1933-04-18

UNEMPLOYMENT RELIEF

Hon. W. A. GORDON (Minister of Labour) :: I desire to lay on the table of the house certain orders in council passed pursuant to relief legislation.



PENSION ACT AMENDMENT

[Stage Direction]
Hon. MURRAY MacLAREN (Minister of Pensions and National Health) moved that the house go into committee at the next sitting to consider the following proposed resolution :
That it is expedient to amend the Pension Act to give effect to certain recommendations of the committee appointed to investigate the administration of the act; to provide for the elimination of various provisions relating to the pension tribunal; and for an increase in the number of members of the commission and to prescribe their tenure of office; for the continuation of the pension appeal court as a court of appeal and of review; for the appointment of an ad hoc judge as a member of the pension appeal court and his remuneration; for the appointment of a travelling inspector of the veterans' bureau, and of pension counsel, and a reviewing officer; for the payment of awards by the comptroller of the treasury, and generally to simplify and improve procedure under the act.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. JOHN VALLANCE (South Battle-ford) :: Will the Minister of Labour please inform me whether it is the intention of the government to continue the relief camps for single men after the thirtieth of this month. (In Prince Albert national park there are ten such camps, and the men are performing a very necessary work. Is it intended to continue these camps?


Wesley Ashton Gordon: The continuance of the relief camps referred to is at present under consideration. I agree that the men in these camps, in places at least, are doing very useful work and the desirability of their continuance in this work

C.N.R.-C.P.R. Bill
is under consideration. In plenty of time notification will be given as to the policy to be pursued.



PRIME MINISTER'S VISIT TO WASHINGTON

[Stage Direction]
On the orders of *he day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): May I ask the Prime Minister whether he will go to Washington next week in the capacity of negotiator, like the Right Hon. Mr. MacDonald, or in the capacity of observer like Mr. Herriot, and whether he will be accompanied by experts. If so, who are they?
Right Hon. R. B. BENNETT (Prime Minister):: It is the intention of the Prime Minister to go to Washington. He will not
be accompanied by experts.



CANADIAN LEGION

[Stage Direction]
On the orders of the day:
Mr. A. E. MUNN (Vancouver North):: I
have a question to ask the Minister of Labour. It is based on a report appearing in a newspaper published in my riding. The Canadian Legion made an appeal to Victoria, the capital of the province, for further assistance for the unemployed and to take care of those being evicted. The answer came back from Victoria, from the Minister of Finance, to the effect that in his opinion the allowances *were inadequate but that they were doing the best they could, and that, in the meantime, the federal government was in arrears to the province to the extent of $2,000,000. Is that report correct?


Wesley Ashton Gordon: The question only illustrates again the undesirability of relying upon newspaper reports. The hon. member was good enough to intimate to me that he would ask the question. The Dominion government does not owe the province of British Columbia $2,000,009; $185,910.42 is the total of the accounts at present in the Labour department, $100,000 of that amount of accounts being received only to-day. It takes about five days to a week to have the accounts passed through the various departments of government for payment. I can assure the hon. member that the report in the newspaper is not correct.


Albert Edward Munn: My private opinion is-


Mr. SPEAKER:: Order.


Albert Edward Munn: -that the Victoria report is incorrect.



RADIO BROADCASTING

[Stage Direction]
On the orders of the day:
Mr. F. G. SANDERSON (South Perth):: I desire to direct a question to the Minister of Marine. Has the radio commission or the department under the minister taken over the broadcasting station at London, Ontario, which has been controlled by the London Free Press?


Hon. ALFRED DURANLEAU (Minister of Marine):: I will take the question as a notice and refer the matter to the radio commission and give an answer later.



CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL

[Stage Direction]
The house resumed from Wednesday, April 12, consideration in committee of Bill No. 37, respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific Railway system and for other purposes-Mr. Manion.-Mr. Gobeil in the chair.
On section 3 (h)-Tribunal.
Mr. MACKENZIE (Vancouver):: An amendment had been moved by the hon. member for Swift Current (Mr. Bothweli) to subsection (h) of section 3. As I recall it, the discussion was in connection with a point raised by the hon. member for Shelburne-Yarmouth (Mr. Ralston) as to whether the Canadian National system could abandon lines without the consent of the Board of Railway Commissioners and the governor in council. The opinion of the hon. member was that inasmuch as the Canadian National company had taken over the operations and management of the entire structure, no portion could be abandoned without the consent of the Board of Railway Commissioners and the authority of the governor in council. The committee was discussing this point when it rose at six o'clock on Wednesday and I was wondering whether the minister had looked into the matter and was prepared to make a statement.


Mr. MANION:: It is the desire of the government that this bill should be as acceptable as possible to all sections of the house, and to that end, I intend to make a suggestion. Before making this suggestion, may I say that the Duff commission were very strongly of the opinion that as far as possible wre should endeavour to have the National railways so managed as not to be subject to pressure of any kind either from members of the house or members of any government. In other words, it was felt that in so far as it
C.N.R.-C.P.B. Bill

was possible we should endeavour to place the Canadian National Railways in such a position that they could be managed as a private railway company would be managed and not subject to what might be termed political or public pressure. For these reasons, it is the desire of the government that so far as possible we should avoid referring to the governor in council matters which have been decided upon by the trustees. The moment you get back to the governor in council, you get back to political pressure of some kind from the party in power, or the other.


Mr. JACOBS:: Only the one party, not the other.


Robert James Manion: In order to comply with the suggestion of the Duff commission and at the same time not leave the management open to political pressure, it has been suggested that an amendment should be made to section 2. This amendment will provide that lines may not be abandoned without the approval of the Board of Railway Commissioners, and I think it will appeal to hon. members opposite as being a reasonable and satisfactory solution of the difficulty. We have no desire that the trustees should be in a position to do anything but good for the Canadian National Railways. At the same time we have no desire to get away from the recommendation of the commission that the railways should be kept free from political or public pressure. Section 2 has been allowed to stand but this amendment can be proposed when the committee is again considering that section. It will be remembered that section 2 is a preliminary section and applies to the bill as a whole. For that reason it will probably be better to have the amendment made to that particular section. The suggested amendment reads:
Notwithstanding anything in this act or any other act, no railway company-
This would apply to the Canadian Pacific as well as to the Canadian National Railways. -shall abandon the operation of any line of railway or any part thereof without obtaining the approval of the Board of Railway Commissioners for Canada of such abandonment.


Ian Alistair Mackenzie: Would
that apply to the operation of the railway docks located at Vancouver?


Robert James Manion: No. We have tried to word this amendment so that it would not apply to those railway activities which it is felt should be operated more in a cooperative spirit than they have been in the past. There is no reason why running rights over certain lines should be interfered with, and there is no 
reason why the docks at Vancouver, for instance, should not be operated jointly. The fear has been expressed by 'hon. members, possibly with some ground, that the board of trustees, either acting for themselves, for the Canadian National Railways or in an endeavour to cooperate with the Canadian Pacific, either with or without an arbitral board, could abandon portions of the Canadian National. I think that is the conclusion which might be drawn from the discussion which has taken place, and it was thought that if the Canadian National and the Canadian Pacific had to obtain the approval of the Board of Railway Commissioners before any abandonment could take place, it would be reasonably satisfactory to all portions of the house.


Mr. GARDINER:: Would the decision of
the Board of Railway Commissioners be final?


Robert James Manion: Yes. I would refer the
committee to clause (e) of section 17 of part III of the bill. It must be remembered that this part of the bill deals with the arbitral tribunals. Subsection (3) of section 17 states that the powers of the tribunals shall extend to the abandonment of lines, services or facilities and in view of the amendment which has been suggested, it will be necessary to eliminate at least- that part of clause (e) of this section which deals with abandonment of lines. The committee could decide later on whether it desires to eliminate that part of the clause dealing with services or facilities. It would thus be made clear that in so far as the abandonment of lines was concerned, the Board of Railway Commissioners would be supreme over an arbitral tribunal.


Mr. EULER:: As a matter of information
I should like to ask the minister what is the position under the present act. Is it possible for the board to abandon lines?
' Mr. MANION:	That was the question
we were discussing very fully the other day.


William Daum Euler: There is mo certainty about
it?


Robert James Manion: I think there is, according to my information. The Canadian Pacific could abandon any part of its system except the main line, and the Canadian National, iwith the exception of the Grand Trunk, could abandon portions of its lines without submission to the Board of Railway Commissioners, and in some cases without submission to the govenor in council. As I said before, the Canadian Pacific can abandon any portion of their system, with the exception of the (main line. This amendment would put a restriction upon the Canadian Pacific as well as

C.N.R.-C.P.R. Bill
upon the Canadian National. I may say quite frankly that I have not discussed this amendment with the Canadian Pacific to see whether or not they would be pleased with it; I do not know their attitude.


Samuel William Jacobs: I am sure they would be
delighted.


Robert James Manion: I am not so sure; I
should not be surprised if the Canadian Pacific did not care to have an amendment of this kind, but we have not had time to submit it to either railway company. I am submitting it now to the committee as a reasonable compromise arrangement which I think should be fairly satisfactory to all parties in the house.


Mr. BEAUBIEN:: Under this proposed
amendment would the public be in the same position in regard to the abandonment of lines as they are to-day, with respect to the Board of Railway Commissi oners?


Robert James Manion: As a matter of fact I
think they would be in a far better position. As I pointed out before, the Canadian Pacific could abandon some of ite lines without submission, and 'the Canadian National, according to the advice of those learned in legal lore, could abandon limes, with the exception of those of the Grand Trunk, without submission to the board. By this amendment neither company could abandon a line without submission ito 'the board, so I think the public is protected to a greater extent.


Mr. DUFF:: Do I understand that under
the amendment suggested by the minister no railway line shall be abandoned unless that is agreed to by the Board of Railway Commissioners? How would that affect lines which are partially constructed? Would the same thing apply; before such lines were abandoned would the matter have to be submitted to the railway commission?


The CHAIRMAN (Mr. Gobeil):: May I
remind the committee that the proposed amendment reads:
-shall abandon the operation of any line


Robert James Manion: I was going to point out
that this W'ould apply only to the abandonment of lines that were in operation, but the chairman has just pointed out that fact. I know the line to which my bom. friend is referring, the Sunny Brae-Guysborough branoh, which is in his riding, and in that of my hon. friend from Piotou. There is no reason why this amendment would place that proposed line, which is partially constructed, in any different position than it is in to-day, because it is not in operation and therefore would not be affected by the amendment. The
question of the completion of that line would remain in the hands of the Canadian National Railway Company, as it is to-day; it will be completed when they think it wise to do so.


Mr. MALCOLM:: Would this legislation, if adopted, override existing contracts with muneipalities which subsidized the construction and operation of branch lines?


Robert James Manion: No.


Mr. MOTHERWELL:: I understood the minister to say that he was not going to move this amendment just now.


Robert James Manion: The only reason I did not move it was that we happened to be dealing with section 3, but if the committee wishes to do so we can go back to section 2, and I will be glad to move it.


William Richard Motherwell: I would prefer not to have that done, because I should like to consider the amendment first.


