 amounted to $44,000,000 or 112 per cent. He took the trouble to point out where these savings had been made -in the higher salaries, in travelling expenses, club dues, radio and legal services, and advertising, a saving amounting to $4,000,000. After all, that amounts to but a very small proportion of the total saving of $44,000,000. I think it is safe to say that the greater part of that sum was saved by reductions in wages.


Robert James Manion: And reductions in traffic.


James Shaver Woodsworth: Yes, partly through a reduction in traffic. The reduction in passenger service was estimated at $8,000,000, but I submit that in reality this means largely a reduction in wages. There is a certain saving on the amount of coal used, but I think something like 67 per cent of the entire operating expenditure is taken up by wages.


Robert James Manion: Of course that is quite
right, but they cannot pay wages if there is not enough traffic to provide work for the men.


James Shaver Woodsworth: I am just pointing out that to a large extent this reduction has been made by reducing wages, reducing staffs and putting men on part time work.


Robert James Manion: I was only mentioning
these special economies of the higher staffs.


James Shaver Woodsworth: In his speech yesterday the Prime Minister (Mr. Bennett) made this entirely a financial problem. I cannot agree with that. The whole of our Canadian development has conformed to the development of railways; settlement all through the west has largely followed the extension of the railway lines into new territory. The Prime Minister suggests that it is time for plain speaking, and then he enunciates his conception of the situation. I think I am being fair to the right hon. gentlemen when I put his argument into three propositions. The first is that the road belongs to the investors, and the right hon. gentleman pointed out that these investors were scattered over Canada, the United States, Great Britain, Europe and even Asia. The Prime Minister says the people do not own the road but that at best they own only the equity of redemption. If the road is indeed bankrupt I suppose that means that since we have no assets the people own the right to pay the debts. I take it that this is practically what is involved.
The Prime Minister's second proposition is that the road is bankrupt. It is not going through any bankruptcy court; the proposals in the bill suggest a very much different line than bankruptcy proceedings. Then the third proposition is that the dominion and the provinces cannot default. The Prime Minister says this is the time for plain speaking, so in this case I should like to ask why not? Bankruptcy is a process devised so that a debtor shall not remain forever a hopeless slave. The Jews had a very good way of accomplishing this; every fifty years they declared that the debtors should go free. It is against all sense of equity that people should remain forever in slavery. I submit that although developments along national lines are very recent, we are beginning to witness a somewhat simi-

C.N.R.-C.P.R. Bill-Mr. Woodsworth
lar process being worked out with regard to national and international affairs. A few months ago there was great rejoicing when an international conference declared that reparations were practically at an end. What did that mean? It involved the repudiation of international obligations. France reduced her franc from approximately twenty cents to about four cents. What did that mean but the repudiation of a great part of her national obligation? I happened to be in Europe a little over a year ago when Great Britain went off the gold standard. In good faith I had invested a certain amount in English sovereigns, but suddenly I found myself deprived of 25 per cent of my English investment. That was a repudiation by Great Britain of her obligations to the extent of 25 per cent. In more recent years we had Great Britain notifying the United States that she could not continue to pay her war debts to that country. Again that was a repudiation of a solemn national obligation. Well, I submit that once we recognize that it is possible to repudiate international obligations such as these, we may very soon come to consider whether we must indefinitely retain the idea of the sacredness of all so-called national obligations.


An hon. MEMBER:: Individual also?


James Shaver Woodsworth: I have not said anything about individual obligations; I was speaking of the repudiation of some of the so-called sacred national obligations. I agree with the hon. member for Muskoka-Ontario (Mr. McGibbon) when he says this bill offers no permanent solution. It is a temporizing measure. We have been accustomed to think of royal commissions as being entirely impartial and above political considerations in the reports they present, but I think this report bears evidence of being political in character; that is, it brought in only such solutions as might be considered politically feasible.
Having laid down his general principles that the road belongs to the investors, that it is bankrupt and that the dominion and the provinces cannot default, the Prime Minister proceeded to outline his special device for meeting the situation. The trustees, he said, are in reality in the position of receivers. Strangely enough, however, the bondholders receive all the benefits of a solvent enterprise. That is the curious combination we have offered to us.


Edward James Young: They are the receivers.
Mr. W'OODSWORTH: Yes, they are the receivers, if you like; they receive it all.
The Prime Minister tells us we are to have all the benefits of a receivership but at the same time the road is to be kept in operation. He tried to frighten us by suggesting what would happen to the public if the road ceased to operate, and he also suggested the dire things that might happen the employees in such a contingency, but he did not say anything about what would happen to the investors if the road ceased to operate. It is impossible to think of this road ceasing operations; hence there is no use trying to frighten the public by referring to anything of that kind. In this case, as at the time the government took over the Canadian National, if this bill passes we are entering into an agreement by means of which we are trying to save a group of investors at the expense of the general public. Under a receivership, as we would deal with private debts, the investors might get fifty cents or thirty cents on the dollar, but under this arrangement we practically guarantee the investors a hundred cents on the dollar, even though it means that this parliament must give up all real control, and in addition undertake to pay all deficits. A few weeks ago a financial friend of mine suggested rather a good scheme, which I pass on for what it is worth. Why not exchange these bonds for shares, and pay dividends on the shares when the business warrants it? I do not see why one class of people should be entirely exempt from the exigencies which affect everyone else. Sooner or later we shall have to face the scaling down of the bonded indebtedness of this road, and I cannot see why at this stage we should enter into any arrangement that would reduce the people of Canada to almost perpetual slavery, slaving to pay the bondholders of the road.
Amalgamation has been proposed and it has been rejected by those responsible for the Duff report. Further than that, the Prime Minister has I take it given his guarantee that there will be inserted in this bill a clause to the effect that nothing in the measure shall be regarded as looking to amalgamation. Whether that is done or not, I do not think makes a great deal of difference. This is moving in the direction of amalgamation, and I would not condemn it for that reason because in my opinion, taking the long view, amalgamation of our roads is sooner or later inevitable. I would urge however that if and when that amalgamation comes it must be amalgamation under government and not under private ownership and control. What I fear in this bill is that the way may be opened so that possibly by degrees there may come an amalgamation under private ownership. It
2912	COMMONS
C.N.R ,-C.P.R. Bill-Mr. Woodsworth
seems to me that when amalgamation comes it must be amalgamation not only of these two great railway systems but of all motor traffic, of all traffic by water and of all traffic by air, so that all these great systems of transportation and even of communication shall be correlated into one vast transportation organization. Sooner or later, I think, we must face some such development.
The present bill has been characterized by some as a socialist measure. There is perhaps some ground for saying that, but it is only in part socialist. It is a long step I submit towards the control of private corporations, and I do not much wonder that Mr. Beatty rather protests against a bill of this kind. Undoubtedly it is a long step in the direction of the control of private corporations. The thing I do not like about it, however, is that the kind of control proposed is not democratic. I agree with the hon. member for West Lamb-ton (Mr. Gray) and others when they say that we shall be setting up a virtual dictatorship. The appointment of this board of trustees will not be democratic; as pointed out time and again, they will be a self-perpetuating board whose removal will not be easy. Moreover, the powers of the board are very largely in the hands of one man, which means, as far as I can read the legislation, that we are setting up a virtual dictatorship.
A good deal of fault has been found with Sir Henry Thornton because he was too far removed from the control of parliament. He was probably as good a man as could have been selected, with a wide experience both in railroading and in public affairs; yet as time went on a great many hon. gentlemen in this house began to feel that he had been given too great latitude. In more recent years Sir Henry Thornton himself, with his staff, appeared before a special committee of this house to go over his estimates, and some thought that this was putting him in rather an undignified position, that he should be asked to discuss matters with parliament. But the protest came from both sides of the house in more recent years that he had altogether too free a hand, and that, I submit, has been the ground for such severe criticism of Sir Henry Thornton on the part of the present administration. Yet they are now proposing to place in the hands of one trustee power which is a great deal more autocratic than any at any time exercised by Sir Henry Thornton. I cannot see the logic of such an argument.
Since the bill is founded largely on the Duff report, we must examine the report to understand the purposes of the measures proposed. And here may I say a word with

regard to the personnel. The commission itself was suggested by the president of the Canadian Pacific Railway and endorsed by Sir Henry Thornton, and the personnel of the commission might very well have been chosen by the former gentleman himself. The bondholders were well represented. As pointed out by my colleague from North Winnipeg (Mr. Heaps), however, Labour was not represented at all. It would seem that, with the large numbers of Labour men and officials who have made such a large contribution to the building up of this road, there should have been some representation on the commission from the people who actually know railroad affairs, but there was none whatever. The bondholders, I repeat, were well represented. More than that, several gentlemen on the commission were very decidedly private ownership men. One has only to read the evidence-I have not time to go into that to-day-to note the extreme bias, shall I say, of Mr. L. F. Loree, who again and again came out urging the most drastic cuts in the wages of the men and repeatedly pointing out the benefits of private ownership under which the road would not come under the review of the parliamentary authorities. And even the vice-president, Mr. Ruel, declared very definitely his belief in the advantages of private ownership. With this evidence before us I agree with the hon. member for North Waterloo (Mr. Euler) that when the board of trustees is appointed there should be on that board men who are heartily in sympathy with the principle of public ownership, for only such men can be expected to make this great public ownership enterprise a success.
Let me comment briefly on the main considerations which the commissioners say they had in mind. First, they say, the identity of the two railway systems should be maintained. In my opinion this leaves the way open for further trouble. I think it was Lincoln who said, during the Civil wrar, that it was not possible to have a nation half slave and half free. I do not think it is possible permanently to have one half of our transportation system under private ownership and the other half under public ownership; one or the other must give way. So that this is a temporary expedient. In the second place, they say that the management of the national railways should be emancipated from political interference and community pressure. It seems to me that that is an expression of absolute despair with regard to parliamentary and democratic institutions. What is meant by the phrase "community pressure"? If it means that the people located out on the

C.N.R.-C.P.R. Bill-Mr. Woodsworth
prairies fifty, one hundred or two hundred miles from a railway have no right to press their claims for railway services, then I say this is something we ought not to permit. Many of us who have lived through the pioneering days know what it is to have our friends far removed from any railway line. They were induced to go out there and year after year, sometimes decade after decade, they waited for railway services. They sacrificed the education of their children as well as their own immediate welfare in the hope that one day the railway would come. Is it meant that there must be no community pressure of that kind, no consideration given to the needs of local communities? Let me say again that in the first place these railways were constructed to serve the people and I protest against any change in policy that makes the first consideration that of providing dividends or guaranteeing profits to the bondholders.


Mr. MULLINS:: Would the hon. member take away the savings of widows and orphans?


James Shaver Woodsworth: I wish the hon. gentleman would not bring up the widows and orphans to-day. I know he is thinking of some of the bonds held not by widows and orphans but by some other hon. gentleman. The widows and orphans always make a good smoke screen. I am as anxious as any hon. member in this house to protect the widows and orphans but I should like to ask the hon. member how he proposes under this bill to protect the widows and orphans of hundreds of thousands of railway employees.


Henry Alfred Mullins: By making the line a success.


William Richard Motherwell: What about the
widows and orphans on the frontiers?


