1933-05-04

[Stage Direction]
Mr. A. U. G. BURY (East Edmonton) presented the third report of the select standing committee on standing orders and moved concurrence in the second report of the committee.
Right Hon. R. B. BENNETT (Prime Minister):: This motion involves concurrence in the report of a committee, which permits certain bills to be considered at this stage of the session. I merely rise to say that the government cannot give any approval to this course of action being pursued with respect to at least one of the bills which might involve rather lengthy discussion. We will not oppose adoption of the motion, but there is no assurance that the legislation can possibly be considered at this session.
Motion stands.



CANADIAN NATIONAL RAILWAYS- WAGES

Hon. R. J. MANTON (Minister of Railways and Canals):: Mr. Speaker, I desire to lay on the table of the house the return asked for by the hon. member for Weyibum (Mr. Young) in regard to wage scales and agreements between the Canadian National Railways and their employees. I wish to state that I am laying on the table of the house everything that the railways agree might be given. It is not a complete return of the information as called for, but it contains everything that could be presented in justice to the public interest.



RADIO BROADCASTING

Hon. ALFRED DURANLEAU (Minister of Marine):: Mr. Speaker, I desire to lay on the table of the house certain amendments to the radio regulations from Nos. 20 to 30 inclusive.



BRIGHT FAN

Alfred Duranleau: I have also to lay upon the table certain information received with respect to the insurance which was effected on the ss. Bright Fan. A few days ago the hon. member for Melville (Mr. Motherwell) asked for this information. Upon the previous occasion I stated from memory that I had received the information from the insurance company. I shall have to rectify that by stating that the information was received by the owners of the ship.



JUDGES ACT AMENDMENT

[Stage Direction]
Hon. MAURICE DUPRE (Solicitor General) moved for leave to introduce Bill No. 84, to amend the Judges Act.
Some hon. MEMBERS:: Explain.

C.N-R.-Advertising


Mr. DUPRE:: The object of tlhe amendment is to add a subsection to section 28 of the Judges Act, which is chapter 105 of the revised statutes of Canada, 1927. The purpose of the change is to provide that any judge of a superior court of any province oi the Yukon territory who continues or is continued in office after attaining the age of 75 shall suffer a reduction in salary to an amount equal to that which he would receive by way of retiring allowance, if he were retired at 75, less any sum which he may receive from the provincial government by way of additional remuneration. The new salary rate will commence when the judge attained or attains the age of seventy-five years, or on the first day of July, 1933, whichever is later. In the case of a judge who would not be entitled to a retiring allowance if retired at the age of seventy-five, the operation of the act will be postponed until he is eligible for a retiring allowance.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. JEAN:: 1.	Who are the official or temporary announcers of the federal radio commission in the province of Quebec?
2.	What is their nationality?


Alfred Duranleau: Dropped.


Mr. SPEAKER:: Do I understand that the bon. member is dropping this question?


Alfred Duranleau: I gave the hon.
gentleman certain explanations and he is willing to have the question dropped.
Question dropped.


QUESTION PASSED AS ORDER FOR RETURN
Mr. SPENCER:: 1. What were the annual advances to the chartered banks and savings banks under the Finance Act from August 22, 1914, to March 30, 1933?
2.	What was the rate of interest charged?
3.	What was the aggregate amount of interest received by the government on these advances?
4.	What were the total advances during the aforesaid period to each bank unit?


CANADIAN NATIONAL RAILWAYS- ADVERTISING
[Stage Direction]
On the orders of the day:
Mr. A. E. ROSS (Kingston City):: I should like to direct a question to the Minister of Railways and Canals (Mr. Mamion) based on a long letter which I have received. The question is this: Have the Canadian National Railways sold to a private company a franchise to erect and maintain illuminated and other outdoor advertising signs on the Canadian National right of way across Canada?


Robert James Manion: Mr. Speaker, the hon. gentleman was good enough to tell me he was going to ask this question, and I think one or two other hon. members of the house are interested as well, notably the hon. member for Bow River (Mr. Garland), who said he was going to ask a question along this line. '
In brief the facts are that the management and directors of the Canadian- National Railways have entered into an agreement with a Montreal company-I think McArthur-Irwin is the name-not to erect signs across the entire right of way, as the hon. member suggests, but to place advertising signs on their bridges, under proper conditions. I am informed by the management and by the directors that this should bring in a reasonably good -income -which has not been enjoyed by any railway in Canada previously. I may add quite frankly that I entirely agree that -this is a wise step to take, particularly in view of present financial conditions.


Mr. C. B. HOWARD (Sherbrooke):: May
I ask the minister if he is aware of the fact that last year the province o-f Quebec passed legislation forbidding the placing of advertising signs along either side of the highway even on private property?


Robert James Manion: I was not aware of that
fact, but I do not know what bearing it would have on this matter. I understand that the agreement relates only to bridges, and of course that advertising would have to be within the laws of the various provinces. I am informed that the agreement amply protects the railway company in every possible way, so there is no danger of any conflict with provincial laws.


Mr. MARCIL:: Is that an exclusive contract, or is it open to other companies as well?


Robert James Manion: I understand that it is an
exclusive contract. I do not think it could be anything else, as a matter of fact.

Tariff Board-Applications


Charles Benjamin Howard: I think the minister
missed the point I was trying to make. He is practically permitting the Canadian National Railways to do something that other companies cannot do with regard to the highways.


Robert James Manion: We are not permitting the Canadian National to do anything; the Canadian National itself has entered into the contract, and I assume this company, like any other corporation, will have to remain within the laws of the provinces. The contract was drawn up by the lawyers of the Canadian National, and I assume they took into account whatever laws might affect this advertising.


TARIFF BOARD-APPLICATIONS
[Stage Direction]
On the orders of the day:
Hon. E. N. RHODES (Minister of Finance):: Yesterday the hon. member for South Perth (Mr. Sanderson) directed a question to me; he wished to know what applications for hearings had belen received by the tariff board from Canadian and British firms. Upon inquiry I find that my predecessor, the late Mr. Robb, took the position with respect to similar requests when the former tariff board was in existence that to give this information in the ordinary course was not in the public interest. That practice obtained during the existence of the former board. I must say that I think that position was quite sound, and it is the intention of the present administration to follow the same practice, so that any information which is desired will come from time to time as and when the hearings take place before the board.


Mr. E. J. YOUNG (Weyburn):: As I
recollect it, Mr. Speaker, the former practice was to advertise these hearings so that all interested could be heard if they so desired.


Edgar Nelson Rhodes: The same practice will
obtain with respect to the new board, as I understand it, but my hon. friend must realize that the board is only starting its work.


Mr. F. G. SANDERSON (South Perth):: I might remind the minister that when he answered my question yesterday he said he would let the house have the information today.


Edgar Nelson Rhodes: I beg my hon. friend's
pardon; here is what I said:
Obviously I will have to ask_ that my hon. friend's question stand as a notice, and I will give an answer to-morrow.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: I promised yesterday, Mr. Speaker,
that I would advise the house as to whether or not it was the intention of the government to proceed with the redistribution bill. It is proposed to proceed with that bill at once. The other bills on the order paper will be proceeded with also, with the possible exception of the bill dealing with admiralty courts, which may not be proceeded with this session in view of the fact that the shipping bill is not being pressed. The arrangement made in 1926, 1929 and 1930 with respect to shipping contemplated uniform bills throughout the British Empire. It was felt that when the statute of Westminster was passed and admiralty courts acts were adopted by the various dominions we would have a fair measure of uniformity having regard to the different conditions existing in the various dominions, but the shipping acts themselves, modelled on the Merchant Shipping Act, would be similar for reasons that I fancy I need not state in this house.
That was the view taken at the Imperial conference in 1926, and again in 1929 and 1930. Inasmuch as there has been no legislation of that character passed as yet by the other dominions the matter is further under consideration; the shipping bill is not being proceeded with and a further opportunity will be given to study the various provisions of our act and other acts that may be drafted by the other dominions in order that we may carry out the understanding agreed upon at the imperial conferences and the drafting committee conference in 1929. The Admiralty Court Act, therefore, following on that, wiK not be passed. The other bills on the ordei paper will be proceeded with whenever the opportunity offers. There is one other matter, namely, a short bill to grant the governor in council power to extend the duration of the New Zealand treaty beyond the 24th day of May of this year, when it expires. There is the French trade agreement, if an agreement is submitted to the house to be dealt with, and there is an amendment to the Excise Act which cannot be submitted until after the budget provisions have been entirely adopted, because they contain administrative machinery dealing with legislation that has been and will be considered by the house with respect to the budget. At the moment, after conferring with my colleagues, I do not think there is any other legislation except an amendment; to
Coal Inquiry

the Tariff Board Act-a short amendment- which will not give my hon. friend from Wey-burn (Mr. Young) any work. There is the Coastal Shipping Act, which is now in the Senate and which will be brought down to this chamber, and there is also an amendment to the Insurance Act, in connection with certain investments, which by accident was left out of the bill last year. That Senator Beau-bien has in the Senate and it will be submitted to this chamber in due course. I think there are some other private bills in the Senate, but apart from what I have mentioned there is no new legislation contemplated. The Soldier Settlement bill is on the order paper. The redistribution schedules will be completed as early as possible, and if unfortunately agreement cannot be arrived at in the committee, the committee will report the bill to the house and we shall have to endeavour to arrive at some conclusions with respect to legislation.
I may say that I have placed on the order paper for Monday next a notice suggesting that the house meet on Tuesday at eleven o'clock, but that is entirely in the hands of the house; whatever the house may desire in that regard, we shall be glad to accommodate our views thereto. It is also contemplated that the house shall sit on Wednesday evening next.


Mr. CASGRAIN:: Is it the intention to bring in some amendments to the Shipping Act with respect to coastal trade?


Richard Bedford Bennett: That is what I mentioned. That bill is now in the Senate.



EXCHEQUER COURT ACT

[Stage Direction]
On the orders of the day:
Mr. LAPOINTE:: Does the Prime Minister intend to proceed with Bill No. 26, to amend the Exchequer Court Act? The reason I ask that question is that the Minister of Justice, before leaving, had intimated to me that it was not the intention to proceed with that bill.


Richard Bedford Bennett: The Minister of Justice gave me to understand that he had indicated that it was not thought desirable to proceed with the Admiralty Court bill. I spoke to my colleague to-day and asked him to call the bill for committee for the purpose of hearing what observations the former Minister of Justice had to make on the matter, and we would then determine what action should be

taken. If the Minister of Justice indicated that we would not proceed with it, we will certainly carry out the undertaking he gave.



COAL INQUIRY

[Stage Direction]
On the orders of the day:
Frederick George Sanderson: I have a question to ask the Minister of Labour with regard to the report of the registrar appointed under the Combines Investigation Act with respect to the inquiry into importation and distribution of British anthracite coal. Yesterday the minister made some remark touching Ithis question, ,and according to Hansard he said that the report was not to be made public; yet I find in yesterday's press, in the Toronto Globe of yesterday-


Pierre Édouard Blondin: Will the hon. member
proceed with his question?


Frederick George Sanderson: I am about to state it.


Pierre Édouard Blondin: The hon. member must not read from newspapers.


Frederick George Sanderson: I have not read anything, but in the Toronto Globe, in great headlines, it is reported that importers-


Pierre Édouard Blondin: Order.


Frederick George Sanderson: -are using the duty to overcharge users of British fuel, and then it mentions an hon. member of the other house, the salary he has been getting-


Some hon. MEMBERS:: Question.


Pierre Édouard Blondin: To ask a question it is
not necessary to retail to the house what appears in newspaper's.


Frederick George Sanderson: I must frame my question, Mr. Speaker. With all due respect to you, sir, I submit that if you will give me a moment I will put the question. My question is this: If the press of Canada can get part of the details of the registrar's report, is not that report to be had by members of parliament? If it is to be semi-public we might as well make it public. I would ask the Minister of Labour whether the members of this house have a right to see the report.


Hon. W. A. GORDON (Minister of Labour):: I do not think I can usefully add anything to what I said yesterday. I understand that there were comments in the press with respect to what was thought to be in the registrar's

C.N.R.-CJP.R. Bill
report. The press very frequently hazards opinions about what is contained in documents, about what governments intend to do, as well as about the intentions of individuals. I am not stating whether what appears in the press is in the report or not. Certainly I am not going to attempt to control or direct What the press may or may not say, but I feel confident that the practice and procedure outlined yesterday is the one that has been adhered to in the past. I believe it to be a sound practice, and with respect to this report it will be followed. I am dispatching the report, the evidence and the exhibits to the proper attorneys general for attention.



INTERIM SUPPLY BILL

Edgar Nelson Rhodes: Unless we grant interim supply, Mr. Speaker, hardship will result to a certain number of civil servants and more particularly to those returned soldiers who are in receipt of hospital treatment. I would therefore ask the unanimous consent of the house for the passage of a supply bill granting one-twelfth of supply. I move that you do now leave the chair for the house to go into committee of supply.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.


Edgar Nelson Rhodes: Resolved, that	a sum	not exceeding
$16,220,422.36, being one-twelfth of the amount to be voted as set forth in the main estimates for the fiscal year ending 31st March, 1934, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending the 31st March, 1934.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in.

[Stage Direction]
Mr. RHODES moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.
Edgar Nelson Rhodes: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March, 1934, the sum of $16,220,422.36 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 83, for granting to His Majesty certain sums of money for the public service for the financial year ending Mardh 31, 1934.
Motion agreed to, bill read the first and second time, considered in committee, read the third time and passed.

[Stage Direction]
The house resumed from Friday, April 28, consideration in committee of Bill No. 37, respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific Railway system and for other purposes-Mr. Manion-Mr. LaVergne in the chair.
On section 6, subsection 1.-Vacancies.
The CHAIRMAN:: There was an amendment moved by the ihon. member for Quebec South (Mr. Power).


Mr. MACKENZIE KING:: What is the amendment?
The 'CHAIRMAN: To strike out all the words after the word "occurring" in the fourteenth line.


Robert James Manion: The amendment would wipe out the panel idea.


William Lyon Mackenzie King: I think we are all for that.


Ernest Lapointe: Is the amendment acceptable to the minister?


Richard Bedford Bennett: Is it desirable that future appointments should be in the hands of the political party which happens to be in power at the moment?


Mr. EULER:: Certainly.


Ernest Lapointe: Why should not the same theory be applied to the first appointments?


Richard Bedford Bennett: It has been the custom
to commence these institutions or commissions by appointments made by the government of the day. That involves the government being censured for the appointments which may be made and criticisms may be offered so as to destroy public confidence in the body. If we desire to assure ourselves that political considerations will be eliminated, the panel system offers the only method. Should a vacancy occur it is contemplated that the remaining trustees along with the chairman of the Board of Rail-

C.N.R.-CI'Jt. Bill
way Commissioners and the president of the exchequer court shall prepare a list from which the appointments would be made. It seems to me that that is as far as you can hope to get if there is an earnest desire to eliminate purely political factors. I think the view of those who are responsible was that if we could we would remove temptation which might arise from the desire of those who felt they had claims upon the government to have such claims recognized by appointment to such a position as this. It is true that the government has a majority but if a substantial body of this committee is of the opinion that the panel system as indicated in this bill is not desirable, we are not concerned about it. However, I want to put it fairly to the committee.


William Lyon Mackenzie King: I submit that my right hon. friend has used a phrase which hardly describes the situation accurately. He asks whether it is desirable to have future appointments made by a political party. I submit that what he should have asked was whether it -was desired to have future appointments made by the government of the day. It is the government and not political parties that makes appointments and the government of the day is the one body to which the people have a right to look for appointments. What the complexion of the government of the day may be rests entirely with the people of the country and it seems to me that their voices should be heeded in these matters. I must say that I think it is a very unfair reflection for the Prime Minister to make when he assumes that, when any political party comes into office its members are not going to be actuated by motives quite as high as those which have actuated the government of which he himself is the head. I said the other day quite frankly that we all agreed with the Prime Minister in his view that it was difficult enough to obtain for those high positions men who were equal to the task and that if such persons were secured any government, it seemed to me, would be only too pleased to retain them in office; there would not be any desire to change them. I think that is quite true. I say to my right hon. friend that I believe we might well agree that all governments will be actuated by motives equally honourable, that the obligation upon one government should be just the same as upon another, and that full responsibility should go with office in the matter either of retainr-iiig those who may in part be administering the nation's affairs or in replacing them. The

government cannot free itself from that responsibility, and the only way in which it can properly be held responsible is by leaving it free to act as it thinks best.
As regards this panel, I do not think it amounts to anything; it is a mere sham, a mere pretence and for that reason it is worse than nothing. No one will believe that appointments are being made as a result of a non-political panel when those who are filling the offices that are named as those of the persons to select the panel, have all been appointees of one political party. Apart from that altogether, I submit that the president of the exchequer court, however able he may be, does not begin to have the same knowledge of the persons best equipped for the position of trustee of railway, that members of a government have. I do not see why a government should give to some group, inferior to itself, the responsibility of making what perhaps would be the most important of all the appointments to be made. I would ask that, so far as possible, the fundamental principle of ministerial responsibility be observed in these appointments.


Richard Bedford Bennett: I wonder whether the
right bon. gentleman realizes that by his observations in the last part of his speech he contradicted the first part of it and he used exact words in contradiction. He said that appointees were the appointees of the government; then he said that the two, who would have to be half of the four, are appointees of one political party. Which does he mean? The first or the last? If he means the first, then he separates the government from a political party. If he means the last, he and I are wholly in agreement. He said that he thought I was reflecting upon the honourable capacity of governments to make selections. I was pointing out that governments selected those who generally supported their political party. The words he used were that the two would be appointees of one political party and that they would select as additions to the board men who were in accord with t'heir party. It was in order to prevent that, if possible, that this provision was inserted. It is in order to provide that by the joint selection of four men a panel might be prepared that would not necessarily be merely the selections of one political party. It is always well to discuss practical matters in a practical way. I could cite as an outstanding illustration of what I mean the commission that constructed the National Transcontinental. It was a political commission.


Mr. MALCOLM:: Certainly.

C.N.R.-CR.R. Bill


Richard Bedford Bennett: Yes, that is what I am trying to point out, and the results that followed are reviewed in the Gutelius report.
I am only pointing out that there is no desire to avoid ministerial or governmental responsibility, but if there is a wish on the part of the 'house that we should have a panel of names that commended themselves to four persons, from which panel the government might make a selection-and the house may reconstitute the method of selection in any way it pleases-to escape the evils that have followed from purely political appointments, we should adopt the course I suggest. Who will say that this country has not had too long an experience of the political type of appointees that built the National Transcontinental? No man, free from political bias, who will just look at the facts, the classifications that were approved and the costs involved, will say that that is not so? It follows in the necessary sequence of things that would be so. It was to avoid such a situation that this suggestion was made. If this committee this afternoon is of opinion that an effort should not be made to divorce from politics, if possible, the class from which selection should be made, by limiting it to persons approved by a body consisting of the two trustees, for instance, who would remain, and the gentlemen named, well and good. Certainly neither I nor the government desire to press it upon the committee or the house. We only wish to carry out the purpose which was in the mind of the commission when they made their report in which they said that members of parliament should not be eligible, and which aim was to divorce the administration of the system from politics, and to say that the government must assume responsibility for all the acts of the board is to beg the question, because the hope was and is that a body will be created that will discharge all the functions of a board of directors free from control or restraint so far as governments are concerned and conduct the business of an enterprise that means so much to this country as though it were a private undertaking, with the benefits that would accrue from the exercise of the best business judgment they have in dealing with the problems before them. That is the reason the provision was inserted in the bill with regard to members of parliament, senators, etcetera. It has not been unusual in all parliaments to provide by legislation for the exclusion of certain classes from appointments to certain offices. It may not be generally known, but there was once in Great Britain a statute that all lawyers were
excluded from the House of Commons. It may be interesting to some hon. members to know that it was discovered in a very short time that parliament could not get along without lawyers. I mention that merely as an illustration. There have been other restrictions of a similar character.


Ernest Lapointe: The ignoramus parliament.


Richard Bedford Bennett: That is exactly the name by which it was known. Although the government has a majority with which to carry out its will with respect to this matter, we shall keep faith with the principle on which we brought this bill into the house, and if it is the wish of the opposition that the panel provision be eliminated, we shall not waste time in trying to force it through.


William Lyon Mackenzie King: May I say to the Prime Ministier that his argument, if it carries any weight at all, is equally applicable to the first appointments; I do not think that can be denied. I think he should be chivalrous enough to concede to his political opponents a desire to be just as fair in making these great appointments as would be the members of any other government. He has cited formeT commissions, I am not going to take up the time of the committee in saying what might be said on all sides of the question, but there have been commissions appointed by his political opponents that commended themselves even to my right hon. friend, for example, the board of grain commissioners Who were appointed by the late Liberal administration. Hon. gentlemen opposite have retained them in office because they found that they were acting impartially and fairly. Without question one of the strongest influences to compel those likewise situated so to do would be the thought that they would wish to commend themselves to the successors of the government that might at the moment be in office as well as to the government in office.
I mentioned the other day 'the International Joint Commission. There again hon. gentlemen opposite had made appointments that might be regarded as very strong from the point of view of political partisanship, if you wish to term it such. One of the gentlemen appointed had been Conservative premier of his province, but he received that appointment to the commission and he was retained in that office during all the time the Liberal administration was in power. Another member of that commission who was retained
C.N.R.-CJ>Jt. Bill

throughout by .the Liberal administration had been a Conservative member of this House of Commons.
The same thing is true of judges. Over and over again it had been said that judges when they assume office on the bench give up their partisan politics, although they may not altogether change their personal feelings.
Reference has been made this afternoon to what was termed an ignoramus parliament. I do not see why we should constitute ourselves an ignoramus parliament at the instance of the commissioners who have made this recommendation. I do not like any commission appointed by a government to say that the government of the day is not capable of honourable action with respect to the discharge of public affairs. That is my strongest objection, to this provision proposed, I do submit that the government ought not to try to have it both ways. Either make this panel, if it amounts to anything and signifies anything, applicable at once to immediate appointments, or if it is not of so much significance, allow to all subequent ministries with respect to the filling of vacancies the same authority and responsibility that the ministry is taking to itself at the moment.