Robert James Manion: I laid it on the table because I thought it might save a good deal of discussion; several times my hon. friend from Quebec South proposed that we should lay our amendments on the table in order to give hon. gentlemen time to consider them. While I am on the subject of amendments there is another point with which I might deal. There has been a good deal of discussion with regard to the possibility of amalgamation, and my right hon. leader and I have both told the house and the committee that it is not the intention of the government to permit amalgamation. We have both stated that an amendment would be moved designed to prevent any amalgamation, and perhaps since I am laying one amendment on the table so that hon. members may have an opportunity to study it, with the hope of curtailing unnecessary discussion and perhaps shortening the time we must spend on this bill, I might read to the house the amendment dealing with amalgamation, a copy of which I shall send across to hon. gentlemen opposite. Probably this amendment will be moved as the last clause of the bill, so that it will apply to the whole act. The proposed amendment is as follows:
Nothing in this act shall be deemed to authorize the amalgamation of any railway company which is comprised in national railways with any railway company which is comprised in Pacific railways, nor to authorize the unified management and control of the railway system which forms part of national railways and the railway system which forms part of Pacific railways.
That sounds a little complicated, but in view of the many acts which have been passed by this house at various times with regard to the organization of the Canadian National rail-
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way system it is necessary to put this amendment in this form. To show how difficult it is to get an amendment fully covering the intention of the government may I say that this morning there was a good deal of difference of opinion among those of us who were considering the matter, with regard to two different amendments, the one I have read and another, both drawn with the intention of preventing amalgamation. Finally, after the matter was submitted to the Department of Justice and considered there, with the object of getting an amendment which would prevent anything in the way of amalgamation of the two companies in any manner whatever, this amendment was approved by the Department of Justice.


Mr. MACKENZIE KING:: I should like
to direct my 'hon. friend's attention to some ivords appearing in one section of the bill which I suggest might very properly be added to the proposed amendment. I would suggest that at the end of the amendment my hon. friend might add the words found in subsection 4 of section 9, preceding them by a reference to the section so that it would read as follows:
The provisions of this act, in so far .us they may be inconsistent with the provisions of this section, shall be read in the light hereof and be construed so as to conform herewith.
If that additional clause was incorporated in the amendment proposed by the minister, it would make the meaning wholly clear.


Robert James Manion: I will take that suggestion into consideration; of course I cannot decide upon it at the moment. I do not think the words would make the amendment any stronger, because it says very distinctly that nothing in this act shall be deemed to authorize amalgamation, so I think the point is amply covered. But I will give consideration to the suggestion of my right hon. friend and discuss it with my legal advisers a little later. I do not know that I could pass an opinion upon it at the moment.


Mr. ILSLEY:: I should like to ask the minister whether it will be necessary still for the governor in council to approve certain abandonments. As I understood the argument of the Prime Minister a week ago last Friday night it was that section 23 of the Canadian National Railways Act is still in force and that the trustees merely have the powers of the directors with regard to the abandonment of portions of the Canadian National railway system. If the Prime Minister was correct in that contention it would appear to me that even if we pass this amendment the position will be that with regard to parts of the Cana-

dian National system it will be necessary to have the approval not only of the Board of Railway Commissioners but also of the governor in council. Is that the understanding of the administration?


Robert James Manion: The whole question is so
complicated and involved at times that I do not like to answer too definitely. If I may speak subject to possible correction a little later, though I think I am right, I would say that in regard to the government railways such as the Intercolonial, for example-since the Intercolonial has been entrusted to the Canadian National for operation, by order in council-I do believe that before any part could be abandoned, in addition to the approval of the Board of Railway Commissioners, which is covered by this proposed amendment, the approval of the governor in council would be necessary also.


James Lorimer Ilsley: Under section 23 of the
Canadian National Railways Act?


Robert James Manion: Perhaps. This is a very
complicated matter and I do not know that I wish to say specifically that it would be under that section. As I pointed out the other evening, so far as my information goes section 23 applies specifically to the Grand Trunk, which was the only road to be amalgamated with the Canadian National Railway Company. I do believe as well that with regard to the government railways, such as the Intercolonial, the National Transcontinental and the Prince Edward Island railway, in addition to the approval of the Board of Railway Commissioners there would have to be further approval by order in council. They have been entrusted to the Canadian National for operation; that was done by order in council, and therefore I think any abandonment would require to be approved by order in council as well.


William Richard Motherwell: In the event of the Hudson Bay railway being incorporated with the Canadian National for administrative purposes, it would apply to that also?


Robert James Manion: The Hudson Bay railway
has never been incorporated with the Canadian National. It is merely operated bs' the Canadian National as agents for the government.


William Richard Motherwell: I prefaced my question with the words "in the event of." In the event of the Hudson Bay railway being incorporated with the Canadian National, it would be in the same position?


Robert James Manion: Yes.

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


James Lorimer Ilsley: Do I understand that an
amendment is to be proposed to take away from the tribunal the power to order the abandonment of lines?


Robert James Manion: That is right.


Frederick George Sanderson: I do not know whether I am in order now, but I should like to put a question to the minister for information. It affects the whole act and I have never heard any explanation in regard to it. In what way does this bill affect the lines of the Canadian National Railways in the United States?


Robert James Manion: The lines in the United
States are not affected at all so far as cooperation with the Canadian Pacific is concerned. That is as regards Part II. Nor are they affected so far as Part III of the bill is concerned which deals with the arbitral tribunal. But so far as Part I is concerned, the American lines are affected just the same as any other portion of the Canadian National Railways, because Part I applies to the Canadian National Railway Company alone; it does not apply in any way to the Canadian Pacific as regards cooperation or otherwise. My legal adviser points out that the trustees are not the directors, and that is true. When the new trustees are appointed they will not be the directors of either the Grand Trunk Western or the Central Vermont, because by the laws of the United States these lines have to have certain groups of directors. They are both American corporations and naturally they have to be managed according to the regulations of the Interstate Commerce Commission, so in that respect they are in a somewhat different position. So far as Part I can apply to those roads it would apply; but so rar as cooperation with the Canadian Pacihc ;s concerned, that does not apply at all in regard to Part I of the bill.


Frederick George Sanderson: For further information, is not the board of directors of the Canadian National railway system also the board of directors of the lines owned by the Canadian National in the United States?


Robert James Manion: No. They have their own separate boards of directors, both the Central Vermont and the Grand Trunk Western.


Frederick George Sanderson: I take it from the
minister's reply that when this bill becomes law the trustees will have no jurisdiction over the lines in the United States?


Robert James Manion: That is quite true so far
as aobuial management is concerned, but of *course they will have supervision over those lines in a general way just as the board of
directors to-day has general supervision over them as a part of the Canadian National railway. I do not know if I have made the difference clear to my hon. friend.


Frederick George Sanderson: Perhaps it is my fault that I do not quite see the difference. What I should like to know is this: If this bill becomes law, who will control the lines of the Canadian National in the United States? Who will have the management of them?


Robert James Manion: The trustees will have the management so far as the board of directors now have the management. They will be general snpervisors, if I may put it in that way, of the whole Canadian National railway system. In addition, there is a board of directors of the Grand Trunk Western and of the Central Vermont, some of whom are directors as well of the Canadian National in Canada, and some of whom are Americans. Through these boards these American lines would be managed subject to the control of the trustees as to financing, and generally in an advisory way.


William Daum Euler: Will the new board of
trustees have representation on these American boards?


Robert James Manion: Yes, no doubt.


Richard Bedford Bennett: We own all the shares.


William Daum Euler: Will one of the trustees be
on each board?


Robert James Manion: For example, some of the
directors of the Canadian National are also directors of the Grand Trunk Western. My deputy minister is a director of both of them, and so is Mr. Hungerford; Mr. Grant, the financial comptroller, is also one of the directors over there. That might have to be changed, but perhaps not. It is quite probable that one of the trustees, or possibly two, would be directors on the boards of the United States, but I have not thought that out sufficiently.


Mr. HEAPS:: When this bill was first before the committee the Minister of Railways promised to get certain information in regard to the effect of cooperation or the consolidation of train services between Montreal and Toronto and Ottawa and Toronto. I would ask him if he has that information now and if he will give it to the committee.


Robert James Manion: I am sorry I have not
that information. I must confess that I have overlooked that detail. I remember quite well that my bon. friend wanted information
C.N.R.-C.P.R. Bill

as to what would be the effects on labour of the general cooperative scheme. I looked into that matter and found that that information was not available. I am afraid that I have neglected to secure the information my horn, friend now asks for as to the decrease in labour employment because of the pooling of trains between Montreal and Toronto and Ottawa and Toronto, but I shall be glad to get it for him.


Abraham Albert Heaps: There was more than that involved. There was also the question of the anticipated financial saving as a result of this consolidation of services. I should like to go even further than that. The dividing line between consolidation of services and cooperation or amalgamation is so thin that any subsequent enactment against amalgamation does not mean anything 'because by this bill to all intents and purposes we are going to have cooperation or the amalgamation of services under two managements instead of one. In the case of the consolidation of services between Montreal and Toronto, and Ottawa and Toronto, for instance, to all intents and purposes there you have amalgamation under Canadian Pacific and Canadian National management, and what I should like to know is what are the anticipated savings over a certain period of timie for the Canadian National and the Canadian Pacific as a result of that consolidation of services. Secondly, what is the amount of labour that has been displaced as a result of that same consolidation of services. While the minister is obtaining that information I think he might go a little further. As I said on a previous occasion, it is common knowledge that efforts are already being made by the two railways to bring about greater consolidation and cooperation of services right across the country. In the last few days I have been among a great many railway men, and the spirit of these men has been completely broken down by the bill that is now before the house. Men with fifteen or twenty or twenty-five years of service do not know how long they are going to be kept in the employ of the railways. I know that engineers have been looking over many of the large terminals of this country on behalf of the railways to see what saving might be made by the closing down of certain terminals and the consolidation of services right across the country. I anticipate myself that in a short time, perhaps two or three years, about twenty thousand railway men will find themselves without a job. Now that is a very serious state of affairs. I do feel before the bill passes the committee hon. members ought to be fully aware of the impli-

cations involved in it. I am not so much concerned about tribunals or the powers of any board which may be appointed under the bill, but I certainly am concerned with any move to introduce legislation which will have the effect of throwing about 20,000 men out of work when, as a matter of fact there are hundreds of thousands walking the streets with no possible opportunity of being absorbed into industry. In addition to obtaining information in regard to the consolidation of services between Montreal, Ottawa and Toronto, and the effect such consolidation has had upon the financial situation of the two railways, I am asking the minister now to obtain information showing what efforts are now in progress, or what action has been taken by the two railway companies, towards cooperation in services between other terminal points in Canada.


Robert James Manion: My hon. friend asked that question a few days ago. However in listening to the discussion which followed I am afraid I overlooked the smaller detail in attempting to oblige him with information on the larger points at issue.


Abraham Albert Heaps: It is not a smaller detail.


