1933-03-16

Mr. GORDON:: I desire to lay on the table a number of orders in council passed pursuant to the relief legislation.



SUPPLEMENTARY ESTIMATES, 1932-33

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates for the financial year ending March 31, 1933, was presented by Hon. E. N. Rhodes (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

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

[Stage Direction]
Mr. LaVERGNE:
1.	What are the names of the members and the persons constituting the Canadian delegations sent annually to the League of Nations for 1932-33?
2.	What are the items making up the total annual expenditures in connection with these trips ?
Mr. GUTHRIE:: 1932-33.-13th Assembly-Hon. C. H. Cahan, $2,261.77; Henry F. Munro, $1,437.10; Madame Chas. Fremont, $1,440.04.


SUBVEY OF NATIONAL PORTS
Mr. MACKENZIE (Vancouver Centre):: 1.	What was the total cost of the Gibb commission investigating national ports?
2.	By whom was it paid?


Mr. DURANLEAU:: 
SMELT FISHING-RESTIGOUCHE RIVER
Mr. MARCIL:: 1.	Were any complaints received by the Department of Fisheries regarding smelt fishing on the Quebec side of the Restigouehe river ?
2.	If so, by whom were these complaints made, what were they, and what action was taken, if any?


Mr. DURANLEAU:: 1 and 2. A request was made by the Department of Colonization, Game and Fisheries of Quebec, for an extension of the season this year. The same season applied on the other side of the river and throughout Quebec, New Brunswick and Prince Edward Island. In the interest of the industry as a whole no extension of the season was authorized anywhere.
BRAZILIAN BONDS HELD IN CANADA*


Mr. JEAN:: 1.	What is the amount of bonds issued by the government of the United States of Brazil held in Canada?
2.	Is the government of the United States of Brazil meeting its interest and sinking fund payments on said bonds?
3.	If not, have any representations been made to the said government for the protection of Canadian holders of these bonds?


Mr. RHODES:: The answer to parts 1 and 2 is that the government has no information. The answer to part 3 is no.


QUESTION PASSED AS ORDER FOR RETURN
Mr. PERRAS:: 1.	How many fluorspar mines are being operated in Canada?
2.	What is the location of each such mine and total production for each one in the years 1930, 1931, and 1932?
3.	How many tons of fluorspar have been imported into Canada in the years 1930, 1931, and 1932, from (a) any part of the United Kingdom; (b) France; (c) Germany; (d) the United States?
4.	What is the rate of duty on fluorspar imported from (a) the United Kingdom; (b) France; (c) Germany; (d) the United States?
5.	What is the total value of the importations from the above countries and total duties collected in the case of each country exporting fluorspar to Canada?


Mr. CAHAN:: Tabled forthwith.


LIGNITE COAL TARIFF
[Stage Direction]
On the orders of the day:
Hon. E. B. RYCKMAN (Minister of National Revenue):: Yesterday the hon. member for Assiniboia (Mr. McKenzie) directed a question to me as to whether or not the tariff on lignite coal entering the United States had been reduced recently. I have

C.N.R ,-CJP.R. Bill-Mr. Mackenzie
made inquiries, and1 I am informed that lignite coal entering the United States is free, and has been for some time.


DREDGING-DETROIT RIVER
[Stage Direction]
On the orders of the day:
Mr. ECCLES J. GOTT (South Essex): I should like to direct a question to the government based on complaints which have come to me by letter and telegram with regard to extensive property damage being done in the township of Anderton and near the town of Amherstburg because of the dredging operations being carried on by the George Mills Construction Company. I should1 like to make a brief explanation.
Some hon. MEMBERS:: No.


Mr. SPEAKER:: The hon. member must
put his question.


Mr. GOTT:: I should like to ask the
government if they will intercede and request the construction company to use smaller blasts than they are using at the present time in order that more property may not be destroyed.


Hon. H. A. STEWART (Minister of Public Works):: I am not sure whether the work
to which my hon. friend refers is being carried on by the Department of Public Works. If that is so I will make some inquiries and see what authority or supervision we have over the company.


Eccles James Gott: The work is being carried on in international waters by the United States government.



CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL

[Stage Direction]
The house resumed from Wednesday, March 15, consideration of the motion of Hon. R. J. Manion for the second reading of Bill No. 37, respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific railway system, and for other purposes.
Hon. IAN MACKENZIE (Vancouver Centre):: Mr.	Speaker, in my judgment this
has been a very excellent debate, and I think its duration has been more than warranted by the transcendent importance of the problem to this house and to the Canadian people. At the outset may I extend my con-

gratulations, with certain reservations which will become manifest as I proceed, to those who have participated in this debate thus far. May I be allowed to extend to my hon. friend the Minister of Railways (Mr. Manion) my personal felicitations upon the studied moderation of his presentation of this resolution. I trust and hope that after having been subjected for two weeks to the slings and arrows of the outrageous Grits on this side of the house, my hon. friend) will maintain that same degree of studied and constructive moderation when he concludes this debate to-day. If he does that he will have convinced us that he has experienced a remarkable change of heart since the days when he sat on this side of the house.
As I said before, this is to me one of the most important debates which has ever taken place in this house. At the outset of my remarks may I suggest that the Canadian transportation problem is affected by both national and international factors. The national factors lie largely in the policies of the present administration for which they must accept direct and final responsibility. The international factors are of two kinds. First, there are the factors which affected our railway system during the great war, from 1914 to 1918; second, there are the repercussions of these factors upon our Canadian national life and structure.
May I summarize briefly three of these great world factors. I would remind the house of the tremendous cost of the great war to the participating nations. The great war cost Great Britain and her allies $43,000,000,000; it cost the Germanic allies, $15,000,000,000, a total of $58,000,000,000. This amount was expended largely in the destruction of property and human life within the brief period of four and one half years. May I also refer the house to the tremendous expansion which took place in world trade between 1913 and 1928. From the dawn of civilization up until the year 1913, the total export and import trade of the world amounted to $35,000,000,000. Within fifteen short years, all within the lifetime of everyone of us present in this house, the trade of the world increased from $35,000,000,000 to $08,000,000,000. This increase was not due to the expansion of the gold reserves of the world because they increased only from $7,489,000,000 to $10,500,000,000. The trade of the world practically doubled in fifteen short years. Let us consider next the

C.N.R.-C.P.R. Bill-Mr. Mackenzie
national debts of the various countries of the world. Next Tuesday, when the Minister of Finance (Mr. Rhodes) presents his budget, we will probably hear something of the public debt of Canada. The war cost this country something like SI,700,000,000. In 1688, the year of the revolution, the British debt was only $3,320,000. In the year of the first jubilee, 1887, this debt had increased to $3,690,000,000. Just before the war it was $3,255,000,000 but by 1920 it had increased to $39,390,000,000. There had been an increase in the British debt of $36,000,000,000 in six short years. In the United States there was a similar increase from $900,000,000 to $16,000,000,000 during the same six years. There was also a corresponding increase in Germany and France. In 1870, at, the time of confederation, the debt of Canada was only $78,000,000. Before the war it was $336,000,000 but last year it had reached a total of $2,504,000,000. This is our national debt apart from other obligations which must affect us. I mention these things at the outset of my remarks to show the house the tremendous obligations which confront us at the present time.
Our railroad problem has been affected by these international factors; it has been affected by world considerations and yet we are attempting to solve this great problem with a mere administration bill which is now before the house. There is nothing within the four corners of this bill of a constructive nature to meet the quintessence and fundamental needs of this transportation problem. One of the most essential recommendations made by this commission is in connection with our canal structure, but what do they say? They say that water-borne competition does not affect in any way the transportation problem of this country. I should like to direct the attention of the house, of the government and of the Minister of Finance, if he were here, to some of the figures showing the investment in our canal system. Up to March 31, 1932, the total investment in our canals amounted to $245,000,000. For operation and maintenance there had been expended up until last year a total of S81,000,000, or a grand total of $326,000,000. In 1931-32 the operations and repairs amounted to over $3,021,000, while interest at five per cent amounted to $16,300,000, or a total in round figures of $20,000,000. The revenue for 1931-32 amounted to $976,845, so that in one year there was lost to the Canadian treasury a total of $19,000,000.
I suggest to the Minister of Railways that the time has come when we should impose tolls for the use of our canal system. This
would be in the interests of the Canadian people and the Canadian treasury. What happens in connection with this water-borne traffic? We have Norwegian tramps, Danish tramps and German tramps coming over here during the summer months to enter into competition with our own steamers and our own transportation systems. These boats do not pay one cent into the Canadian treasury, while the Canadian steamship companies pay income taxes as well as direct taxes to the Department of Marine. I suggest that this government should immediately meet this problem of wateT-borne competition. I am immediately suspicious of the recommendations of the Duff commission when it says that the development of our waterways will not be prejudicial, deleterious or injurious to our railway systems. I believe there is in that recommendation an implied approbation of the policy of this administration in signing the St. Lawrence waterways agreement with the great republic to the south. That paragraph apparently is inserted in the Duff commission report as a justification for the signing of an agreement which is unfair to Canada.
Your Honour knows as well as I do the conditions which now prevail in western Canada. Ships going through the American Panama canal are subject to an average toll of one dollar per ton. An average sized ship pays a toll of $8,000 going backward and forward through the canal. We have an expensive canal system representing an investment of $326,000,000 and there is nothing in any of the treaties now in effect with the United States to preclude us establishing a toll against American ships similar to one to be charged against our own. There is not a single word in the Duff report to show how this situation could be met.
There is nothing in this bill. A board of trustees and an arbitral tribunal is the concrete result of an expenditure of $62,000, by the Canadian people. There is only the prospective establishment of two Tory triumvirates. I am quite certain the Minister of Railways will agree with me. He has read the report of the Drayton-Acworth commission of 1917 very carefully and he knows its provisions. He has also read the Duff report very carefully. I can find in this poor and pallid Bill No. 37 which we have in front of us now, but three things, part of them the recommendations of the Duff commission, part of them the recommendations of the Drayton-Acworth commission of 1917, and the most insidious features of them the reeom-

C.N.R ,-C .P.R. Bill-Mr. Mackenzie
mendations of neither one commission nor the other, evidently written in by the fine Machiavellian hand of some member of the present administration.


Some hon. MEMBERS:: Oh, oh.


Ian Alistair Mackenzie: Before I conclude I think I shall be able to satisfy my hon. friends that what I say is true. Before I come to a detailed consideration of this bill, I should like very briefly to refer to railwaj' development in the Dominion of Canada. One of the speakers said the other day that the history of railway legislation in this country was not a happy story. I should respectfully like to disagree with that statement. To my mind railway development in this dominion is the story of Canada herself since the year 1853; it is the story of the great struggles of statesmen on both sides of political life, the story of the enterprise of great financial men throughout this country and, above all, the story of the vision, energy and genius of great engineers who were able to overcome the tremendous difficulties of the Rocky mountains, and under handicaps almost insuperable, to bring these lines of steel to our Pacific coast. So I do not think it is right for the Prime Minister or anyone else in the house to condemn any former leader of a party for the vision that inspired that gigantic program after 1903.
May I say this in regard to the Prime Minister's observations: It ill behooves him, in the time of this nation's financial and economic peril, to be constantly indulging in those Cassandra-like wails in which he indulged in this chamber the other day. He attacked members of the opposition, accusing us of being the people who were trying to undermine the integrity of our country. What about his own Toronto speech delivered just before the house convened, when he made that tragic and tremendous blunder in regard to our maturing obligations in the United States? And when that had to be recalled and corrected in the press within two or three hours after it was delivered, what about the fact that exchange went down four per cent the day after the right hon. gentleman made that address in Toronto? What about his interview with the labour men a few days after when he told them that we were on the brink of the abyss, on the verge of disaster? It is no wonder that Canadian exchange suffered. I take issue with him in this hour of our country's need and peril, if such it is. What we need is not pessimism, and yet we had in his speech nothing but a 
gospel of despair proclaimed by the man who should lead this house and country to greater courage, faith, optimism and belief in this Canada of ours.
Let us take the story of our railway development and I shall deal with it only incidentally. The wonderful story started between 1850 and 1860 when the Grand Trunk group went over to London in 1853 to project the development of 1,200 miles of railway. In 1850 we had only sixty-six miles of railway and in that decade we increased the mileage by 2,000. Take the period of the Canadian Pacific development between 1880 and 1890 and it is a story of achievement and endeavour of which the Canadian people may legitimately be proud for all time to come. Take the story of the Transcontinental development, these same costs that are affecting Canada at the' present time. It was the great war that compelled the Canadian Northern and the Grand Trunk Pacific to come clamouring to the treasury for help. Who gave them the help, the grant, to extend the Canadian Northern from the Yellowhead pass to Vancouver? It was the Conservative administration of that day. Who gave them the guarantees of 845,000,000 in 1014? It was the Conservative administration of that day, and yet the Prime Minister had the effrontery, during the course of this debate, to tell the house that his party was not responsible for the present situation. If you study the history of railway obligations; if you consider the financial obligations incurred before 1922, to what do they amount? Since confederation there was expended on the Canadian National system as a whole the sum of $2,487,000,000 from the federal treasury and $2,045,000,000 were expended before the Liberal government came into power in 1922. Still these hon. gentlemen tell us: Our party did not cause the trouble. These were not the words which the present Prime Minister used in the debate of 1914 when he said that both parties were equally to blame. I would advise the Minister of Railways to read that remarkable address delivered in 1914 by his present leader. In it will be found strange words: "receivership," others with reference to "equity of redemption." We have there ideas that caused the address the other day by the Prime Minister.


An hon. MEMBER:: The precedent.


Ian Alistair Mackenzie: Yes, that is the precedent, and of course there are some unusual things in it too. He referred to his former colleague, who is his present leader in another chamber, as "an impertinent young

C .N .R ,-C.P.R. Bill-Mr. Mackenzie
man." That gentleman was roundly condemned by the present Prime Minister, and yet to-day we find these two confederates piloting this bill'-


Some hon. MEMBERS:: Oh, oh!


Ian Alistair Mackenzie: -through first the Senate and then the House of Commons. This Bill No. 37 means what? It means the destruction and annihilation of public ownership and control of railways in the Dominion of Canada.


Mr. COTNAM:: How about the Vancouver Sun?


Ian Alistair Mackenzie: How
about my hon. friend using some intelligence and keeping quiet?


Ira Delbert Cotnam: The hon. gentleman does not use any when he is speaking.


Ian Alistair Mackenzie: If my hon. friend wishes to discuss the Vancouver hotel I shall give him an opportunity later.


Ira Delbert Cotnam: I was speaking about the Vancouver Sun?


Ian Alistair Mackenzie: There was moved to this resolution an amendment which was disposed of on a point of order. That amendment contained two essential and fundamental principles. The first dealt with the larger principle of amalgamation and the second with the fundamental principle of the control of parliament. The Prime Minister, in speaking to that amendment, announced that the government would insert in this legislation, before it was finally disposed of, a provision that there should not be any amalgamation between the two railways. In my opinion that provision will be absolutely useless, for this reason; the government are absolutely destroying public control and ownership; they are setting up a self-perpetuating board of trustees with a supreme Caesar in charge of the triumvirate appointed by this administration. When the government goes to the people in six months or a year from now, faces the acid test of public opinion, and is rejected and cast out, and this party comes into power


Some hon. MEMBERS:: Oh, oh.


Ian Alistair Mackenzie: -what will be the situation then? We shall have an appointee of the present government, a self-perpetuating trustee, and the government of the day will not have the slightest say in regard to regulation or management of that official, the chairman of the board, or any of
the trustees. My hon. friends might very well take a leaf from the recommendations of the Drayton-Acworth commission, because they said that the five trustees mentioned in their report should be appointed in the first instance by parliament. Will the Minister of Railways consent to having the House of Commons insert in this bill, before it goes through this house, the names of the three trustees? That is the recommendation of the Drayton-Acworth commission appointed by his friends in 1917. That would retain at least a semblance of popular control. Why not leave this iniquitous legislation alone? Why not cut down the present directorate from seven to five, and appoint to the board a representative from the west, one from the east, one representing labour, and if possible one representing the Minister of Railways, so that there will foe a link and liaison between the board and the government of the day, so that we can have at least a semblance of popular and democratic control in this dominion? But as it is, here is this board of three trustees, and what control have we got over them? The Prime Minister says that they must submit their budget to parliament. Is that control? Of course it is not. Section 12 is specific and inexorable. It says that the budget is submitted to the board of trustees, and except as regards income deficits and certain advances in regard to meeting maturing obligations and with regard to capital expenditure this house has no authority, not the slightest tittle or semblance of authority, over the financial expenditures of this great triumvirate which we are going to establish to manage the railway system of Canada. Just imagine the situation if a Liberal government were returned to power in this dominion next year, believing as we do in our platform, in maintaining the integrity of the Canadian National Railways, and yet finding ourselves without the slightest power to control or dismiss these trustees! Will the Minister of Railways do this? Will he have the power given to this House of Commons to have the trustees dismissed upon a resolution of this assembly alone? We are the elected representatives of the people of Canada: the other house is not. The other house is . altered in complexion by whatever party happens to be in power at the time. If the Minister of Railways wishes to maintain and preserve a semblance of democratic control in this dominion, will he eliminate that provision of the bill, that the trustees can be dismissed only upon a joint address of both houses of parliament? I know that the Drayton-Acworth report recommended that the board should be

C.N.R.-C.P.R. Bill-Mr. Mackenzie
appointed like judges, which is probably where the Prime Minister got the idea. But will he admit that he believes in the public ownership and public control of railways? If he does, he should be willing to meet us half way, and in the first place have the first trustees to be appointed named in the bill by this House of Commons; and secondly, he should have their dismissal, subject to the will of those who represent the people in this House of Commons.
On the twenty-seventh of February my right hon. leader placed on record the viewpoint of those of us to your left, Mr. Speaker, in regard to the Canadian National Railways. The Liberal party believes in and stands for the maintenance of the integrity of the Canadian National Railways as a publicly owned and publicly controlled service. But have we got a publicly controlled service in this bill? No, every vestige of control is gone. Every single tittle of democratic control has absolutely vanished-banished by this administration.


Mr. NICHOLSON:: No.


Ian Alistair Mackenzie: Who says no?


George Brecken Nicholson: I say no.


Ian Alistair Mackenzie: There
is not a section in this bill which leaves the slightest vestige of control to this House of Commons.


George Brecken Nicholson: Certainly there is.
Read the bill.


Ian Alistair Mackenzie: Not one.


Ira Delbert Cotnam: What control was there
over the old board?


Ian Alistair Mackenzie: We had a committee of parliament in the old days which considered the budget of the national railways. Immediately after the budget of the national railways was presented to this house by the Minister of Railways, it was referred to a committee composed of all parties of this house, and in my experience that committee every year presented a unanimous report to this House of Commons. And could you have a finer exemplification of democratic control than a unanimous report of a committee of parliament representing every single party in the House of Commons of Canada? Will you have that under this bill? Not a single shadow of it. The power is entirely gone from this House of Commons and is placed in the hands of this board of trustees, who are appointed not by this House of Commons, but by the government of the day, and who can be dis-
missed, not by this House of Commons, who can in fact be dismissed by nobody except upon a joint address of this House of Commons with possibly an accommodating majority in the other house. That is the situation, Mr. Speaker.


Ira Delbert Cotnam: That is parliament.


Ian Alistair Mackenzie: I am
very glad to have my hon. friend's interpretation of parliament. I suggest to my hon. friends that public ownership means ownership and control by the people, and that means ownership and control by those who represent the people in this House of Commons. The members of the other house, and I speak of them with all respect, do not represent the people, because they are not elected representatives but are appointed by the party that happens to be in power at the time. But you can go back to your constituency and I to mine as representatives responsible to the people, the final tribunal of Canadian public opinion. The other house has no such responsibility.


Ira Delbert Cotnam: Why didn't you reform
the Senate?


Ian Alistair Mackenzie: You are reforming it now, only in a different way from what I would.


Mr. POULIOT:: Better reform North
Renfrew.