William Daum Euler: As I have said before, if this provision of a panel for the selection of trustees ensured to any reasonable extent that politics would be eliminated in the appointment of these trustees, I would be disposed to favour it, but the objection I made previously to that clause as it stands was this, that while it does provide for a panel of eight for the filling of subsequent vacancies, the original appointments are made by the government itself, and s-o I think these two provisions are entirely inconsistent with each other. If the government would so alter the bill that the selections of the original trustee board would also be made from a properly constituted panel, I for one would be inclined to favour it. I know that that conflicts perhaps with the opinion of my leader in that there is not government responsibility there, but there would still be left a reasonable measure of government responsibility because after all from the panel of eight the appointments must be made by the government itself, and to that extent ait least there is government responsibility. But I admit that I would go some little distance even at the sacrifice of what might be called government responsibility if thereby we could ensure that there would be very little of political influence or political patronage in the selection of that board of trustees, but I do submit that the two provisions, the first appointments by the
(Mr. Mackenzie King.]
government and future appointments from a panel, are entirely inconsistent with each other. If the government so desired to have it, and I am not accusing them of that, the first board might be an entirely political board if the government makes the first selections, and I submit that now is the time if ever that the management of the Canadian National Railways should be as free from political influence as it is possible to have it, because the railway is in the most critical period of its history. So I would say if it is not possible to amend the clause so that we may have non-political appointments from the beginning, I would just as soon have that provision wiped out altogether and let the government take the responsibility. But if the government can provide for a non-political panel right from the outset I would be inclined to support that.


Mr. HANSON (York-Sunbury):: In view of the concluding remarks of the Prime Minister and in view of the arguments which have been advanced by the right hon. leader of the opposition, I should like to say that I think there is a very substantial body of public opinion on this side of the house as well as on the other side which, having regard to the doctrine of ministerial responsibility and the manner in which the first trustees are to be appointed, is of the view that the panel system should not be included in this bill. I have no doubt in the world that the government will be held responsible for the success or lack of success of the principles underlying this bill. Hon. gentlemen opposite will see to that if the legislation fails, and hon. gentlemen on this side of the house, if it succeeds, will claim any merit there is in it. That being the case, and human nature being what it is, I strongly suggest to the Minister of Railways that if he has evidence that there is a substantial body of opinion in this house that the panel system should be eliminated, it be eliminated forthwith.


Ernest Lapointe: In support of what my hon. friend from North Waterloo has said, may I say that if these trustees are going to have such an important office as has been represented, and I believe they are, I do not agree that the government should select the appointees from among the men who according to the Prime Minister would offer their services as having been good supporters of the party in power. I think that for an office of this kind conscription rather than voluntary service would be the best system. The government should go after the best men available for the office, and how can that be done by means of a panel system? How can the

C.N.R.-C.PJI. Bill
Exchequer court judge or the president of the railway commission properly go and ask men to accept the office who according to their own view would be the best qualified to administer the Canadian National Railways? How could they go after those fellows and ask them whether they would accept the office or not? They would have to form a panel of the persons who would be best qualified according to their views, but how would they know whether those persons would accept the office? My own experience is that for an office of this kind the minister who is responsible and his colleagues are seeking out the man who would accept, and I think that is the best way. Even in the appointment of the board of trustees we should maintain ministerial responsibility, and not entrust the task of forming a panel to those gentlemen who will merely put names down without knowing if the men will be available for the office or not.


James Malcolm: I should like to say that I appreciate very much the attitude of the Prime Minister in dealing with clause 7, in leaving the question of a panel or ministerial responsibility to the judgment of the house. I thoroughly agree with the remarks made by my hon. friend from North Waterloo, but I should like to submit to the members of the committee that there are worse kinds of patronage than political patronage. Very often there exists a good deal of executive patronage within organizations, which is harder to deal with than political patronage. If an executive is appointed with any feeling of entire independence of the government of the day, I do not think that such a relationship is desirable. I believe that whoever is appointed, if appointed by the government in power, will be the very best selection that can be made from the material available. I believe with my leader that parliament has made some of the best selections for commissions that could possibly be made, as is evidenced by the lack of criticism of many selections. Nor do I think that in a matter as important as the administration of the national railway any government of the future will select a man who is not competent and capable of administering this great trust.
My abject in rising, however, was to point out to hon. members of the house what was pointed out by the senior member of the house, the hon. member for Bonaventure (Mr. Marcil) only a few days ago, and to which I referred the other evening. There is no reason why we should run Canada like a soviet. There is no reason why we khould put the most important department of administration in this nation under men over whom this house would have no control.
If we are going to administer the affairs of Canada according to British parliamentary practice, we are certainly going to have parliamentary control over the administration of government. Someone said only recently that in a very few years we could turn Canada into a soviet, just by appointing a chief commissar, and that there were already commissars for every department of government. I believe the people of Canada will trust this government; I believe they will trust succeeding governments to make as good selections as can be made. If a panel were to be appointed to select names for submission to the government I can see no reason whatever for the existing commissioners having any say in recommending their favoured friends. The remaining commissioners will no doubt make friends. If future appointments were to be made by a panel, I think the chairman of the railway commission and a judge of the exchequer court could make recommendations to the government. I do not see, however, how even they would have any better opportunity of knowing the men available than would the Prime Minister and his Minister of Railways.
I do submit that the hon. member for Quebec East brought out the very point to which the Prime Minister referred only a few days ago, namely, that the men who are wanted will have to be sought after. It will not be the men who are applying for the job that the Prime Minister will want. No doubt to-day he and his Minister of Railways are canvassing the situation to see what men are available who W'ould meet the necessary requirements. I do not believe anything is to be gained by parliament or the government giving up its responsibility for a great national asset and appointing men who do not owe their appointments to parliament, which after all represents the owners of the road, and who do not owe their appointments to the administration in power, which after all must be responsible to the people for expenditures of money on the railroad.
I believe the government will be following the wishes of the country if they maintain British parliamentary institutions, and make appointments by governor in council of the men who are to be appointed in the first place, and the men who are to succeed when the original appointments expire.


Mr. STEWART (Edmonton):: Mr. Chairman, I wish to be brief and to avoid covering the ground which has been previously covered by hon. members from this side of the house. When speaking on the introduction of the bill I remember the Prime Min-
C.N.R.-CI>Jl. Bill

ister made the statement that the appointments would be made much in the same manner as the appointment of judges. Undoubtedly Canada has been particularly fortunate in the appointment of judges. Naturally, when these men receive their appointments they bear the political complexion of the party in office.


Richard Bedford Bennett: Not always.


Charles A. Stewart: Perhaps not always, but there are very few exceptions. Despite that fact however, I believe I may say without fear of successful contradiction that most of them, indeed all of them, have fulfilled their duties to the entire satisfaction of the litigants appearing before them, and to the public generally. However, I look upon these appointments from a different standpoint altogether. Judges are appointed to interpret the law and to settle disputes. In this instance, the men appointed will have to spend a very large amount of money. They will have to be business men, in the real sense of the word. No doubt what the hon. member for Quebec East (Mr. Lapointe) has said is quite true. Personally, while I would not trust the judgment of the Prime Minister in all matters, in the selection of these gentlemen I should prefer his judgment linked with that of the Minister of Railways to that of a panel, as is set out by the provision in the legislation.
Moreover, if three gentlemen are to be selected who are going to spend and have control over as much money as the government of Canada spends annually, and if the enterprise is likely to remain in that position, then surely the government of Canada through the governor in council should retain control over appointments. I cannot, see that any good purpose would be served by delegating to any body, no matter how worthy a body it might be, the naming of the men from whom selections are to be made. There must be governmental responsibility, if this railway system is to remain, as we now term it, a national railway. So long as it is the railway of the people of Canada the government of the day must take responsibility for it. If they do not, my fear is that we will have the privilege of voting the necessary funds for the carrying on of the railway, but will have no control whatever over its management.
For those reasons I want to voice my opposition to the suggested' method of selection. I should very much prefer to leave such selection in the hands of the governor in council. May I say that I heartily agree with and concur in the protMr. C. A. Stewart.)
vision for the reduction of the board to three members, Further, I do not believe that so-called political patronage has had very much effect upon the operation and administration of the railways. True, there is some justification for the statement made so frequently to the effect that municipalities and different parts of the country exercise some influence upon the railways. With two competing railway lines in existence, that influence will be exercised again. However, I do not believe that is the reason that the national railways have suffered. As a matter of fact I am not prepared to admit that the national system has suffered much more than the privately owned system now running in opposition. I do sincerely trust that the government will agree to have control remain where it has been, namely in the hands of the governor in council.


Mr. GARDINER:: Mr. Chairman, inasmuch as the Prime Minister has been good enough to ask for the opinions of hon. members in regard to this important matter, I shall state my opinion very briefly. The proposal to create a panel does not appeal to me at all, inasmuch as the two remaining trustees will have probably the greater say as to whose names shall be submitted as part of the panel. I am fully in accord with those hon. members who have suggested this afternoon that parliamentary control should continue. I am quite willing to trust any government which may be in power to find the proper men to put into these positions, when vacancies occur. One of the objections I have already voiced to the bill has been the taking away from parliament of practically the whole control over the national railways. So long as we have our present parliamentary institutions, with members of parliament responsible to their electors, parliament should exercise control. I believe the house would do well to ask the Prime Minister to accede to the request which has been made, namely that the governor in council should be responsible for all appointments made to the board of trustees, either in the first instance or to fill vacancies.


Robert James Manion: Mr. Chairman, I shall not speak until the hon. member for West Middlesex (Mr. Elliott) has spoken.


Mr. ELLIOTT:: If the minister is about to say that the government has decided to have the appointment of the original trustees and of those who are appointed to fill vacancies made in the same way, then it is not necessary for me to urge what I have stated on a former occasion. Having the power to appoint

C.N.R.-C.PJi. Bill
the three trustees, I believe the government should have power to fill the vacancies. If on the other hand the three are appointed from a panel, which I believe restricts the class from which they can be drawn, then in my view further appointments should be made in the same way.


Robert James Manion: In view of the opinions expressed from all sections of the house the government has decided to accept the suggestion of doing away with the panel. Unfortunately the amendment as moved by the hon. member for Quebec South does, not fill the bill because, no doubt unintentionally, he moved that the whole clause after the word "occurring" be stricken out. Since the hon. member is not here to withdraw the amendment I shall have to ask the committee to vote it down, and then I will have an amendment moved simply striking out the words after the word "occurring" to the end of the sub-clause.


Armand Renaud La Vergne: That is the way the
amendment reads now, to strike out all the remaining words in the section.


Robert James Manion: Yes, but that means all of section 6.
Amendment (Mr. Power) negatived.


Robert James Manion: Then I have this amendment.


Richard Bedford Bennett: I move that all the words after the word "occurring" in subsection 1 of section 6 be struck out.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 7-Removal from office or reduction of salary.
William Lyon Mackenzie King: This section
reads:
No trustee shall he 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.
We have just decided, I think unanimously, that in the matter of the appointment of trustees the doctrine of ministerial responsibility should be observed and maintained. I would submit that all that can be said in favour of maintaining that doctrine with respect to appointments ought to apply equally with respect to the continuance in office of trustees and with respect to their salaries. I think this clause ought to be struck out altogether on that ground, without mentioning other reasons that might be equally strong, if not stronger.


Robert James Manion: We held this section in
abeyance, and it has been fully discussed by the government. We are of the opinion that this clause should stand as it is at present.
I think the best arguments that can be advanced in favour of this provision were advanced when the section was first under consideration. They were to this effect, that if one or all of the trustees proved unworthy or unfit to fill these positions there is no doubt that the other chamber, whatever might be its composition, would be glad to help get rid of them. On the other hand if it should so happen that any government-and I do not refer particularly to the government of my right hon. friend opposite-for any unfair or unwise reason should desire to get rid of trustees who had been doing excellent work, it would be only right that the other chamber should refuse to permit that action to be taken. I do not submit this argument in criticism of any party or any group; I simply say that if such a situation should occur we ought to have that safeguard. I believe the House of Commons can feel sure that if these trustees, or any of them, should be unfit to carry on or should in some way betray their trust, both chambers of this parliament would be glad to act in unison to get rid of them.


William Lyon Mackenzie King: What the minister has just said is the equivalent of saying that one branch of parliament should be supreme as against the ministry itself, which itself is responsible to parliament as a whole and through parliament to the people; moreover the particular branch of parliament which the minister mentions is the branch which has not the immediate responsibility to the people that the elected chamber has. I do not see why it should be necessary for any minister of the crown to reflect upon a government as such, and that is what is being done in this paragraph and even in the words used by the minister this afternoon.


Robert James Manion: I did not reflect on any
government.


William Lyon Mackenzie King: The minister's words were an implication, if not a reflection; he referred bo any government that might be in office and that might want to do something that was not right and proper. Since when did one administration become the keeper of the conscience of its successor? I submit that so long as we have responsible government we must assume that the government which is placed in office by the people will be actuated by fair and honourable motives, and we must give that government a free hand.
C.N.R.-C.P.R. Bill

I do not think it is right or fair for one government to try to bind its successors in any way, and that is what hon. gentlemen opposite are seeking to do not only in this but in other measures they have put through. The government has a hard enough job in times such as these, and in fact at all times; they should be given the freest hand possible to deal with public affairs. They are always responsible to parliament and through parliament to the people. Any ministry that would take a course such as that just now suggested by uny hon. friend and do what was obviously unfair in the dismissal of a trustee of the Canadian National Railways would find itself defeated at every by-election, and ultimately thrown out of office for such unjustifiable action.
Here we have at stake the whole basis on which parliamentary government rests under British institutions. It is not merely a question of how parliament may view a given matter at a particular moment; there is involved the whole question of the election of representatives to parliament and the basis upon which they are elected, namely, to carry out the will of the people. That is tested in by-elections and at general elections, and it is the one thing after all that is the controlling factor in a government's actions. It is but fair and right, and in keeping with our parliamentary institutions, to ask that a clause which would restrict any ministry in the exercise of its responsibility, I do not care what the ministry's political complexion may be, should not find a place in our statutes. I believe this section should be struck out.


Armand Renaud La Vergne: The hon. member for Vancouver Centre has presented an amendment to strike out section 7.


Mr. NICHOLSON:: Speaking to that
amendment, Mr. Chairman, and following the remarks of my right hon. friend, let me say-


Armand Renaud La Vergne: In my opinion this
amendment is out of order. The committee must vote for or against the section, so this amendment which would strike out the section is negative, and I declare it out of order.


George Brecken Nicholson: Then speaking to the section itself, Mr. Chairman, let me say that if we emasculate this bill much further we might as well withdraw it, because it will serve no purpose ait all. As I see it the report of the commission and the bill founded upon that report constitute one final effort to rescue the railway system from the bedevilment of politics. It matters not what anyone says in relation to that; go back over the whole his-

tory and you will find that politics, parliamentary politics if you like, are responsible for the situation in which we now find ourselves. Whether you can get a board of trustees that to some degree will lift this system out of that situation I grant at once to be a question, but if you are to have trustees you must get the best possible men in this country. The chairman of this board will have the biggest job ever assigned to any Canadian in Canada, and the right hon. gentleman opposite suggests that we should go out looking for that man and say to him, "We want you to take this job. Divest yourself of every other responsibility and interest you may have, but remember that you will remain there subject to dismissal in case there is a change in government." It seems to me that is the position. Can we possibly expect to get the type of man we want under those conditions? I conceive it to be impossible.
I am not going to labour that point, Mr. Chairman. My right hon. friend referred to governmental responsibility and the right of one government to tie the hands of another. What is the procedure in regard to appointments to the railway commission? Every single member of that board is appointed for a definite term of ten years. Already we have reduced the 'terms of appointment under this bill to five, four and three years, which to my mind simply weakens it to that extent. What is the practice in regard to judges, if you like? We might as well say that a judge appointed by one government is to be subject to the will of any other government that may follow. We have many evidences, if we wanted to go back over the past and introduce the political aspect, to show exactly what has resulted from the removal of men-and that in the case of the national railways itself-and the appointment of other men for political reasons. I say therefore that if this bill is to be further emasculated we should withdraw it altogether and wipe out the farce.


Charles Marcil: The hon. gentleman is
dreaming of a time to come when there will be no politics either in this house or in the Senate. Unfortunately, under the system we now have, the people cannot attend this meeting here but they send their delegates, and they hold us responsible whenever we go back to them; they demand an accounting on our part. The Senate is a very honourable body but it is not under that obligation; its members do not have to go back to constituents. They are merely a court of appeal as it were, and that was the reason for their appointment in the first instance, to protect the rights of minorities in the provinces. That role has not

C.N.R.-C.P.R. Bill
been filled but it exists nevertheless. In this case I am glad to know that both leaders have recognized the principle of ministerial responsibility. We cannot get away from that, and if the hon. member wants to escape it he will have to retire from the political field, because when he goes back to his constituency he will be accountable for everything that has taken place during his term in parliament.
The idea of sharing responsibility between the cabinet and the Senate with respect to the removal of any of these appointees is inviting discord from the inception. Suppose you have a cabinet of one political complexion and a Senate of another. That idea is all right when the appointment ds made by parliament; the appointee can be removed only on a joint address of both houses. In this case however the appointments are not being made by parliament but by the governor in council, and the people will hold the governor in council responsible for what occurs. If the new policy is a success the government will boast of it and will receive the credit; if it is not a success they will be condemned by the people. Why therefore should you have the governor in council make, the appointments and then compel that body to go to the Senate for approval in the removal of anyone? I do not think it is workable; moreover, it is contrary to the principles of responsible government. In the light of such experience as I have gained here in the period of a third of a century, I think that the more we depart from the old-established rule of responsible government the deeper the mess we shall fall into. The people must rule and the House of Commons are their representatives. The Senate exists for certain purposes, to revise hasty legislation and to make certain amendments which the government of the day, in view of public opinion, cannot make but which may be necessary in the face of conditions that may be inimical to the interests of the country. But the responsibility rests with this house, and when the hon. member for East Algoma goes back to his constituents he will be held responsible not only for this act but for everything that has been done in this house; he will be responsible for the report of the Duff commission if he approves of its conclusions. I can only say therefore that I am opposed to this clause in principle as it stands. I want the whole responsibility left with the committee of this house called the governor general in council.


Mr. McGIBBON:: It seems to me there are only two methods of procedure before the house; one is for the government to take full
responsibility in conducting the railways, having the Minister of Railways in the House of Commons responsible to the house and the people; the second method is to remove the railways as far as possible away from politics and political influence. It does seem to me that we are halting between these two methods. I do not think that anyone who has had the privilege of attending the special committee on railways and shipping can conscientiously say that in the past politics has been divorced from the management of the national railways. I am not going to discuss here the results, for they are only too apparent to-day to the taxpayers of Canada, and in my opinion will be in the lifetime of every member sitting in this house at this moment. In that I may be wrong; I hope I am. Rightly or wrongly, however, with the background and history we have had since 1923, when the national railways were consolidated, the Duff commission has taken the view that politics in the past has been evident in the management of the railways. Read the report and it will so inform you as plainly as the English language can state it. As a remedy-and it is time we were finding a remedy-the commission submitted certain recommendations which are reflected in this bill.
I say frankly, as one representing the people of this country, that of these two policies I prefer the first. Under normal conditions I should have preferred to have the minister and the government take full responsibility, but I do not believe that the people of Canada want that; I do not believe that any government could carry it out at the present time. Consequently we are left with but one alternative, namely, for the government to remove the railways as far as possible from parliamentary and governmental influence; and while I prefer the first method, I am not sure that the government were wise in withdrawing the amendment they did a few minutes ago, because that would certainly put the management a little further away from parliament than it is now.
If there is anyone here who thinks that the national railways do not present the greatest problem the country has to deal with, he is an optimist. I for one believe that the taxpayers of the country will be called upon for years to come to put their hands very deeply into their pockets to pay the deficits of the road. All I want to remind the house of at the moment is this, that only in one year did they come anywhere near meeting the interest obligations to the public, and it would take $20,000,000 more to-day of an operating surplus than they had in 1928 to meet the situation. Does anyone think that business will
C.N.R.-C.P.R. Bill

come back as quickly as that, with traffic on the railways falling, as it is to-day, out of sight almost every hour? Does anyone think that the railways will pay their obligations to the public? Well, I do not, and I say to the government that if I were in their place I would, on the authority of the Duff commission, unload this responsibility and get it as far away from me as I could. They have authority for that. They appointed a commission comprising the best mein they could get, and thait is their report. The report was well received by the public of Canada as hon. members know. I did not think very much of it, but that is neither here nor there; but having decided on a policy of divorcing the management of the railways from politics and from parliament, if I were Minister of Railways I would certainly get it as far away as I could, because I should hate to shoulder the responsibility.


William Daum Euler: Would my hon. friend, then, have supported the first appointment of trustees by the government?


Peter McGibbon: I gave a reason which
I think is justifiable. Having appointed a commission of the most. eminent men available, men eminent in railway matters, in finance, and in law, having given freely of their time and having made a report to this house, I think it would be an insult to that commission if we did not adopt their recommendation. I do not pretend to hold my judgment as being superior to theirs but probably I am not as conceited as some hon. members of the house.


An hon. MEMBER:: Order.


Peter McGibbon: We have a tremendous problem upon our hands and in my opinion this problem will be increased in the future by the fact that mail, express and package parcels will be carried largely by air. The busses and trucks are taking business away from the railways. They serve the thickly populated parts of the country, they stop anywhere for passengers or freight while the situation of the railways is just the reverse. I cannot see a very bright future for the railways in this or any other country. If parliament could solve this problem it would be doing one of the best turns possible to the people of Canada.


William Lyon Mackenzie King: Mr. Chairman, the hon. member who has just taken his seat based his argument upon the advisability of carrying out the recommendations made by the Duff commission. He stated that as the government appointed this commission, they

ought to carry out its recommendations. May I say that the Duff commission never made the recommendation which is included in this clause. The clause reads:
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.
The words "on address of the Senate and House of Commons of Canada" have been added by the ministry.


Peter McGibbon: Surely those words were a fair deduction from the recommendation?