James Shaver Woodsworth: As the hon. member for Melville (Mr. Motherwell) says, what about the widows and orphans on the frontiers, and widows and orphans generally?
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


James Shaver Woodsworth: Before the house
took recess I had been trying to point out that we in this corner are not opposed to labour saving devices or to economies in management or even to amalgamation, but we consider that the welfare of the workers and of the community and the rights of this parliament should be safeguarded. We believe
that the care of the men displaced should be a first charge upon the savings effected, and that amalgamation, if and when it comes, should be under public ownership and should include not merely railway transportation but other transporation systems as well.
I further tried to point out that our roads were constructed in the first place to serve the people, but that under this bill, as I see it, the interests of the employees and of the public generally are to be subordinated to the interests of the bondholders. The Prime Minister explained that we should all sacrifice. Yes-all but the bondholders, who are not called upon to make any sacrifices at all. Indeed, it would seem as if the bill was primarily designed to bring about a condition under which the bondholders will receive one hundred per cent even though the road is declared by the Prime Minister to be bankrupt.


Robert James Manion: Would my hon. friend
explain how he would go about dealing with the bondholders? I am a little puzzled at his remarks.


James Shaver Woodsworth: There are various
ways in which it could be done. As I said this afternoon, we recognize that under certain conditions, when a private concern is hopelessly insolvent some relief must be given. The concern goes through a formal process by which it passes into the hands of a receiver, and the creditors have to accept a certain percentage of their claims. But it is not proposed that this road should go through any process of that kind, even although the Prime Minister suggests that the trustees occupy the position of receivers. This afternoon, I made a concrete suggestion which I said had been given to me by a financial friend of mine, that we might possibly offer shares to the bondholders.


Robert James Manion: But they would not accept that.


James Shaver Woodsworth: They might be
forced to accept it, and in such a case it would mean that they would have been called upon or forced to sacrifice to the extent that the rest of the community has to sacrifice, just as they might enjoy prosperity when prosperity returns to the rest of the community.
Last summer I could not but think of the waste by duplication that has taken place in our transcontinental systems and also of some of the more remote consequences of this waste. I drove by car from Edmonton to Jasper over the right of way which has since been abandoned. The grade has been trans-
2914	[DOT]	COMMONS
C.N.R.-C.P.R. Bill-Mr. Woodsworth
formed in part into a highway. The steel rails are gone, the ties are gone, some of the bridges are gone, but the interest has still to be paid on these vanished bridges and ties and rails. In the construction of those roads many a man was killed, and in some instances these men were buried in the dump and their dependents got very little recompense. The workmen are gone, but the interest has still to be paid on the dynamite that killed them in their blasting work.
It seems to me that we are recognizing the claims of only one group in the community, and at that only a particular group of the creditors, the bondholders, and so arranging matters that they shall be the beneficiaries of the entire operations of the road.
I then proceeded to the report itself, and said that a study of it would give us some idea of the considerations which the commission had in view. Paragraph (II) of clause 202 of the report reads:
The management of the national railways should be emancipated from political interference and community pressure.
It seems remarkable that nothing is said about the pressure that has been exerted in the past by promoters. Anyone who knows the history of Canadian railroads knows that there has been a great deal of that pressure upon parliament and upon governments right from the very first. There was, for instance, the old scandal in connection with the Canadian Pacific Railway in the early days, and there were the scandals-I think them such- of the lobbies in connection with the old Canadian Northern. Everywhere pressure was brought to bear by private interests. In fact it is that pressure that has landed us where we are, and yet nothing whatever is said in this report about the pressure of private interests.
We are told that we must beware of political interference. Again let me say that the railroads themselves have been very glad to come to parliament in order to secure special privileges and grants and concessions, and now we are asked by these same roads-we were told that it was Mr. Beatty who had made the suggestion for the appointment of the commission, and this proposal was endorsed by Sir Henry Thornton-to place the railroads :n such a position that they shall be free from what is termed political interference. It does seem to me that this clause in the report is a challenge to our parliament and to our so-called democratic institutions. If we are to adopt a dictatorship, let us do it with our eyes open; but we must remember the cost that it may impose upon the people of Canada.

We have been witnessing a very strange development in recent years. The management of industrial and financial affairs has passed largely into the hands of a comparatively small group of people who are not in any sense responsible to the people. It would seem as if by this bill we are deliberately sanctioning that kind of thing and placing the control and management of one of our largest public utilities in the hands of a virtual dictator. Political interference! We are to take that as it stands it would seem that before very long parliament must abdicate. Already as we go over the estimates we find that a very large proportion of the expenditure comes under what is termed uncontrollable expenditure, and now we are about to erect a board which will also be entirely uncontrollable, because I take it that no machinery is set up that will give parliament any effective control over the operations of this proposed board of trustees.
Paragraph (III) says:
Machinery should be provided for cooperation between the two systems for the elimination of duplicate services and facilities and the avoidance of extravagance.
May I say that while this sounds well, I am afraid that in practice it will not work out. As Mr. Beatty said in an address before the Canadian Club at Toronto, which has already been quoted in this house:
If we were mistaken in our appreciation of the value of competition, or did not sufficiently realize the waste and losses it involved, _ and especially involved in railway competition between the government of Canada and a private company, should we perpetuate another fallacy on the assumption that we can have competition and cooperation, that we can struggle for conflicting interests and yet not conflict? Why delude ourselves into the belief that we are super-men, indifferent to the spirit that competition and contest provoke, that we can maintain our own traffic and revenues and yet divide them, that we can act like enemies and friends at the same time, and, lastly, that we can afford to do the things we cannot afford to do and perpetuate the waste we cannot afford to perpetuate.
Clause (iv) is as follows:
The attainment of a scale of economies which will bring the burdens of the national system within reasonable dimensions and _ effectively check extravagant and costly operation.
Again this reads well; surely everyone is desirous of eliminating unnecessary expense. But we must read this in conjunction with the preceding section, which warns us against community pressure, which, in practice, may mean the needs of the local community. Then, section (v):

C.N.R.-C.P.R. Bill-Mr. Young
Reasonable protection for the privately-owned undertaking against arbitrary action by the publicly-owned undertaking which might unfairly prejudice the interests of the privately owned undertaking.
The whole point in the section lies in what is fair or unfair. As I said this afternoon, we here face the fundamental question whether or not it is possible for a privately owned concern to exist in the same field with a publicly owned concern. It seems to me that ultimately the privately owned concern will, by perhaps a slow process, take over the one owned by the public, or sooner or later the public concern will have to absorb the private one. I am afraid there is nothing in the provisions of this bill to safeguard the publicly owned system, and with a board and tribunal constituted as proposed it will inevitably mean that private interests will in time obtain control. With these considerations in view I cannot support the bill.


Edward James Young: Mr. Speaker, it is difficult to understand how the passing of this bill could solve our railway problem. At page 53 of the Duff report we find listed the contributory causes of that problem; they are seven in number. Let us go over them briefly and endeavour, if we can, to see how the bill is designed to deal with them. Of the seven contributory causes the bill pretends to deal with only two, and in my opinion deals with them very ineffectively. The first contributory cause is given in the report as-
The over-development of railways beyond the immediate needs of the country.
I might say, Mr. Speaker, that the overdevelopment of our railroads, the excess mileage, is due not to the management or mismanagement of our railroads, but to state policy. From time to time it has been the policy of this country to have railroads built. If after this depression lifts we have another boom; if once more settlers should flock into the unfilled portions of Canada, the same policy will prevail. Will those settlers not demand railways? If we put the management of the national railways and that of the privately owned system beyond the reach of public influence where they cannot be persuaded to build lines they do not want to build, what will follow? The men who go in and pioneer the new parts of our country will not be deterred from demanding railway services because of any reorganization of our railway companies. New companies will be 53719-185
organized; new charters will be demanded, and the parliament of Canada will not refuse them.
The second contributory cause given in the Duff report is-
Aggressive and uncontrolled competition between two nation-wide railway enterprises, a competition the more disastrous in that one of the competitors was publicly owned and supported by the full resources of the dominion.
That is the one contributory cause for which this bill appears to have been designed; for that reason we shall pass it for the moment, and return to it later. The third case appearing in the report is-
The reactions of the world trade repression which began in 1929 and has progressively increased in its severity with each succeeding year.
In my opinion that is the chief contributory cause of our present railway problem.


Mr. HANBURY:: Read it again.


Edward James Young: I will:
The reactions of the world trade repression which began in 1929 and has progressively* increased in its severity with each succeeding year.
In my opinion, as I have said, that is the chief contributory cause. There was no railway problem when there was plenty of tonnage; there was no railway problem when traffic and goods were moving. There is less traffic to-day because business is not moving to the same extent. But certain business is moving; we ship as much wheat to-day as we did four or five years ago. We ship as much as we did in 1929, and the freight rate is just as high as it was at that time. The earnings of the railway companies from that source are just as great as and greater than they ever were. But the prices we are getting are such that we cannot bring goods back. It is not within the power of this government to increase the cash price that the people of Europe will give for our wheat. But when we sell our wheat abroad, although nominally we get paid for it in money, actually we take payment in goods, and it is within the power of this parliament to let us take more goods for our wheat than we are getting to-day. It has been and still is the policy of this government to insist that when we take payment for our wheat in goods we shall take less than the people in the outside world are willing to pay us. If, for example, the people of Great Britain are willing to give us two yards of cloth in exchange for a certain quantity of wheat, and our government steps in and says, "You must not accept two yards of cloth; we



C.N.R.-C.P.R. Bill-Mr. Young
will not allow you to accept more than, one yard for that quantity of wheat," it naturally follows that our railways will have the job of hauling only one yard of cloth. There will not be as great a tonnage coming back. The same applies to our lumber. We are not shipping lumber out of Canada because the price the world is offering is not sufficient to pay the wages of the men who produce it. Lumber, like wheat, is paid for in goods. Our exports are paid for by our imports, and when the government of the countiy says to the lumbermen, "We will not allow you to bring in as many goods in exchange for your lumber as the people of the world are offering you," are they not denying the railways traffic? Are they not denying the railways the job of hauling the lumber out and hauling goods back?
Some time during the next summer we expect there will be a world economic conference. The best contribution our government could make to the solution of economic problems would be to announce that they are going to the conference firmly resolved at all 'costs to break down the trade barriers which have prevented the passage of goods backwards and forwards throughout the world. And, if other nations are not willing to cooperate to that end, our government should state that Canada at least will do her share to break down the barriers that are strangling her own trade.
This bill calls for cooperation between the two railway systems. A little cooperation between the government and the two railway systems towards the creation of traffic, and an effort to get goods moving, would do more to solve the railway problem than all the legislation in this bill, a dozen times over.
Then we come to the fourth contributory cause-
Competition from other forms of transport, notably road transport.
That was dealt with this afternoon by the hon. member for North Bruce. He made the very interesting suggestion, which I would like to repeat when this bill comes before the committee, that the minister be prepared to tell us how much traffic the motor and truck business has brought to the railways and how much it has taken' from them. There is a growing feeling abroad that although motor trucks and automobiles have taken business from the railways they have added many millions of tons of traffic to the railways. It would be interesting for us to know what that figure is, but the bill does not make any provision for dealing with that contributory cause.