Ian Alistair Mackenzie: I wish
to emphasize my submission that under this bill every vestige of democratic and popular control of our national railways is gone. You can put in a section providing against amalgamation, but what does that amount to? Nothing, because you have one private company, and another company controlled by three trustees responsible to whom? Responsible, not to this parliament, not to this house; and they cannot be dismissed by the minister. I think the Minister of Railways himself, for the sake of maintaining the dignity of the office of Minister of Railways, should resent this power being taken away from him.
I wish the Prime Minister were here. He used to quote in this house from a favourite book of his. This is the scripture according to Bennett. Hon. gentlemen who were here in this house before the last election will remember the Prime Minister quoting from The New Despotism,- by Lord Hewart of Bury who, at page 158, says:
Where is the arch-defender of bureaucracy who would have the courage to say in the House of Commons:	"I am placing these

C.N.R.-C.P.R. Bill-Mr. Mackenzie
proposals for legislation before the house, but candour compels me to tell the house that the only terms upon which matters so intricate can be disposed of are that my department should be placed above parliament and beyond the iurisdiotion of the courts"?
Again:
It is right that the public should be made thoroughly well aware of the price which they are invited, or compelled, to pay. If they were really aware of it, they might well think that the price was too high, and that they would prefer to forego the particular commodities which are so expensively to be obtained.
Those words, Mr. Speaker, used to be quoted in this house by the present Prime Minister when he was in the ranks of the opposition, and his objection did not go so much against the establishment of bureaucracy such as you have it under this bill, as against vesting too much authority in the executive of government. But this is a hundred times worse than vested authority in the governor in council. We protested against the powers taken by the governor in council in regard to peace, order and good government, and anyone who voted against giving to the governor in council those tremendous powers in regard to peace, order and good government and who now votes to give these powers to this board of trustees, is voting for something that is tenfold more disastrous because this board of trustees has no responsibility whatever to the people. Furthermore, the Minister of Railways is reduced to the shadow of a shade if this clause goes through. He will have no responsibility, nothing whatever to do with the Canadian National Railways.
We came down to this house, Mr. Speaker, in 1930, summoned by this government of conferences and commissions, this government of Fabian tactics, this C.C.F. government on the other side of the house, to deal with unemployment, and overnight we found the tariff raised, and we were told to hurry home because the great man, the superman, was going to cross the seas to take part in the Imperial conference of 1930.
Again, in 1932, in this house we endeavoured to deal with the problem of unemployment and the other great national problems of this dominion, and what were we told? Hush, hush, we were told by the Minister of Labour (Mr. Gordon). Hurry back to your homes, he said, and be ye good; do not stir up strife, but bless this government for the wonderful work it has done in regard to unemployment. And why were we told to hurry home on that occasion? Because July was going to see the Imperial conference of 1932 in Ottawa. Well, we had that conference, and its great results have been presented to this house.
What happened at that conference? We found that the fundamental rights of parliament were violated in the legislation that followed because we lost control over our fiscal policy and over questions of tariff taxation in this dominion for a period of five years.
Then, again, this session we have looming over us the shadow of the international economic conference, and when we come to discuss the budget and other things we shall be told that we cannot discuss budgetary or tariff matters or the Bank Act or monetary questions because an international economic conference is going to be called and the Prime Minister is going to attend.
What about commissions? Commissions- non-political commissions, to deal with radio! What have we got? Oh, a splendid Tory triumvirate all over again, just the same as we will have in this bill. And we had a tariff commission, another Tory triumvirate adorned by an ornament from my hon. friends of the C.C.F., the left wing. What are we going to have here? Fabian tactics, Tory tactics, CjC.F. government-that is what we have. A conference government, commission government, Fabian tactics government-that is what we have.
Mr. Speaker, I feel it my duty to explain to my constituents why I am opposed to this legislation. If every one of my colleagues would support this legislation I could not support part I of it, nor part II nor part III. Why? The Prime Minister told us, in that address containing more inconsistencies than any address which has been delivered in this House of Commons-he told us that part II meant cooperation by agreement, and that part III meant cooperation by direction. I say part II of this bill means cooperation by direction, and part III means cooperation by compulsion. So far as I am concerned, I am opposed to part II and part III. So far as part I is concerned, I say it is taking away privileges from the Canadian people; it is destroying public ownership and public control of your railway system in the Dominion of Canada. For those reasons I am opposed' to this legislation. I believe it destroys the fundamental rights and the constitutional authority of Canada. It destroys the essential privileges of the House of Commons which we find outlined so well in the first fifteen or twenty pages of Durrell's great work on parliamentary grants. A great struggle was waged in Britain in 1910; two great elections were held in the one year on the question of the final responsibility of the House of Commons and the ordinary control of the House of Commons over national expenditures. This

C.N.R.-C.P.R. Bill-Mr. Mackenzie
House of Commons is asked to throw away its rights, to take a leap in the dark, to throw away its own voluntary and free will, to throw away the rights of our forefathers who fought for hundreds of years for the constitutional development of our country.
I suggest to the house that this legislation should not pass. Amend your railway act; give extended power to the railway commissioners. If you are going to force this legislation down our throats make it that it shall become operative by proclamation of the governor general in council, because I believe this legislation will be regretted by the present administration. If I should happen to be in any subsequent parliament-


An hon. MEMBER:: You won't.


Ian Alistair Mackenzie: I will
take my chances with any of you over there. I took my chances once before with one of your best.


Some hon. MEMBERS:: Hear, hear.


Ian Alistair Mackenzie: If I
should happen to be in the next parliament I will use all the strength I can towards the repeal of this legislation, and towards the restoration to the Canadian people of full and undoubted control over the Canadian National railway system, because I believe this bill is an abnegation of the fundamental constitutional rights of parliament and, inferentially, of the Canadian, people. As Locke said long ago: Parliament is the people. This parliament seemingly is not the people. This government and its supporters are floundering in a Serbonian bog. By this measure we would be establishing a bureaucracy, a Tory triumvirate who would function in glorious Tory togas for the next seven years. You took one from the C.C.P.; you will take them from other sources. I resent and repudiate the policy of this administration in pursuing such tactics as these.
What did the Prime Minister say? He said: This national railway is not the property of the Canadian people. I am going to fight my next election on that declaration by the Prime Minister of Canada. This railway, said he, belongs to the bondholders and the security holders. I ask hon. gentlemen opposite: Do they endorse such a statement by the Prime Minister? Do they endorse it?
Mr. MoINTOSH: No answer.


Ian Alistair Mackenzie: No, they are not exactly sure where they are. They are floundering in the dark, every single supporter; they don't know where they are.

And if the whips were called off I am sure that my smiling friend across the way, and other friends who sit across there, would gladly vote against the second reading of the bill.
In conclusion may I say this: Remember the splendid showing made by the national railways between 1923 and 1930. To-day continents are paying tribute to that record. And here I wish to pay tribute to that great Canadian who a few days ago passed from our ken and who, in the future days of Canada, will be looked upon as one of the greatest, public servants this dominion ever had. May I say this: Let us not lightly or wantonly destroy the property of the Canadian people. Let us not forsake all to support a party to make possible the second reading of this bill, a bill which violates the cherished principles I have mentioned. Remember the words of Kipling about freedom that was won for us by the men of long ago,-"
AH we have of freedom,
All we use or know,
This our fathers bought for us
Long and long ago.


Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, with some of the remarks of the previous speaker in regard to the railway bill, I am in agreement. But with some of the asides he made I am not so much in harmony. For instance, he made reference to the C.C.F. It is not very long ago since he was proclaiming in the western provinces that the Cooperative Commonwealth Federation were preaching the gospel that the Liberal party had preached for so long. Now the hon. member charges the government with being CjCF. I do not know whether he is intending to insult the government or the C.C.F.
Previous speakers in this debate have laid great stress and emphasis upon the importance of railway service in Canada. In that regard I need not repeat what they have said. Nearly all speakers have offered felicitations to the minister for the high ground he took in presenting the bill, and particularly for his eschewing anything in the nature of a party debate. I am sorry that I have to oppose a measure so presented. I agree with the broad generalizations of the previous speaker in respect to economic conditions throughout the world which certainly indicate, as I understood him, that the railway problem cannot be solved by itself, that it is merely part of a great economic problem with which Canada and the world is faced, and that the railway problem would more or less automatically solve itself, were the major economic problems of the country solved.

CJV.R ,-C .P.R. Bill-Mr. Irvine
I oppose the bill not because of some of its details, with which I also disagree, but because of the principles involved. I am not influenced by any undue enthusiasm for national ownership, for as a matter of fact we have not got a national railway in Canada. Everyone should know, if they do not, that the people of Canada through their government became responsible for the bonds, worthless in some instances, of defunct concerns-


Miss MACPHAIL:: Privately owned.


William Irvine: -that it guaranteed those
bonds and the interest on them, and the Canadian people have since that time run the railway in the interest of those who own the bonds. That is not national ownership. So I have little enthusiasm for the railway system thus begotten and controlled. I oppose the bill chiefly because it ignores the difficulty for which it purports to be a remedy. What are the conditions? I shall not waste the time of the house by going into the figures as presented by the Duff report, upon which this legislation is largely based; I confine myself rather to what those figures indicate. In the main, the figures show that the fixed charges on the Canadian National are greater than the earning power of the system oan support. And the traffic is becoming less, naturally, through the present depression. Higher freight rates cannot be charged to make up the deficits, therefore not only the Canadian National so-called, but the Canadian Pacific as well, are both coming to the point where they cannot take care of their fixed charges. These fixed charges jeopardize both railway systems. The fixed charges of course are charges on bonds, and arise out of a faulty financial system. Bonds represent money invested, and money is supposed to represent wealth. Wealth is perishable, but bonds are eternal. Besides being granted eternal life these bonds have been fructified through being made interestbearing and become prolific in their creation of debt. If bonds were no more eternal than any form of wealth which money might represent there would be no such debts as we have to-day. But on this phase of the matter I shall not dwell.
In order to meet the shortage in earning power of the railways to take oare of fixed charges the bill proposes retrenchment. The retrenchments proposed are at the expense of the railway workers, the wage earners on the system. They are also at the expense of the railway services which should be given to the people of Canada, in view of all the expenditures and guarantees which the people of Canada have made and given on both
systems. Why should there be retrenchment of railway services at the present time? Certainly not because of lack of equipment, for we are assured by the minister, on the authority of the present head of the national system, that the equipment was never in better order. So it is not due to lack of railway lines or cars or engines or men that we have to curtail services. But we propose to curtail railway services in order that we may protect the interests of the bondholders. There can be no question about that. I am opposed to this bill because its purpose is retrenchment in the interest of bondholders in a vain attempt to meet the situation I have described. That attempt ultimately will be absolutely vain.
Let me come then to the real point as I regard the duty and responsibility of an individual member of this house. Members of this parliament really represent the directors of the 'Canadian National Railways, since, as I have described, a certain government of this country made the Canadian people responsible for paying the interest on bonds and paying the principal. In connection with this situation therefore, this parliament is in the position of directors of the company representing the investment of the Canadian people. As such I ask, will the people of Canada be able more adequately to meet the payment of the bonds that they have guaranteed and the interest on those bonds, as well as the expenses of the national railway, by passing this bill? As far as I have been able to understand from the bill itself, or from the speakers on the government side, or others who have supported the measure, I cannot see how the position of the Canadian people can be improved in the slightest degree by the passing of this bill. Therefore, unless such assurance can be given me as a representative of the people in this enterprise, I feel it my duty to oppose the bill. I contend that this bill will jeopardize the investments for which the people have become responsible. The people of Canada cannot carry both systems while the fixed charges remain as they are. Up to this time the two railway systems have been running in competition. According to the statement of the minister and many others, as far as this bill is concerned, this competition is not to be interfered with. But the inevitable logic of competition is that one or other of the systems will not survive. Faced with the fact that competition is not to be interfered with, according to the minister, and recognizing that the logic of competition means that either the Canadian National or the Canadian Pacific will ultimately go down, there are only
C.N.R.-C.P.R. Bill-Mr. Irvine

two courses which this government could take. The first course is competition to the death, giving no quarter to the Canadian Pacific, writing off the dead stock of the Canadian National, economizing in every legitimate way, getting the best possible management, meeting the Canadian Pacific at every turn with irresistible competition. The other course is the nationalization of the Canadian Pacific along with the other. There is no middle course. Of course we cannot nationalize the Canadian Pacific on the same basis as we did the Canadian National, for to-day that would bankrupt the nation. But the bill does not propose that we nationalize the Canadian Pacific, it proposes rather something which would require Professor Einstein and the use of his fourth dimension to explain, for it is to be competition with cooperation, and outside of the fourth dimension I am unable to explain what that would mean. In spite of the fact that the management was highly praised by the minister for having saved the nation a great deal of money last year this management is to be changed, and the interests of the Canadian Pacific Railway are to be given at least equal attention.
Perhaps it may be regarded by some as being part of the duty of this government and of parliament to give equal attention to concerns other than national concerns, but since the bonds guaranteed by the Canadian people would be jeopardized if the Canadian National were to be run inefficiently or to yield in competition to the other line I maintain that our first duty is to the Canadian National, in order that these bonds may not be endangered by any hesitation on the part of the administration to face the competition of the opposing system. Since competition is to be adhered to, according to the decision of the government, I submit that the national system must fight the Canadian Pacific to the death. Every ton of goods hauled over the Canadian Pacific which might be hauled by the Canadian National will jeopardize that enterprise and endanger the investment that has been guaranteed by the Canadian people. I say this bill brings about fraternity with the enemy, and since the government under the proposed measure loses control of management of the national system it may be even worse than that. Hon. members may argue that if the government should put the resources of the state behind the Canadian National and enter into keen, cutthroat competition with the Canadian Pacific it would mean the ultimate bankruptcy of the Canadian Pacific, but bad though that might be

I say it would be better than the bankruptcy of the nation, and in my opinion this course will bankrupt the nation.
Let us look for a moment at this proposed compulsory arbitration. I conceive that this would be resorted to most frequently when one line or the other made extravagant claims in one particular; this body then would decide just how the matter should be settled. Let us suppose that this board should make what might be regarded as a fair decision under the circumstances; no one would quarrel with that. But let us suppose this arrangement had not been made and that through competition the Canadian National gained the advantage otherwise yielded by a decision of the board. Then to the extent that such an advantage might be nullified by the actions of the arbitral tribunal the Canadian people would suffer and their bonds would be jeopardized. If on the other hand, however, as a result of competition the Canadian Pacific would have obtained an advantage but for the decision of the board, then there will come a time when this railway problem no longer can be put off as it is put off by this bill and when the effect on the financial structure of the company inevitably will be felt. Then the Canadian Pacific Railway will have at least a moral, and for all I know a legal, claim upon this government for having interfered with open competition and having thus brought the railway to the point where it cannot longer carry on. That will be the argument, and in that case we will find the people of Canada left holding the bag in both instances, burdened writh the responsibility of meeting the bonds of both railway systems.
In my opinion, Mr. Speaker, the objective of this parliament should be one national railway system, and that system may be evolved in one of two ways. The first method of bringing about one national system of railways would be by having the Canadian National successfully compete with the Canadian Pacific until that road became bankrupt, when it might be taken over at bankrupt prices. So far as I know there is only one other way of accomplishing that purpose; that is to face the facts as they are and conscript or expropriate the Canadian Pacific as it now stands. There is no other course open except the yielding of the Canadian National to the Canadian Pacific, thus losing to the Canadian people the investment they have guaranteed by the assets of the nation. Of course I appreciate the fact that this house would not think of conscripting the Canadian Pacific; the house only thinks of conscripting men in

C.N.R.-C.P.R. Bill-Mr. Ferland
time of war. It is all right to conscript men, give them $1.10 a day and kill them; there is nothing wrong about that. But when this nation is faced with a tremendous problem which neither the government nor the opposition can solve, if one should propose that in order to meet this problem we should create one national system by conscripting the Canadian Pacific, and pay $1.10 a day to those holding Canadian Pacific bonds while they lived, that would be considered a great tragedy; it would be breaking faith with the bondholders. It is much simpler for us to break faith with humanity; that really does not matter, but the bondholders must be saved without regard to expense.
In view of the fact, therefore, that this bill rather evades the situation which it purports to meet; in view of the fact that it proposes to put competition on a cooperative basis, which is impossible and which in the last analysis probably will mean that the government will stop competing but that the Canadian Pacific will continue; in view also of the fact that if this bill is carried into practical effect it will mean jeopardizing the investment guaranteed to the bondholders of the Canadian National by the people of Canada, as a representative of those people I have no choice but to vote against the bill.


Mr. C. E. FERLAND (Joliette):: Mr. Speaker, I realize that the house desires to hear the remarks with which the Minister of Railways and Canals (Mr. Manion) will close this debate, but I should like to place on record my personal view's with regard to this very important question. Since I am more familiar with the French language I should like to speak in French, but for doing so I do not offer any apology. I want everyone to know that I am simply exercising a right which for many years in the past was denied but which now is acknowledged by both parties in this house.
(Translation): Mr. Speaker, the bill under discussion is the most important one which has come before parliament since I have had the honour of representing the constituency of Joliette, in the house. This railway problem is probably the most serious one we have had to solve and is of the utmost interest to my constituents. Canada must settle the question of our railways. To my mind, this measure is important because it concerns the whole of Canada and more particularly the town of Joliette where we have a terminal station. The hon. Minister of Railway and Canals (Mr. Manion), in a splendid speech, when introducing this bill, expressed his personal views as well as those of the government of which he is a member.



S3719-194

[Stage Direction]
I heartily agree with him on one point, namely, when he acknowledges the efficiency, ability, experience and competence of the higher officials of the Canadian National in managing this colossal enterprise. I entirely agree with him. and I am glad, indeed, to associate myself with him in congratulating the higher officials not only of the Canadian National Railway but also those of the Canadian Pacific Railway.
However, there is one phase to which I wish to take special exception. In these days of economy, I think that the higher officials of our railway companies are too highly paid in contrast with the salaries received by the Prime Minister and other members of the government. I was glad to hear, not long ago, that both senators and members, would again be given the opportunity to subscribe $400 to the public treasury, by a cut made in our parliamentary indemnity. It is a duty for members to accept with the best grace and satisfaction this cut of $400, because this sacrifice asked from senators and members is of a nature to encourage the poor, if not in a pecuniary manner, at least morally. It behooves members as well as all public administration, to set an example in such matters of economy and self-sacrifice that is incumbent on everybody, in order to relieve the crisis and help the poor who are more numerous than ever.
The higher railway officials, as I have just stated, are too highly paid. First, their own private interests are not at stake. They manage a public enterprise, their positions are permanent and assured, as secure as those of our hon. senators; therefore, in my opinion, their salaries should not be as large. However, I do not insist on that point as I shall refer again to it.
At present, there is a railway question, in Joliette, which needs to be settled, I have already drawn the attention of the house to it, in my first speech in this Chamber. When I had the honour of seconding the address in reply to the speech from the throne, I requested the government of that date as well as the railway management to recognize the rights of the town of Joliette, in connection with the car repair shops. The following day, I read in a newspaper, opposed to our views, that for a member who moves or seconds the address it was certainly overstepping the mark to rebuke the government.
I have confidence in the fairness, rectitude, experience and competency of the present president of the Canadian National Railways. Mr. Hungerford rendered me a service at one time. About two years ago, I headed a delegation of the municipal councillors of Joliette
[Stage Direction]


C.N.R.-C.P.R. Bill-Mr. Ferland
who were to interview Sir Henry Thornton, in Montreal; we submitted our case, namely, what we considered our rights in connection with the Joliette terminal station. As Sir Henry Thornton generally made no decision without consulting his high officials, he called in his engineers, some experts and Mr. Hunger-ford. After perusing part of the memorandum which I had prepared in English so that it might be understood by all, Mr. Hunger-ford, in the presence of Sir Henry Thornton, stated that by virtue of the well known contract between the city of Joliette and the Canadian National Railways, we were requesting a terminal station and shops for the repair of cars in Joliette. He added the following which is important: A terminus comprises a superintendent and his staff. We are entitled to a terminal station in Joliette, according to the contract to which I have just referred; however, at present, we have neither superintendent nor any staff. All business transactions are carried on in Montreal; our repair shops have been abandoned and the Canadian National railway has completely disregarded a valid contract which still exists, and all cars are repaired in Montreal.
About 1900, the mayor of Joliette was the Hon, Justice Mathias Tellier, who, to-day, presides over the Quebec Court of Appeals, one of the most learned judges of our province; I take great pridie in this fact since, beside being a relative, he resides in my town. Mr. Tellier himself prepared and had the contract to which I refer, accepted; it was endorsed by the Quebec Legislative Assembly and may be found in the Quebec Statutes of 1900, 63 Victoria, chapter 59. There is no need to enter into details about this contract since it is embodied in a statute. I already told Sir Henry Thornton that he could not read, when we disagreed on the interpretation of this contract.
As Sir Henry Thornton has passed away, I do not intend to quarrel with him in his grave; quite the contrary, I pray God to forgive him the errors of his ways inasmuch as the city of Joliette is concerned, but especially because he was responsible for a loss amounting to about $100,000 per year, to that city.
By virtue of the contract upon which my request is based, the Great Northern Company obtained subsidies and exemptions of taxes which amounted to a considerable sum; it undertook to establish and maintain permanently, in Joliette, car repair shops; to establish and maintain a terminus or a divisional point where it was to repair the cars of the division comprised between Joliette and Quebec, in the province of Quebec, and

between Hawkesbury and Joliette, in the province of Ontario.
The shops which the company had built were destroyed by fire in 1925 and were never rebuilt by the Canadian National Railways which practically stopped all work in Joliette. I have here a list of cars which, during the years 1931 and 1932, were sent from Longue Pointe to Joliette, thence from Joliette to Montreal, for repairs. According to the terms of our contract, these cars should have been repaired in Joliette. Instead of adhering to the terms of this contract, these cars are sent a distance of 70 miles to Montreal, to be repaired. Thus the ratepayers' money was wasted by sending these cars to Montreal or vicinity, when they should have been repaired in Joliette.
I have no need of stating, sir, that I am not satisfied with the mangement of the National Railways, inasmuch as it affects Joliette. Perhaps, it may be said, to-morrow: The member for Joliette is not satisfied with the policy of the higher officials of the National Railways, and in retaliation he requests that their salaries be reduced. No, sir, I am more serious and honourable than that, if I request that their salaries be reduced, it is because I deem it only fair and equitable. I do not think it right for any citizen of Canada, whether he is president of a large insurance company or member of a board of directors of a railway, to draw from their own treasury a salary of S40,000 or $50,000 per year.
At present, when we have hundreds of thousands of unemployed, who are in distress and receive but three or four dollars per week to feed and keep up a home with a family of five, ten or twelve children, I state, no one in this country is entitled to draw from the treasury of large insurance companies or railways an annual salary of thirty, forty or fifty thousand dollars.
It is absurd and inexcusable for the representatives of thei people to tolerate such abuses.
I am opposed to this bill for various reasons. I do not intend to repeat all the arguments set forth by my liberal colleagues, however, briefly, I may state that the bill is a great menace to the security and welfare of the workers or railway employees; it is the most threatening bill that has ever come before Parliament or Legislature of any province. It is inconceivable that,-owing to the problem being so important and requiring to be studied by experts, technical and experienced men- this bill does not provide at least, for the appointment of a representative of the labour classes on the board of management.

