1933-03-09

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



QUESTIONS

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

Mr. REID:: '
1.	What firm or company has been granted a lease of the New Westminster harbour elevator on the Fraser river?
2.	Is Mr. Sam McClay, chairman of the Vancouver harbour commissioners, financially interested dr connected with the firm or company who have been given lease of this elevator ?
3.	What is the amount or amounts to be paid under any agreement or arrangement by those operating the elevator for the use of the elevator: (a) how and when are the payments to be made; and (b) for how long a term is the agreement made?
4.	Have any cash, bonds or cheques been paid up to date by those now operating the elevator, and if so, what amounts either in cash, bonds or cheques have been paid up to date?
5.	What amount of wheat has been placed in the elevator, and what has been the total amount of wheat shipped out of the elevator since it was leased?


Mr. BENNETT:: As regards this question, this government is not in a position any more than any member of the house to ascertain the information asked for in the second part of this question:
Is Mr. Sam McClay, chairman of the Vancouver harbour commissioners, financially interested or connected with the firm or company who have been given lease of this elevator?
There are also certain other questions over which this government obviously has no more control than has any private member of the
house or any citizen of the country. I would ask that the question be drawn in such form that the government can deal with it.


Mr. SPEAKER:: This question will be
withdrawn for amendment.


RURAL MAIL BOXES
Mr. POULIOT:: 1.	On the following dates: January 1, 1931; July 1, 1931; January 1. 1932; July 1, 1932; January 1, 1933; March 1, 1933, did the Post Office Department have rural mail boxes in storage?
2.	If so, how many on each of the above mentioned dates?


Mr. SAUVE:: 1.	Yes.
2.	January 1, 1931, 23,002; July 1, 1931, 20,088; January 1, 1932, 18,294; July 1, 1932, 25,760; January 1, 1933, 25,638; March 1, 1933, 25,412.


Mr. POULIOT:: 1.	From August 1, 1930, to March 1, 1933, did the Post Office Department purchase rural mail boxes?
2. If so, what is: (a) the name; (b) the previous occupation; (c) the address of the party or parties to whom the order or orders were given; (d) what is the total number of nerw rural mail boxes which have been ordered;
(e)	what was the price of each one; (f) were there any rural mail boxes in storage on the date or dates when such order or orders were given; (g) if so, how many each time?


Mr. SAUVE:: 1.	Yes.
2.	(a) Amedee Lesieur; (b) manufacturer's agent; (c) Montreal, P.Q.; (d) 10,000; (e) $2.75 each, plus sales tax, f.o.b. Montreal;
(f)	yes; (g) 18,294 stored as follows; Vancouver, 720; Edmonton, 1,125; Calgary, 3,471; Moose Jaw, 1,223; Saskatoon, 1,990; Winnipeg, 488; London, 1,741; Toronto, 4,624; North Bay, 11; Ottawa, 1,501; Montreal, 1,108; Quebec, 141; Moncton, 30; Saint John, 40; Halifax, 34; Charlottetown, 47.


RURAL MAIL ROUTES
[Stage Direction]
Mr. POULIOT;
1.	From August 1, 1930, to March 1, 1933, did the Post Office Department sign contracts with mail carriers on new rural mail routes?
2.	If so:	(a) how many; (b) what is the
total distance covered by the said mail carriers; (c) what is the total number of the new boxes on the said new rural mail routes?
Mr. SAUVE:: 1.	Yes.
2.	(a) 155; (b) 3,275 miles; (c) 5,546.

Question as Order for Return


GILLESPIE PORTAGE AND ANDOVER, N.B., CUSTOMS HOUSES
Mr. VENIOT:: 1.	What was the contract price of the customs house erected on the boundary line at Gillespie settlement, Victoria county, New Brunswick, and actual cost of same?
2.	What was the contract price of the customs house erected on the boundary line between Andover, New Brunswick, and Fort Fairfield, Maine, and actual cost of same?
3.	To whom were the contracts awarded?


Mr. RYCKMAN:: 1.	Contract price, $4,550; amount paid, $4,835. Two extras were awarded to the contractor: (a) rear addition to main building, 8 feet by 20 feet, $200; Ob) additional excavation, foundation wall, sink and cesspit, $85.
2.	Contract price', $4,457; amount paid, $4,457.
3.	The contract at Gillespie portage was awarded to Mr. G. F. Smith and completed by his widow as administratrix.
The contract at Andover was awarded to Mr. Percy Britton.


QUESTION PASSED AS ORDER FOR RETURN
Mr. SHAVER:: 1.	What county court judges and district court judges reside without their respective court districts, and what are their names and respective court districts?
2.	Is an additional travelling or per diem allowance made to such judges by reason of their so residing without their respective court districts?
3.	If so, what is the basis of such allowance?
4.	By reason of such non-residence within Iheir respective court districts, what additional amounts have actually been paid by the federal government to each of such judges, and in what vears were such amounts so paid since the year 1927?


INQUIRY FOR RETURN
[Stage Direction]
On the orders of the day:
Mr. E. J. GARLAND (Bow River):: On
February 16 last an order of the house was passed in connection with a question asked respecting the steps taken by the government to relieve distress in the coal mining area known as district 18. When will the return be tabled?


Richard Bedford Bennett: Recently so many returns, some
of which are very voluminous, have been asked for, that they will just have to take their turn. They will be completed as quickly as possible. Every department is taxed to the uttermost.



CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL

[Stage Direction]
The house resumed from Wednesday, March 8, 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.
Mr. HUMPHREY MITCHELL (East Hamilton):: Mr. Speaker, during the course
of my remarks of yesterday in connection with the bill before the house, I pointed out that from 1929 to 1931 there had been a reduction of approximately 33,000 in the employees of the railroads of this country. This is not the only sacrifice that the transportation workers have made in connection with the present depression and the cooperative efforts that have already taken place on the part of the two railroads. We find that those employees have also accepted a considerable reduction in their hours and days of labour, and further, that they have taken a reduction in wages. This bill will, of course, further intensify the laying off and the possibility of a further reduction in the working days and hours of the men involved. We have come to the conclusion through a very practical experience that the individuals who go to make up the national life of this country are more important as consumers than as producers. It is not so very long ago that the whole drive was towards greater production. The cry was: Produce more and our problems will disappear. I think it will be agreed in view of the conditions in which we now find ourselves that that analysis was directly opposed to the forces at work in connection with the enormous productive capacity of the nation.
Rationalization both in the railways and in industry generally, unless its direct effect is to produce more employment opportunities for the men and women of this country, is not sound and should not take place in the economic structure and government of industry, where some people think it rightly belongs. In view of the very optimistic statements that were made by the Minister of Railways (Mr. Manion) in introducing this measure, more particularly that prosperity was in the offing, I am of the opinion that the tendencies towards consolidation should be slowed up. We should pause a while in the consolidation of our railway system lest we create a more intensified unemployment problem.
Coming to the question of amalgamation, I believe that there is still a great body of opinion in this country that thinks the real intent of this bill is amalgamation. I was glad to hear the minister say that such was not the case, but I was sorry to hear him and

C.N.R.-C.P.R. Bill-Mr. Mitchell
also the Prime Minister say that it was surplus language to include the section which was deleted from the original bill in the Senate reading:
But nothing herein shall be taken to authorize any amalgamation of any National company with any Pacific company.
I think tve have found that the laws of this country and possibly of every other country do not always work out as they were intended to, that the interpretation placed upon the legal phraseology after the passing of a law is quite often in direct conflict with the original intent of the lawmakers. I believe it would be well, Mr. Speaker, if that section were reintroduced into the bill so that the people of this country would have absolute confidence in the sincerity of the desire of hon. members of this house that this bill has absolutely no intent at this time, at all events of amalgamating the railroads of this country. I believe that it would allay the uneasiness in the public mind and definitely show the intent of this bill in regard to that question.
Coming to the board of trustees, the bill provides that a board of three shall be appointed. I should like to quote briefly from the observations contained in the memorandum of comments and recommendations on behalf of the railroad employees representing 200,000 workers:
We are particularly concerned about the problems involving the human element of the Canadian National and consider that at least one member of the new board of trustees, regardless of its size, should be especially qualified to counsel in respect to these problems because of his experience and the confidence imposed in him by the railway employees. This policy was recognized in the make-up of the present board of directors of the Canadian National, and also on other important public boards and committees. To this arrangement must be attributed much of the loyalty and enthusiasm, as well as good relations between management and men on the Canadian National of which the royal commission took special cognizance. In the opinion of railway labour it would be a grave mistake to ignore the wholesome lesson taught by this experience and in the face of it now deny labour the opportunity to continue to help in the administration of the government-owned railway system.
I agree with the contention of many hon. members who have spoken before me that it would be in the best interests of the Canadian National Railways if the board of trustees were increased to five. In view of the large reduction in the number of directors of the road, it must be conceded that the experiment we are making is revolutionary. I know of no example in this country either in business or in transportation where the
executive driving force has been reduced to so few in number. I believe it would be just as logical for the board of the Canadian National Railways to have a board of the same size as that of the Canadian Pacific Railway, because in that way you get the benefit of the various contacts and the various points of view, and I suppose that the directors are largely appointed for that reason. Of course, I am primarily concerned with the continuance of labour representation on the directorate of the Canadian National Railways. I agree with the Minister of Railways that without that loyal cooperation between the directors and employees and the magnificent esprit de corps displayed it would be practically impossible to run a large enterprise of this character successfully. The time has long since passed when labour should be expected to work merely for a daily wage. The logical course of events, and I believe it is the sound line to pursue, is that the best interests not only of the Canadian National Railways but of the Canadian Pacific Railway as well will be served only when the human point of view of the men and women engaged in that particular industry is reflected in the executive decisions that are made by the directorate. If such representation is not granted to labour on the board, Canadian railway labour will view i.t as a retrograde step. They anxiously look forward to the government of this country recognizing the soundness of their position, that no break should be made in the precedent which was established by a previous government in giving to the men and women engaged in the railway transportation business of this country representation on the board of directors.
I might add, Mr. Speaker, that I have lost faith in big men. We have heard a lot recently about big men, the so-called supermen in this country. There is one thing for which the working people cannot be blamed; they cannot be blamed for present conditions because they were not consulted. I hope when the board is appointed better discretion, will be used by the government than has been used in the appointment of other commissions. I agree with the viewpoint of the hon. member for South Waterloo.


Mr. EULER:: North Waterloo.


Humphrey Mitchell: The hon. member will
not lose caste by accepting South Waterloo; however I thank him for the correction. In my view the board should be imbued with the spirit of service and a sympathetic inclination toward the soundness of public ownership.
Now I come to the arbitral tribunal. I believe that in this body too much power is
2842	COMMONS
C.N.R.-C.P.R. Bill-Mr. Mitchell
reposed in the hands of a single man, and I am convinced the objections taken are sound. Frankly I do not believe that the tribunal will be used to as, great an extent as some people imagine. I recognize the fact that some tribunal is necessary to act as a cushion between the conflicting viewpoints which might arise in connection with the cooperation which, in effect, is the principle behind the bill. I believe it is very necessary that some tribunal should exist to which the directors and management of the Canadian National Railways may go, and to which may be referred those matters upon which there have been expressions of public opinion. I am convinced however that the present Board of Railway Commissioners would have been a more satisfactory tribunal for that purpose, because they have as a background a wealth of information and experience in railroad matters. Further, they would be able to hear the evidence of parties who have not been heard in connection with this bill. The viewpoint of all communities affected should be heard. In fact, if necessary the viewpoint of the working men involved should be heard. For those reasons I believe the tribunal suggested in the bill is unnecessary, and would mean only further expense. I am convinced the work could be more expeditiously carried out by the railway commission, and that that body would be in a position to bring to bear more intelligent and practical opinions upon railway problems.
In conclusion I should like to express my views concerning the Canadian National Railways. I know that in certain sections of the press, and by some of the people of our country there is a tendency to look upon the national railways as the bad boy of public ownership. In this debate I believe it would be well to repeat that the Canadian National Railways were not the result of a deliberate policy of public ownership, but were the outcome of our mad rush to develop Canada. At the same time they offered a profitable investment for railroad promoters. Notwithstanding contrary opinions it is my view that the consolidation of the many roads under the control of the Canadian National Railways represents great progress, and is a monument to the genius for organization of Sir Henry Thornton. I predict I shall live to see the day when he will receive the credit he deserves in connection with this enormous undertaking. After all is said and done, the problems which confront our railroads are the problems confronting every industry and undertaking,-the problem of the elastic dollar. That problem is reflected in the fall in price levels, and in our inability to adjust
[Mr. Mitchell.l
our debt structure or to cope with the trade situation.
I am not unmindful of the great contributions the railroads have made to the development of Canada. That development is amply proven by statistics. We find that between the years 1900 and 1929 the mileage increased by 133 per cent, the gross earnings increased by 656 per cent and, incidentally, the external trade of Canada increased by 645 per cent. We cannot predict the future; this bill is based on the experience of the past. I believe that mighty tides are in the making which will carry this civilization either backwards or forwards. I hope we will have sense enough to let our imagination catch the flood of progress. Our railroads have been the arteries of our material development; we should see that our present conditions are only temporary.


Mr. G. B. NICHOLSON (East Algoma):: Mr. Speaker, rising to say a few words concerning the bill before us, I find myself in a position very much similar to that described by the hon. member for Muskoka-Ontario (Mr. McGibbon). I cannot say I am supporting the bill because I have not any too much faith in what may arise from it. I do believe however, that if the trustees appointed under the bill are the type of men I should like to see appointed, in a very short time they will find themselves faced with a task so utterly impossible of solution that they will come back to parliament and recommend what parliament should have done when the railroads were consolidated in the first instance.
I do not intend to make more than a passing reference to what took place when the group of railroads which was found on the doorstep of Canada in the years 1916, 1917 and 1918 were brought into one common organization. But in view of statements which have been made concerning public ownership, what it has accomplished, what it may accomplish and all that sort of thing, and particularly in view of statements which have been made that the condition in which Canada has found herself during the last fifteen years with regard to railroads is due to the failure of private ownership, and to the building of railroads for the purpose, as the hon. member who has just taken his seat has said, of providing profitable investments for promoters, I should like to make a very brief statement. The question of public ownership, as it could be applied to the Canadian National Railways, was never held out as an argument either for or against the principle of public ownership. Between the years 1900 and 1910 the parliament of Can-

C.N.R ,-C.P.R. Bill-Mr. Nicholson
ada created a railroad situation-the parliament of Canada, not private owners, in any sense. It was the private owners who undertook to develop the railway lines in Canada, induced to do so by the governments of Manitoba, Saskatchewan and Alberta. The owners of the Grand Trunk Railway made an effort to project their line into western Canada and practically came to an arrangement with the Canadian Northern interests by which the Grand Trunk in the east and the Canadian Northern in the west would comprise a transcontinental road. Then a transcontinental road was projected from Moncton to Brines Rupert and no arrangements were made to link up with the Grand Trunk. In this way a vast expenditure was loaded upon the transportation system of this country and the Canadian people are now in the position where they are called upon to carry that load.
In 1918 and 1919 parliament found it necessary to do something for these roads. At that time Canada had a total investment in these railroads of $1,106,237,629.72. There was a large surplus of mileage and if the problem had been taken hold of as it should have been taken hold of, this surplus would have been eliminated and the unnecessary capital which was wasted in the construction of the Transcontinental and the Grand Trunk Pacific would have been written out of the picture and the railroads given a chance to carry on. But that was not done. The expenditure of
8300,000,000 would have brought these lines up to the standard of class one railroads, and anyone who wishes to read the debates which took place in the House of Commons during 1918, 1919 and 1920 will find the statements set out quite clearly. Any railroad man looking over the situation as it was then and as it is now will agree with that estimate of the amount required to bring these railroads up to class one condition. If the proper course had been followed that amount would have been sufficient. In the meantime, what have we done? We have raised our total liabilities from $1,100,000,000 to $2,600,000,000 and that is a burden the Canadian people have to bear to-day. People will say: What are you going to do, are you going to scrap portions of these roads after having paid for their construction? They will ask what is to be done with the territories through which they run. I say without hesitation that until the people of Canada acting through this parliament decide to abandon the surplus duplicating lines of the Canadian National Railway and, in many cases, of the Canadian Pacific Railway, the railroad problem of this country will never be solved. I believe that if the right type of trustees are appointed they will find the task
so utterly hopeless even with cooperation that they will come back to this house and recommend to be done what we ourselves should have done long ago.
I should like to refer to some of the statements made with regard to the situation that has developed from 1920 on. The hon. member for Kenora-Rainy River (Mr. Heenan), with whom I agree in some of the positions he has taken, stated yesterday that in 1923 Sir Henry Thornton found these railroads in the mud but had brought them up to the level of first class roads and only because of that was it possible to make the economies which have been made in operating expenses during the past year or two. When we look into what Sir Henry Thornton did say with regard to that I think it will be found that he agreed with the statement I made a few moments ago, that the cost of bringing these railroads up to class one standard was not $1,000,000,000 but $300,000,000. In 1922 Sir Henry Thornton made a statement to the Minister of Railways which appears on page 10 of the annual report of that year. After dealing with the general condition of the property, he said:
On behalf of the board, I would like to state that after inspection of the main arteries of the system, we find that the work undertaken has been well performed, and that the expenditures have been well applied. While the demands for capital expenditure on a system of such extent in a growing country, as the former board stated, are never ending, yet 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. The problem as far as the lines covered by the report is concerned, is how sufficient traffic may be developed to carry the overhead and maintenance expenses. As far as transportation costs gO, an economical performance is being made. Under these circumstances the margin for improvement with the present light volume of traffic is largely dependent on circumstances beyond the control of the management.	,
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.
That was the statement made in 1922 by Sir Henry Thornton when he took over control of the property. It has been stated this afternoon as well as previously that some day a monument will be erected to Sir Henry Thornton. It is not my intention to find


Mr. SPBAKMAN:: ! should like to ask one question for information. Is the hon. member taking into account in this summing up the contribution made by all the various branch lines to the earnings of the terminals of the system and a small part of the main lines themselves, which could not exist and earn anything without the branch lines?
* Mr. NICHOLSON: I was just coming to that. If you analyze the situation in relation to the Canadian National Railways or any other railway system you will find that the branch lines are given credit for the earnings which they contribute to the main line.


Mr. ERNST:: Perhaps.


Alfred Speakman: They should be.