Then we have number 5:
Inelasticity of freight rates and railway practice generally which prevents prompt action in the meeting of falling revenues and dealing effectively with competition from other forms of transport.
Here again we have a contributory cause which is not 'being dealt with in the bill. Perhaps it cannot be. In my opinion that inelasticity, that rigidity in railway practice and freight rates, is due in large measure to the magnitude of the companies and perhaps those who believe in amalgamation will bear this in mind. I can illustrate it by an example. A friend of mine who once worked on a transcontinental railroad told me that the company had certain rules governing the conduct of its employees. My friend told me he was always in hot water with the officials. Why? Because when a situation arose he generally did the thing that he considered in the best interests of the company, the thing that he thought would move the traffic most expeditiously. In doing so he would break the rules, and the officials would say: "We cannot allow that. We know you did it in the interests of ithe company, but if we allow you to break the rules we will have to allow others to do so, and a big system Mke this cannot operate without rules." That weakness is inherent in such large bodies, and those who would combine our two railroad systems into one would do well to bear that in mind.
Then number 6:
Contractual arrangements with labour organizations which set up a rigid wage scale and inflexible labour practices generally.
There is nothing in the bill to deal with this very important contributory cause of our railroad problem. Not many days ago a delegation representing some 20,000 unemployed railway men came before the government to ask that these contractual agreements be set aside, at least for the time being. They said that in past years when times were more prosperous those agreements worked to their advantage, but to-day they are working to their disadvantage and rendering it impossible for many of them to make a living. There is another side to the question, that we have not heard. I would like to place some figures on Hansard in connection with our railroads for the years 1913 and 1931. I have taken 1913 as being the last pre-war year, and 1931 because it is the last year for which figures are available. This is what we find- and these figures apply not to the national system alone but to all railroads in Canada:

CM.R.-C.P.R. Bill-Mr. Young
1913

1981	Increase	Decrease
$3,464,380,000 $1,377,800,000 34,972,899,000	4J*
16,135



$256,702,703 $182,011,690 245,237 142,609 $215,887,868 57,811 $100,000,000 36.043J

[Stage Direction]
*34	-62
10,097
$358,540,382	$101,846,679
[DOT]77	1-02
$321,025,588	$139,013,898
[DOT]55	-92
Investment in road and equipment..
Units of work done	
Units of work per employee	
Number of employees	
Total wages paid	
Labour cost per unit of work done.. Units of work done for every $1,000 invested in road and equipment..
Gross earnings	
Gross earnings per unit of work done.
Operating expenses	
Operating expenses per unit of work..
* Per cent.
. t Decrease.
A study of these figures reveals the fact that between 1913 and 1931 we spent hundreds of millions of dollars in improving our railroads -better roadbeds, heavier steel, stronger bridges, bigger cars, more powerful engines. For what purpose? To improve the efficiency of our system. And the result was what? Higher freight rates, higher operating costs. Capital investment in these railroads for betterments could have been justified only on the ground of increased efficiency, but we find that our capital investment has resulted in decreased efficiency and higher operating costs. That is not an indictment of the publicly owned or of the privately owned system ; it is an indictment of the management of both systems.
The next contributory cause of our railroad problem is:
The special disabilities of the Canadian National Railways due to:
[Stage Direction]
(a) Assumption, through government action, of liabilities of insolvent railway systems for reasons of national credit.
In passing let me remark that it has been said that the government has advanced to the national system something like $1,000,000,000 which is added to the railway debt of the country and on which we do not receive interest. Some people are going about this country, quoting stupendous figures of the public and private debts of this country, and frightening people into the belief that they can never be paid. Take this particular item; here is $1,000,000,000 that the people of Canada borrowed first, and it was added to the national debt; then they lent it to the railway companies and it was added to the railway debt, and these people say the debt is $2,000,000,000, but $1,000,000,000 will pay it. If these people who are so busy stampeding the people would consider the duplications and triplications, yes, multiplications, involved in the figures they quote with respect to our debts, the amount would not look so stupendous.
53719-185J
Then, passing over item (b) and turning to (c):
Political .and community pressure on the management arising out of direct government control.
Much has been said about what the railways are costing the government. I sometimes think it would ibe interesting to know what the government is costing the railroads. This political pressure to which it is said here the national is exposed is also exerted on the Canadian Pacific. We are told that in the last three years the railways have spent some $25,000,000 on relief. Why did they do this? The government persuaded them to do it. The government persuaded these railways to make improvements and extensions which they did not require and could not afford. The government said: "Do this in order to relieve the unemployment situation and we will pay the interest on the money until such time as you require these improvements." The debt of $25,000,000 is hanging over the railways in the meantime. I have no quarrel with that method of dealing with unemployment; perhaps it was the most economical method possible at the time, but when we ask the railways to shoulder $25,000,000 of a government obligation in order to relieve unemployment it is hardly fair to turn around and say the railroads are millstones about our necks.
Robert James Manion: We did not ask the railways to do anything they were not going to do. They advanced their work, that is all. They did exactly what they were going to do, only they advanced it.


Edward James Young: It was not at the request of the government?


Robert James Manion: I think we proposed it, but it was part of their own work.


Edward James Young: I admit that the work would have been done some day, but they would not have done it at that time. They did not need it; they could not afford it but they

C.N.R.-C.P.R. Bill-Mr. Young
did it to help relieve the situation which was facing the people of Canada, and in doing so they assumed an obligation of $25,000,000. It is not fair for us to say they are millstones around our necks while they are carrying that load for us.
Then I am told that in the western division alone the Canadian National Railways are compelled to pay $1,000,000 a year more for coal than is necessary, just in order that they might buy Canadian coal so that employment may be given in certain Canadian mines. If that is so in the western division how much in addition is being paid jn the eastern division? I am told also that this same railway company owns a coal mine in Ohio which has been closed down so that Canadian coal can be used at this additional expense. That pressure has not been confined to the Canadian National Railways, for I understand that the Canadian Pacific was also pressed to use Canadian coal instead of coal that could be bought for less elsewhere. Is it fair to load the railways with that burden? I think it was in 1929 that Mr. Milne, who was then a member of this house, made an estimate of what the tariff policy of this country had cost the railways since confederation. Taking the total purchases of the railways during that time and the additional cost of those purchases because of the tariff, he figured that the railways had paid enough extra because of the tariff to have rebuilt and re-equipped every mile of railway in Canada.
I am sorry this bill is not going to the railway committee. I believe it would be in the public interest to have the officials of the two companies appear before that committee and tell us exactly what these insane buy in Canada policies are costing them. The other day the minister boasted that since taking office he has required the national railways to make larger purchases of Canadian made goods than they were making formerly.


Robert James Manion: Where they could get equal quality at equal prioes; that is what I said.


Edward James Young: I am glad the minister does not require them to pay more for Canadian goods than they would pay elsewhere, but could not the minister trust the officials of the company to do that anyway?


Robert James Manion: No, because they were
specifying forty per cent of American goods, although in large part goods of equal quality could be obtained in Canada at an equal price.


Edward James Young: Will the minister tell me why that specification was made?


Robert James Manion: I should like to know myself.


Edward James Young: Did you not ask?


Robert James Manion: I corrected it, which was more important than asking why it was made.


Edward James Young: It is very important from our point of view that we should know why that specification was made. I do not think the officials of the Canadian National Railways would insist on a specification of that kind without a very good reason. Evidently the minister was not concerned about that; he was concerned with putting a stop to the practice. At all events, I say it is not fair to the railway companies to make them adopt these uneconomic practices in their business and then say they are millstones around our necks. I believe the remedy is publicity. If we are going to adopt these insane policies we have a right to know what they are costing us. We should know how much in addition the railways must pay for their coal every year, as well as for other purchases, because of these insane practices.
Reference has been made to political and community pressure on the management arising out of direct government control. Look at this bill. Ostensibly it is to remove this board of trustees from direct government control, from political control but look at subsection 2 of section 14:
The trustees shall so direct, provide and procure that all freight destined for export by sea which is consigned within Canada for carriage to national railways either at point of origin or between that and the sea shall, unless it has been by its shippers specifically routed otherwise, be exported through Canadian seaports.
Will any man justify that section on economic grounds? That is a political clause, pure and simple; no one will attempt to justify it on any other ground.


Mr. SPENCE:: That is what you think.


Edward James Young: I not only think it; I know it. That is a political clause. I do not say it is party politics, but it is politics; it is community pressure. This bill, designed to remove community pressure, has this thing embodied in it, and the trustees have no choice. The Canadian Pacific Railway is not bound by any such provision. That company is to be permitted to route its freight in the way that will give the best accommodation. The result of this provision will be that in time shippers will discover that they can get better service over the Canadian Pacific and they will route their freight over that line. I do not know how much money that will cost the Canadian National; I have no means of computing it. I know they will lose a tremendous sum because they will be forced to carry such freight

C.N.R.-C.P.R. Bill-Mr. Young
as they get 800 miles to the seaboard instead of 300 miles. But the Canadian Pacific railway will get the cream of the business.
Now let us look at the proposal. We are to have three trustees, holding office for seven years, who cannot be removed from office, whose salaries cannot be reduced and who cannot be disciplined in any way except by an address from both houses of parliament, and these men are to have a voice in choosing their own successors. The object of the removal of this board from public control, so we are told, is to escape political pressure. I cannot agree with the hon. member for North Waterloo (Mr. Euler) when he says these trustees should be men who believe in public ownership. I cannot agree on that point because in my opinion no man who really believes in public ownership would accept a seat on that board. This is the very negation of public ownership. Those advocates of public ownership who support that policy, and who say that the managers of this road should be removed from the control of parliament and the government as well as from the possibility of community pressure, by their very attitude confess that they have no faith in their own doctrine. We cannot have public ownership without public control. We might as well face facts. As a parliament we may remove this body from our own control, but we cannot escape our responsibility to the people of Canada. They will hold us responsible; they will hold the government responsible for the management or mismanagement of the system, and they will never accept it as an excuse if the road is mismanaged that you delivered the road into the hands of a body of men over which you have no control. If the people of this country have no capacity for managing a railroad that capacity will not be developed by taking the management out of their hands. If you leave the management in their hands and they show that they cannot develop the capacity to manage their own railroads, the sooner we find that out the better because in the long run our railways should be controlled by those who are best able to run them. The average citizen of this country is little concerned as to whether the title deeds to. our railway rest in the government vaults in Ottawa or in the strong boxes of private individuals. What he is concerned about is this: What kind of service do we get from our railways and what is that service costing us? And if as a result of government ownership and operation we demonstrate that we can get better service at lower cost than under any other system, then in the end public ownership and operation will prevail. If on the other hand we demonstrate that
we cannot run the railway, that we cannot manage our own affairs, then the sooner we find that out and transfer the ownership to those who can, the better it will be for all of us.	.
What is the remedy for undue community pressure? There is only one remedy that should be applied and that could be applied successfully under public ownership, and that is publicity. Let the people know; give them all the facts; let them know exactly what this policy of public pressure is costing the country. If a community is pressing for some special advantage to itself at the cost of the general system, let it be known; if a thousand communities are doing the same thing, let it be known; let it be known how far we are yielding to such pressure. If the public, with all the facts before them, and realizing that if one community is allowed to get some unfair advantage with the result that all the others are going to be allowed to do the same thing, public ownership is bound to fail-if, in spite of that knowledge, the public persists in that course, then they will have demonstrated their total incapacity to run their railways and the sooner they part with them the better.
Let us look at the bill again. I turn to part II, section 16. The two companies are instructed to cooperate. Now, the minister told us the other day that they are cooperating, and that by cooperating voluntarily they have made the very considerable saving of some $40,000,000.