Robert James Manion: Certainly Montreal, Ottawa and Toronto are small when compared with the whole of Canada. So far as the larger question is concerned I could not and cannot obtain information concerning it. The railway management informed me that they are only surveying the whole matter at the present time. They cannot give me any estimates and I cannot force them to give me estimates in regard to the number of men who may possibly be laid off through cooperative efforts or by pooling the use of terminals.
The hon. member has stated that about 20,000 men may be laid off. I do not in any way pretend to be an expert in railway matters, but I believe that instead of laying off men in the. near future, due to the cooperative efforts being made, the railways will be taking on men. If they do not, then I think it will be a serious matter both for the railways and the country. With all due respect may I say that some people, including some railway men themselves, to a certain extent have overlooked the present financial condition not only of the railways but of the country. The railways must effect economies or they will be in such condition that not 20,000 but more men will be laid off for some time or, at any rate, until the railways get into a better financial position than they are to-day.

C.N.R.-C.P.R. Bill
This country cannot go on paying $50,000,000 or $75,000,000 a year out of its revenues for the Canadian National Railways, without serious effect upon the whole financial structure of our country. Last year the Canadian Pacific Railway barely earned its fixed charges, or the interest on its bonds. At any rate, it has paid no dividends on its common stock, and I believe it has discontinued dividends on its preferred stock. Hon. members will see that it has barely earned sufficient to pay interest on its bonds. Therefore unless there is a revival of business, the Canadian Pacific Railway, too, will be in a very serious condition. May I add that in the last week the decrease in traffic on the Canadian National railways, and no doubt on the Canadian Pacific railway, continued. So far the traffic has continued to decrease each week in 1933, when compared with the same weeks of last year. The decrease in gross traffic has amounted to about $600,000 a week.


Abraham Albert Heaps: Could the minister give us the percentage?


Robert James Manion: Last week was about 22 per cent under the same week last year. I do not like to use percentages, because I believe thej* are dangerous in matters such as this. However the fact is that last year in gross earnings the Canadian National Railways were about $39,000,000 below the 1931 figure. So far this year the decrease has continued. There seems to be no bottom to the worldwide condition through which we are passing. Because, despite anything in the nature of criticism which may be lodged, the condition is world-wide and not confined to Canada alone. Railways in the United States are certainly in no better condition than are our Canadian lines. Many of them have gone into the hands of receivers, and unless conditions change, no doubt more will follow.
Therefore I suggest that the seriousness of the situation ought to be considered. No member of this government has any desire to see men thrown out of work. Certainly I should regret very much if this legislation should have that effect. However, coming back to my former statement, in my opinion if there is a revival in business, as there must soon be if we are to avert a complete catastrophe, the railways should be taking on men rather than laying them off, despite cooperative efforts being made.
I shall endeavour to get the information for the hon. member by to-morrow. We cannot get through this bill to-day, I am quite sure. I shall endeavour to obtain for him the
information he wishes in regard to Ottawa, Montreal and Toronto services, with the information showing the savings and the number of men involved. I may say that Mr. Hungerford and Mr. Beatty gave out a statement in connection with the pooling of the passenger services between the points in question-I believe I have a copy of it among my papers-and at the time the statement was made they counted on saving something like $500,000. They did not mention the number of men affected, but without any doubt a number will be affected temporarily, at any rate.


William Lyon Mackenzie King: The minister
has spoken of the falling off in traffic on the Canadian National railways, and suggested that there might be a similar falling off on the Canadian Pacific railway. I received a communication to-day stating that quite recently arrangements had been made for sending a number of members of the Royal Canadian Mounted Police and their mounts from Regina to Saskatoon. The original transportation order had been placed with the Canadian National Railways, but was changed at the last moment, it is alleged, by reason of the fact that the government had directed the traffic should be given to the Canadian Pacific Railway. If that is the case, undoubtedly there must be a falling off in Canadian National Railways traffic. I should like to ask the minister whether he knows anything of this matter, also whether it is the government's policy to route government business via the national railways, or if not whether the government gives any direction concerning the routing which shall be followed?


Robert James Manion: My reply to the right
hon. gentleman is that in that connection this government acts exactly the same as did the last one. I must say that the Department of Railways and Canals gives practically all its business to the Canadian National Railways. However I made inquiries after this government came into power which disclosed to me the fact that most of the departments of government, as they did under the late government, divide their traffic about fifty-fifty between the two railways. However the Department of Railways and Canals have taken the position, which I believe was taken by the late government, that practically all our traffic, whether it be freight, express or telegraphic, should be given to the Canadian National system.
In regard to the passage of mounted police and the shipment of their mounts, and any change made concerning the routing which
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would benefit the Canadian Pacific Railway, I have no doubt there was some good reason for making the change. However I cannot make a definite statement in the matter. May I say while I am on my feet there is a great deal of misconception throughout the country in regard to a possible condition implied by the remarks by the right hon. gentleman. In certain newspapers statements are being made to the effect that it has been the object of this government to push traffic over Canadian Pacific rather than over Canadian National lines. I have made a survey of that question, because I am of the opinion that if any government-the late government, this one or any other government-endeavoured to take traffic away from the people's railway and give it to the Canadian Pacific in an unfair manner, that government would certainly be unworthy of the confidence of the Canadian people.
I certainly do not admit that this government is any different from other governments in that regard. This government, like the last government, I presume, when it was in power, has treated the Canadian National as far as traffic is concerned as fairly as possible. I do not suppose anyone would suggest, whatever government is in power, that all the traffic from that government should go to the Canadian National and the Canadian Pacific get none. There may be some who would suggest it, but it has never been done.


Abraham Albert Heaps: Why not?


Robert James Manion: My hon. friend says "Why not." Anyhow I repeat that it has never been done. After all I think the Canadian Pacific Railway should be treated fairly. The people of this country owe something to the Canadian Pacific; it is an institution of which we can well be proud, just as we can of the Canadian National once it gets back on its feet. I do not think it would be the desire of any government-even if such an unlikely thing happened as that my hon. friends should get into power-to give all the business of the government to one railway, I believe they would give some to the Canadian Pacific.


William Daum Euler: They could not do it.


Robert James Manion: The Prime Minister mentions another point, that the Canadian Pacific Railway Company is one of the largest taxpayers in this dominion.


William Lyon Mackenzie King: The railways
would be all one under the existing government. There would be no Canadian Pacific.


Robert James Manion: Well, the railways might
be all one, or there might not be any railways.


Mr. WOODSWORTH:: If I may come
back for a moment to the question raised by my colleague from North Winnipeg (Mr. Heaps); it does not seem to me that the minister has given an altogether satisfactory answer. We are not suggesting that there should not be an arrangement made for economies, but we do say that the government has some responsibility, not merely to those financially interested in the roads, but also to the employees of the roads. And as fas as we can ascertain there is nothing whatever in this legislation, nor in the amendments which are now being laid on the table by the minister, to suggest that anything is to be done in the interests of the men who are to be laid off through the various economies proposed. Now I cannot see how a railroad or a government-this is a little of both-can avoid all responsibilities of an honourable employer. The employees constitute part of this railway system, they have had a great deal to do with the building up of the system, they have been encouraged to do their best work, to stay with the company in order to help build up the system. Now it would seem that they are to be thrown aside, with only the most remote possibility of ever being taken on again. It seems to me that is not fair, it would not be fair in the case of a private employer and is especially unfair in the case of a public employer. I am not urging that these men should be continued in the poistions which they have had in the past, it may be necessary to pool certain services; but since there are to be economies effected, running perhaps to half a million or a million dollars, even in the taking off of a few trains, if these economies are to be effected, it seems to me that something should be done to help the men in the meantime. It may be that ultimately these men will be able to secure some other work, but that is an impossibility under the present circumstances. I talked to some of these men only this last week, publicly and privately. They are at their wits end to know what to do. For instance on these trains mentioned between Montreal and Toronto, I know one man who was transferred from Winnipeg, to be given an opportunity of working on that train. He has now his little house in Toronto; shortly, he expects to be on the street; no connections here in the east whatever other than his railway connection, and no possibility of being able to secure a job on the railway in the near future, much less in the general labour market outside. I do think that under these circumstances the minister should pay some attention to the suggestion that we have made that the

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immediate needs of these men-I will not say entire compensation, that is a phrase which perhaps is liable to a good many meanings- but that the immediate needs of these men who are being laid off should be a first charge on the savings to be effected. I think that is a reasonable proposal. My friend here suggests an equal charge; I do not think that, I think there ought to be a preference given the men. We are trying to provide that the bondholders shall not suffer, but even in bankruptcy proceedings the last stick cannot be taken out of a house and the family left helpless. In most of our provinces there is a certain minimum amount exempt from seizure so that the people can manage temporarily. It seems to me we ought t-o adopt some such policy as that, make some minimum provision for these men. Now is the time to do it, when other amendments are being offered. I hope the minister will take into serious consideration the addition of a clause that will make some provision for the men displaced under the operation of the proposed legislation.