William Lyon Mackenzie King: If the Duff
commission had thought that it was right and proper that the ministry should be restricted by the addition of words of that kind, those words would have been included in the recommendations of the report. May I give an additional reason as to why they would have done so. Another commission, the Drayton-Acworth commission, investigated the question of railways and it made a recommendation that in the particulars here mentioned it should be impossible for a subsequent ministry to undo anything that a previous ministry had done. That appeared in the majority report of the commissioners. The minority report of one of the commissioners who dissented is very significant. When the Drayton-Acworth commission sought to bind succeeding ministries much in the way that this clause seeks to bind them, one of its members took exception. I shall read his words which were as follows:
I am unable to join my colleagues in their recommendations. They propose that practically all of the railways in Canada, except the Canadian Pacific and the American lines shall be turned over to a corporation to be managed by a board of trustees appointed by the government. They insist that this board is to be permanent and self-perpetuating. I do not know by what means one parliament can bind its successors to a given policy, especially in so simple a matter as changing the organization of a government board. My friends seek to avoid government ownership and operation, in fact condemn it as inadvisable, but propose a plan which contains so many elements of danger in the direction which is sought to be avoided that I am unable to join them.
In other words, the commissioners, as set forth by one of their number, were seeking to make government ownership and operation impossible, and one of their recommendations was that the board of trustees should be self-perpetuating and after appointment not be removable by a ministry at a later date. May I point out that the governments of the Right Hon. Sir Robert Borden and of the Hon. Mr. Meighen had the report of this commission

CM.R.-C.PH. Bill
before *them but neither government were prepared to take action in accordance with their recommendations. The Duff commission had the report of the Drayton-Acworth commission before its members but they were not prepared to recommend to the government and through the government to parliament the adoption of any such provision as this. The fact that in the circumstances the Duff commission refrained from making such a recommendation is the strongest argument that could be advanced as to why this parliament should not insert in this bill any provision of the kind. I am going to move that all the words after the word "cause" in the thirty-fourth line be struck out. Should this amendment carry, the section would then read:	[DOT]
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.
The words I am proposing to strike out are:
[DOT]-and on address of the Senate and House of Commons of Canada.
May I give a further reason why these words should be struck out? By the passage of previous clauses, this committee has decided that the governor in council shall make appointments and shall fix salaries. It has given to the governor in council the power to increase salaries; if the governor in council is to be given the power to increase salaries why should it be denied the power to reduce salaries? Why should the reduction of salaries as well as the removal from office be made subject to the will of the Senate as well as that of the House of Commons? It seems to me that there are two fundamental constitutional principles being sacrificed by the olause in the form in which it appears. The first is the one already referred to of the responsibility of a ministry, in other words the principle of responsible government; the government taking full responsibility for its actions and not being subordinated to the will of a non-elected house of parliament. The second and a very important fundamental principle is the control by the Commons of all matters of expenditure. By this clause the House of Commons is impliedly parting with its right of control over expenditures and the taxation incidental thereto; they are being made subject to the will of the Senate. It may be that the amount involved is small but the principle is very great. This principle, probably more than ony other, has occasioned long and acrimonious debate in the British parliament during recent years. The same statement, in fact, applies to most
parliaments. For this as well as for the other reasons mentioned, I do not think that this clause should be accepted in its present form.
I fail to see just why it should be necessary to reflect in this indirect way upon any ministry that may be in office. I think that in the future, members of governments will be as honourable in their actions as their predecessors, whether those actions relate to appointments or to dismissals. Speaking the other day in connection with these appointments, I said that if at any time a Liberal administration should be returned to power and I had anything to do with it, my last desire would be to remove any trustees appointed by the present government provided they were performing their duties impartially, fairly and well. If they were not doing that, it seems to me that the ministry of the day ought not to be restricted in its attitude towards them. The ministry will have to carry the responsibility of their actions whether it wishes -to do so or not.
May I say a further word about this getting rid of government control? It seems to me that here another fundamental principle is involved. Either these roads must be considered as government controlled as well as government owned roads or they should be passed over altogether into private hands. If the ministry is of the view that parliament is not the proper body to control the national railways, then let them bring in a measure which will ask parliament to transfer thf roads to private control. The ministry claim that the president and board of directors under the late administration and as they exist at the present time were possessed of too great a power, but it now proposes to go a step further and give still greater power to the three trustees. The complaint has been made that the board of directors have had too free a hand, that certain expenditures would not have 'been made if they had been subject to greater control by the ministry, but now the ministry proposes to go even further and take away all control on the part of the ministry. These three men are to be given the power to do as they please with respect to the largest expenditure that the country will be concerned in. Reference has been made this afternoon to human nature and, knowing human nature as we do, I cannot but believe that any gentlemen who may be given appointments as trustees will be all the better in administering these national railways for realizing that they are subject to the control of whatever ministry the people may be responsible for having placed in office.
C.N.R.-C.P.R. Bill


George Brecken Nicholson: What happened in 1923?


William Lyon Mackenzie King: I do not know to what my hon. friend is referring.


George Brecken Nicholson: The gentleman brought here to foe president of the Canadian National Railways.


William Lyon Mackenzie King: If this clause had been inserted in the original act, how would the ministry of to-day have felt had they been obliged, notwithstanding whatever argument or reasons they might urge, to retain in office whoever had been appointed? The leaving of the appointment of the president of the railway as at pleasure was the only sound and sensible position to take. I do not think the ministry can do other than agree with this statement because, when they came into office, they became responsible, and they assumed their responsibility in the way in which they believed it should be assumed. If they assumed it in the wrong way, and without justification, their action is subject to criticism. The very fact, however, that as a responsible ministry they found it advisable to make a change is the strongest reason why they should hesitate in binding any subsequent ministry.
May I say this with reference to the appointment of Sir Henry Thornton. The government of the day before it was able to secure Sir Henry, had sought high and low for a president of the national railway. As I recall the circumstances, it was a matter of a search of a year or more before the person regarded as suitable could be found to take the position of president of the national railways. When we appointed Sir Henry, we believed we had secured one who was in no way associated with either the Canadian National or the Grand Trunk, who would as between these former rival systems have no preference or feeling one way or the other, and who was independent of all other former influences. He was given a free hand. He came to us from England; his experience had been largely in the United States. If there ever wa3 a man who was ideally fitted so far as general qualifications and the like were concerned, and calculated to be impartial in the discharge of his duties once given a free hand, Sir Henry Thornton was that man. Whatever hon. members may now wish to say about him, or of his administration during the last year or two, they will have to admit that they themselves when on this side of the house were as strong in endorsation of Sir Henry Thornton's management of the road at the time as were the members of the government in office.
IMr. Mackenzie King.]


Peter McGibbon: They could not find out anything about the situation.


William Lyon Mackenzie King: We must admit that at any rate up to a certain period there was general agreement throughout the country that the best man possible had been found for the position. But the man who was regarded the best at the time was evidently not thought to be the best man to continue indefinitely. A like situation may arise as regards any appointment. Therefore the ministry of the day, of whatever complexion it may be, should be given a free hand to assume and discharge its responsibility in its own way
The hon. member for Muskoka-Ontario has made a reference to political interference. I am not going to bring that subject into the discussion except to put on record one statement which I think it is owing to the former administration should be on record so far as alleged political interference on the part of the government of the day is concerned. Sir Henry Thornton himself gave to the Saturday Evening Post on July 6, 1929, a statement of the circumstances under which he took office as president of the railroad, of the manner in which he managed its affairs, and of the extent to which up to that time there had been aught in the nature of governmental interference. I shall quote just one paragraph from page 9 of the Saturday Evening Post of the date mentioned. I shall say nothing at present about what Sir Henry Thornton may have subsequently said on the same subject. After mentioning the circumstances of the problem with which he was confronted he continues in this article as follows:
But, as I have mentioned, I love a good fight. So I crossed the ocean and had a talk with the Right Hon. Mackenzie King, the Prime Minister. He, too, said, there would be no politics. I took the job.
There never has been any politics. But that wasn't the fault of a great many persons. Premier King kept his promise. And during the period between elections when the Conservative party was in control no one laboured harder in the real interest of the property than Sir Henry Drayton, who carried on governmental administration during the election period. Within a year a bulwark had arisen to back him-the opinion of the people of Canada. To-day there is as much chance of politics getting into the Canadian National Railways as there is of an elephant walking a tigbt-rope. Both have yet to be done. Last year, for instance, the railways which I am fortunate enough to administer bought $99,000,000 worth of supplies. Not one cent of those purchases was dictated politically, nor any that preceded them.
I place this statement on record because it has been before the public for some years and no exception has ever been taken to it;

C.N.R.-C.P.R. Bill
it was before the House of Commons at the time it was made, and exception was not taken to it then. I shall not enter into any argument over what may have taken place since, but I submit that so far as I know the situation, that was the relationship of the government of the day to Sir Henry Thornton and the railways under his management. The minister himself I think has said that, so far as politics are concerned, the kind of thing to which he had reference and which we all had in mind was not so much the possible influence of the ministry of the day or of members of parliament upon the trustees as it was the kind of influence that may be brought to bear from different sections of the country, a sectional influence that may be very real at times. That kind of influence upon the trustees is not going to be in any way affected by the manner in which this particular clause is framed. The trustees will do their duty according to their lights; making them removable for cause is only a just and fair way of proceeding, and if there is cause there should be freedom on the part of the ministry to remove them. Whether there may be cause or not, there should not be in the statute an implied reflection that the ministry of the day will do other than what is honourable in the circumstances in which they may be called upon to act.


Richard Bedford Bennett: I wish the committee would calmly consider this matter from another angle. I quite appreciate all that has been said, but the effort to secure good men for this position has already commenced. I know exactly what the former government had to contend with at the time they secured the services of Sir Henry Thornton. I think it is only fair to say this; the whole affair is past and gone; the gentleman himself is now no more. I came back from England and I left for the then Prime Minister, who was at the time out of town, a memorandum stating that I had been interviewed by two or three gentlemen who had spoken in the highest terms of Sir Henry Thornton's railroad experience; I thought he was admirably qualified by reason of his experience to undertake the task. I left that memorandum at the office of the Prime Minister at the time I returned from England. I was not then in the House of Commons. If we are to secure the kind of trustees that I believe are essential-and I cannot say how seriously I regard the matter; I cannot overstate the seriousness of it to the country-we must get men who will not think that by accepting office they are "conscripted," which I think 53719-290
is the word used by the hon. member for Quebec East. If we have to conscript them, we cannot hope that men are going to take these positions who will be subject to, shall I say, the ill treatment of any government, even the government that appoints them. The leader of the opposition says that I suggest governments will not do thus and so. I know, for instance, that the international joint commission was originally appointed by the king in council. The appointment had not been completed when Sir Robert Borden came into office, and therefore the positions were filled by three Conservatives: Mr. Powell, Mr. Casgrain and Mr. Magrath.


William Lyon Mackenzie King: Sir William
Hearst.


Richard Bedford Bennett: No, I am referring to the first ones. Then the government of my right hon. friend had the matter amended so that the governor in council could appoint them.


William Lyon Mackenzie King: Any government.


Richard Bedford Bennett: I mean the government in Canada-4 want to remove it from any possible chance-and the pressure upon the right hon. gentleman was veiy great, as I happen to know. Now under those circumstances, knowing as I do and as every hon. member knows, just what the feeling is in a young country like Canada where you have not a great reservoir to draw upon such as you have in an older country, of skilled and trained men, we face this situation, that if we ask men to take one of these positions they are going to refuse unless they know that they are not going to be kicked about like men holding such offices too often are. When we say that good cause must be assigned for their removal or dismissal I am glad to hear the right hon. gentleman say that he thinks that is fair.


William Lyon Mackenzie King: I agree with that entirely.


Richard Bedford Bennett: We say just what a board of directors would say. The House of Commons and the Senate, not simply the House of Commons, but both houses of parliament, represent the shareholders, if you will, and we say that no government weak with the frailties of political life, at least, shall be in a position either from mere caprice or what they believe to be good cause to make these men walk out. The approval of parliament must be given. If the approval of parliament is given the government is vindicated.

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If parliament refuses its approval the government will have to vacate its place.
The right hon. gentleman must also realize that in determining what constitutes good cause you raise an issue of the utmost importance. The courts, for instance, have always had difficulty in deciding as a matter of law whether or not a given set of facts constitutes cause or not. Therefore in every case where an employer dismisses his employee before the termination of his period of employment the employer must face the responsibility of either paying damages or satisfying the court that he has done what he has done for good cause. The cause is a question of law. I can give one illustration that many hon. gentlemen may be familiar with. We had a case in the courts under which an employee of the Canadian Pacific Railway sued that road for damages for dismissal. The cause assigned was that he had appropriated to his own use fares on the railway received for the carrying of passengers. The railway company dismissed him. In accordance with the provisions of the schedule he appeared before 'his superior officers and he contended that he had made good his defence, 'but the company dismissed him. He then sued the company, and the learned judge decided that he had been dismissed without good cause, and awarded him $10,000. Apart from the fact that the damages were improper because the measure of damage could not be that in any event, the question at issue was whether or not that was good cause. The case went to the appeal court and finally to the privy council, where the judgment of the trial judge was reversed, as it was by the court of appeal. The issue was the sufficiency of the cause. The man himself was not permitted to say whether it was good or bad. He took the risk. Now in order' that we may be able to induce competent men to accept this position we say that we are not going to leave it to the caprice of any government, our government or any other, to say that a given condition constitutes good or bad cause to exercise the power of dismissal. Therefore once a decision has been arrived at to terminate the employment by dismissal we say that before final action is taken parliament must say, just as the privy council had to say, that the cause assigned is a good cause, and if this house and the Senate say that it is not good, then the government of the day must go; but if on the other hand the commons and the Senate say it is good the government is vindicated in the position it has taken.
The reason why the Senate is introduced into this, apart altogether from the fact that
IMr. Bannett.l
the tenure of office of judges is during good behaviour subject to age and other conditions which will be before the house presently as defined by the Judges Aot, is this: We want the board to be independent of the executive, just as no executive action should be capable of terminating the services of a judge. Therefore the appeal is made to parliament. In the case of the judges that is as old as the statute that provided it. It has come down through all these years, and parliament means both houses. The answer that at least one hon. gentleman would make if the commons alone were mentioned would be that the government of the day has always a majority in the commons and therefore is always sure of being sustained in that chamber. But the government has not always a majority in the other chamber, whether in this country or any other, and therefore the government of the day may not be sustained in the other house; it may not secure the joint approval of the two houses of parliament by which these men may be removed. You thus secure the possibility of men of position in the commercial world accepting at the hands of the government positions which they otherwise would not accept, and having accepted the position they know that their tenure of office is not to be subject to the caprice of any government which in its anxiety to change the personnel of the trustees may determine that a given set of facts constitutes good cause. The question must be submitted to the high court of parliament, and the government of the day having submitted its cause, not to this house alone but also to the other branch of parliament which may not conceivably support the government, and that has very often happened, if it is unable to secure the approval of that other branch of parliament, as well as the approval of the commons, it fails and the government must go.


Charles A. Stewart: My hon.
friend is not suggesting that if a government measure is defeated in the other house the government must resign.


Richard Bedford Bennett: It would in this case.


Charles A. Stewart: That makes it worse than ever.


Richard Bedford Bennett: It is not a question of
defeat. There must be joint action by both houses to make it complete. Both bodies must approve before you can deprive of his office a man who may be taken out of a great place in the commercial life of the country and induced as a high matter of public service to give years of his life-this

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house has now reduced the term to five years -to the country in this way, and giving his services to the country in this way we say that he shall not be subjected to dismissal unless the sufficiency of the cause assigned is approved by the parliament of Canada.


William Daum Euler: Just to clear up the point
raised by my hon. friend from AVest Edmonton, I can hardly believe what I understood the Prime Minister to say. Does he say seriously that if such a joint address initiated by the government were refused by the Senate, the government would be compelled to resign?


Richard Bedford Bennett: In my judgment the
government would certainly have to resign.


William Daum Euler: Because the Senate does not approve?


Richard Bedford Bennett: The government assumes the responsibility of asking the approval of parliament for the dismissal of Mr. A, the chairman of the board of trustees. The House of Commons says yes and the Senate says no. The government has failed.


William Daum Euler: Not at all.


Some hon. MEMBERS:: No.


Richard Bedford Bennett: Of course, it has failed.


Edward James Young: Then let us amend the bill
before it is too late.


Richard Bedford Bennett: Parliament takes that
action not on a statute but on a resolution, a joint address, and the government risks its all on the sufficiency of the cause for dismissing a man from this position. There is no doubt about that, not the slightest doubt in the world. It would not be so with respect to a statute, but this is a case in which the government has taken the risk of putting a man out of his position, throwing him out on the street for cause assigned which was wholly inadequate-the commons says it is adequate; the Senate says it is not. The government has failed. How can a government carry on?


Edward James Young: Then the trustees can get rid of the government?


Richard Bedford Bennett: No, the trustees cannot get rid of the government, because it is a question of termination of the relations of employer and employee, the trustee as an individual. AA7hat is the good of this business of always talking high platitudes with respect to parliamentary institutions, when you have to deal with facts and realties? The reality -is that if the House of Commons does not approve of the action of the government, 53719-2905
that is the end of it; the government goes. And if you have said that the House of Commons plus the other house must approve, and it does not, the government goes equally. That applies with respect to the dismissal of the individual. That is not so about a statute at all. What is more, there are illustrations of it; it is not a new question at all. When a joint address is to be agreed upon, if one party does not agree to it, there is no joint address, and the government which initiates it must accept the responsibility for it. That is the difference between that and a statute. A government's measure may be defeated in the Senate, and that is the end of it. But that is not this ease. The government has risked its fate by dismissing a man from his job. It has risked its all on that dismissal, and it has made that dismissal subject to the joint approval of two branches of parliament.


Mr. HEENAN:: Mr. Chairman-


William Daum Euler: I believe I had the floor first.


Richard Bedford Bennett: Yes; as a matter of fact the hon. member for North Waterloo (Mr. Euler) withdrew for me.


William Daum Euler: I am sure the Prime Minister will believe me when I say, without in any way trying to be offensive, that the statement he made at the conclusion of his remark provides for me the strongest reason why this bill should not go through in the form in which it appears.


Richard Bedford Bennett: That is what I thought you would say, and that is the reason that I made myself clear.


William Daum Euler: I cannot conceive that the life of the government, for any reason, can be dependent upon the action of the Senate of Canada. The Prime Minister laughs at that, as he so often does.


Richard Bedford Bennett: The Senate put the Macdonald government out.


William Daum Euler: I am looking at the matter in a common sense way, and I believe in the way that the average citizen of Canada would look at it. Like the hon. member for Mus-koka-Ontario I do not regard the Duff commission report so very highly. I do not believe that the bill which we are now discussing again can accomplish a very great deal. On the second reading I gave it support, which was not at all enthusiastic, but I did it because it went at least some length in the direction in which I desired action to go. It offered a certain amount of cooperation, and: decrease in the expense of running the road.
C.NJt.-C.P.R. Bill

If there was one clause of the bill to which I objected, it was the clause we are now discussing, namely 7. A little while ago the government accepted the suggestion that they should take full responsibility for making appointments. I was rather in favour of the panel idea, if it could be made nonpolitical *-I admit it would be difficult-because I always had in my mind that if the government would change clause 7 so that it or the House of Commons would have the power to discharge these trustees, their responsibility would be very well maintained. Now they *have declined to eliminate clause 7. There are two reasons given, one by the Minister of 'Railways and the other by the Prime Minister. [DOT]The Minister of Railways gave as his reason [DOT]that a politically minded government, if we wish so to describe it, might unfairly discharge these trustees. I believe I am correct [DOT]in my interpretation of what he said. I have put it bluntly, but I believe that is what was at the root of his statement, namely that a politically minded or partisan minded government might unfairly desire to discharge these trustees, and that the Senate would prevent such an injustice. I contend that if it be true [DOT]that for political reasons a Senate might prevent a government from discharging these *trustees, it is just as fair to assume that a politically minded Senate, or a partisan Senate might prevent the removal of these trustees for the same political reasons. So that upon [DOT]that score it seems to me that we are even.
The Prime Minister advanced another argument in which there may be some weight, but against which I think provision could be made. [DOT]He stated that unless the men asked to take office as trustees could be assured that they could not be discharged by a politically minded government, the best men for these positions could not be obtained. If there were no safeguard, I believe there would be something in his argument. But at this point I am going to suggest a safeguard, as I did previously, upon which occasion I incurred the .[DOT]idicule, if it may be so termed, of the Prime Minister. I stated that it should be the duty of the House of Commons alone, and the government-not of the Senate-to discharge the trustees, if they wished to do so. I hold to that. I stated frankly before, and I repeat it at this time, that to my mind the responsibility should not be placed upon the Senate, that this House of Commons should not share the responsibility with the Senate, because only the House of Commons and government are responsible to the people of Canada. I hold to that principle very consistently, and,
I suggest, very soundly. If there is danger Euler.]
that, from fear of partisan governments, executives or cabinets, the best men could not be secured for the positions, and if there is fear that for political reasons they might be discharged, I believe such fear might very well be allayed and the danger very definitely averted if we inserted a provision or amended this clause so that the trustees could be removed not by the executive or by the cabinet, but by a vote of the House of Commons, not including the Senate. If the men were competent, no House of Commons or no government would dare to introduce a resolution or bill into the House of Commons providing for the removal of such trustees, unless for very good cause. On such occasion the debate in the house and the fear of the criticism of an alert opposition would prevent any government from introducing such a measure, unless it were absolutely certain of its ground. The press throughout the country would take the matter up, and in my opinion, that would be ample safeguard against that which the Prime Minister seems to dread.
I shall conclude by repeating the statement with which I began, namely, that when the Prime Minister now claims or states-and he knows more than I do about constitutional law-that because of the rejection by the Senate of a resolution initiated in and passed by the House of Commons, the government must resign, he is, if stating the fact, giving the very best reason why this clause should not be passed as it now stands.


Peter Heenan: I desire to commend the
Prime Minister at this stage for his frankness. I recall that only a few evenings ago I was in the company of two government supporters, and while discussing section 7 I said that I thought that we might go to the point where a government in power could introduce a resolution to dismiss the trustees, and that in the event of the resolution being rejected by the House of Commons and the Senate the government would have to go to the country. I do not mind saying that although the two Conservative members were friends of mine, they laughed at me. I am very glad to sit here to-day and to hear my idea substantiated by the Prime Minister.
Why are we so solicitous of gentlemen whom we are going to appoint as trustees? Why is there the discrimination between employees of the railway and trustees? Here we have an economy measure which will result in thousands of employees being thrown on the street, but the man who will be appointed to carry out these measures of economy, the chairman of the board of trustees, cannot be

C.N.R.-C.P.R. Bill
put out of office unless the government stakes its life on a resolution which must be adopted by the House of Commons and the Senate. Every man working on t'he railroad, whether he is a section man, a carpenter, a machinist, a bridge builder, an engineer or a conductor, is just as important in the life of that railroad as the trustee will be, yet now we are going to engage a man for five years, during which time he will have to throw thousands of men on the streets without a moment's notice. We disregard their lives and the lives of their dependents, but we cannot dismiss the gentleman responsible for this unless we have an address of the House of Commons and the Senate. Why should there be this discrimination 'between Canadian citizens?
We heard the hon. member for East Algoma and the Minister of Railways say that we must have big mem. Yes, in connection with the operation of the Canadian National we must have big men, but I think they must be big railroad men. And why should these big railroad men have their jobs ensured for five years while they have the power to dismiss the employees without notice? For the life of me I cannot see why we should be required to ensure their positions while other men, who are just as necessary for the successful operation of the railroad, may be dismissed without very much consideration being given. I believe that a really big man would not take a job such as this unless he knew he was big enough to handle it, and if he handled it to the satisfaction of the country that in itself would ensure his job. I think that is the only barometer we should have.
While we are dealing with this question of trustees I want to repeat that one man on the board should be appointed to represent the employees. I know the government takes the position that the two hundred thousand railway men in Canada should not receive greater consideration than the million or more agriculturists, but I want to point out to the minister that these railway men have devoted their lives to this work. One might say that everyone who deals with or uses the railways is interested. I believe it costs ten or fifteen cents to send a suit of clothes from Winnipeg to Regina, and the gentleman in Regina who pays that sum might be said to be interested in our railways to that extent. Surely, however, he should not be compared with the men who entered the railway service in their youth and have remained there for many years. These men have built their homes and brought up their families in that service, and surely they are entitled to representation on this board. The Minister of Railways said
the door was not closed yet; I am very glad he did so, because I cannot conceive any government appointing trustees for the Canadian National without giving representation to the men who have invested their lives in this work.
The hon. member for East Algoma said that if we emasculated the bill much more it would be better to abandon it because it would mean almost nothing. On the other hand, however, I know that many amendments from this side, and even from the other side, have been refused and that the only amendments accepted by the government have been those which in their opinion would strengthen the bill, so I do not think there is very much in the argument of the hon. member for East Algoma. I should like to point out to the hon. gentleman that these trustees will not be ordinary men after they are appointed; turn to section 16 and see what powers they are to have. They can form new companies, grant leases, enter into agreements, grant licences, agree on the division of earnings arising from joint operations, grant joint trackage, running rights, joint ownerships or joint operating agreements, and so on. Yet these gentlemen cannot be dismissed for five years unless the government in power Stakes its life on a resolution of the House of Commons and the Senate. I am very glad the Prime Minister was frank enough to give us that information; I mentioned that fact a few evenings ago to some hon. gentlemen opposite, and they laughed at me. It is no laughing matter now, however, since we heard the Prime Minister make that definite statement on the floor of the house. Therefore I am heartily in sympathy with the amendment moved by my right hon. leader, and I hope the House of Commons will accept it.