C.N.R.-C.P.R. Bill-Mr. Ferland
Railwaymen constitute a body of worthy citizen® who are entitled to our gratitude for their services. The employees of the Canadian Pacific Railway or Canadian National Railway, are highly thought of, they are the fathers of fine families in the various provinces; they have travelled, are well read and received their education in our schools. In 1923, 210,000 were employed, since that date, 90,000 were thanked for their services and have joined the ranks of the great army of unemployed. This bill having closed every avenue to the railwaymen, there will be fifty or seventy-five thousand less, within two or three years.
Shall the answer be: we must do something. A liberal senator stated, the other day, at a caucus: "The people of Canada expect that something will be done; it is shameful to allow deficits to accumulate and thus waste the people's money. It is said that our two railway systems show a deficit of $1,000,000 per week-
Mr. GGBEIL (Translation):: Do not betray caucus secrets.


Charles-Édouard Ferland: 
Mr. BARRETTE (Translation):: Have you any knowledge whether this report was forwarded to the Prime Minister (Mr. Bennett) and to the Minister of Railways (Mr.. Manioni) ?


Jean-François Pouliot: If the Prime Minister were in the House, he could inform us.


Mr. JEAN (Translation):: It was addressed to all members.


Charles-Édouard Ferland: 
Jean-François Pouliot: If the Prime
Minister is not in the House, it is because he is endeavouring to master that repoi-t.
Mr.FERLAND (Translation): In expressing my congratulations to the railway men, in connection with their memorandum, I do so

Whereas the railway companies have decided to reduce, for the second time, the wages of their employees, we the undersigned, all in the employ of said railways, in your district, heg of you to espouse our cause and this to the best, of your ability, for the reasons undermentioned:
Whereas last year we had to undergo a reduction of ten per cent in our wages.
Whereas the railway companies realized, during the year 1932, substantial savings and were able to show a reasonable balance sheet, considering the depression prevailing in all spheres of activity, which is a direct proof of the sacrifices, already too numerous, imposed on their employees.
Whereas said employees retained in the service of our two large railways have to their credit a length of service of at least ten years, all heads of family and receiving wages already too little remunerative and equitable.
Whereas if the proposed cut is carried out the salaries of the undersigned wTould be of a minimum of $900 and maximum of $1,800.
Whereas, if o-ther economies are necessary, it is important that those who receive higher salaries be first affected, this to conform with the decision taken in connection with the civil service.
As our representative we heg of you to nobly champion our cause and to rest assured that we shall greatly appreciate this cooperation.
This document carries weight and comes at a time when economies are practised at the expense of railwaymen who are unfairly treated. Because the government and a number of companies, here and there, throughout the country, enforce a ten per cent cut in salaries, the railwaymen are reduced 20 per cent. I would request the hon. Minister of Railways to use his good influence to prevent railway companies perpetrating this injustice.
Before closing my remarks, sir, I wish to state that I am opposed to the present policy of the government for reasons known to all;

C.N.R.-C.P.R. Bill-Mr. Dorion
however, I wish to add that I disapprove also of the abuses perpetrated in the past by capitalists in this country. I strongly protest against such abuses. I do not request a change in the fundamental principles of our constitution and administration, but I request the government to be more vigilant and guarded against the large corporations which, in the past, have, in many instances, robbed the people. Keeping this in mind, no new measure will even be necessary, since the companies act embodies a clause which provides for such acts and stipulates that the government may hold1 an inquiry over the operations of any company doing business in this country.
I therefore close my remarks by requesting my railway friends to forget my reproaches with reference to the French language, and I wish to openly state: Above all, I am a French Canadian, honi soit qui mal y pense.
Mr. C-N. DORION (Quebec Montmorency) (Translation):	Mr. Speaker, I do not intend
to follow the hon.. member for Joliette (Mr. Ferland), in the narrow path he has pursued.


Mr.   MBRQIER@St. Henri) (Translation: A slippery one.


Mr. DORION (Translation):: This bill is
a national affair, and should be studied in that light. When we examine the present railway situation in Canada, we quickly conclude that radical remedies must be applied, without further delay. It is futile, for the moment, to seek the origin of such a situation and place the responsibility of it on such and such a political party. This question has been before the public for the last twenty-five years. Already, in 1925, a special committee of the Senate was selected to hold an inquiry and report, on the means to be taken to relieve the country of the heavy expenditures in which our railways had dragged us. A number of plans were proposed and these form the nucleus of the Duff Commission's report.
We are bound to acknowledge the fact that, of all the difficulties prevailing in the various spheres of our national activities, the transport industry of railways is certainly the one which affects us the most. The situation of this industry is most alarming. No more than in the various fields of activity were our railways spared, however, what makes the settlement of the problem more difficult, is that it embraces our entire national life.
Personally, I do not think that the remedy proposed by the present bill can entirely restore the finances of our railways, although it will perhaps, improve the conditions now
prevailing. Even after this measure is enacted, we must discontinue the operation methods used heretofore.
No doubt we will be called upon, before long, to again legislate in order to rescue what can be saved by merger, in connection with the management and operation of the railways, namely the colossal sums invested in the railways by the Canadian government and shareholders of the Canadian Pacific Railway.
Let us be frank, is this not the beginning of a liquidation? Is it not our duty to endeavour to make this liquidation the least burdensome possible for the Canadian people? If we do not stem the tide of this crisis, it is the entire structure of our financial system which will be shaken.
In a message to the United States Congress, President Hoover pointed out the immense danger threatening the United States railways, and I think the same may be said of our Canadian railways.
The railway problem, he stated, is, among all, the most pressing one. The prosperity of our railways is closely linked to that of all the country's industries. The financial stability of the railways is of the utmost importance to the United States, and all improvement in the economic situation is subordinate to its maintenance.
This weighty statement, I repeat, might also have been made to the 'Canadian people. Our railways had and still have to contend with numerous defects: too numerous lines; double or triple services without any profit possibility; exaggerated and ruinous competition with one another for over forty years; lack of a sound policy generally in the railway management; numerous duplication of lines, etc. But what has caused more trouble in the railway transport industry are the senseless expenditures as, for instance, the building of large hotels, many of which cannot meet their cost of operation; also the continual and unrestricted borrowing, either on long or short terms, without providing for a sinking fund to meet these liabilities. I shall not quote what the amounts of the liabilities of our two railways are, they are on record. Without the continuous and repeated help given by the state to the Canadian National Railways they would have been bankrupt long ago.
Again, I state that I am doubtful of the complete efficiency of the remedy proposed by the bill under discussion. With the fixed charges which burden the national railways, the enormous capital which must be refunded, and the mortgages they are burdened with, their operation becomes almost impossible.


Mr. J. A. VERVILLE (Lotbiniere) (Translation) :: Mr. Speaker, I closely followed the
speech which the hon. member for Quebec Montmorency (Mr. Don on), has just read to
the house. From his viewpoint, his speech is a vindication of the bill under consideration, it is also, to a great extent, a censure of the measure. So far as we can judge by the provisions of the bill, we must readily recognize that it lays down a principle that we must either accept or reject. Must the government exercise a control over our railways? This question is clearly stated in the bill.


Mr. MERCIER (St. Henri) (Translation):: Hear! hear!
Mr. VERVILLE .(Translation):	My reply
to this question is that I cannot answer for the Liberal party; however, as a member of the opposition, I state that the government should not divest itself of the responsibility which it assumed when it took over the administration of the railways of this country.


Joseph-Alexandre Mercier: That is the point!


Joseph-Achille Verville: If, at the time, the government were justified in assuming the responsibility for the administration of our railways, it behooves them, to-day, to carry on this administration, and, I wonder why the government tell us: Let us set aside this responsibility, because the Senate requests us to do so and wishes us to act in such and such a way. Who is responsible to the people? The House or the Senate?


Joseph-Alexandre Mercier: The people.
An hon. MEMBER (Translation): Louder.


Joseph-Achille Verville: I put the
question, whether I do so in a loud voice or not, the question is put and let hon. members answer it.


Joseph-Alexandre Mercier: The people.


Joseph-Achille Verville: I am in
favour of the bill inasmuch as no merger of railways is contemplated or the national railways, do not become the property of the Canadian Pacific Railway.


Joseph-Alexandre Mercier: That is to the point!


Joseph-Achille Verville: I should
like to use an expression which is commonly used-however politeness and the rules of the house do not allow us to disclose all our thoughts. I shall simply state:	The bill
such as it is, is very indefinite as to what may become of our railways. The government

C.N.R.-C.P.R. Bill-Mr. Verville
will appoint three commissioners-designate them as you please-however, let us proceed rationally; there is no intelligent member who does not foresee what will happen. The government will appoint some one to represent the Canadian National Railways, there is no doubt that it will he a person connected with the -Canadian Pacific Railway. The latter will naturally recommend also, that one of its men be appointed, both will then choose a third person who will again be a Canadian Pacific Railway man. We shall then have three Canadian Pacific Railway men to manage the Canadian National Railways. The bill states that there will be no merger; however, the bill embodies all the necessary provisions to safeguard the Canadian Pacific Railway bondholders-there are a great number of them on the government side and they will appoint their own men to carry out the merger of the Canadian National Railway, with the Canadian Pacific Railway; not officially, as this merger practically took place two years ago.


Joseph-Alexandre Mercier: Quite to
the point!


Joseph-Achille Verville: To better
illustrate what I have in mind, may I state that, if one has travelled the least between Quebec and Montreal-the railway distance is not a long one, 170 miles-
An hon. MEMBER (Translation): It is a tedious trip.
Mr. VERVILLE (Translation); -one knows that the Canadian National Railways gave us a very efficient train service between Quebec and Montreal. It has now been discontinued. This train afforded people, who were travelling to Montreal, an opportunity of arriving early to pass a quiet evening.
Some hon. MEMBERS (Translation): Cooperation ! co-operation!
Mr. ST-PERE (Translation):	What train
does the hon. member take?


Joseph-Achille Verville: I always
took the train on which I could get service, that is the one which was taken off. Now, each time I have to travel to Quebec, I take the Canadian Pacific Railway because I get better service, for which the officials of the Canadian National Railway became responsible when they discontinued this train service to the benefit of the Canadian Pacific Railway.


Joseph-Alexandre Mercier: Shame!
shame!


Joseph-Achille Verville: I should
like to ask the government a question-; however, I know the government will refuse to answer it: When the Grand Trunk was purchased by the government so as to permit the bondholders to save whatever money they * had invested in this enterprise, is it not a fact that the higher officials of the Grand Trunk were transferred to the management of the Canadian National Railways? After putting, first, the Grand Trunk into bankruptcy, to-day these same officials are responsible for putting the Canadian National Railways into bankruptcy! And to thank them for this service, positions are created for them! They are told: we shall merge your company with the Canadian Pacific Railway; however, you must keep it quiet; the bill stipulates: no merger, fair competition.


Mr. CASGRAIN (Translation):: There is more than one way of killing a cat!


Joseph-Achille Verville: One complains that the government railways are costly, that they do not meet their liabilities, that the country must disburse millions and millions of dollars yearly to meet their deficits. I wonder how it happens that this was only discovered since our friends opposite have assumed power. Have hon. members opposite noticed that a crisis existed throughout the country? Have they noticed that there was a business depression? They stated when they were endeavouring to get in power, that there was nothing abnormal. Do they notice anything now? They were wrong, they expected that the crisis would only last a year; it is lasting too long for them and, to-day, instead of admitting that they were wrong, they confess their incompetence.
Mr. ST-PERE (Translation); It will destroy them.
An hon. MEMBER (Translation): Hear, hear.


Joseph-Achille Verville: They have made quite a find to replace the word merger; fair competition. Is there anything which would lead us to believe that our hon. friends are in favour of fair competition? Let them state it openly! We belong to the people, we live among the people, we are not capitalists. We might make suggestions which would improve the lot of our railways, however, they state that they could not accept them because their leaders, the front benchers, would not wish to invest their millions in any enterprises we might suggest.


Mr. LAFLECHE (Translation):: Not the millions of the hon. Minister of Marine?

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


Joseph-Achille Verville: Instead of concealing the facts, let them state, in the house, that they are ready to act; let them ask us for suggestions and show that they are ready to accept them and co-operate with us. They request co-operation, let them give us proof that they are in earnest. That is necessary-


Charles Napoléon Dorion: Honey would
be needed.


Joseph-Achille Verville: I did not catch what my hon. friend said. Would he kindly speak louder.
An hon. MEMBER (Translation): The hon. member said that honey would be needed.


Joseph-Alexandre Mercier: That is not slippery enough.


Joseph-Achille Verville: That is unnecessary, there is much more on this side than there is on the opposite side, that is why the ground is more slippery on one side.


Charles Napoléon Dorion: It can also be found in bee-hives.


Joseph-Achille Verville: I am
amazed, after all the speeches I have heard in the house, to note that no one discussed a deficiency in the service of the railways and which is a cause of a large decrease in their yearly returns. No one referred to it. Is it to protect certain interests, certain people? I wonder. I requested, last autumn, that the freight rates on cord-wood be reduced. I stated then that it was astonishing to note that it cost more to ship a car-load of cord-wood from the county of Lotbiniere to Montreal, than the wood itself cost. At present a car of cord-wood, including the loading, costs $28, while the freight rate, from Lotbiniere to Montreal, is $43. I requested a lower rate, and I wish to thank the hon. Minister of Railways for the correspondence exchanged between myself, the railways and his department in this respect.
Unfortunately, the final answer came, that it was impossible to lower the freight rates.


Joseph Philippe Baby Casgrain: However, many promises were made.


Joseph-Achille Verville: A car of cord-wood costs $28 loaded, and it costs $43 to ship it to Montreal, a distance of 170 miles. Mr. Hungerford, who is acting as president of the Canadian National railways, occupying the same post as the late Sir Henry Thornton, assured me that it was impossible to lower the freight rates.
I wish to draw the attention of the house to another point? The price, at present for a
return ticket from Laurier to Montreal, is $8.40. Excursions are organized, at times, and the price of a return ticket is $2.50. When these excursions are held, forty to fifty people take advantage of it. This has been going on for six months, even last week there was such an excursion. When the price is $2.50 people travel to Montreal. They have not the means to pay $8.40. One complains of motor vehicle competition. What happens? A person that owns a motor car invites others to travel to Montreal as paying guests, as they travel four or five in a car the expenses are small and much cheaper than by train. However, people do not care to travel as far as Montreal by motor car, they prefer the safety and comfort of trains. Only, the cost is toe high. Let the railways bring down the passenger rates. They have had some experi< ence by their excursions, there is again one this week, from Toronto to Montreal for $2. Why is this done? Because it is profitable to the railways. Reports from ticket agents show that people travel when railway fares are reasonable. Then why not lower the passenger rates and ask a reasonable price?
The same may be said for freight rates. Railways complain of a lack of freight traffic. The public cannot afford paying the rates charged so they look elsewhere to have their goods transported. I shall cite a case: A small manufacturing concern had to ship 2,500,000 feet of lumber from Laurier station to Vic-toriaville, they inquired from the railways what their lowest rates would be, the directors found the rates too high, so they had these 2,500,000 feet of lumber transported by motor trucks and saved $1.50 per thousand feet. The name of the concern is the Olivier Mercier Company, of Laurier, it saved $1.50 per thousand feet by shipping its lumber by motor truck instead of by railway. That is the kind of service the public gets from those officials receiving $30,000 per year.
It was shown at the inquiry held two years ago, that there were more than 300 employees, both in the Canadian National Railway and Canadian Pacific Railway, receiving each S30.000 per year. I contend, sir, that not one o.f these officials should receive $30,000 at the present, when salaries are being reduced all over the country. Let the railways first reduce the salaries of their higher officials before depriving the small wage earners of their livelihood. Railway stations, which do not give big returns and where employees earn only $100 per month, are being closed. The order to close them comes from those officials who receive $30,000 per year.

C ,N .R ,-C .P .R. Bill-Mr. Verville


Mr.   LAFLBCHE@Translation: Who appointed them?


Joseph-Achille Verville: Who appointed them? The railway management- and hon. members opposite are as guilty as we are.


Mr.   LAFLBCHE@Translation: Who appointed Sir Henry Thornton?


Joseph-Achille Verville: Let him
rest in peace. I do not think that as much praise will be bestowed upon you, when you have passed away, as there has been upon Sir Henry Thornton.
Let the salaries of high officials be reduced before asking for our cooperation.


Samuel Gobeil: Why did you not reduce them?


Joseph-Achille Verville: Put out the officials who are useless and are like leeches.
An hon. MEMBER (Translation): We would have to put out the opposition.


Joseph-Achille Verville: Do away with private cars. I could point out many abuses. At a certain divisional point, I know that some superintendents are unable to move fifty feet to attend to their private affairs without having a private car. Suppress such abuses. Begin by practising economy where it should be practised, among those who can afford it, they do not earn their money. That is what I request and I state so openly, because I know all this to be true.


Joseph-Alexandre Mercier: That is being very frank.


Joseph-Achille Verville: The bill
stipulates that there is to be no merger. May I inquire from the government how will the three trustees, who will manage the affairs of the Canadian National Railway be appointed, and who they will be? I shall go a step further and inquire whether they will give the names of those assigned to office. If we had the guarantee that our railways, while under government control, would be managed by people outside of political influence, who have not supplied funds to the Conservative party, who expect no favours and are appointed to carry out their duties and draw their salary, I might perhaps change my views; however, I know for certain that under the administration of hon. gentlemen opposite, three Tories will be appointed and that is why I protest.
Some hon. MEMBERS (Translation): Oh, oh.
[Mr. Verville.)


Joseph-Achille Verville: No doubt exists that the house will be asked one day or another to approve of their salaries; again, under the guise of economy-when $5,000 or $6,000 is sufficient for any man to earn- the salaries will be fixed at $15,000 or $20,000.
An hon. MEMBER (Translation): With a pension?


Joseph-Achille Verville: With a
pension, that is understood. Such people display a great affection for their friends and wish to prove it while they are alive and ten years after they are in their grave, they still display this affection by paying a pension.


Charles Napoléon Dorion: That reminds you of the time you were a Conservative.


Joseph Philippe Baby Casgrain: He was never a Conservative.


Joseph-Alexandre Mercier: He never made such a mistake in his life.


Joseph Philippe Baby Casgrain: Or he
mended his ways as he grew older.


Pierre Édouard Blondin: I would ask hon.
members not to interrupt.
Mr.VERVILLE (Translation): Mr.Speaker, I had no intention of speaking for forty minutes. I have submitted my views to the house. There is one remedy, I do not know whether there is anyone opposite open-minded enough to refer to it; however, I shall suggest it myself: instead of recommending all kinds of quack remedies which are simply fool-traps, let them recommend a radical one; reduce the high salaries of officials in large companies, do away with big offices which are unnecessary. In Quebec, for instance, there is a railway superintendent, while in Levis there is another. Because a river separates these two cities, there is no need of two railway superintendents. Do away with one. I do not suggest to throw on the street the Quebec employees; let those who are required be transferred to Levis, but cut down the large salaries. Too much consideration seems to be shown for those who receive high salaries.


Mr. DUPRE (Translation):: Did you
suppress them previous to 1930?


Joseph-Achille Verville: Suppress them, do away with a superintendent and place the employees in one office. They will perform their duties more efficiently than at present. It will, perhaps, then be possible to suppress three or four salaries of $30,000. Do away with the private cars of superintendents. Nothing prevents them travelling

C.N.R.-C.P.R. Bill-Mr. Vervilie
in passenger cars like we do. There is an excellent Pullman with almost every -train, let them travel in it. They travel free. Each time that the superintendent at Levis comes to my constituency, it costs -the country S600 or 1700-this happens three times a week.


Joseph Arthur Barrette: Why did
you not make such a suggestion when your party was in power?


Mr. YERVILLE (Translation):: I am suggesting it now that this bill is before the house. It is because the Liberal party's policy was to never shift on private individuals the responsibility which was incumbent to them. To-day, it is proposed to shift this responsibility. Let us, as members, bear this responsibility.
It is not because railways are passing through a crisis -that we should shift this responsibility. Everybody has made losses within these last years. If there is an institution which can afford losses, it is our national railways, since they have the people *to -back them while we have no- one. It is a -public service; let us bear our responsibility as in the past-. Let us practise thrift and cooperate, as the bill states, but let the government show that they are in earnest by cooperating when they request us to do so. We point out the way, and, for my part, I have already made a suggestion.
Let the railway companies avoid duplicating their lines. Is there anything more ridiculous to see trains leaving Montreal for Ottawa, one at 3.30 p.m., another at 3.45 p.m., again one leaving at 6 p.m. and another at 6.15.p.m., and, in the morning, one at 8.25, and another at 8.30.
The railway officials have a hard time keeping up their time schedule to avoid collisions before -the trains leave the station. I think some improvement could be carried out in this connection.