Mr. MITCHELL:: Following the remarks of the two previous speakers on this side, in 1921 a railway consolidation bill was passed in Great Britain which had for its purpose the consolidation of 120 railroads into four systems. The problem that is under discussion here this afternoon naturally confronted the British government at that time. This bill dealt only with private roads, but that government accepted the responsibility, which in my judgment is a responsibility of all governments when legislation is passed throwing on the labour market thousands of men. When my colleague from Winnipeg North Centre (Mr. Woodsworth) was speaking I remarked that the responsibility for the men was at least equal to that to the bondholders. I believe that under these circumstances, where there is going to be a saving of possibly $75,000,000 a year, fifty per cent of that saving should be used to create a fund for the amelioration of the condition in which these unemployed railway workers will find themselves. It is true there is a section of the Railway Act, No. 179 I think, giving protection in certain cases, which will be unaffected by this legislation. But that does not begin to meet the situation. Take the towns in northern Ontario where these men have built homes, built up a community life, which towns will be wiped out by the passage of this legislation, because they are purely railroad centres. They are left in the midst of, may I say, a desolate waste, all that they
have built there will be rendered absolutely unnecessary by the passage of this bill.
I would like to read into the record-it will take some time but it may be useful-the clauses relating to the men who would have been laid off had this provision not been made in the British act. The act is chapter 55, of The Public General Acts of the United Kingdom of Great Britain and Ireland, 1921:
An act to provide for the reorganization and further regulation of railways and the discharge of liabilities arising in connection with the possession of railways, and otherwise to amend the law relating to railways, and to extend the duration of the rates advisory committee.
Third Schedule
Existing Officers and Servants
The following provisions shall apply in respect to persons who at the date of the passing of this act are, and for a period of not less than five years have been, officers or servants of any constituent company or subsidiary company, and who shall not. prior to the amalgamation or absorption of such constituent or subsidiary company, have become pensioners or annuitants in accordance with the rules of any railway pension or superannuation fund of which they may be members, or have voluntarily retired, or have been removed from the service of any such constituent or subsidiary company by reason of misconduct or incapacity (all of which officers and servants are in this schedule hereinafter referred to as "existing officers and servants"):-
(1)	Every existing officer and servant shall, as from the date of amalgamation or absorption. become an officer or servant of the amalgamated company:
(2)	The amalgamated company may abolish the office or situation of any existing officer or servant which they deem unnecessary, and any existing officer or servant required to perform duties such as are not analagous or which are an unreasonable addition to those which as an officer or servant of the company from whom he was transferred he was required to perform may relinquish his office or situation:
(3)	No existing officer or servant so transferred shall, without his consent, be by reason of such transfer in any worse position in respect to the conditions of his service as a whole (including tenure of office, remuneration. gratuities, pension, superannuation, sick fund or any benefits or allowances whether obtaining legally or by customary practice of the constituent or subsidiary company) as compared with the conditions of service formerly obtaining with respect to him:
(4)	If any question arises as to whether the provisions of the last foregoing paragraph have been complied with, the question shall be referred to a standing arbitrator or board of arbitration appointed by the Lord Chancellor, and, if the arbitrator or board consider that those provisions have not been complied with, and that the officer or servant has thereby suffered loss or injury, they shall award him such sum to he paid by the amalgamated company as they think sufficient to compensate him for such loss or injury:
401S
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(5)	Every existing officer or servant whose office or situation is so abolished or who so relinquishes his office or service or whose services are dispensed with on the ground that they are not required or for any reason not being on account of any misconduct or incapacity, or whose salary, wages, or remuneration are reduced on the ground that his duties have been diminished, or who otherwise suffers any direct pecuniary loss by reason ot the amalgamation or absorption (including any loss of prospective superannuation or other retiring or death allowances and allowances payable to his widow or orphan children, whether obtaining legally or by customary practice of the constituent or subsidiary company), shall be entitled to be paid compensation for such pecuniary loss, to he determined and paid by the amalgamated company, subject to appeal to such standing arbitrator or board of arbitration as aforesaid, in accordance with the provisions contained in section one hundred and twenty oi the Local Government Act, 1888, relating to compensation to existing officers, and those provisions shall apply accordingly as if they were herein reenacted with the necessary modifications. For the purpose of this schedule, any solicitor who was continuously retained by a company as their chief legal adviser for the period of five years before the passing of this act shall be deemed to be an existing officer of the company:
Provided that, in the case of any officer or servant who was appointed to his office as a specially qualified person at an age exceeding that at which public service usually begins or of any officer or servant who suffers any loss of prospective superannuation or other retiring or death allowances as aforesaid, such addition may be made to the amount of compensation authorized under the said provisions as may seem just, having regard to the particular circumstances of such case:
Provided further that the expression in subsection (1) of section one hundred and twenty of the Local Government Act, 1888. "the Acts and Rules relating to Her Majesty's Civil Service" shall mean the Acts and Rules relating to His Majesty's Civil Service which were m operation at the date of the passing of the Local Government Act. 1888.
(6) The fee payable to an arbitrator or member of a board of arbitration under this schedule shall be such as the Lord Chancellor may fix. and that fee shall be paid by the amalgamated company concerned.
After the remarks of the hon. member for Winnipeg North Centre I looked up that act, and I -ee no reason why the government of this country should not, within the four corners of this bill, make provision for the protection of those thousands of men who will be laid off in consequence of this legislation which we are now considering. The men in the railway industry are specialists of a kind. They are men who, in my judgment, have made their contribution to the successful operation of the railways, and when they are thrown out they will have to take their place in the unskilled labour market of the country. I say, they are specialists, and they are special-

ists of a type absolutely essential to the proper conduct of a transportation industry such as we have in this country. The minister said there had been a considerable falling off in passengers even in the last week. Well, I believe that you can keep chopping off the limbs of a tree until you have no tree left. I quite agree with him that we are facing in Canada a condition that almost borders on bankruptcy in the next twelve months, but I believe that this condition has been brought about by the deliberate deflationary policy of this government. No one else is responsible for it. I think the government would be well advised to adopt the suggestions made by the small group in this corner of the house, who still have regard for the human element in our railway industry.


Robert James Manion: I do not think the small group in the corner should arrogate to itself sole regard for the human element in the railway industry. Hon. gentlemen directly opposite as well as those on this side have just as much regard for the human element as my hon. friends in the corner.


An hon. MEMBER:: More.


Robert James Manion: Some hon. gentlemen say more, but certainly as much. The question is worthy of consideration, but I would point out to my hon. friend that it was fully argued the other day, when an amendment was moved by the hon. member for Winnipeg North Centre and ruled out of order. I do not admit the huge figures mentioned by some speakers with regard to the numbers of men who are likely to be laid off in consequence of cooperation between the two railways. This parliament meets every few months. We shall be out of session only seven or eight months, at most ten months, before parliament meets again, and if after the passing of this legislation some amendment were found desirable, it could then be made. The passing of this bill is not the last word that will be said in this matter. It is possible that the act may require amendment. It is new legislation and, like most acts of parliament, it may require attention later on. If it is found that as a result of cooperative arrangements between the two railways amendments are necessary, they can be dealt with at the next session, although I make no promises as to what will be done-I do not wish to be misunderstood in that regard. At any rate, at the present time the government takes the position that we should pass this act and give the new trustees an opportunity to function, and the new arrangements a chance to produce results

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which we hope will tend to retain men who have been at work; and if it were found later on that something had to be done because men had been treated unjustly, because of the passing of this bill, then the matter could be brought up at the next session of parliament and dealt with at that time as the government of Canada and the House of Commons might see fit.


Abraham Albert Heaps: I am fully in agreement
with what the minister has said, but perhaps I might put my point in another way. There are a large number of people who have invested money in the railways of this country and who live in the United States and other parts of the world. These people draw dividends from the securities which they hold.


Robert James Manion: None of them are drawing a cent of dividends at the present time.


Abraham Albert Heaps: They are drawing interest.


Robert James Manion: There is quite a difference between the two.


Abraham Albert Heaps: As I understand it, a large
part of the Canadian Pacific securities are in the form of bonds.


Robert James Manion: About half.


Abraham Albert Heaps: Interest is being drawn upon
almost the total amount of the Canadian National indebtedness and these securities are held largely in the United States and Great Britain. I do not think more than fifteen per cent of the securities of the Canadian National and Canadian Pacific railways are held in Canada. These security holders draw interest amounting to millions of dollars. Why should we not follow 'the suggestion of the minister and let these people wait until next year so that we can give relief to our own Canadian people who are out of work? Let us put the boot on the other foot and see if it would not work just as well.


Robert James Manion: Last year the Canadian
Pacific Railway barely earned its bonded indebtedness. Bonds are first mortgages and how could that company say to its bondholders: We do not intend to pay you part of the interest which is due. The bondholders would at once foreclose upon the railway and put it into liquidation, just as has been done with many of the railways in the United States. It is quite true that a larger proportion of the indebtedness of the Canadian National Railways is in the form of bonds than the indebtedness of the Canadian Pacific Railway; it is true also that the Dominion of Canada has guaranteed these bonds and the only way that the payment of 53719-254
interest could be avoided would be for this country to repudiate its indebtedness. So far, Canada has not decided to take that step. Last year the Canadian Pacific barely earned enough to pay the interest upon its bonded indebtedness while the Canadian National Railways was $53,000,000 short of paying the interest upon its bonded indebtedness. My horn, friend, the other members of this committee and the taxpayers of this country are the people who are paying the interest upon this bonded indebtedness. We cannot refuse to pay that interest unless we choose to repudiate our debts. I think these facts should be kept in mind by hon. members rather than the bringing up of the bogey that employees of the railways are to be thrown out on the streets to starve in order that the bondholders may receive their interest. We are looking after the interests of the bondholders simply because we cannot help ourselves. As far as I am concerned,
I would prefer to see the indebtedness of the Canadian National Railways in the form of securities upon which dividends would not have to be paid unless earned. Unfortunately, in the wisdom or lack of wisdom of all governments, at least since 1919, it was decided that this indebtedness should be in the form of bonds. Until this country decides to repudiate its indebtedness, therefore, it cannot refuse to pay the interest upon these bonds.


Abraham Albert Heaps: The effect will be the laying
off of a vast number of men.


James Malcolm: What about sharing the
work?


Abraham Albert Heaps: That is my interpretation of
the effects of this bill. A large number of men will be thrown out of employment as the result of the consolidation of services, as has been demonstrated by the consolidation of the services between Montreal and Toronto. The principal saving has been in the form of wages and the use of equipment. The minister says that we have to meet our obligations to these security holders, but I contend that we should choose between our own Canadian people and these security holders, the big majority of which reside outside of Canada.


Robert James Manion: How can we refuse to pay
the interest upon this bonded indebtedness without repudiating our debts? If my hon. friend will tell me how we can choose in favour of our own people and keep them in employment rather than to pay the interest to the bondholders, I should be very glad to hear any suggestion he has to offer.

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


James Shaver Woodsworth: What would happen if this legislation did not go through?


Robert James Manion: The indebtedness of the
railways would probably increase.


James Shaver Woodsworth: All we are suggesting is that one of the conditions of holding down this indebtedness shall be that the men must be looked after.


Robert James Manion: If that is done we will be taking away the chance of economy. It does not matter very much whether you use money to pay men who are not required or to pay interest upon securities. It was the opinion of the Duff commission, which opinion I think is shared by all reasonable Canadian people, that these two railways must economize. It was felt that if they did not do so, the whole financial structure of the country would be endangered.


William Daum Euler: What I have to say, I say
with a good deal of hesitation because I know it will not meet with the approval of certain hon. members of this committee. I think most hon. members know that I have always been in favour of the public ownership of railways but I have always felt that a railway, even though publicly owned, could not be successful unless it were conducted as much as possible as a private business would be conducted. I have every sympathy with those who may be thrown out of employment by the measures of cooperation between the two great railways which may be possible under this bill, but if we are going to operate the national railways upon the principle to which I have just referred, we cannot follow the principles laid down by my hon. friends to my left, for whom I have every respect, and operate the^ railways mainly for the purposes of providing employment. The railways are being run by the Canadian people-I am referring to the Canadian National Railways-for the purpose of giving efficient railway service at as low a cost as possible and the employment of men to run the railways is incidental in a measure to what I have just enunciated. I agree with the minister when he states that unless something is done in the way of the elimination of waste, the railways will be in a perilous position and the whole financial structure of the country may be endangered. It becomes the duty of parliament to do whatever is possible to reduce the expenses of running the railway as a purely business proposition. There is one point to which I would direct the attention of my hon. friends; if this government is going to differentiate between classes of employees, this country will be entering upon a very big proposition. In the 
industrial and other centres many people are being thrown out of work because of the development of conditions in this country. In the city of Kitchener we have a great many furniture factories and to-day one of the largest factories is giving its employees only nine hours work per week, and only half of the usual number of employees are at present employed. This merely shows that if you are going to differentiate so far as railway employees are concerned, you will be entering upon a very difficult course. If we are going to say that because the employees of the Canadian National Railways are working for the people of Canada the government of Canada has a special duty to perform in looking after them when they are thrown out of work, I think it almost necessarily follows that we should enact legislation which will delegate to employers in other lines of industry the duty of looking after their employees when they are out of work. If we are going to adopt the principle at all it must be adopted in a general way. Then we get into an entirely new field, and what I am trying to say is this: I think in fairness to the country we cannot set the railway employees apart from other working men. If that is done with regard to the Canadian National, and the company is to carry the loss which otherwise would not be the case if some men were laid off, how can the company compete with its great rival the Canadian Pacific. I think you would have to enforce that principle also in connection with the Canadian Pacific, as you would have to enforce it in connection with other lines of industry. I hope I am not misunderstood; I have every sympathy with the employees of the railway company. I will say that if the government feels that by reason of the economies effected through the laying off of men by the national railways it is the duty of the government to look after those men, I am absolutely in accord with that position, but the burden should not be thrown upon the company as a business proposition. That is my point of view.
Something has been said as to whether the business of government departments should be given to the Canadian National Railways, and I am afraid in that regard I shall have to disagree with the minister. I believe that the Canadian National, which is owned by the Canadian people, should receive all the business the Canadian government possibly can give it. That sounds reasonable to me. Let us say a man has two businesses. He is a contractor and is putting up a building in one city, while his other business is the manufacture of construction material, such as

C.N.R.-C.P.R. Bill
bricks. Would it not be absurd for that man to go to one of his competitors in order to buy the bricks necessary in the construction of the building?