Ernest Lapointe: I am sorry to say that
when the Prime Minister made his remarks he lost a prospective supporter of this section. I was inclined to give my support, but my right hon. friend has given an interpretation which surely we must accept, because this section is the work not of the commission but of the government. The Prime Minister says that if a government undertakes to dismiss one of the trustees for an assigned cause, for mismanagement or something else, and is supported by the House of Commons but not by the Senate, it means the resignation of the government. I cannot follow the right hon. gentleman that far, and I shall vote against the section.


Edward James Young: In his remarks the Prime
Minister said we must deal with facts and
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realities. It seems to me he is making this board of trustees a reality, so much so that the government will be reduced to a mere shadow. Let us suppose that a quarrel developed between the government and the board of trustees; naturally the government would ask for the dismissal of the board, and the Senate would have to decide whether or not that should be done. If the Senate happened to be of the opposite political complexion from the government does anyone suppose for a moment that the matter would be dealt with on its merits? The Senate naturally would want to see the government out of office. There is a very simple method of getting rid of them, and that is, simply to refuse to dismiss the board of directors. Let me give an example of what might happen. I have before me the report of the bureau of statistics showing the earnings of the two railway companies for two four-month periods. They are the latest periods I could get, November and December 1932, and January and February 1933, being one period, and the corresponding period of the year before, November and December 1931, and January and February 1932. The earnings of both railways declined in those periods but the decline in the Canadian National Railways was 24-89 per cent and on the Canadian Pacific 19-35 per cent, or a difference of 5| per cent.
Ordinarily speaking, the Minister of Railways should call before him the board of directors and demand an explanation of such a state of affairs, and if a satisfactory explanation were not forthcoming he would naturally request the resignation of the board. He would ask for dismissal for cause, because they would have shown their incompetence. But what would happen? They would immediately canvass the Senate to see what support they could get if they decided to refuse to resign, and if they could get sufficient support they would refuse and the government would be forced to resign.
I cannot see how the government can escape responsibility for the management of the railways. Set up any structure you like and the people of the country will hold the government responsible; and if they go before the people and say, "We cannot help it; we have created a board which is beyond our control, having given them full charge of the railways," the people will reply, "You had no business to set up any such board because you are the people and the only people we hold responsible for the management of the railways, and if you cannot manage them you had better geit out and let someone else do

so." Public control and public ownership are inseparable, and if we cannot control the railways we have no business owning them. If the government, elected by the people, cannot manage the railway, then the sooner we find that out and the sooner we get rid of it the better. That is my opinion.


Mr. BROWN:: I have had a good deal of hesitation about intervening in the debate with regard to the railways. When this clause was brought to the attention of the committee my first reaction was that I could not offer any very strong objection to it; indeed, I felt it was possibly an instance in which the Senate might discharge the functions it was originally intended to discharge in preventing hasty action on the part of the government and the House of Commons. But the statement made by the Prime Minister, that the refusal of the Senate to endorse the action of the government and the House of Commons would necessitate the resignation of the government, is a doctrine to which I could not possibly subscribe. In view of that statement I certainly agree with the hon. member for North Waterloo and the hon. member for Quebec East. I cannot support the clause in question under these circumstances and certainly I shall have to register m3' objection to it.


Charles A. Stewart: I intended to oppose this clause in any event. I do not want any misunderstanding; I am opposed to it in every particular. I believe that the responsibility should rest in the hands of the governor in council. I do not insist, as my good friend from North Waterloo has done, that it shall be the responsibility of parliament, but I do maintain that the responsibility should rest in the governor in council.
Let me put this to the leader of the government and the government itself. When they felt that the interests of this institution would be better served without the services of Sir Henry Thornton, they took the responsibility in that matter and I find no fault with them. The responsibility, I say, was theirs. But do they mean to say that if there had been an adverse majority in the Senate, or if there had been a Liberal Senate, they would have- succeeded in having Sir Henry Thornton dismissed, particularly if that Senate thought for a moment that they could put this government out of office on the question? The thing is almost ridiculous. With all respect to the Prime Minister, I cannot conceive that even he would suggest such an arbitrary manner of dealing with the government.

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I will vote against this proposal more heartily than I did before, much more heartily. So far as I am concerned, I am bound to say that this is the worst imposition that has ever been offered the House of Commons of Canada. Are we going to be made subservient to the Senate in a grave matter of this sort? And that is exactly what will happen. The members of that body do not have to appeal to the electors at all; they are there during their lifetime and, if they saw fit, willy nilly they would maintain in opposition to the elected representatives of the people a board which in the judgment of the latter should be dismissed, a board handling, as I said on a former occasion, just as much money as the government of this country is likely to handle.
May I say to hon. gentlemen who have been critical of the railway situation that I do agree with certain things the Prime Minister has said. I agree that we have overbuilt in Canada. I would ask my hon. friend from East Algoma however this question: Would he incur again in his lumbering business the same obligations he did in more prosperous days? We all know that hindsight is always better than foresight. I would point out to this house however that notwithstanding the severe losses incurred by the Canadian National Railways and the Canadian Pacific the people of Canada have enjoyed lower rates than those that have prevailed on the other side. We must admit therefore that there are advantages in the government railways, and if the government are to divest themselves of all responsibility for this institution then I say to them, turn it over to private enterprise at once and have done with the whole thing. I do not know whether the institution can be made a success or not, but I do know that no such method as is now proposed can be adopted by the government without their incurring very grave displeasure. I say that so long as the government are determined to maintain the national railways as a government institution they will have to accept the responsibility -any government will have to accept that responsibility. It cannot be otherwise. This attempt to remove it from political control is in my opinion so much hooey; it cannot be done, and that is one of the penalties we shall pay for government institutions.


Mr. ERNST:: I thought "hooey" was
banned.


Charles A. Stewart: I mean this bugaboo that is always trotted out about
political control. I do not believe there has been very much political control. I do know that municipalities and communities have got what they should not have got, but they have got it from the Canadian Pacific Railway as well. I could cite dozens of instances where they received from the Canadian Pacific treatment they were not entitled to. I say, however, that if hon. gentlemen are genuinely opposed to government control they should say so outright ; but if we are to have government control and operation, let the government take responsibility through the governor in council.


Mr. MAX ION:: This clause has been debated fully to and fro but I should like to point out to the committee something that has already been mentioned by the Prime Minister. In the dismissal of any of these trustees exactly the same method is used as that which would be followed in the dismissal of a superior court judge. Let me read this extract from the British North America Act, section 99:
The judges of the superior courts shall hold office during good behaviour, but shall be removable by the governor general on address of the Senate and House of Commons.
While of course a judge holds a very high office, I would point out that from the standpoint of financial responsibility, from the standpoint of our whole financial structure, the trustees who are going to be put into power in the Canadian National Railways are in a much more important position. Without any doubt the object is to place the handling of the affairs of the Canadian National Railways as far away as possible from government pressure, from political pressure or from public pressure. That was the thought in the minds of those who drew up this clause. The right hon. leader of the opposition and the hon. member for North Waterloo have, perhaps unintentionally, put an interpretation upon my word which was unfair. I was continuing the discussion which took place the other day in connection with the possibility of there being a Senate of a different political colour than the government of the day. It was stated that they might block a dismissal. Generally speaking, I think if can be assumed that the Senate will take as honourable and as highminded an attitude as this chamber. The hon. member for North Waterloo has suggested that any dismissal should be made by a resolution of the House of Commons only, but I think he will admit that any government in power having a decent majority would be able to get any reasonable resolution passed through the house.
C.NJi.-C.P.R. Bill


William Daum Euler: I said that public opinion
would prevent them from introducing a resolution which was not founded on proper reason.


Robert James Manion: And in the same way, public opinion would prevent another chamber of this parliament from refusing to dismiss a trustee who should be dismissed.


William Daum Euler: I was following the statement of the Prime Minister that they could put another government out of office.


Robert James Manion: I would not like to argue with the Prime Minister as to constitutional questions, but I must confess that I do not interpret the matter in the way he does. Suppose a government of the day wished to dismiss a trustee. The procedure would be something like this: the government of the day would introduce a resolution to the House of Commons in which cause would be given; that resolution would go to the Senate and if it passed the Senate, the man would be dismissed; if the Senate did not pass it, the man would not be dismissed.


Charles A. Stewart: That is
what we thought.


Robert James Manion: I have no desire to get
into a constitutional argument with the right hon. leader of the government because he is much more capable than I in that regard;
I am simply giving my interpretation of the clause. I have listened intently but I have not heard any real argument advanced as to the possibility of injustice being done by this clause either to the trustees or to the government of the day.


Charles Marcil: The only thing wrong
with the minister's argument is the fact that these trustees will not be judges. Judges are appointed to interpret the laws passed by parliament. A judge may be impeached and brought to the bar of this house for trial. This is the high court of the nation and we merely delegate our powers to the judges of the land to interpret our laws. In this case we are appointing administrators who are going to administer these railways to the best of their knowledge and ability. We are not going to give them any directions as to how that is to be done; we are not going to pass a statute to say that this, that or the other thing shall be done. They are to be given carte blanche and will act entirely on their own volition. They are in an entirely different position from that occupied by the judges and there cannot be any comparison between the two.

The assent of the Senate to the removal of an officer is quite competent when that officer is appointed by parliament. The general returning officer is appointed by joint address of both houses of parliament. The Auditor General of Canada is responsible to parliament. Parliament delegates powers to the cabinet council; the government of the day is merely a committee of parliament. Parliament has the power to remove these officials which I have mentioned but only by the assent of both houses. In the present case this argument would not apply because the trustees are not to be appointed by both houses, they are to be appointed by the governor in council.


Richard Bedford Bennett: Which comprises both houses.


Charles Marcil: The governor in council is responsible to this parliament. I have no desire to disparage the Senate, as I have heard splendid descriptions of its responsibilities and irresponsibilities. In this instance we are dealing with a money question which comes entirely within the jurisdiction of this house. The Senate has not a word to say. The Senate can reject a supply bill holus bolus but it cannot amend it. When I was a young man this whole issue was brought to the fore in the Quebec legislature. A conflict arose between the cabinet and the legislative council and pandemonium reigned in that province for some time. Responsible government ceased to exist because the lieutenant governor arrogated to himself powers similar to those which we now seek to confer upon the Senate. The result was that the government of that province was sustained for two years by the casting vote of the Speaker. A precedent was established by the removal of the lieutenant governor by the governor in council. He was declared to be merely a federal officer and not a representative of the crown. The then governor general referred the matter to the home authorities who declared that the lieutenant governor of a province was a nominee of the dominion cabinet which had the power to remove him for cause. At the present time we are merely using our prerogatives as members of this house dealing with a money matter. We are appointing trustees to administer public property, and with all due respect to the Prime Minister, I must say that I am amazed at his stating that a government would have to resign office and go to the people merely because an adverse vote had been cast by the Senate.


Richard Bedford Bennett: The hon. gentleman has fallen three times into the same error-in spite of his wide experience in constitutional matters, he has referred to the cabinet as a committee of this house. It is not; it is a committee of parliament. Ever since confederation there has not been a cabinet in which there has not been a member of the second chamber. The hon. gentleman may easily be excused for falling into that error, but if it is corrected, the argument which he advances vanishes immediately. The cabinet is a committee of parliament and I trust it will always remain so.
The question of taxation would not arise in this case unless it so happened that the road did not earn enough to pay the salaries. I think it would be reasonable to assume that if the road did not earn enough to pay its salaries, the trustees would not come to this parliament to ask it to provide money. They are to be employees of the road and the bill is clear on that point. Their salaries are to be paid from the revenues of the road and not from the consolidated fund of Canada. There will be no charge upon the consolidated fund. The only way such a charge could be made would be in the form of an item. I cannot conceive of these trustees coming to this parliament for their salaries when the road had not made sufficient to pay operating expenses and to provide salaries. Usually that point does not arise in connection with companies of this character.
As to the point which I put to the committee a short time ago in connection with the possibility of the government falling by reason of there not being a joint address, I would state that that was predicated upon the fact that the dismissal took place before they came to parliament. Perhaps that point was not sufficiently clear in the minds of those who followed me. Assuming that the government of the day, that is the executive, took the responsibility of dismissing a trustee or trustees and assigned a cause. If, as has been suggested, that is not a true interpretation of the section but rather that the action follows a joint address of parliament, it is obvious that the government would not fall if the Senate did not agree. If the government risked its power-I am trying to make it perfectly clear-by giving notice of a dismissal from employment of John Smith and assigned cause, it is obvious the government has staked its life upon being able to carry through the action which it has initiated. That means a joint address of both houses of parliament and if one house only passes it, it follows that the government has failed.
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That would be a matter which should engage the attention of the administration of the day, and when I said that the government would resign, I mean only that a government that I lead would do so. Other governments might take a different view. It is always competent for the leader of the government of the day to take the view that such a situation does not constitute a termination of his office. Hon. gentlemen who have studied political biographies will remember that when Lord Rosefoury resigned, it was thought that he should not have done so. He resigned because of an adverse vote on a cordite item in the estimates. It was not expected that he would resign, but all the commentators thought he was only making an excuse for doing so. I am merely expressing my personal and independent opinion that if the executive of the day, speaking through the governor in council, passed an order in council dismissing John Smith as a trustee and assigned a cause for so doing, the government then of course must face just what I said a moment ago, the joint support of both houses, that is, the Commons and the Senate, because the statute so provides, and if only one gave its approval, then the government bad failed in the action which was taken by its executive.


William Daum Euler: It could still do as it liked
about resigning.


Richard Bedford Bennett: Certainly; I was expressing my opinion that under those circumstances I would resign; I would have no hesitation about the matter.


William Daum Euler: I understood the right hon.
gentleman to say that it was compulsory.


Richard Bedford Bennett: No; I was only trying
to express my view of what the constitutional issue would be. As I say, Lord Rosebury did resign although it was thought he should not have done so. When the vote was taken there were only a few members in the house and the vote was on a cordite item in the estimates. Each prime minister must do what he considers is his duty. In the one case a prime minister resigned, was sent back by the sovereign and consented to form a new administration. I mention that merely because the matter depends entirely-and I am sorry my hon. friends have approached it from the wrong angle-on the method of approach. If the dismissal is made by the executive, the executive must take the consequences of failure to secure approval as provided by the statute. If, however, it asks for approval before making the dismissal, it would not be
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bound one way or the other, but it would be an impossible situation to have a board of trustees or any member of it operating in that way.
But it all comes back to this-and I submit it to the committee with some confidence -if we are to secure the type of business men we require for the purpose of discharging this function, we must do as I have suggested. I do not desire in any sense to belittle the arguments that have been made as to political control of railways and references to public services. The fact is that as between private and public ownership, you must sharply differentiate between ownership and administration. If the public in the narrow sense is to manage and administer the enterprise, disaster is inevitable, but if the administration is to be conducted by those who are skilled and competent, under the same restrictions and with the same supervisions and safeguards as are imposed by shareholders upon their directors and as public ownership, that is the public ownership of a utility, exercises its power to ensure it that security, stability, continuity, efficiency and effectiveness in management and administration that are essential, then I believe we may succeed. But I do not think there is any chance for what I call public ownership if it is to be subject to the pitfalls that arise from purely public administration, and I draw a sharp distinction between holding administration responsible not to the whole body of the public and the delegation of administration of power by the government to the persons selected for that purpose. That has been the experience, at least in other countries. In Germany they have had for a long time a system of public administration. In Australia their railroads were so administered for a time, and it will be remembered that Sir Thomas Tait, then Mr. Thomas Tait, left for Victoria for the purpose of administering the state railways. Each state had a different gauge, so that the cars of one state could not go beyond its boundaries into another.
Many hon. gentlemen know we have had great difficulty in connection with what we describe in no offensive terms as the political effect on governments of the administration of government-owned property. I should like to give the committee an illustration of that because I should think every hon. member would be interested. One of the members of the pension appeal board brought an action against t'he crown for damages for his salary. It will be recalled that the position was abolished in 1930. I daresay hon. members

will remember that by a joint committee we arrived at certain conclusions and they had the result of abolishing the appeal board as then existing. The consequence was that several gentlemen were out of positions; they secured a fiat and brought an action against the crown. This action was dismissed by the exchequer court and by the Supreme Court of Canada. The other day counsel applied for leave to appeal to the privy council. In reading the proceedings and the application I find that counsel said this: After this statute was passed, there was a general election in Canada and as a result of this changed condition, the appellant, not being of the political faith of the new government, did not secure a position under the new administration as he would have had the government of the day been sustained, and others who were of a different faith were more fortunate. That illustrates what counsel will say before the Judicial Committee of the Privy Council regarding political matters in a country like this.


Ernest Lapointe: I suppose that did not
have much effect on the court?


Richard Bedford Bennett: 
William Lyon Mackenzie King: I agree with the Prime Minister that there is nothing further that he could add to what he has just said which would enable him to wriggle out of the untenable position that he took at the outset,
I do submit however, that while he has resorted with some degree of skill to endless circumlocution in seeking to wriggle out of that original position, he >iis far from convincing us that the position which he originally took did not differ very materially from what he is now saying it was. May I give my reason? A moment ago he said that the latter part of a statement of mine contradicted the former part. I would say the same of what he has just said. He said in the 'earlier part of his remarks that these trustees did not have to come to parliament for their salaries and they did not have to come to parliament for money-


Richard Bedford Bennett: I did not say that.


William Lyon Mackenzie King: -unless they ware in a hole where they were not getting sufficient to carry on with.


Richard Bedford Bennett: Every dollar that they get for the purposes of capital expenditure on that property this parliament gives them, and for deficits and everything else.


William Lyon Mackenzie King: These gentlemen do not come to parliament for their salaries; they are secure in their position', and the Prime Minister by this clause is seeking to make them absolutely secure against dismissal except by an address of both houses of parliament. If a ministry ware to dismiss them before asking parliament to dismiss them-


Richard Bedford Bennett: That is the usual course.


William Lyon Mackenzie King: What then is the usfe of inserting a clause that they can only be dismissed by both houses?


Richard Bedford Bennett: To prevent any abuse of the power; just exactly 'that. No executive is going to dismiss people when they know that behind their action there must be the approval not only of this chamber but of the other chamber.


William Lyon Mackenzie King: When this section becomes law any action of any ministry in the direction of dismissing these gentlemen is of no avail at all until both houses of parliament have joined in an address to that end. The Prime Minister now says that a ministry that wishes to get rid of these gentlemen might geit rid of them by dismissing them first, and then getting the approval of parliament. In so saying he is contradicting the language of the proposed statute because under this section these men cannot be dismissed until both houses have acquiesced. The Prime Minister might as well say at once, especially after his Minister of Railways has openly differed with him, and now that he recognizes that he has not support in his own cabinet for the doctrine he was putting forward, that his original position is untenable and that he is now recanting what he said. For that he might well be commended.
Mr. MANI.ON: Mr. Chairman, we have had quite a lengthy discussion from all sides, the right horn, gentleman has put himself on record and other hon. gentlemen, and with all respect I would suggest that we take the vote.


William Lyon Mackenzie King: All right.


Peter Heenan: I would be prepared to support this clause if the minister would take into consideration the insertion of a provision that no railway employee on the Canadian National would be dismissed except on a joint resolution of the Senate and the House of Commons.


Some hon. MEMBERS:: Oh, oh.


Peter Heenan: Why the laugh? What right has a trustee to be appointed with all these safeguards, a man who has a right to dismiss employees without justification, a man who has the right to dismiss the manager of the Canadian National Railways if he does not do his bidding, a man so entrenched in power that his salary cannot be reduced or he himself be dismissed from office unless the government risks its life upon passing a joint resolution of the Senate and Commons. I never heard anything so preposterous in all my life. We have heard of dictatorships,
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but Mussolini and Hitler in Germany were never surrounded with all the safeguards that these trustees will have after they are appointed. The easiest way for the Prime Minister to get out of power would be to appoint these trustees as soon as we get this bill passed enacting this clause. That would be the easiest way for him to get out and go to the country, and if I thought that that would be the result I would vote for this clause immediately so that the people could pass upon the record of this government. Here we have been discussing this measure for the last three weeks, and we have now come to the point where we are asked to pass a clause providing for the appointment of a dictator with all the worst elements of a dictatorship because the government appoints this man to-day and cannot dismiss him to-morrow. This dictator has power to make an onslaught on the railroad unions of this country as provided by this measure, he can create new terminals and create new companies, fifty per cent Canadian Pacific and fifty per cent Canadian National, and he can say to the employees of these companies: You used to have rights on the Canadian National and on the Canadian Pacific, a certain wage scale and certain working conditions, but under this new company you start in as new men if you start at all. No matter what he does to these men or to other men in the employ of the Canadian National Railways, no matter what he does to all this railway property worth billions of dollars, this government cannot dismiss him unless it risk its life on a joint resolution of the Commons and the Senate. Mr. Chairman, I never heard of such a thing, and I cannot believe that the government is seriously considering enacting such a clause. I would suggest that they consider it further between six and eight o'clock. Here we have a bill with two clauses in it pertaining to labour. As I said before, section 179 of the Railway Act is not applicable to the present act.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Armand Renaud La Vergne: Is the amendment carried?