Robert James Manion: The hon. gentleman is
misquoting me; he cannot read that in my statement.


Edward James Young: The minister did say they
were cooperating.


Robert James Manion: I do not think I discussed it the other day. I said that the bill was for the purpose of making them cooperate to a greater extent than in the past.


Mr. MACKENZIE (Vancouver):: The
minister spoke of voluntary cooperation.


Robert James Manion: Yes. I said that it was
not going on as it ought to. That was what I said.


Edward James Young: At any rate there is cooperation going on and this bill is intended to make them cooperate to a greater extent; it so instructs them.


Robert James Manion: That is right.


Edward James Young: But there is no one apart
from the railway companies themselves to see that they do it. The officials of the railways

CJV-R -C.P.R. Bill-Mr. Young
can put their hands in their pockets and declare that they are cooperating and neither the minister nor anyone else has any authority to compel them to do more. There is no one mentioned in the bill who can compel them to take the initiative; their instructions are that they are hereby directed to *cooperate, and if in attempting to cooperate they find that there are questions of disagreement, then these questions shall be submitted to an arbitral tribunal to decide between them. The tribunal shall consist of three members, one chosen by each railway and the third one shall be the chairman of the Board of Railway Commissioners.
Let us consider what sort of questions are likely to come up before the tribunal. If one railway wishes to abandon a particular service or to close down a branch line that is not paying, that is a matter between the officials of that company and the Board of Railway Commissioners, and the other company will not appear in the picture at all. There is no room for cooperation there; there is not likely to be any dispute there. Where there is likely to be dispute is where both companies render similar service in the same territory and one says to the other, " You abandon this service to us; you leave this part of the field to us and over yonder we will leave that field free to you." Without any such tribunal as is proposed, if they were voluntarily cooperating, that is what they would say, and by a process of bargaining they would reach an agreement which would probably be beneficial to both. But with an arrangement such as is provided in this bill one might say to the other, "You abandon this field to us, but we do not know whether we will abandon that other field to you; we will arbitrate the matter." And so they call for an arbitral tribunal. If the company making the application wins, then it makes an enemy of the other company and that will be the end of voluntary cooperation. Cooperation from then on will be only compulsory, and as has been pointed out several times in this debate, compulsory cooperation is unthinkable; it is impossible.
But consider for a moment the position in which this bill will place the chairman of the railway commission. Suppose a question comes before the Board of Railway Commissioners. The chairman decides one way and all the other commissioners decide the other way and they vote him down. What can the chairman do? He can ask one of the railway companies, the one he happens to be in favour of, to demand an arbitral tribunal. That tribunal will be set up. It will consist of two representatives of the railways whose votes
(Mr. Young.]
will neutralize each other, and he will be the sole arbitrator. So that you put him in a position where he not only dominates the arbitral tribunal but can defy the railway commission itself; for though the whole railway commission might be opposed to him, he could appeal from their decision and appeal to himself. In other words, you are making him, the chairman of the railway commission, an absolute autocrat in all railway matters in Canada.
Summing up I might say that, as outlined by the Duff commission, the causes of our railway trouble are seven. The principal ones are, first, lack of trade, which this government, if it will come to its senses and reverse its trade policy, can do much to alleviate. Next there is over-investment, which this bill does not and cannot remedy. Next, political pressure, which this bill cannot remedy, though it seeks to put the entire control of the affairs of the company beyond the reach of parliament. Next, contractual agreements, with which the bill does not pretend to deal. I see therefore nothing in the bill to warrant us in supporting it, and though I have every sympathy with the effort of the government to find a solution for our railway problem, I must say that I can find no solution within the four comers of this measure.


Mr. C. E. BOTHWELL (Swift Current):: As I read this bill, it means that we are asked to turn over to three men an investment of some 82,300,000,000 of the people of Canada. Whether that is a good investment or not is to some extent beside the question. However, we have an investment there which the Prime Minister (Mr. Bennett) believes is good to the extent of the bonds that are outstanding in the hands of the public, amounting to about $1,300,000,000. Parliament is asked to divest itself of practically all responsibility to the people of Canada for the administration of that investment.
I am hopeful that we shall be able to put through the necessary amendments to this bill in committee. I feel satisfied that the government itself cannot be content with the provisions of this bill as it stands now, and I am equally satisfied that the people of Canada will never tolerate the members of this parliament permitting the bill to go through in its present form.
We all know we have a railway problem in Canada. We know that no one government is responsible for the situation; we know also that no one railway company is responsible for it. Everyone I believe is convinced that most of the people in Canada, along with the railway companies themselves, have to bear their share of the responsibility. Reading the evidence that was given before

C .N.R ,-C .P.R. Bill-Mr. Bothwell
the committee of the other house, it is interesting to note some of the remarks that were made by Mr. Beatty as to excessive or wasteful expenditure, as it has been called. At pages 33 and 34 of the proceedings before the Senate committee he is reported as saying:
The report makes mention of branch line construction and expenditure on hotels. In the policy of the company in these matters, competitive considerations had only a minor part. The chief factors were the interruption of railway construction during the war, and the rapid extension of settlement, particularly in the western provinces, which followed it. In Saskatchewan and Alberta alone the area under wheat increased from 6,993,000 acres in 1914 to 21,490,000 in 1930. Industry and commercial enterprises talso entered new fields, and for all these, railway service was necessary, These settlements and industries owed their existence in a very large measure to the colonization and development work of the company.
And again:
The traffic returns of the new lines up to 1930 fully justified their construction, and the falling returns of subsequent years have been no more characteristic of the new lines than of other parts of the railway.
In order to give the viewpoint of the heads of both railways, I should like to quote what Mr. Hungerford had to say in giving evidence before the commission itself. He said:
Ever since the inception of railways, there has been an insistent demand on the part of communities for more and more railways with the object of opening up more tributary territory and thereby securing a larger volume of trade, and the country as a whole has generally supported large railway projects, even although they involved the building of a very large amount of mileage through almost wholly undeveloped territory.
After referring to the extensions which were made because of the insistent demands of the public, Mr. Hungerford directs attention to the fact that this railway development assisted largely in the development of industry and the external trade of the country. I quote further from his evidence:
It is significant that while railway mileage increased between 1900 and 1929 by 135 per cent-the gross earnings of railways in the same period increased 656 per cent and the external trade of the country increased by 645 per cent, from which it appears to be a fair deduction that the external trade of this country has been made possible by the developments through railways.
The railway situation now confronting Canada has been brought about not only by the building of these colonization roads but by the dearth of traffic offering to the roads. This was referred to by the hon. member for Weyburn (Mr. Young), who directed attention to the fact that the restricted trade policies of this government have something to do with it.
There is a dearth of traffic offering to the railroads in other countries; a railroad problem is not peculiar to Canada. The same situation exists in the United States and in Great Britain. We must not get panicky because we have to face a difficult situation. There is no doubt that there is some duplication of mileage and a decline in passenger and freight traffic attributable to other competition. The complaint has been made by the commissioners that some of our problem is attributable to the contractual relations with labour and also to the fact that our freight rates are not sufficiently high. We must not get alarmed and go to extremes in trying to solve this problem.
The Prime Minister spoke yesterday as if his party had nothing to do with the railway situation which now confronts the people of Canada. As I gathered his remarks, he was endeavouring to place upon succeeding Liberal governments the responsibility for the present position. His words were to the effect that any person might have known that we would not need the present railroad development in Canada with a population of 8,000,000 or even
15,000,000. He lamented the tremendous expenditures which had been made. I thought this was most unfair and I took the trouble to look up some of the promises he had made in connection with the development in Canada. I should like to refer to one or two statements he made during the campaign of 1930. If he knew that Canada was facing such a difficult situation with regard to her transportation system, he would hardly have used the following words:
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 ocean and to the establishment of a national highway system.
Apparently in those days the Prime Minister did not have any fear of the tremendous investment we had in railway facilities. Speaking in Vancouver, he is reported in the Vancouver Sun as follows:
"We must look forward to the building of highways, of waterways and railways to provide work," Mr. Bennett said. He would undertake, for instance, the completion of a highway across Canada, from Cape Breton to Vancouver. . . . "Canadians do not ask for charity or doles. They want work and wages. That is why it
2922	COMMONS
C.N.R.-C.P.R. Bill-Mr. Bothwell
will be my duty, if elected, to call a special session of parliament to anticipate those great undertakings to which we are pledged to enable Canadians to keep themselves and their families in comfort."
Speaking at Woodstock, he is reported in the Mail and Empire as follows:
We must pass laws at the special session that will anticipate work for our people on national highways, on great canals, that we must make for our waterways to the sea in great undertakings such as branch lines and matters of that kind, in order that we may give employment to our people.
Again speaking at Woodstock, he is reported in the Mail and Empire as follows:
Parliament has first of all to pass laws^- nott orders in council-that will institute great national undertakings, national highways, great canals to the sea, branch lines, and matters of that kind, improving conditions in order that we may give employment to our own people.
The Minister of Railways (Mr. Manion) will be interested in the next statement. Speaking at Brandon, the Prime Minister is reported in the Mail and Empire as fallows:
Endorsation of the suggested Mafeking cutoff to afford Manitoba a shorter route to the Hudson Bay railway was voiced by the Conservative leader. Supporting the proposal, Mr. Bennett said that this would be a proper national undertaking to be started to relieve unemployment and he asserted such was his intention. I
I think all members of this house should look at the situation that confronts us without endeavouring to blame one person or one party, because it looks to me as if most everybody in Canada is responsible for the situation with which we are faced.
Speaking of wasteful extravagance on the Canadian National Railways, I believe that there has been wasteful extravagance also on the Canadian Pacific Railway, the privately owned corporation, and I take Mr. Beatty's own. words for that as given before the Senate committee. He does not attribute the situation with respect to the Canadian Pacific Railway to unfair competition from the Canadian National, because his words are, "competitive considerations had only a minor part." Mr. Hungerford had this to say in connection with expenditures:
Since 1920, say the last ten or eleven years, so far as I can see, and I think I am pretty well informed with respect to the situation, the management of the Canadian Pacific Railway has pursued exactly the same policy as that of the Canadian National. I see no difference at all.
Again he says:
I can hardly believe that it was dictated in very large degree-

That is, by the policy of the Canadian National :
-from the fact that the Canadian Pacific took the initiative on many occasions in connection with the development of new enterprises. I say that in no spirit of criticism; it is simply a statement of fact.
Lord Ashfield asked this question:
So far 'as you know, it is equally true to say of the Canadian Pacific that during the last ten years they have not been tempted to make expenditures for services beyond what business prudence would demand on account of any policy of the Canadian National Railways?
Mr. Hungerford: I do not think so. I think if there had been another private company competing with the Canadian Pacific, a company that had equal resources and opportunities, the degree of competition would have been about the same.
During the past few years I have been a member of the committee known as the committee on railways and shipping. I have heard the Canadian National Railways budget discussed year after year before that committee, and my recollection is the committee brought in reports which it had unanimously approved. Expenditures were always provided for in that budget, to which no exception was taken by hon. gentlemen opposite. We discussed matters fully in the committee, and sometimes there were differences of opinion. All of the members would' disagree with certain policies that were proposed by the railway company, and where the committee deemed it advisable and in the interests of the railway itself and the public as well, certain reductions were made in the proposed expenditures, but throughout all the period during which that committee has had the Canadian National Railways budget before it, I have heard up until the last year or two very little criticism in that committee of the expenditures proposed.
Coming to the bill itself, I take exception in the first place to the appointment of three trustees to administer the railways. The people of Canada have sent 245 members to this house; there are 96 members of the Senate. Are we, the representatives of the people, going to shift all the responsibility on to three men who are being given apparently unlimited powers under this bill? Section 7 says:
No trustee shall be removed from office nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada.
Subsection 6 of section 9 says:
No order, regulation, by-law. act, decision or proceeding of the trustees shall require the approval of His Majesty or that of any other shareholder of any company to which this section applies.