Mr. EDWARDS:: Pretty far-fetched.


William Daum Euler: It is not far-fetched at all;
surely we should patronize ourselves first. If you want to put it this way, charity begins at home.


An hon. MEMBER:: What should we do
as individuals ?


William Daum Euler: This is a free country, and
an individual can patronize any company he pleases. We ought to patronize our own line. As I said at the outset, Mr. Chairman, I know a good many hon. members will disagree with me on that point, but in the past I have always taken that position.
A good deal has been said with regard to amalgamation. I can only repeat that I do not believe this bill will do all that should be done. As many ihon. members know, I always have been in favour of complete amalgamation, and in spite of the fact that the Prime Minister repeated many times the slogan " Amalgamation never; competition ever," I think that was an unfortunate statement, and I believe in due course he will have to change it.


Richard Bedford Bennett: Do	you believe in
amalgamation?


William Daum Euler: Yes; I believe in amalgamation under public ownership, not under private ownership. I think we will never get the full measure of saving and economy that is possible until we have complete amalgamation. I did not rise to make a speech on amalgamation, but that has been my position in the past, and I may as well make it clear now. I am in favour of the bill if certain amendments can be introduced, though I think it has a great many weaknesses. I am in favour of it because it goes a certain distance in the direction I should like to see it go, that is, in the saving of money in the operation of the road. Something has been said about the sharing of work. I am inclined to think that something more might be done by the railway people themselves so that the work which is available might be shared a little more equally among those who have been working for the company.
I have said perhaps a little more than I intended, Mr. Chairman, but once more I should like to make it clear that the railways must be run as a business proposition. If by reason of that it becomes necessary, unfortunately, that some men no longer may be employed, that cost should not be saddled 53719-254 J
upon the company; it should be borne by the whole country. There you enter upon a principle which is a great deal wider than simply taking care of those who lose their employment with the national system; you will have to extend it to all lines of business in Canada, and perhaps we will come to that yet.


Mr. POULIOT:: I listened carefully to the hon. member who has just taken his seat, and I quite agree that the railways were built for service. The hon. gentleman added that they were not built to create employment, but neither were they built to create unemployment. This is an important fact. May I add that I cannot imagine any locomotive being operated by robots. Men are essential to the operation of a railway, but we must face the situation as it is and make the best of it. Many men have worked for the railway all their lives; their children have followed them, hoping that some day they might take the places of their fathers or grandfathers. While Sir Henry Thornton was president of the Canadian National he very often paid deserved tribute to his partners, the employees of the road. He understood that no railway could be run without the help, the loyalty and the devotion of the men employed by the company.
There is another point to which I should like to direct attention. In 1928 and 1929 the Canadian Pacific sold bonds to their own employees; these men were canvassed to invest their life savings in Canadian Pacific bonds. To-day, because of the decrease in traffic, those bonds do not return any interest, and as a result these employees are suffering because of their loyalty to the company. That loyalty did not impose upon them the obligation to buy railway bonds; that loyalty was shown when they did their full duty to the company. But they did more, and as a result to-day many of those men have lost their jobs and are receiving no return from their investment.
This only goes to emphasize the importance of having all the information available when discussing this question. I was very pleased to hear the hon. member for North Waterloo refer to the discrimination shown as between different classes of employees. It is most important that complete figures should be given; we should know how many engineers, firemen, conductors, trackmen, station agents, men working in shops and men working in the yards have been set back. What are the records of these men? We should have those figures for the Canadian Pacific as well as for the Canadian National. I think the Minister
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of Labour should be furnished with full information with regard to these men so that employment may be found for them elsewhere if there is no work on the railways. That is why I direct attention to the fact that nothing can be done for the railways unless we get the proper information and nothing can be done for unemployment unless we get all the facts. The government should be able to give the whole facts. We have already been given some figures which show the extent of the trouble, and we must see to it that a remedy is provided. That is why I ask for the information. I know that the Minister of Railways is well disposed. We cannot proceed to pass legislation without proper consideration. This House of Commons has been considering this bill for more than two weeks, and it would really take months of study by a group of members of the House of Commons to oome to a definite conclusion on the subject and bring down legislation which would meet all the necessities of the case. In a few days it is impossible to have this House of Commons properly consider such important legislation having such far-reaching effects on Canadian life from ocean to ocean. The legislation needs to be studied in detail. The legislation as first drafted, by whom I do not know, was so poor that the Right Hon. Arthur Meighen, leader of the government in the Senate, would not accept it. It was such poor legislation that he did not want to attach his name to it, and the legislation was changed in the Senate. It is not yet in its final shape. I sympathize fully with the Minister of Labour, but I also sympathize with all the men who have been let out of employment. I do not say that it is the fault of the minister, but I say that it is due to some of the policies of this government that the railways now have no traffic and that Canadian trade is curtailed. The railway business is only one side of Canadian life. Everything must be taken into acoount. There is trade, traffic, business. No railway can exist without such business. There must be an understanding of the whole situation, of all the factors involved. Although Lord Ashfield may be a good man, neither he nor another gentleman from the United States nor another gentleman from Toronto nor another gentleman from Montreal sitting together on a commission can decide such an important question as the railway question in this country. They can spend some time investigating the situation, and they can submit a report giving their views. But does the government say, when it gets 'the views of the commission, these are our views? The government says: Here are the views of the 
commissioners, and we accept them. The commissioners are the motive power of the government.
May I take this opportunity also to say this? When I see railway men out of jobs, I think of those who made money during the war at the expense of the people. We know of the immense profits that they have stolen from the people of this country, and instead of forcing them to pay back what they have stolen we see one of them, Joseph Flavelle, appointed a commissioner, and he is called an able business man. I think of the poor men who have nothing to eat and no work to do and who have spent their savings, and I get indignant when I think that their fate is decided by a common thief. I get indignant about that commissioner, about that war profiteer, who 'has been appointed with honest men on the transportation commission. This is a thing that no one with a head on his shoulders can understand. It must be explained to this country how the fate of these poor men, honest, hard-working, who have devoted their lives to their country in the work they were doing, should be decided upon by a man who is a millionaire, a war profiteer-lord bacon.


Robert James Manion: Mr. Chairman, before anybody else gets into the discussion, may I remind the committee that we have been on this bill now in the neighbourhood of two weeks and we have only passed two or three definitions. The whole discussion to-day, including my own remarks in reply to the hon. gentleman who brought up the subject, has without doubt been out of order. The clause now before us is paragraph (h) of clause 3, defining "Tribunal." May I suggest with all due deference that after two weeks of discussion by all sides of the house there has been a full opportunity for consideration of the principles of the bill, and the discussion which has taken place this afternoon should,
I think, have taken place on the second reading. I suggest that we try, if at all possible, to stick to the clause under consideration.
I do not wish to limit discussion in any way, but I should like to see some progress made on the bill, and I think the whole house wishes it.


William Lyon Mackenzie King: The bill ought to have gone to a committee of this house; that is the whole trouble.


Richard Bedford Bennett: That is an excuse; it is not fair.


William Lyon Mackenzie King: It ought to have gone to a committee of the House of Commons. The method that has been adopted

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in regard to this bill it has been suggested may be followed by my right hon. friend in connection with other bills. It is suggested that they be dealt with in a different manner than is customary in this house. I think that they should go to a special committee, and I hope that my right hon. friend will reconsider any decision of that kind with respect to the future because the procedure of this parliament is being departed from by my right hon. friend to far too great an extent.


Richard Bedford Bennett: The Conservative tendencies of my right hon. friend do him credit.
I am glad to see them and his desire to cling to precedent, and I am not ungrateful to him for reminding me that I never feel bound by hoary precedent or hesitate to depart from it if by so doing I can advance the interests I have at heart. This bill is not being advanced by the discussions that have been taking place in this house. The right hon. gentleman suggests that the bill should have gone to a committee, but it is quite apparent from what has transpired during the last two weeks that a deliberate effort has been made to prevent the passage of this bill.


William Lyon Mackenzie King: No.


Richard Bedford Bennett: I do not say by the right hon. gentleman. I said that a deliberate effort had been made, not by the right hon. gentleman because he has not said very much during the last two sessions, nor have the leading members of his party during the last session, but let anyone look at the debates! I may say that a perfect stranger looking at the Hansard drew my attention to it the other day and said, "The rules of your house certainly are very strange." To think that hour after hour we have been listening to what has taken place this afternoon-I have heard it five times, and I have not heard it all, except on two occasions. We have listened to a speech this afternoon which consisted of an attack against an eminent Canadian. It is not a new speech in this house, but since the war it has not been made so frequently. It does not do any credit to the Liberal party nor to the gentleman who made it, to attack in this house a man who is outside, without any opportunity to say a word in reply, and who was appointed to this commission, not from any desire to serve upon it, but at the earnest request of the people, not simply one road but both roads, who thought by reason of his great experience and great business capacity that he was best qualified to arrive at sound conclusions with respect to the question, a gentleman who rendered a service gratuitously to this country, without any desire to serve any selfish purpose. To make such an attack in this house upon such a man is certainly not encouraging to those to whom we look for public service. To be attacked in this wray in this house, and referred to in the terms used, charged with being the type of men we have heard they were, is not conducive to the accepting of public service by men who have by their great ability and talents made great business successes in this country. I mention that because I do not think that an attack of that sort is advancing the cause that we have at heart.
It is said that the trouble is that this legislation did not go to a committee of this house. The fact that it was considered by another chamber, in one of its committees, is a good reason why it should not go to another committee of this house. An ample opportunity was given in the Senate committee to consider this legislation. There may be differences of view as to whether that is sound or not, but it is clear that in the light of the speeches we have heard they have no reference to the bill itself. All the consideration in the world before a committee would not assist the bill, because the character of the speeches we have heard would indicate that they are aimed against the measure as a whole-to	destroy it. The amendments moved would destroy it. Therefore any consideration in committee would not help it. The effort has been to destroy the measure as a whole. I think any one will agree that the minister has been exceedingly courteous and patient in his endeavours to answer any inquiry, relevant or irrelevant. He has considered carefully, at the earnest solicitation of hon. members opposite, the questions of amalgamation and the power of trustess. All those points he has endeavoured to meet, and has met admirably with the amendments he suggested. If the committee says that it is going to cause all the delay possible in the enactment of the legislation, the government cannot help it.