Joseph Philippe Baby Casgrain: Trains
have already collided.


Joseph-Achille Verville: Let both
the Canadian National railway and Canadian Pacific railway cooperate in spacing the time between their express trains so that we may not be held up eighteen hours in Ottawa. This will avoid sending out -three or four trains practically at the same time. The same thing happens between Montreal and Quebec.
An hon. MEMBER (Translation):	It is
the same everywhere.


Joseph-Achille Verville: Let us
practise economy in big things and let us not close the doors of small country stations,
which were built for the service they render to the public.
An hon. MEMBER (Translation):	Hear!
Hear!


Joseph-Achille Verville: The
moment you close a station, motor coaches and trucks appear which cater to the people and divert traffic to the highways, to the detriment of the railways. This is happening at present, andi, I shall prove it: there was an excursion from Quebec to Montreal, the price of the return ticket was 12.50; the local agent-I can give his name if the house wishes-called on me to inform me that some officials of the railway company had given an order for the train not to stop at Laurier station-this station serves five parishes. It was doubtful whether the -train- would stop or not. After numerous telephone messages, telegrams and protests, the train did stop, however, I was obliged to guarantee^ personally, the sale of 25 tickets.


Joseph-Alexandre Mercier: How generous they are!


Joseph-Achille Verville: What
happened? The train arrived with 32 passengers and took 37 on at Laurier station. We did this to help the Canadian National railways and our own citizens. Ever since, when there is an excursion the train stops. It is evident that a train which does not stop at a station cannot pick up passengers; yet the high officials of the railways, those who receive large salaries, do not seem to realize these facts. I have in all earnestness drawn the attention of -the house to this matter, these are facts, although it may not please everybody.
I shall vote against the measure, because no explanation is given as to how the railway deficits are to be eliminated and, because the bill embodies a fool-trap clause which permits the government to safeguard the interests of their friends by helping the Canadian Pacific railway to the detriment of the Canadian National railways, inasmuch as the [DOT]three trustees to be appointed will be Canadian Pacific railwaymen; finally, because it is submitted to the house by the government and its leader (Mr. Bennett) in whom I have no faith.


Mr. C. G. POWER (Quebec South):: Mr. Speaker, my only reason for rising at this late stage of the debate is that the course of action which I propose to take on this bill will in all probability require some explanation and perhaps some apology, if not to the House of Commons, at least to my constituents.
C.N.R.-C.P.R. Bill-Mr. Power

Reading the report of the Duff commission I was particularly struck with the chapter dealing with the contributory causes of the railway problem. I do not propose in the time at my disposal to go into these causes, but I suggest that a study of them will help us to understand better what is proposed to be accomplished by this bill.
The first cause mentioned at page 53 of the Duff commission's report is, "the overdevelopment of railways beyond the immediate needs of the country." May I point out, sir, that there is no great danger of any further over-development of railways at the present time or for some considerable time to come. The financial condition of the country, the financial condition of the Canadian National Railways and the financial condition of the Canadian Pacific Railway, would seem to indicate that at least for many years to come there will be no more of that over-development. On the other hand, the recommendation of the commission, which is translated into the bill, calling for cooperation in order to do away with any excess mileage at present existing, does I believe have some application, and for that reason I think the bill should receive at least some measure of support.
The second cause mentioned is the aggressive and uncontrolled competition between two nation-wide railway enterprises. That also is dealt with in the legislation which we have before us in the attempt by compulsory arbitration to do away with aggressive and uncontrolled competition. To that extent also I believe the bill is worthy of some support.
The third cause mentioned by the Duff commission reads:
The reactions of the world trade repression which began in 1929 and has progressively increased in its severity with each succeeding year.
That cause is not dealt with in the bill at all; it is not even being considered by the government. It seems to me to be highly improper for the government to endeavour to bring about a solution of the railway problem without touching one of the fundamental causes which have brought about this problem. That feature has been dealt with by a number of speakers on this side of the house, and I do not wish to traverse the arguments which they have put forward, but may I submit that before we can accomplish anything in the way of rehabilitation of our railways we must first settle our trade difficulties, bring more trade to the country and more traffic to the railways.
There is another contributory cause mentioned by the Duff commission, namely, com-

petition from other forms of transport, notably road transport. I notice that the commission took three or four pages in which to discuss the competition by road transport with rail transportation. In order to deal with this question I have but to refer to the observations made by the hon. member for North Bruce (Mr. Malcolm), who I think showed conclusively that on balance, if you take the advantages derived from the invention and operation of automobiles since their inception, you would find that the railways of Canada have profited far more from the automobile industry than possibly from any other industry, what with the building of roads necessitated by motor traffic, what with the traffic originating on account of the factories building motor vehicles, together with the traffic derived from the establishment of motor vehicle factories themselves. I remember that in 1928 or 1927 some member of the railway committee asked the late Sir Henry Thornton whether the railways had suffered from motor traffic, and the answer which he gave at that time in most emphatic language was that taking it by and large the railways had derived more profit from the shipment of automobiles and automobile materials than they had lost through the competition of automobiles engaged in road transport. And here I make the same observation, as did the hon. member for Vancouver Centre (Mr. Mackenzie) that, strangely enough, the commissioners were somewhat loath to deal with water transportation. It seems to me that that was an extraordinary omission from a document such as the one they placed before the public of Canada. We were on the verge of entering into a contract with the United States of America-if we had not already done so-whereby we would throw open to water transport hundreds of miles of waterways. It is not necessary to quote figures to show that if the arguments put forward by those who favour the St. Lawrence waterway development are of any value whatsoever, the construction and operation of these waterways must inevitably take away from our railroads hundreds of millions of dollars worth of traffic. To the extent that the commission did not make a study of that question, and did not place figures or estimates before the people of Canada, to that extent I think they were lacking in the duty they were appointed to perform.
Then, there is another contributory cause, namely the inelasticity of freight rates and railway practice generally. This is not dealt with anywhere in the bill. Hon. members on both sides of the house have spoken about freight rates and have explained that either excessive freight rates or certain rates put into

C.N.R.-C.P.R. Bill-Mr. Power
force have interfered with the normal development of the trade and commerce in the regions they represent. To my mind in the reconstitution of our railways it is of vital importance that something be done about freight rates. They have been mentioned, but purely casually, in the report. No indication or guidance is given to the people of Canada or to the House of Commons as to whether or not it was the belief of the commission that, by a decrease in freight rates on at least certain commodities, the trade of Canada might be further developed. I note that the Minister of Trade and Commerce (Mr. Stevens) is in his seat. I believe he will agree with me that at the present time it is absolutely unfair to maintain the same freight rate on lumber, for instance, when the cost of that commodity has decreased about one-third. The same is true all along the line. If we are not to be met with competition from road traffic we will have to decrease our freight rates.
Then, the sixth cause is:
Contractual arrangements with labour organizations which set up a rigid wage scale and inflexible labour practices generally.
I note that the commission was mighty careful to say nothing about that. They did not consider it within the ambit of their duty to make any recommendations along those lines. As I understand it, unfortunately this bill may bring about that which a great many people would like to have in Canada, namely a reduction of the wages of labour by the indirect method of setting up a board of trustees and an arbitral tribunal from which there will be no appeal, and which will not be affected by public sentiment.
Then, we come to No. 7 which, in my view, is the most important. We shall read to the end of the first subsection:
7. The special disabilities of the Canadian National Railways due to:-
(a) Assumption, through government action, of liabilities of insolvent railway systems for reasons of national credit. I
I submit there is nothing in the legislation before us which can prevent that very thing from happening namely, assumption through government action, of liabilities to sustain the national credit of Canada. May I give an example? There is a railway in British Columbia known as the Pacific Great Eastern, the bonds of which are guaranteed or in some way secured by the people of that province. Should it so happen that traffic should fall off to an extent where the railway could no longer pay its bonds, I submit that as sure as we are in this House of Commons, at some time, sooner or later, the people of Canada
in order to save the national credit, would be called upon to take over that road. There is nothing in the bill now before us to prevent it being taken over and placed under the control of the trustees.
Then, the large capital expenditures mentioned in subsection (b) of the special disabilities of the Canadian National Railways may perhaps to a certain extent be considered. But, in any case, there will continue to be these large capital expenditures, if we have to take over railroads, lame ducks, outside of the present system.
Then, subsection (c):
Political and community pressure on the management arising out of direct government control.
May I suggest nothing has gone out to the public so far which has given them a worse impression of the operation of the Canadian National Railways than has this very paragraph. They are under the impression that individual members of parliament, ministers, and people interested in politics throughout the country, simply through their political influence, have been able at any time to enter the offices of the various railway executives and impose large expenditures on the railways.
Mr. MoINTOSH: They are judging others by themselves.


Charles Gavan Power: Paragraph 146 at page 51
of the report is as follows:
Of direct political interference by ministers and members of parliament in the detail operations of the railway, we were assured by the officials there was little or none. It was in the larger sphere of policy that political considerations led to unwise and unnecessary capital expenditures, the result of which was to create an atmosphere in which the ordinary principles of commercial operation of the railway were lost sight of.
There is nothing whatsoever in the bill to remedy that situation. If, for instance, the hon. member for Temiscouata (Mr. Pouliot) were to find that the Temiscouata Railway, now being operated, I believe, by the Quebec Central Railway, a subsidiary of the Canadian Pacific Railway, were to be closed up, and if he were to come to this house with the same energy, the same ability and the same perseverance as he showed in connection with the railroad station in his constituency, he could force any government to take this road over, and there is nothing in the bill to prevent the government from doing so. If the House of Commons of Canada voted to take over 'any railway, it would be taken over. So, in so far as this bill purports to get away



'COMMONS

[Stage Direction]
C.N.R.-C.P.R. Bill-Mr. Power
from the serious part of political interference, it fails. Having said that may I deal with the sections of the bill.
With the principle of section II which provides for cooperation, I am in accord. I do believe, however, that there should be some restrictions placed upon the powers of cooperation vested in the trustees. I believe it would be very dangerous, for instance, to leave in the hands of trustees the right and ' power to lease the Intercolonial railway or any part of it to the Canadian Pacific Railway. There is nothing in this bill to prevent it.
With part III, dealing with compulsory cooperation and the restriction of competition, I am also in agreement. I believe we have carried competition too far, not only in connection with railways but in many other things. I cannot agree with those who regard this provision as being of a confiscatory nature. I am convinced that it is the duty of parliament and of the people of Canada to see that corporations, no matter how large, are restrained in their operation and kept within the control of the people. It is true that in the theory of government usually held by persons on this side of the house the laissez-faire policy has been fundamental. But I believe that in this modern age we have to set that aside and think rather of the greatest good for the greatest number; and if in any community a corporation or an individual becomes too powerful and by its action threatens disorder to the state, or works injustice, it is the duty of the representatives of the people to restrain and restrict such action. For that reason I favour part III of the bill.
Coming to part I, I listened with considerable interest to the very remarkable speech made by the Prime Minister on March 9. It was remarkable in this, that as we listened I believe most of us were almost persuaded that it was one of the best speeches he has delivered in this house since he became Prime Minister. It was remarkable also in that when it is analyzed I think it is one of the worst. He began by giving us the political history of railroads in this country. I hope I may be excused for saying that the political part was better than the historical. He told us, in regard to part I of the bill, that the number of trustees should be three. At page 2858 of Hansard he is reported as follows:
Why is the number three? It is the considered judgment of the commission, every one of them, that any number greater than three means disaster.

I wonder where the Prime Minister got that. I have not been able to find it in the Duff report. At page 2859 he continued:
And by that unity of effort which three, rather than five, can make possible, we will restore the property to the position in which we desire it. That is the fundamental recommendation with respect to administration.
I ask you, Mr. Speaker, what is there that is fundamental, what is there that is holy, what is there that is sacrosanct about the number three?
Some hon. MEMBERS. The Trinity.
Charles Gavan Power: It is true that there are
three leaves in the shamrock. But I hardly think the Prime Minister can expect us to accept as a fundamental principle of this bill, one of the things on which the government must stand or perish in the attempt, the number three. Perhaps three is a good number. I am of the opinion that perhaps the Prime Minister's speech was not intended so much for us on this side of the house as for some of his own supporters who showed indications of wanting more than three. I have an open mind as to whether the board of trustees shoidd consist of three members or five, but the argument of the Prime Minister almost convinced me that I should vote against the bill, because if he attaches so much importance to the mere number of trustees it gives me the impression that when we endeavour to amend the bill before third reading we may get very little consideration for the suggestions we offer by way of amendment.
WTith respect to the powers of the board of trustees, I share entirely the views expressed by the hon. member for Vancouver Centre (Mr. Mackenzie). We have no justification, no mandate, and no right to give away the property of the people of Canada-we believe it to be their property notwithstanding what the Prime Minister said-to give that property to any three men and tell them: "You may do what you like with it and we will pay the bill". As the hon. member for Shelburne-Yarmouth (Mr. Ralston) said, he who pays the piper has the right to call the tune..
There is something more. No one who has spoken in favour of this bill on either side of the house has said anything more in its favour than that it is a palliative; no one has given it as his considered judgment that the bill is a permanent solution of the railway problem of Canada, not even the Minister of Railways, not even the Prime Minister, not even my hon. friend the member for North Waterloo (Mr. Euler). I take it the best we can say for it is that it is an emergency measure to

C.N.R.-C.P.R. Bill-Mr. Power
deal with certain, aspects of the problem. It does not settle it; I do not think even the Minister of Railways will say that it does. Why, then, set up a board which by its very nature is irrevocable? We are dealing with a temporary situation; why set up an administration which cannot be changed or removed even by the will of the people of Canada? To that feature I have the strongest objection, and unless it is so changed as to bring these trustees more under the control of the parliament and people of Canada I shall be reluctantly forced to vote against the bill on third reading. We should be setting up an eternal self-perpetuating board, committed to payment of their salaries, and giving them full power to carry out their policies for the term of their appointment. Nobody taking over the management of a railway would lay down a policy for one month or one year; they would base their policy on the term of their tenure of office. I think in binding ourselves so we should be exceeding our mandate. Therefore unless this provision is altered I think many of us will have to vote against the bill on the third reading.
I propose to vote for the second reading because the bill is the outcome of the report of a commission which the government set up on the unanimous recommendation of the house. The recommendations of the commission's report are largely embodied in the bill, therefore it should have respectful attention, and it would be inconsistent and illogical not to permit the bill to come before the committee of the whole to be considered in detail, when it may be amended or modified. For that reason also I am inclined to support the second reading.
There is a further reason which perhaps should appeal more strongly to my friends on this side of the house. Never since the present administration came into office, so far as my recollection serves me, have we been so favoured by a minister bringing down a bill. When this bill was introduced the minister told us that he was prepared to consider amendments and that he would welcome suggestions from all quarters. In spite of the remarks of the Prime Minister, which to a certain extent seemed to limit the authority of the minister to consider our suggestions, I prefer to take the position that the minister, as the man responsible for this legislation, is in good faith and that, if he is not prepared to acquiesce in all the views we may express in committee, at least he will give us a fair hearing. We on this side of the house have constantly claimed that the government have not sought our cooperation. On this one occasion, when perhaps the government wishes
to get away from its own responsibilty, 1 think it would be very ungracious if we did not extend every assistance and all cooperation in endeavouring to whip this matter into something resembling the form we think it should take in order to deal with the problem confronting the people of Canada to-day.
Since this debate opened a great deal has been said with regard to the lack of foresight and the extravagance displayed by the people of Canada. Perhaps while I am on that point I may be permitted, though some may consider it rather indecorous, to refer to a great Canadian who has just passed away. I realize that perhaps, in the midst of a controversy with regard to the things with which he was closely connected, this is neither the time nor the place to refer to his work, but I think all hon. members will agree when I say that Sir Henry Thornton was a great Canadian. At no time was that better shown than today, when hundreds of thousands of people throughout this country are bowing their heads in grief at the passing of a real friend.
I am not one of those, Mr. Speaker, who are prepared to hang their heads in shame because those who have gone before were extravagant in this matter of railways or in any other matter. That was characteristic of the people who inhabit this North American continent; it was characteristic of the two great races which make up the great Canadian people. They went forth into the blue to explore, to discover, to Christianize and to civilize. They were not fireside pioneers; they were not armchair explorers. They mortgaged their future when they went to the western prairies and when they took up land in the back settlements of Quebec and Ontario. They did not know from where the next dollar was coming. If they borrowed a few dollars from a merchant in order to go into the woods they never knew how they were going to repay that loan, but they did so through unremitting toil, they were sustained by high courage and they refused to despair. If during the good days we believed this country had a magnificent future; if we spent more money than we should it was, as I said before, only characteristic of the people. What do we care if we did spend too much? Are we any the worse off to-day because we indulged in an orgy of spending? I do not think we are. We gambled on the future of this country, and what young pioneer country would not gamble in that way? I believe throughout the length and breadth of this land to-day you will find people who are scheming and working in an endeavour to find a way out of their difficulties, and they are working far harder and exerting far more mental and physical effort

C.N.R ,-C.P.R. Bill-Miss Macphail
than would have been the case if money had continued to be plentiful as in the days gone by. If in connection with our railways we are loaded with debt it is but an incentive to our people to show their courage, their initiative and all the other qualities which have made this country what it is to-day.
So, sir, I resent the charges of extravagance which have been made. Money might have been saved in some cases, but if it helps this country realize that we can only get along by working harder; if it helps us remember that our ancestors showed better foresight than we did; if it helps us realize that before we came on the stage of public life there were those in this country who believed that there was a future in Canada; if it helps us enter into the spirit of those men, I think Canada will become even greater and more prosperous.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.
Miss AGNES C. MACPHAIL (Southeast Grey):	Mr. Speaker, it will take but a very
short time for me to say what I have to say. I think all hon. members will agree that our railway problem originated a long time ago, and that our railroads have been overbuilt and built unwisely because of paralleling lines and insufficient branch lines or feeder's for the trunk lines constructed. Many of the original railroads which now go to make up the Canadian National Railways had gone broke. AfteT a process of many railroads becoming fewer in number, they were then taken over as the national system. These roads were taken over at great cost but had they been written down to something like their real value we would have got rid of one of the difficulties which has followed ns ever since. In my opinion the Canadian National Railways never had a real chance to show the virtues of public ownership. There was always this backbreaking burden of debt to carry, a debt which should not have been carried by the road proper. The earnings could not possibly cover the charges against the road. I have often thought that this national road was forced upon us before the public was ready to support public or state ownership. Then again we had the problem of having people connected with the administration who did not really believe in public ownership. It seems to me that I read some place that the present president of the road stated publicly that he did not believe in public ownership. It is a 
great handicap to any experiment if those conducting it do not believe in it.
I do not intend to discuss the bill in detail because those who have preceded me have done so much better than I could. I know the Minister of Railways (Mr. Manion) is having a very difficult time with the railways because of a lack of volume of traffic, but this bill will not increase traffic. It seems to me that the railway problem is being attacked in the wrong way. I believe that the deflationary monetary policy which has been pursued by this administration has had -more to do with the lack of volume of traffic than any other one thing. There is not enough money 'in circulation to enable Canadians to exchange the goods they produce for other goods, and therefore the railroad traffic has been lessened. There are also the tariffs to be considered. While the monetary problem is fundamental and the tariff problem is not, it is rather curious that an administration that has done everything possible to obstruct international trade should now be worried because our railroads have not a sufficient volume of traffic. Not only have 'tariffs been raised higher and higher but we have had excise taxes and dumping duties as added obstructions to trade. Is it to be wondered at that we have a railroad problem of gigantic proportions? The ability of the Canadian people to produce goods lias not been lessened; we could have just as great a volume of goods and passenger traffic as we ever bad because there are just as many people and their ability to produce goods is just as great as ever.
If this bill should pass, our unemployment problem will be increased. Further unemployment will be created among the railway employees and the employees in the steel and other industries closely associated with the railroads. Employees of the railways and in the steel, wood-working and other industries will be affected. They will not be able to purchase as much as previously and this will prove to be but another step in the process of deflation and the further contraction of the purchasing power of the Canadian people. On general principles, I am opposed to the bill.
Apparently the government has expended much enei'gy and time upon the railroad problem as a separate problem, but I think it would have been wiser had the administration devoted its energies to increasing traffic for the road. In my opinion, the best way to do this would have been to increase the medium of exchange and remove the obstacles to trade. It is also within the power of the