George Brecken Nicholson: And they are, and in the analysis that has been made by the Duff commission you will find that this is how it
(Mr. Nicholson.]
is carried out. Each branch line is credited with the earnings originating on that branch line and also with the earnings originating on the main lines and projected to the branch lines. Everyone who knows anything about this country knows that in many cases branch lines have been projected ahead of their time, so to speak, but it is the duplication of main lines, of terminals and of services of every known kind that a railway must maintain if it is to operate which provides the difficulty.
I am sorry my hon. friend from Kenora-Rainy River has left the chamber; I wanted him to hear one or two things I have to say, because I am both in agreement and in disagreement with him. The hon. member referred to the consolidation of terminals and shops and so on and spoke of the effect this would have on the employment of labour. He particularly referred to what are known as back shops. Back shops, Mr. Speaker, are the shops where locomotives are taken when they receive what is known as a general repair, as contrasted to the ordinary running repairs from day to day which are looked after in the roundhouses. If you close the Angus shops of the Canadian Pacific Railway in Montreal and repair all the locomotives of both lines in the Point St. Charles shops of the Canadian National Railways, or vice versa, that will not necessarily mean that the mechanics who repair these locomotives will be dismissed. Not at all. A substantial saving will be made in fuel and in electric power and there will be some saving in supervision, but when these locomotives go in for a class A, a class B or a class C repair it takes the same number of mechanics to repair them in the Point St. Charles shops as it would take if the repairs were made in the Angus shops. The same thing, of course, applies to carshops. Certainly there will be some reduction in staffs, but in the main that reduction will not be in what are called mechanics but rather in the supervisory staffs of both companies. The same thing will apply in the yard service. You cannot switch a thousand cars with the same number of switchmen and switch engines as you can switch five hundred cars, I do not care whether you do it in one yard or in two.
This is the point, Mr. Speaker: Can the taxpayers of this country continue to carry this load, which is always increasing? The interest charge this very year will be increased by $2,500,000 or $3,000,000 by reason of the advances the country must make to cover the deficit and interest charges for 1932, and so on all along the line.

C.N.R.-C.P.R. Bill-Mr. Nicholson
One other point raised by the hon. member for Kenora-Rainy River was in relation to compensation. "What will you do," he said, "with the people located along these lines and with the railroad men who have gone into the terminals and built homes?" I fully agree with him that the country must compensate these men. At the same time I say to him that I can point out a thousand miles of railroad line in the province of Ontario where the rails could be taken up-and the roadbed turned into highways if you like-and every living soul on these lines evacuated, paid their expenses and put into some profitable employment somewhere else, and it will not cost this country more than an amount equal to the cost of maintaining the line for three years, without taking into account the operating cost. Certainly that is what we will have to face. The country must face it sooner or later, and my hon. friend is perfectly right when he says that compensation must be given. If this bill involves the abandonment of terminals or anything of that kind that brings hardship to individuals and groups who have gone there honestly or have been induced to go there, I say at once that the country should . compensate them without question.
There is just one other matter to which I wish to refer; that is what my hon. friend said with regard to statements that have been made in relation to the rates of pay and so on received by the running trades on the railways. My hon. friend from Stanstead (Mr. Hackett) referred to that point in his speech, I understand, although I did not hear it. There is a very considerable discussion going on throughout the country among men who do not understand, I think, what is the real situation with regard to the excess earnings of the running trades in railway service. These running trades, and the conditions under which they are employed, are frequently held up as the reason why the railroads are creating deficits instead of earning surpluses, as they should.


Mr. HACKETT:: Only one of the reasons.


Mr. XICHOLSON:: Well, as one of the
reasons. I submit, Mr. Speaker, and I believe I can show, that there is a very great misconception in the minds of a large number of people with regard to the basis upon which these men are employed. The hon. member for Kenora-Rainy River was perfectly right when he said yesterday that these rates have not been fixed arbitrarily; they have been the subject of negotiation. It is true that the standard of living for railway employees has been materially raised during this century; it began to be raised about 1890, in relation to
other classes of working men. But this is the situation, and I will take 1928 as the basis for what I have to say, and I will refer to just one class of men employed in the running trades, the locomotive engineers, the highest paid class. In 1928 the basic rate of the locomotive engineer was not as high as the basic rate of a bricklayer, a plasterer, a plumber, an electrician or a carpenter in any city of this country. I challenge anyone to investigate the situation and find this out for himself. It is true, perhaps, that these men earn a day's pay in a few hours, but I am going to suggest this to anyone who has never tried it: Let any hon. member of this house get a pass from the Canadian Pacific Railway to-night-and a pass will be readily made available to him-and get on board one of those 2,300 class locomotives that pulls train number 5 out of here on the main line. Let him get into the most comfortable position that he can find in the cab of that locomotive and ride from here to Chalk River. When he gets there let him say whether he would like to turn right around and come back. I venture to say that he would want to go to bed and stay there all day to-morrow, and I know whereof I speak.
In my opinion, Mr. Speaker, there is no class of labour in this country that is faced with greater responsibility and strain on their nervous and physical systems than the men employed in the running trades on our railroads. They are in control of machines that in themselves are so complicated that if a man had nothing else in the world to do but watch the variety of gauges with which he is faced in order to see that the train is kept moving along safely it would be enough to keep him busy, but that is not all the engineer has to do. I had hoped to have a standard rule book with me here. I should like to submit it to a group of lawyers in this house and find out how long it would take them to understand the rules and see what the man in charge of a train is faced with if he is to keep the passengers and the public safe. I venture to say it would take any man in the house a year thoroughly to understand those rules. It takes those men on the railroads much longer; they are apprenticed in the first place and gradually work up. What are they faced with then? There are all types and forms of signals, and complicated train orders are put into the hands of these men one or two minutes, never longer than that, before the train pulls out; and when a train is running at forty miles an hour we can well imagine what the possibilities are in the way of danger at one of the terminals with a

C.N.R.-C.P.R. Bill-Mr. Nicholson
myriad of lights flashing in the faces of the trainmen. If there is the slightest mistake on their part they are apt to run into the rear end of a passenger train and kill many people. One mistake and the doors of the penitentiary are open waiting for these men, and this because of the laws of the country. Let me give you one illustration. Less than a year ago a fast train of the Canadian Pacific, running between Smiths Falls and Trenton, and travelling at a speed of not less than seventy miles an hour, equipped with a series of lights in front of the locomotive, and an electric headlight, met with an accident through the detachment of this electric headlight. This occurred as the train approached the crossing. The engineer blew the whistle and did everything else he could think of, but an automobile was hit and a man killed. The engineer was arrested and thrown into prison. He was haled before the magistrate and committed for trial and put back into gaol, but his friends bailed him out and after a long period he was acquitted. I mention this to show the conditions with which these men are faced, and I say to you again that in relation to other classes of mechanics their basic rate of pay is no higher than those of bricklayers, plasterers, stonemasons, electricians and plumbers, and in many cases not so high. I make this statement because in my opinion the country should know that what has been said with regard to the trainmen is absolutely without foundation.
One other point I wish to deal with for a moment is the division of mileage. My hon. friend from Muskoka-Ontario referred to it yesterday and indicated what certainly would take place. There is a misapprehension with regard to the division of mileage. I heard in the railway committee statements which were substantially exaggerated. Every man with a heart in his breast sympathizes with the men who are out of employment, but I know that the senior men who are being so much criticized have made very considerable voluntary reductions in the mileage they are taking. Let me refer for example to the shop men. They are entitled to work fifty-four hours a week and to receive pay for fifty-four hours, and voluntarily step by step they have reduced their hours, four hours now, four hours later on, and so on, until they are down to thirty hours a week, and they have done this in order to obviate the necessity of their fellow men being left without any work at all. And let me say that I am speaking in this regard with respect to lines which I know about. I cannot tell you what is taking place throughout the

country but I know of many terminals where the mileage rates have been brought down considerably, though not to as low a point as some would suggest as being necessary to afford employment to all. It is however a mistaken conception of what the men are doing to suggest that they are arbitrarily taking all that they can get, their pound of flesh, so to speak, and leaving all the other men out in the cold.
I will conclude as I started. I am supporting this bill, not because of anything I hope will result from it in its present form, but because I believe it is a step in the direction of showing the people of Canada what they are actually faced with, and proposing the only way by which they can get out of the difficulties they are in.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: 
John Thomas Hackett: Hear, hear.


William Lyon Mackenzie King: Hon. gentlemen opposite say, "hear, hear;" that may be their view. It is a subject for debate. It may be that in our day government ownership and operation is impossible. I do not believe it is. I believe that due control on the part of parliament, sympathetic control, would help to make government ownership and operation go very far. But so long as the government of the country owns a great national railway system, just so long must the ministry of the day take responsibility with respect to the essential features of that system. In my view that is the fundamental consideration; the ministry cannot possibly divest itself wholly of responsibility.
If the attitude is taken that the ministry should divest itself of all responsibility, what would it mean? It would mean that the ministry of the day is, to all intents and purposes, making a present to one man of the railway system of the country. He is to have entire control. It means you hand over the system to private control, because anyone who could do as he pleased with property would, to all intents and purposes, be in the same position as the owner of that property. We would be getting rid of government ownership and control if by legislation we said, "We will divest ourselves of all say and all control; we will not allow the people's representatives in parliament to have a word in regard to the matter, but we will give to one individual power to do as he pleases with respect to the whole system." That is the danger which I 53719-181
confess many hon. members on this side have seen in the legislation before us. It is a danger we wish to guard against. If by its provisions this bill really means that we are preparing the way for amalgamation, that such is the intention behind it, and further that we are freeing entirely both the executive and parliament from any control over this great national railway system, then we must be absolutely opposed to it. We would be opposed to that principle.
From the debate which has thus far taken place, the position of hon. members on this side of the house, has already been made fairly evident. We are all one with respect to doing everything we can to effect economies on the national railways. We are all one in regard to legislation which will further effective cooperation with the Canadian Pacific Railway, but which will maintain the integrity and identity of the Canadian National Railways as a government owned and controlled system. But we are unalterably opposed to an amalgamation of the Canadian National Railways with the Canadian Pacific Railway, and we are unalterably opposed to divesting this parliament of its supreme rights in anything and in everything, and of taking away from this House of Commons its duty with respect to the control of expenditures of public moneys, which involve taxation.
There is the one further main division of the bill, namely that relating to the arbitral tribunal whose duty it is to settle disputes which may arise between the two companies, in the working out of a more effective cooperation. In connection with this part of the bill may I say I do not believe our views will be greatly different from those held by hon. members opposite, except as to the best form the tribunal can take. We recognize that there must be some tribunal to settle disputes, and that the establishment of the tribunal mentioned in the bill would probably serve a very useful purpose. Whether or not the tribunal suggested in the measure before us in the best one, is a matter open to debate. However, that may best be discussed when we reach the committee stage of the bill.
There are many who feel that, with its wide knowledge of railway matters, and the staff and equipment available to supply necessary information, the chairman of the Board of Railway Commissioners along with representatives of the companies could best act as an arbitral board. On the other hand there are some who do not hold that view. Again, this is a matter which can best be discussed in committee of the whole.
It seems to me that one real difficulty is tha t which presents itself where there is com-
RtVISED EDITION
2852	COMMONS
CJV.R,-CJP.R'. Bill-Mr. Mackenzie King
pulsion with respect to something concerning which there may be a wish to bring about effective cooperation.
The principle involved is very much the same as that which has to be considered with respect to disputes generally. Some years ago this House of Commons debated at considerable length the merits of compulsory arbitration as against compulsory investigation in connection with disputes between employers and employees of the great public service utilities. The legislation of such countries as Australia which had compulsory arbitration laws upon their statutes was carefully studied in relation to the alternative of compulsory investigation leaving the enforcement of the award more or less to the force of an informed public opinion. At that time this parliament came to the conclusion that a compulsory investigation law which would bring out all the essential facts of the case, not to compel acceptance of the award but leave that to the operation of public opinion, would in the long run be more serviceable in the prevention and settlement of disputes than a system of compulsory arbitration. I think the decision made at that time was a wise one, and I believe its wisdom has been borne out by the experience of many years past in connection with industrial disputes. Take the railways, for instance. It is very seldom that one finds after a dispute has been carefully investigated by a board of investigation that the award made is not accepted by one side or the other. There is one aspect of the situation where it concerns railways which seems to me to make compulsory investigation the most effective method of dealing with matters of this kind. There is no party more concerned in the justice of a decision and the enforcement of a just decision than the community itself, and where a board of investigators is charged with full power to go into the merits of a case and disclose them publicly, I cannot conceive of many instances where public opinion would not be so strong as to compel the acceptance of a wise and just decision by both sides. My own personal feeling is that it would be advisable to take this step first, and try it out. We need not do everything at once; if it does not work, well and good. Something believed to be better can then be tried. W'e know that at least one of the companies is very strongly opposed to this compulsory arbitral feature, and it may be that it has strong reasons for feeling as it does. Where the parties can agree upon referring a dispute it may well be left to arbitration, the finding would then have to be

acceptable to both sides. But where one party is brought before a board in an unwilling frame of mind and feels that it is being coerced, that kind of thing cannot be kept up very long. I think, when we come to this phase of the matter, we ought to consider very carefully what it may be best to do.
I hope I am putting my position quite clearly. The house will appreciate that so far -as we on this side are concerned, we- are entirely at one with the government in the alleged objects of this bill, but I want to distinguish between principle and object. If there is any room for doubt as to the principle not being the same as the object, then we must be very careful with regard to the position we take. I want to accept the word of the minister that the principle underlying this measure is confined solely to the matter of cooperation, the effecting of economies and the improving of the system by freeing it from unnecessary and undue political control. On the other hand, I would not be true to myself, nor to hon. gentlemen on this side, -nor to the people of this country, if I did not point out that before we pass the second reading of this bill there should be no doubt whatever as to the principle which we are really supporting. With the view of removing any possible doubt in that regard, I have drafted an amendment in the nature of a privileged motion which I would like to move at this time. I move this amendment in the hope that it will be accepted by hon. gentlemen opposite, and that it may be the means of bringing hon. members of the house into a sufficiently united frame of mind to enable us to move on immediately to the committee stage, and there debate the possible differences between us. The minister said the other day that he hoped the house would not send this bill to the select standing committee on railways, canals and telegraph lines or to the special committee on railways and shipping, but that it should be considered by the committee of the whole house. If that course is to be followed, there is an additional reason why at this time we should be absolutely certain of the principle we are supporting and which should govern and guide the committee in its discussions and deliberations. There should be some direction from the house to the committee of the whole as to the principles it wishes to have kept uppermost in the consideration of this measure.
The motion before the house is that the bill be now read a second time. I beg to move, seconded by the hon. member for -Charlevoix-Sagai-enay (Mr. Casgrain):
That all the words after "that" to the end of the question be left out in order to insert the following instead thereof:	"the second

C.N.R.-C.P.R. Bill-Mr. Bennett
reading of this bill be postponed until this house have declared that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific company; or to divest parliament of its rights; or to take from the House of Commons its primary duty to control expenditures of public moneys and the taxes required to meet the same: and that the provisions of said bill shall be read in the light of this declaration, and be construed so as to conform therewith, and that in so far as any of its provisions may be inconsistent therewith they shall be amended accordingly,
and that the adoption of this amendment by this house shall constitute the declaration of its intention and purposes as set forth herein."
I should like to quote an authority which will help to explain the purpose I have in mind in moving this amendment. The citation from May under standing order 48, which is the order respecting privileged motions, reads,-I am reading from Beau-ehesnes Parliamentary Rules and Forms, paragraph 406:
The object of an amendment may be to effect suc-h an alteration in a question as will obtain the support of those W'ho, without such alteration, must either vote against it, or abstain from voting thereon, or to present to the house an alternative proposition either wholly or partially opposed to the original question.
In moving this amendment, I am not attempting to follow the second of the two courses mentioned in the rule; I am not presenting to the house an alternative proposition either wholly or partially opposed to the original question. What I am seeking to do is to effect such an alteration in the question as will obtain the support of those who, without such alteration, must either vote against it or abstain from voting thereon. I have not consulted with the members of the party generally, but I think I have a true impression of how they feel. I believe I can say for hon. gentlemen sitting on this side that if my right hon. friend will accept this amendment, all of us will be prepared to support the second reading of this bill. It will be thus made clear that our opposition, if opposition is necessary, is not to the principle of effecting economies, bringing about cooperation and helping to remove the national roads from political interference but to any enactment which would compel amalgamation of the national railway system and the Canadian Pacific or which would take away from this parliament or this House of Commons the rights which they should have at all times.
I hope I have followed the example suggested by the Minister of Railways (Mr. Manion) in not attempting to make this a controversial discussion but to bring the political parties as close together as possible at this very critical time. I move this amend-53719-181J
ment in the sincere hope that it may be the means of enabling this House of Commons to take a united stand on this all important measure. May I point out, Mr. Speaker, that the amendment does not involve any lengthening of the debate or any delay in getting into committee. It will rather have the opposite effect; it will shorten discussion very materially. If the amendment is carried the house will declare as a guiding principle what the minister himself has declared already is intended, and also what I cannot conceive any government being willing to other than declare with respect to the right of parliament and the duty of the House of Commons. With the house expressing its opinion in this way, we shall feel a sense of security in supporting the principle of the bill for there will then be no possibility of mistake as to what we are supporting. But if that cannot be done, 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.
Mr. SPEAKER; Is it the pleasure of the house to adopt the amendment?