William Lyon Mackenzie King: No one says
that.


Richard Bedford Bennett: You do not have to say it in terms; nothing has to be said in terms; all you have to do is act. I do say, with the wide experience the right hon. gentleman has had, if he will take Hansard from the day the bill came into the house and read it-no, I should not impose that penalty upon him- but if he will look at Hansard from the day the bill came into the house until to-day he will find it very difficult to recall any occasion, with the exception of possibly one,
C.N.R.-C.P.R. Bill

in the last seven years in which there have been the same sort of reiterated statements directed towards the principle of any measure -not the details of the clauses under consideration. I do urge that if the committee desires to attack the measure, the way to do it is to move that the committee rise, and that will be the end of it. If we do not desire to kill the bill, let us consider the clause before us with any amendment there may be to it. Anything I have said in that connection I say in the best temper in the world, because as far as I am concerned I can sit here for the rest of the summer, if the house can. If the numbers in the committee become small we will manage to keep a majority in some way.


William Lyon Mackenzie King: I speak only
for the official opposition. With the exception of an occasional speech here and there, to which some exception may be taken, our discussion has arisen out of our difficulty to understand the purpose of the government with respect to certain provisions of the legislation. Our questions have arisen in connection with the .meanings of certain sections and I say now, as I said before, that when the minister began to make explanations we came to have a view of the purposes of the government with respect to certain sections entirely different from what we had when the bill was first presented, or during the discussion on second reading. One of the amendments the minister has brought in ito-day has thrown light on the matter. We have had no desire in tire world to obstruct or to delay but, for the most pant, so far as the Liberal opposition is concerned, we have been seeking to get at the exact significance of the legislation and its probable effect whenever it may come into force.
With regard to the important matter which for the most part has been discussed to-day, I do not believe exception can be taken to a very keen desire on the part of hon. members, while the bill is before the committee, to speak on behalf of those men who are going to be thrown out of employment as the result of greater cooperation between the two railways. We should give special consideration to this phase if it is at all possible so to do. The matter has to be viewed from all sides. From one point of view, the question of employment is 'Certainly one of the most important problems, if not the most important, with which we have to deal. If the bill involves throwing men out of employment it is only reasonable that every possible step should be taken to help meet such a situation until some further adjustments may be made.


Abraham Albert Heaps: I do not know whether the house has considered the bill for two weeks, or not-


Mr. YOUNG:: Off and on.


Abraham Albert Heaps: This is the fourth day the bill has been before the committee. On two former occasions when the bill was before committee, I was away.


Robert James Manion: We considered the second reading for about five days.


Abraham Albert Heaps: That was a general discussion. But tjiis is the first time we have been able to get down to details, and I do not believe the Prime Minister was fair when he pointed to this corner of the house and suggested that we were delaying unduly. I believe we are justified in exercising all the latitude given us to speak in the interests of the men who would be affected. By the provisions of this bill men who have been in the services of the railways for twenty or thirty years in the very near future may find themselves without means of subsistence. We all admit the greatest problem parliament has to face is that concerning unemployment, and if we do take a little extra time discussing possible unemployment which may arise from the passage of the measure, I believe we would be only fulfilling our duty to our constituents and to parliament itself.


Samuel Gobeil: I do not believe there is any doubt that a good part of the discussion this afternoon has been out of order. In that connection may I read subsection (2) of standing order 58:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
No doubt much of what has been said today is not relevant to section 3 subsection (h) of the bill which reads as follows:
"Tribunal" means an arbitral tribunal constitute! pursuant to part III of this act.


Ian Alistair Mackenzie: I shall discuss the subsection and the amendment moved by the hon. member. In reply to the strictures placed upon the committee by the right hon. Prime Minister I wish to point out that one of the amendments moved in committee was that moved by the hon. member for West Lamfoton, so that the provisions of section 23 of the Canadian National Railways Act would have effect. We have been told about a wonderful discussion in another place in connection with this bill. I venture. to suggest that the Senate committee never brought out the points which have been raised in this committee in regard to the power of the railways in Canada in connection with the abandonment of branch lines. The dis-

C.N.R.-C.P.R. Bill
cussions we have had in this committee have centered around the powers of the board of trustees in connection with the abandonment of branch lines. As the result of all that discussion which originated from this side of the house the Minister of Railways has to-day brought down an amendment which meets our wishes and protest in regard to the abandonment of branch lines.
I suggest -to the Prime Minister if ever opposition was justified to 'the details of legislation as it left the Senate and was presented to this House of Commons, it has been justified in this instance, and that the opposition have been acting quite fairly in the last four or five days the bill has been before the oommittee. Everything we have pressed for, so far, has been given by amendments the minister himself has brought down. I repudiate the assertion made by the Prime Minister that there has been a waste of time. If there has been any waste of time, the government has been responsible for it in not having taken the oommittee into its confidence in connection with amendments. By our aggressive criticism we have forced them, in part at least, to move the amendments we wanted.
I repeat the request we have made on several occasions that if the Minister of Railways has any further amendments which he will bring down in future sittings, let him table them now so that, the committee may give them careful consideration. I protest against being called an obstructionist, or in fact against any one on this side of the house being so referred to.


Richard Bedford Bennett: The word was not used.


Ian Alistair Mackenzie: But the
implication was most obvious. It was referred to by my right hon. friend the other day when he spoke of the useless, involved, legal discussion dealing with that veTy section 23. I happened to take some part in that discussion, and I am amply vindicated this afternoon, because what we sought for has been given by the Minister of Railways. I also protest against the suggestion that because a committee of the other house considered this bill, the consideration has been complete. We never heard about the fact that the Canadian Pacific Railway could abandon branch lines without the consent of the Board of Railway Commissioners, or that the Canadian Northern and 'the Grand Trunk Pacific could abandon branch lines without the consent of the Board of Railway Commissioners, from the discussion in the committee of the Senate. We dragged that information out of the Minister of Railways in this oommittee. I venture to suggest, Mr. Speaker, that if this bill is worth anything at all whan finally passed by this house it will be as a result of the careful and considered criticism offered by hon. members to your left.


William Richard Motherwell: Mr. Chairman, it is some time now since the Prime Minister gave us one of his little curtain lectures to which we 'have become accustomed during the past two or three years, and perhaps it was to some extent due from his standpoint. Had the chairman ruled an hour and a half ago that we were out of order probably we would have kept a little closer to our knitting. As a matter of fact the Minister of Railways admitted that not only the committee but he himself was out of order, so perhaps we are all equally guilty. I think I asked two questions that took a couple of minutes, so I do not feel particularly guilty. And if we have taken up one afternoon and part of another in committee we have some amendments and proposed amendments to this bill which are worth it, and we hope to get still more. So we are encouraged to go on and make suggestions. The Prime Minister says that the Duff commission, composed of eminent men, had spent, not a whole afternoon, but nearly a whole year-at intervals of course-in producing the report on which this bill is based. We a'-e going to swallow it all in two afternoons! We are responsible to our constituents. The. people are not going to ask me, What did the Duff commission think about it? What did the Senate committee think? They are going to hold me responsible. My constituents look to me, not to the Duff commission nor even the august Senate. It did good work, and so did the Duff commission, but after all we are the representatives of the people, who, I still believe, own this great railway although it- is claimed by some to belong to the bondholders. In the last analysis we are the ones who will be held to account as to what is being done with it, as well as the government. The Prime Minister having settled it all in his own mind, everything shaped up fine a whole year of propaganda through the press to prepare public sentiment, a commission sitting to help formulate it, educational if you will, and the Senate making some important amendments-why can we not let it slide through without so much talk? Of course the Prime Minister is disappointed. But he will have to take it out in disappointment. We would be like the minister himself, abrogating our duty, if we took any other attitude. The government themselves apparently want to wash their hands of the administration of this road, handing it over to a board

C.N.R.-C.P.R. Bill
that they themselves appoint and to an arbitral tribunal consisting of* the chairman of the Board of Railway Commissioners. I am sorry to differ from the Prime Minister for he has not done too badly in his unusually mild strictures. He expresses disappointment, but just the same we have to discuss this bill in order to improve it further and now I have taken about five times as much time talking about the objection the Prime Minister made as I did in asking my two original questions. But he himself is the author of this delay, not the opposition.


Samuel Gobeil: I was not aware of the amendment until a few minutes ago. May I remind the hon. gentleman who has just spoken that I was under the impression he was out of order. This amendment reads:
That all the words after the word "means" in line 10 shall be deleted and in place thereof shall be inserted the words "Board of Railway Commissioners for Canada."
I have no objection to hon. members answering the Prime Minister, three of them have already done so, but may I ask the committee to discuss the amendment.


William Lyon Mackenzie King: In view of
what the Minister of Railways has said, that he proposes himself to move an amendment to a previous section, which will ensure the Board of Railway Commissioners considering in the first instance any abandonment of lines, I think with the leave of the house the amendment might be withdrawn.


Robert James Manion: That will be satisfactory
to the government.


Frederick George Sanderson: Mr. Chairman, I would like to go back to the question I brought up about half an hour ago in regard to the Canadian National lines in the United States.
I do not think the explanation the minister gave me was very clear, I do not quite understand it. I find that the Canadian National system, which is owned by the taxpayers of this country, has almost 2,000 miles of railway in the United States.


Samuel Gobeil: Order.
This has nothing to do with the amendment.


Frederick George Sanderson: The amendment is
withdrawn, I understand.


Samuel Gobeil: Is it the desire of tire committee that this subamendment be withdrawn?
Amendment withdrawn.


Frederick George Sanderson: Then, Mr. Chairman, If I am in order- I would like to continue.


Robert James Manion: I do not wish to suggest
that the hon. gentleman be limited, buit may I suggest that we stick to the clause under debate? The question the hon. gentleman is asking at the moment has nothing to do with the tnbumal. When some appropriate clause comes up if the hon. member will ask his question then we will explain.


Frederick George Sanderson: With all due respect, I have no desire to prolong the discussion-


Samuel Gobeil: Well, the hon. gentleman must stick to the subsection unless the committee desires otherwise.


Frederick George Sanderson: My contention is that my question does relate to this subsection, because it refers to the tribunal and also to the trustees.


Samuel Gobeil: We have not come to tire trustees yet.


Jean-François Pouliot: On a point of order, Mr. Chairman, I submit that we are discussing now a bill which is based on the report of the commission. According to the statement made in this house by the Minister of Railways the bill we have now before us has been drafted mostly in accordance with that report. The minister can contradict me if I am wrong. Now may I point out that on every clause of the bill we can discuss what has been said by the commissioners on that clause, and we can discuss the person or pedigree of any commissioner, and be within the rules. I will not impose on the house, but may I say this, that I am the most amenable man in the world when I am supplied with the information I am entitled to every time I ask for it. And may I pay this tribute to the hon. gentleman who is Minister of Railways, that very often I have put questions on the order paper and have been courteous enough [DOT]to telephone to him beforehand, but the Prime Minister blocked the answer every time.