C.N.R.-C.P.R. Bill-Miss Macphail
Dominion government to lift the burden of federal taxation from the masses of the people and put it upon those best able to pay, by means of direct taxation. I believe that these methods would provide a permanent solution of our railroad problem, which I do not think is provided by this bill.
The bill calls for compulsory cooperation upon the part of the Canadian Pacific Railway. I am afraid that that may lead to a moral responsibility on the part of the Canadian parliament for the bonds of the Canadian Pacific. There is a very real danger of it, and we want no more of that kind of thing. Having taken over the fearful debt burdens of the roads which went to make up the Canadian National, let us not put an additional burden upon the Canadian people in the form of responsibility for the Canadian Pacific bonds. In my opinion, people who hold bonds should take a chance of personal loss. If we are going to guarantee the Canadian Pacific bondholders against loss, as we have guaranteed the bonds of the Grand Trunk, the Grand Trunk Pacific, and so on, we should guarantee every individual in Canada against loss. But that we do not do, and so we ought to be very careful not to put ourselves in a position where there will be a moral obligation in connection with the Canadian Pacific bonds.
The Prime Minister (Mr. Bennett) stressed the importance of the board of three to be appointed. Apparently the Canadian National is going into receivership and the members of this board are to be the receivers. If that is the case, the business of this board will be to get as much out of and put as little into the road as they possibly can. We may look for a curtailment of services and a possible disregard for the well-being of the employees of the road. If this board is to be a receivership, why should it be in perpetuity? That is the second reason why I am opposed to the bill in principle. I may not be justified in seeing these dangers, but I do see them in connection with a board that is self-perpetuating. No matter what the views of any future government may be they cannot change the committee of three without the *consent of both houses of parliament, of which, as we know, in practice is very hard to get.
I should like to say a word or two about the commission. I think that mental capacity and integrity should be admired and respected whether found in high or low circles, at home or abroad. But the occupancy of a conspicuous position is not, in my opinion, necessarily proof that the incumbent possesses [DOT]either or both these qualities. At any rate 53719-195
I have come to the place where I am not willing to take the word of any person just because that person holds a high position or possesses great wealth. I rather drew from the forceful words of the Prime Minister that it was almost going too far to criticize any members of the commission and that the commission being what it w'as, we should take its recommendations without further thought. With that I do not agree. I know very little about the members of the commission, but I want to tell the house an incident in relation to two of them which does not strengthen my faith in the recommendations of the commission. One is a very personal little incident. At a meeting in Newmarket a couple of years ago which was attended by Sir Joseph Flavelle, he stated that the bankers had only the savings of the people to lend and that they could not lend any money other than that of the depositors. I asked him if he actually meant what he said, and he replied that he did. I think no one could accuse Mr. Wayne Plumptre of Toronto university of being a radical. Yet he, in a recent article in MacLean's said:
The fallacy that bankers lo-an only other people's deposits is just as pronounced as the fallacy that money is backed by the security of gold. The banker, in the main, does not lend accumulated savings.
I would prefer to believe that Sir Joseph Flavelle really thought the bankers did loan only savings. We are getting him into a rather tight box, because, if he thinks they lend only depositors' money, I am afraid I do not bow in admiration to his ability, and if he knows they do lend ten times as much as is deposited with them, then I am afraid I cannot admire his integrity, so that in either case he is really in a bad fix. Besides that, with all respect for years, I think this is a time when people who got their ideas out of this generation should be in high places and on commissions. To too great a degree we have people affecting the action of to-day whose ideas were formulated in a time that is past forever, an age very different from the one in which we live.
I found accidentally in the New Republic a very interesting story about Mr. Loree, who was the United States citizen on the commission. I am sorry that the members are not interested in Mr. Loree; at any rate, I shall proceed to put this on Hansard, even if only the Hansard reporter and I hear it. This is, as I said the New Republic of February' 8 of this year:
Leonor F. Loree. boss of the Delaware and Hudson Railroad, having bought his way into the New York Central road, wants to become

3076	COMMONS
C.N.R.-C.P.R. Bill-Miss Macphail
one of its directors. If he were applying for the job of office boy instead of director, the personnel department would want to know something about his record. If they found out that, as an office boy, he had done anything quite on. a par with at least one of his performances as a railroad director, he would be tossed out of the window. However, there is one standard of ethics for office boys and another for directors. If you doubt it, draw up your chair while we tell you a little story about Mr. Loree.
I shall try to abbreviate the story, but it is i very interesting one:
He has now caused his Delaware and Hudson Railroad to buy 500,000 shares of New York Central stock and thus become its largest stockholder. Before that, however, he was ambitious to set up a great trunk line of his own with the Delaware and Hudson in the north and the Kansas City Southern in the south as the nucleus of the dream. Loree is chairman of the board of the Kansas City Southern as %vell as of the Delaware and Hudson. As part of this plan it was necessary to purchase stock control of some other railroads. Here is what he did.
September 25, 1924, as chairman of the Kansas City Southern board, he named a special committee to buy stocks in railroad companies in the southwest. November 6 and 7, Loree bought for his own account 14,000 shares of Missouri, Kansas and Texas common at an average of $20.35 a share-total cost $285,872.14.
Four days later (November 11) the special committee began buying Missouri, Kansas and Texas stock for the Kansas City Southern. It bought 350,000 shares at an average price of $32. Total price, $12,000,000. Mr. Loree then sold his shares at prices ranging from $31 - 375 to $32-375. He made a profit on the deal $144,707.


An hon. MEMBER:: Did he buy any oil
stock?


Agnes Campbell Macphail: I shall tell the hon.
member about that some day. If Mr. Loree did, he would not have made money out of it. The article continues:
This was all secret and no one knew of it until in 1928 the facts came out in a hearing before the Interstate Commerce Commission. The Wall Street Journal commented on these strange facts, but no daily newspaper published any account of them.
This is tire Wall Street Journal's account under date of July 27, 1928, analyzing the conduct of Mr. Loree:
The reason why Mr. Loree should not have bought stock in Missouri, Kansas and Texas, for his personal account is that he contemplated purchasing Missouri, Kansas and Texas stock for the account of the Kansas City Southern of which he is the head.
When the New York Stock Exchange discovered some years ago a broker trading on his own account against the interests of his clients he was expelled from the stock exchange with the stamp "obvious fraud." That broker, having an order to purchase shares, would first buy for himself, then, of course, at a higher price for his clients. It mattered not to whom he sold the stock later. He

traded for his own account against the interest of his trust.
Mr. Loree traded for his own account against the interest of his trust. That is the simple, plain and direct statement, if one must put a label on Mr. Loree's conduct.
A Boston lawyer, who saw this report in the Wall Street Journal, remembered he had a client who had a block of shares in the Kansas City Southern, so on behalf of his client he asked the directors of that railway to bring Mr. Loree to account. But the board of Mr. Loree's railway submitted the demand to a well known New York lawyer who advised them that Mr. Loree's conduct was quite proper and the board thereupon passed a resolution whitewashing him. The Boston lawyer then notified Mr. Loree and his directors that he would institute a stockholders' suit to force Loree to disgorge his profits, and as the suit would have to be brought in Missouri, the Boston lawyer engaged Senator James Reed to bring the suit. When it became known that the doughty Missouri senator, famed for his ruthless and searching cross examinations, was about to launch an attack, Mr. Loree, just as the bill in equity was about to be filed, caved in and paid the entire amount of his profit including interest, to the railway company.
I said that I have respect for ability and for integrity, but may I say that the two gentlemen whom I have named do not, in my opinion, strengthen the findings of the commission. I know nothing about the others, nor do I want to do so, but for too long have we thought because people occupied high positions or because they possessed great wealth, we should swallow any statements they made as being the wisdom of the ages. I have got quite past that point, and for the reasons which I stated earlier and which I do not care to repeat, I shall vote against the bill.


Mr. J. K. BLAIR (North Wellington):: Mr. Speaker, I shall briefly give my reasons for objecting to this bill. I believe that as labour and capital are partners, labour should be represented on the board. This legislation tends toward amalgamation and eventually the destruction of the national ownership of railways. I object because this bill will remove entirely from the hands of parliament control of the national railways, and has a tendency to destroy the principle of responsible government. Undoubtedly the effect of the bill will be to aggravate unemployment in this country. Surely the government could devise some means of alleviating the economic conditions in Canada without increasing unemployment. I object to this bill because

C.N.R.-C.P.R. Bill-Mr. Blair
undoubtedly it will aggravate unemployment. Its concern appears to be moneyed interests, and it disregards the interests of labour. Surely the government knows that its primary obligation is the relief of unemployment. In 1922, when conditions somewhat similar obtained, the government of that day did not dismiss men from the railway or lower their wages. They adopted other means of improving the conditions by lower tariffs, and at this time the humanitarian side should also be considered. We all agree that first in importance is the problem of unemployment, next farm relief, and third, perhaps, the economic condition of the railways. This bill proposes to relieve the economic condition of the railways at the expense of the railway employees, among whom, every member of this house will agree, it will increase unemployment. I have often thought that labour and labour unions went too far, but surely none of us now can say that labour has not drunk deep of the bitter cup of poverty.
All that is wrong with the railways in my opinion is that we have overbuilt. A young nation, like a young person, is apt to be overoptimistic. Perhaps we expected too much of this young country. What the railways need, and I am speaking now of both Canadian railways, is more business, and I believe that if the tariffs of this country were lowered, and the sales tax removed, if there was less bursting and blasting, if we would learn how to be courteous to other nations, it would help both external and internal trade and bring about a great improvement in the condition of the railways. It would help to check this wholesale selling of our ships, the rusting of our trains on railway sidings, the wholesale dismissal of train men and sailors. I intend, Mr. Speaker, to vote against the bill.


Pierre Édouard Blondin: It is my duty to point out to the house that if any other hon. member wishes to speak in this debate he must do so before the minister rises to reply, as the minister will close the debate.


Joseph Philippe Baby Casgrain: Mr. Speaker, before the minister speaks, I rise to a point of order. Standing order 43, at page 366 of Beauehesne's Parliamentary Rules and Forms, says:
(1)	No member may speak twice to a question except in explanation of a material part of his speech which may have been misquoted or misunderstood.
The next subsection of standing order 43 reads:
(2)	A reply shall be allowed to a member who has moved a substantive motion.
53719-195J
Your Honour will find a substantive motion defined at the bottom of page 108, paragraph 366:
By a substantive motion is meant a motion not incidental to a proceeding before the house.
I submit, Mr. Speaker-


Mr. HANSON (York-Sunbury):: That is
pretty dirty stuff.


Joseph Philippe Baby Casgrain: I would ask the- hon.
member to withdraw that remark. He has no right to make it. I am a, member of this house, and have the same privileges as every other hon. member. I insist, Mr. Speaker, upon the remark being withdrawn.


Pierre Édouard Blondin: I did not understand what the hon. member said.


Joseph Philippe Baby Casgrain: He said, "dirty stuff." I heard him, as did others around me, and he repeats it.


Pierre Édouard Blondin: I am not aware which
hon. member made the remark.


Joseph Philippe Baby Casgrain: It was the hon. member for York-Sunbury (Mr. Hanson).


Some hon. MEMBERS:: Withdraw.


Pierre Édouard Blondin: I am sure that the hon.
member for YorknSunbury, if he made the remark, will withdraw it.


Richard Burpee Hanson: If the
remark is unparliamentary, Mr. Speaker, I will withdraw it, but I meant it just the same.


Joseph Philippe Baby Casgrain: I rise to a point of
order, Mr. Speaker. A member cannot qualify his withdrawal.


Pierre Édouard Blondin: Do I understand that
the hon. member for York-Sunbury unequivocally withdraws the remark?


Richard Burpee Hanson: I do, Mr. Speaker.


Joseph Philippe Baby Casgrain: Having regard to the
rule which I have quoted, Mr. Speaker, I submit that it would not be proper for the hon. Minister of Railways to resume the debate.


Pierre Édouard Blondin: Notwithstanding what the hon. member has said, it has been the practice of this house to consider the motion for the second reading of a bill as a substantive motion. Prior to 1927 what is now standing order 43 of this house was standing order 21, and it contained the words, "who has moved a substantive motion or the second reading of a bill." When the rules were revised the words "or the second reading of a bill" were considered superfluous; it was considered that it went without saying that a motion for the
3078	COMMONS
C.N.R.-C.P.R. Bill-Mr. Manion
second reading of a bill would be considered as a substantive motion. On March 30, 1920, and on May 30, 1920, the Speaker of this house so treated a motion for the second reading of a bill. A similar ruling was given during the present parliament. So I cannot admit that the hon. member's point of order is well taken. In accordance with the practice of this house the member moving the second reading of a bill has the right to reply.


Hon. R. J. MANION (Minister of Railways and Canals):: Mr. Speaker, in view of
the fact that during the two weeks this debate has been going on, two out of three speeches have been coming from the other side of the house, and that on three occasions at least this side of the house permitted hon. gentlemen opposite to exceed their time against the rules of the house, I must confess that, after extending this courtesy to hon. gentlemen opposite, I am somewhat surprised by the attitude now' taken by the chief whip of the Liberal party in trying to prevent me from speaking.
In speaking for the forty minutes at my disposal in closing the debate on the second reading of this bill, I do so with mingled feelings because, in moving the second reading nearly two weeks ago, I particularly requested of all sides of the house that, as far as possible, they should deal with the question on a high plane. I will quote my words:
I sincerely hope that when this bill goes to the committee of the -whole or is otherwise disposed of by this house it will be dealt with on exactly the same high plane, because I submit that this is no time for party strife, and I do not believe that the people of this country in these critical times, particularly having in mind the incidents of last week, are looking for party strife on a matter which is so serious to them as is this question.
I repeated the same suggestion later in my remarks. I endeavoured at that time to take a non-partisan, non-eontrove-rsial and unbiased attitude on this whole question, and this is proved by the commendations which I have received from the other side of the house from various speakers, on the high stand taken at the opening of the debate; though their commendations have made me sometimes wonder if I was not wrong. Then the hon. member for North Waterloo (Mr. Euler) took exactly the same attitude as I did. He took an unbiased, non-partisan attitude, certainly one which supported the position which I had taken. He was followed later by the hon. member for North Bruce (Mr. Malcolm) later by the hon. member for Gloucester (Mr. Yeniot), this afternoon by the hon. member for Quebec South (Mr. Power), by the hon. member for West Edmonton (Mr. Stewart),
IMr. Speaker.]
and various others who took exactly the same broad attitude towards this very important question. I may add that a number of speakers on the other side of the house who belong to the third party took the same position. Of course they differed in regard to details of the bill, but on the whole they took a non-political stand, although they were critical of some portions of the bill. I congratulate them and the others I have mentioned on their very fair stand.
Speaking after me, the hon. member for North Waterloo obviously spoke on behalf of the whole Liberal party. He was their spokesman for the time being, and I must confess that sometimes since the beginning of this debate I have found myself wondering how he felt, after having stood up in this house and showing a very fair-minded attitude and more or less pledging the party, to see a large portion of the party desert him. That is not his fault, and I am not urging it as any criticism against him; yet I found myself wondering over and over again, as I listened to the change in tone after the hon. member for North Waterloo and one or two others had spoken, as to what caused that complete change of attitude voiced by so many hon. gentlemen who followed a little later in the debate.
.Somie hon. MEMBERS:	The Prime Minister's speech.


Robert James Manion: The attitude of hon. members had changed long before the Prime Minister's speech. However, I will deal with that later. Criticism did come, it is true, in regard to some details of the bill, from this side of the house. I admit that. I find myself again wondering if it was not a fact that the right hon. leader of the opposition (Mr. Mackenzie King) came to the conclusion there must be some difficulty in our party, and therefore decided he would do well to take advantage of it and perhaps split the party on a vote. However, I am just guessing as to that.
I do say this, that I listened to every speech made in this debate from all sides of the house, and I heard no speech from this side-and in that I include the Prime Minister's speech-I heard no speech from this side of the house which was really partisan in any way. I shall try to establish that as I go along. But some hon. members on the other side, at least half of them, made political speeches. They found fault not only with the bill-and I do not quarrel with that -but they imputed motives to us. The right hon. gentleman who leads the opposition

C.N.R.-C.P.R. Bill-Mr. Manion
spoke of sinister designs behind this bill. I doubt if anybody could have used more severe language than to suggest that there was anything in the shape of a sinister design behind this bill. It is true hon. members opposite-as they did also a minute ago-in their speeches did charge the Prime Minister with having taken a partisan attitude. I deny it. He followed the hon. member for West Lambton (Mr. Gray) whose speech was a very very severe castigation, from a political standpoint, of everything coming from this side of the house. He followed the speech of the right hon. leader of the opposition who moved an amendment which could not possibly be accepted, the right hon. gentleman who used the expressions I have just quoted.
The right hon. gentleman opposite suggested sinister motives, and so that there may be no mistake I shall read his words as they are reported in Hansard. At page 2853 of Hansard the right hon. gentleman is reported as follows:
But if that cannot be done,

That is, if the amendment cannot be accepted-
-I must confess that so far as I personally am concerned I should not find it possible to support the second reading of this bill, because I would find in the refusal by the government of a declaration of this kind, evidence that there must be a sinister design which is not apparent on the face of the measure itself.
What possible suggestion could anyone make of a more partisan nature than that the whole government of my right hon. leader had a sinister design behind the bill? I say the leader of the government was justified in becoming a bit irritated by the speech of the leader of the opposition, and1 even more so by the speech of the hon. member for West Lambton.


Mr. MACKENZIE KING:: My remark
was conditioned upon the acceptance of the amendment.


Robert James Manion: Upon the acceptance of
an amendment which could not be accepted, because it amounted practically to a six months' hoist, an amendment which the Speaker himself ruled out of order. Yet we were asked by the right hon. gentleman to accept the amendment; in the event of not accepting it he suggested there was a sinister design behind the bill.
It is true the Prime Minister did quote Sir Wilfrid Laurier as having said that the National Transcontinental and the Grand Trunk Pacific would cost the people some $13,000,060 when the cost was hundreds of millions. However that is a matter of history.
There was nothing wrong with the quotation; it was absolutely according to facts. He also pointed out that Mr. Blair, the Minister of Railways of Sir Wilfrid Laurier's day, had resigned because he did not agree with the proposal to build the Transcontinental railway. However those are historical facts.
I do not remember any statement made by the Prime Minister which was of a partisan nature.


Ian Alistair Mackenzie: Oh, oh.


Robert James Manion: On the other hand, the
hon. member who has just said something to me which I did not hear, the hon. member for Vancouver Centre (Mr. Mackenzie) got up to-day in this House of Commons and commended me upon my moderation, and hoped that I would show the same type of moderation in my speech to-night. But here is the way he showed moderation: I marked down two or three headings as the hon. member spoke. He talked of an iniquitous bill; he talked about an insidious measure; of the Machiavellian hand of this government; of a Tory triumvirate; of a Tory conspiracy. I found myself again asking the question:	If
that is a moderate speech, what would he say if he were immoderate?
The right hon. leader of the opposition, in his speech, of course dealt with the bill in most moderate fashion. I shall give some of the statements he made. He said the bill was sinister in design. He said it would deprive parliament of its fundamental rights; that it would adversely affect the Intercolonial railway and the rights of the maritime provinces. I ask hon. members just to note the geographical distribution of his phrases. He said it might result in the shut-down of the Hudson Bay railway project-he had jumped from the maritimes to the Hudson bay. He said the limitation of the board of trustees was unfair to organized labour; that was a touch for labour. He said that the powers granted the trustees "may effectively bring about amalgamation," as to which, unlike certain of his followers, he was "unalterably opposed." I say that the attitude of the right hon. leader of the opposition was merely a camouflage, that he was merely pretending to take a moderate attitude in connection with the bill, that he was simply carrying out the usual policy of an opposition whose duty it is to oppose. He is opposing the measure.
I do not wish further to deal with that line of thought, but may return to these matters later. In the remaining time at my disposal I shall turn my thoughts to the charges made by some hon. members.

C.N R,-C.P.R. Bill-Mr. Manion
The hon. member for West Lambton made a very partisan speech. He made the statement that the position of president and chairman being divided under this bill would have a very serious effect on the national railway.


Mr. GRAY:: No, no.


Robert James Manion: He opposed very strongly the division of this power. I simply point out-


Ross Wilfred Gray: I do not wish to interrupt the minister, but I commended the minister on the very fact that there should be this dissociation.