C.N.R.-C.P.R. Bill-Mr. Bothwell
And what can that committee of three do.? They can agree with the Canadian Pacific Railway to enter into or help to form new companies, enter into leases, entrusting agreements or licences, or agreements for the pooling and division of earnings, also agreements covering the use of joint trackage, running rights, joint ownership, or make joint operating agreements, or agreements with respect to joint or individual highway services, or highway and railway services combined, in any form. It may be possible to get some supermen in this country to whom we should hand over this $2,300,000,000 of investment, but I as one of the representatives of the people in this house do not feel that I am doing my duty by the people whom I represent if I turn over that investment to a body of three men and give them absolute control so that they can enter into leases, entrusting agreements or licences, about which we have nothing to say.
I was rather interested in the opinion of Sir Joseph Flavelle, speaking on this very subject of supermen, when dealing with the question of the Canadian Pacific Railway controlling the whole of the railway situation in Canada. These are his words:
The other aspect bathers me-whether any single executive body can be entrusted with the responsibility of interpreting for the community the service necessary under the diverse circumstances that we have in Canada.
Again he says, addressing Mr. Beatty:
We have not yet discovered, so far as I know, any field of human endeavour that we can pass over to a very small group for determination of policy affecting the interests of the public.
In appointing three trustees over whom parliament has no control, as apparently this bill proposes to do, I submit that we are going away beyond what we have any right to do as members of parliament representing the people of Canada who are really the owners of this railway. Just at that point I want to interject this. We have heard about equity of redemption. To me it is ridiculous to talk about the people of Canada only holding an equity of redemption in the Canadian National Railways. True, we have outstanding bonds amounting to $1,300,900,000, but as the Prime Minister himself says, those bondholders have the guarantee of all the assets of the Dominion of Canada and of the different provinces besides. If I mortgage a piece of land and raise some money on it, and in addition to giving the mortgage on the land I turn over to the mortgagee dominion bonds in amount equivalent to that of the mortgage, and1 bearing the same rate of interest, I know what is going to happen if I default on my mortgage-the mortgagee is
going to take the bonds I have assigned to him. And in this particular case, while the national railways owe some $1,300,000,000 in bonds, the bondholders have the additional security of all the other assets of Canada. It is foolish to talk about equity of redemption, because we know we have to pay those bonds; we are not able to default. I should like to ask the minister this question: Was not the interest paid on those bonds last year, and was it paid out of operating revenues of the railway? I suggest it will be paid again this year, and in all probability will not be paid out of operating revenues. We realize we have to pay, and we are going to do it.
I am opposed to the manner of appointment of the three trustees, and to their appointment by the government. This government has put into effect certain economies and has endeavoured to effect other economies on the railroads which I am not convinced are in the best interests of either the railroad or the country. In order to indicate what I mean I should like to place on Hansard a record of the falling off in passenger traffic on the Canadian National railways since this government took office, and to compare the passenger traffic of the national lines with that of the Canadian Pacific. Every year up until 1932 the Canadian National carried more passengers one mile than did the Canadian Pacific. In 1932, however, that position was reversed. Let me give a comparison of the figures showing passengers carried one mile by each of the railway companies. I shall not read all the figures for the years 1922 to 1932 but will give those for 1922, 1931 and 1932. The following table is taken from the statistics on steam roads:
Passengers Carried One Mile
Canadian Canadian Year-[DOT]	National	Pacific
1922	 1,287,308,000 1,250,197,000
1931	
788,423,840	743,036,6671932	
632,465,682	644,797,144
These figures indicate that there is a decline of 156,000,000 passengers carried one mile on the Canadian National railways, and a decline of 98,000,000 on the Canadian Pacific railway between 1931 and 1932.
I should like now to give some figures concerning revenue freight ton miles. In 1932 the Canadian National carried more freight ton miles than the Canadian Pacific did. But between the years 1931 and 1932 there was a decline in revenue freight ton miles of 1,-
300,000,000 on the Canadian National railways, while on the Canadian Pacific railway there was a decline of only 744,600,000. Perhaps the practice of economizing is being carried too
2924	COMMONS
C.N.R.-C.P.R. Bill-Mr. Bothwell
far, and not in the right direction. I believe economies have to be effected on the railroads, but we must be sure that those economies are not to their disadvantage and to the disadvantage of the Canadian people.
Another objection I have to the bill is in connection with the arbitral tribunal. So far no hon. member has explained what objection there can be to the Board of Railway Commissioners, or the necessity for setting up an entirely new board to adjust the difference between the two railroads. Over a period of years the people of Canada have had confidence in the Board of Railway Commissioners, and so far as I can see there is no necessity for the additional expense which will be incurred if the measure before us passes. The hon. member for Weyburn (Mr. Young) referred to disputes which would come before these tribunals, and stated that after one dispute had been settled the railroads would not return for other settlements. If that is going to be the result we would be well advised to adopt the cheapest course open to us. It seems to me however that the Board of Railway Commissioners, a body of men who have been trained in matters pertaining to the operation of railroads, would be the most competent body to deal with this matter.
There are many other minor amendments which should be made to the bill, but in my opinion the most important one is that concerning the appointment of trustees without any governmental supervision. I do hope when the bill reaches committee the government will see to it that such an amendment is made, and that the last word will be left with the government. I would rather trust even this government than a board of three men appointed by it. For the life of me I cannot see why the government wants to divest itself of its responsibility. Surely in connection with railway development in Canada they are able to resist the importunities of their political friends; surely they can resist those importunities to the extent that they will not allow any board appointed to put into effect economies which are not in the interests of the people and of the railroads.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker, at this late stage of the debate it may not be possible to offer anything new by way of argument. The position taken by the great majority of hon. members on this side of the house has been well and ably presented. It is not m3' intention therefore to speak at any great length. Perhaps it would be sufficient to say that my personal views concerning the bill were ably presented by the hon. member for Hants-Kings (Mr. Iteley). With

perhaps a question mark after one statement he made, or one position he took, I agree in toto with what he said, and I believe the hon. member is to be congratulated in that he was able not only to detect the fallacies in the speech of the Prime Minister (Mr. Bennett), but to reply almost immediately with a complete exposure of those fallacies. Sometimes the Prime Minister by what is called the exuberance of his own verbosity sweeps his hearers off their feet. Unless one is capable of quick thinking he may for a time be carried away by the arguments of the Prime Minister, and it is only after calm deliberation by' those of us who think somewhat more slowly than the hon. member for Hants-Kings, that we are able to detect those fallacies.
There were one or two statements made by the Prime Minister that I admit came to me with a distinct shock. Although the arguments against this bill have been so ably presented by the hon. member for Hants-Kings and the hon. member for North Bruce and others who have spoken, there are one or two things that I would like to say on my own behalf. I want to refer to a remark made by the hon. Minister of Railways, (Mr. Manion) speaking of the amount of wheat carried by the railroads. At page 2776 of Hansard he said:
I found that in the year 1929, 4,609,000 tons of wheat was shipped on the railways, and in 1932, 5.300,000 tons, an increase of 700,000 tons in 1932 as compared with 1929; yet the gross revenues of the Canadian National Railways were down in 1932 as compared with 1929 by $125,000,000.
Then at the top of page 2777 he says:
I must confess it was my own conviction that grain traffic was the paying traffic of the railways. As a matter of fact, it was not so much the wheat and grain traffic that was the paying traffic for the railways as the fact that the people of the west were selling their products at a reasonable price and bad the money with which to purchase goods from some other section of the country, thus providing return traffic; and that total traffic brought about the prosperity of the railways.
I want to say to the hon. Minister of Railways that there are a lot of fish up that stream if he will follow it. I wish he would apply the principle here enunciated to traffic in general. I wish when he comes to consider the possibilities of the Hudson Bay railway', to which he pledged himself, he would emphasize, as he has done on this occasion, the necessity for two way traffic. The Hudson Bay railway can never be made to pay on one way traffic. The wheat we export will not stand the cost of operation both ways either on the railway or on the ocean. I want to say also to the members for the maritime

C JV.R ,-C.P.R. Bill-Mr. Brown
provinces who come here insisting that traffic shall go by way of Canadian ports, that if they are to win the sympathy of the people of the west who grow the wheat that they want to go out through their ports, and if they insist that that wheat shall be carried at extra expense by a circuitous route of some 800 miles instead of 300, they must give consideration to the question of two way traffic. The railways cannot afford to take train loads of wheat around the long circuitous route of the Intercolonial and haul back empties. The necessity for two way traffic must be recognized. And I say to the people of the mari-times, not the members who represent them here, that if they want the sympathy of the people of the west in their position they must send members to this house who are opposed to measures in restriction of trade as practised by this government. They must send more members who hold the views of the hon. member who sits in front of me, the member for Antigonish-Guysborough (Mr. Duff). That hon. member and I sometimes differ very widely in our opinions, but I agree with him wholeheartedly on the question of trade. With him freedom of trade seems to be almost an obsession, and I fully agree with him that if we want to prosper we must provide increased traffic, we must remove restrictions on trade, we must recognize the necessity of two way traffic.
In view of the frequent expressions of opinion that we have in this house and the country generally in regard to amalgamation it may not be necessary at the moment to discuss that matter at any length. But a remark made yesterday by the Prime Minister in regard to the taking of a plebiscite on the question is perhaps worthy of some attention. I wonder whether that was entirely unpremeditated or whether it meant that he was thinking of such a thing. If premeditated it indicates that there is still propaganda going on in favour of amalgamation, and it will be necessary to carry on some counter-propaganda. This therefore must be my excuse for making some reference to the question.
I lived in Manitoba, Mr. Speaker, in the days when the Liberals under the leadership of Thomas Greenway were fighting the Dominion government on the question of the disallowance of our railway charters. I remember the battle of Fort Whyte, which, though like the battle of Montgomery's farm it may not take a very high place among the decisive battles of the world, nevertheless is of great significance to the people of Canada. I remember also when the then president of the Canadian Pacific Railway, Sir William
Van Horne, sent a message to a farmers' convention in Winnipeg in reply to a telegram that had been sent to him with reference to the building of branch lines, to the effect that there would be no branch lines built in Manitoba until the fool killer went through Winnipeg. The attitude of the Canadian Pacific Railway at that time was arrogant and intolerant towards any person who presumed to dispute its position. I admit that after that time and for mans' years the relations between the farmers' organizations and the Canadian Pacific Railway were on a much more cordial basis, and we got along together very well in many respects. At the same time, remembering these things, I could not contemplate for a moment with equanimity the idea of a railway monopoly, a private railway monopoly. The dangers to which we would be exposed from such a condition would be too tremendous. There would be the possibility of the government itself being dictated to by the railway management. It might be said that such a system would be more efficient than that we have at present. That might possibly be, but it would be efficiency secured at too great a cost. I think of railway monopoly and the possibility of dictatorship in railway matters as I think of dictatorship in the state. It may be contended that dictatorship in the state would give the most efficient government, and sometimes that may be true. Perhaps we have an illustration of that in Italy to-day, and we may have another in Germany. But at the same time we would view such a situation with a great deal of alarm. I often think of a principle that was laid down by my old college professor, to this effect, that were perfection and wisdom and love combined, the perfection of government would be absolute monarchy, which is unsafe among men only because men are neither perfectly wise nor perfectly good nor perfectly loving. So in spite of the weaknesses of democracy we prefer it and will continue to prefer it to anything that savours of autocracy or absolute monarchy. A few days ago the Prime Minister made some reference to the weakness of democracy, and he said that weakness lay in the fact that results were arrived at by the counting of heads according to their number rather than according to their quality. I thought that was rather unkind of the Prime Minister; I thought it showed a great lack of gratitude on his part in view of the fact that in the opinion of many he occupies his present position by virtue of the counting of heads by number rather than by quality.