Richard Bedford Bennett: Mr. Speaker, I desire to reserve the right to discuss the question whether or not the amendment is in order. In my judgment portions of it are not in order, but at the moment that is not a matter of importance.
The closing words of the right hon. gentleman opposite indicate clearly what was in his mind in the drafting of this amendment. When you speak of sinister motives or designs you can always be sure there is something of the kind behind a suggested amendment such as this. To suggest in a time like this that there are sinister motives in the introduction of the bill which is now before the house for second reading, and that these sinister motives are to be met by the introduction of the amendment just submitted is quite beyond me. However, the right hon. gentleman and his followers will have to adjust themselves to the necessary viewpoint to deal with that phase of the question.
I am going to make a very short review of the situation, Mr. Speaker, and of the legislation now before the house, and I think I can convince hon. members opposite that they are approaching this question from, shall I say, the wrong angle. The position is not, as has been suggested so frequently in this house, that these are the properties of the people of Canada. These are now the pro-

C.N.R.-C P.R. Bill-Mr. Bennett
perties of the people who loaned their money to build them, and under normal conditions they would take possession of them. It does seem to me that there are a few fundamental ideas which must be kept in mind in discussing these proposals. Let us look at them.
In Canada we had the Canadian Northern railway system, the Grand Trunk system, the Grand Trunk Pacific system, the National Transcontinental system and the Intercolonial line. These roads were the property of the crown with regard to the National Transcontinental and Intercolonial lines, and of private interests with regard to the Grand Trunk Pacific, the Grand Trunk and the Canadian Northern. These properties were built with borrowed money, and that money was obtained largely through the guarantees given by the provinces and by the dominion which enabled the securities to be sold in the money markets of the world. In the case of the Grand Trunk Pacific the Grand Trunk gave its guarantee to the securities of the affiliated enterprise, it being the parent company. In the case of the Canadian Northern there were guarantees both by the provinces and by the dominion. Guarantees were given by a Liberal government in connection with the. construction of the line into Edmonton, and those who will look at the statutes of that time will find there an express condition that the road never should be amalgamated with the Canadian Pacific Railway. Guarantees were given by the province of British Columbia in regard to the construction of the old Canadian Northern from the mountains to the Pacific. We had the Canadian Northern Alberta, the Canadian Northern Saskatchewan and the Canadian Northern Ontario; we had various broken bits of line bearing the names of the provinces through which they passed, the securities of which were guaranteed by the provinces and by the dominion. The Grand Trunk railway system, which ran from Portland to Chicago, through Quebec and Ontario, combined a large number of branch lines and in fact, as is well known to those who are students of the railway question in this country, separate entities or companies still exist. For instance, there was the old Canada Atlantic, the line running from Ottawa to Parry Sound or beyond, the rails of which were carried to Coteau. These systems still exist; their securities are outstanding. They have been guaranteed in some instances by, we will say, the Grand Trunk; in others by other companies and in still others by the crown, but the fact is that the Grand Trunk system as such consisted of a large number of separate companies grouped together under one controlling management, and the very {Mr. Bennett.]
fact that they were bought at such a great cost had much to do with the subsequent financial difficulties of the Grand Trunk railway system.
It is needless for me to deal with the Grand Trunk Pacific railway to-day. It was bankrupt before it was built; it was insolvent before it was completed. It passed into receivership and then came into the hands of the crown, really, under the amalgamation known as the Canadian National railway system. The Intercolonial railway was built by the people directly and owned by the crown. The millions of dollars that were invested in that enterprise were borrowed on the credit of the Canadian people plus a guarantee that was given, it will be recalled, under the provisions of the British North America Act, to enable the money to be obtained cheaply for its construction. That road was not located having regard to the best economic conditions; for strategic and other reasons it was built where it now is rather than where it should have been. These conditions were referred to during the course of this debate, but the money invested is the money of the people of Canada and not of any private enterprise. The obligation to repay the money was a direct obligation on the people of this dominion. The National Transcontinental, which represents an investment of hundreds of millions of dollars, was built in part from the surplus in the consolidated revenue fund, obtained from taxes imposed upon the people of Canada, and in part by borrowed money. It was to cost $13,000,000; it cost several hundred millions.
As I have said, Mr. Speaker, I shall not do more than indicate that these bankrupt enterprises were united into one system. When the decision of the privy council was finally given-and at that time the party of my right hon. friend was in power-an order in council was passed that brought all these systems under one control. They are known now as the Canadian National Railways. As I have said, they comprise the old systems to which I have alluded, together with the new roads built by the people of Canada-the National Transcontinental, the old Intercolonial railway, as well as the Grand Trunk Pacific, the Grand Trunk system, and the Canadian Northern.
The immediate effect of that amalgamation, not expressly stated in terms, has been to relieve the provinces of the weight of their guarantees, and if these guarantees were made effective against British Columbia, Alberta, Saskatchewan and Manitoba those provinces would all be hopelessly bankrupt. That is

C.N.R.-C.P.R. Bill-Mr. Bennett
the railway position so far as the provinces in question are concerned.
Having been united under the conditions I have mentioned, they operated as an entity, as a system, and they carried on transportation from Portland to Chicago and in every province of Canada; and in the operating system was included the old Intercolonial railway. I wonder whether this house realizes just what the present position is. Sometimes I feel that the magnitude of the problem that confronts this parliament is little understood or appreciated. It is the greatest problem that confronts the Canadian people; it is the problem beyond all others that calls for the exercise of patience and in my judgment of much sacrifice on the part of the taxpayers. Why? Because not only have the provinces given their guarantees, but the dominion has given its guarantee with respect to the securities that are outstanding.
To what extent does the public own the securities of these systems that are now called the Canadian National Railways? Almost every hon. member knows, but I venture to repeat it. It amounts to nearly $1,300,000,000 -that is, nearly thirteen hundred millions of dollars are in the hands of the investing public in almost every country in the world, and securities representing the investment are guaranteed by the dominion or the provinces of this confederation.


Mr. STEWART (Edmonton):: Altogether?


Richard Bedford Bennett: I am speaking of the
securities that are outstanding in the hands of the investing public of the world: Canada, the United States, Great Britain, continental Europe and even in the far east. Purposely, I do not mention the numbers of railway lines that have been brought into this system for prices that are little short of a public scandal; I do not mention that because it is unnecessary-it is past history so far as the act is concerned. As regards the branch lines, they have been built by the Canadian National Railways and by the Canadian Pacific Railway both, and in some instances duplication of facilities has brought disaster to both systems. I am not giving the exact figure; I said $1,300,000,000-it is $1,280,000,000 odd. That does not include the sums of money that have been paid out by the Canadian people from the consolidated revenue of Canada, or borrowed by them and handed over to these railways.
Do you realize, Mr. Speaker, just what that sum represents? It represents nearly one thousand millions of dollars. So that the two together, the securities that are now outstanding in the hands of the investing public,
representing roughly $1,300,000,000, plus the money that the Canadian people, either from surplus taxation or by direct loans made upon the sale of their own securities, have contributed, represent a total of nearly $2,300,000,000. And when I made the statement as to the investment by the crown, that is by the people, I did not include the interest upon the moneys thus invested. If I were to do so it might be almost unbelievable because the aggregate is so large.
Therefore we have this problem before us as Canadians: How can we so adjust conditions as to make possible the very lowest demand being made upon the Canadian taxpayer to provide interest to pay the annual requirements of the securities held by the public, to say nothing of the interest upon.^: the moneys which we have directly put into these enterprises? And that eliminates, of course, interest on the Intercolonial railway system.
Now we have another railway system in this country. That system was heavily subsidized by the Canadian people in land and money and it became a very great and prosperous organization. It is known in every part of the world. It was a competitor of the combined systems, now known as the Canadian National railway system. Sometimes, if I may be pardoned for saying it,
I wonder how intelligent men ever thought that it was possible to create three transcontinental systems of railways in Canada. Take the history of world transportation, take just the bald outlines of it, and ask yourselves how Canadians could ever have thought it possible to create a Grand Trunk Pacific transcontinental system, a Canadian Northern transcontinental system and a Canadian Pacific transcontinental system. It is beyond me. The other day I had brought to my attention a life of Sir Wilfrid Laurier written by a great friend of his, Senator David. In the 1905 edition, the first edition, the author opens one paragraph with the assertion that Sir Wilfrid Laurier was not only a great orator but that he had clairvoyance inasmuch as he saw the future of the country when he brought forward the Grand Trunk Pacific railway. Later editions of the book leave that out. I need hardly point out that there must have been something in the minds of Canadians that now makes it impossible for us to understand who could have dreamed that three transcontinental railways could be sustained by eight million people.


William Daum Euler: They thought there would
be more.
C.N.R.-C.P.R. Bill-Mr. Bennett


Richard Bedford Bennett: Of course they did; but
you could not project your mind into the future on any material that then existed that .vould warrant any such expectation, that you jould maintain three transcontinental systems .n this country.


Mr. McINTOSH:: If you have faith in your country.


Richard Bedford Bennett: One does not wish to
have faith in one's country to the extent of being foolish, and anyone knows that the mere suggestion that eight million or fifteen million people could sustain three transcontinental railway systems, over the territory these railways crossed, is absurd.
Now, I have been a witness to this. I saw these railways being built in western Canada. For thirty-five years I have lived there and I saw the development of transportation in that area. I remember the day the first Canadian Northern train reached Edmonton, and I remember when the Grand Trunk Pacific party came west for the purpose of considering the construction of their lines. I travelled west from Calgary to Banff with Mr. Hays and Mr. Morse and the prospective board of directors of that time, and I recall exactly what was then said. No one ever expected that there were going to be two systems then. People fully expected that the Canadian Northern and the Grand Trunk Pacific would be united into one system. Those who recall the dramatic moments in this house, though not in this particular chamber, when Mr. Blair left the government of that day, will remember as they recall it that he pointed out that what has happened would happen. It has happened even as he foresaw it. The point I desire to make is that we have received this as a legacy, and I think we have some right to ask hon. gentlemen opposite to give us their assistance in the solution of this difficulty. I say that for the reason that this party did not create it.


Mr. HANBURY:: The people of Canada did.


Richard Bedford Bennett: This party did not create it.


Cameron Ross McIntosh: It created the trade
tangle.


Richard Bedford Bennett: Under our constitution the measures that made possible the construction of those lines had to be initiated by the government of the day and they were initiated by the then governments of the day. This is not a question of the people of Canada; it is one of governmental action, the initiative being taken by the governments of the day for the eonstruction of those lines. But as I have said
fMr. Euler.]
frequently in public and made perfectly clear, I repeat in this chamber that the provinces of the west must assume an enormous responsibility with respect to the guarantees that they gave to the Canadian Northern system, without which guarantees that system would never have reached the coast. That is clear; every thoughtful man who examines the history of the matter knows that. In a period of universal depression, a period in world history the like of which has never been known before, this government has fallen heir to that condition. Having fallen heir to that condition, it had to seek as best it could some means for the solution of the difficulty that would not be wholly incompatible with the views of the Canadian people. I recognize the fact that no soft words are going to solve this problem, and no criticism of high taxation will pay the bills that result from it.
Let us see what has been done. Some hon. members may doubt the wisdom of the appointment of a royal commission; some may very properly say that the government of the day could have arrived at the same conclusions as those reached by the royal commission. But when you find the view put forward by the directing executive head of the national system and acquiesced in by the head of the Pacific system, that a royal commission was desirable in order that the problem might be studied from every angle, political considerations being eliminated, I think hon. members will agree that the government at least was warranted in taking the attitude it did. But I go further: this chamber approved that view. When the select committee made its report recommending that consideration be given to the views expressed by the railway executives, it will be recalled that the house acquiesced in that recommendation. There are those who say that the report of the royal commission does not advance the matter at all. In my judgment that commission gave more careful attention and consideration to the problem than is usually the case with public commissions. Let us for a moment examine it. The British interests, comprising practically 90 per cent of all the Canadian Pacific securities and the major part of the Canadian Northern securities that were issued prior to 1920, were represented by Lord Ashfield. My colleague, the Minister of Railways (Mr. Manion), has pointed out to the house that in Lord Ashfield we had a man skilled in finance, an expert in the operation of transportation systems who, during one of his visits here, had to shorten it in order that he might return to deal with the complex problems arising out of the underground systems of transportation in the great city of

C.N.R.-C.P.R. Bill-Mr. Bennett
London. He came here, dispassionate, unprejudiced, and looked carefully over the situation. He traversed this country from ocean to ocean. The same may be said of his United States colleague. It is true that the latter was not a trunk line president. Owing to conditions that obtained in the United States at that time, the securing of the services of a trunk line president was absolutely impossible, but Mr. Loree is recognized by all railroad men in the republic to the south of us as having no superior so far as the practice and theory of railroading are concerned. He saw this problem with his own eyes. Then, if you take our own Canadians, I think most hon. members will agree that the chairman of the commission is a man whose position, and reputation as a jurist not only in this country but elsewhere, entitles us to have the utmost confidence in his dispassionate and judicial weighing of evidence and in the conclusions at which he would arrive. As regards the businessmen, Mr. Leman is the general manager of a bank but he has also had wide experience as an engineer. If my memory serves me aright, he is a graduate of McGill university and has wide experience. He concentrated his mind upon the problem. Certainly Sir Joseph Flavelle will, by the common consent of all who know him, be regarded as one of the foremost businessmen this country has yet produced. In regard to the selection of a gentleman from the extreme east I cannot do more than adopt what was said by my colleague the Minister of Railways, and everyone from western Canada who knows Professor Murray, president of Saskatchewan university, will agree that in considering this problem, he brought to it a skilled, disciplined mind, without prejudice. I think I am within the judgment of the house when I say that this commission considered the railway situation without fear, favour or bias. They examined the presidents of the roads, the directors, the financial comptrollers, the operating officials and they saw the roads themselves. They understood fully the duplication not only of trackage but of facilities. They saw all that was implied and involved in the branch line programs to which effect had been given and they learned with dismay of the financial position. They made a report. This government took the view that, the report having been received, the best way to proceed was to ask that a bill be prepared containing all the recommendations that had been made, that is for discussion only, and in the early stages it was thought it might be introduced into this chamber, but after consultation with my colleagues, it was concluded that a more ample opportunity for what one might call calm, dispassionate consideration of the problem, could be given if the bill were first introduced into the Senate.
I say this to my colleagues in the House of Commons, that I believe seldom has any committee given to a problem the same careful, thoughtful, unprejudiced consideration that was given to the bill by the Senate committee on railways. I am violating no confidence when I say that Lord Ashfield said to me in December last in England that he had read with the greatest interest the reports of that committee as they had been published and that he could not conceive of better consideration and attention being given to any matter than that evidenced by the work of that committee. The bill has been changed from *what it was originally; clauses have been added; clauses have been withdrawn, but in the main the principles continue to be those which the commission reported should be adopted. The government as such has in this legislation no object but one-to do what is best for the Canadian people. If constructive suggestions are offered from any corner of this house, the government will consider them on their merits, and they will be either accepted or rejected as they are considered sound or unsound. In other words, if the weight of argument would indicate that some view other than that indicated by the bill or some other clause should be adopted, the government is only too glad to avail itself of every assistance that may be offered. Why? Because the problem is not the problem of a government: it is the problem of the whole people, of this House of Commons and of parliament itself. In approaching that problem, let us see what the evidence discloses before I touch on the bill itself.
The evidence discloses not only the financial position to which I have alluded, but further that there is imposed annually upon the Canadian people a burden that amounts to many millions of dollars-roughly a minimum of one million dollars a week-to discharge the contractual obligations which the Canadian people, as taxpayers, have incurred. It is no good to say that we will repudiate those obligations. To do so is to destroy the credit of this country because the guarantees given constitute a contract to pay on the part of all the people of Canada just as though the securities were issued by the Canadian people without the medium of a railway at all. That is the difficulty of the position. Every year these moneys must be

C.N.R -C.P.R. Bill-Mr. Bennett
raised. Last year it is probable that some five millions of dollars may have been earned by the railways to take care of an obligation that amounted roughly, with capital expenditures, to between sixty-five and seventy million dollars. Does the true significance of that go home to the Canadian people, or even to this house? I looked the other day at the painting of Sir John Macdonald, and yet in the year that Sir John Macdonald died the entire revenues of the Dominion of Canada were not as great as the deficit of the Canadian National Railways we are now discussing, so rapidly has this country expanded and so limitless apparently have we thought our ability to provide the taxes, for in the end it becomes a matter of taxation.
Now what would happen under normal conditions if this were a private enterprise having defaulted in the payment of its obligations? What would happen would be that which took place in the case of the Grand Trunk Pacific. An application would be made to the Exchequer court to appoint a receiver, the directors would pass out of existence, the receiver would take charge and would operate the system for the benefit of the bondholders or creditors of the road.
There has been introduced into this debate, as there was by others in another place, the thought that we are thinking of the financial interests as opposed to the human interests that may be concerned. Mr. Speaker, human interest centres in the employees of the system only if it continues to operate, for if it does not operate there is no employment, and unless a very, very great improvement is made in conditions the system as a whole cannot continue to operate. Every thoughtful man knows that. Everyone who has given attention to it knows that. Under normal conditions a receiver would be appointed by the courts. But there can be no receiver where you have the provinces and the dominion with their guarantees. The crown cannot default; the dominion and the provinces must pay or else their credit is done. Therefore, at the very threshold of the problem, the commission had to consider how to combine the powers of a receivership with the continued operation of a system that must if possible be maintained in operation, and so they selected three trustees. They did not call them trustee receivers, because the word would not be appropriate when dealing with the crown, because the crown does not go into a receivership. But nevertheless that was the condition with which they had to deal-default certain and positive for at least some period of time.

Under normal conditions the effect of a receivership, as every hon. gentleman knows, is that interest is no longer paid, and all the revenues are available to rehabilitate the system and bring about its reorganization. I am not going to take the time of the house this afternoon to mention more than one or two receiverships, but the great Milwaukee system went into receivership, as did Northern Pacific, the Union Pacific, the Santa Fe, the Wabash, and the Chicago and Great Western. All these roads went into the hands of receivers, and during the period of the receivership the security holders got no interest on their money. But you cannot do that in connection with our road because the provinces have given their guarantees and the dominion has given its guarantee as well. So we have the situation where this commission had to select a plan that would ensure the benefits of a receivership without in any sense restricting the operations of the system so far as that was possible from an economic standpoint. In other words, the legal necessities, together with all existing facts, made it essential that a body should be selected that would have all the powers of a receiver, together with the powers of a controlling management, to bring about that equilibrium between income and outlay that is the aim of every receiver before a reorganization takes place.
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. That is their view. They do not put forward that view as politicians or as members of parliament. They put for-word that view as business men because they know that in the history of enterprises in which the effort to bring about an equilibrium between income and outlay has succeeded it has been necessary to have a small management. For the most part receiverships, which in the case of the railways I have mentioned were composed of two receivers, and if my memory serves me right, in one of the greatest the number was three. But the commission is very certain that any number greater than three will bring about a difficult if not an impossible situation.
I understand the difficulties involved-does any hon. member of this house think for a minute that living as long as I have in western Canada I do not understand the difficulty that anyone is going to have in explaining why you have only three trustees and they all living in one city, Montreal? Does anyone believe that I do not appreciate that difficulty, or that I seek it lightly and happily and

C.N.R.-C.P.R. Bill-Mr. Bennett
gladly? Of course not. But we accept it because we believe, on the balance of the arguments that are presented, that there is no answer to the fact that any number of men greater than three could not bring about what we are aiming to accomplish, the restoration of equilibrium between expenditures and income in the reorganization of the system. It is because we believe that any number greater than three means disaster, and that is based on experience that is universal.
I once heard Lord Buckmaster say that Lord Macnaghten, one of the greatest jurists of the Victorian era, said that the ideal number for a court of appeal was three, and he never changed his mind with respect to that. In England the highest courts, Divisions No. 1 and No. 2 are limited to three in number because experience has taught them that three is a much better number of men with which to deal with the problems than any greater number. I am bound to say that my own experience, which is not a matter of importance, and my observation, which is a matter of greater importance, and my reading, as well as the reasons presented to me, have convinced me beyond question that we should stick to the recommendation of three trustees in this matter. I put this to the house: Suppose we make the number five; those who have to deal with the matter or come after us will say, if success does not follow, "Why did you not follow the advice of the commission; why did you not accept their advice?" If one of the three is to be selected from one group or one class, then shall we say that political, racial, religious or occupational consideration shall prevail? Must it not be that these three men are selected with the same regard for merit, and for merit only, as induces a court to select a receiver?
The high court of parliament has now been called upon to determine how many men shall constitute the trustees for this system, to bring about again equilibrium between income and expenditures, and restore this road to a position where it will earn its way. The high court of parliament is now asked to accept or reject the advice which has been given by those who went out and studied this problem more carefully than you or I can study it-and their conclusion is that three is the number which should be appointed. I share that view. Apart from the arguments which their report indicates- and in my judgment they are conclusive- the experience of the world in dealing with matters of business is that when you have a situation, such as that to which I have alluded, there should be a small body of men constantly in consultation who will be able
to concentrate their minds upon the problem. 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. The directors disappear, not because the commission wanted to get rid of directors, per se; they disappear because of the financial position of this enterprise. They disappear because in a court of law, under normal conditions, they would thus disappear. And so it is that these trustees are substituted for the directors, by . the high court of parliament, just as the directors would be superseded in a court of justice, as was done in the case of the Grand Trunk Pacific by a statutory receivership to preserve the property and to bring about, as I have stated, the equilibrium between income and expenditure.
I believe I have satisfied-at least, I trust I have satisfied the house, that the property is not the property of the people, except to the extent to which the people own the securities which are in default. INo interest has been paid upon it, and therefore it is fair to say that the Canadian people, as the holders of securities, have an interest in the enterprise. But this enterprise belongs to the investors; let us keep that in our minds.