Robert James Manion: I accept the hon. member's correction. However, some hon. members made that statement. Some suggested the arrangement would be detrimental to the railways. I have a list of sixteen American railroads on which such an arrangement obtains. The hon. member for West Lambton said that the government was seeking to foist its trustees on the country, and keep them in that position. He took that stand. I cannot agree with him because if the government had desired to do that it would have gone a whole lot further in carrying out the recommendations of the royal commisssion in that regard. At page 64 of the report it is recommended by the commissioners how the trustees shall be appointed in case of a vacancy. It is stated in the first sentence at page 64:
Vacancies among the trustees shall be filled from a panel of eight named by the remaining trustees.
But when the bill was going through the Senate it was changed so that the panel would be supplied not by the remaining trustees but by the remaining trustees with the addition of the chairman of the Board of Railway Commissioners and President of the Exchequer Court of Canada-in other words widening the base. If we had been desirous of perpetuating our trustees we would not have widened the base for the framing of the panel, because it will be remembered that the president of the exchequer court, for whom I have the greatest respect, was an outstanding Liberal, and a minister in a former Liberal government.
Another of the complaints, this one I think from my hon. friend the member for West Lambton, was that this bill by clause 16 would lead to amalgamation. Of course laws can be broken, but this measure is not being enacted for the purpose of permitting amalgamation. I think it was Daniel O'Connell who at one time said he could drive a coach and four through any act of parliament, and this act may be like others in that respect. But my right hon. leader, the Prime Minister, gave the pledge that I had already mentioned-that
[Mr. Manioa.J
we do not intend this bill to bring about amalgamation, and we have given the pledge that an amendment will be moved to protect against that possibility. It would be also a breach of trust on the part of the trustees appointed to look after the welfare of the Canadian National Railways should they take it upon themselves to adopt any such policy, and I do not think this or any government would consider appointing to such an important position men who would do this.
Then it was suggested that this measure is for the purpose of wrepking the Canadian National Railways. I say, and have said on many other occasions, that any man who would set out intentionally to wreck the Canadian National Railways would not be fit to bear the name Canadian or to represent any constituency in this house. Canada has too much interest in, is too much bound up with, the Canadian National Railways; that great transportation system is too intimately related to our national life, for anyone on either side of the house to endeavour to wreck it.
The hon. member for Provencher (Mr. Beaubien) claimed, as did the hon. member for Cartier (Mr. Jacobs), that this bill could only mean amalgamation, and the hon. member for Provencher opposed it for that reason. If that is the object in view, why is the bill so strenuously opposed by the Canadian Pacific Railway? That, I think, is a sufficient answer, for Mr. Beatty has taken the position throughout the country that he believes amalgamation is the proper solution of Canada's railway problem, yet the Canadian Pacific is opposing this bill very strongly,-they did so in the Senate, and they are not favourable to it at the present time.
The hon. member for Kenora-Rainy River (Mr. Heenan)-I am sorry I do not see him here at present-spoke of the decrease in wages to be brought about, and said that already there had been a decrease on the Canadian National, as I understood him, of $125,000,000 from 1929 to 1932. I find there has been an actual decrease of $59,000,000, a little less than half the amount the hon. gentleman gave, but as the hon. gentleman is so often not more than half right I suppose this is in line with his usual accuracy in such matters. He also took the attitude that this measure was going to injure labour, and asked for consideration of what he called the human element in industry. Of course we must all think of the human element-and if I may be permitted to refer to my own constituency, it is, I think, more a labour constituency than that of the hon. member for Kenora-Rainy River-I am just as anxious for the welfare of the industrial class, the working class so-

C.N.R.-C.P.R. Bill-Mr. Manion
called, as any one in this house, and I do not except the hon. member for Kenora-Rainy River although I do not speak so often about it as he does. I even go so far as to admit that our economic system is at a fault in permitting conditions to exist that have existed in this depression and other depressions in the past, and that we will have to correct those conditions so that men thrown out of work in any industry will have some care given them. I admit that, but at the moment such measures have not been put into effect and cannot be put into effect under the conditions existing at this time. During all the years that the hon. gentleman administered the Department of Labour in the late government I did not notice that he put any such policies into effect.
But I do not think it is proper in this house to argue the question from the standpoint of any one class in the community. It seems to me that an hon. member represents every class not only in his own constituency but in all the country; at least that is the position I have taken as a member of parliament. And while the argument may be made that there should have been a representative of the railway workers on the commission or the board of trustees, what about the agricultural workers? We have in this country under 200,000 railway workers and over 1,000,000 agricultural workers, and one class is just as dependent on the railway as the other, because the agricultural people cannot buy anything that they require to eat or wear or use that does not pay toll to the railways. So if 200,000 or less railway workers must be represented surely the agricultural class have the same right.
My friend the hon. member for Winnipeg North Centre (Mr. Woodsworth), together with the hon. member for Red Deer (Mr. Speakman), the hon. member for Peace River (Mr. Kennedy), the hon. member for Wetaski-win (Mr. Irvine), the hon. member for Southeast Grey (Miss Macphail) and others, took what I consider a fair attitude; but I wish to refer to one statement made by the hon. member for Winnipeg North Centre. He said the bonds of the railway should be exchanged for stocks. If the holders were willing, yes, I agree. But you cannot take possession of the bonds and give stock on which dividends would be paid only when earned, unless you are prepared to repudiate the country's pledge, because the bonds of the Canadian National Railways are guaranteed by this government, and unless we come to the point, which we have not reached yet, that we repudiate our obligations, we cannot force the holders of these bonds to exchange them for stocks.
The hon. member for North Winnipeg (Mr. Heaps) complained that there was no labour representative on the commission. I point out that there was no class representation of any kind on the commission. Perhaps I was a little unfortunate in saying that Lord Ashfield and Mr. Loree represented bondholders and stockholders in Great Britain and the United States. I did not mean that they were chosen for that purpose; I simply meant to point out that as there were hundreds of millions of dollars of Canadian Pacific securities held in Great Britain and Canadian National bonds in the United States, it was the opinion of the government that it would bring about a better understanding if we had on the commission a representative from each of these great countries. I think that was a reasonable and logical attitude to take. But, as pointed out this afternoon by some speaker, labour was considered in this report. Section 190 deals with contractual relations of labour, and a clause was put in the bill by Senator Murdock to protect labour in changes brought about by cooperation, so that the labour people on the two great systems would get a fair deal. Throughout the hearings before the commission and also before the Senate committee representatives of many different labour organizations appeared and made representations, so that labour did have opportunity to put its case before both the commission and the Senate committee.
On this side of the house a number of members, two particularly, the hon. member for York-Sunbury (Mr. Hanson) and the hon. member for Queens-Lunenburg (Mr. Ernst), advocated enlarging the number of trustees, and the same recommendation came from some members on the other side of the house. As to the number, I would only repeat the argument of the Prime Minister, that three was the number recommended by the royal commission. As far as numbers go I believe that, as I said in my first speech, the seventeen who are on the board now have done splendid work in bringing about economies, but at present rearrangement is needed. There must be a chairman to assist Mr. Hungerford, because he cannot be both operating head and chairman or whatever you choose to call the position. So since the royal commission recommended three, it was the opinion of the government, as expressed by the Prime Minister, that we should as far as possible follow such recommendations.
After all, the imporant man among the trustees is the chairman. It will not be an easy thing to pick a man suitable for that position, but if we succeed in getting the man
C.N.R.-C.P.R. Bill-Mr. Manion

most suitable for it, I think all hon. members of this house will agree that he would be quite well able to act alone as far as that is concerned.
The hon. member for North Waterloo claimed that the public was not being protected in the tribunals. I do not agree with him on that, because the 'head of any tribunal will be the chairman of the Board of Railway Commissioners, Mr. Justice Fullerton, a man who, before he came to this city of Ottawa, had won a very high position indeed in the judiciary and who to-day has the confidence, I think, of both railway systems and of the people of this country generally. He is the head of the Board of Railway Commissioners for the purpose of protecting the people of this country against possible injustices on the part of the railways, just as on the arbitral tribunal he will be in a position to protect the public. So in that regard I think my hon. friend has a fear which is without foundation.


Mr. EULER:: He could not initiate a
tribunal himself, could he?


Robert James Manion: No, he could not, I will
admit; it has to be asked for by the railways. The hon. member for Melville (Mr. Motherwell) in what I will say for him, as he said for me, was a very moderate speech,-


Mr. MOTHERWELL:: Thank you.


Robert James Manion: -did make one or two immoderate statements, which was a fairly low average for the hon. gentleman, and I do not wish to be unkind at all. One of the statements he made-I submit without support at all-was that the Conservative party always has been against the Canadian National Railways. That is unfair and untrue. The Conservative party always has been for the Canadian National Railways. Certainly we were for the system in 1919, and the best service to be done for the Canadian National system during its history has been done during the last two or three years, when it encountered present business conditions. The hon. gentleman also reiterated a charge which has been floating around western Canada for a long time; I thought it had died, but my hon. friend resuscitated it. His words were to the effect that freight was being switched from the Canadian National to the Canadian Pacific. He did not say we were doing that, though one might have taken that inference from his remarks. I think he did say, however, that freight was being switched from the Canadian National to the Canadian Pacific. I should like to point out to him and to my hon. friend from Humboldt (Mr. Totzke), who I think made the same charge-


Mr. TOTZKE:: I did not take that attitude.


Robert James Manion: My hon. friend even quoted figures to prove it.


Albert Frederick Totzke: I said we were losing business.


Robert James Manion: My hon. friend did take
the attitude that business was going to the Canadian Pacific rather than to the Canadian National. The hon. member for Melville was a little more extreme in his view, but I am not quarrelling with him.


William Richard Motherwell: My hon. friend will remember that I gave him the opportunity to quote the correct figures.


Robert James Manion: I think my hon. friend was very generous, and I have no objection to take to his remarks. I am merely directing my hon. friend's attention to the fact that if he did not charge us with switching, as I thought he had, certainly we have been so charged throughout the west. I should like to give the percentage of gross earnings of the two railway's which went to the Canadian National Railways during the last few years, in order to make the position quite clear. I am hurrying a bit, because unfortunately for me my time is somewhat limited. Of the total gross revenues of both railways in 1928 the Canadian National earned 51-8 per cent; in 1929 it earned 52-6 per cent; in 1930 it earned 53 per cent; in 1931 it earned 53-7 per cent, and in 1932 it earned 53 per cent. These earnings were from traffic of every sort. So it will be seen that the average is pretty constant, though there has been a slight gain in the last two or three years.
One hon. gentleman whom I see here to-night though not in his own seat, the hon. member for Vancouver-Burrard (Mr. Han-bury) made a speech to which I do not wish to reply except to this extent:	May I
say that he did what I think was not necessary in dealing with a bill or statute of this kind; he made a personal attack upon the Prime Minister. In considering measures of this kind I do not think such personal attacks are called for; I think they are entirely out of place, and I do not believe my hon. friend made a speech worthy of himself in so doing.
This afternoon the hon. member for Lot-biniere (Mr. Verville) made the statement, I understand, that we have not been making the proper salary reductions. I do not know where he got that information, because I gave the figures showing that the management of the railways had cut salaries-urged by ourselves, I frankly admit-to the extent of $1,900,000 during the last two years. That is, the salaries for 1932 as compared with

C.N.R.-C.P.R. Bill-Mr. Manion
1930 showed a decrease of $1,900,000. And here I must remind hon. members that this refers only to salaries of over $3,000 a year received by the main officials of the road. I am not speaking now of any wage cuts; I am speaking of the salaries of the officials of the road. By reducing those salaries and eliminating certain positions the management brought about a reduction of $1,900,000 in 1932 as compared with 1930. In addition let me say something else I had not intended to bring up, and may I just interject here that many of the things I am saying now I had not intended to say, but hon. gentlemen opposite have made statements which must be refuted. We did away with the positions occupied by many men drawing huge' salaries, who should not have been drawing them. There was one gentleman whose name I will not mention, because possibly he may be seeking some other railway position to-day. This gentleman was drawing a salary of $62,000 a year; he had been drawing from $50,000 to $60,000 from 1925 on, and from no official of the system could I find that this man was doing any service useful to the railway. As a consequence the officials of the road were instructed to look into the matter, and the officials themselves were very glad to get rid of that gentleman. And there were various other officials drawing huge salaries, though possibly not so great as that drawn by the gentleman I have mentioned, whose positions have been eliminated.
Now I should like for a moment to deal with the speech of my hon. friend from Quebec South (Mr. Power). This afternoon the hon. gentleman delivered a speech which was not only able and analytical but which was fair in every possible way. He pointed out that there was nothing in this bill to remedy public interference or public pressure in the larger sense. I should just like to say that to my mind the whole purpose of the bill in appointing the trustees as outlined and placing them beyond the power of parliament and the power of the government is to attempt absolutely to remove them from such influences and make them independent. I believe they are so much removed from such influences that they could refuse to listen to any parliamentary representatives who might press them for favours, and could refuse to heed public pressure from any part of the country. That is why they have been given such powers under this bill. They are given the power to oppose public and political pressure, in the interests of the railways as my hon. friend the Minister of Public Works (Mr. Stewart) suggests.
My hon. friend from Weyburn (Mr. Young) made a speech in the course of which he
blamed everything upon protection. He often reminds me of Mr. Dick in David Copperfield, who always found the head of King Charles before him. The hon. gentleman cannot discuss anything in this house without bringing in the question of free trade. He said that one of the troubles with this railway was the insane practice of buying Canadian goods.
I should like to ask him or anyone else why this practice should be called insane. It seems very strange reasoning to me; surely the people of Canada and particularly a Canadian institution such as the Canadian National Railways-and the Canadian Pacific Railway also, for that matter-should buy Canadian goods where they can get goods of like quality at equal prices.


Mr. YOUNG:: I did not say the practice
of buying Canadian goods was insane; I referred to the insane practice of forcing the railways to buy-


Robert James Manion: Canadian goods.


Edward James Young: -Canadian goods when they could not buy them to the best advantage.


Robert James Manion: My hon. friend can have it his way, but I wrote down his words as he uttered them. I am sorry I have not had time to read his speech since, but I think if he checks it up he will see that I have quoted the effect of his words if not the words themselves. I noticed that my hon. friend found it difficult to correct me, but I do not wish to do the hon. gentleman any injustice. It did strike me as peculiar reasoning, however. I frankly state, as I think every hon. member will admit, that we must love our own country and our own people best, and we should endeavour to give them whatever favours we have to give.
The hon. member for Cartier (Mr. Jacobs) made a very interesting and witty speech, full of good humour, the sort of speech he usually makes in this house. Whether or not you agree with the hon. gentleman he always makes a speech that entertains and that is enjoyable to listen to. As he spoke he reminded me of the fact that he cares very little about the danger of losing his reputation by being humorous. There was a great English statesman who once said that the only way for a public man to keep his reputation of being wise was to be as solemn as an ass, and I can assure my hon. friend that he never is as solemn as that.
However, the hon. gentleman did make one or two statements to which I must take exception. He stated, or at all events implied, that the Canadian Pacific Railway was on the

C.N.R.-C.P.R. Bill-Mr. Manion
verge of bankruptcy. I do not think that was a wise statement to make; I do not think it is on the verge of bankruptcy. I believe both the Canadian Pacific Railway and the Canadian National Railways will come back if we have a decent revival of business, and I do not think it will do any good to exaggerate the condition in which these railways find themselves. I have no desire to do that and I do not think any other hon. member of this house wishes to do so. I noticed also during the course of my hon. friend's very interesting speech that he said he supported the bill because he believed it would lead to amalgamation.


Mr. JACOBS:: Hear, hear.


Robert James Manion: And my hon. friend now says, "hear, hear." He has never lacked courage. As he said the other night, we have both been in this house for some seventeen or eighteen years, but in spite of being on opposition sides of the house we always have been the best of friends. The hon. gentleman said that he favoured the bill because it led to amalgamation. I should like to point out to the house, especially to my hon. friends on the otheT side who have been pointing to us as the amalgamationists, that the only man in the whole house who openly favoured amalgamation was one of their own members, the hon. member for Cartier.


Samuel William Jacobs: I hope the hon. gentleman will give me credit for frankness.


Robert James Manion: I do, and for courage as well. It takes courage as well as frankness to differ from one's party, as I well know.


Samuel William Jacobs: And truth also. That is one
of my weaknesses.


Robert James Manion: I know some of my hon. friend's weaknesses, but I do not know them all.
The hon. member for Shelburne-Yarmouth (Mr. Ralston) made one of those speeches for which he has become famous in the house. He can draw his own conclusions as to what I mean by that statement. He said that he wanted to draw the attention of the house "to the legacy we got and the legacy we left," the "we" being the Liberal party. He twitted the Minister of Justice (Mr. Guthrie) on a speech he made in 1928 when he referred to the progress made by the Canadian National Railway. The Minister of Justice does not need me to defend him, but I think I should say that at that time he could not tell what the Liberal party was going to do to the road in 1929.

An hon. .MEMBER.: Very weak.


Ian Alistair Mackenzie: May I point out that he spoke in 1929 also.


Robert James Manion: He is a very fine speaker and he speaks every year.


Ian Alistair Mackenzie: He went on record then to the same effect.


Robert James Manion: It must have been before he recognized that to which I am now going to refer. My hon. friends have forced me to refer to these matters. I had no intention of taking them up but in view of the severe criticism of hon. friends opposite I believe it is only fair that these facts should be told. In 1929, because of public pressure, if you will, political pressure, if you will, or some sort of pressure, the Canadian National Railways presented to this house a budget amounting to over $200,000,000. When hon. members recall that before the war the national debt of this country was only $336,000,000, they will realize the immensity of the $205,000,000 mentioned in the report of the royal commission. A year before the royal commission was appointed I gave the figure as $270,000,000, but I was high by $18,000,000, which represented refundings. Subtracting $18,000,000 from $270,000,000 leaves $252,000,000, which I think is the correct figure instead of the $205,000,000 given by the royal commission.
I should like to refer to some of the sections of the royal commission report. Section 142 reads in part as follows:
The conduct of the affairs of the national railway has been subjected in the past to political and public pressure.
Section 146 reads:
Of direct political interference by ministers and members of parliament in the detail operations of the railway, we were assured by the officials there was little or none. It was in the larger sphere of policy that political considerations led to unwise and unnecessary capital expenditures, the result of which was to create an atmosphere in which the ordinary principles of commercial operation of the railway were lost sight of.
Section 150 refers to the budget of $205,000,000, and section 151 reads as follows:
The actual cash expenditures during the same year covered by these authorizations amounted to $113,859,777, the balance, $91,748,104, being chargeable to subsequent years as construction work proceeded or obligations on account of roads purchased matured.
Section 152 reads:
The net increase in funded debt of the Canadian National due the public for the year 1929 amounted to $144,670,459;

C.N.R.-C.P.R. Bill-Mr. Manion
Section 154 reads:
When considering the scale upon which branch line extensions and acquisitions, as well as hotel expenditures were made, and railway and steamship services duplicated, it is impossible to avoid the conclusion that the board of directors and the management of national railways were amenable to political influence and pressure, which it would have been in the public interest to have withstood.
That was in 1929, a preelection year. These commitments were made from coast to coast covering steamships at one end, hotels in the east, terminals at Montreal and branch lines through the western provinces.


Joseph Philippe Baby Casgrain: Did the members of the railway and shipping committee object to those expenditures? I think they were unanimously adopted.


Robert James Manion: Probably that is right but I cannot check it up. In 1929 the Minister of Trade and Commerce (Mr. Stevens) sitting beside me as he is to-night, made a speech wherein he pointed out the immensity of the expenditures being made. I remember that speech very well. It is true that we did not do much criticizing, but it must be remembered that if we had dared to open our mouths against the Canadian National Railways we would have been accused of enmity towards the road. That is the, position we were in. I remember when the Prime Minister was sitting in the seat of the right hon. the leader of the opposition. I remember faking a seat beside him and discussing the immensity of the expenditure. But I repeat, if a man had dared to open his mouth at that time in criticism of any of these expenditures he would have been branded as an enemy of the Canadian National Railway.


William Lyon Mackenzie King: The committee was unanimous.


Robert James Manion: Hotels were scattered from coast to coast. One of the hotels to be built was at Prince Rupert, a town of four or five thousand people. They were going to build a S600.000 hotel, and 8250,000 was later included in the estimates for that purpose. These expenditures were projected from coast to coast.
I should like to point out an extraordinary thing which has never been referred to publicly before. During 1929 when this country was being committed to expenditures totalling over $200,000,000 on behalf of the Canadian National Railways, Sir Henry Thornton was not technically an employee of the company. Sir Henry Thornton's contract had run out on October 3, 1928, and it was not renewed until September 23, 1929.


Mr. HANBURY:: That is not very good law.


Robert James Manion: I am not arguing about the law, I am simply pointing out that during that particular time when this country was committed for these tremendous expenditures, Sir Henry Thornton was not technically an employee of the company. His contract had run out and it was necessary that it be renewed. Sometimes I find myself asking this question: Was that used as a club over Sir Henry Thornton? My right hon. friend the leader of the opposition shakes his head rather emphatically, but he did not hesitate to impute sinister motives to us.


William Lyon Mackenzie King: The minister is the only one who would think of that sort of thing.


Robert James Manion: It is a rather strange thing but Sir Henry Thornton was not again employed by agreement until long after the session of 1929.-
This road has now been brought to a state of fitness from the standpoint of economical management and our desire is to keep it in that position. It will be easy for the board of trustees to do it if we get the right men.
I should like to point out one or two facts in connection with the arbitral tribunal. It seems to be thought that the arbitral tribunal is to be a continuing body, but it is not. The tribunal will be set up only upon the request of one of the railroads whenever there is a dispute between the two roads as to cooperation.


Ian Alistair Mackenzie: That is not the recommendation of the commission.


Robert James Manion: Oh, yes, I think so.


Ian Alistair Mackenzie: They went further.


Robert James Manion: I have not the time just now to argue it out but we can deal with it in committee. The purpose of the arbitral tribunal is to effect economy and to bring about more remunerative operations. That is the only purpose of the tribunal. It cannot do damage to the Canadian Pacific Railway and it cannot do damage to the Canadian National Railways, because its whole purpose will be to bring about cooperation to result in economies and more remunerative operations. Had an arbitral tribunal been in existence a few years ago with the same powers as are being given by this legislation to the present arbitral tribunal, there would have been no duplication of hotels at Halifax and Vancouver and there probably would not have been commenced that wild scheme of a
C.N.R.-C.P.R. Bill-Mr. Manion

$50,000,000 passenger terminal in the city of Montreal, the total of those three items alone amounting to S63,000,000.
Another question I wish to deal with in hurrying along-


Pierre Édouard Blondin: The hon. gentleman's time has expired.


Some hon. MEMBERS:: Go on.