Some hon. MEMBERS:: Order.


Samuel Gobeil: Order.


Jean-François Pouliot: That is why the Prime
Minister is the last man who can blame us for seeking information on the bill.


Samuel Gobeil: I cannot see the point of order. Does the section carry?


Frederick George Sanderson: Mr. Chairman, I am
speaking now on subsection (j).

[DOT]1027
C.N.R.-C.P.R. Bill


Samuel Gobeil: 
Robert James Manion: My hon. friend will be
quite in order on subsection (j), if 'he will wait a minute or two and let the two preceding subsections pass.


Mr. McKENZIE (Assiniboia):: I would like to ask if the tribunal will have power to deal with all services, such as the closing of railway stations and matters of that kind?


Robert James Manion: The tribunals deal only with disputes. It is the hope of many that there .may be no tribunal; in other words, that the railways will be able to cooperate and so obviate that necessity.


Mr. STEWART (Edmionton):: The minister does not propose offering an amendment with regard to the constitution of the tribunal?


Robert James Manion: No. There is one amendment but it has no reference to the constitution of the tribunal. There was a suggestion with respect to the power of the chairman of the tribunal in the event of there being five on the tribunal, the purpose being to give him a somewhat more limited power. However, we can deal with that when we come to it. It does not affect the question at issue now.


[Stage Direction]
Subsection agreed to.
On section 3, subsection (i)-Trustees.
Charles A. Stewart: I listened with a good deal of interest to the statement of the Prime Minister with regard to the changing of the name from directors to trustees. Personally I favour the appointment of three, but I hardly understand why the change in nomenclature is made. If it is done to indicate that the national railways are in receivership, then of course trustees is the appropriate term. As that is not the case however, the property being after all the property of the government of Canada in the name of the people-at any rate they are guarantors of all its obligations-I cannot understand the reason for the substitution of trustees for directors. Personally I should very much prefer a change in the definition, to read directors rather than trustees. I will not take up the time of the house elaborating the question now, but I should like to know why this change has been made. What particular purpose is being served?


Richard Bedford Bennett: The word directors has a well defined meaning. The law usually requires that directors shall be shareholders,
and there is a provision in our statute that obviates the necessity of the directors of the Canadian National Railways holding shares. The term directors means those who direct. As this property is in the financial condition in which it is, but for the fact that the dominion has guaranteed the securities it would be in the hands of a receiver. That is the point I endeavoured to make, and I repeat it: But for the fact that this country, so long as it remains solvent, cannot permit the Canadian National Railways to go into receivership, we having guaranteed its obligations, it would be inappropriate to use the Word receiver, and therefore trustees carries the exact sense that attaches to the word, namely, those who are charged in trust with the responsibility of carrying foiward the undertakings that are mentioned in the statute itself. The word was one which it was difficult to obtain, so I was told by the commission. It is not easy to find a word with the exact shade of meaning. Receiver would carry an impression as to the insolvency of our own country.


Ian Alistair Mackenzie: The word was recommended in the Drayton-Acworth report.


Richard Bedford Bennett: I thank my hon. friend for reminding me of that fact. In choosing the right word to express the meaning, difficulties are met with for reasons which I think will be apparent to every lawyer. I agree with the hon. member for West Edmonton that, unless he has followed the legal side of it with great particularity, the necessity for using some word other than directors might not be so obvious. Neither the word directors nor the word receiver being quite adequate under the circumstances, the use of the word trustees sufficiently indicates the legal position of the three gentlemen to be appointed.


Charles A. Stewart: Is it possible for this utility-perhaps that is the proper expression-under present peculiar circumstances, ever to be in the position of receivership so long as Canada is solvent? I can only speak from the point of view of a layman, but I do not think the word that is being used convejrs the right impression. The gentlemen who are going to undertake the control and administration of the road are to be designated trustees, and personally I have very great objection to that. I do not think that any good purpose is being served by changing the name, because under no circumstances, so long as Canada is solvent, can the Canadian National Railways be declared to
[DOT]102S
C.N.R.-C.P.R. Bill

be in bankruptcy; if that were the case, then the dominion itself would be bankrupt. For that reason I take very strong exception to the change. I do not think the proposed definition is applicable to the Canadian National Railways as such.


James Malcolm: The expression trustee was first used I believe in connection with the administrators of our national system, in section 31 of the Drayton-Acworth report. Personally I have no objection to the term, but I do agree with my hon. friend from West Edmonton that it is not a happy expression. A trustee is someone who holds something in trust. We are not turning over the property to these trustees; we are simply engaging them to administer it. There is no transfer of assets to these men as is the case when a private business goes into liquidation and a receiver is appointed, or when there is a trustee for its administration. I do not think it makes a great deal of difference whether we call them trustees or not, but the Prime Minister's point is that, were the national railways a private corporation, it would be in the hands of a receiver, being administered for the shareholders; and as the road is in that unfortunate position it is necessary for the shareholders, who after all are the people of Canada, represented by every member in this House of Commons, to appoint trustees in perpetuity. I do not want to anticipate any of the sections of the bill. We have been dealing with sections that have been passed, but when we come to section 4, if I may refer to it for a moment, it will be seen that we shall have to give the governor in council power to dismiss all existing directors, and the right to appoint in the place of directors certain men who are cited as trustees. Section 4, subsection 1, would indicate that the directors of the Canadian National Railways, who have been directing, are to be succeeded by some other men who are to do something more than direct. I cannot imagine, but perhaps the Prime Minister or the Minister of Railways can explain, what these men are to do that has not been done by the directors. Certainly the financial problem is not facing them; any deficits they have are guaranteed by the government. The me problem that does seem to face them is ;he problem of the economical administration af the railways in order to reduce deficits and if possible to produce a surplus. So that in so far as the name is concerned, it matters little; what they are engaged for is the purpose of efficient management of a public utility which is owned by the people of Canada and 
which is not being handed to them in trust. They could be called commissioners. As trustees they do not own the property, nor are they asked to hold the property in trust. They are not even asked to hand the property back after they have placed it on a basis of efficient administration. A receiver is usually appointed for. one of two purposes: either to liquidate and wind up the business or to administer it more successfully than it has been, and when it is in good shape to hand it back to the shareholders. That is not the intention under this act, because these men are being appointed in perpetuity. You can call them trustees or directors, but I contend that their function is practically the same as the function of the previous directors.


Richard Bedford Bennett: I do not intend to
trespass too much upon the time of the committee, but the hon. member for West Edmonton (Mr. Stewart) has asked a question to which I will at once give the answer: It is possible to appoint a receiver of an enterprise the securities of which are guaranteed by the Dominion of Canada. In the case of the Grand Trunk Pacific Railway, a statutory receiver was appointed in the person of the Minister of Railways. It would be possible to appoint a reeeiver for the Canadian National, despite the guarantees. One reason why it would be difficult in practice to carry it into effect is the fact that the system consists of various enterprises linked into one whole. Without an enormous amount of accounting effort, it would be difficult to establish the insolvency of one particular section as distinguished from another. One piece of road, the bonds of which might be guaranteed by the province of Alberta, might be producing an operating surplus, while another, the bonds of whioh were guaranteed by the Dominion of Canada, might be operating with a great deficit and the two linked together might show a deficit. It would require a tremendous amount of accounting effort, such as took place at one time in connection with the properties in Manitoba and Saskatchewan, to determine those facts. I answer the question by saying:	Not only is it
possible to appoint a receiver of a property the securities of which are guaranteed by the Dominion government, but it has been done in the case of the Grand Trunk Pacific Railway, the Minister of Railways being appointed as the statutory receiver.


Charles A. Stewart: That was
when they were taking it over from the private owners.


Richard Bedford Bennett: Taking it over was the
result of the receivership.

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


Charles A. Stewart: The difference now is that the roads have been taken over.


Richard Bedford Bennett: Quite so, but it is still
possible to put them into receivership because they cannot pay their fixed charges. I suggested some days ago that the legal position of the security holders would be that the title would stand in the name of the taxpayers of Canada. In reality the roads were built by those who loaned the money with the guarantee of the people of Canada that it would be repaid. Inasmuch as an operating surplus has not been earned and the properties have been in default year after year, they would pass into the hands of a receiver but for the guarantee. We are endeavouring to continue the existing condition rather than to create a receivership, the receivership not being for the shareholders, as suggested by the hon. member who has just taken his seat, but for the security holders. I think that is what he intended to say.


James Malcolm: Yes.


Richard Bedford Bennett: These security holders are scattered all over the world. I should like to answer the question asked by the hon. gentleman. The purpose alleged by the commission was to remove all possibility of political control of the enterprise. When I use the word "political" I use it in a large sense as indicating what the commission referred to as the pressure which is sometimes exerted, not by parties but by communities, and which constitutes political pressure to bring about a given result. The effort was to remove that. I think any of us would in private conversation admit that the members of the board of directors of the Canadian National Railways have all been political appointees. If the committee were to review the history of this board from the time of the first appointments down to the present, I think it would be unanimous on that point. In order to remove that possibility it was suggested that three trustees should take the place of the directors and constitute an administrative trust. I do not think the hon. gentleman has been misled by the use of the word "trustees"; I do not think he believes that the appointment of these trustees will necessarily mean the holding of property.


James Malcolm: An administrative trust
is usually given ownership.


Richard Bedford Bennett: Not always; it is quite
the opposite in many cases. Inasmuch as the securities exist to the extent to which they do and the deficits have become so great, the question of the property title becomes unimportant because under the law it is vested in
the crown itself. Therefore, no transfer becomes essential. It is an administrative trust, and being an administrative trust, the trustees are possessed of wider powers than were possessed by the directors. It is assumed-I use the word "assumed" because hon. gentlemen opposite may disagree-that they will be free from political pressure. That is the idea and it may or may not be possible to accomplish it. In the minds of those who had to deal with this matter, and I agree with their view, this was the last effort which could be made to maintain this property as the property of the crown and to administer it under such circumstances as would ensure efficiency and effectiveness. I believe this was the last possible suggestion which could be made because no one knows better than the hon. member for North Waterloo (Mr. Euler) the dangers which confront public ownership in laxity of control and increased expense of administration.


William Daum Euler: The Prime Minister states
that bv the appointment of these trustees he is removing the national railways as far as possible from political control or influence. The right hon. gentleman has stated that the members of the old boards were political appointees. That is perfectly true, but as I understand it, the members of this board will be appointed by the government.


Richard Bedford Bennett: Certainly; that is the
only way it can- be brought into being.


William Daum Euler: The past boards were and
this board will be political appointments. If the right hon. gentleman can show otherwise,
I shall be very glad to hear his remarks.


Richard Bedford Bennett: I do say positively that the trustees will not be political appointments.


William Daum Euler: But under this bill they could
be?


Richard Bedford Bennett: It is on the assumption
that they will not be that the bill is now before parliament.


William Daum Euler: How do we know they will be any different from the radio commission appointments?


Richard Bedford Bennett: I would not think the
hon. gentleman would describe the appointments to the radio commission as political appointments.