Wilfred Hanbury: How about guarantees?


Richard Bedford Bennett: I am talking about
that-the people who have put their money into it and have not had any interest paid, and investors who have bought securities, have bought them on the strength of our guarantees. There is no question about that. Under those circumstances I trust this house realizes that many of the considerations which you and I, under normal conditions, would find operative in inducing us to arrive at a conclusion, must disappear. For we are now dealing'with very simple matters-securities, property in default, and security owners having a right to enforce their claims unless we, as guarantors, exercise our position and make payments. Under those circumstances I think-at least I hope-that the house will recognize just what the position is. Business men in this chamber, as they reflect upon the analogy between that and an ordinary joint stock company which is bankrupt, or as they reflect upon the history of great enterprises in this country, will realize how essential it was that the property be placed in charge of the numbers I have indicated for the purposes we and they have in view.
Some difficulty, apparently, has been experienced by hon. members opposite in the

C.N.R.-CJ".R. Bill-Mr. Bennett
thought that there is some sinister motive in this bill to bring about an amalgamation with the Canadian Pacific Railway. I say to this house now that if that apprehension is grounded upon the fact that the section in the bill which was put in as it was originally drafted, has 'been taken out, is the cause of that apprehension, then we will restore it.


Some hon. MEMBERS:: Hear, hear.


Richard Bedford Bennett: Then we will restore it.
There is no thought of any trick to bring about something which we have pledged ourselves not to do. There is no sinister design behind this measure to accomplish the amalgamation of these systems, when this parliament is opposed to that being done. In my judgment it would be impossible to bring about the amalgamation of these two systems on any terms or conditions unless the people, themselves, had an opportunity so to declare. I have given much thought to the point as to whether or not the honest and proper method to pursue is, at the next general election, to afford an opportunity by plebiscite for the people to determine whether or not it is desirous that this should happen. It is true there was a plebiscite in this country concerning prohibition. It was not held at a general election, and the result gave us prohibition as they had it in England and free trade as they had it in Maine.
At any rate, let us leave that for the moment. I desire to make it abundantly clear to the house that in my judgment no government could ever have any mandate which could be regarded as ample to warrant it in taking the step to which reference has been made, unless it proceeded from the direct authority given by the people who owned the equity of redemption. The people of this country own not the road but the equity of redemption. And so long as the government of Canada is Father Christmas and pays under the guarantee, just so long, there being no foreclosure, that equity of redemption has a right to express its views as to what shall be done. And it can only in my judgment be done in the manner I have indicated, by affording to every citizen who, in the end, owns the equity of redemption, an opportunity to express an opinion for or against amalgamation.
In order that there might be no misapprehension, in order that hon. members might be deprived of an opportunity of casting even a suspicion of bad faith upon the government-although I do hesitate to deprive hon. members opposite of an argument-at any rate in order that they might be deprived of that argument, I desire to say we will

place in the bill in adequate terms words which will make it clear that there may be no amalgamation of the two systems nor destruction of their integrity under and by virtue of this measure. And I may say that when I first heard of it my colleague the Minister of Railways (Mr. Manion) had not learned that such a suggestion was in the mind of anybody, because I do not believe this bill is susceptible of any such construction being placed upon it.


Wilfred Hanbury: But it could possibly be interpreted in that way.


Richard Bedford Bennett: I hardly think it is fair
to say that there is any such possibility. But lest there be, I desire to remove that stumbling block from the cooperation which the right hon. gentleman desires. We will make that clear.
Now, let us proceed one step further, the desire to eliminate politics from the control and operation of the system. I am not going to dwell upon that phase of the matter. I am not even going to digress at length, beyond saying that the commissioners thought it was wise, not as an insult to members of parliament or the Senate, but as a principle which they thought should be made effective, that members of this parliament, whether in the Senate or the House of Commons, should not be eligible for appointment as trustees. They had no desire to insult any member of this parliament, whether in one house or the other, but they desired to make it abundantly clear that the whole principle was that the benefits which accrue from privately owned operation should be made available for this road. That is why they put that provision in the bill. It was struck out in the Senate because hon. gentlemen thought that there was some reflection upon their fitness. I do not so construe it and I hope it will be the will of this house to restore such a provision in order that there may be no question of that kind with respect to the measure.
Leaving aside the question of politics, leaving aside the necessity of this action being taken, we come to the methods suggested in the measure to accomplish the ends desired. As I have indicated there is, first, cooperation by agreement and, second, cooperation by direction where the parties fail to agree. If there is no amalgamation and if the object which must be always kept in mind when a property is placed under trustees or receivers is to be attained, it must be done in one of two ways. It must be done either by amalgamation with its competitor or cooperation with its competitor so as to eliminate waste-

C.N.R.-C.P.R. Bill-Mr. Bennett
t'ul and useless services. I warn every hon. member of this house, including myself, that we must be prepared to put up with great sacrifices to attain our end. It is no good for a member to come into this house and say:
I have only a train once a week on my branch line, I should have six trains a week. It is no use to say: I must have three trains a day instead of one. It is no use to carry on political agitation and intrigue for the purpose of enforcing that upon the government. Just so long as you have a government able to control the management, just so long will you have intrigue and combinations to force upon the management the views of the government and its supporters. These are times for plain speaking, and there is no hon. member now looking me in the face who does not know that rvhat I say is true. I know it is as as true as the fact that I am looking at hon. gentlemen opposite.
Let us face the facts. Let us realize that the reason cooperation is provided for in this bill in the terms it is is to make effective the purposes of the bill. How else are we going to do it? I will admit it is drastic but modern surgery says that if you will cure, the operation must be radical where the evil is deep-seated. This is a surgical operation and it must be a radical operation. In order to make it effective and successful we must eliminate every political consideration which would interfere with the success of the operation. This is not a pleasant thing to say. There are hon. members in this house within sound of my voice who the moment I said what I have said began to think in terms of what it was going to mean in votes in a particular locality. We are all human, but we must not forget that we have a larger obligation. Our effort must be to save not the road alone but, as I said, because of the guarantees that have been given, the credit of the guarantors themselves.
Let us go a step further and deal with cooperation by agreement. The minister gave evidence of what might be accomplished when one had the purpose and the intention to accomplish. There is no doubt that all one has to do is to take the time tables and he will see where cooperation by agreement will accomplish a great deal of saving, bring about many economies and prevent waste.
We come now to the second point with reference, to which I should like to make a few observations, cooperation by direction as the result of arbitration. Some hon. members of this house regard this measure as one that interferes with the statutory and corporate rights of the Canadian Pacific Railway. My
examination of the facts so far as I have been able to look behind the scenes leads me to conclude that that clause was put in by those who -were responsible for it because they thought it would be beneficial to the Canadian Pacific Railway Company. There is no one who would interfere with the corporate powers granted to that road just merely for the sake of interfering. When the railway commission came into being it was clothed with powers which gave it the right to interfere here, there and elsewhere. It is true' that it may be said that this provision came about by reason of agreement but leaving all aside for the moment, it must be remembered that we have always claimed the right, either by the governor in council before the railway commission or by the railway commission exercising its statutory powers, to deal with problems affecting the rights of the people with respect to the railroads that serve them. The theory is that all corporations created by this parliament are created for the purpose of serving the people and the basis of this statutory cooperation-that is what we will call it-is that it must be beneficial. There can be no arbitration under this bill unless the cooperation sought by arbitration is cooperation that will result in good to the systems affected. It must be beneficial to both systems, not only to one. The condition precedent to the exercise of the compulsory powers of arbitration, a condition which must be determined antecedently to the powers being exercised, is that as a result of the exercise of these powers, if they are exercised, benefits will result to both systems. That is the basic principle of the statute, that benefits must result to both before the arbitral powers can be exercised.
I shall not transgress too long upon the time of the house, but I want to say one word more with respect to the control of parliament. If I have not been unfair, and I do not think I have, in stating the general purposes and intentions of the measure, the house will agree with me that we must eliminate the possibilities of what I shall call interference with this extraordinary management. Even as receivers or trustees have to go to a competent court to receive their powers, their authority and their right to issue securities if the earnings are not sufficient, just so is this parliament the high court to which these trustees must always come. There is no other court to which they can go for the purpose of discharging their duties under this statute. The statute renders them independent as though they were the operators of a private system but it renders them subject to all the control
2S62

C.N.R.-C.P.R. BUI-Mr. Bennett
to which a private system would be subject. Further, it does more; it provides-I think the right hon. gentleman must have overlooked this-that this parliament must supply the money for the deficits.


William Lyon Mackenzie King: We did not overlook that.


Wilfred Hanbury: And have no control otherwise.


Richard Bedford Bennett: If that is so, what further control can be had in anything except the control to grant or withhold supply?


Wilfred Hanbury: After the money is spent.


Richard Bedford Bennett: Not at all; a budget has to be presented. If the hon. gentleman has not read the act I may tell him that it provides that a budget must be presented, and this parliament gives its sanction and approval in order that it may have that power and control that is essential. I put this to the house, Mr. Speaker: How would it be possible for these trustees to function and operate if they were to be subject to the governor in council? I put that problem to the house and to every individual member. What is the governor in council? The governor in council is the government of the day.


Wilfred Hanbury: Responsible government.


Richard Bedford Bennett: I have heard it otherwise described in this house by hon. gentlemen opposite. I suppose government by order in council, which rescinded a contract for $4,000,000 for a hotel in Vancouver, substituting contracts that brought the cost to $11,000,000, is responsible government. That may be responsible government, but responsible to whom? The problem which this house and this country faces is not to be glossed over by any talk about constitutional rights or parliamentary powers such as this. Can parliament create a body with such powers as would be exercised by a private enterprise and still have control by reason of having to find the necessary money to enable them to function? I say yes. That is what is embodied in this statute. That is parliamentary control in its broadest and best sense; that is responsible government. Not a dollar can be found for this road or for these trustees; no money can be advanced to enable them to meet the obligations that have been imposed upon the roads by the guarantees alike of provinces and the dominion, unless this parliament grants it to them. That is the essential control that parliament must exercise, and if I so desired I could name many commissions both in England and in Canada in which we find the same situation.

I desire to avail myself of this opportunity, Mr. Speaker, to say that if government ownership is to succeed it can only do so if it observes the same business maxims that are observed by private enterprises. It cannot succeed if those who administer it are to be dragooned on the one hand by their political friends and attacked on the other hand by their political foes. It cannot succeed if its policies are made the football of contending parties. It can only succeed if it has the same free, untrammelled opportunity under the laws of the country that is afforded private enterprise. The corporate position of these trustees must be the same as the corporate position of the directors of the Canadian Pacific Railway. Both are under the law; both control properties; both exercise their powers to the best of their ability, with an eye singly directed to the success of the enterprise. If this parliament should be dissatisfied with their conduct action can be taken any year when it is asked to provide means and money for the operation of the system. No one will complain, I am sure, if the time ever comes when they do not have to apply to parliament for money, but if parliament in its wisdom, in the exercise of its plenary powers, is dissatisfied, it can declare that it will not give them further money unless they vacate their offices. Parliament has complete control. Anyone who knows the fundamentals of government knows this is so. This house, in its power to vote money, has complete control over that board of trustees, and parliamentary control can never be more strongly exercised than it can under these very powers.
I shall not deal longer with this phase of the matter, Mr. Speaker, but I should like to say that when subsection 6 of section 9 is referred to it must be perfectly clear that the crown is the crown as a shareholder, because as a shareholder the crown owns the Canadian National system. The words "any other shareholder" of course contemplates to the crown as a shareholder. With respect to the possibility of amalgamation being brought about by an indirect method when it could not be directly accomplished, the section that we will offer will provide against both direct and indirect means, so the house need have no fear in that respect.
Now I should like to say a word or two with respect to the amendment. I hope the right hon. gentleman will withdraw it. Perhaps my hopes are beyond my expectations, but for a moment let us look at what it contains. It asks that the second reading of this bill be postponed, and of course that means the end of the bill.

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


William Lyon Mackenzie King: No, it does not.


Richard Bedford Bennett: Hold on a moment. Look at the rules with respect to the six months hoist and the three months hoist. The postponement of the second reading of this measure means an interference with its orderly passing in this house under the government of the day.


William Lyon Mackenzie King: I rise to a point of order, Mr. Speaker. I submit that under the ruies of the house this amendment can be put and, if it is carried, the house can immediately proceed with the second reading of the bill.


Pierre Édouard Blondin: I do not think that is a point of order.


Richard Bedford Bennett: There can be no proceeding with the immediate passing of the second reading of this bill, for the motion is that the bill be now read a second time, while the amendment asks that all the words after "that" be struck out and something substituted therefor. If that is not the negation of the second reading I think every hon. member of this house must have difficulty in understanding the English language. What follows is this: The amendment asks that the second reading of this bill be postponed until this house has declared-and here is the manual of constitutional law that the house is to adopt. Task the house to listen to it. First:
. . . that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific company;
The appropriate place for that, of course, is in amendment to the measure itself, and not in amendment to the second reading of the measure, which is the adoption of the principle. That is the answer to that point. The next point is:
... or to divest parliament of its rights;
There can be no divesting of parliament of its rights by any statute of this parliament, for the parliament that acts to-day may act to-morrow in an entirely different way. It can repeal to-day what it enacted yesterday, and it may enact to-morrow what it rejected to-day. Parliament is omnipotent.


William Lyon Mackenzie King: I should like to ask my right hon. friend this question: If this measure were passed to-day could parliament remove the chief trustee to-morrow?


Richard Bedford Bennett: Certainly.


William Lyon Mackenzie King: In what way?


Richard Bedford Bennett: Just by passing a statute removing him, without repealing the whole of the measure. I do not want to be offensive, but I do say that no student would suggest that the passing of this statute will divest parliament of any of its rights. What are the rights of parliament? They are defined in the British North America Act. Are we amending that act? Can we amend it? Are we changing the constitution? Are we considering an address to change the constitution? Are we trying to take from parliament any rights which it possesses? Its plenary legislative powers exist tomorrow, after we pass this bill; they exist next week and the week after; they exist in continuity and in perpetuity until the constitution itself destroys those rights. Is there any doubt about that? Then the amendment goes on to say;
... or to take from the House of Commons its primary duty to control expenditures of public moneys and the taxes required to meet the same;
This bill provides that this parliament shall itself control the public moneys that are to be made available to these trustees. Does this bouse expect to have the right to control the expenditures made by the company itself? The amendment says not. It contains these words:
. . . public moneys and the taxes required to meet the same.
This bill provides that if this parliament sees fit it need not grant a single sou to the trustees. Parliament has complete control over taxes and expenditures.


William Lyon Mackenzie King: May I interrupt the Prime Minister for a moment. I should like to direct his attention to section 7 of the bill which provides:
No trustee shall be removed from office, nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada.


Richard Bedford Bennett: Surely.


William Lyon Mackenzie King: I would ask my right hon. friend whether that does not make this House of Commons subject to the will of the Senate with respect to the salary to be paid to the chief trustee named therein.


Richard Bedford Bennett: But it is the same with respect to the judges. This followed the provision with respect to the judges, that is all; it desired to place the trustees beyond the influence of political control and to give them the same position of independence as the judges enjoy. They can be removed only by a joint address of the Senate and the House

C.N.R.-C.P.R. Bill-Mr. Bennett
of Commons. Let me go further however. If this parliament, notwithstanding that provision, saw fit to pass a statute the day after tomorrow repealing that section, it has the power to do so. Everyone knows that.


Charles A. Stewart: The Senate would have to be in agreement.


Richard Bedford Bennett: Yes, of course; you cannot pass any bill unless it is passed by the commons, the Senate and the crown, for those three constitute parliament; there is no parliament without that conjunction. Let me quote further:
And that the provisions of said bill shall be read in the light of this declaration.
Well, all bills are read in the light of that declaration; there is no bill on the statute books that is not read in the light of that declaration. But, I ask, why should we adopt, as a preliminary of the second reading of the bill, a short essay on responsible government? I ask that question without offence. All bills, I say, are passed in this country in the light of that declaration, and to suggest that this bill should be singled out as one that shall be passed in the light of that declaration is to put it mildly to do violence to constitutional practice and authority. Further:
And be construed so as to conform therewith, and that in so far as any of its provisions may be inconsistent therewith they shall be amended accordingly.
In other words, before you know what is to be done, Mr. Speaker, you are asked to adopt amendments in this house. The time for this of course is when the bill is in committee, the time for it is when amendments are under consideration in the committee; the time is when an opportunity may be offered for consideration and discussion, when we know whait we are dealing with. But as regards this pious declaration that the rights of parliament are not to be taken away in the passing of this bill, and that the control of public expenditures is in the hands of the House of Commons-that is only partly true, unfortunately; they are in the hands of parliament, for the Senate sometimes rejects money bills. I wonder if it is beyond the memory of hon. members that the Senate rejected the Yukon bill by which a subsidy was provided for the construction of that road; I wonder if it is beyond the memory of the house that the Senate rejected a bill in the days of Sir John Macdonald with respect to a section of the Canadian Pacific that passes through the State of Maine. Is that beyond the memory of hon. gentlemen? The statement should be that parliament controls, for no bill that

is passed by this house, not the budget bill, becomes law until it is passed by the second chamber and assented to by the crown. There are three divisions of government in this country-the legislative and executive and of course the judicial, which we leave out for the moment; and the legislative divides itself into three branches: the commons, the Senate and the crown. Now, this is a suggestion that only the commons shall be concerned in the matter before us. Let me point out however that we cannot adopt any such statement as the law of the country, not even to oblige my hon. friend from Winnipeg North Centre (Mr. Woodsworth)-that the commons is the only house. There is still a reformed Senate.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: Hon. gentlemen laugh, but I read in a newspaper that it had been reformed by death-that was some years ago. So that it is hardly fitting that we should endeavour to insult one house of parliament by adopting a resolution to the effect that the control of expenditures of public moneys, and the taxes required to meet the same, shall not be taken away from the House of Commons.


William Lyon Mackenzie King: "Primary duty" are the words used.


Richard Bedford Bennett: Oh, to take from the
House of Commons its primary duty.