Robert James Manion: No.


Peter Heenan: Mr. Chairman, I heard the minister say "no" when you put the question, which indicates that the government has not changed its mind in reference to 
clause 7 of this bill. In view of that fact I was wondering if the minister would consent to let clause 7 stand until we had discussed other features of the bill. There is no doubt about it that the trustee is fairly safeguarded, and that he has more power than I should care to give him, if I had anything to do with it. I should like the clause to stand, however, because I would like to see what protection railroad employees would have against a man who might, while in office, use his dictatorial powers.
I have in imind two amendments to other subsections which are now standing, and which provide the safeguards for employees. So far as I am concerned my further opposition to clause 7 would depend greatly upon the consideration given the other amendments. When I have discussed this bill in public some people agreed as to the possibilities I had pointed out, but suggested that to imagine them happening was drawing considerably on one's imagination. One or two of the railway employees aotually suggested that I was drawing too much on my imagination. But anyone who was in the house this afternoon and heard the Prime Minister's interpretation of clause 7 must admit that in comparison with his, my interpretations were mild indeed. In fact, as I said this afternoon, I was out with a couple of government supporters the other evening, and while discussing this measure I pointed out that if the government presented a resolution to both houses of parliament calling for the dismissal of a trustee, and the resolution were rejected, the government would have no option but that of resigning. I do not like to use the words they used, but the fact is that they laughed very heartily. I am sure they must have sat in amazement this afternoon when they heard the Prime Minister place the very same interpretation on the clause. In connection with section 16 I have offered two amendments for consideration. I do not know whether or not the minister has them before him. I believe my first amendment is disposed of by the amendment which was accepted a week ago last Thursday night. That amendment affected employees laid off as a result of economies effected. I believe they are not provided for, intentionally or otherwise, owing to the fact that the government accepted the suggestion that after the merging of services the apportionment of work would be done only through negotiations with representatives of the railway employees. My last amendment, however, is still necessary. It is to the effect that wages and conditions of employment would not be changed in an arbitrary manner.

C.NJt.-C.P.R. Bill


Armand Renaud La Vergne: I must ask the hon. member to keep to the clause.


Peter Heenan: One more sentence and I shall have finished. I am explaining why I should like the minister to allow the clause to stand. My amendment asks that wages and working conditions of employees shall not be changed, except through the usual method of negotiations. Will the minister let clause 7 stand until we have completed the rest of the bill?


Robert James Manion: Mr. Chairman, we have
been letting so many clauses stand that we are not making any progress. I cannot see any association between the hon. member's proposals and the clause now under discussion. We discussed this clause for at least half of the afternoon. With all due respect to the hon. member I think the rest of the committee were ready -to deal with it before six o'clock. The government takes its responsibility in the matter, and has decided to allow the clause to stand as it is. After all, the right hon. leader of the opposition and his friends have put themselves on record as opposed to it. I think that should be sufficient.
In regard to the amendment which the hon. member suggested in connection with a later section, I may say that we are trying to pick out those parts which might fairly be put into the bill. As a result we are considering putting in a subelause to section 16, which would read as follows:
The National company and the Pacific company for and on behalf as aforesaid are directed to endeavour to provide that any new company created as in subsection (2) of this section referred to shall give preference for work to employees in any services or on any works taken over by such new company.
There were legal reasons why we could not make it wider than that. While we were just as anxious to protect the men as is my hon. friend, we thought the provision I have just read would give the men as much protection as possible. I believe the bon. member's point is very well covered by the amendment which we will propose at the proper time. I should like if possible to have this clause dealt with.


Armand Renaud La Vergne: The question is on the amendment.
Amendment negatived.
Section 7 agreed to on division.
On section 9 subsection 6-Approval of His Majesty or of shareholders not required.


Robert James Manion: The wording of subsection 6 of section 9 was opposed in various parts of the house. It was pointed out, perhaps correctly, that the words "approval of His
Majesty" appearing in the subsection were not clear. We therefore decided that we would strike out the words "His Majesty or that of any other shareholders" and insert, the word "shareholders" the clause then reading as follows:
(6) No order, regulation, by-law, act, decision or proceeding of the trustees shall require the approval of the shareholders of any company to which this section applies.
As the government is a shareholder in certain cases, that would cover His Majesty as a shareholder. Therefore we do not need to put in "His Majesty." I believe the suggested change would oover the intention of the subclause.


Richard Bedford Bennett: And removes any possible ambiguity.


William Lyon Mackenzie King: That is right.


John Campbell Elliott: The marginal note would
have to be changed to "Approval of shareholders not required."


Robert James Manion: Yes. I move that the
change I have mentioned be made.


[Stage Direction]
Amendment agreed to.
Subsection as amended agreed to.
On section 11, subsection 2-Majority votes ineffective unless the chairman included in maj ority.
Robert James Manion: The hon. member for West Middlesex (Mr. Elliott) moved an amendment the effect of which was to make it a straight majority vote, instead of giving the chairman of the board of trustees a deciding vote. In other words, according to this clause no vote of two of the trustees shall prevail unless the chairman is one of the majority. We have discussed it very thoroughly and in all fairness, and we have come to the conclusion that it is better to leave it as it is. After all, even though it is the intention at the moment that in all probability the three trustees will work full time for a certain period at least, the chairman, whoever he may be, will have very much more responsibility and will be a man of outstanding ability, we hope, and he will be the man to whom not only the government of the day but the people generally will look for results. Without doubt the other two trustees will be of importance in the organization, but we adhere to the idea that the chairman will have a position of such outstanding importance that certainly he should be of the majority.
Some arguments have been advanced against this provision, to the effect that a certain
459S
C.X.R.-C.P.R. Bill

amount of jockeying might take place, but we hope that the chairman will be sufficiently broadminded that if a thing is right and the other two members are unanimous they will be able to convince him that he should be in accord with their views, and with all due respect I think that is a reasonable attitude. I think the clause as it stands is safer for the railways generally and perhaps even for the government of the day as well, because they can look to one instead of to three. I believe the clause is better as it stands.


John Campbell Elliott: If the government are
absolutely decided on the question I suppose there is no great object in taking up the time of the committee in repeating the arguments I have advanced already. I hope the minister is not wedded to the idea, however, to such an estent that he will not change his opinion if good reason is shown.
I have already indicated, Mr. Chairman, that this is perhaps the most important board or commission the government has appointed or may appoint. It has to do with assets of the people of Canada worth many millions of dollars, and I think it most important that if the work hitherto carried on by a board of seventeen in the case of the Canadian National and a similar board in the case of the Canadian Pacific is to be carried on by a board of three, those three members should be able to exercise their power to the fullest extent. I do not know that I can impress that point upon the government more forcibly than I have already. There can be no doubt that a trustee cannot and will not function, that it is not human for him to function, in the same way if he thinks, "Well, I am able to exercise my powers on this board only when I agree with the chairman." May I point out to the minister that he is going to select three trustees. While under the act he has power to select men who will work part time, I sincerely hope the three trustees will be full time men, for this reason:	The minister knows, as I think every member of this committee knows, that we are imposing upon this board of trustees the most onerous duties that have been imposed upon any board ever appointed in this country. You cannot get the best service from them if they are in a position of inequality so that one man is inferior to another. That is bound to produce dissatisfaction because it restricts the powers of the members, and I submit that this is bound to impair the efficiency of those gentlemen. It oould not be otherwise.
I should like to take a moment to point out the difference between this and some of the other boards that exercise functions some-

what similar to those that will be exercised by these trustees. Under section 118 of the Railway Act a majority of the directors shall form a quorum. The section states:
The directors at any meeting regularly held, at which not less than a quorum are present, shall be competent to exercise all or any of the powers vested in the directors; and the act of a majority of a quorum of the directors present at any such meeting shall be deemed the act of the directors.
I am bound to say that under section 119 I find the following provision:
No director shall have more than one vote, except the chairman, who shall, in case of a division of equal numbers, have the easting vote.
If the minister cannot see his way clear to go .the full distance, as I should like him to, I think the chairman surely would be vested with sufficient power if he were put in the same position as the chairman of the board of directors under the Railway Act. That is, he would only have a casting vote in case of a tie. Then take another very important commission. The Radio Broadcasting Act, which is chapter 51 of the statutes of 1932, appoints a commission to be known as the Radio Broadcasting Commission. Subsection 3 of section 3 provides that two members of the commission shall constitute a quorum, and subsection 4 provides:
In any proceedings of the commission the vote of the majority shall govern, but in case there are only two members present the chairman or vice-chairman may cast an additional vote.
That is perhaps the next most important commission functioning in this country today. Then we have the Canada Grain Act, which sets up a commission known as the Board of Grain Commissioners, to consist of three commissioners appointed by the governor in council. By subsection 7 of section 4 two commissioners shall constitute a quorum, and no vacancies on the board impair the right of the remaining commissioners to act. Then there is the Canada farm loan board, which is to consist of four members, one of whom is to be the minister, who shall be chairman, and the other three to be appointed by the governor in council on such terms and conditions as the governor in council may prescribe. The board may, subject to the approval of the governor in council, make regulations not inconsistent with the act for the conduct of the business of the board. Those are the most important boards or commissions functioning in Canada at present. We have also the Civil Service Commission and one or two others, but I cannot under-

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stand why on this board, which will exercise the most important, onerous and difficult functions carried on by any commission in Canada, and which will have control over a vast amount of property, we Should not have three members with an equality of votes. No doubt the minister will select the best three men he can get, but when he selects his chairman I do not think he will say to himself, "Well, this is the man who is going to work practically alone." I think he will endeavour to get two other good men as well. It may happen, after this board functions for a certain period, that one of the trustees other than the chairman will prove to the satisfaction of the minister and everyone else who observes the operations of the board that he is the most capable and efficient man on the board. So I say the board will work under a severe handicap lif these other commissioners are not vested with full voting power. They cannot take that interest in the work which they should; it is not possible. I am satisfied that the government cannot expect to get from that commission the same results that would be obtained if there were three full grown, full fledged trustees all functioning. I do not know that there is any object in my taking up the time of the committee further. I cannot agree with the minister that we should be doing justice to this great enterprise by handicapping it in the way this section proposes. I have already moved the amendment.
Amendment negatived on division.
Section as amended agreed to.
On section 12-Annual budget.


Robert James Manion: In connection with this
section the hon. member for North Bruce proposed an amendment, adding the words "subject to approval of parliament," so that the section would read:
The annual budget of National railways shall be under the control of the trustees, subject to approval of parliament.
To this amendment we have also given full consideration. I was strongly of the opinion when it was proposed that it would not be a wise proviso, for it would give to parliament a more strict control over the national railways than has ever been exercised under any government. Let me read the sentence following the one I have just quoted, with the amendment as I have added it:
Amounts required for income deficits, for interest on obligations outstanding in the hands of the public, for capital expenditures and for refunding or retirement of maturing
securities shall be submitted by the trustees to the Minister of Finance for the consideration of the governor in council prior to presentation to parliament.
In the original argument on the proposal of my hon. friend from North Bruce I read that sentence, pointing out that under that provision all branches of the railway management might, if parliament so desired, be brought under discussion inasmuch as the Minister of Finance will have to come to parliament with bis estimates to cover the items indicated-deficits, interest on outstanding obligations, capital expenditures, and so forth-and in connection with those estimates the House of Commons will be able to do anything that it does to-day. It can appoint a committee to go into matters just as thoroughly as they are investigated at the present time, and if the house at any time decided that it had not received sufficient information from the trustees who were brought before the committee, the house would be in the all powerful position of refusing to pass the estimates. If, however, we are to make the budget subject to the control of parliament, we are simply putting the operation of the railways, the technical operation, absolutely under parliament; we are making it subject to the control of parliament, which is something that has never been done before. Parliament has never, under any government, had to do with the detailed operations of the railways. Under these circumstances I regret that we cannot accept the suggested amendment.
My hon. friend also said that the time was coming shortly when the national railways would not require moneys for deficits, additions and betterments voted by the house; the trustees would not have to come to parliament at all. My personal opinion is that if the Canadian National Railways within the next few years could reach that state of perfection they would have attained the ideal; in other words, it would be evidence that the trustees were handling the affairs of ti e railways with entire efficiency. I doubt whether it is likely that in the near future they will be in that position, but if they did succeed in getting there-and that success, attained in so short a time, would be more rapid than I expect-then the government of the day, whichever it might be, could bring in an amendment to the act to institute any greater measure of control which might be thought necessary in the public interests.


William Lyon Mackenzie King: The minister's statement is that the government's policy is
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one of public ownership but not of public control; the most that one can say is that it is quasi-public control but not public control in the full or any real sense of the word.


Robert James Manion: Not control of detailed
operations.


William Lyon Mackenzie King: The operations, I should say, are distinct from the financial aspect. Of course, in one sense everything connected with the railways must depend upon the finances; but the budget means receipts and expenditures, and I submit that you cannot have public control of any railways unless you have the entire financial affairs of those railways subject to review by parliament. Assuming that the railways are obliged to come to parliament only in so far as it is necessary to make good deficits and the like, these deficits bear a relationship to original expenditures, as well as to original receipts; and to ascertain whether or not such expenditures have been justifiable, and whether the receipts are what parliament had a right to anticipate, involves of necessity a full review. The minister says that we can discuss all these things anyhow. I say that if we can discuss them, to make our discussion of any value we ought to have the final say. Discussion means nothing if as a result of it parliament cannot voice its opinion to effect one way or the other.


Robert James Manion: But parliament can discuss these things as much as it has ever done. According to my interpretation of the clause, parliament can in the future discuss such matters as extensively as it has done in the past, although what my right hon. friend says is true, namely, that the loss would already have been incurred. But that has always been so; we have always dealt with the budget only in so far as deficits, betterments and additions have been concerned. Under my right hon. friend's government as under this, that has been the method pursued. My absolute conviction is that under this clause we have as full power as we have ever had to go into any matter we wish to discuss, but I do not think it would be wise to make the operating budget of the railways subject to approval of parliament. That would be carrying parliamentary interference to an extent unheard of in the past.


William Lyon Mackenzie King: Will the government be still obliged to authorize capital expenditures?


Robert James Manion: Yes; that is distinctly
indicated in the next sentence.


William Lyon Mackenzie King: The situation with respect to additional capital expenditures will remain as it is.


Robert James Manion: Yes.


William Lyon Mackenzie King: It seems to
me that the government and parliament are really on the horns of a dilemma in dealing with this matter. My difference with the minister is perhaps most simply stated by citing the actual facts, in the words that seem to be most applicable. I think it is a mistake to talk of public control when parliament is deliberately handing over the control of the budget to three trustees who are independent entirely of the House of Commons. I think we might as well say that the government are of the view that public ownership and public control in the full sense of the word are not possible; that the most the government are prepared to concede is that there can be public ownership with a degree of quasi public control. If the minister feels that it will embarrass the situation to have the entire budget brought before parliament, the ministry being held responsible, I will not press the matter further. My own view however is that the Minister of Railways should be continued as such and should be answerable to parliament for the action of the trustees. He should as minister, as a member of the cabinet, review the situation of the national railways in its entirety, and the budget of the railways in its entirety should be brought to parliament; whether to be discussed in detail or not, whether to be discussed in a special committee or in the committee of the whole house, are matters for the government to decide. If you are going to have public control, I think it is necessary that some minister of the crown should take responsibility for the budget framed by the trustees, and being clothed with the necessary authority the government should be prepared to stand or fall as it is supported or not supported.


Mr. RALSTON:: I wonder if the minister has considered fully the wording of this section? I understand that his intention is that the items mentioned here, that is, income deficits, interest on obligations outstanding in the hands of the public, capital expenditures and refunding or retirement of maturing securities, shall be submitted to parliament. The minister is perhaps more familiar than I with the act, but let me point out that the act provides for the issuance of securities for equipment purposes without the approval of parliament. That is a capital expenditure which may be made without the

C.N.R.-C.P.R. Bill
approval of parliament. I mention this because it seems to me the section is none too clear in requiring that these expenditures shall be submitted to parliament. It is worded rather vaguely, the effect being that they shall be submitted by the trustees to the Minister of Finance for the consideration of the governor in council prior to presentation to parliament. Section 28 of the act provides for certain capital expenditures which do not have to be submitted to parliament but which may be passed by the governor in council. Section 30 provides that after parliament has authorized expenditures on equipment to the extent of twenty-five per cent of the cost, the company may make equipment issues for the remaining seventy-five per cent. Under subsection 4 of section 28 equipment certificates and other obligations may be issued without the intervention of parliament. I think the section should be worded a little more clearly so as to provide definitely that these things shall be all submitted to parliament, rather than having the nebulous provision that they shall be submitted to the governor in council prior to presentation to parliament.


Robert James Manion: The hon. member is right as to section 30 of the act. For the information of the committee, I shall read that section. It is:
Where parliament has .authorized expenditures on equipment to the extent of twenty-five per cent of the cost of such equipment, the company may make or cause to be made one or more equipment issues for the remaining seventy-five per cent of such cost.
My hon. friend is slightly in error. In the past these matters had to come before parliament. It is quite true the railway could borrow seventy-five per cent of the cost but it had first to submit to parliament the twenty-five per cent. This is known as the Philadelphia plan and is followed by all the railways on the continent in the purchasing of equipment. Let us say that a railway desires to buy $1,000,000 worth of equipment. They would get twenty-five per cent of the cost from their shareholders-in this case the parliament of Canada-and they would go out and borrow the remaining seventy-five per cent of the cost in the form of equipment trust bonds. These were usually sold in the United States but during the past year, because of the financial situation in the United States and the financial condition of the Canadian National Railways, these have had to be taken up entirely by parliament. I am afraid that for some time to come the amounts needed for equipment will have to be considered in parliament in the estimates of the Minister 53719-291
of Finance just the same as other additions and betterments. But in any event, twenty-five per cent of the cost would have to be approved of by parliament before the railways could go out and borrow the other seventy-five per cent. At the present time there is no chance at all of the Canadian National Railways borrowing money on their own guarantee. As my hon. friend the Minister of Trade and Commerce points out, in any event they would have to come here for twenty-five per cent of the cost. I do not think that clause 12 lessens the powers of the Canadian National Railways.


James Layton Ralston: Would the minister just look at the section. I am suggesting that after the word "submitted" there be inserted the words " to parliament". There would then be no question at all as to these matters having to be submitted to parliament. The words "prior to presentation to parliament" would be struck out. I think that would make the section much clearer and would leave no necessity for implication.


Robert James Manion: I would point out that irrespective of the act, these matters have to come to parliament. The Minister of Finance has to provide the money and the only way he can do that is by an estimate. The money must be voted by parliament, so the matter must come to parliament.


James Layton Ralston: As I understand it, seventy-five per cent of the cost is raised by equipment issues without coming to parliament.


Robert James Manion: They must first come to
parliament for twenty-five per cent.


Mr. STEVENS:: They could not raise the
seventy-five per cent without first getting the twenty-five per cent.


James Layton Ralston: Section 30 of the act is
an enabling clause. Where parliament has authorized expenditures on equipment to the extent of twenty-five per cent of the cost, the company may authorize issues for the remaining seventy-five per cent. Subsection 4 of section 28 refers to equipment certificates or obligations in any form intended to be issued to the public. Under that section they are issued by the governor in council and not by parliament. I contend that this section could be drafted ini such a way as to require the submission of these things to parliament instead of stating in an indirect way that they shall be submitted to the Minister of Finance for the consideration of the governor in council prior to presentation to parliament.

C.N.R.-C.P.R. Bill


Richard Bedford Bennett: It could be made to read "and thereafter submitted to parliament."


James Layton Ralston: Instead of "prior to"?


Richard Bedford Bennett: Yes. The section now
reads:
-of maturing securities shall be submitted by the trustees to the Minister of Finance for the consideration of the governor in council prior to presentation to parliament.
I suggest that after the word "council" there be added the words "and thereafter presented to parliament", striking out the words "prior to presentation to parliament".


William Lyon Mackenzie King: Could not the section be further improved if instead of the word "consideration", the word "approval" was used?


Richard Bedford Bennett: Is not that the word
usually used when anything is submitted to the governor in council? That word implies a possible disapproval, while consideration is distinct from approval. The section as amended would read:
-by the trustees to the Minister of Finance for the consideration of the governor in council and thereafter presented to parliament.


William Lyon Mackenzie King: I had in mind the making sure that the governor in council approves every capital expenditure. If it is simply for consideration, capital expenditures might be made by the company in advance of any approval.


Robert James Manion: They must get the money from parliament.


Richard Bedford Bennett: As the right hon. gentleman knows, that did happen on one or two occasions and it caused trouble.


Edward James Young: Mr. Chairman-


Robert James Manion: There was an amendment proposed by the hon. member for North Bruce.


The CHAIRMAN (Mr. Morand):: It was only a suggestion.


Edward James Young: Before the amendment
carries, I would like to ask the minister whether some time before parliament prorogues he will endeavour to give an explanation of the figures I put on Hansard this afternoon.


Robert James Manion: With what was the hon.
member dealing? In the lengthy discussion I have forgotten what it was.


Edward James Young: I quoted figures to show
that the decline in earnings on the Canadian National Railways was 24-89 per cent while on the Canadian Pacific it was 19-35 per cent, or a difference of 5| per cent.


Robert James Manion: I might as well dispose
of that now. I noticed some -time ago some of the newspapers and my hon. friend and one or two other members were making the statement that in the last few months the decline in earnings on the Canadian National was greater than on the Canadian Pacific. I naturally wondered why that should be. At that time I asked the question of the management. I shall first give the explanation briefly in my own words and then Mr. Hungerford's explanation which is in the shape of a telegram addressed to me. My recollection of the explanation was this, that the Canadian Pacific has not in the United States the connection that the Canadian National has. The Canadian National has the Grand Trunk Western in particular which in the past used to supply -a very heavy traffic to the Canadian National by reason of the automobile business in particular and other commodities. The Grand Trunk Western runs from the Canadian side right through Port Huron and Detroit to Chicago, -through a very heavily populated and highly developed industrial section of the United States, and because of the severe depression in that section

and Detroit perhaps has been hit harder in proportion to population than any other section in the United States-the Canadian National has suffered acutely. In other words, it was not being fed the -business which it had heretofore been receiving. That in a nutshell was the explanation given -to me. There was an article in one of the local Canadian papers, a paper which, while of Liberal leanings, is not unfriendly to the administration; I think, generally speaking, it desires to be fair in its criticisms, but this article was so severely critical that I telegraphed to Mr. Hungerford the same night, drawing his attention to the article and asking for his explanation. This is the telegram which Mr. Hungerford sent me in reply:
Mr, CASGRAIN:	What paper was that?