C.N.R.-C.P.R. Bill-Mr. Brown
Then we come to the idea of amalgamation under public ownership. I know the hon. member for North Waterloo (Mr. Euler) is strongly impressed with the idea that amalgamation under public ownership might be for the good of the state, but I do not think that opinion is very generally held. I often recall a statement made to me by a former member of this house who is now Minister of Education in Manitoba, Mr. Hoey. He told me that he attended a farm convention in Kansas City, and that while there he came in contact with leading business men and railway officials who discussed with him the railway situation in Canada. Their statement was something like this: "We believe that you have in Canada the ideal railway situation, with one government owned line and one privately owned line. If your railroads were all owned privately the result would be a monopoly; if they were all owned by the public there would be no standard of comparison, and lacking that standard there would be dissatisfaction no matter how successful they were." I think, generally speaking, that would be the position taken by the people of Canada to-day.
When the Minister of Railways moved the second reading of this bill I felt that in view of his very dispassionate presentation of the case, in the appeal he made for a non-partisan discussion and his statement that amendments would be accepted by the government-


Robert James Manion: I did not say they would
be accepted; I said they would be considered.


John Livingstone Brown: Then we will say that amendments were to be considered. Perhaps it is well that the minister made that correction, because it confirms our opinion that consideration will be all they will receive at the hands of the government.


Robert James Manion: If there were many like the one we had yesterday probably that is all they should get.


John Livingstone Brown: Well. Mr. Speaker, in view of what I believe to be the desire of the country, that we approach this matter in a non-partisan way and give it a calm and unprejudiced discussion, I felt it would be well not to oppose this bill on the second reading. I felt a desire to give the government an opportunity to demonstrate their good faith in the matter of amendments; I felt that it would be wise for us to work with the government to as great an extent as possible. I have never made any secret of the fact that I am

absolutely opposed to the general fiscal policies of this government, but at the same time I do not adopt the attitude that the first duty of an opposition is to oppose.


James Houston Spence: You always do it.


John Livingstone Brown: Generally we have good
cause. I remember a statement made by Mr. Meighen some years ago when he was leading the opposition. It was that he believed it was his duty to place the government of the day before the people of the country in the worst possible light, or something to that effect.


Peter McGibbon: That was easily done in those days.


John Livingstone Brown: I cannot agree that this is the duty of an opposition. I believe an opposition should criticize, scrutinize and offer constructive suggestions if possible, and of course there comes the time when it may be and is our duty to oppose the position taken by the government. At any rate, while that was my desire when this debate commenced I must confess that the speech made by the Prime Minister yesterday somewhat shook my determination. I think the speech of the right hon. gentleman, confirmed by the remark of the Minister of Railways just now in which he substituted consideration for acceptance in regard to amendments, made it abundantly clear that no amendments will be accepted unless perhaps they have to do with the length of the cross of the "t" or the size of the dot to be put above the "i". I think it is quite clear that any amendments we may deem advisable will not be accepted by the government.
I am not very much impressed with the willingness of the government to reinsert the section having to do with amalgamation. That does not mean very much to me, because even if that section is placed in the bill it will not prevent the board, which is entrusted with the complete management and control of the system, from pursuing a course that would inevitably force us into amalgamation. With the powers entrusted to them under the terms of this bill they may adopt a course that would make it impossible for us to avoid being driven into amalgamation. Therefore, Mr. Speaker, to me part I is the importaijt part of the bill. AVith a board of trustees doing their duty in the interests of the country parts I and II would be entirely unnecessary, but if part I does not work effectively there is no power under heaven that could make parts II and III work well. I think that should be perfectly clear.

C.N.R ,~C.P.R. Bill-Mr. Brown
Something has been said as to the qualifications of the trustees. Naturally this must be a subject that gives us a great deal of concern. If this were a matter between two private roads we should naturally expect, and we should be justified in expecting, that the respective representatives would stand absolutely by their own interests. But how can we be. perfectly sure that a board of trustees representing the publicly owned railways, representing no immediate interests of their own, would be so completely devoted to the interests of that road as to allow no other considerations to enter their minds? It is all very well to say that we must have men of integrity. Certainly we must; we must have men with high ideals of public service, men who are sympathetic to the idea of public ownership. But how are we going to apply these tests in choosing men to fill these positions?
Perhaps I might offer another suggestion that might be worth considering, although it may possibly be thought narrow on my part. Nevertheless, it is worth, considering, whether men who within the last five years have had a large interest in the Canadian Pacific Railway could give to the operation of the national road that wholehearted, sympathetic management which alone can make it a success.
Referring again to the speech of the Prime Minister, although I said that at the time I did not grasp the full significance of his remarks, yet there was one thing that came to me with a distinct shock and that was his statement that we did not own a railway. The people of Canada had been congratulating themselves upon their ownership of a magnificent railway system comprising some 23,000 miles of steel rails. We were congratulating ourselves on the fact that we were the owners of one of the greatest properties in the world, and now the Prime Minister comes along and tells us it is all a delusion.


Peter McGibbon: How much equity have you in it?


John Livingstone Brown: We have it all in one sense.


Peter McGibbon: Mortgaged for twice
what it is *worth.


John Livingstone Brown: The fact of the matter is that we do own the railway, in spite of what the Prime Minister has said, and I believe the people of Canada will suffer the same shock as those of us on this side received yesterday when we were told that we did not own a railway which we thought all the time belonged to us. In common with the great majority of the Canadian people, I had been
cherishing the belief that we were owners of this great railway system, and now we are told that all the interest we have in it is the privilege of paying the deficits. It is true the Prime Minister did mention later on that we had the equity of redemption, and that is an admission; but, as the hon. member for North Bruce told us this afternoon, the true value of the railway consisted in its earning power, and the very fact that we have guaranteed the bonds and so far have not defaulted indicates that we have at least some ownership in the line.
Briefly, let me state my attitude towards the bill. It probably is desirable that a board of trustees should be substituted for the large board of directors. If a board having the proper qualifications is appointed, a board with an eye single to the welfare of the national road, then perhaps all will be well. But, Mr. Speaker, I am heartily in sympathy with w-hat has been said with regard to the method of appointment. I think it has been well said that if subsequent boards of trustees can be appointed by selection from panel, then the principle is equally good with respect to the first appointees. Considering the tremendous power with which this board is entrusted, we must ensure if possible that the board be appointed in such a way as will secure to us men of the very highest character and calibre, for the country will be satisfied with no less.
With respect to the question of government control, it has been stated quite frequently that the failure of the system, if it can be called a failure, has been the result of a lack of such control. We can all acknowledge that it is perhaps a somewhat difficult matter to maintain a proper balance, keeping that government control which is necessary in order that the government of the country may keep its hands on its own property and yet at the same time preventing that pressure from which perhaps we may say that the Intercolonial system undoubtedly suffered in the past. But it is abundantly clear that this parliament cannot resign into the hands of a self-perpetuating body of men, no matter how good they may be at the outset, that control which parliament must of necessity exercise over a system which is the property of the people of Canada.


Mr. E. R. E. CHEVRIER (Ottawa):: The bill which is at present before the bouse, now that it is bereft of the amendment, is, I take it from the words of the Minister of Railways the other day, as well as from the words of the Prime Minister, the crystallization of the findings of the Duff commission. Both the
2928	COMMONS
CM.R.-C.P.R. Bill-Mr. Chevrier
Minister of Railways (Mr. Manion) and the Prime Minister (Mr. Bennett) took some time to extol the qualifications of the members of that commission. So far as I am concerned, and, I believe, so far as every hon. member of this house is concerned, that eulogy was love's labour lost, for no one would doubt the qualifications of the gentlemen that comprised the commission. I would be the last one to doubt the outstanding qualifications of the very distinguished and able gentlemen who sat on the commission, and particularly the one who so admirably presided over its deliberations. But the fact that the commission was composed of such eminent men is no reason why we should conclude that the matter placed before them was a most complex and difficult one. Very often quite eminent judges are called upon to listen to and to decide some of the most unimportant and futile cases. It frequently happens that the eminent jurists who sit on the supreme court bench, and their lordships of the privy council, have to decide cases that have just barely stepped over the mark of jurisdiction of the respective courts. Very often these appeals are dismissed on the bench. Because this matter was submitted to this commission is no reason why we should say that it was very complex and complicated. Why bring that up?
As was to be expected from the high calibre of its members, the commission did its work thoroughly. It was something like Caesar's wife, above suspicion. The commission laboured long, laboured hard and laboured well. This afternoon in the parliamentary library I had under my hand the five huge volumes which compose the evidence given before the commission and the two huge volumes containing the report and the appendices. Those volumes constituted almost a monument and they looked like a mountain. Out of that mountain came this bill, out of the mountain we got this mouse. In matters of this kind the Minister of Railways is a wonderful magician, and I trust that in the performance of his duties hereafter he does not have to produce similar results. At page 6 of the proceedings of the commission I find the following words of the Minister of Railways in his opening address:
We have a difficult situation so far as the railways are concerned,-decreasing revenues and competition from motors and from the air.
In explaining the difficult situation to the commission the minister stated that so far as the railways were concerned the difficulty consisted in decreasing revenues and competi-

tion from motors and from the air. I might say to the minister: Cura te ipsum-why do you not start by curing yourself rather than by curing others? If our trouble is decreased revenue, who is responsible for the decreased revenue? Like other financial institutions, the railways began to feel the depression around 1930. This depression was worldwide and it spread into Canada and was beyond the power of man to stop. When the present administration saw the storm in the offing it took no measures to meet it. Instead of taking precautions when it was seen that trade might languish and decrease, the present administration took measures to stop the flow of trade. Instead of attempting to blast their way into other markets, as the Prime Minister had promised in June and July of 1930, the present administration proceeded to limit markets. By limiting markets they limited trade, and by limiting trade they limited the tonnage available to our railroads. Immediately that was done it was only natural that the revenues would fall off. I shonld not labour this point because the hon. member for North Bruce (Mr. Malcolm) explained it fully this afternoon. I think it would be a loss of time to attempt to cover the same ground. I would say to the genial Minister of Railways:	Et vodE pourquoi, docteur,
vobre fille est muette! We all realize the difficulties facing the present administration but if they would take steps to extend the circle of our commercial operations there would be an immediate improvement in the railway situation.
The minister stated that our railway troubles were due to the decrease in revenue and the competition from motors and from the air. There is some reference made to these matters in the Duff report but no recommendations are made in connection therewith. But there is another type of competition which was not taken up by the Duff commission. I wonder why, but on second thought I realize that it might be because the members of the commission were limited by the terms of the order in council under which they were appointed. I have no doubt that they considered the matter but they probably found it was not within their jurisdiction. I refer to transportation by water, one of the greatest drains upon the revenue of our railways. Our canals do not charge tolls of any kind. Some years ago a very famous bill was introduced in this house and it took the attention of the house for a considerable length of time. At that time I advocated that tolls should be charged on