William Lyon Mackenzie King: That is what it says.


Richard Bedford Bennett: But that is not its primary duty.


William Lyon Mackenzie King: It is.


Richard Bedford Bennett: Its primary duty?


William Lyon Mackenzie King: Certainly it is.


Richard Bedford Bennett: That shows you, Mr. Speaker, how difficult it would be to adopt this essay as a preamble to the bill before us, because there are differences of opinion as to whether or not that is so. The primary duty of the House of Commons is not the control of expenditures of public moneys and of taxes.


William Lyon Mackenzie King: What else is
it?


Richard Bedford Bennett: The primary duty of the House of Commons, as the right hon. gentleman knows, is to legislate. That is its primary duty; that is its job. And what is more, no legislation enacted by this House of Com-

C.N.R.-C.P.R. Bill-Mr. Ilsley
mons with respect to public expenditures or taxes is law until the other two branches of our system of government have functioned, namely, the Senate and the crown.


Mr. MACKENZIE (Vancouver):: The right hon. gentleman knows that under the constitution of the mother country and of this country the right of the House of Commons over taxation and expenditures is fundamental.


Richard Bedford Bennett: That is not what this
amendment says. The hon. member for Vancouver (Mr. Mackenzie) and myself will not be in disagreement as to fundamentals; the only difficulty is when you speak of the primary duty of the House'of Commons. The fundamental duty of the House of Commons is, as between it and the Senate, to control expenditure of money; but the Senate has gone on record as saying that in this country that is not so. You will find that in the sessional papers of the Senate. They have the power to amend any money bill.


Ian Alistair Mackenzie: Does the right hon. gentleman believe in that?


Richard Bedford Bennett: That is not the point I
am discussing at the moment. The hon. gentleman's question reminds me of the stock question always put to the youthful candidate, "When will the hon. gentleman stop beating his wife?" I do not propose to answer that question. If it will be of any interest to the hon. gentleman. I may say to him frankly that I have always thought that so far as the control of expenditures is concerned the Senate had the power only to accept or to reject but not to amend. That has been my personal view.
I think I have covered the situation, and while I suppose it is not to be hoped for, I suggest that this amendment should be withdrawn. We propose to proceed with the bill and we ask the united assistance of the house in giving it the second reading and affording to every member of the house, on our own as well as on the opposite side, an opportunity to make any suggestions that may be at variance with the provisions of the bill as they now read.
It is my earnest hope and sincere desire that, realizing that the government of the day merely happens under our constitution to be the' spokesman as between, the crown on the one hand, who must initiate, by message, any legislation involving money, and the house on the other, hon. members will adopt the bill after the fullest possible opportunity has been afforded for considering any amendments that mas' be suggested by the other side; and
we will assume the responsibility for incorporating in the measure a provision that nothing therein contained shall be taken, read or construed as authorizing directly or indirectly any amalgamation of the Canadian National and the Canadian Pacific systems.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. J. L. ILSLEY (Hants-Kings):: Mr. Speaker, the Prime Minister (Mr. Bennett), in the course of his speech this afternoon, made one statement with which I agree, and that is that the government has some right to the assistance of hon. gentlemen on this side of the house in dealing with this very important railway problem. Having listened to many of the speeches that have been made in this debate and having read the ones which I did not hear, I believe they have been of such character and quality that they must have been of considerable assistance to the government in its effort to deal with this problem. That applies to the speeches not only from the other side, but from this as well. There are many respects in which most of us on this side are in agreement with the Prime Minister. Many of the statements which he made this afternoon will not meet with much disapproval from opposition members. But there are some respects in which most of us, at least on this side of the house, cannot agree with him, and I shall deal with those before I finish my remarks. [DOT]
In a general way this railway problem which confronts the Canadian people admits of three possible solutions. The first is the continuation of. the system which at present exists, that is of more or less unrestricted competition between the two great railway systems. There are some advocates of that course, some persons who believe we can safely leave the solution of this problem to the systems themselves. They point to the great economies which have been effected recently by the voluntary efforts of the executives of the two systems, and they consider, by a continuation of those efforts in the direction of economy, the Canadian Pacific can be put upon a dividend paying basis and the Canadian National Railways can be put upon an interest paying basis. I am, however, afraid that that view is based upon too optimistic an expectation. I fear that the return of prosperity will be so long deferred that if the country does not take some more drastic steps than a policy of laissez-faire,

C.N.R.-C.P.R. Bill-Mr. llsley
within a year or two it will be driven to take very drastic steps. So I do not agree with a policy of continuation of unrestricted competition between the two systems.
The second proposal, one which, I think, is propounded by some hon. members but not very many, is the one which we have come to call amalgamation. By amalgamation I do not mean the sale or transfer of the Canadian National property to the Canadian Pacific Railway Company. That is advocated by very few people. I mean unified management of the two systems. When we are speaking about amalgamation as a practical proposition, we mean unified management by the Canadian Pacific Railway Company of all the railways in the Dominion of Canada. There are those who believe unified management under government ownership would be advantageous, but it may be dismissed from one's mind as being beyond the realm of the practical, because there is such a large volume of outstanding liabilities of the Canadian Pacific-and I mean' by that their share capital as well as their bonded indebtedness -that no practical proposal has been placed before the Canadian people whereby provision can be made for a return of the investment of those who have put their money into the Canadian Pacific Railway Company. So when we are speaking of amalgamation, we mean amalgamation under the management of the Canadian Pacific Railway Company. I do not propose to argue at any great length for or against amalgamation, because to all intents and purposes it is not a < live issue in this house. One has only to listen to this debate and to hear hon. members on both sides express their convictions, to realize that public sentiment is such that the Canadian people at the present time would not approve amalgamation of the two railway systems. There are many reasons for that, the strongest of which is, I suppose, that it is feared that to give the operation of 40,000 miles of railway to the Canadian Pacific Railway Company would be to place too much power in the hands of one great corporation, and just as the radio committee last year, finally, by unanimous vote, rejected the proposal of Mr. Beatty that the channels of radio communication in this country be all handed over to a great private corporation, so the house and the Canadian people generally would at this time undoubtedly by a large vote reject any proposal that our channels of transportation be handed over to a great private corporation. Therefore I do not think I need spend much time in discussing amalgamation. It is quite possible that greater economies would be

effected by amalgamation than by any other proposal we could adopt. Mr. Beatty's estimate of the economies that could be effected is, I think, $75,000,000. That may or may not be too large an amount. They can be brought about only by the scrapping of whole communities, the taking up of thousands of miles of rails and the displacement of an enormous number of labourers, and at present at least, serious as the situation is, the solution known as amalgamation is for all practical purposes out of the question. The benefits it would bring would be purchased at too great a price.
That brings us to the third proposal, the only other one that has been placed before the Canadian people, and that is the proposal * along the lines of the recommendations of the Duff commission. It may be summed up in this: competition with cooperation, with provisions for enforcing the adoption of cooperative measures where the two systems themselves are not able to agree upon them. With that principle I am in accord. I arrive at that conclusion by the process of elimination. It seems to me to be the best of the three proposals. It has, of course, many difficulties. The very term "compulsory cooperation," which so many persons apply to that proposal, involves in one sense a contradiction in terms. But in many walks of our business and industrial life there is cooperation together with competition, and while the experiment is a very difficult one to perform successfully, still I would be prepared to support the main principles underlying part III of Bill A of the Senate which is now before the house for consideration.
Let me come now to the bill itself. To begin with, I do not agree with the Prime Minister when he would have the house adopt the view that because great care was taken in bringing together experts in the Duff commission and because those men have met with great success in their various walks of life, the bouse should adopt their proposals without modifications. Nor am I greatly impressed either by the very able committee of the other house of this parliament. In this House of Commons we must exercise as honestly and as fearlessly as we can our own intelligence. AVe are very likely to be impressed by the opinions of successful men, but often men who have made a great success of their own business do not' know what is best for a government or a parliament or a legislature to do. One can look around and see instance after instance where these successful men have made most horrible mistakes in the legislative sphere because the principles which have made them successful

C.N.R.-C.P.R. Bill-Mr. Ilsley
in their own. business are not the principles which should be applied to the legislation of a country. So I decline, and I think every hon. member should decline, to permit his intelligence to be dragooned into subservience to the opinion of a royal commission or of a Senate committee. We must get down to the subject ourselves, apply ourselves to it to the very best of our ability and in the right spirit, a non-partisan spirit, and attempt to work out the best solution we possibly can.
With regard to this bill, the leader of the government in the Senate appeared to think that part III was the vital and most important part. With that view I do not agree. I think that the most important part of the bill is part I, and I think that to part I there are very serious and very grave objections to which I shall refer before I conclude my remarks. But first I desire to make a few observations with regard to part III which provides for compulsory cooperation so called.
Some members of the bouse think that instead of a system of arbitral tribunals the Board of Railway Commissioners should deal with the disputes that arise between the Canadian National and the Canadian Pacific systems. I have no very strong views one way or the other on that, but I can see that there are certain advantages in having arbitral tribunals rather than the Board of Railway Commissioners. To begin with, disputes are to be arbitrated. From the very nature of the case these are arbitrations, and the application of fixed or fundamental principles, the application of statutes, will not take place in these disputes. These might very well be left to a court. But I believe that a system of arbitration is preferable to a system of decision of disputes by the Board of Railway Commissioners, although I have not any very strong convictions one way or the other upon that.
It is possible also that giving large powers to the chairman of the tribunal has some advantages. It at least ensures some continuity of principle underlying the decisions of successive tribunals, and it may be that that is advantageous. One may think of many disadvantages as well as advantages, but as I have said before, I think that the important part of this bill is part I. If part I operates well, there may be no arbitral tribunals at all. On the other hand, if it operates badly, then the railway problem will be settled badly; it will not be solved at all. So it is rather on part I that I lay the chief stress.
Coming now to part I of the bill, what does it provide for? The Prime Minister went into it fully this afternoon and made certain statements with which I shall deal when I come to the latter part of part I.
First of all I wish to say something about the method of appointment of the trustees.
I listened with care to the Prime Minister this afternoon, and he said nothing at all about the method of appointment of these trustees. But the bill provides that they are to be appointed by the governor in council, and I could not help wondering, when the Prime Minister was inveighing against political interference and political control, why he did not apply those principles to the appointment of the first trustees themselves. The trustees are to be perpetuated by a system of panels, but the first trustees are to be appointed by the government, and the trustees are to be more or less self-perpetuating because when one of them retires the two who remain are placed on the board choosing the panel which selects the other trustee. Consequently, if this bill goes through as it is, it puts it in the power of this government to say who shall be the trustees not only for seven years but for a great many years to come, probably for generations to come. With that I disagree. I think that if political interference and political influence in successive appointments is bad and should be eliminated, it certainly is bad for the first appointments, and I agree with the hon. member for North Waterloo (Mr. Euler) in the argument he made in that regard.
I just want to make this statement, which may be interpreted as political. I have not as much confidence in this government in the matter of appointments as I had a year ago, and I will tell you why I say that, Mr. Speaker. In the report of the radio committee there was this paragraph:
We desire to call attention to the extreme importance that the commission should not assume, or even be suspected of assuming, a political complexion.
And yet a Conservative organizer was appointed as one of the members of the radio commission. Therefore we on this side of the house are within our rights and have reasonable grounds when we say we fear political influence in the appointment of these first trustees, and I think some amendment to the act must be made-


Ian Alistair Mackenzie: And in connection with the tariff board too.


James Lorimer Ilsley: Yes, in connection with the tariff board as well. Some amendment must be made to the act which will ensure that

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C.N.R.-C P.R. Bill-Mr. Speakman
thought of in the past, and when parliaments were administering the property of the people they never surrendered all their powers as is being done under this bill. The reason given by the Prime Minister is that the commission has made this recommendation, but this is something about which the commission did not know as much as a good many members of parliament.
It is necessary to keep some control. What was the great weakness in the Canadian National Railways during the last few years? Was it the exercise of political control, or was it a slacking off in the control exercised? A bureaucracy was established; that was the great difficulty with the Canadian National Railways, and that difficulty is not guarded against by this bill. I urge that that is a weakness in the bill which should be remedied before it is enacted into law. Parliament and the country will be caused great grief in the future if we do not insert in this bill some provision to give parliament greater control over the trustees.


Alfred Speakman: Mr. Speaker, in discussing this extremely important measure in which is embodied many months of labour and arduous research upon the part of a royal commission and many weeks of careful consideration upon the part of the Senate and its committee, I must keep in mind, and we should all keep in mind, that under the rules of this house there are two distinct aspects under which it can be considered. While these two aspects are inseparable and interrelated, while they form two parts of the one whole, each must be discussed at its own time and upon the appropriate occasion. I intend to confine my remarks wholly to the underlying principles of this measure, leaving the discussion and consideration of the methods by which these principles shall be carried out until we are in committee of the whole.
As I see it, and I believe this is the feeling commonly held throughout the house, there are three main principles embodied in this measure. First, there is the principle, implied rather than expressed but discussed and agreed to on every side of the house, of maintaining the integrity of the two systems as separate entities. It may rightly be said, as it has been said, that this is a somewhat academic subject at the moment, that the time may come when it will become a matter of real consideration, so on that aspect I shall say only this: If and when the time does come that in the opinion of the people of this country and the parliament of Canada we should, for the well being of Canada, have one great rail-fMr. Ilsley.]
road monopoly, I do not believe the people will tolerate anything other than a state monopoly. It is quite obvious, and it has been stated again and again, that there is a great difference in principle and in effect between a monopoly in the hands of the people and controlled by the state and a monopoly in the hands of a private body of citizens no matter how eminent or how desirous of doing right that body may be. Transportation is not only a business in itself, it makes possible all other business and all other enterprise. To create a private monopoly in transportation would be to create something in the nature of a giant octopus which would have the power, even though it might lack the will or intent, to strangle any industry or any community in any part of Canada. On the other hand, if a state monopoly became inevitable, it would be held by a body which represented every industry and every part of Canada and to which all of Canada could look with confidence for fair dealing and fair play. At this time I merely indicate as my own unalterable conviction, and what I believe to be the unalterable conviction of every man and woman in this country who has thought about the subject, that if the time does come that there should be an amalgamation of the two great transportation systems, that amalgamation must be a publicly owned monopoly operated by the state.
I come now to the next main principle, efficient management. Here again I find myself in accord with the measure now before us. This is a question of the transfer of management and operating responsibility from a large directorate exercising very small powers and having very vague and dubious authority, coupled with a president who exercises practically entire authority, financial as well as operative, to a small body of trustees, which would not only exercise the authority now vested in the directorate but have the financial control now exercised by the president. I did not intend at the moment to discuss the number of trustees that should be appointed. In spite of what was said by the Prime Minister (Mr. Bennett) in what I looked upon as a very able address, in spite of the pronouncement of the royal commission which examined into the facts, and in spite of the view of the Senate which examined into the evidence and drew their own conclusions, I am not at all certain that a somewhat larger body of trustees, possibly representative in character, would not be better and would not be more effective.
What is the underlying motive of this measure? What was it that made necessary the appointment of the commission, and what

C.N.R.-C.P.R. Bill-Mr. Speakman
interests should we have in mind in dealing with the situation? The deduction I drew from the statement and the attitude of the Prime Minister was that the one consideration which overshadowed all others was the financial aspect. The Prime Minister pointed out something which has long been in the minds of many Canadians, namely, the gravity of the financial situation in which the Canadian National Railways now finds itself and the serious condition which as a result faces the Canadian people. They find themselves in the position of debtors, either by way of direct obligations or by' way of guaranteed bonds, to the extent of something like $2,300,000,000, a tremendous sum, almost inconceivable in the magnitude of the burden it places upon the people of this country; for after all when we speak of this liability it matters little whether we have reference to guaranteed bonds held in various countries and in different parts of this country by various private bondholders, or to the thousand million dollars or so which has been advanced directly by the people of this country, the major part of which was borrowed money upon which we are still paying interest. So I agree with the Prime Minister that this must be a very great factor in our consideration of the problem. We must consider the extent to which this burden may be carried and the means by which, if possible, it may be lightened. This is something which affects every taxpayer in this country; it will affect every taxpayer for generations to come. So it becomes the personal problem of every man and woman; it becomes the mass problem of the public generally.
But, Mr. Speaker, we would be not only derelict in our duty but would fail absolutely in an appreciation of the problem itself were we to stop there and look upon that as the only interest we had to conserve and the only aspect from which we must survey this situation. Those same people are just as vitally interested in this matter from the viewpoint of users of railway service. As users of railway service, as customers of the railway if you wish to so phrase it, practically everyone in every part of Canada, every industry, every vocation and every community, is more or less dependent, but still vitally dependent, upon transportation service for its livelihood and its prosperity. It is vital to them, in respect of freight and passenger rates, that these shall be reasonable and shall bear a fair relation to the value of the goods or commodities transported, or, in respect of service, that it shall be adequate and shall provide that which is necessary for the carrying on
of their business, whether in buying or in selling. Strange though it may be these two interests, conflicting at times, are still the interests of the same people and must be considered by this house when dealing with the matter. It would be just as fatal were we to sacrifice the interests of the people in respect of freight and passenger rates and transportation service upon the altar of finance as it would be were we to forget the financial side, the tremendous burden of liabilities and the plight of the taxpayer, and consider only the needs of this country by way of transportation service. So both must be kept in mind and both are of vital concern in our consideration of this problem.
Then, too, for we are all interested in this question from various angles, we cannot forget the labour problem which is involved and which has been placed before this house so ably by different hon. members, particularly those who directly represent labour. We cannot forget the men who are and have been engaged in this great undertaking on both railways. We cannot forget the service they have rendered; we cannot forget their future, their families, their lives and their prosperity. Indeed, that also has its influence upon the public mind, upon the public as a whole and upon the taxpayer, because this problem of labour must be considered not only from the point of view' of those men w'hose positions may be threatened; it must be considered from the point of view of the taxpayer, in respect of the tremendous problem of unemployment and unemployment relief which faces us to-day and which is becoming of greater and greater magnitude.
So 1 say, Mr. Speaker, that in examining this problem we must consider the various aspects from which it must be approached. We must not forget one of those different and sometimes conflicting interests which we must always have in mind, the interests of the men and women throughout Canada whom as a parliament we represent, and whom as individuals we represent by virtue of our individual ridings. Of that, however, I may have a w'ord to sa}' later. At any rate there is the second of the principles involved, the efficiency of management, and let me repeat that. I believe in the principle of a relatively small body of trustees, devoting their whole time to the task and given as their responsibility the job not only of outlining the general policies and supervising the operations of the Canadian National Railways but of assuming responsibility for the financial policies of the system, the lack of which has been partly responsible for our present plight.
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As to the question of the number of members of the board of trustees and the mode of appointment I shall have more to say. However, I consider this to be a matter of detail which can be well left to the time when the house is in committee, when it can be discussed with greater knowledge and greater result. In passing I will merely suggest not only that possibly a somewhat larger body of trustees might be more efficient and more representative, having in mind the various aspects to which I have already alluded, other than those financial, but that some consideration might be given the mode of appointment and particularly of reappointment, which has been said by the hon. member who immediately preceded me (Mr. Ilsley) to make the board of trustees at least partly a self-perpetuating body. I think when we reach committee of the whole some thought might be given that aspect of the question, and perhaps some definite changes might be made.
We come now to the third principle, and there again, speaking as a matter of principle only, I think there is hardly a member of the house who is not in full accord with the principle of reasonable cooperation between those two great systems. Again I am speaking of the principle of cooperation, not necessarily of the details of the machinery by means of which we seek to bring it about. This has been spoken of as a system of compulsory cooperation, and perhaps to some slight degree it might be so termed, though I should hardly call it such myself. It begins, of course, with the opportunity for and the suggestion of voluntary cooperation, the same principle which has been carried into effect during recent months, and the suggestion is that it be carried as much further as circumstances may reasonably permit. Then what? This legislation does not seek to give to any committee or to any appointed body the power to suggest and initiate cooperative policies. It really proposes to appoint a committee of arbitration, who shall deal with proposals which will be brought forward by one or other of the lines, or by both acting together, upon the details of which they fail to agree. If it were compulsory in the true sense of the word the legislation would give to that committee the power of initiating and suggesting methods of cooperation. This is rather a measure of compulsory arbitration on matters brought to the notice of the appointed board of arbitration by the railway systems themselves. I think the principle there embodied is perfectly sound. However, we must remember to differentiate very clearly and definitely between the principle and the method by which that principle