Robert James Manion: That does not make any
difference. The article was written on April 4, and the reply was sen-t to me from Montreal by Mr. Hungerford on April 5. The telegram reads:
A statement was given to the House of Commons last week showing the gross revenues of the Canadian National and Canadian Pacific Railways for the first eleven reporting periods of 1933 as compared with the corresponding periods of 1932. The fact that the Canadian National Railways returns showed a decrease of 23 per cent as compared with 1932 and those of the Canadian Pacific Railway a 17 per cent decrease has led certain editorial writers to draw unwarranted deductions. One Toronto newspaper said yesterday:

C.NH.-C.P.R. Bill
"On the face of things the Canadian National Railways is getting the worst of the cooperation deal."
The cooperative economies have had nothing to do with the fluctuations in the amount of decrease on the two major Canadian railway systems. The Canadian National management is continuously watchful of the traffic and other interests of the system and there has been no diminution in its efforts to safeguard its business. The fluctuations to which attention has been drawn are no greater than previous fluctuations which were in favour of the Canadian National. The relative traffic situation of the two properties varies from time to time in accordance with changes in the crop conditions and trade conditions in the territories respectively served by the carriers. The explanation of the present swing is to be found in two major factors. The first is that the Canadian Pacific gross earnings are at present receiving a stimulus from a comparatively good crop in 1932 in southern Saskatchewan and Alberta, in which territory that system is the chief transportation agency. For the previous three years that territory had suffered from crop failures. The second condition affecting the relative showing at this time is the falling off in traffic between the United States and Canada and the reduction in United States traffic passing through the dominion, the business disturbance which accompanied the "banking holiday" having accentuated this decline in recent weeks. The Canadian National, by reason of the location of its lines in Canada and the United States, is a larger factor in business of this character than the Canadian Pacific. The earnings of the Canadian National Railways therefore reflect more closely the conditions which have prevailed in the United States and international traffic. In the working out of cooperative measures between the Canadian National and Canadian Pacific Railways, yon may be assured that the best interests of the Canadian National system will be fully protected.
That was a telegram which, in so far as its contents are concerned, was unsolicited by me. I merely drew to Mr. Hungerford's attention this editorial which was a very severe one along the line mentioned, and asked him for an explanation. This is his explanation which is a very full one. In giving mine from memory, I had forgotten that not only he but other officers had mentioned to me the fact, to which he draws attention in the telegram, that crops in southern Saskatchewan and Alberta had increased in the last year as compared with the previous three and that the Canadian Pacific serves, as the committee knows well, the southern portions of those provinces to a greater extent than does the Canadian National, the latter having been built later and serving to a large extent the northern areas. That, I think, is a fair explanation of the figures given by my hon. friend. I thank him for mentioning the matter, be-53719-2915
cause I have had this telegram since April 5, a month ago, and I am glad to have this opportunity of giving it to him and to the committee.
Amendment (Mr. Bennett) agreed to.


William Lyon Mackenzie King: Before the section as amended is carried, I think the Prime Minister agreed with me that it would be wise to substitute the word "approval" instead of "consideration" in line 46. I would like to suggest that that be accepted if possible. I have under my hand an amendment to that effect, but I would much rather the amendment came from the ministry itself, if they deem it proper. My reason for again mentioning the matter is this: we seem to be assuming all along that the three trustees will be paragons of virtue, the ministry dark angels and all members of parliament suspect in some way. That may or may not be the case.


Richard Bedford Bennett: Under present conditions it might be.


William Lyon Mackenzie King: I shall not go even that far at the moment, but certainly if these three trustees are going to have power for an indefinite time and to be free from any kind of supervision, I think they ought to be obliged to get the approval of the governor in council before they incur vast new expenditures on capital account.


Richard Bedford Bennett: I am afraid the right hon. gentleman did not quite follow me in my statement as to why I thought the word "consideration" would be the apt word instead of "approval." Would he be good enough to observe the language of the clause?
Amounts required for income deficits, for interest on obligations outstanding in the hands of the public, for capital expenditures and for refunding or retirement of maturing securities shall be submitted by the trustees to the Minister of Finance

Not for his consideration, but "for the consideration of the governor in council prior to presentation to parliament." The word "consideration" involves the right to cut them down. If it is merely approval, as the right hon. gentleman will see, there would be no power in the governor in council to cut them down. The addition of another word may be necessary, but the word "consideration" is the apt word there. I quite agree with the idea of my right hon. friend, but the word "consideration" is inserted for the purpose of
C:N.R.-C.P.R. Bill

indicating that the governor in council may approve or disapprove and if it disapproves, obviously the use of the word "approval" would not be quite apt.


William Lyon Mackenzie King: But the words "consideration and approval" might be used; add the words "and approval." Otherwise I think the section will be construed by the trustees to mean, that they are free to incur fregh capital expenditures, and that only after they are incurred will they be obliged to send along a statement of What they have done for the consideration of the governor in council, not necessarily for his approval at all. Then the statement will come to parliament and parliament will be told: "Oh well, the governor in council had nothing to do with this. It was all done before we knew anything about it." I think all capital expenditures ought to be made subject to the approval in advance of the governor in council.


Richard Bedford Bennett: If the right bon. gentleman desires to make that clear beyond perad-venture we might add after the word "consideration" in the forty-sixth line the words "and approval or disapproval in whole or in part" of the governor in council.


William Lyon Mackenzie King: That is all
right.


Richard Bedford Bennett: It is rather long but I
am perfectly willing to put that in.


Richard Burpee Hanson: The leader of the opposition wants to load the government of the day with the onus of approval or disapproval. I think he speaks with feeling on that subject for my mind goes back to the days of the Scribe hotel when a capital expenditure of very great magnitude was made by the railway company without, we were told, the knowledge or consideration of the government. If that lesson has sunk in and this government will be good enough to take notice of that lesson I am heartily in favour of the proposed amendment.


Richard Bedford Bennett: Then I move, Mr. Chairman, to add after the word "consideration" in the forty-sixth line the words "and approval or disapproval in whole or in part." It is rather awkward but it covers the point.


William Lyon Mackenzie King: Thank you.


[Stage Direction]
Amendment agreed to.
[Ml. Bennett.]
Robert James Manion: There is also an amendment to be made in the second line. The words "Estimates of the" should be inserted before the word " amounts."


[Stage Direction]
Amendment agreed to.
.Mr. MANION:	Would you read the section as it now stands, Mr. Chairman, with the amendments?
Raymond Ducharme Morand: It reads as follows:
The annual budget of National railways shall be under the control of the trustees. Estimates of the amounts required for income deficits, for interest on obligations outstanding in the hands of the public, for capital expenditures and for refunding or retirement of maturing securities shall be submitted by the trustees to the Minister of Finance for consideration and approval or disapproval in whole or in part of the governor in council and thereafter presented to parliament. Income deficits shall not be funded. Amounts provided by parliament to meet capital expenditures shall not be diverted to cover deficits in operation unless with the express authority of parliament.
Section as amended agreed bo.
On section 16-Cooperative measures, plans and arrangements by C.N.R. and C.P.R.


Robert James Manion: The bon. member for
Kenora-Rainy River proposed two amendments which I shall read so that the house will get the gist of them. The amendment I read a few minutes ago takes in the better part of the amendment proposed by my hon. friend from Keniora-Rainy River and covers to a large extent the idea he had in mind. He proposed to add the following paragraph to subsection 2:
Employees laid off as a result of economies effected under the provisions of this section shall be given preference for employment in any terminal or other company organized for joint operations.
And then this paragraph:
Employees so transferred to or employed by any terminal or other company shall not be subject to any change in working conditions except through negotiations and shall he entitled to be represented through their labour organizations in all matters affecting their conditions of employment.
We are proposing the following in place of those itwo paragraphs. It will be subclause 3. The numbering will have -to be changed:
(3) The National company and the Pacific company for and on behalf as -aforesaid are directed to endeavour to provide that any new company created as in subsection (2) of this section referred to shall give preference for work to employees in any services or on any *works taken over by such new company.

There were reasons why we could not go further than that, reasons for example which take into account cooperation, we will say, between two shops in one city with perhaps the complication of other sections of the country being brought into the dispute. If I understood my hon. friend aright, the idea he had in mind was that if two shops in Winnipeg, let us say, were amalgamated, then so far as possible the employees who had theretofore been employed in those two shops should be utilized in the new shop or the shop that was kept in operation. In our amendment we have covered that point without bringing in extraneous ideas that would complicate the matter and simply lead to difficulties between the men and the company. We have endeavoured to cover it as fairly as we could without making it wide enough to start nothing but disputes between the employees and the railway company.


Peter Heenan: I believe the minister has gone a long way to cover the point I had in mind, but I fear he has not grasped the full significance of all I had in mind. The minister will observe that section 16 gives the trustees the right to enter into an agreement with the Pacific company and to form new companies controlled by stock ownership between the Canadian Pacific and the Canadian National. What the men feared was, and they have to look forward, that the new company might say to the employees that they have no seniority rights, that they are under the new company, and that therefore the new company was not obliged to take them over. The minister has covered that point. But I was not thinking so much of the merging of two shops into one as of the possibility that the new company that might bp organized under subsection 2 (a) might tell the employees that they would take the men they required for the carrying on of the service but not under the old schedule of wages and conditions of employment. In other words, they could break their agreements; that is what I had in mind. The minister has gone a long way to cover the point, and if he will only add to his amendment a few words so that there will be no question as to the men having any say in the matter I shall be obliged. His amendment now reads:
The National company and the Pacific company for and on behalf as aforesaid are directed to provide that any new company created as in subsection (2) of this section referred to shall-
Then I would add these words:	"by
negotiations with the representatives of the employees affected,"
C.NJR.-C.PJl. Bill
-give preference for work to employees in any services or on any works taken over by such new company.
I suggest the addition of only these words "by negotiations with the representatives of the employees affected." That would then be in line with the amendment accepted the other day from the hon. member for East Algoma.
If the minister would approve of those words,
I believe we would be satisfied.
M.r. MANION:	Mr. Chairman, a few
moments ago the hon. member sent across to me1 the change which he had suggested. I am afraid' however, that his proposed change would bring about one of the complications which we are trying to avoid. May I illustrate -I may be illustrating badly, because I do not know at ail well how the two companies will go about cooperating as to terminals, shops and so on-but an my own humble way let me illustrate what might happen. I am ^ convinced that the clause he has suggested would cause difficulty. Let us suppose that there are two shops in one terminal point where twio railway companies have been operating, and that the two railway companies using two separate shops decided to operate with only one shop. I imagine that that is something which might take place at certain points. Perhaps instead of using the term shops I should use the word "terminals." At Toronto, for example, there is a joint terminal company which handles all the terminal work at that point.
It is not a Canadian- National terminal; it is not a 'Canadian Pacific terminal; it is operated by a separate and distinct company. Suppose at Winnipeg the same policy is decided upon,-and at this point may I add that I have no reason for choosing Winnipeg as an example. I have no wish to be quoted as saying that there is any suggestion of this practice being adopted 'at that point, but it is possible that it may be dome at some points. We will suppose that in. Winnipeg a terminal company is decided upon such as is operating in Toronto. Such terminal company would be separate and distinct from the Canadian National or Canadian Pacific railways. In working the terminal, by the amendment which we propose, we are directing them to employ so far as possible the men who were employed in the two terminals previously operating. But if we provide that they must negotiate with the representatives of the employees affected there is a: danger that the new company would be placed: in a difficult position. I may not be able to explain clearly the point I have in mind, but we must remember that it would be a new company. It would not be the
C.N.R.-C.P.R. Bill

Canadian National Railways and it would not 'be the Canadian Pacific Railway. Therefore the agreement which they had had with the men would cease to be operative for the time being. There is no reason to think that, necessarily, conditions of labour would be altered; there is no reason to believe that wages would be changed. But at the same time it would be a separate and distinct company negotiating with the men, and I am not sure that the suggestion of the horn, member would not complicate matters. After discussing the matter with the railway companies, and discussing it very felly with my officers, we came to the conclusion that we would not be justified in accepting the suggestion, As the hon. member admits, we did cover the ground fairly well by the amendment which we proposed. I ask the hon. member to accept the clause in its present form, and if it is found that in any case the mem are not being treated fairly, there should benio difficulty in arranging an amendment to improve their position. I have no reason to believe that the Canadian Pacific or the Canadian National would treat their men other than fairly; I believe in years gone by they have always done so. I hope the hon. member will accept the amendment which is made in the best of good faith as a reasonable compromise in regard to his two amendments.


Peter Heenan: I wish I could, because I am just about as tired of this debate as the minister is. However I am satisfied that the minister would be doing a good turn if he were to invite the representatives of employees to come in, because they always help rather than hinder. Let me give an illustration. We will suppose that in Winnipeg there are two shops. As a matter of fact there are four shops, namely at Fort Rouge, North Transcona, the C. P. R. shops, and the new roundhouse. We will say however, that there are two shops, and that we are forming a new company from them. As I read the clause, it is provided that preference will be given to the employees taken over. However the very fact that preference is given immediately opens up the question as to which men will be taken over, and as to whether they will be selected according to seniority, fitness, age, or for some other reason. Therefore I suggest that as in the last fifty or sixty years the railway companies should negotiate through the two channels. I believe the minister will agree that that is a helpful suggestion. I have left out all questions of wages or working conditions. The minister will note that a week ago last Thursday he accepted the very same amendment, in the following words:

They are further directed that whenever they_ shall so agree they shall endeavour to provide negotiations with the representatives of the employees affected.
The suggestion I am making now is really the same that I made on the former occasion. I do wish the minister would accede to my request.


George Brecken Nicholson: I do not know exactly what thoughts are in the mind of the minister which lead him to feel that by the inclusion of the suggestion made by the hon. member for Kenora-Rainy River, complications may arise. In my own judgment complications would be very substantially avoided by accepting the hon. member's suggestion. I have had much experience in connection with the amalgamation of the two railroads, the operations of two railroads, and the incorporation of the employees of the two railroads into one body. I am certain that if the minister could see his way clear to accept the hon. member's viewpoint he would be making it much easier for those who are bringing about the cooperation. The change suggested by the hon. member would be very helpful if a new company were formed where two now exist.


Robert James Manion: I am just as anxious to satisfy the men as anyone is, and I am very happy to hear the opinions expressed by the hon. member for East Algoma. I still fear, however, that the suggested change would complicate the clause. In the event of the formation of a third company, the two old companies, namely the Canadian National and the Canadian Pacific, are directed by our amendment to endeavour to give preference to former employees. The new company, owing to the fact that it is new, will have no agreements; I cannot understand, however, why it would not desire to pick the men according to seniority, as is done in every other section of the railway works. I am afraid if we put in the words suggested by the hon. members for Kenora-Rainy River and East Algoma we would be inserting words which might possibly give rise to difficulties. I propose that for the moment the clause stand, and that we proceed with the two other clauses with which we have to deal. We could return to this one later.
Section stands.
On section 23-Certain orders of tribunal require formal written consent of presiding officer.


Robert James Manion: We are changing the wording of this section merely to clarify it. In

C NJR.-C.P.R. Bill
place of section 23 as it now stands I am proposing the following:
23. Where the execution of an order, or the carrying out of a decision of a tribunal, involves the doing of any act which by any statute requires the leave, sanction, assent or approval of the Board of Railway Commissioners, or where in the opinion of the presiding officer of a tribunal composed of not more than three members the public interests involved are of sufficient importance to warrant it, no order made by a tribunal shall be operative without the concurrence of the presiding officer and his formal written assent, and on such concurrence and assent having been given, no such leave, sanction, assent or approval of the said board will be required.
Perhaps that was a little difficult to follow, and I might explain it in a few sentences. Originally it was provided tihat in a case with which the Board of 'Railway Commissioners had a right to deal in the ordinary course of events, or in a case where the chairman thought the public interest was involved, he could veto the decision of the other members. It was drawn to my attention, I think particularly by the hon. member for Dauphin, that the chairman should not be in a position to overrule the other four members if they differed from him. I thought this was a reasonable attitude, so this change has -been made. In a case where, in the ordinary course of events, the Board of Railway Commissioners would be consulted, the chairman of the arbitral tribunal, who is also the chairman of the Board of Railway Commissioners, can veto the decision if he wishes, because he is acting in the dual capacity of chairman of the Board of Railway Commissioners and chairman of the tribunal. In the second place, when there are three members of the tribunal and the chairman considers the matter in the public interest he can overrule the other two members. He has that power because as chairman of the board he is supposed to be, and I think has been and is at present, more familiar with railway questions and with the public interest as it bears upon those questions than the other members may be. So when there are three members of a tribunal the chairman can overrule the other two if he considers it in the public interest that he should do so. Then, in an arbitral tribunal consisting of five members-because as my hon. friends know there are cases in which two other members may be brought in-where it is only a matter of public interest the chairman cannot overrule the other four members; if three of the other four take a certain position he has not the power to overrule them.
I hope I have made myself clear. We have endeavoured to clarify the clause and I believe we have really made it more useful and, if you like, more democratic.


Charles A. Stewart: This may or may not be a rather serious power to give the chairman, but I suppose these will be largely cases involving both railways with regard to the elimination of duplication and expenditure. Could the minister cite a case in which the ruling of the board might be overruled. Frankly I do not think this is very serious, but I do not like the idea of an order of the railway commission being overruled.


Richard Bedford Bennett: The privy council has that right now.


Charles A. Stewart: Yes, but this is not the privy council; this is a tribunal. If the minister could give an instance where an order of the board might be overruled by the tribunal it would help us understand this section better.


Robert James Manion: I do not know that I can
give a specific case, but as my hon. friend knows there are many instances in which the railways must get the approval of the board before they can cooperate, even without this law. For example, supposing one company leases to the other company running rights over one of its lines. That agreement must be approved by the Board of Railway Commissioners. Suppose that in such a case the board took one attitude and the arbitral tribunal took another. That does not come under this clause, but suppose that happened: in such a case, where the two railways wish to carry on the measure of cooperation and the tribunal decided that they should be allowed to do so, the tribunal could overrule the decision of the board. The real point here is that the chairman of the arbitral tribunal is the chairman of the Board of Railway Commissioners; he knows the regulations of the Board of Railway Commissioners and, in a sense, he possesses the powers of that board except in cases of abandonment, which my hon. friend will remember we dealt with particularly. With that exception he has the powers of the board in ordinary cases, and in those cases which in the ordinary course would have been submitted to the board he has the power of veto. His agreement with the decision must be put in writing or it does not become law.
I do not think there is anything in this provision that we need fear; I think it is absolutely fair and just. As a matter of fact I believe we have made it better by the change, because we have allowed four members of the tribunal to overrule the chairman in matters of public interest.


Mr. YALLANCE:: When a tribunal of five members is appointed who determines who shall be the other two members?
C-N.R.-C.P.R. Bill


Robert James Manion: If it were a very serious
case the two railways might ask for a tribunal of five, and in most cases the president of the exchequer court would be the man to choose the other two members.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 24-Tribunal orders prevail over orders of railway board.
Robert James Manion: This section reads:
In the event of any conflict between an order of the^ Board of Railway Commissioners and that of any tribunal, the order or decision of the tribunal shall prevail.
We have already adopted a clause providing that in cases of abandonment the approval of the Board of Railway Commissioners must be obtained, and the right hon. leader of the opposition suggested we should make that exception in this clause. I took the attitude at the time, with the advice of my legal officers, that this provision was already made in part II of the bill, which overrode section 24. If there is any doubt about it, however, there would be no harm in including at the end of the clause these words:
except in the case of any abandonment of any line of railway.
This is really a repetition, but it will not make any difference and if the right hon. leader of the opposition thinks it adds to the safety of the railways I have no objection.


William Lyon Mackenzie King: I am not pressing that; I do not think that was really what I was emphasizing. What I had in mind was the sort of thing the minister himself had in mind with regard to the previous section. The Board of Railway Commissioners is the body that more particularly represents the public. The tribunal represents the railways plus the Board of Railway Commissioners, and the final word, so to speak, in a conflict should rest with the Board of Railway Commissioners rather than the tribunal. I thought the minister had the cart before the horse, that was my point.


[Stage Direction]
Section agreed to.
Robert James Manion: Then there is to be a
section added, which will be clause 28, as follows:
28. This act shall come into force on the 1st day of July, 1933.


Mr. MACDOUGALL:: I should like to be sure as to the status of the Intercolonial railway before this act is passed and we give this unnamed board of trustees power to administer railway matters in this country.


Robert James Manion: In my opinion there is
nothing in this act that will in any way interfere with or take away the rights of the Intercolonial railway, which was built under obligations agreed upon even before the British North America Act was passed. While the British North America Act merely states that the Intercolonial railway will be built, there are at the same time understandings which have never been interfered with and which I do not think will be interfered with under this act. I do not think that any government would disturb the rights of the Intercolonial, so that my hon. friend can set his mind at rest in that regard.


William Lyon Mackenzie King: Is the minister in a position to advise the committee what salaries will be paid the trustees?


Robert James Manion: No, I am sorry; that is a matter that has not been discussed'. The opinion is that if we get the right type of men we shall have to pay reasonable salaries, but personally I do not believe that we shall have to pay any such salary as was paid the late president. I say that without any intention of reflecting on anyone. I have looked into this matter carefully and I believe the three trustees will be paid less than the amount paid the seventeen directors plus the president, because one of the trustees is chairman and acts on occasion as president. I think there will be a considerable saving, even allowing for exceptionally good salaries such as might be demanded.


William Lyon Mackenzie King: Even if they
give all their time?


Robert James Manion: Frankly, I cannot go into this matter fully because it has not been discussed. I have a few ideas <on the subject myself but so far they have not taken definite form, and therefore I do not care to express them at the moment.


[Stage Direction]
Section agreed to.
On section 16-Cooperative measures, plans and arrangements by C.N.R. and C.P.R.
Robert James Manion: We have given a good
deal of study to the framing of an amendment to cover the point made originally in connection with this section by the bon. member for Kenora-Rainy River, a section in which the hon. member for East Algoma is also very much interested. Having done that, I do not like to accept any amendment of a kind which my legal adviser, two or three

C.N.R.-C.P.R. Bill
times in the course of the discussion, has given me to understand that, like myself, he fears will confuse the issue. If the two hon. gentle-me~ ' ) whom I have referred would agree-


Peter Heenan: If the minister will pardon me, I will make one more attempt at this stage to convince him. The proposal he is about to submit to the committee means practically that the railways shall give preference to employees. Which employees, may I ask, the senior employees, those most fitted for work, the youngest or the oldest? Many of these questions will come up, and it is absolutely necessary that the negotiations should be carried on through the representatives of the men as has been done in the past. I am not asking the minister to accept my amendment; I am not offering it as an amendment; but I would ask the minister to change his amendment in such a way as to incorporate in it the idea I am putting forward. I believe that is what he wants to do, and it cannot be done properly with the proposal as it stands. What the minister proposes would exclude negotiations with the men.