C.N.R.-C.P.R. Bill-Mr. Chevrier
our Canadian canals. The bill did not go through, the principal objection being that other nations did not charge tolls on their canals. I am still of the opinion that tolls should be exacted by our canals, and that opinion is strengthened by certain evidence, to which I shall refer in a few moments, that the ships plying through the Canadian canals are subsidized to the extent of two dollars per ton of freight because of the non-payment of tolls. One can realize immediately the disadvantage under which our railroads are operating when ships, Canadian and foreign, are granted an advantage of two dollars per ton in the transportation of freight. At once one can visualize how enormous the problem becomes when one thinks of that huge fleet of freighters plying through the waters from the gulf of St. Lawrence right through to the head of the lakes. But as I said, the worst feature of this unfair competition is that it is not limited only to Canadian ships but extends also to foreign shipping. Ther| is no Canadian control at all over the rates on these foreign ships. They may transport freight at the most ridiculously low rates in our waters, and pass through our canals and deliver their cargo in American ports at rates that are simply ludicrous, thereby constituting a tremendous drainage upon the revenues of our own railways. I have been told that recently Danish ships were unloading barbed wire, steel and iron in Chicago, which of course had been brought up through the St. Lawrence, and that the rates charged were so low that nobody could even think of competing with them. On their return these tramp vessels do not go without cargo. They cannot compete with our own Canadian ships in the transportation of wheat, and so they return laden with other Canadian commodities at rates ridiculously low, which constitutes a further drain upon the revenues of our railroads.
In going through the evidence that was submitted before the Duff commission I find at page 1088 the submission of Mr. R. K. Smith, K.C., who expressed himself in these words:
I would like now to deal with the question of water competition. Railway lines on the North American continent are exposed to water competition from all angles, with very few exceptions. The major developments which have brought about the situation are, first, the Panama canal, which materially affected the transcontinental rail rate levels; the St. Lawrence river and Great Lakes system and the Mississippi river development. These facilities have permitted the easy flow of waterborne traffic, and have been largely the result
of governmental activity. After spending millions in the development of the great lakes and St. Lawrence waterway system, the Dominion government cancelled the tolls against shipping and cargo tonnage, and to-day this great waterway system is open to shipping free of charge, and the Canadian taxpayer is carrying the capital cost of the construction.
From an estimate prepared recently it is calculated, taking into consideration interest, maintenance and operating expenses, that cargo tonnage moving on vessels on the St. Lawrence river and great lakes is indirectly subsidized to the extent of at least $2 a ton. This is in direct competition with the railway lines which have to meet this condition, not only being forced to make tolls to the public which reflect water competition, but are contributing large sums in the form of civic, provincial and federal taxes. This is a problem which requires very serious consideration, and particularly as pressure is constantly being exerted towards the enlargement of artificial waterways systems, which inevitably would increase this competition.
I do submit, Mr. Speaker, that those are words of wisdom, and they come from a gentleman who knows the water transportation situation. I trust that the suggestions he has made will be taken into consideration by the government at its very next opportunity. If the water rates were carefully looked into and foreign ships particularly had to pay tolls passing through our canals, if their rates were controlled by the Canadian parliament in some way, I believe that it would to a large extent relieve the drainage from this source on the earnings of our Canadian railroads. When I say that the railroads do feel the effect upon their revenues of this water competition, as to which no remedy is suggested in the Duff report, probably because that subject was not within their purview, I should like to submit this. I find at page 1598 of the evidence taken before the commission that Mr. H. C. Patton of the Toronto Transportation Company said:
The increasing use of waterways, of pipe lines and diversions of traffic through the Panama canal has decreased the freight tonnage available for railways.
The long term trend of freight tonnage carried by vessels on the great lakes has been steadily upwards.
I have not got the figures of the corresponding decrease in the transportation by rail, but if transportation by water has increased to this extent then there must be a repercussion downward in the same ratio upon the earnings of the railways.
I shall not place before the house all the figures I have here, but I shall just give a synopsis of them covering the years 1900, 1905, 1910, 1915, 1920, 1925 and 1930, giving in three
2930	COMMONS
C.N.R.-C.P.R. Bill-Mr. Chevrier
columns the traffic passing through the St. Lawrence canals, the Welland canal, and the Sault Ste. Marie canal:
St. Lawrence Canals
Year-
1900	
1905	
1910	
1915	
1920	
1925	
1930	
Tonnage
1.309.000
1.752.000
2.760.000
3.409.000
3.067.000
6.206.000 6,179,000
Those figures show that there has been a rapid and continuous increase of tonnage through the St. Lawrence canals from 1900 to 1930. Here are the figures for the Welland
canal:
Year- 1900. 1905. 1910. 1915. 1920. 1925. 1930.
Welland Canal
Tonnage
	 719,000
	 1,092,000
	 2,326,000
	 3,061,000
	 2,276,000
	 5,640,000
	 6,087,000
Our railways must certainly have felt the repercussion of the increase in traffic through the Welland canal. But what do we find in the case of the Sault Ste. Marie canal?
Year- 1900. 1905. 1910. 1915. 1920. 1925. 1930.
Sault Ste. Marie Canal
Tonnage
	 25,640.000
	 44,270,000
	 62,303,000
	 71,290,000
	 79,279.000
	 81,871,000
	 72,897,000
One can readily conclude from those figures that the railroads must of necessity have felt a tremendous drainage on their revenues due to water competition.
Coming to the bill itself, at this late stage of the debate, Mr. Speaker, there is very little to say that has not already been said. I shall not detain the house at very great length with a consideration of the various aspects of the bill. This is the second reading, and I take it that on the second reading only the principle of the bill is under consideration. One of the first matters with which I was concerned was to learn the principle of the bill. I could not find it from the preamble, except that in that part of the bill cooperation was mentioned. The part of the bill respecting the title is short, and does not enlighten me to any great extent. There is a part of clause 2, however, which I should like to see implemented when the bill reaches committee stage. I refer to paragraph (a), in which the rights of railroad employees are supposedly safeguarded. I do

not know to what extent that safeguard may be effective, but if there are to be any changes in or departures from the protection now afforded in the Railway Act to railway employees, we may as well know it right now. That Railway Act is the result of many years of experience and has been amended time and again. In so far as their protection is concerned, apparently the men are satisfied with its provisions, and I most earnestly urge that whatever may be done under the bill, any measure of protection which the railway men now enjoy under the Railway Act should in no way be molested or prejudiced.
I am rather doubtful about section 4 of the bill, which deals with the appointment of the three trustees. In my view a larger number of trustees, not exceeding five, would be much better. I am not unmindful, how'ever, of the very strong reasons given to the contrary by the right hon. the Prime Minister, and I am content to admit there is considerable weight in what he said. Nevertheless I believe that iSore adequate representation would be given to the various organizations, divisions of trade and activity in Canada if there were at least five appointed. If under section 6, in order to remove any political colour or shade it is possible to appoint subsequent trustees from a certain panel, why would it not be possible to do the same thing and to use the same means in the appointment of the first three or five, as the case may be? I believe the government, if it is really sincere-and I have no reason to doubt its sincerity-and desires to remove this matter from the sphere of party politics, could arrange for the appointment of the first three or five in the same way that subsequent trustees are appointed.
Now we come to part II, which is supposed to contain the principle of the bill. In that connection I do not know whether the principle is contained in section 12, section 16 or section 17. But with the purpose of the bill as enunciated in section 16 I have no great quarrel, if it can be demonstrated that the real principle is to effect economies. I believe the Canadian people to-day desire that economies should be made. I doubt, however, the wisdom of making them in the way proposed in the measure now before us. If by this bill parliament is given power to do what it seeks to do, I wonder whether it will not proceed right down the line and investigate other private corporations. It is quite true that after all the Canadian National system is the railroad of the Canadian people. We will not quibble as to who has the equity of redemption, as to who is the bondholder or the holder of securities; the fact is that the

C.N.R.-CR.R. Bill-Mr. Chevrier
Canadian National is the railroad of the Canadian people. It is very easy for us to investigate matters over which we have special jurisdiction, but I doubt the wisdom of investigating privately owned corporations to the extent contemplated in this measure. Why do we not investigate hydro commissions, the Bell Telephone Company, telegraph companies, grain growers' associations, banks and other financial institutions in order to force them to effect economies? The line must be drawn somewhere; but with the principle of effecting economies I am fully in accord. I doubt very much, however, whether this is a wise step in that direction.
The other day in a very able address the Minister of Railways stressed economies which had been effected in the Canadian National railways during the last year. Those economies reflected considerable improvement. But if that is true of the Canadian National I wonder if it is not true also of the Canadian Pacific. I have no means of finding out what economies, if any, have been effected by the Canadian Pacific during the past year. But surely if the Canadian National was able to economize to the extent shown by the minister, the Canadian Pacific must have done the same.
It is quite true that the Prime Minister, in order to remove any doubt in the minds of hon. members, said that there was no intention of any amalgamation, and if I understood him rightly he said the government was prepared to introduce an amendment to the bill to make it clear that there was no thought of amalgamation. Concerning amalgamation the Minister of Railways is reported at page 2770 of Hansard as follows:
There is nothing in it-
Referring to the bill.
-to cause anyone to fear that it may lead to the amalgamation of the two great railway systems of Canada because the whole trend and spirit of the bill as well as every clause and letter of it points to cooperation, and cooperation means, and can only mean, the working together of the two parties to an understanding.
Here we have the minister saying that the whole trend and spirit of the bill, every clause and letter of it, points to cooperation. Well, in clause 3, outside of the definition of the term " dispute," there is no mention of cooperation at all. I have gone through the whole bill and have found that there is not a tittle of evidence of cooperation in sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15. Section 16 is the one dealing with economies. Certainly section 17 does not show any spirit of cooperation, because that is the section 53719-186
which sets up the tribunal which must operate in the absence of cooperation. Section 18 deals with the creation of the chairman of the arbitral tribunal, which functions when there is no cooperation. Sections 20 to 26 deal with practice in matters of routine. So that out of the whole twenty-six sections of the bill there is only one that deals with cooperation, and that is the worst one. This cooperation provided' for in section 17 is compulsory cooperation. To me it seems that such a phrase as " compulsory cooperation " or " directed cooperation " or " instructed " or " forced " cooperation is bad English, because of its redundancy. I cannot imagine cooperation that is not voluntary. It is something like saying wet water or black jet or cold ice. The very spirit of forcible cooperation is contained in that section as the fruit is contained in the seed. I shall not labour the point, because the hon. member for West Lambton (Mr. Gray) expressly dealt with it. But even if there were a special amendment to this bill declaring that at no time should there be [DOT]amalgamation, then a most radical amendment must follow in the tenor of section 17, because it means insidious, compulsory cooperation. I think it is quite obvious that step by step, inch by inch, a little here and a little there, the tribunal may make certain orders, certain rulings, certain leases, probably not at the time openly with the view of ultimate amalgamation, but in fact producing in the final result complete amalgamation of these lines. The hon. Minister of Railways has said that there is to be no amalgamation. I will take his word that in the bill there is no explicit mention of amalgamation, and no desire to have amalgamation. The hon. gentleman is much cleverer as a physician than I am as a lawyer, but still-and I say it without offence-I am entitled to my own opinion. I do believe that in this section 17 amalgamation is just as insidiously contained as typhoid fever is in the bacilli coli. That is my impression.
This section is to impose compulsory or directed cooperation. I admit that my knowledge of the English language is most limited; my training is French, but I cannot conceive in French of anything like compulsory cooperation. In my own language that would be nonsense, and I do not think there is any difference between French common sense and English common sense or between English nonsense and French nonsense. I think any brain will react to truth in the same way, whether it be in an English or in a French cranium. To my mind I cannot