is brought into effect. After all, as is the case in so many matters both public and private, the essential and vital thing is the spirit and the ability of the men who exercise those powers and who seek to put the act itself into full operation. The success of this movement, the success of any effort towards cooperation through the medium of this board of arbitration, will depend wholly not only on the mentality of the men who compose that board, but upon the spirit with which they approach their task, in which spirit may be reflected fairly closely the underlying motive and the real purpose which lies behind this measure and the entire investigation.
It will I think be recognized quite frankly and readily that all cooperation through which economies are effected must mean the reduction or the elimination of certain services. Where for example two lines are found where only one is required, and where in consequence operating costs rise far beyond the point they otherwise would reach, it is obvious that the only economy that could be brought about through cooperation would be by the abandonment or closing-down of one of these two lines. This is a case in which the arbitration board will come into play. Now we will take it that one of these lines must of necessity be a privately-owned line belonging to the Canadian Pacific and the other must be a Canadian National line belonging to or controlled by the people, and it is of the utmost importance, it is vital to the purpose of this measure, vital to the realization of our hopes and expectations, that these men shall approach their task certainly with an impartial mind, for the opportunities would be vast and numerous to throw the weight of influence and the benefit of the cooperation one way or another. We have therefore to ask this question and frankly face it: Is this economy to be for the benefit and in the interests of the Canadian taxpayer, or is it to be in the interests of vested capital? There is a matter that cannot be ignored, a matter that can be fully understood only when this measure is in operation. I am hoping that when it is in full operation at least fair play will be given both. But if there is to be a question one way or the other, if we have to balance and weigh one against the other, if we must help one to the detriment of the other, then I hope that it will be the Canadian people as a whole, the taxpayers of the country, who will receive the benefit of any doubt that may exist.

C.N.R.-CP.R. Bill-Mr. Speakman
I speak of the invested capital as found in the privately-owned system, not as found in *the publicly-owned system, because the bondholders of the publicly-owned system-and I still use that word owned for reasons to which I shall allude-the bondholders of the Canadian National Railways, I say, are in a preferred position in this time of depression. Theirs is not the responsibility; theirs is not the risk. In their case the interests of vested capital and the interests of the taxpayer become one and the same thing, because the taxpayer must stand behind the system, guaranteeing the returns of the vested capital itself. On the other hand however we have vested capital owned by bondholders and stockholders, and while I believe in treating them fairly may I reiterate that in the spirit of the measure, in the spirit of its enforcement, in the spirit of the arbitration which may come to pass from time to time I hope that the larger object will be kept in view and that the interests of the people as a whole will be the predominating and prevailing influence.
One or two matters have come up to which I would refer for a moment. There is for example the statement of the Prime Minister, at least the inference he drew, that the real owners of the Canadian National system, notwithstanding the opinion often expressed in different parts of this house, are not the Canadian people but the bondholders who have invested their money in those lines now forming the Canadian National railways, and the payment of whose interest on capital was guaranteed by the people of the country. I must confess that I find myself somewhat under a handicap in differing from the Prime Minister. Not only is he a man of great ability and wide experience but he is a lawyer of high repute, w'hile I am a layman lacking his experience and, I am free to confess, his ability. But at the same time I cannot understand the position as he takes it. In the first place, and following his own argument, w'hat do we find? We find that the bondholders have certain rights, certain vested interests in these lines. They do not own them; they are not shareholders; they have loaned money to them and have taken a mortgage, and until such time as they foreclose and throw the lines into the hands of a receivership, surely the people of this country who are now the shareholders must own the property. And until the people of this country default in their payment of interest, until they fail in their obligations, until they give notice that no longer will they be responsible, until then surely there can be no question as
to who, actually speaking, are the owners of the property. When that time comes it will be a question indeed as to who may own the railways thereafter, after the receivership may have been called for; for, again, I cannot agree that the appointment of this board of trustees is in effect the appointment of a receivership to take over a ruined and bankrupt undertaking and if possible to set it on its feet, administering it in the meantime in the interests of those financially concerned. I cannot look on it in that light, because after all it is an undertaking vital to the wellbeing of Canada; it is an undertaking vital to the people not only from the point of view of finance but also from the point of view of service; it is an undertaking which under no circumstances will the people of Canada allow to stop or fail. We know that.
Now we are going to put these men in control for one purpose and one purpose only, namely, to serve the interests of the true owners of the railways, and that is the Canadian people from Halifax to Vancouver. That brings me to the point raised by the hon. member for North Waterloo (Mr. Euler) and to which exception has been taken by some others, and that is, the attributes, the point of view, the mentality which we should look for in our trustees. The hon. member for Stanstead (Mr. Hackett), I think it was, rather objected to the idea that we should expect these trustees to be believers in the principle of public ownership, and he suggested that this was no part of their qualifications into which we should inquire. Were he speaking of the railway commission, whose functions are judicial, whose duty it is to act impartially as between public ownership on the one hand and private ownership on the other, I should be inclined to agree with him. Were he speaking of the arbitration committee which will be set up and whose duties, again, are impartial and cooperative, I might say yes. But when he is speaking of a body of trustees whose duty and responsibility it is to manage for the people of Canada a property entrusted to their care, then I take issue with him. For who are their employers? The people, all the people, and their interests must be served. But how can their interests be well served by men who do not even believe in the principle under which they are employed? How can the interests of a railway still in competition with a private road be properly served by a body of trustees who disbelieve in the principle under which the lines they control are managed and run, and who in their hearts incline towards the principles of the competitive
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line? To my mind it is essential that the men we employ to take over this high and arduous task should be men in whose loyalty we can have absolute confidence-in their loyalty not only to the financial interests bound up in the Canadian National, to their immediate employer, the government or parliament, or their ultimate employers, the people, but to a principle which alone gave them their opportunity of service.
Another important point has been raised, upon which there is some difference of opinion, and which becomes of even greater importance as we go further into the question. This is the matter of political interference. It has become habitual in the house and, indeed, throughout the country, to look with shuddering horror upon the slightest approach to political influence or interference in matters of business. The conviction is apparently held not only in the country, but in the house, that the moment a politician lays his blighting hand upon any enterprise, it is damned and doomed to failure. If that be true, it is a tremendous indictment not only of the individual members of the house, but of the very system which sends them here. If it oe true, it means that the fact that members are elected to this house of parliament, the fact that they belong to institutions such as this, so unfits them foir any other task that any business matter they approach will be managed inefficiently and is bound to fail. Leaving that aside, I believe there is an important distinction between what might be called partisan influence and interference and political influence properly so termed. I believe as firmly as does any man that in any business matter with which we have to deal we should utterly divorce ourselves from any considerations of partisan complex. Party politics, feelings and influence, as distinct from political influence, are wholly bad when applied to public business. But that surely does not mean that this government and parliament shall totally abandon and abrogate all their influence, all their responsibility, in connection with a tremendous undertaking of this nature, one belonging to and to be managed and conserved in the interests of the Canadian people, the people whom this parliament represents, parliament to which the people look for the protection of their interests. Surely there is a wide distinction between partisanship, partisan interference, and a recognition of the vital and inescapable responsibility which must rest upon the administration and upon parliament in respect of any publicly owned and operated 
utility. As a matter of fact, while the Prime Minister emphasized the necessity of placing this board of trustees beyond the reach of political exigencies, of parliamentary influence, in almost the same breath he admitted and laid emphasis on the fact that in any circumstances, under the very terms of our constitution, the very terms on which any board of trustees must be appointed and money must be granted, the essential and fundamental responsibility of parliament must and shall be maintained. I am in agreement with the hon. member for Hants-Kings who preceded me. I believe we should make it very clear in legislation that ultimately the responsibility, the influence, the enacting of policies in the large, not the ordinary policies of management, but generally speaking the oversight of the policies of this country in respect of transportation matters, should be held, and if necessary, exercised by parliament. For, after all, we speak of the efficiency of certain men in carrying on a business of this character, and, as I suggested before, were that efficiency directed only towards one objective, were only one interest involved; were only one point of view affected; were only one objective sought, that of making the business financially sound, I would say that perhaps three, four or five efficient, honest, experienced business men might do better than has parliament at times. But that is not the only point. Transportation is so vital to every part of Canada, to every industry, that parliament cannot evade some responsibility as regards its general policies. For transportation may make or may damn a community; it may build an industry or destroy it; it may open up new territory or cause bankruptcy in and depopulate areas already settled. It may do almost anything. Next to finance, transportation is the lifeblood that makes industry, commerce, the life of the country, possible, and to my mind almost more than any other question it is one not only in which everyone is interested and vitally concerned, but in which parliament in the ultimate analysis must have the strongest and the final voice. For parliament cannot sit by and see any industry ruined, any part of the country depopulated by a body of business men, even though, in that depopulation and in that destruction, deficits are reduced and dividends paid.
But in my opinion there is one aspect that cannot and should not be forgotten. We speak of the solution of this great railway problem; we appoint commissions and we study and consider the question. We seek through legislation to remedy existing ills and to set the

C .N .R ,-C.P R. Bill-Mr. Myers
system on its feet and make it financially sound. To my mind the transportation problem is caused by and inseparable from economic conditions as a whole throughout Canada, and it is no more possible to solve the transportation problem without dealing with it as part of a general policy of rehabilitation, and first removing the causes which have brought transportation into the position it now occupies, than it is to solve the problem of unemployment merely by tackling it as a problem by itself. Upon what is the problem based? There are two factors. Undoubtedly there was unwise expenditure, unnecessary competition, foolish duplication. All of those are assuredly factors. But what is the great and underlying factor? Why is it' that four short years ago this house and the country acclaimed every new loan and the president of this great company, the Canadian National Railways, was looked upon as the greatest man in Canada no matter what he spent; that he was encouraged, urged to spend more money because then times were prosperous and we looked to repay and more than repay all that had been expended? Now he has dropped into the shades of oblivion; the system is frowned upon, damned and indicted. Why? Because the freight which supports and makes profitable any system, upon which any system must depend, is lacking; because tonnage is cut in half or no longer found. You can no more solve the railway problem until you have adopted policies which will bring tonnage back; you can no more make the financial structure of the Canadian National sound and profitable until the condition of the people is improved, than you can remove unemployment without rehabilitating industry. The thing is impossible. To my mind one danger is that we ourselves shall look with too great optimism towards what might be done by any form of management, however high its degree of efficiency and its practice of stringent economy-that we shall look to see miracles performed. In the second place, the danger is that we shall go to the people of this country and say: "Lo, the railway problem is solved, the legislation is passed, the foundation is laid for prosperity and future progress for our transportation system," when we know in our hearts, and should never let the people forget, that whittle where you like, manage the system as efficiently as archangels could, it will not prosper until the people of Canada are prosperous. The system is just part of one great whole; and that is the culminating thought which I should like to leave upon the mind of the house. It is a part, an important part, but only a part in this general problem of economic depression
which now faces us, and the danger is, and it is a danger against which we must guard, that in this surge of enthusiasm, this determination regardless of all consequences and of every condition to make the system finnancially sound, we may do far more harm than good, we may so cut and mangle and destroy essential services that rehabilitation may be delayed or rendered impossible. I think that is one thing, Mr. Speaker, to which we must pay the greatest heed; for the saving of a few million dollars a year at the expense of deepening the depression in industry and agriculture would be a saving dearly bought, one which in the years to come might cost us fifty times the saving thereby accomplished. Reasonable economy, yes; reasonable cooperation, yes; but in our financial zeal do not let us forget that the primary function of a transportation system is to serve the communities of this country and to make possible the interchange of commodities between one industry and another. If in dealing with the relatively superficial and inconsequential we destroy the fundamental, then indeed, Mr. Speaker, we have wrought ill for this country.
May I say, in conclusion, that, endeavouring as I have to deal only with principles, I have indicated that I approve of maintaining the present integrity of the national system, that I approve of a more efficient form of management, and I believe that the trustee form will be more efficient. I approve of cooperation and arbitration, and so I shall vote for the second reading of the bill, reserving to myself without prejudice the right to discuss and oppose or support the details of the legislation when the bill is in committee, and to consider it in its final form when it comes up for third reading.


Mr. J. H. MYERS (Queens):: Mr. Speaker, in rising to say a few words on this important question I assure you that I do not do so merely for the purpose of prolonging the debate. I would much rather see the debates cut short and that we get along with the business of the house and wind up the session and get home, but the importance of this question I believe demands the very best attention of which every member of this house is capable. In the few remarks I intend to make I may follow a somewhat different line from that which has been pursued by almost all the members who have preceded me, except perhaps the hon. member for Red Deer (Mr. Speakman) who has just taken his seat. I always enjoy listening to him; for even although he is not a lawyer he usually has something of a practical nature to put before the house. In the few remarks I intend to make I shall discuss the railway
2S76

C.N.R,-C.P.R. Bill-Mr. Myers
situatiou somewhat along the same lines as those followed by the hon. member for Red Deer, dealing with it more from the standpoint of transportation as a service to the country than anything else.
The bill now before the house is based upon the report of the Duff commission. Enough already has been said about the constitution of that commission, the work it did, and the report it presented; I shall therefore not occupy the time of the house by reiterating what has been said in that respect. I have given the report a great deal of study and thought, and after stripping it bare and divesting it of all the frills, I find that three outstanding facts remain and refuse to be set aside.
The first fact is that we must always have railways in Canada. Geography itself says so. Our wide open spaces, the long distances, and the heavy commodities of farm and mine and forest, which can be moved only by rail transportation, make it necessary that we always have railways in this country.
The second fact is that motor transportation has come to stay, and it must be dealt with as such.
Third, and I am free to admit the most important fact of all, is that the taxpayers of Canada cannot long continue to pay every Saturday night a deficit of a million dollars on the Canadian National Railways.
The bill that is before the house is an attempt, I take it, to coordinate and amalgamate and bring together into one scheme the three facts which I have just mentioned. Just before I left Prince Edward Island to attend the present session of parliament I was asked to address a meeting of the railway employees of the city of Charlottetown. They were gathered together in their hall, and I received very short notice. I had no knowledge of the object of the meeting, nor did I know upon what subject I was expected to address them, but as the meeting opened this piece of paper was put in my hand, from which, with your permission, Mr. Speaker, I shall quote a brief paragraph which sets forth what I conceive to be a worthy object on the part of the railway employees:
It is the object of this Traffic Club to unite all the employees and retired members on the island division of the Canadian National Railways, that they may work together and be of valuable assistance to the railway in its struggle to regain and retain its lost traffic from the various kinds of motor vehicles that have by means of very unfair competition made such inroads on its revenue. Transportation being the only goods we have to offer, it is our desire that we give same at a reasonable rate together with best possible service an up-to-date transportation company composed of a loyal bunch of workers can give.

In ather words, transportation is what we have to sell; let us go out and sell it. That was the object of the meeting of railway workers in the city of Charlottetown the day before I left home. I want to say for them, and I presume I am speaking for all railway workers throughout Canada, that they are absolutely loyal to the railways; their heart and soul is in their work, and, as is characteristic of railway men wherever you meet them, they hate the motor truck. It was their object to endeavour to secure for the railways that business which had been lost. In rising to address that meeting I prefaced my remarks by stating I had certain things to say to them with which I did not expect them to agree. I knew I was addressing railroaders, and it is my habit on every occasion to speak just exactly what is in my own mind, and not what is in the mind of somebody else.
In this connection I should like to quote one or two passages which I believe will bear out what I have said and will have to say with respect to the transportation system in Canada. At the end of paragraph 157 of the Duff report I find the following:
Since any measures looking to a revival of trade are beyond the scope of the commission's inquiry, we pass from this topic with the observation that an increase in traffic of even twenty per cent above the figures for 1931, which would still be below the gross earnings for 1925 would result in substantial improvement in the railway position in Canada.
Hon. members will note that there is reference to a twenty per cent increase in freight handling. Then, in paragraphs 188 and 189 we find the following:
188.	While we have refrained from making any recommendations we recognize that the question of freight tariffs and tolls is inextricably bound up with the question of transport. The position at the moment, however, is difficult and complex. It has been represented to us by many competent witnesses that any increase in tolls would only impose a further handicap on the Canadian manufacturer and producer at a time when they can least afford to shoulder additional burdens, and that the increased tolls might have the effect of so restricting traffic as to afford little, if any, relief to the railways.
189.	It -would appear that, at the moment, any adjustment of the freight tolls and tariffs would be inadvisable, but we feel it our duty before passing from this question, to express the view that even under more favourable circumstances the financial position of the railways may be such as to demand that the whole question of tariffs and tolls, in its widest sense, should be the subject of special investigation, with a view to determining whether or not the existing tariffs and tolls charged for the conveyance of freight are just and reasonable both to the railways and their customers.