Robert James Manion: The hon. member for East Algoma takes the same attitude as the hon. member for Kenora-Rainy River, but having given a good deal of attention to the drafting of the clause I regret that I cannot accept it. I assure the committee that I am prefectly sincere when I say that if difficulties arise later on and are pointed out I shall have no objection then to considering an amendment. But I should not like on this short .notice to make any change, although I am just as anxious as my hon. friend to safeguard the interests of the men. I think we have gone as far as we can be reasonably expected to go when we stipulate that the railways are directed to endeavour to provide that any new company created shall give preference for work to employees in any service or on any works taken over by such new company.


Peter Heenan: The minister says he has discussed this matter with the law officers, and after that discussion he is reluctant to change it. He has listened to me representing what I regard as the sentiments of the men, and he has also listened to the hon. member for East Algoma, a supporter of the government, who has had some experience in these matters; yet he hesitates to accept an amendment which is the practical working out of all these problems.


Robert James Manion: Will the hon. member give a concrete illustration of his meaning?


Peter Heenan: Yes, I will, because I believe that the minister wants to do the right thing. Suppose we created a new terminal in Winnipeg, where there are four yards at the present time, three of them operating, and three back shops. On the formation of a new company under this act, with the amendment which the minister suggests, the officials of the railway company will give preference in connection with works or services that are taken over. That means that the railway company can pick and choose among the men, and they might not place them according to seniority, because there is no provision as to what men are to be chosen, or how, or what shall govern in regard to age, seniority, or anything else. All I want is that they shall be taken over after negotiations with the men, so that the representatives of the men will come to an agreement with the company to fill the several positions satisfactorily. The minister knows that we have had a Montreal agreement which has been the subject of dispute for many years, involving the appointment of boards of conciliation, and after the expenditure of large sums of money the men are not yet all satisfied.


Robert James Manion: And never will be.


Peter Heenan: Maybe.


Robert James Manion: It is impossible to satisfy all because some are naturally demoted.


Peter Heenan: But we can satisfy as many as possible, and if we satisfy the representatives of the men that at any rate will withdraw the railway companies from further controversy. I do regard this matter as important, and I can assure the minister that I am not proposing it off my own bat, because the men really want it. The amendment now suggested by the minister however practically excludes the men from negotiations, for it instructs the railway companies to do the choosing.


Robert James Manion: It does not say so.


Peter Heenan: No, but it says this, to put it briefly. The national company and the Canadian Pacific company shall give preference. That is to say, the two railways shall give preference and therefore the representatives of the men have nothing to say as to who should get the preference.


Robert James Manion: My hon. friend is not reading it correctly. It is not the national company and the Canadian Pacific company that shall give the preference. The national company and the Canadian Pacific company
C.N.R.-C.P.R. Bill

are directed to endeavour to provide that any new company created shall give preference. This will be a new company and that is where the complication arises in dealing with the organizations. The new company would not have any contracts with the men. If a new company is formed, as it was in the city of Toronto in the case of the terminal, it would not have any agreement with any organization. Within the last few minutes it has been pointed out to me by an hon. member who represents one of the big divisional points that even though there is no specific mention in the bill, the men's organizations will be in just as good a'position as they were formerly to deal with the new company. This clause was drawn up after much study and work in an endeavour to meet the wishes of the hon. member for East Algoma and others, and the legal officers advise me that the clause would be complicated and the men would be given no greater protection by the insertion of this amendment.


Peter Heenan: How would it complicate the clause to insert the words "through negotiations with the representatives of the men"? The minister and the government accepted a similar amendment last Thursday.


Robert James Manion: To what clause?


Peter Heenan: To Clause 16. The minister will note that that section now reads:
They are further directed that whenever they shall so agree they shall endeavour to provide through negotiations with the representatives of the employees affected.
The words "through negotiations with the representatives of the employees affected" formed the amendment moved by the hon. member for East Algoma which was accepted by the government and the committee. All I ask the minister to do is to ensure that these new companies shall give preference for work through negotiations with the representatives of the employees affected.


Robert James Manion: Can the hon. member give me an illustration of where a complication might arise through his suggestion not being accepted?


Peter Heenan: There might be a case where the Canadian Northern, the Grand Trunk and the Canadian Pacific were to use one terminal or one yard. A new company would be formed under this section and it would be directed to give preference to employees of the companies taken over. That means that the new company would have to take men from the Canadian Northern, from the Grand Trunk and from the Canadian Pacific. Some of these men might have
[Mr. Manion.l
seniority rights only in one district and not in another; others might have seniority rights applicable to the district generally, while others might have seniority rights applying to practically all the eastern lines. All this would have to be negotiated under some scheme.


Robert James Manion: Does the hon. member suggest that men might be brought from the eastern lines to work in Winnipeg, for example?


Peter Heenan: No.


Robert James Manion: The hon. member mentioned the eastern lines. Let us stick to Winnipeg as an example, as both my hon. friend and myself have been using that city as an illustration.


Peter Heenan: There are only the two
railroads running into Winnipeg and the seniority rights are fairly uniform. The situation would not be quite so complicated as it would be in the case of a divisional point into Which ran three different roads. The new company would have to take men from each organization and they would have the right to say that they would not take men over forty-five years of age. They would have the right to say almost anything and yet the men's representatives would have no say in the negotiations. I think I have shown the complications which might arise and I think the minister would be well advised in the interests of the new companies and in the interests of the men to provide that any arrangements shall be made through negotiations with the representatives of the men.


Isaac Duncan MacDougall: Will the hon.
member permit a question? Does he really think that the seniority rights of any member of the brotherhoods will be interfered with by this bill? If he can give me one instance where they will be interfered with, I ghall vote against the bill.


Peter Heenan: I would not like to see
my hon. friend voting against the government.


Isaac Duncan MacDougall: I have the courage of my convictions.


Peter Heenan: That fact alone would
make me hesitate to give an illustration. I want to point out to the minister that these complications have arisen and will arise. I am quite satisfied that during .his and my lifetime we will not see the end of these disputes. Why the minister should hesitate to incorporate in this section the provision

C.N.R.-C.P.R. Bill
that these things shall be done through negotiation with the representatives of the men is beyond me. I suggest to the minister that he will yet see the advisability of accepting this amendment.


Isaac Duncan MacDougall: Are the seniority
rights of the men employed by either the Canadian Pacific or the Canadian National Railways jeopardized by this bill? If the hon. member will give me one specific instance, I will vote against the bill.


Peter Heenan: I think the minister is
aware of the Montreal agreement and he knows what complications have arisen in that part of the country through the abandonment of lines and the merging of services. I am sure that if he insists that this section pass in its present form these grievances will exist during the lifetime of many of us now sitting in this chamber. The amendment now before us would give the men no say at all in the matter.


Robert James Manion: It does not do that at all.


Peter Heenan: Surely the government has no intention of providing a measure whereby in Canada new railroad companies will be created that might have for their purpose depriving the railway workers of their rights on the properties of the Canadian National or the Canadian Pacific. Why, this is even worse than anything that was ever contemplated! I have been talking to some of the men and I have drawn illustrations of what could happen under this bill. I have pointed out to them that new companies could be formed and the management of such new companies could call those men in and tell them that they had rights on the Canadian Pacific; they had rights on the Canadian National, but under this new corporation they bad no rights at all. That is possible under this measure. I have pointed out to them that the new company could say to them: You did have a scale of wages and working conditions on the Canadian National and on the Canadian Pacific, but on this new company you have no rights, no standards of wages and no conditions of employment. That is possible under this legislation. The minister himself acknowledged that by saying that the national company and the Pacific company could create a new company.


Robert James Manion: I hope the hon. gentleman will make his own speech and not say that I acknowledge anything? I do not wish to acknowledge anything the hon. gentleman says without examining it. I do not acknowledge anything he has just stated.


Peter Heenan: If the minister will contain himself, I shall make my speech. He said only a few minutes ago that the National company and the Pacific company could create a new company.


Robert James Manion: At a terminal.


Peter Heenan: Or a new terminal, and I say: when they do that, that new company can tell the employees of the Canadian Pacific and the Canadian National that they have no rights.


Mr. QUINN:: The hon. member is absolutely wrong and he knows it.


Peter Heenan: All I want to do is to protect the men from that sort of thing. I do not for a minute believe the minister or the government intends that, but under this bill it can be done. Why should we pass an act of parliament that will permit any new company, with a dictator at the head of it, to tell the railroad men that the representation which they have bad for the last sixty years is now gone by the board? Some of the men have said to me: "Why, you are drawing on your imagination!" I was told that the other night when I said that my interpretation of clause 7 as it would work out was that if the government recommended the dismissal of a trustee and the Senate of Canada did not pass the resolution, the government would be practically forced to the country. Those two gentlemen with whom I was speaking, supporters of the government, laughed at me. This afternoon we had the Prime Minister from his seat in the house giving the same interpretation. Those two gentlemen are not laughing to-night, and I see both of them in their seats. Therefore one cannot draw on one's imagination sufficiently to cover all the possibilities that are contained in this legislation. We have just passed clause 7 of this bill providing that a trustee cannot be dismissed for five years; that his salary cannot be reduced unless the House of Commons and the Senate of Canada pass a resolution to that effect. He is to be entrenched with all possible safeguards and he cannot be dismissed unless the government of Canada takes its life in its hands. The government that appoints this man today cannot fire him to-morrow unless it takes the chance that the Senate may defeat the resolution and put the government to the country. Yet we are going to give this trustee all these powers, power to create a new terminal, a new company, which will have author-
C.N.R.-C.P.R. Bill

ity to tell the employees that they have now no more rights on the railways than has the man in the moon. Is that the intention of the government?


Robert James Manion: No.


Peter Heenan: All right; I shall take the minister's word for that and I believe that is not the intention of the government. I do not believe they ever thought of such a thing, but under this legislation there is the possibility of it and after you appoint this man to administer the legislation, you cannot dismiss him unless the House of Commons and the Senate acquiesce.


Robert James Manion: Let me point out to the hon. gentleman where there is a fallacy in his argument. He says that we are appointing a trustee to administer this measure. The trustee is only one of a group which has anything to do with the act. We are discussing the arbitral tribunal, the cooperative measures in clause 16 which the two railways work together, so that the trustees whom we appoint are only one portion of those who work under clause 16 which we are discussing. The other group consists of the Canadian Pacific, so that the bon. gentleman is not right in saying that we are appointing one man or three men to administer this legislation. The part we are discussing is the cooperative measure which is dealt with not by the trustees but by the two railway companies, by the management of the Canadian National on the one hand and the management of the Canadian Pacific on the other.
The hon. gentleman mentions the Montreal agreement. I know there have been difficulties as to that but everybody cannot be satisfied for the reason the Montreal agreement was made when the Intercolonial, the Grand Trunk and the Canadian Northern were all linked up together, and consequently the question of seniority of the men on the different lines of railway came into the picture. It was finally settled on the principle of the greatest good to the greatest number. They did not expect by the Montreal agreement that all the men would be satisfied, and under no rearrangement under this legislation can all the men be satisfied. If men lose their positions, they will certainly be dissatisfied, so that it is impossible to put into this bill a clause that will ensure satisfaction to all classes of employees. Though the railways are not specifically enjoined in (he case of a new company to deal with the organizations of the men, they will naturally deal with the organizations and the latter will look after the interests of the men. The hon.
[Mr. Heenan.l
gentleman is conjuring up many things that are not at all likely to occur. Some of the dissatisfaction that has been expressed-and I say this without in any way meaning to be unfairly critical-by the railway-men has been induced by the statement of the hon. gentleman that this bill will do such a terrible amount of harm to them. I do not agree with any of the statements of the hon. gentleman as to the immense injury this will do to the railway men. I repeat that under this legislation and a proper revival of business, men will be taken back and not dropped out, and if we do not have a revival of business, whether under this or any other legislation, the railways cannot get on their feet; this bill alone cannot save the railways unless the whole world experiences a revival of business.


Peter Heenan: Mr. Chairman-


Robert James Manion: Does the hon. member
*wish me to withdraw this amendment?
Mr. HEEiNAN:	I would just as soon he
withdrew it.


Robert James Manion: Then perhaps it might be just as well, if the hon. gentleman takes that attitude. In other words he takes the position that if he cannot get his way 100 per cent, he does not want the men to have anything. That is the attitude he is taking at the moment.


Peter Heenan: After the minister has that outburst out of him, if he will listen a little white, we shall try to make him see reason. Neither the minister nor any other man on that or this side of the house can filibuster me into accepting anything that I do not think is in the interests of the railwaymien of this country. No threats of withdrawal will scare me out of that position. I will say to the minister right now before I go any further that I would rather see that amendment withdrawn, whether he offers the threat or not, than accept it without the provision to safeguard the railway employees of this country. It is making it even worse that it was before.


Robert James Manion: It is not doing any such thing.


Peter Heenan: Here we have a bill that is intended, and designed to put between twenty and forty thousand railway mien of this country on the streets.


Robert James Manion: Nothing of the sort.


Peter Heenan: There are only about two little sentences in the whole bill that refer to labour at all. We discussed the question of inserting section- 179 in its entirety, and after

C.N Jt.-C.P.R. Bill
nearly a whole day's discussion I withdrew my amendment on the word of the minister that we could take care of the matter at some future time. Then after nearly an hour's discussion on Wednesday and for the whole of Thursday afternoon we discussed the question again on the clause that we are mow discussing, and the M mister of Railways was finally kindly disposed, after a member on the government side had moved practically the same amendment which I had been contending for all afternoon. Rut I am not going to discuss that at this time.
Here we have an amendment to section 16 which was put in, the minister says, at my suggestion, but it is not the amendment that I proposed. It is not an amendment that I consider amply protects the railroad men of this country. The minister took my amendment into his office and after discussing the matter with his legal officers brought in another amendment which I say goes a long way to take care of the situation, provided that these negotiations are carried on through the representatives of the employees affected, but when it comes to -that suggestion the minister hesitates to accept it. The very faot that the minister refuses now to accept my suggestion 

it is not an amendment-indicates to me one thing, that the government or the minister's officers or his legal advisers fear that there is something in those few words that will give the representatives of the railway employees some say in the matter. Consequently the amendment as now proposed by the minister practically excludes by law the representatives of the employees from negotiating with the company.


Robert James Manion: It does not do anything of the sort. The hon. gentleman is just building up a lot of straw men so that he can go out and parade them about on the hustings.


Peter Heenan: 1 would have a lot of straw [DOT] men to build up before they would be as strawy as a lot on the other side of the house. I am not building up any straw men at all. The bill says that new companies may be created, and the new companies can say just what they like to the representatives of the men,. The men have no say in the matter. I do not want to say it, but my mind is coming pretty close to thinking that that is what is designed by the government.


Robert James Manion: You have said worse than that lots of times. Why not go ahead?


Peter Heenan: I will say this: If the minister does not accept this suggestion, I will say that this was designed to be done by the government.


Robert James Manion: I do not care what you say. Go ahead.


Peter Heenan: I know, but there will be a time when you will care, just like the rest of us care. I would rather be elected or defeated representing the voice of the men than representing the voice of the bondholders and the money lenders of New York. I am not going to be a party, if I can help it, to sitting idly by while a law passes through this parliament which practically excludes the representatives of the employees from any negotiations in connection with these mergers. That is really the game, and we will see how far it goes. He laughs best who laughs last. The minister's amendment reads:
The National company and the Pacific company for and on behalf as aforesaid are directed to endeavour to provide that any new company created as in subsection (2) of this section referred to shall give preference-
That is the new company shall give preference :
*-for work to employees in any services or on any works taken over by such new company.
The new company created shall give preference. What preference, and to whom? To what class of men? Will they take men in according to their age, their seniority, their fitness for service? Will they take a greater proportion from one company than from the other? All these things must be done as they have always been done for the past fifty or sixty yearn and that is through negotiations with the men, but the minister by his amendment practically says that the company shall discriminate, that the company's officers are the only ones with any right to a say in the matter, and consequently the men are excluded by act of parliament. This is far more serious than anyone contemplated. I challenge the minister to take me at my word when I suggest that this is being done designedly by the government. Let him show that it is not, but that on the contrary he intends to provide in a measure a safeguard so that the representatives of the men will have some say in the matter. The same argument prevailed a week ago last Thursday.
The companies under this bill are empowered to do what? To form new companies, enter into leases, entrusting agreements, or licences, or agreements for the pooling and division of earnings arising from the joint operation of any part or parts of freight or passenger traffic, and to make arrangements with respect to joint trackage, running rights, joint ownership, or joint operating agreements. The minister accepted an amendment that these things would be done through negotiations of the

C.N.R.-C.P.R. Bill
representatives of the men affected. But when we come to the point where a new company is created, we fear to embarrass the new company. We feel that they may call in the representatives of the employees, and because of that we now have an amendment before us to exclude entirely the heads of the railroad unions. I cannot for the life of me see yet why we should para a law in this country which is designed, and it is of no use if it is not so designed, to throw thousands of railroad employees out on the streets. The government refuse to accept any suggestions with respect to compensation such as were made by the hon. member for North Winnipeg. They refuse practically any consideration of the human element throughout the whole bill except in that one sentence which was adopted in section 16 a week ago last Thursday.
Now we are at a new stage entirely. We have a new proposal before us. We have a provision whereby a new company can be formed, and this company can say, and might say, and judging by the attitude of the government now, I am afraid that they will say, that the men on the Canadian Pacific and the Canadian National will have no rights in this new company, and that if the men are taken over it will be under new wage conditions without any protection with respect to seniority or any other rights that they have earned. The minister has gone a certain distance by saying that these men will be given preference. But he has left out entirely the most important feature of the whole matter, namely that the work should be given after negotiations with representatives of the men affected. Consequently I am now concerned more than ever because I feel that the law is designed to deprive the men of certain privileges and rights. Why, such a new company could do the men out of their pension rights already earned. The new company could simply say: "You did have pension rights under the old Canadian Pacific or Canadian National railways. but you have no pension rights here." They could say all these things to the men. All I want to do is to provide that arrangements be made through negotiations with the men's representatives. If provision is not made for that, so far as I am concerned I would just as soon see the amendment withdrawn entirely.


George Brecken Nicholson: Mr. Chairman, while
I should have preferred seeing the suggestion of the hon. member accepted, yet I am wholly opposed to his suggestion that because it is not accepted the proposed amendment be dropped. I had not the privilege of reading the clause before I spoke earlier, but in the 
meantime the minister has allowed me to see it. Frankly I do not think the hon. member for Kenora-Rainy River need be alarmed if the clause is included. He has said that the amendment is designed to make it impossible for the men to secure employment and maintain their rights. I shall come to a point in a moment or two where I believe I shall be able to convince even my hon. friend that the men will not lose their rights. The amendment as we read it is simply this:
The National company and the Pacific company for and on behalf as aforesaid are directed to endeavour to provide that any new company created as in subsection (2) of this section referred to shall give preference for work to employees-
To what employees? To whom do they give preference?
-in any services or on any works taken over by such new company.
May I use the illustration which my hon. friend has been using this evening, namely that concerning a Winnipeg terminal? If the different shops and yards of the Canadian National and Canadian Pacific in Winnipeg are taken over, the companies are directed by this provision to give preference to the employees in the shops, terminals, yards and so on, so taken over.
One other point, in relation to the brotherhoods or organizations, as they are sometimes called. These organizations are not units in relation to specific points; they cover the whole system. They cover the Canadian National Railways from Vancouver to the Atlantic ocean and the Canadian Pacific in the same way. I am not in the least degree alarmed that any of the employees who are members of these units, who are being and have been protected-units which have negotiated with the railway companies-will not be protected in the same way by the same units. In speaking to this subject the hon. member for Kenora-Rainy River displayed considerable heat and made definite statements as to what the legislation was designed for. He has made definite charges against members on this side of the house in relation to their attitude towards railway men. I have stated to some railway men whom I know very well, representatives of organized labour, that if more temperate statements had been made perhaps things would have gone along more smoothly. Only last Friday night, speaking at North Bay, my hon. friend opposite made the statement that there was not a member on the government side of the house who was prepared to treat the railway employees any differently than Chicago gangmen on the streets

C.N.R.-CR.R. Bill
of that city on a dark night would treat people whom they happened to meet. I say to him that hon. members on this side of the house are just as anxious as he is to see that railway employees get justice. And I believe they are getting justice. As a matter of fact the bill is designed to make it possible for the railroads to earn enough money to employ men, and pay them the wages to which they are entitled. I, for one, want to hand back to the hon. member the statements he made not only in this house but throughout the country with regard to hon. members on this side of the house. I trust the minister will not accept the hon. member's requests for the withdrawal of the amendment. Perhaps it may not go as far in some directions as one might like it to go, but it does provide that in the event of a new company being formed, the companies from which that company is formed are specifically directed to provide that employees shall be taken care of.


Robert James Manion: In addition to what the
hon. member who has just taken his seat has said, there are some other statements that I should like to make. To illustrate just how unfair the hon. member for Kenora-Rainy River has been, I should like to read another clause which he knows is in the bill, which is part of the clause now under discussion, and an amendment to which was moved by the hon. member who has just now taken his seat. If the committee will direct its attention to the first subsection of secion 16, they will find there a direction that the national company and the Pacific company shall provide for cooperative measures, plans and arrangements. I want it understood that one of these measures, plans or arrangements would be the proposed formation of a new company.


Richard Bedford Bennett: It is specifically stated
right below that.


Robert James Manion: It is pointed out in the
bill that one of the measures, plans or arrangements consists of the formation of new companies. The first subsection contains the following:
They are further directed that whenever they shall so agree

For cooperative measures.
-they shall endeavour to provide-
And this is where the hon. member interjected his amendment.
-through negotiations with the representatives of the employees affected, as part of such measure, plan or arrangement or otherwise, for a fair and reasonable apportionment as
between the employees of National railways and Pacific railways, respectively, of such employment as may be incident to the operation of such measure, plan or arrangement.
Then subsection 2 continues:
Without restricting the generality of the foregoing, any such measures, plans or arrangements may include and be effected by means of-[DOT]
(a) new companies controlled by stock ownership-
And so on. "New companies" are companies such as we have been discussing. The very thing for which the hon. member is asking is in the legislation at the present time. The amendment simply supplements and strengthens the provision already existing. Yet the hon. member States that the purpose of the legislation-I believe his expression was "the design"-was to injure the men. We have protected the men, not on the recommendation of the hon. member for Kenora-Rainy River, but on the recommendation of the hon. member for East Algoma. He suggested, and we accepted, a change which protects the men to a greater extent than did any proposal suggested by the hon. member for Kenora-Rainy River. The hon. member opposite ought to be fair in his statements, when he knows that there is legislation protecting the men, that the representatives have to deal with the railways and the railways in turn have to deal with the representatives.