Robert James Manion: I wish to thank my hon.
friends for allowing me to go on for a few moments. They are returning the kindness we showed to some on their side and I appreciate it.
A number of different speakers, particularly the hon. member for Toronto West Centre (Mr. Factor) and the hon. member for Shel-bume-Yarmouth (Mr. Ralston), stated that when the Canadian National Railways in 1923 went through the process of reorganization or coordination, or whatever the term was, they had been taken over in a dilapidated condition, and it was pointed out what wonderful work was done in coordinating these straggling nonentities into one system.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: Let me quote the words of the hon. member for Toronto West Centre. He spoke of the responsibility-listen to this; it is rather good:
The responsibility of joining disjointed, disconnected, dilapidated, insolvent and bankrupt lines of railways into one national system.
I thought this was rather effective from his own standpoint, and I found myself thinking of a remark made by a great gentleman of his own race about fifty years before he was born, Disraeli, who became prominent as a prime minister of England, who on one occasion spoke of Gladstone as being "intoxicated with the exuberance of his own verbosity." I wonder if my hon. friend had not been a bit carried away by his own verbosity. If not, he was certainly carried away to some extent by a lot of arrant nonsense, because those roads were not in any such condition as my hon. friend and many others have tried to make out and as lias been reported in the press throughout Canada at various times.
Let me give some of the facts very briefly. In the first place the Intercolonial was then and is now a high-class railway. I do not think it is any better railway now than it was in the old days. The Grand Trunk railway was built in the fifties and was and has been throughout all these years one of our greatest railways running from Portland on the east through the southern part of Canada to Chicago on the west. The Transcontinental

and the Grand Trunk Pacific have the finest roadbeds ever built in this dominion and the lowest grades through the mountains. In addition to that there was the Canadian Northern, which I have left to the last because there may be some criticism of it; but even that w'as not in anything like the condition my hon. friends painted. To prove I am not altogether wrong in my statement, I might as well quote one whom my hon. friends opposite always accept, and that is Sir Henry Thornton, who, to the regret of all of us, died recently. In the 1922 report of the Canadian National Railways signed by him, he made a few statements about the condition of the road, and I shall put them on record just for the sake of future discussion. He said:
1922 completes the four-year period of unified management of the former Canadian Government Railways and the Canadian Northern railway system.
Then he says:
During the period the government has provided large sums of money for the physical improvement of these properties, for coordination facilities, for additional rolling stock and for branch line construction.
Then a little lower down:
While the demands for capital expenditure on a system of such extent in a growing country, as the former board stated, are never ending, yett it may now be said that the three groups of lines, until recently the Canadian National Railways, enter the consolidation in excellent physical condition and operating at a high mark of efficiency as regards actual performance or movement of traffic and other factors controllable by management. Apart from certain well known cases of duplication the lines are well located and in exceptional position to successfully perform the transportation demands of the country.
A little further down:
On some of the older sections there are still improvements that should be undertaken, but in the main the lines are modern in character and were built or have been brought up to standards which are ahead of actual traffic requirements, except under stress of seasonal movements.
He concludes:
The whole reorganization has been accomplished with the best of good feeling generally prevailing, and I feel sure that the splendid loyalty which I found existing among the employees of the various lines now brought together is being rapidly transferred to the new administration and that enthusiastic and constant team work will be forthcoming from the great army of men in the system's employ
That is signed by Sir Henry Thornton in April, 1923. Therefore the statements that the roads were in a dilapidated condition are absolutely beside the mark and untrue; the roads were in splendid condition, and while I am not trying to belittle anybody, they did

C.N.R.-C.P.It. Bill-Mr. Manion
not require the work that some of my hon. friends state they did to coordinate them and to get them into splendid, first-class running shape.
Let me give another proof by pointing out the figures in regard to earnings. In 1922 the total earnings of the system amounted to $234,000,000. The highest figure ever attained was in the peak year, 1928, and it amounted to $305,000,000, so that there was not a very large gain in total earnings after hundreds of millions of dollars had been spent on the road.
Let me give some other figures. In 1923, the first year of coordinated management, the gross income of the national railway amounted to $253,000,000. In 1930, the last year in which my hon. friends opposite were in power, the gross earnings were $250,000,000, or practically the same figure. But the interest on the bonds in 1923 was $35,000,000, and in 1930, $54,000,000. As the net operating revenues in both years were the same with the exception of two million dollars, there was a deficit in 1930 of $32,000,000 against $15,000,000 in 1923, so far as paying interest to the investing public is concerned. I give that because those facts prove that the roads were in splendid earning condition, and also that the hundreds of millions of dollars spent upon the road and added to the capital cost were not giving an adequate return. That is all I wish to prove by that.


Mr. SANDERSON:: I should like to ask the minister if he agrees with his chief, the Prime Minister, that the people of this country have no more equity in the Canadian National Railways?


Robert James Manion: My hon. friend can ask the Prime Minister that the next time he gets the chance. My leader is quite capable of . taking care of his own statements.


Frederick George Sanderson: The hon. gentleman is Minister of Railways.


Robert James Manion: The trouble was that there was no check on the management of the Canadian National Railways either by the late government or by the late directors, and that is why the capital expenditures increased much more rapidly than the returns coming back to the national road. The hon. member for Shelburne-Yarmouth spoke of recapitalization, and while it would not have any material effect upon the Canadian National, there would be no particular reason against it. If my hon. friends will look at the report of the royal commission, they will find there the suggestion that the trustees deal with this question at the earliest possible opportunity.
I did not know until late this afternoon that I was limited to forty minutes and I had prepared some statements which I have in my hand, but I shall not take up much more time. In regard to amalgamation, it has been pointed out by the Prime Minister and myself that we intend to move an amendment to prevent amalgamation and to protect the railways in every possible way. It is the opinion of many railway experts that the amalgamation of these two roads would be too immense an undertaking for any one man to handle. I have a quotation from a former president of the Southern Pacific Railway of the United States who, when he was asked to increase his railway from 10,000 to 11,000 miles to 25,000 miles by the inclusion of another line, said that this would make an impossible proposal from the standpoint of proper administration. There would be a great danger of that in our own case. May I point out another danger in regard to the amalgamation of these roads? So far as we are concerned we are not in any way supporting amalgamation, because if you had amalgamation there would be the very great danger of a huge body of voters having political influence over any government, this government or any other. Let me tell a little story in that connection which will illustrate what I mean. When we suggested cutting down the salaries which were being paid to some of the officers of the system, salaries of very large proportions in times like these, for which the people of Canada had to dig down in their pockets and pay by way of taxation, we took the attitude with the late management, as we have taken it with the present management, that irrespective of whether or not these officers were really earning these salaries running up to $30,000 and $50,000 and $60,000, they were too high to be paid under present conditions. The directors themselves took that attitude, and one day after a meeting of the directors at which a number of them had been taking a strong attitude against the high salaries paid to some of the officers-it was recommended, for instance, that a salary of $30,000 should be cut to $18,000, and others in proportion-one of the directors when he left the room was approached by an officer high up in the railway service, not vice president but the head of a branch, who told him that if he were not careful he was going to get this government into trouble. "I want to advise you," this man said, "that you had better leave salaries alone, because if you interfere I have enough dynamite to blow that government up there to hell." It was not very elegant language, but those were his words, and I might add for the benefit of my hon. friend from Cartier that this man said

C.N .R ,-C.P.R. Bill-Mr. Manion
that he had enough dynamite to blow the
late government also to the same place, and perhaps the Cooperative Comomnwealth Federation might think it a good idea if we were both there. However, that was the threat he made to one of the directors. I was told the story by a member of this house to whom the director had told it. I asked the director if it was true, and he said that it was. I said that that man should be dismissed by the directors, and let him set off his dynamite. It took about two months, and then the directors dismissed him, and there have been no explosions of any particular kind that I have heard since. I think that story illustrates the power which these huge organizations might exercise if they grow to too great a strength.


Samuel William Jacobs: Was that official dismissed?


Robert James Manion: Yes, he was.


Samuel William Jacobs: Perhaps he has gone to
prepare a place for you.


Robert James Manion: I can only say in reply
to my hon. friend that while he and I are of different religions I hope that we shall meet wherever we do go hereafter.
There was one other question with which I wanted to deal for a moment, and that was the alleged political colour of the royal commission. It was stated by some hon. gentlemen that the royal commission had a political tinge, a Conservative tinge. As a matter of fact, there were only two men on that commission who had ever been Conservatives. Three had been Liberals, and Lord Ashfield and Mr. Loree were from other countries than Canada. I mention that in passing because I think it is worth remembering.
In closing, I wish again to urge upon the house that when we go into committee on the bill we get back to a proper plane in discussing this measure. I admit that I have got a little off that plane myself, but my hon. friends opposite led the way, and I certainly was not going to permit them to make statements that were not correct. I should like to go back to the high plane on which the debate started, but if my hon. friends decide otherwise we shall stay on the plane we are now on, for I have not any fear of not being able to take care of myself. My hon. friends can take their choice, or as my hon. friend from Cartier would say: You pay your money and you take, your choice.
There has been no objection to the principle of the bill; there have been objections to its details. In dealing with the details, let us try to come to an understanding, let us

try to cooperate. It has been suggested many times that you cannot have cooperation with competition. I believe that you could have the finest demonstration of cooperation with competition that has ever been given to this house if all three parties in this house competing for power would cooperate to put this bill through in the best possible manner. It would be a splendid example to give to the people of this country of cooperation with competition.
I say to labour that if a business revival takes place, as I have no doubt it will, it will mean the taking on of more men, not the laying off of men. It is the hope and belief of everybody who gives real thought to present day problems that a revival will take place. This country does not need to put up its shutters. It is only beginning its career; its greatness is only starting. This country can go forward with an optimistic attitude concerning its future, and I believe that in enacting this legislation into law we shall be laying the foundation which will make both the Canadian National and the Canadian Pacific greater roads than they have ever been in the past.
I repeat that when we get into committee we are ready, not necessarily to accept, as I have been quoted as saying, but to give fair consideration to and perhaps accept the suggestions of my hon. friends in regard to some of the details of the bill. If we cannot agree on the details, after all we can agree to disagree, and the government will be prepared to take the responsibility.


Mr. SPOTTON:: I was paired with the
hon. member for West Elgin (Mr. Hepburn). Had I voted I would have voted for the motion.	.


Mr. BELL (St. Antoine):: I was paired with the hon. member for Beauhamois (Mr. Raymond) :	Had I voted I would have voted
for the motion.
Ahearn,
Beaubien,
Bertrand,
Blair,
Bofchwell,
Bouchard,
Boulanger,
Bradette,
Brown,
Butcher,
Cardin,
Oasgrain,
Coote,
Denis,
Desrochers,
Donnelly,
Dubois,
Dumaine,
Dupuis,
Elliott,
Factor,
Fafard,
Ferland,
Fiset, Sir Eugene, Fontaine,
Fournier,
Fraser (Northumberland, 0.), Garland (BowRiver), Girouard,
Golding,
Goulet,
Gray,
Hall,
Hanbury,
Heaps,
Heenan,
Howden,
Hurtubise,
Irvine,
Jean,
King, Mackenzie, Maelnnis,
MacLean,
Maephail, Miss, McKenzie (Assiniboia), McPhee,
Malcolm,
Mercier (Laurier-Outremont),
Mercier (St. Henri), Mitchell,
Parent,
Perras,
Reid,
Rheaume,
Roberge,
St-Pere,
Seguin,
Spencer,
Taylor,
Thauvette,
T otzke,
Veniot,
Verville,
W oodsworth,
Young.-65.


Mr. WILSON:: I was paired with the hon. member for South Battleford (Mir. Vallance). Had I voted I would have voted for the motion.


Frederick George Sanderson: I was paired with the hon. member for Haldiiimand (Mr. Senn). Had I voted I would have voted against the motion.


Ian Alistair Mackenzie: I was
paired with the hon. member for Saskatoon (Mr. MacMillan). Had I voted I would have voted against the motion.


Mr. HOWARD:: I was paired with the
hon. member for GrenviLle-Dundas (Mr. Cas-se(man). Had I voted I would have voted against the motion.


Mr. WEIR (Macdonald):: I was paired with the hon. member for Selkirk (Mr. Stitt). Had I voted I would have voted against the motion.
Mr. MoINTOSH:	I was paired with the
hon. member for Winnipeg South Centre (Mr. Kennedy). Had I voted I would have voted against the motion.
C.N.R.-C.P.R. Bill-Division


Mr. ROWE:: I was paired with the hon.
member for Beauce (Mr. Lacroix). Had I voted I would have voted for the motion.


Eccles James Gott: I was paired with the hon.
member for Kent, Ontario (Mr. Rutherford). Had I voted I would have voted for the motion.


Mr. SMOKE:: I was paired with the hon.
member for South Oxford (Mr. Cayley). Had I voted I would have voted for the motion.


Mr. BLACK (Halifax):: I was paired with the hon. member for Chicoutimi (Mr. Du-buc). Had I voted I would have voted for the motion.


Mr. MacDONALD (Cape Breton South):: I was paired with the hon. member for Colchester (Mr. Urquhart). Had I voted I would have voted for the motion.


Mr. DESLAURIERS (Translation):: I was paired with the hon. member for Inverness (Mr. Macdougall). Had I voted I would have voted against the motion.


Jean-François Pouliot: I was paired with the hon. member for North York (Mr. Lennox). Had I voted I would have voted against the motion.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Hackett in the chair.
On section 1-Short title.
William Lyon Mackenzie King: I understood
the minister to say last night that when the second reading was carried we would take up other bills.


Robert James Manion: I think the right hon.
gentleman misunderstood me. I said when the bill was finished-I meant concluded. I noticed my remarks did not seem to be interpreted that way, although they were really humorous at the time. May I suggest that we might deal with clauses which are not controversial? My right hon. friend misunderstood me.


William Lyon Mackenzie King: Hansard will
show that the minister said we would take up other bills.


Robert James Manion: Yes, if we were finished
with this one.


William Lyon Mackenzie King: When we were finished with the second reading.


Robert James Manion: No, I did not say that.


William Lyon Mackenzie King: Read the record and see what it says.


Robert James Manion: Here are the exact words. The right hon. gentleman asked: "I assume we will continue to-morrow with this debate," and I said, "Yes, and should we get through we will go on with some of the other bills." I meant that if we got through this bill we would go on with some of the others.


William Lyon Mackenzie King: I submit the
minister could not have meant that at all. We were talking about the debate on the second reading. The minister could not possibly have meant that he would go on with this bill in committee.


Robert James Manion: The right hon. gentleman
cannot say what I meant; I know what I meant. I meant we were going to continue with this bill, and the rest of my remark was merely jocular, because there was no possible chance of finishing this bill to-day. I meant we would go into committee of the whole. Members on this side and from other sections of the house have asked me, and I said we were going on with it.


William Lyon Mackenzie King: There are
some hon. members on this side of the house who are not here to-night to whom I gave the assurance that the minister had said we would not go on further with the bill. However, if he wishes to go on, well and good. But I submit that is not a fair way to treat the house.


Robert James Manion: I object to the right hon. gentleman's last remark. If he misunderstood me, very well; I admit my language was not altogether clear, but he has no right to state that I treated the house unfairly. I am just as fair in my treatment of the house as he has ever been. I resent any such suggestion.


William Lyon Mackenzie King: May I say my remark just made has reference to the statement the minister gave to the house as it appears on Hansard. I quote from page 3048:
Mr. Mackenzie King: I assume we will continue to-morrow wth this debate?
Mr. Manion: Yes, and should we get through we will go on with some of the other bills.
On that record the minister is not treating the house fairly if he insists on proceeding in committee at the present time.


Robert James Manion: I have suggested to the right hon. gentleman that we should deal with no clause that he or any of his party object to. Surely I could not be fairer than that. I admit my words are open to misunderstanding, but I tell my right hon. friend that neither I nor the government thought of anything else.

Exchequer Court Act
I have no desire to quarrel with the right hon. gentleman about it, but I see no reason why the right hon. gentleman should object to dealing with any clause that is not controversial.


Joseph-Achille Verville: Mr. Chairman, I requested a copy in French of the bill under discussion and until I have received it, may I ask that the debate be postponed. I trust that the discussion will not be resumed until my request has been granted as I wish to understand what it is all about. I am informed that there are no more French copies.


Robert James Manion: Mr. Chairman, since there seems to be a misunderstanding I gladly move that the committee rise and report progress.


Joseph-Achille Verville: I wish to thank the Minister of Railways.
Progress reported.



EXCHEQUER COURT ACT


[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the second reading of Bill No. 44, to amend the Exchequer Court Act (exclusive jurisdiction).
Joseph Philippe Baby Casgrain: Mr. Chairman, I would
like to ask the hon. Minister of Justice if he has received communications from the bar of the province of Quebec and the Attorney General of Quebec?


Hugh Guthrie: My friend has the wrong bill. This is an innocuous measure complementary to the bill we introduced a few days ago with regard to visiting commonwealth forces.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Hackett in the chair.
On section 1-Exclusive original jurisdiction.
William Lyon Mackenzie King: The minister gave a short explanation at the time he introduced the bill. Perhaps he would say a word as to the significance of this section.


Hugh Guthrie: This bill is framed to give jurisdiction to the Exchequer Court of Canada in respect to visiting forces of the army, navy or air force of the mother country or any of the self-governing dominions which may in future be in Canada as visitors. At the present time there is no court in Canada 53719-196
clothed with jurisdiction in regard to such forces. During the present session a bill has been submitted, and stands on the order paper for further consideration in committee, to regulate the conduct of visiting forces while in Canada. That bill results from the Statute of Westminster. Some court should have jurisdiction in regard to such forces, and the proposal in this bill is to give the exchequer court that jurisdiction, to deal with writs, cases of capias or mandamus or other cases of that nature which may arise. Otherwise none of our courts would .be clothed with the appropriate jurisdiction.


Mr. ELLIOTT:: Does this make any change in the law as it is at present as to applications for a writ of habeas corpus, for instance?


Hugh Guthrie: No, no change.


John Campbell Elliott: As to where those applications may be made, must it be to the exchequer court here in Ottawa, or can they be made in any of the county towns as in ordinary cases of habeas corpus?


Hugh Guthrie: This is not the ordinary writ of habeas corpus; it is habeas corpus ad subjiciendum, in other words, bring forth the bod}'' and submit, or submit to the jurisdiction of the court. I assume that applications for such a writ in regard to these forces would have to be made to the Exchequer Court of Canada in the future as the only court having jurisdiction.


John Campbell Elliott: AVould that mean that the application would have to be made in the city of Ottawa?


Hugh Guthrie: Wherever there is a judge; it would not necessarily have to be made in Ottawa. The exchequer court judges are often away from Ottawa.


John Campbell Elliott: But are they? I think as a general rule they sit in Ottawa, not in different places as do the judges of assize and other judges.


Hugh Guthrie: No, the exchequer court is in the nature of a travelling tribunal. It sits in the chief cities all over Canada, as the judge may determine for the convenience of parties.


John Campbell Elliott: Very seldom.


Hugh Guthrie: No, quite frequently. The president of that court, I think, sits in every province in the course of the year. He is now planning a trip to the west to hear a large number of cases. It is in that way a travelling

Soldier Settlement Act

tribunal for the convenience of the public, though I think' the majority of cases are heard here.


Mr. CARDIN:: I am afraid that does not apply to the initiation of proceedings. The judge travels to hear a case, but not to initiate proceedings.


Hugh Guthrie: No, I was referring to the hearing of a case.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported.

[Stage Direction]
Hon. W. A. GORDON (Minister of Immigration and Colonization) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to amend the Soldier Settlement Act to provide for the remission of interest in certain cases and the application of payments made to reduction of principal indebtedness; and for additional credit on payment of arrears or instalments; the removal of the lien on the equipment of soldier settlers; and for the application of certain of these provisions to British family settlers by consent of the British government.
Some hon. MEMBERS:: Explain.


Mr. COOTE:: I wonder if the minister
would be good enough to explain.


George Gordon: Perhaps I could explain
it better in committee, but if hon. gentlemen would like the explanation now I can give it. The bill to be founded upon this resolution is remedial in its character with respect to soldier settlers and others owning land or under contract to purchase land the title to which is at present in the crown.
The first part of the resolution refers to the remission of interest. In the bill founded upon the resolution it will be proposed to remit the interest accruing for the twelve months immediately preceding the standard date as determined and interpreted by the statute. In order to avoid the error that arose in connection with the thirty per cent reduction, for the sake of those who have paid their interest it is proposed that credit be given in such cases by a reduction of the principal indebtedness.
The remainder of the resolution has to do with extending credit, dollar for dollar, for the years ending with the standard dates in 1927 to those who pay the whole or part of the instalments falling due during those years.

Hon. members will remember that in 1930 the interest was spread, so this bill will deal from the period from 1932 to 1937.


Mr. NEILL:: Will the minister say a word about the British settlers?


George Gordon: I presume the hon. member for Comox-Alberni has reference to what is known as the three thousand family scheme. The bill founded upon the resolution will make reference to the situation of those settlers and will indicate the couree to be followed by the government in the event of the agreement under wdiich these settlers came to Canada being changed, which of course would have to be with the consent of the British government. It is contemplated that appropriate representations will be made in order to secure that end.


Mr. REID:: Will there be anything in the
bill to take care of those soldiers w7ho have purchased under the soldier settlement board during the last six or seven years, and who do not come under the original act?


Pierre Édouard Blondin: I would remind hon. members that the house is not in committee.
Motion agreed to and the house went into committee, Mr. Baker in the chair.


Thomas Reid: I should like to ask the minister if he can answer the question I just asked, whether it is intended to do anything for those soldiers who have purchased land during the last seven or eight years, and who do not come under the original scheme. There are many returned men, as the minister knows, who have purchased land under the soldier settlement board and who are in great difficulties.


George Gordon: Those cases will be provided for in the legislation.


Mr. GARLAND (Bow River):: What is implied in the words "the remission of interest in certain cases"?