C.N.R.-C.P.R. Bill-Mr. Myers
You will notice, Mr. Speaker, the statement is made that a twenty per cent increase in the volume of freight traffic would make a great difference to the railways. Have the railway managements up to the present time made any attempt by a modification of their cast-iron rules to secure that twenty per cent increase?	I believe the house will
pardon me if I relate some circumstances concerning shipping conditions under which we in the province of Prince Edward Island laboured during the last season. By reason of the high duty on potatoes going into the United States, and because the Cuban market was closed to our products, we were forced to look elsewhere for our market. That market we found in central Canada, Ontario and Quebec. When we began to look around for means to move our crop to the Canadian market we found out, due to the fact that potatoes were very cheap, and that the consumer owing to curtailed buying power was not in a position to pay a high price for our commodity, that if we were to live at all it was necessary for us to get those potatoes to the market in the very cheapest possible way. The freight rate by rail on potatoes moving from Prince Edward Island to Montreal is thirty cents per hundred pounds, thirty-three cents to Ottawa and thirty-eight cents to Toronto. But we found last fall that by using steamships we were able to move our potatoes to the market in central Canada for about twenty cents per hundred pounds. For the first time in the history of my section of the country steamers left Prince Edward Island and proceeded up the St. Lawrence river to Montreal and Toronto. I should like hon. members to know that that is neither a popular nor a profitable way of transporting potatoes. Neither would it be at all necessary for the railways to meet the waterborne freight rate. The farmer or the shipper likes very much to have a railway car pull into his siding so that he may pile in his 500 sacks or 650 bushels, which go to make up the carload of potatoes. He likes to pile them in, neatly and snugly, close the doors and send the car through to its destination. At that time of the year those potatoes will leave the car in exactly the condition in which they went in.
That is not the case with potatoes carried by steamship. In the steamship there are from 40,000 to 60,000 sacks, and hon. members will readily understand that in loading, unloading and storing a cargo of that size some damage must result. Many potatoes are bruised, and a great deal of damage takes place. In my opinion by a very slight concession or a slight reduction in the rate for
the time being the railways would have had no difficulty in securing a twenty per cent increase in freight handled, and our section of the country would have been put in a much better condition.
I should like to say a word concerning the manner in which shippers and farmers are treated when they load cars. If a shipper is loading a steamer for Cuba, the railway company will allow him the use of cars for ten days. That is, cargoes may be assembled from the different railroad stations throughout the province and brought to the seaport. Under these circumstances no demurrage is charged during a ten day period. But for some reason which I cannot understand, and which I doubt whether any other hon. member can understand, when we seek to ship potatoes either to the United States or to another part of Canada, we are allowed the use of the cars for only five days. The assembling of a large cargo of potatoes consisting of 50,000 or 60,000 sacks requires a great number of cars and takes considerable time. A -steamer is not like a railway train; it does not always arrive at its destination at the time expected. Storm or accident of some kind may intervene, and it may be one, two or three days late, but only five days' use of the cars is permitted. Last fall our shippers sent a delegation to the head office of the Atlantic division at Moncton to ask that they be allowed ten days' use of the cars in loading steamers, but they were met with a blank refusal. If the general manager, Mr. Appleton, had been home at the time I think their request would have been successful, because we have always found him very obliging and willing to meet our wishes. However, he was not there, and this delegation met the freight or traffic manager who gave them a blank refusal, The result was that the shippers had to unload their cars into the freight sheds, which entailed a second handling at extra expense and with additional damage to potatoes. Some of the shippers were so vexed about the matter that they moved their potatoes to the seaport by motor truck instead of using the railway.
There is just one other matter about which I should like to speak, and that is the freight classifications. The hon. member for Red Deer said that transportation is the most important factor in the life of a country. There is no denying that, but what is the use of having transportation facilities if they are not available in such a way as to be best suited to those whose business it is to use them? A short time ago I was talking to a gentleman engaged in the building
C.N.R.-C.P.R. Bill

Mr. Myers

supply business. He sells all kinds of lumber, brick, cement, windows, doors, and so on, and he was telling me of his shipping troubles. An owner or a contractor would come to him with a bill of material for a house he intended to build, and ask that that material be put in a car and consigned to his railway station. Because of the rigid classification this man found that he could not ship brick or cement with lumber, or windows and doors with scantling, that the shipment would have to be broken up into the different classifications. It would take nearly a whole train before the man could get what he wanted. In this connection I should like to quote from section 155, subsection 5 of the Duff report, as follows:
Inelasticity of freight rates and railway practice generally which prevents prompt action in the meeting of falling revenues and dealing effectively with competition from other forms of transport.
The classifications may have been all right at the time for which they were made, but that time has long since gone by. We are now faced with the competition of the motor truck which knows nothing about classification of freight. It will back up to your warehouse and take brick or cement or lumber or anything you offer, and if our railways are to survive they must meet this competition upon common ground. Transportation is what we have to sell, so let us go out and sell it.
I should like to quote a few figures in support of what I have said. Looking over the carloadings, I find that the total for the year ended December 3. 1932, was 2,041,755. In 1931 the carloadings were 2,406,189 and in 1930, 2,959,597. Miscellaneous freight showed the largest decrease, 157,105 cars or 26 per cent. Merchandise declined by 85,442 cars or 11-9 per cent. These figures go to show that miscellaneous freight and merchandise are most easily affected, or shall I say, most easily offended by the classification rules now in existence on the Canadian railways.
Under the bill now before us it is proposed to set up a new board of trustees. A great deal has been said on this matter by hon. members who have preceded me. The bill calls for three trustees. Some members would like to have five, and the hon. member for Muskoka-Ontario (Mr. McGibbon), who always takes a keen interest in railway matters, expressed the opinion yesterday that a board of two with one dead would be the ideal board to manage the railway. My own view in this matter is this: If it were possible, and it probably is not, I should like to see not less than nine members on the board so that every province might be represented. I

am democratic and I do not believe in taxation without representation. However, this matter has been carefully considered by the Duff commission and by the upper chamber, and a board of three has been practically agreed upon. A great deal has been said as to who and what kind of man the chairman of this board should be. Some members express the opinion that he will have to be a superman. It is my opinion, Mr. Speaker, that whatever else he may be he must be a sensible man. The idea that seems to permeate the speeches in this house is that above all other things the chairman of the board must be able to save money. In part I agree with that. He must have the ability to save money; he must have due regard for economy on all occasions, but above that there is one other qualification which to my mind is more essential, and that is his ability to go out and get business. Transportation is the only commodity he will have to sell; let him go out and sell it, not according to any rigid, cast-iron classification rules but in the way that will be easiest and most beneficial to the patrons of the railway.
In passing I should like to say just a word with reference to the present directors, who will soon be retired. They have been in office only a short time, but I believe that during the last two years they have played a very important part in the history of Canada in regard to transportation. I think they have done wonderful work in cutting down the expenses of the railway and trying as far as humanly possible to make revenue and expenditure come close together.
The other evening my hon. friend from Queens-Lunenburg (Mr. Ernst), speaking on this bill, expressed the fear that his branch line might be almost entirely cut off, and that the fishermen in his constituency would not be able to get their fresh fish to market. The hon. gentleman has my sincere sympathy, and I want to advance the opinion which has been very well expressed by the hon. member for Red Deer, that service is the prime factor. We must have transportation, and if any service of the kind mentioned by the hon. member for Queens-Lunenburg is unduly curtailed I believe it is the duty of the railway company to see to it that something is substituted. I know something about the fishing business, and I know something about the shipping of fresh fish to market. We have a number of shipping stations in my province, and rapid transportation is the one essential for those who are engaged in the fishing industry. The railway might very well study the question of putting on properly equipped motor trucks to convey the products of the fishermen to the nearest railway centre, if

C.N.R.-C.P.R. Bill-Mr. Myers
railway service from any point such as this is to be curtailed. The fishermen have it pretty hard. If there is one class in this world for whom I have had great sympathy during the past two years it is our fishermen. I have seen them landing the very best codfish that can be taken on the Atlantic seaboard and selling them for less than one cent a pound, and the same applies to mackerel. It is the duty of the trustees, I submit, whoever and whatever they may be, to look after the business interests of the farmers, the fishermen, the lumbermen and all others engaged in the primary industries of this country.
I should like to say just a word with regard to that old question in the maritime provinces, the Intercolonial railway, which already has been referred to by other hon. members. It is well known to every member of this house that this railway was the one inducement which prompted the maritime provinces to enter confederation. They were told that they would be linked up with the markets of Canada, in lieu of the markets they were losing along the Atlantic seaboard, by a government owned railway. Up to the present time we have been fairly well treated,-and I do not believe we will receive any different treatment from the new trustees. However, I should like to throw out this hint to the Minister of Railways, and to the new board of trustees:	The one thing for which we will
not stand is interference with our railway rights in regard to the Intercolonial system. It is true that this line has been merged with the Canadian National Railways, but it is vital to us, and any attempt to curtail our rights in that regard might be misconstrued and might lead to trouble in the maritime provinces. I have no fear of this happening, however. I believe the new trustees will be sufficiently broadminded to take all these questions into consideration and give fair play to everyone. .
I am almost finished, Mr. Speaker, but there is one other point on which I should like to touch. I can hardly believe that in a young, vigorous and growing country such as this the railway problem is absolutely hopeless. I believe that in a short time we will see a return to prosperity and good times. I cannot help but feel that way, and I believe our railways and our railway employees will be all busy again. It is quite true that when the government attempted to weld into one system the various railways now comprising the Canadian National the roads were in a run down, worn out condition. That is not so to-day. There is no doubt that to-day the Canadian National is a fine system. The roadbed is good, the rails are good, the rolling stock is good and the men are right, and I believe there are better days ahead. It may be true
that, as the Duff report says, the red thread of extravagance showed up a little in the past few years, but money was plentiful then and to show for it we now have a fine railway system of which we all should be proud.
In this connection I should like to refer to the hotels owned by the Canadian National. I thought from the very outset that the idea of a railway building and owning hotels in Canada was a huge mistake. It has not been done in the United States; the railways in that country do not own hotels, and I know of no country other than Canada where this has been done. However, we have them now and it is up to us to make the best of them.
I should like to touch on just one other point in conclusion. In reading the proceedings of the Senate committee which dealt with this bill I notice a reference, by one gentleman who gave evidence, to our little hotel in the city of Charlottetown. I resent the remarks that were made on that occasion. This gentleman said we had a hotel that was out of all keeping with the province; that it was so grand and so elaborate that the natives of Prince Edward Island were afraid to enter it. Nothing is further from the truth, Mr. Speaker. In Charlottetown we have a nice little one hundred room Canadian National hotel, and from the standpoint of earnings I think it is about fourth in the system, although it has been in operation less than two years. I can assure you that hotel is well patronized by the people of Prince Edward Island and by the tourists who visit the province in the summer time. During the winter a great many citizens of Charlottetown take up residence in the hotel and they invite their friends and entertain them there so that the hotel gets the benefit of that patronage. There is scarcely a club of any note in Charlottetown that does not hold its meetings in the hotel, giving it full patronage, and a great deal of the success that has been achieved by the hotel is due to the efficient manager we have in charge. I resent therefore the slighting remarks that have been made with regard to our little hotel in the city of Charlottetown.
I have spoken at greater length than I intended to. The bill before the house has been very carefuly considered by the Senate; that body has given it a great deal of consideration and it met with the almost unanimous support of the opposition in the red chamber. I consider therefore, taking it all round, that the bill in its present form is quite satisfactory and it is my intention to vote for the second reading, reserving the right, as the bill passes through its various stages, to criticize any part of it which I think calls for criticism and to support those parts of it which in my opinion are worthy of support.
C.N.R.-C.P.R. Bill-Mr. Duff


Mr. WILLIAM DUFF (Antigonish-Guys-borough):: 
An hon. MEMBER:: Eighteenth.


William Duff: Thank you, eighteenth. I sat here from 1923 to 1930 and I looked in the faces of my good friends opposite during that time. I looked in their faces when the committee on railways brought in their report, and when the estimates for the Canadian National Railways were laid on the table of the house and discussed; and unless I am getting old and am very forgetful-though I think my memory is as good as it has ever been-I do not recall hon. gentlemen on either side getting up to object to any great extent either to money spent on capital account for the Canadian National Railways or to money voted for current account. In 1929, in 1928, in 1927 or in previous years did we come here and, like the Prime Minister, bewail the fact that the railway was in such a deplorable condition? What is the reason for the present position not only of the Canadian National Railways but also the Canadian Pacific so far as operation is concerned? The Prime Minister should be the last man in this house to say very much about it. It seems to me he should go away back and sit down after all the promises he made in 1930, when he realizes what has happened not only in connection with the railways of Canada but in connection with business generally throughout the country, as a result of the policies of the present government.


Some hon. MEMBERS:: Oh, oh.


William Duff: My hon. friends laugh.


Mr. ROWE:: What about 1925?


William Duff: In that year the Canadian National Railways earned almost enough to pay interest on bonds to the public.


William Earl Rowe: I mean the promises of 1925.


William Duff: All that is wrong with the railways of Canada at the present time, and I am speaking of both systems, is lack of business; they have not as much business as

C.N.R.-C.P.R. Bill-Mr. Duff
they had in the past. Give us freedom of trade; let the products of this country move back and forth over the lines of the Canadian Pacific and the Canadian National Railways. Let us sell our surplus products in the markets of the world and we shall have business for the railways of Canada not only from Vancouver to Halifax but also from these points to the central and western provinces.
This afternoon the Prime Minister, in his references to these railways, endeavoured to give us their history and to tell us what had brought about the present amalgamation of the various units which comprise the Canadian National Railways. Again we had the lamentations of Jeremiah, and he bewailed the fact that there were three transcontinental systems. I can understand that the Prime Minister would have been satisfied, not only now but years ago, if there had been only one transcontinental system, but the Canadian people, realizing that this was a great and growing country, decided that there should be more than one transcontinental railway and that there should be competition in railway matters. Therefore, whether we like the situation or not, we surely must not criticize either the provinces or previous governments if they in their wisdom saw fit to guarantee the bonds of the Canadian National Railways or to advance moneys in subsidies for the building of those lines.


Mr. McGIBBON:: The hon. member says that we should not criticize previous governments. I say: Why not?


William Duff: I am afraid my hon. friend did not catch my point.


Peter McGibbon: I did.


William Duff: What I say is this: The Prime Minister complained bitterly because Sir Wilfrid Laurier had built the Transcontinental and the Grand Trunk Pacific. If I remember my right hon. friend's words correctly, he said that he could not understand how Sir Wilfrid Laurier could have done this. I do not think it lies in the mouth of the Prime Minister to go out of his way in order to bring Sir Wilfrid Laurier's name into this discussion. To do so is absolutely unnecessary and out of place for him, but we must not forget that Sir Wilfrid Laurier held two general elections with regard to the building of the Transcontinental and the Grand Trunk Pacific, and Conservatives and Liberals united in backing Sir Wilfrid and giving him a mandate to go ahead and build those lines. Will my hon. friends from the maritime provinces object to the construction of the Transcontinental and the Grand Trunk Pacific, because we had hoped that by the building of those lines a greater flow of traffic would come to maritime province ports? The Prime Minister waxed very indignant when he talked about the three transcontinental systems; he said that he could not project the mind of Sir Wilfrid Laurier in what he had done in regard to the Transcontinental railway. Sir Wilfrid Laurier had vision. Surely there w'as more reason for Sir Wilfrid Laurier in 1904 to promulgate the building of the Transcontinental than there is for the present Prime Minister to talk about the St. Lawrence waterways. When he comes before the house this afternoon with his tongue in bis cheek and talks about the terrible financial situation of the railways of this country-


Pierre Édouard Blondin: I do not think it is a proper expression for the hon. member to use to say that the Prime Minister comes before the house with his tongue in his cheek. I would ask him to withdraw it.


William Duff: If you think I am out of order, I shall be delighted to withdraw it.


Pierre Édouard Blondin: I am sure of it.


William Duff: Perhaps I can say, with his
tongue in his mouth? It is rather strangf for the Prime Minister to criticize either the expenditures with regard to the building of the Transcontinental railway or the moneys which were expended by the different governments on the Canadian National railways, because, when those great undertakings were projected, when the money was spent on the Canadian National railways, this country was in a very much different position from what it is to-day. Yet not only did my right hon. friend advocate the building of the St. Lawrence waterways, which means an expenditure of millions and tens of millions of dollars of public money, if this project is proceeded with, but I notice that in the famous Duff commission report those great men-and no doubt they are great men-


Mr. COTNAM:: All the Duffs are.


William Duff: That is the reason I think
they are. Those gentlemen, although they were appointed solely to deal with railway questions, that of the Canadian National and the Canadian Pacific, went out of their way to say that they did not think it would affect the railways if the St. Lawrence waterways were proceeded with. I take direct issue with those gentlemen who comprised that commission, because everybody must realize that if the St. Lawrence waterway is built,
C.N.R.-C.P.R. Bill-Mr. Duff

and if steamers can go from either the old country or from foreign lands up the St. Lawrence river and on to the head of the lakes, surely this will interfere with the revenues of both the Canadian National and Canadian Pacific railways.
The Prime Minister, in discussing the great cost of the Canadian National Railways, endeavoured to infer, if I may use the word, that the Liberal party was practically to blame because this amount of money was expended on this great undertaking. It is quite true that when we came into power in 1922 we found that under a bill passed by parliament in 1919, and one which many Liberals of that day opposed, those railways had been amalgamated. How was this done? Were those railways taken over as a business man would purchase a property? Where, for instance, does the blame lie for the famous speech made in 1914 by the present Prime Minister on the subject of railways in this country, when he termed the gentleman who sponsored the bill in the Senate as "the gramophone of Mackenzie and Mann"? Were we responsible in 1914 when the Conservative government of the day voted $45,000,000 in cold cash out of the public treasury to a certain Canadian bank for a certain railway? Were we to blame in 1915 and 1916 when $15,000,000 and $10,000,000 were also given to the same company? Where is the blame when the government of my hon. friends opposite in 1917 or 1918, after Sir Henry Drayton had made a report stating that the owners of the railway had no equity, paid out of the public treasury $10,000,000 to those owners?


Peter McGibbon: They had to do that to keep the business going.


William Duff: Were we to blame in 1919
when the arrangement was made with the Grand Trunk Railway, when, as I said a moment ago, instead of the government of the day acting as business men and taking over the Grand Trunk at a sheriff's sale or in some other way so that we could have bought it at the smallest amount possible, they guaranteed the bonds so that hundreds of millions of dollars of the present Canadian National Railways debt is money voted and spent by the Conservative party? Was the Liberal party to blame in 1918 when the Union or Conservative government of that day-because it was really Conservative, just a camouflaged Union government-


Mr. McGIBRON:: There were a few Grits in it.


Mr. CASGRAIN:: They soon turned Tory.


Mr. MALCOLM:: They did not remain
long.


William Duff: 
Peter McGibbon: Give us the revenues for the same period.


William Duff: I am very sorry, but I have
not those figures.


Peter McGibbon: 
William Duff: I am not talking about the
profits, and it must not be forgotten that most of the Canadian National railway hotels were built in the years 1929, 1930 and 1931, while the Canadian Pacific hotels had been established for years and had built up a clientele. But I am glad to hear that the Canadian Pacific Railway made $7,000,000 on their
hotels. I think, however, my hon. friend from Muskoka-Ontario will admit that the Canadian Pacific Railway is not making a profit on its hotels to-day any more than the Canadian National.


Mr. STANLEY:: Or anybody else.


William Duff: 
George Douglass Stanley: In Saskatoon.