Mr. HEAPS:: If the clause which the hon. member read covers the point, is it not superfluous to move any further amendment?


Robert James Manion: Yes, I think it is. But I should like to point out to the hon. member for North Winnipeg, who has been most fair in his criticism throughout, that we have endeavoured on a dozen occasions to satisfy hon. members from all parts of the house. We have been endeavouring to compromise, and to show our interest in the men. As a matter of fact, I have a list before me which only a few moments ago I scribbled on the back of an order paper, which goes to show the amendments which we have made in our endeavour to satisfy hon. members. First there was the amendment we accepted with regard to the abandonment of lines; we included a clause to make the protection to the public in regard to the abandonment of lines stronger than it ever has been in the past. Then my right hon. friend the leader of the opposition suggested the application of the Industrial Disputes Investigation Act, and we put in a clause in that regard. We dropped the question of a panel; we cut down the
C.N.R.-C.PJR. Bill

seven year tenure of office to five years; we changed the shareholders' approval in regard to the government. We inserted a clause with regard to amalgamation, though there was nothing in this bill to bring about amalgamation. We did not admit that possibility for a moment, but to show our desire to comply with the wishes of the whole house so far as possible, and to avoid if possible unnecessary fears that might obtain throughout the country that something with regard to amalgamation was hidden in this bill, my right hon. leader and myself agreed to put in the clause with regard to amalgamation. Then there was the amendment proposed by the hon. member for East Algoma, which I quoted just now. There are seven or eight amendments which we have accepted in our desire to protect the workingmen, at the same time giving the companies a fair deal, and in order to provide against any misunderstanding that might arise.
I think we have been eminently fair, Mr. Chairman. I have been in this house for seventeen or eighteen sessions, and I do not believe that in all that time I have ever seen a government measure to which so many amendments offered by the opposition have been accepted in a desire for conciliation and to show our fairness in every possible way. I submit that almost every hon. member opposite has been fair in his criticisms and suggestions with the exception of the hon. member for Kenora-Rainy River, who has not been fair. That hon. gentleman again and again charged the members on this side of the house with a desire to injure the workingmen. No man in this house, whether he sits on the other side, in the far comer or on this side, desires to do anything but help the workingmen so far as that is possible. I think the hon. member for Kenora-Rainy River should look at the first part of that clause before he brings forward -as I suppose he will as soon as I sit down -more of his unfair criticisms.


William Lyon Mackenzie King: I had not
intended to take any part in the debate on this section, Mr. Chairman, but the minister, and more particularly the hon. member for East Algoma, seemed to feel that the exMinister of Labour was stressing his point unduly, and I think the minister himself said unfairly. I do not think the hon. member for Kenora-Rainy River, the ex-Minister of Labour, has had any intention of the kind. The other day the hon. member fought pretty much all day long for a certain amendment, and at the close of the day that amendment was conceded. This evening, (Mr. Manion.]
however, my hon. friend the minister has been giving credit to the hon. member for East Algoma as being the one who in the main was responsible for that amendment being accepted. If we are to be absolutely fair in the matter, we must admit that the amendment was finally accepted by the minister owing to the very hard fight by the hon. member for Kenora-Rainy River. I believe the hon. gentleman feels that the railway men have placed a special degree of confidence in his judgment in this matter, and I must say that I have reason to think that they have that special confidence. Within the last day or two I have received two telegrams which speak for themselves. I need not say they were wholly unsolicited. I do not so much as know the parties who signed them. The first is dated May 2, and is from Montreal. It reads:
Hon. W. L. Mackenzie King,
Ottawa, Ont.
Gentlemen:
Whereas it has been brought to our notice that it has been expressed in the House of Commons and through the press that the Hon. Peter Heenan is not representing the sentiment of the railway employees in connection with railway bill now before parliament, the delegates representing the locomotive engineers on the Canadian Pacific railway from coast to coast of Canada and the Canadian National railways central region now in session in Montreal go on record as unanimously approving his position as taken in connection with railway Bill No. 37.
James G. Grieves. C.N.R.
D. Guthrie, C.P.R.
The next is from Quebec, under date of May 3:
Hon. W. L. Mackenzie King, M.P.,
House of Commons, Ottawa, Ont.
General committee of adjustment, brotherhood of locomotive engineers, Canadian National railways, Atlantic region, now in session at Quebec City, wish to advise that the position taken by the Hon. Peter Heenan, M.P., on railway Bill No. 37 is strictly in accord with our vierys and we therefore want to be recorded as unanimously endorsing his action in connection with the railway Bill No. 37.
P. K. Chisholm, Secretary.
J. E. Mitchell, General Chairman.
These telegrams are from leaders of the brotherhoods named; they have come in response to or as a protest against just the sort of thing that was said to-night by the hon. member for East Algoma, namely, that the ex-Minister of Labour, in what he had been urging, did not represent the point of view of the employees. I will say quite frankly that I think the hon. member for Kenora-Rainy River has perhaps reiterated his contention too often. I think he might have been content with making a strong pro-

C.N.R.-C.P.R. Bill
test and allowing it to go at that, but that he has been doing so for any purpose other than to try to get what he believes to be a necessary clause included in the amendment, I do not think should be suggested for a moment. My own feeling is that the exMinister of Labour has stated his position very clearly, and if I were he I would take the word of the Minister of Railways and Canals that what has been done has been with good intent and good purpose, and that he has gone as far as he thinks he can go in the matter at present. Certainly if I were the hon. member for Kenora-Rainy River I would accept the amendment before the house at present and allow my own words to speak for themselves as to anything further which Should have been included.


Abraham Albert Heaps: I have not had an opportunity to see the amendment before the committee ; I have only heard it read on two or three occasions. It appears to me, however, that if we have two conflicting amendments with regard to similar matters complications may result when the bill comes into operation. In other words, if we have an amendment in the earlier part of the bill which is all-inclusive so far as the bill is concerned, and on the other hand we pass another similar amendment dealing with a particular section of the bill, we may have some difficulty in understanding what is meant. Of course I am not a lawyer and cannot speak definitely on the subject, but if the amendment now before the committee has reference to the matter dealt with by the previous amendment, which is all-inclusive, there may be conflict in the future.
I believe this is what the hon. member for Kenora-Rainy River has in mind in pressing his point: In case a new company is created which will take over large numbers of men, the rights of those men under their agreements with the two railway companies should be protected. There is the feeling, I think, in the mind of the hon. member for Kenora-Rainy River-and to some extent in my own mind-that this may not be the case. A new company may come along and take over some of the employees; the old agreements may be scrapped and the rights possessed by the men under those agreements may not be worth anything.
If I were a representative of the mein's organizations I should not be very happy if I had to sit in with the exiecutives of the railway companies to consider which men should be let out of the employ of those companies. The clause itself presupposes that the service of a number of men will be dispensed with, 53719-292
that the railways will have no work for them. If the amendment suggested by the minister is adopted, these men representing the organizations will be asked to sit in consultation with the representatives of the companies, and between them they will determine the men who are to be kept on by the new company and the men who will have to be let out. I know this is an evil which the representatives of the mien probably will have to face, and I have no doubt that 'the railway men would prefer to have their representatives consult with the executives of the companies and amicably adjust the question of who should remain and who should not. In other words, it is a question of retaining for the men in the employment of the company those seniority rights*which they have at the present time. That I think is the main point which the hon. member for Kenora-Rainy River is now emphasizing. As an ordinary layman, I think myself that if the other claiuse in the earlieT part of the bill, as amended by the hon. member for East Algoma, fits in with the clause now under discussion the bill might be better without the amendment as worded now. If the minister feels that there should be in this particular clause an amendment dealing with the righto of the men, it should be all-inclusive, exactly as in the other section in the earlier part of the bill.


Robert James Manion: I sincerely believe that the mien are protected by the clause which I have read. The phrase "through negotiations with the representatives of the employees affected" covers the point made by the hon. gentleman. It satisfies, I think, the objections that have been taken by the hon. member for Kenora-Rainy River, and so far as seniority rights are concerned, I do not believe that there is anything in the act that will interfere with them either on tihe Canadian Pacific or on the national railways.


Mr. MITCHELL:: I support the position taken by the hon. member for Kemiora-Raimy River and the hon. member for North Winnipeg, and I do not say this critically. I believe however that the government is largely to blame for the filibuster that has developed-
' The CHAIRMAN: Order.


Humphrey Mitchell: Well then, the protracted debate that has taken place on those sections dealing with the men engaged on Uhe two railways. I submit that the government should have followed the precedent established by the British government when the railways there were consolidated. The position taken by the hon. members for



C.N.R.-C.P.R. Bill

Kenora-Rainy River and North Winnipeg is absolutely sound. As I have said before, the government must accept some responsibility in this regard. In my judgment the clause as now worded has the potential effect of wiping out seniority rights as a result of the consolidation of these companies. In this connection I wish to read into the record the opinion of a railway manager, Mr. Daniel Willard of the Baltimore and Ohio Railroad Company, given before the committee on interstate commerce of the United States Senate:
. . . the economies to be realized eventually by consolidation-and I believe there will be very substantial economies-will come through making it unnecessary to provide as much new capital as might otherwise be necessary. That is one economy.
The other economies which can be lumped in one item, are labour and material, less of both being needed, probably-particularly labour. In fact, the only way economies can be made to any extent in railroad service is by the use of fewer employees, and with that would always go the use of some less labour. Our figures show that the wages paid for labour constitute about sixty per cent of our total operating expenses, and material about forty per cent. It is safe to say that of that material probably fifty per cent represents wages paid to labour, so that when a railroad reduces its operating expenses by a dollar, it is a sate thought that eighty per cent of that represents less wages being paid to somebody.	,
We must recognize that in accomplishing these economies that seem to have been thought desirable in the public interest, they will he brought about largely by the employment of fewer men, and that certainly does present a problem in which the men have a right tq be concerned. As has been stated, I have expressed my views on that on different occasions and I have said that I thought it would only be fair and right if congress, in legislating on this whole matter, pursued action somewhat similar to that taken by the English parliament in connection with their amalgamation act. In that act, in round terms, it was provided that the men who had been in the employ of the company for five years should not be displaced, and should not be reduced in rank or in compensation, and they should be worked around in such a way as might be until they could be taken care of.
The suggestion is sound, I think, that unless there is some stipulation that the representatives of the men shall be heard in connection with any consolidation it might be better to do without the amendment. Frankly I cannot see any objection to incorporating the proposal of the hon. member for Kenora-Rainy River; I do not think there is any danger in it. It seems to me it would put the thing on an even keel and might set at rest the minds of men directly affected whed any new companies were established, because t'he minister has frankly admitted that agreements would expire on the establishment of

a new company. I believe that seniority rights transcend any agreement, and anything that can be humanly done Should be done to protect the men.


Peter Heenan: The minister has asked
me a few times to-night, and I have tried to satisfy him, to give him an example showing where the suggestion I have made might be necessary. Will he be kind enough now to mention anything in particular that might happen, to prove that the words I suggest would clutter up the act or provoke bad feeling. Can the minister show me where they would do any harm? I have tried to show him where they could be distinctly helpful, and I should be glad if he would show me in what way they would have the opposite effect.


Robert James Manion: I have already replied to my hon. friend on this point and I do not wish to go over it again. What he suggests is amply covered by the amendment which was moved by the hon. member for East Algoma. Something has been said with regard to credit for it, and I am not going to quarrel with anyone on that score. As a matter of fact it was my own amendment and I discussed it with the member for East Algoma. I repeat, what my hon. friend opposite has in mind is covered by the phrase "through negotiations with the representatives of the employees affected."


Peter Heenan: Is there any harm in
repeating that?


Robert James Manion: Just the harm pointed out by the hon. member for North Winnipeg, that we should not have a lot of clauses that are .redundant and unnecessary. We have already accepted a number of proposals to satisfy my hon. friends and I do not think it is necessary to put this in again. The hon. member chose to modify my amendment. My amendment covers the taking on of employees while the amendment of the hon. member for East Algoma covers the negotiations with the representatives of the employees affected The hon. gentleman's suggestion is covered now.


Peter Heenan: With that explanation I am willing to take a different attitude, but I should like to point out one or two things to the minister. Had he in the first instance given the interpretation to the amendment passed last Thursday which he now gives, we would not have wasted most of this evening. Someone must have put it into his mind at the last moment. When section 16


Soldier Settlement Act
was first introduced I expected him to say that the member for Kenora-Rainy River had placed two amendments upon the minutes last Thursday and that he considered we had the matter covered in the amendment which was accepted by the government at that time. But he did not do that. He offered another amendment and it was in order to make that amendment worth while that I added the additional words in order to carry over the provisions contained in the first part of the section. After all is said and done, this measure is not going to be interpreted by the courts of the country; it is going to be interpreted by the two railway companies and I believe the government will have some say as to what is intended. If the minister says that everything is covered by the amendment moved by the hon. member for East Algoma, well and good; I am satisfied.


Robert James Manion: Then let the section pass.


Peter Heenan: I am not going to let it pass before I complete what I have to say. The hon. member for East Algoma has been blowing hot and cold". First he springs these suggestions and then he blows out of the chamber.


Robert James Manion: He had to catch a train for Toronto.


Peter Heenan: I am leaving on a train for Toronto also.


An hon. MEMBER:: When?


Peter Heenan: The hon. member for East Algoma commented upon the speech I made in North Bay last Friday. I am not going to take back one word that I said in that speech. The least consideration that could possibly be gjven to any body of men has been given to the employees of the railways of this country by this measure.


Robert James Manion: That is not so.


Peter Heenan: 
An hon. MEMBER:: You were speaking.


Peter Heenan: With the explanation of the minister that this matter is covered, 1 withdraw my suggestion and accept the minister's amendment.
Amendment (Mr. Manion) agreed to.
Section as amended agreed to.
Mr* MACKENZIE KING: Before the bill is reported, may I suggest to the minister that before the third reading it be reprinted to include all the amendments?
M;. MANION: We intended to do that before third reading.
Bill reported.



SOLDIER SETTLEMENT ACT

[Stage Direction]
Hon. W. A. GORDON (Minister of Immigration and Colonization) moved the second reading of Bill No. 45, to amend the Soldier Settlement Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1.
James Layton Ralston: As this 'has come on rather suddenly, would the minister just explain the general purposes of the bill?


Wesley Ashton Gordon: The purpose of this bill is to give some relief to soldier settlers and to civilian purchasers of land under the Soldier Settlement Act. It is proposed that the interest accruing in the year 1932 shall be entirely remitted. Section 73 provides that any settler or purchaser whose contract was njade prior to January 1, 1933, and who make*
Soldier Settlement Act

payments enuring the fiscal years 1933-34, 1934-35, and\1935-36 on arrears or instalments due between April 1, 1933, and March 31, 1937, inclusive, shall have his account credited with an additional amount equal to such payment. Section 74 deals with what is known as the three thousand British family scheme. Heretofore settlers brought to Canada under that scheme did not receive the benefits of certain remedial legislation that was passed from time to time. Section 74 provides that the effect of this statute shall be applied to those settlers, provided, of course, that the imperial government takes such action as will permit us to take that course. As hon. members, I think, know, while the Dominion government provided the land, the imperial government provided stock and equipment. Thus there will be a division of the loss in proportion to the amount involved for each government. Generally speaking, the interest oi the Canadian government in this scheme is 62J per cent and the balance is taken care of by the imperial government. This is the way in which the loss would, generally speaking, be apportioned, if the imperial government takes appropriate action to bring their settlers within the scope of this enactment.


Mr. SPEAKMAN:: Has there been any
correspondence between this government and the British government on that point? Has the British government indicated its attitude towards this legislation or been given an opportunity to do so?


Wesley Ashton Gordon: I wrote them only a short time ago advising them of the course we intended to take and I communicated with the Minister of Justice, who is at present in London, asking him if he would lay the bill before the imperial authorities in order to facilitate bringing the three' thousand British settlers under this bill.


Ernest Lapointe: How much would those various sums which are remitted under this bill amount to, approximately?


Wesley Ashton Gordon: It is difficult to determine the amount to which the various classes of settlers will become entitled, because it will depend entirely upon their ability to pay- I asked that question of the officials; I do not know whether their guess would be any better than ours, but having regard to the number and relying in a measure upon their forecast of the future, they believe that for soldier settlement loans it will run between $7,000,000 and $8,000,000 for the whole of Canada.


Alfred Speakman: The amount of interest will, of course, be a fixed sum.
	f


Wesley Ashton Gordon: Yes.


Alfred Speakman: Has any computation been made as to the amount of interest itself that is involved and which, of course, is a definite amount?


Wesley Ashton Gordon: I shall have the figure in a moment.


Alfred Speakman: The other part, of course, depends entirely on how much is paid in.


Mr. SPENCER:: I understand the soldier settlers will benefit for three years from this year onward?


Wesley Ashton Gordon: Yes; it will be really four yeans; it goes to the year 1937, as will be seen by the wording of the section.


Mr. NEILL:: This bill is practically only one section and if rve pass it we shall be passing the whole bill. I would suggest that the minister allow each of the subsections to be passed separately. Will he do that?


Wesley Ashton Gordon: Yes.


James Layton Ralston: The minister mentions 87,000,000 or $8,000,000' as being the total amount involved. That means, including the arrears of interest which are foregone for just one year. Does that also include the double credit that is to be given for payments in connection with arrears or instalments due between now and 1936?


Wesley Ashton Gordon: Yes, that includes the amount of interest involved, and the balance of it-and I want to make myself clear on that-is purely an estimated amount depending, of course, upon the settlers' ability to pay.


James Layton Ralston: Are we on new section 72 now?


Wesley Ashton Gordon: I was just explaining the bill generally in answer to the request of the hon. member for Shelburne-Yarmouth, but probably we had better start with the first subsection and continue in that way.


Armand Renaud La Vergne: Is it the pleasure of the committee that we take the bill up subsection by subsection?


Some hon. MEMBERS:: Yes.
On new section 72-Certain interest charges remitted.


Mr. DONNELLY:: What did it cost in Saskatchewan last year for the administration of this act, for the supervisors looking after the soldier settlers, and what amount of money was collected from the soldier settlers there last year on this land scheme?

Private Bills


Wesley Ashton Gordon: While that is being looked up, I should like to answer the question asked by the hon. member for Red Deer. The 1932 interest that would be remitted is $2,250,000. The bonuses as estimated are as follows:
Year	Amount
1933		 $1,500,000
1934		 1,500,000
1935		 1,500,000
1930 (Prepayment for)	 500,000
With this $5,000,000 and the remitted interest the total is $7,250,000, part, namely, the interest, a sum certain and ascertained, and the balance estimated according to the ability of the settlers to take advantage of it.


James J. Donnelly: I was asking for the cost of administering the act in Saskatchewan in the past year.


Wesley Ashton Gordon: The accounts of the soldier settlement board are not completely divided with respect to provinces, but the salaries in Saskatchewan amounted in the year ended March 31, 1933, to $106,915.65.
Mr. DONNELLY': What was collected by way of interest in that province?


Wesley Ashton Gordon: The collections from April 1, 1932, to March 31, 1933, amounted to $317,957.94.


James J. Donnelly: What is the total amount owing in Saskatchewan?


Alfred Speakman: Can the minister give us similar figures as to Alberta, of the salaries paid and the amounts received?


Wesley Ashton Gordon: In Saskatchewan the
amount of the loans as of January 31, 1933, was $14,297,421.49. The amount of the loans in southern Alberta as of the same date was $8,076,149, and for northern Alberta, $9,229,431.61. The amount of the collections in southern Alberta from April 1, 1932, to March 31, 1933, was $169,407.71, and the amount of the salaries $61,437.60, The amount of collections for northern Alberta for the same period was $216,400.97 and the amount of the salaries $80,584.20.


James J. Donnelly: When the minister
speaks of salaries, does that include travelling expenses?


Wesley Ashton Gordon: No.


James J. Donnelly: They are extra?


Wesley Ashton Gordon: Yes.
Mr. DONNELLY': Do you supply cars for the inspectors?


Wesley Ashton Gordon: Yes, the cars tare supplied by the department to the field supervisors and to those who look after the collections. The number of cars has been very greatly reduced throughout Canada, from 164 to 120. There may be some further reductions that can be made.


John Vallance: The minister gave a certain figure which under the Soldier Settlement Act was loaned to settlers in the province of Saskatchewan. Did that include advances 'to settlers under the three thousand family scheme?


Wesley Ashton Gordon: Yes, that included the amount loaned.


John Vallance: How much of the amount the minister mentioned was spent in Saskatchewan with regard to the soldier settler and how much with regard to the three thousand family scheme?


Wesley Ashton Gordon: The amount of the outstanding loans for soldier settlers, as interpreted under the act, was $8,574,999.63. The amount of loans outstanding to civilian settlers was $2,784,768.83. The amount outstanding in connection with the British family scheme was $2,937,653.03, making a total, as I indicated, of $14,000,000 odd.


John Vallance: I have a question to ask arising out of the information which the minister has just given. Does this bill apply to the soldier settler, the civilian settler and the settlers under the three thousand family scheme? Suppose the British government does not agree, as suggested by the minister, will it be applied to the 62J per cent under the three thousand family scheme?


Wesley Ashton Gordon: If the British government does not agree, then the three thousand British families will suffer the same fate as they did under past remedial legislation. They receive no assistance, but I trust, and I think I have a fair ground for my assumption, that the British government will agree, particularly in view of the difficulties that these men are passing through.
Progress reported.



PRIVATE BILLS


[Stage Direction]
^ Bill No. 85, for the relief of Emily Florence Lawrence Knight.-Mr. Heaps.
Bill No. 86, for the relief of Marjorie Bertha Willcox.-Mr. Bothiwell.
Bill No. 87, for the relief of George Andrew parruthers.-Mr. Bell (St. Antoine).
[Stage Direction]
Income War Tax Act
Bill No. 88, for the relief of Lilias Torrance Newton.-Mr. Bell (St. Antoine).
Bill No. 89, for the relief of Hilda Mary Falkeniberg Gilmour.-Mr. Bell (St. Antoine).
Bill 90, for the relief of Eva Amy Falle Jordan.-Mr. White (Mount Royal).
Bill No. 91, for the relief of Joseph Claremont Carroll.-Mr. Garland (Carleton).
Bill No. 92, for the relief of Venita Angelin© Scotten Kendall.-Mr. Heaps.
At 11.04 o'clock the house adjourned without quiestion>
put, pursuant to standing order.
Friday, May 5, 1933