C.N.R.-C.P.R. Bill-Mr. Chevrier
see how one can dissociate the effect of amalgamation from section 17 as it now stands in the bill.
The hon. Minister of Railways said further that cooperation means and can only mean the working together of the two parties to an understanding. What does that mean? Working together means with a mind in common, therefore in harmony. There can be no compulsion, no direction, no order. I will be asked:	What about the judicial
decision when two parties come before a court and the judge decides so and so? The judgment must be obeyed; but is that compulsory cooperation? Not in the slightest; there is an absolute difference between the two. In the first place, suppose one company desires to close its terminal or shop and says to the other: We will use yours; then there is an arbitration and the tribunal orders that that shall be done. In case of litigation it is a question of the settlement of legal rights; one party may think he is being prejudiced by the other in the enjoyment of his right. Then the one who thinks he is-suffering an injustice goes to court, the other appears, the case is heard, the decision of the tribunal is a declaration of legal rights, and both parties must accept the decision and forever after hold their peace.


Frederick William Gershaw: Mr. Speaker, the bill which is now before the house for second reading has been long awaited by the people of this country. We have in Canada a country of far flung borders, a country stretching over three thousand miles from sea to sea, and from river unto the land's end, and naturally the means of communication between one part and another are of the greatest importance. If one looks over the pages of Hansard from confederation until the present time one sees that railway matters have occupied much space. Many of the great and notable scenes in this house were inspired by railway affairs, and many important decisions on matters of railway policy have been made in days gone by. It seems to me that at this time we are about to make another important decision; we are changing the policy that has been followed regarding railways. This bill, as I see it, is intended to give guidance to railway activities during the period of depression, to give direction, as it were, during the transition period through which we are now passing. The ultimate aim and object, of course, is to lighten the intolerable burden of taxation which the railway obligations impose upon this country. The legislation has not been hastily brought before this house; the Duff commission made a pretty 
thorough investigation, travelled over the country, tried to see everything with their own eyes, examined many important witnesses, and we have here the net result of their deliberations. This bill, together with the report of the commission, was carefully dealt with in the Senate. In reading the discussion which took place there we are at once convinced that much thought has been given to the framing of the different clauses of the bill. But though the Duff commission considered the matter and though it has been discussed in the Senate, we in the House of Commons may view some of the sections in rather a different light. We may approach this problem from a different angle, and we cannot altogether divest ourselves of the responsibility of inquiring carefully into the objects and aims of this legislation.
Speaking yesterday the Prime Minister (Mr. Bennett) remarked that he expected that great changes would be made under this legislation; he pointed out that he thought economies could be effected and said that some sacrifices would have to be made by people in different parts of the country if we were to have that retrenchment which we all hope will be brought about. But no matter how those changes are made and no matter what tribunal may be set up, I feel sure that the people of Canada will hold the government of the day responsible for carrying out this work and will feel free to appeal to the government against any decisions with which they do not agree that may be made by that tribunal. The Prime Minister also intimated that in case the changes did not result in the hoped for economies, in the near future a plebiscite might be taken to determine whether or not the people of this country would be willing to amalgamate the railways either under private or public ownership. I would humbly suggest that a plebiscite on this one question alone would hardly give this government and this parliament the necessary information.
It is my submission, Mr. Speaker, that the prosperity of the railways is bound up with the prosperity of the country generally, and that we cannot expect favourable balance sheets from our railways while business in other lines is in a depressed state. Along with our railway problem we must consider the general economic situation of the country. We must consider the questions of banking, of currency, of finance and so on, because these things either make or break the ability of the people to purchase the goods which are to be transported from one part of the country to the other. I think the trade policy in particular has much to do with our railways.

C.N.R.-C.P.R. Bill-Mr. Gershaw
They are equipped to handle great tonnage, and if we have a trade policy that restricts external trade and consequently causes poverty so that our internal trade is restricted also, we cannot have prosperous transportation systems. The Prime Minister intimated that other courses were open. If he and the Minister of Railways (Mr. Manion) could decide upon some course of action that would give us reduced freight rates, no matter how much courage it might take, I believe more goods would be transported. If the prices of manufactured commodities such as machinery and clothing were reduced to harmonize with the prices of natural products much more buying power would be in evidence and more business would be done.
To-night I should like to mention briefly two or three factors which have to do with the railway situation. The first will be the obvious statement that the railways of this country were constructed to transport freight and passengers over long and short distances. However, since the advent of the truck and automobile the railways have been compelled more and more to retire from the short haul field and concentrate on the long hauls. They find that their most profitable sphere, in which there is the least competition, is the long haul of bulk commodities, and to a great extent this restricts their field of activities. If the railways are to succeed they must compete with trucks, automobiles, aeroplanes and other types of transportation, and if they are to do this there must be some control over their greatest competitor, the trucks. I realize that this is largely a provincial matter, but it seems to me that since the railways have built and must maintain rights of way the heavy trucks should contribute more generously towards the cost of the highways which they use and abuse to such a great extent. These trucks should submit to a tariff of rates; they should have drivers with well defined qualifications, and they should prove their ability to provide compensation for personal or property damage which may result from accidents in which they are concerned.
The second factor to which I wish to direct attention might be called the human factor in connection with the railroad. I have had the opportunity of coming in close contact with railwaymen for a number of years; I think I have learned something of their psychology and I should like to remind the Minister of Railways of something of which he no doubt is well aware. I refer to the loyalty and devotion of the officers and men of the two railway systems; I think that is something of which we might well be proud.
53719-186 i
They give wholehearted cooperation in their common interests. They are willing to sacrifice their comforts and their own desires for the benefit of the company. The senior officers, particularly of the Canadian Pacific Railway, with which I am best acquainted, make a point of speaking to and encouraging the junior officers and men. I venture to say that Mr. Grant Hall can call almost any of the older railway men by their first names. These veterans of the road, who work so faithfully for the company, regard the interests of the company as a personal matter; they delight in its successes and are cast down and discouraged by its failures. Even the younger men very soon catch this spirit. They are anxious to protect the property of the company, to get as much business as they can and to provide efficient service for their customers. Railwaymen are especially qualified for the work they undertake. Before they can obtain employment on the railways they must submit to a severe medical examination, and unless they are almost perfect physically they cannot obtain employment. Then, after they are employed, each year they must submit to eye tests and intelligence tests to satisfy the examiner that they are to the standard. Moreover, if any accident occurs or if there is any difficulty in connection with the work, any railway man can be asked to submit to a thorough examination, and if some slight difficulty is found that man's services are not very long retained.
The hon. member for East Algoma (Mr. Nicholson) the other day pointed out some of the knowledge that railway men must have, and as well as having that knowledge they are required to assume great responsibilities-The despatcher sits through long hours of the night before his key; the machinist in the shop must see that the work he turns out is perfect; the running men, conductors and engineers, are charged with heavy responsibilities; all these men have important work to perform and they must be competent, sure and trustworthy. They must think quickly and often act very promptly because they have in their hands responsibility for and control over the valuable property of the company and the much more valuable lives of passengers and crew.
These men when retired owing to the age limit are given a retiring allowance. That being so, should they not also be given a retiring allowance when they are laid off as a result of economies which may be brought about under this bill? If a railway company * buys a lot of material for the purpose of perfecting its construction, it issues bonds and

C.N.R.-C.P.R. Bill-Mr. Gershaw
pays interest on that money. Why should not the human material also receive something, when it has been specially prepared for the wort it has undertaken? These men are in *danger so far as their own lives and limbs are concerned, and the risks they take in carrying on their work from day to day are much greater than the risks in any ordinary sphere of activity.
The final factor to which I wish to call attention is the present financial position of the road's. No industry in Canada has been so heavily subsidized throughout the years as the railway industry, and at present we find that the taxpayer's money has to be used to the extent of fifty-eight or sixty million dollars a year in order to make up the deficits of the state-owned system, the Canadian National Railways. We find that in years gone by governments gave money to the railways which now make up the national system, to the extent of a billion dollars; and, as has been said, in addition to that the governments have advanced practically another $1,300,000,000, some of which they have directly guaranteed while some of it has been secured by a first mortgage on the whole property. So that that vast sum must be paid as well as the interest on it. The deficit in the last few years has been about $58,000,000, which is a tremendous sum of money. Think of what could be accomplished socially with that sum. Much joy could be brought to the homes of the people, for with that money we could feed, clothe and shelter twice as many people as are now receiving assistance under the relief funds. We could pay pensions to every man and woman over the age of seventy throughout the dominion, and the difficulty in raising this much money and directing it to that end, to make up the deficits, is a severe strain on the very solvency of the country. It takes practically all that can- be raised by personal income tax, and as the revenues are shrinking it is becoming more and more difficult to procure this money.
In conclusion, may I state that in the changes which will be made in the railway policy of Canada the human element must not be overlooked; and next to that provision must be made so that the railways can act in that sphere where they are most competent, namely, in the long hauls. After that has been accomplished, economies must be made. Perhaps the number of officials might be reduced and possibly certain savings could be effected by the joint use of terminals and trades. Perhaps services less costly might be given certain districts. The people of Canada, the business people, the taxpayers of the ' country, are I believe determined that this

deficit shall be cut off because they are discouraged by the heavy taxation which is involved. I quite realize that difficulties may beset the path of anyone who works in this direction. The route may be steep and rugged and courage may be required; but I believe that if this bill results in the attainment of this objective a service will have been done the people of the country and the age in which we live.
On motion of Mr. Sanderson the debate was adjourned.
On motion of Mr. Guthrie the house adjourned at 10.50 p.m.
Monday, March 13, 1933