William Duff: I admit that that is a very
large sum of money, but if it was bad business to build hotels costing $14,000 per room, it is much worse business to rent $14,000 rooms for 89 cemts per day per room. I shall not have time to go into that question much further.
In my opinion our main business in this parliament is to bring down legislation with regard to the Canadian National Railways, and if by legislation we can improve conditions on the road nobody will object; but I do object to this bill including the Canadian Pacific Railway. There is enough legislation on our statute books to-day to control that privately owned corporation. The statutes regarding the railway commission give it control over the Canadian Pacific Railway, both as regards freight rates, passenger rates, express rates, and the routing of traffic. Other legislation on the statute books at the present time prevents the Canadian Pacific Railway from building branch lines without first receiving authority from the railway commission or from parliament. I say it is a nice state of affairs when a privately owned railway or any other privately owned business must be controlled by this government and by an arbitral board appointed by the government. I say it is not right. As members of parliament we have no



C.N.R.-C.P.R. Bill-Mr. Duff
right and no business to interfere with the private affairs of the Canadian Pacific Railway or anything else. I say that we should stick to our own business, and our own business is to look after our own investment.
I am opposed to the bill because of part I which deals with the appointment of trustees. There is no need for the legislation which has for its purpose replacing directors with trustees, because to do that all we would have to do would be to amend the present legislation on our statute books. What difference would it make whether they were called directors or trustees? I say that we could very well amend the legislation now on our statute books so as to provide for trustees and to effect economies, if such are necessary.
Part II of the bill concerns economies which should be carried out. I say that this bill will never work and, do you know, I have a sneaking idea that it was never intended to work. You know, we cannot forget our old loves, n*o matter how long we are married, or how long we are widowers or how many wives we may have had. We always "lean a little towards Mary." As I read the bill I do not have the same fears as has the president of the Canadian Pacific Railway and his directors. I do believe, however, that part III concerning arbitral tribunals should not appear in the bill. There is only one way to have cooperation; it must be voluntary. Mr. Speaker, if you and I have a difference to settle we will certainly try to settle it to our own satisfaction before we have an arbitration or go to a court concerning it. However, if we had to go to a court, we would go only once. If this legislation passes, what does it mean? Neither this privately owned railway, the Canadian Pacific, an institution of which everyone in Canada should be proud, nor the Canadian National railways will know just where it is at.
We will suppose a dispute comes up concerning hotels. Let us assume the legislation before us passes, and that the Canadian Pacific railway shareholders get together to-night and solemnly declare that they will vote 85,000,000 to build a hotel in Ottawa.
I know that is very unlikely, but I am using it merely as an illustration. The directors put the proposition before the shareholders, and the decision is reached that it would be good business. Is it fair that by legislation, arbitral tribunal or anything else we should say to the Canadian Pacific Railway, a private enterprise, "You should not spend that money"? That is what this legislation 
means,-that the privately owned railroad is going to be hamstrung. The value of their assets will decrease as soon as this legislation goes on the statute book. Why? Because when a dispute arises the Canadian Pacific Railway and the Canadian National Railways each appoints an arbitrator on the arbitral tribunal, the chairman of the railway commission acting as the third. We will suppose that the chairman decides in favour of the Canadian National Railways. In that event is the Canadian Pacific Railway going to be favourably disposed towards the Canadian National Railways? Or if in another case the decision is given in favour of the Canadian Pacific Railway, is Mr. Hungerford or are those men in charge of the national railways going to feel kindly towards the other line? We will not effect economies if we have the railways at each others throats,-and that is exactly what will happen when the arbitral tribunal is operating.
If we are to have economies we must have voluntary cooperation between the two railways. Nobody can convince me in this day and generation, after the experiences of the last few years, that this legislation is necessary, so far as economies are concerned. There is no doubt there were extravagances on the part of both the Canadian Pacific and the Canadian National; we all admit it and know it in our own experience and business. In his speech on Tuesday the Minister of Railways bore me out when he told us how much money was saved in the last year. If these economies were put into effect and these large sums of money were saved without the operation of a compulsory arbitral tribunal, surely Mr. Beatty and his directors and shareholders will make sure that he cooperates with the Canadian National Railways, without having to be forced to do it by legislation.
I say economies would take place more quickly and with less difficulty if the railways were left alone, on the one hand the shareholders of the Canadian Pacific Railway watching Mr. Beatty and his directors, and on the other hand the people of Canada represented by their members in this House of Commons watching the management of the Canadian National Railways. That is the only way we will ever have proper cooperation, and because of that I say this bill is unnecessary, that it interferes with private rights and is not in the best interests either of Canada or the Canadian National Railways or the Canadian Pacific Railway. For that reason I purpose voting against it.

1C.N.R.-C.P.R. Bill-Mr. Deslauriers


Mr. HERMAS DESLAURIERS (St. Mary's) (Translation):: Mr. Speaker, we are requested to consider a measure which, according to the hon. Minister of Railways, is based on the conclusion of the Duff commission. There is, therefore, reason to believe that the report will serve as a guide to the new management of our National railways.
The object which the royal commission, composed of seven members, appointed by the government on November 20, 1931, had in view, was to study the difficult situation in which our National railways are placed, discover the causes and find a remedy.
The work carried out by the commissioners is certainly one of the most thorough and praiseworthy which has ever been presented to parliament. They discovered the main sources of the evil and made the most commendable suggestions, that cannot be gainsaid. However, the true remedy has not been pointed out; perhaps, they thought it was better not to mention it at present, and certain recommendations made therefore, seem to be in contradiction with the principles of economic management.
Numerous factors, it is stated, have contributed to create the sad plight of our National railways; first, the extensive mileage in contrast with our population, trade depression, competition by the Canadian Pacific railway and the various other transportation facilities such as motor trucks, autobus, aeroplanes and ships; the high rates charged on freight and passenger traffic, and the high cost of labour. All the commissioners, however, agree in asserting that one of the main causes was the acquisition of railways and ancillary lines, most of them bankrupt, necessitating very large disbursements in interest and fixed charges. Additional causes were repairs to the railways which had deteriorated and had been neglected, in many instances, requiring a complete rebuilding of both the roadway and stations, so as to put them in condition to meet competition by the Canadian Pacific railway; the erection of hotels, still to meet competition, the establishment of maritime services, always with the same end in view, and finally, an overstaffed management drawing too high salaries. To remedy the first evil, the report recommends abolishing the duplication of train services, both railways to cooperate in this respect. This is an excellent recommendation, this useless war was carried on to the detriment of the two railways, moreover, the public could be given an efficient service without this duplication. By discontinuing to operate the unnecessary lines, instead of having 95 53719-183J
per cent of lines in use there would only be 58 per cent; the operating cost, maintenance and wear and tear would greatly be lessened; therefore, the saving would be very appreciable.
The report, moreover, recommends the merger of the telegraph and express services. This suggestion is an excellent one and a further saving would result.
The maritime coastal service of the Canadian National Railway between Vancouver, Victoria and Seattle, undertaken at a great loss, should be entirely discontinued. The extravagant hotel system should be leased, for it is out of proportion to the requirements of the population.
While recognizing the service rendered by motor trucks and autobus, a service with which the railways cannot compete, owing to its particular facilities, and which better highways has developed and will further develop, the commissioners are of the opinion that it would only be fair to fix minimum rates for the conveyance of goods by railways and motor trucks, so as to establish a workable system between these various conveyances.
This is a recommendation with which I do not entirely agree, and I do not think it is of a nature to improve the situation. First, the question relating to motor vehicles comes entirely under the jurisdiction of the provinces which issue the licences, collect the taxes and establish regulations for the safety and maintenance of their highways. This service is already highly assessed and cannot stand any further taxation), especially, in times of crisis when we are aware that the special advantages derived from this kind of transportation cannot be duplicated by railways.
This recommendation, to my mind, is unfair to the public. It would not matter were the two systems of transportation identical; however, under present circumstances, it means charging the public a higher price, equivalent to that of railways, an antiquated system of conveyance which has seen better days; it means impeding progress which modern methods demand.
The railway management-states the Duff report-should be free from political interference. These are views with which I agree to some extent, however, no more than it is necessary. In fact, as long as the railways remain public property, the people are entitled to safeguard their interests through the medium of their representatives. To my mind, the representatives of the people cannot ignore this fact entirely. Therefore although agreeing that the management of our railways should be carried on in a business way, it is
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impossible to entirely dissociate politics from it or the representatives of the people whose interests are at stake.
The royal commission is not opposed to the St. Lawrence deep waterways, it contends that this undertaking will not harm railway traffic. Quite the contrary, common sense tells us that the dredging of a deep water route to the head of the Great lakes will considerably decrease the railway traffic, owing to lower transportation rates although this method of conveyance is slower. Take, for instance, an ocean ship loaded at any European port, bound for Fort William, instead of Montreal, the cargo thus shipped will mean so much freight taken away from the railways between the two last mentioned points, there is no avoiding this fact. Notwithstanding the outlay of millions of dollars to construct this deep waterway, ships being exempt from taxation, this water route becomes a conveyance subsidized by the State, by those who, themselves, are endeavouring to extricate their railways from the sad plight in which it has fallen, by subsidizing a great rival to aggravate its plight-this seems most absurd.
The report further expresses the views that the wheat increase in the west-although the shipping is to the Pacific ocean and then via the Panama canal or else to Churchill- will always leave a tonnage equal to that of to-day to be shipped East, via Montreal and the Atlantic ocean. Increased wheat production, at present, is very uncertain. In fact, in normal times, such should be the case, and the western prairies could feed a greater proportion of the world's population. However, the contrary is happening at present. This wheat increase is precisely taking place in countries which in the past imported our wheat; however, as long as the world's policy remains unchanged, Canada has very little chance of exporting more wheat.
The commission suggests as a remedy, at Chapter V, Section 204, the appointment of three trustees to see that their recommendations are put into practice. A majority of the trustees should rule, but the majority's decisions would depend on the good pleasure of the chairman. For the purpose of settling disputes it suggests-Section 213-the appointment of the Chief Commissioner of the Board of Railway Commissioners and a representative of the two companies concerned. When decisions cannot be arrived at on important matters the exchequer court would be empowered to appoint two additional trustees. Section 213 is as follows:
Where the execution of an order involves the doing of any act which by an existing statute requires the assent or approval of the

Board of Railway Commissioners or where in the opinion of the Chief Commissioner himself the public interests involved are of sufficient importance to warrant it. no order made by the arbitral tribunal shall be operative without the concurrence of the Chief Commissioner and his formal written assent.
It is clearly shown that the members of this arbitral tribunal and trustees amount to placing the control of all railways in the hands of one man, the Chairman of the Railway Commission, which seems most arbitrary. It is an absolute dictatorship. If, in the appointment of this arbitral tribunal, there was only a question of the interests of the National Railways involved, the granting of such wide powers would certainly be a dangerous proceeding, but where it takes a more serious meaning, is when it violates the contract entered into, in 1881, between the Dominion government and the C.P.R. in which it is stipulated that the Pacific company will manage, maintain and operate its railways and properties, itself, perpetually. If we consider that 35,000 Canadians are shareholders in this company, that they have invested money well earned and savings realized by hard work, while being also taxed to maintain the C.N.R. and that they have put up their own money in purchasing this private railway, it would certainly 'be unjust to dispossess them to-day of their property either directly or indirectly, by placing this private enterprise under the management of this arbitral tribunal, in conjunction with the Canadian National Railway. All seem to point that the state would have the right to ruin a prosperous and indispensible company to save another from bankruptcy. The arbitral tribunal would, perhaps, be acceptable if its powers were limited to controlling the expenditure of the Canadian National Railway and regulating all unreasonable competition between the two systems.
When prosperity prevailed throughout Canada between 1896 and 1911, the future of the country appeared so promising that governments had grounds to venture into railway enterprises, either by means of subsidizing or undertaking the work themselves. They had the means at their disposal and it was but natural to first build railways to transport, afterwards, the pioneers of the country. Railways have alwas's been the means of establishing and developing new settlements. The credit of settling the western provinces must be given to the railways. Without their initiative all these beautiful regions would still be inhabited only by the Indian tribes, scattered here and there. The transcontinental lines made confederation what it is

C.N.R.-C.P.R. Bill-Mr. Deslauriers
to-day. Even then the thought of calling the western plains the granary of the empire and visions of feeding part of Europe existed. Immigration at that period increased our population without hindering anyone. Nobody foresaw this terrible war of 1914, which was in a few years to transform our country, blot out our prosperity, jeopardize our enterprises and trade, and imperil our credit. The world crisis began to spread over the land. This scourge, known as war, upset everything not only among us but throughout the world. To-day, nations impoverished seek to produce their own food. We witnessed foreign countries which in the past had sought our exports, become self-supporting and even invade our own markets. All nations vied with one another in erecting tariff barriers. Canada with its untold natural resources, with a population of hardly 10,000,000 souls is overtaxed and crippled with debts, its people are inactive although the country overflows with produets. The royal commission appointed to solve one of our great problems has failed in its task; its recommendations will in no way better our lot, because the problem to be solved is far greater than that of our railways. The commissioners perhaps visualized the real remedy; however, in this period of trade stagnation and universal unemployment, they dared not make it known for fear of further jeopardizing our situation as a whole; perhaps they thought, not without cause, that their recommendations would not be welcomed by the public, seeing that 500,000 men were unemployed, and at a time when the producer cannot find a purchaser, owing to our impoverished state.
We had reason to expect that this commission, after scrutinizing and analyzing the affairs of our national railway would have visited other countries where there were also railway problems, in order to study on the spot the means adopted to solve these problems and be in a position to recommend to the government a measure differing from that now submitted to us. At all events, the legislation which we are now considering can only be at the most a temporary remedy and not a cure to our railway ills. As I have shown, this measure tends to be unjust, arbitrary and liable to aggravate a more serious problem, that of unemployment, if we examine what other countries have done for their railways we find that they have not followed our example, they have not lost their time in shifting their ills. France, which had to bear the brunt of the Great war, finding the financial situation of her railways threatened, adopted as a remedy
the immediate electrification of her vast system, Paris-Lyon-Mediterranee et Orleans-Midi. The Swiss confederation electrified with success her entire railway system. Our neighbours, the United States, whose water powers are not to be compared with those of Canada, did not hesitate to electrify their Chicago, Milwaukee and St. Paul, Butte, Anaconda, Pacific railway system and others.
Some time ago the press informed us that an Anglo-Franco-German syndicate, with a capital of $580,000,000, had been formed to electrify the railways of Poland, Rumania, Iraq and Portugal which were threatened with bankruptcy. In Canada, with a surplus of water powers-for with only 3 per cent of our railways electrified and our financial situation not in a worse state than that of those countries-the government has no better measure to offer us than this inadequate legislation. It may be contended that the cost of establishing such a system would be very high. If in other countries such a transformation has been carried out everywhere with success, under no better conditions than those prevailing here, why should Canada refuse to follow their example? Since Canada is undeniably in a more favourable situation, any opposition to such a scheme can only arise from certain groups which are interested in blocking such a progressive move. According to statements published by the Butte-Anaconda Railway, we are able to state that for one year's operations-all expenditures included-with a capital of $1,200,000, that company realized a profit of $242,000. When it is known that the Chicago-Mil-waukee and St. Paul system comprising 440 miles, a distance equal to that from Ottawa to New York, which, to-day, however, extends over 600 miles, cost $12,500,000, out of this amount the actual cost of 112 locomotives transferred to other lines must be deducted, we are amazed to hear that one hesitates over a few millions of dollars to provide the country with the only system capable of competing advantageously against all other systems of conveyance. Each year, we face, without flinching, the enormous deficits of our railways, although we are aware of the great advantages of the electrified locomotive such as traction, braking power, etc., over the steam locomotive, and the small operating cost entailed compared with the steam system.
When, in 1922, I had the honour of addressing the house on the subject of the electrification of railways, the objection made was that the population of Canada was not sufficiently 1 rge and that the volume of its trade was not considerable enough. This objection loses much of its force, if we com-
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C .N .R ,-C.P.R. Bill-Mr. Deslauriers
pare our population with that of Switzerland which is highly pleased with its new system, and not without cause, if we consider that with power houses and substations the utilization of direct current provides power for heating, lighting and industrial purposes, with an assured increase in the future if current can be supplied cheaply. When, for instance, a city like Montreal spends for heating purposes only, either in imported coal, oil or gas, not less than $25,000,000 per year; one can easily realize how quickly would be repaid the cost of installation of this new system, even with a population of only
10,000,000 souls. This objection would be of even smaller account if we proceeded to electrify our railways gradually, for instance, if the work was spread over a period of twenty years.
I do not think it necessary to emphasize that we possess water powers in sufficient quantity to carry out this electrification without expropriating, at great cost, the electric companies already in operation. I think that all will admit this fact.
How will it be possible, in these hard times, one may object, to raise the necessary capital to cany out this enterprise? On this point, I entirely agree with the views expressed by Mr. Carrel, of the Quebec Chronicle, that it would be an easy matter to find the necessary capital at 4 per cent interest. The dominion and provincial governments have but to agree to appoint commissions for that purpose and to guarantee their bonds, as Quebec did when constructing dams across rivers to help pulpwood companies, and, also for public toll bridges. The undertaking would be facilitated by the fact that the work would be spread over a period of twenty years, thus affording work to thousands of workmen and encouraging numerous industries to establish themselves in Canada, owing to the low cost of electric current supplied; the people, therefore, as a whole, would indirectly benefit.
These commissions, in order to distribute electric current at a low cost would generate it themselves, because were they to purchase it from a company obliged to pay dividends on its capital, the scheme would be impossible; this objection, however, disappears if the commissions generate their own current and distribute it without profit.
At present, the project can be undertaken without having to expropriate, at heavy cost, electric companies already in existence, not only in Quebec but throughout all the provinces of the dominion; now that the problem of high voltage current loss, when distributed at long distances, has been solved by the invention of electron tubes. If in the United

States, with a water-power developing 200,000 HP. people have built a transmission line of
100,000	volts, brought down to 3,000 volts by sub-stations, we should have no hesitation to state that in Canada this electrification is feasable with very little interference in the current supply.
This electrical transformation would affect the various railway sendees, it would almost absorb their entire staff. As roadways, stations, warehouses, hotels could be utilized and a large proportion of the present stock of locomotives could be distributed in non electrified sections, I think that the cost of the undertaking would be greatly reduced. Comparing the advantages of the electric locomotive over the steam locomotive, proof of which has been completely established from every possible angle, large centres, such as Montreal, have no reason to put up with the nuisance of steam locomotives, allowing them to cross streets in all directions, of being a threat to public health; fouling houses, windows and clothes, making an infernal noise day and night, disturbing the sick child in his sleep, the overtired mother or father, at the end of the day's work. I state that, like in Paris, London and New York, the steam locomotive should have disappeared long ago from our large towns. This reform has been too long delayed.
The reason of such delay is found in the carelessness, lack of initiative and incompetency of our public men. I think it proper to remind them, once awhile, that the electrification of our railways is an absolute necessity as a measure of general public welfare.
On motion of Mr. Malcolm the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, March 10, 1933