Mr. SPEAKMAN:: I was going to ask the same question. Is this to be a general act covering all cases or is it to cover only certain cases?


George Gordon: The act will provide for the remission of interest charges which accrue during the twelve months immediately preceding the standard date in 1932.


Alfred Speakman: For every soldier settler?


George Gordon: Yes, with the exception of persons falling under the agreement between

Soldier Settlement Act
His Majesty's Secretary of State for the Dominions and the government of Canada, which has reference to the three thousand family scheme. As I indicated a moment ago, the legislation founded upon the resolution will show the course the government will follow with respect to these settlers. The matter will be taken up with the British government in order to obtain their consent to the application of these remedial measures to the settlers, and to have the cost apportioned as the agreement contemplates in other cases.


Alfred Speakman: What I had in mind was whether this was to be a general act covering all settlers or whether it was to be discretional, to apply only in certain cases. I understand, however, that it is a general remission.


George Gordon: Yes.


Mr. SPENCER:: Can the minister give us the number of settlers under the three thousand family scheme who have returned to the old country? I should like to know what percentage made good in Canada and what percentage returned to England.


George Gordon: I am afraid I have not those figures, but I believe such an analysis could be made. In all probability I could have that done by the time the item in the estimates comes up for consideration, and I will give the information at that time, unless it is necessary that the hon. member have it now.


Alan Webster Neill: I cannot understand where there is any advantage in introducing legislation in this roundabout way whereby we are forced to discuss a resolution couched in very vague terms instead of having a bill before us which we could discuss intelligently. Presumably there must be some purpose in bringing in legislation in this vague way and presumably there is some sort of a mantle of secrecy over the legislation until it is discussed in committee. This is the sixteenth of the month and under date of the tenth this was all published in the British Columbia papers at far greater length than the minister is giving it to-night. Does the minister think that that is a desirable custom to have in effect?


George Gordon: I do not read the British Columbia papers.


Alan Webster Neill: Shame!


George Gordon: I have not had an opportunity to see what they said about the legislation. There is one thing certain, they never got their information from me. Sometimes 53719-196J
the newspapers are good guessers but I can assure the hon. member for Comox-Alberni (Mr. Neill) that I have not followed any circuitous route in bringing this resolution before the committee. The subject matter of this resolution has been given very earnest study by those charged with the administration of the act, and it is hoped that it will meet with general approval among the settlers. There is nothing further from my mind than to cloud this matter in mystery, as is suggested. I really cannot understand where the newspapers got their information.


Alan Webster Neill: The resolution is essentially vaguely worded as compared with the definite language which would be used in a bill. I am not complaining of that, I simply say that presumably there must be some useful purpose to be served by this method. Why was this information given out to the British Columbia newspapers to a fuller extent than we have had it to-night? The papers published this information on the tenth, but it would have to come from Ottawa, so it must have been given out before that date. I suggest that there must have been a leak somewhere. I am not blaming the minister but I do contend that the information published could not have been based on a guess because it was a very definite statement. If the minister is satisfied I do not suppose I need worry, but it does not seem to be a desirable thing to have information leak out through the press before it is given to the House of Commons.


Mr. BOTHWELL:: Quite a number of soldier settlers are not residing upon the land which they took up under the act but still have an equity therein. I should like to know if any easement is being provided by this bill to take care of such cases.


George Gordon: I imagine that would be purely a question of adjustment between the soldier settler who had sold the land and the soldier settler who was on the land. The debtor to the government would be the settler now upon the land.


Charles Edward Bothwell: That hardly answers my question. The situation in the west is that many of the men on the land have not been able to make their payments to the soldier settlement board. The soldier settler who has an equity in a piece of land sees that equity gradually vanishing. I have one case in mind where a soldier settler has an equity of $2,000 in land that has been sold to another party under the tripartite agreement. The purchaser
Soldier Settlement Act

of that land has not been able to make his payments to the board and interest is accruing. The soldier settler is not actually upon the land and I want to know if he will be taken care of by this legislation.


George Gordon: This legislation will remit the interest accruing in 1932 under the contract. So far as the board is concerned the equity will be paid to the original settler as soon as the tripartite settler completes his contract.


John Campbell Elliott: Could the minister give the committee an idea of the amount of accrued interest now due and the amount proposed to be remitted under this bill? Is it proposed to remit all interest that has accrued or, if not, what part?


George Gordon: It is proposed to remit all the interest for the twelve months immediately preceding the standard date in 1932. Hon. members will remember that there is a standard date for both western Canada and eastern Canada. For the twelve months prior to the standard date in 1932 the interest will be remitted to all those who have not paid. Those who have paid interest during 1932 will be placed in equation with those who have not paid by having an appropriate amount credited upon their contracts.


John Campbell Elliott: That is upon the principal?


Alan Webster Neill: The resolution reads:
-and for additional credit on payment of arrears or instalments;
That is the dollar for dollar credit to which the minister alluded. Would that apply to the payment of interest also, or will they have to pay the interest due after this year in full?


George Gordon: Any payment made after this year and until the standard dates in 1937 will be credited at the rate of two dollars for every dollar paid. As hon. members will recall, these payments are amortized and it does not matter whether it is interest or principal, they will get credit no matter what they pay.


Alan Webster Neill: Are they charged interest upon the past due amortized payments?


George Gordon: That is interest upon interest?


Alan Webster Neill: Yes.


George Gordon: I am not sure of that point.


Alan Webster Neill: Would they get dollar for dollar on that?
[Mr. Bothwell.l


George Gordon: They will get dollar for dollar on anything they pay during those years.


Mr. McINTOSH:: What is the standard
date for western Canada?


George Gordon: October 1 for western
Canada, and November 1 for the provinces lying east of Manitoba.


Cameron Ross McIntosh: Do I understand that the remittance of interest for 1932 will date back twelve months from that standard date? What about the principal that is owing?


George Gordon: If the hon. member will
recollect, the interest is joined to the principal, if I may put the matter in that way. As regards anyone indebted under contracts or agreements made prior to January 1, 1933 if payments are made in respect of arrears, or of any instalment due up to and including the standard date in 1936, the soldier settler will be credited with double the amount of the payment.


Cameron Ross McIntosh: There are quite a number of soldier settlers not only in the riding of North Battleford, but clear across northwestern Canada. May I ask the minister if he understands the objective to which the different locals of the soldier settlers in these different areas are directing their efforts?


George Gordon: Who is the head of the
organization?


Cameron Ross McIntosh: There are different locals and a head to each one. I do not think there is any official head of them all. There is a president and a secretary for every local.


George Gordon: Does my hon. friend refer to the soldier settlement unions?


Cameron Ross McIntosh: Yes.


George Gordon: Their propositions were
received by the director.


Cameron Ross McIntosh: That is the point to
which I am coming. I understand the department over which the minister presides was endeavouring to find out the minimum objective of these soldier settler unions that have been organized right across western Canada for a set purpose, that is to try to find out how they could reasonably remain on the land. In organizing themselves towards this end and in coming to definite conclusions in regard to how they could remain on the land, they worked out one or two main objectives. One was that if they were going to remain there under existing conditions of low prices with farms bought at inflated values

Soldier Settlement Act
and with large sums of principal and interest owing, there would have to be either a total cancellation or a fair adjustment of interest from 1929. If I understand correctly the attitude of the soldier settler unions, they want no interest charges added from 1929 and in their opinion any interest paid between 1929 and 1933 ought to be allowed on the principal, but they definitely state that no interest should be added to the principal accruing from 1930 on, that is from the last revaluation of the soldier settlers' lands. If the department is allowing only a rebate of interest for a year, this is not meeting the viewpoint of the soldier settler unions, and I do not think the legislation will go far enough. I thought it of importance to bring this point before the minister at this time in order to see if he could not try to meet the desires of these men who served their country at such small cost to us, who were overseas for years fighting the battles of Canada, who then came back, bought land at distorted values and are now up against a serious proposition in endeavouring to hold land which they desire to retain and to hand on to their dependents.


George Gordon: What the hon. member
has just said has of course been under my review and from the facts that I have been able to gather, perhaps the hon. member is seeking for the soldier settlers more even than they want themselves. I was well aware that Mr. Price, the gentleman to whom reference has been made, was president of the soldier settlers' union, and on behalf of a very large body of soldier settlers on the land representations have been made by the unions from time to time to the department. Those representations have all been taken into consideration and a number of conferences have been held throughout not only western but eastern Canada making a general review of the situation in the light of present conditions as well as in the light of the situation in which the soldiers .generally find themselves. When I say that the hon. member asks more than the soldier settlers union itself asks, probably he would not urge the proposition he has just outlined. In order to make the position clear, may I read a letter which I received from Mr. Price, president of one of the unions, under date of February 14, 1933.


Cameron Ross McIntosh: May I ask what is
Mr. Price's local?


George Gordon: The hon. gentleman knows who he is. He is Mr. H. J. Price, the man to whom I referred a moment ago.


Cameron Ross McIntosh: I am not clear as to
his district.


George Gordon: He is president of the
soldier settler union and the letter is dated from Saskatoon.


Alan Webster Neill: Union of Saskatchewan?


George Gordon: Yes. It reads:
Dear Mr. Gordon:
I have spent the day discussing with Mr. Maglad'ery, General Ross-
That is Judge Ross, I believe, of Yorkton, Saskatchewan, who is very deeply interested in the welfare of the soldier settlers and the soldiers generally.
-soldier settlers, and representatives of the board, the problems of the settlers and, as a result, we submitted certain conclusions for your consideration. The submissions are generally satisfactory to the delegates who have attended the conference to-day, and I believe will meet the situation.
If you can see your way clear to implement these recommendations by legislation, I will undertake to recommend to the soldier settlers' unions that, barring any unforeseen calamity not at present within our contemplation, the unions should refrain from making any further representations on matters of policy in connection with soldier settlers during the currency of the arrangements which are now recommended to you. I have no doubt that the soldier settlers' unions will accept my recommendation in this regard.
Yours faithfully,
H. J. Price,
President, Soldier Settlers' Union.
The recommendations that Mr. Price has reference to in that letter are incorporated in the legislation that will be founded upon this resolution.


Alan Webster Neill: The union refers apparently to Saskatchewan.


George Gordon: I believe it includes some parts of Alberta.


Alan Webster Neill: In the district that I represent there is a settlers' association of that nature and they keipt aloof from that union because they were not satisfied with the proposals put forward by it. Not anticipating that this matter was coming up to-night, I have not my papers with me, but my recollection is very definite that they went on record they would be satisfied with nothing less than a total remission of past interest, that is, I presume, since the date of the last adjustment of 1930. They said that it was no use beating about the bush or pretending to be able to pay something they could not pay, and conditions were such that they were reluctantly compelled, not perhaps to demand, because we do not demand from the government, but to submit that the only acceptable
Soldier Settlement Act

arrangement, acceptable because there was a possibility of its being carried out, would be a total remission of interest. I have a very definite request from them to that effect. The minister says, and says truly, that these payments are all by way of amortization. A man does not owe $100 and pay 8 per cent interest; he pays a sum capitalized or amortized over twenty-five or thirty years. The minister says that he is going to rebate the interest. Will it not be a very complicated thing to arrive at the interest for any specific year? How is the settler to know to what rebate he is going to be entitled?


George Gordon: I am told that there will
be no difficulty in identifying the interest for 1932, because that is separated in the ledgers. With respect to the following years, the act makes provision for a credit of one additional dollar if one dollar is paid. If he pays one dollar, he gets credit for two. It is putting a premium on thrift rather than otherwise.


Edward Joseph Garland: The minister has made it clear that there is to be a remission of interest from 1932, and the resolution says, "and the application of payments made to reduction of principal indebtedness." Is that payments of interest made? I presume it would be, because it is all in the one sentence.


George Gordon: If the 1932 interest was
paid by any settler, then in order to bring his position to an equality with those who did not pay but whose interest was remitted, the payment of those who did pay is credited upon their payments falling due.


Edward Joseph Garland: When the
interest is credited, does the man also get an additional one dollar credit?


George Gordon: No. For the one class the interest is remitted because it was not paid for 1932. As regards the other class who paid the interest, the person under the contract gets credit on his payments generally.


Edward Joseph Garland: Just to the amount of the interest?


George Gordon: For that year.


Edward Joseph Garland: To the
amount of the interest only?


George Gordon: For that year.


Edward Joseph Garland: The additional credit on payment of arrears or instalments of arrears-that is the dollar added to the dollar-applies in the future and only on principal payments? Is that correct, or does it apply also to interest?


George Gordon: It applies to both interest and principal payments.


Edward Joseph Garland: To all payments?


George Gordon: To payments made from
March 31, 1933 to March 31, 1936. Wherever a payment of one dollar is made, whether on principal or on interest, the settler gets credit for two dollars.


Cameron Ross McIntosh: The Minister has quoted the point of view of Mr. Price. Is Mr. Price the president of the Saskatoon local of the settlers' union, or just what position does he occupy?


George Gordon: He signs himself, president of the soldier settlers' union.


Cameron Ross McIntosh: That may be the soldier settlers' union for the district of Saskatoon, but that is only one local of the soldier settlers' union. I understand that there are fifty locals of the soldier settlers' union organized in northern Saskatchewan and elsewhere, and I do not think the point of view of these fifty locals is the same as that presented through the minister by the locals stated. I did not know this matter was coming up today and there is some information I have not at my disposal, but I have a letter here from H. S. Clarke, the secretary of the North Battleford local. He farms a short distance from North Battleford. He met the commissioner and General Ross when they went out west last fall to meet the soldier settlers and conferred at Lloydminster, Saskatoon, North Battleford and other places.


Mr GORDON:: I see that Mr. Price gives his address as Lloydminster.


Cameron Ross McIntosh: Then that would be the Lloydminster local he was speaking for. What I want to point out is this, that the North Battleford local, I presume, is working in harmony with all the other locals, and therefore I am wondering at the discrepancy between the point of view presented by the minister and Mr. Clarke's conception of the question. Mr. Clarke says:
Our aim is that the debt be as it stood at the time of revaluation in 1929, and no interest charges be made from that date. Any moneys paid in since to be applied to principal only.
If Mr. Clarke has the right slant on this question, then the statement I made previously is sound, that the department is not going as far as I anticipated to meet the wishes of the soldier settlers, and I am wondering if the limits set by the resolution

Soldier Settlement Act
are going to be strictly adhered to by the minister and his department. I rather hope not. I would like to see the minister and the department take as favourable a view of the whole situation as possible.


Alfred Speakman: I shall reserve most of what I have to say until the bill is before us. Did I understand the minister to say that this remission of interest would be from the standard dates in 1932 onward to 1937, for a period of five years, or just for one year?


George Gordon: The interest is remitted for one year. That refers to the interest accruing under the act during the twelve months immediately preceding the standard date in 1932.


Alfred Speakman: So interest is due on present payments? It is just remitted upon arrears?


George Gordon: It is the interest for the
twelve months that have passed. If those interest charges have been paid, the person paying them gets this credit applied on principal. The hon. member for North Battle-ford will probably remember that when the thirty per cent horizontal reduction was made in May, 1930, just near the end of the spring session-


Alfred Speakman: In the last week of the spring session.


Cameron Ross McIntosh: That was the date.


George Gordon: The arrears of interest were spread at that time, and the interest that is being remitted entirely is from the standard date in 1931 to the standard in 1932. That is remitted, washed out, and those who paid are given credit for an amount equal to the payments they made. From that time on anyone who pays a dollar gets credit for two dollars.


Edward Joseph Garland: I am going to ask the minister, when he introduces the bill, to bring down to the house details showing the total cost of administration of the Soldier Settlement Act from the beginning to date; the total cost to the country of the revaluation of stock and equipment; the total cost of the revaluation of land; and after adding all those together I would ask the minister to tell the house whether he has ever thought of the advisability of giving the land to the settlers who still have a flight equity in it and wiping out the whole settlement scheme once and for all.


Alan Webster Neill: I am asking for information, not seeking to delay the minister. Will this resolution, or the bill founded upon it, apply to settlers who, so to speak, have followed up the original settlers?


George Gordon: It does apply to them.


Alan Webster Neill: My other question is this:
The resolution contains the expression, "the removal of the lien on the equipment of soldier settlers." Does that mean that the lien will be wiped out or turned on to the land?


George Gordon: The amount of money
secured by the lien will not disappear, but the lien will be removed the same as it was removed some time ago on stock and equipment.


Alan Webster Neill: It still adheres to the land?


George Gordon: Yes.


Cameron Ross McIntosh: There is one further
question I should like to ask the minister before the bill is brought down. At that time I shall have something more to say. What about the soldier settler who year after year for many years has paid to the board his principal and interest and then, just a limited number of years before his principal and interest is paid, passes out, or goes west? What about the dependents of that man? Will the department modify the legislation in any way so that the property will pass into the hands of the dependents? Because if the money is not paid, and the breadwinner is taken away, they would have to leave their farms and lose all their holdings.


George Gordon: I assume the hon. member is referring to the interests of a deceased soldier settler.


Cameron Ross McIntosh: Yes.


George Gordon: As I understand it, the
interest of the deceased in the land devolves upon his dependents and is administered by the estate. Whether or not there are cases where the estate is not able to administer them and suffers hardship, I do not know. There may be such cases.


Cameron Ross McIntosh: I think the average
soldier settler is fearful of that condition arising. He feels that if death comes there will be nothing left for those remaining.


George Gordon: Nothing left?


Cameron Ross McIntosh: Nothing left, if something is not done to save the estate for those who are left.
Soldier Settlement Act

Mr.'SPENCER: I believe when the minister was considering bringing down this legislation an opportunity was given to soldier settlers to place their views before him. I should like to ask to what extent the present legislation is in line with their wishes.


George Gordon: The present legislation is not in line with the original view of some of the soldier settlers. A number of them wanted the whole debt wiped out. In fact, I believe some of them asked the return of money they had paid. Of course those differences had to be the subject of conferences, investigations and exchange of views. All the various possibilities of legislation of this type had to be considered. In the main these settlers do not want to be legislated into ownership. The final result was that the legislation drafted as nearly as possible conformed to the views of the majority. I have no doubt in the world there are those who will not be satisfied and, although I am an optimist, I never expected that we could satisfy everybody. I do say however that, in my judgment, as a remedial measure the proposed legislation does deal equitably with the soldier settlers throughout Canada, and others holding contracts with the government. An effort has been made in framing the legislation to see that a penalty is not imposed upon other soldiers, because it must be remembered that soldier settlers represent less than three per cent of the Canadian expeditionary force. There are many soldiers in Canada to-day who are not on land and who are in the same difficulties in which many of us find ourselves. I make the statement, believing it to be true, in the relative sense at any rate, that there are many soldiers who are not in the preferred position that the soldier settler is in, and who have not had the advantage of residing upon lands for the last thirteen or fourteen years. Having that in mind, and also the position of other land owners in the various provinces where different legislative enactments have been passed or are contemplated, the government felt that the best course to follow was to deal with the soldier settlers and others holding lands from coast to coast in the way indicated in the resolution, and which will be set out in greater detail and accuracy in the bill to follow.
I do not believe that the horizontal reduction was at all sound. I cannot help but think it was put through in a hurry, and that at the time consideration was not given to the effect it might have. The effect was not an equitable distribution, I think in so far as it is possible this bill will bring about equitable distribution. Then, again, the government do

not deem it desirable to enter into any such agreements as were entered into with respect to taxes and things of that character. They were not universal or dominion-wide in their application. That was hurriedly done; the so-called agreement was hurriedly entered into. I do not say this in a spirit of ultra-criticism of those who had charge at the time, but in my estimation it was hurriedly done and did not extend to all those under the act the benefit of the so-called agreement. As a matter of fact it applied only to the three western provinces, and was entered into when there was before the then soldier settlement board the opinion of the Department of Justice that it was illegal to do it. I have no doubt it was illegal. I say it was hurriedly entered into in the late spring or early summer of 1930, that it was not a wise procedure to take and has not worked out well. It has given endless trouble; it has taught many settlers to disregard their responsibility to their municipalities, and rendered the position of those municipalities almost hopeless so far as collecting taxes is concerned. Some of the settlers do not consider that municipal taxes are obligations which they should take seriously. I say that with great frankness, because that was one of the results achieved by the so-called tax agreement.


Henry Elvins Spencer: I understand that owing
to poor prices for crops last year the soldier settlers had gTeat difficulty in meeting their one-third crop payment. Is an attempt now being made to collect one-third, or is it being dropped to one-fourth?


George Gordon: In accepting a portion of the crop the director endeavoured to conform to the practice and the law in the various provinces. The provinces would adopt one-third or one-fourth or some other fraction, and the director endeavoured to conform. But the practice now is to accept one-fourth or less, regardless of whether or not the province asked for more.


Alan Webster Neill: A lot of these men will have payments coming due for the next ten years, say. The credit of $2 where he has paid $1 applies only for five years. Suppose by some miracle he gets some money-he will not get it out of the land, but his mother-inlaw might die-will he be allowed to pay in advance in order to get this $2 for $1?
Mr*. GORDON:	He can prepay for one
year.


Alan Webster Neill: One year at a time.

Unemployment Relief
Resolution reported, read the second time and concurred in. Mr. Gordon thereupon moved for leave to introduce Bill No. 45, to amend the Soldier Settlement Act.
Motion agreed to and bill read the first time.
On motion of Mr. Bennett the house adjourned at 10.56 p.m.
Friday, March 17, 1933