William Daum Euler: At least one.


Charles A. Stewart: What about the tariff board?



C.X.R.-CR.R. BUI COMMONS

Richard Bedford Bennett: He has given evidence
of splendid business foresight. I have not heard anyone charge him with political partisanship in the discharge of his duties. I assume that every man in this dominion has some political views, some men possessing stronger views than others. If a man who has voted for a Liberal candidate in a particular constituency is appointed to a position, I do not suppose that is a political appointment. That is not the conception I have of these trustees. I believe the directors drew a couple of thousand dollars a year with transportation, although I do not know the exact amount.


William Daum Euler: My right hon. friend knows perfectly well that that was not my argument in connection with the appointment of these trustees. They would have their political views, but I do not think that was the case in connection with one member of the radio board.


Richard Bedford Bennett: A man is not unfitted
for a task because he has been interested in politics. I make that statement with absolute frankness. The other day a gentleman who had supported a vote of want of confidence in this government during this session was appointed to the tariff board.


William Lyon Mackenzie King: All the rest of the time he voted with the government.


Richard Bedford Bennett: No, he did not; the
records will show how he voted.


Ian Alistair Mackenzie: Perhaps
lie had second sight.


Richard Bedford Bennett: What is more, he had
not the slightest idea that he would be appointed until five days before he was appointed.


William Daum Euler: Vrhat is meant by a political appointment?


Richard Bedford Bennett: I take it that a political appointment would be the appointment of a man who had been of very great assistance to a political party but who had no qualification other than that for the position to which he was appointed.


William Daum Euler: The first part goes, but not
the second.


Richard Bedford Bennett: Certainly, it does. That is a political appointment pure and simple.
I could name appointments made by the late administration-


James Malcolm: Not coming under that definition.


Richard Bedford Bennett: Yes, coming under that
definition.


James Malcolm: Without any ability?


Richard Bedford Bennett: Without ability of any kind. Now let us go a step further. I answer the one question by saying this is an administrative trust; I answer the question of the hon. member for North Waterloo by saying that the reason the governor in council makes the first appointments is that you must initiate the appointments. The chairman of the board will be a full time man; the others may not, but for the first year or two I think they would have to devote all their time to the business of the railways in order to get the work started properly. In this country we have no such reservoir to draw from as they have in a country like England, for instance. Look how simple it was when they had to appoint a tariff commission. One member was Sir George May, and I suppose no one knows whether he voted for or against the national government at the last election. Another member was Sir Sydney Chapman, and there was one other whose name I do not recall. There 'they have a reservoir of highly trained and skilled men to draw from. My right hon. friend knows how difficult it was to fill posts to his satisfaction when he was prime minister. No one who has not been prime minister realizes the anxiety to secure the best available man for every position, judicial, administrative or otherwise, and the number of people who are willing to serve the country at any particular moment is most amazing. But I assure the committee that the selection of judges, for example, is one of the most difficult tasks facing any thoughtful man who has regard for our institutions.


Charles A. Stewart: You are never short of candidates.


Richard Bedford Bennett: The hon. gentleman is quite right, but you cannot say to a man, "You are unfitted for this task," because no man takes kindly to any reminder of his own weaknesses. I am not casting aspersions upon anything that has been done previously, but it is amazing what pressure has been able to do for men whose only qualification was their ability to provide that pressure. I make that statement to this committee with great frankness.
The reason the trustees have been selected is to avoid, so far as possible, any suggestion that political considerations are the controlling factors. It is thought that the word "trustees" more aptly expresses the functions of these men who have the powers of directors, and

C.N.R.-C.P.R. Bill
many more powers; who are clothed with the authority of directors but also much greater authority; who are not receivers but who are administering the property in the interests of the shareholders, as my hon. friend very properly observed, the idea being to see to it if possible that the amount of money earned is sufficient to pay first the operating expenses and then interest on the investment. The committee must realize how serious this matter really is. In the month of February this system did not earn its operating expenses. Just think what that means to this country, with 22,000 miles of railway track that did not earn enough to pay operating expenses.
Mr. MACKENZIE KING That is happening in all lines of industry.


Richard Bedford Bennett: It is happening in all
countries. In some industries that is not so, but it has happened wherever there has been a displacement of traffic by reason of the introduction of motor transport and for various other reasons, together with the present stagnation of world trade. I think on consideration the committee will agree, despite what has been said by my hon. friend from West Edmonton, that the word "trustees" is the proper word giving the exact shade of meaning with regard to the duties of these gentlemen who will administer the property.
Mr. STEWART (Edmonton); I shall not detain the committee more than a moment or two. I do not intend to traverse the ground that lias been covered by the Prime Minister and others who have spoken, but I must confess that I cannot see anything in tihe act that warrants the change of name. This board of three will meet all requirements and will resist the pressure which is brought from various sections of the country, as the Prime Minister very properly said, in order to secure concessions from this utility which they are not entitled to receive. I thoroughly agree with the Prime Minister in that respect; I think the reduction in number will meet this very serious objection which we have had to consider up to 'the present. That is why I am in favour of this proposal. But since *this utility is not in bankruptcy, in my opinion the word "director" expresses much more aptly the functions to be performed by the individual appointed. I .am not concerned with whether or not the appointment is political so long as the individual will give his whole time and energy to the administration of this utility and endeavour to save it from utter ruin. If that is to be done I am in favour of the appointment, and I am
decidedly in favour of the number being three. They will not be sectional in any particular, but why should we change the name? Undoubtedly the government have decided that this is the proper name for these administrators, and I presume that name will be adopted. Perhaps it will not make any material difference, but I do not like what it implies, and I would much prefer to have the name "director" remain in connection with those administering this utility.


Jean-François Pouliot: I was very much interested in the remarks of the right hon. Prime Minister, but I do not clearly understand the difference between a trustee and a receiver. I have Webster's dictionary here. It is a United States dictionary, but it does not contain slang. I hope I am in order in reading the definition given by Webster for the words "trustee" and "receiver." The first definition is that of a trustee:
Law. A person, whether real or juristic, to whom property is legally committed in trust; one entrusted with property for another; one in whose hands the effects of another are attached by the trustee process.
In this bill we have the trustee process.


Mr. HACKETT:: That is not the first
definition given; the first is, "a person who holds property in trust for another."


Jean-François Pouliot: The next definition is:
Trustee, v.t. Law.
(a)	To commit (property) to the care of a trustee; as, to trustee an estate.
(b)	To attach by the trustee process. See garnishment.
I would ask my hon. friend, who no doubt knows Webster by heart, to .tell me the meaning of the letters v.t. I am sorry to bake up so much time, but I should like to indicate how I should answer .these questions if I were in the place of some of my hon. friends. The second definition refers to the verb, but in the bill we have the substantive. My knowledge of English perhaps is not as great as that of my hon. friend from Stamstead, but I know the difference between a substantive and a verb. Now let us see the word "receiver." If my hon. friend is not satisfied with this scientific .pleading he should recite his own version. Webster's definition of receiver is as follows:
1.	One who takes or receives in any manner.
There is no difference there:
2.	One who receives on behalf of others:
(a)	A person appointed to receive money due: a treasurer.
(b)	Law. A person appointed, ordinarily by a court of equity jurisdiction, to receive, and hold in trust, money or other property which


Mr. CHAPLIN:: Why not move an amendment on the subject?


Jean-François Pouliot: I wish to explain my
position first, and if the hon. gentleman is then convinced I shall be satisfied. I say, Mr. Chairman, that here is an amendment that was made in the second draft of the bill; it did not appear in the original bill. The definition in the bill of "trustees," namely,
"Trustees" means the trustees appointed under part I of this act, and includes their successors-
-is no definition at all. It is a conundrum. I quote again from Webster's definition of "receiver":
The receiver is an officer of the court, and tile property held as such by him is not subject to process other than in the case itself. He often obtains authority to continue and manage the business as a going concern.
3.	One who takes or buys stolen goods from a thief, knowing them to be stolen.
He does not mention a knight.
4.	That which receives; a receptacle; specif.:
(a) Chem. (1) a vessel connected with a
retort, or the like, to receive and condense the product of distillation; a matrass,
And so on. To conclude, there is no distinction between a trustee and a receiver, except in law, and as we are making a law here we can give to any word its legal meaning. If the Canadian National Railways are not bankrupt, if the right hon. the Prime Minister was wrong when he said that the country had attained its borrowing limit, then I leave it to the fertile imagination of the right hon. the Prime Minister to find another word than trustee or receiver. He has a great wealth of expression, and in his rich vocabulary he may find another word which is not so humiliating because if "receiver" is humiliating, "trustee" is just as humiliating.
Webster also defines "receiver's certificates", and in that connection he speaks about railways. There is great profit to be had in eon-

suiting a dictionary. Webster defines a receiver's certificate as follows:
An acknowledgment of indebtedness made by a receiver under order of court to obtain funds for the preservation of the assets held by him, as for operating a railroad. Receiver's certificates are ordinarily a first lien on the assets, prior to that of bonds or other securities.
There are no words in the English language which have such significance as "trustee" and " receiver." The word " trust " in itself is a nice word. One thinks of Montreal Trust, Royal Trust, and so on. That is the first point I wish to make, that there is no difference in meaning between " trustee" and " receiver." When the Prime Minister was making a distinction between trustee and receiver he was simply wasting the time of the house and he took half an hour over it, while I have taken only five or ten minutes to give my demonstration that there is no difference in meaning between the two words.
May I say, Mr. Chairman, that we are not to be governed by words but by a strong policy, and that policy must first of all be framed after due consideration. We have some nioe words about the appointment of the trustees. I know the Prime Minister is troubled at times to fill the position from amongst so many applicants, and he has my sympathy, but he has made good appointments, to the bench at least, upon which I congratulate him; I give the devil his due -I hope I am in order, Mr. Chairman.
What are the qualifications for a trustee? He must be a man above politics. What do I mean by that? I mean that a man who is a candidate for the position of trustee must be a man who can put aside his personal views and consider the public interest. He must allow no political affiliations to interfere with the fulfilment of his duty. That is the first qualification.
A trustee should also be a big man, not physically but mentally, a man who can put the public interest before his own in all hia dealings with the railway.
Then he must also be a man who has had wide experience in the railway business. He must be able to decide railway questions. What I say of one trustee applies to them all; they should be able to give a decision on all matters that are submitted to them.
An hon. MEMBER; Carried.


Jean-François Pouliot: Thank you for your support. Every time I am interrupted I shall repeat what I said before, which will make my speech twice as long, although it is not a regular speech, but rather observations that I am making for the benefit of the government.

C.N.R.-C.P.R. Bill
I have said that the trustee must put the public interest before his own in all his dealings with the railway, and that he must have experience and good judgment. Good judgment is essential, because the trustees will be above the government and above parliament. They will be given a free hand to decide questions of vital importance to the future of this country. So the Prime Minister will have to find among his supporters or amongst those to whom he does not give the cold shoulder men with good judgment. He cannot find them among his own supporters. Will he find them in the Canadian National Railways or in the Canadian Pacific Railway? If he finds them in the Canadian Pacific, people will say that he is favouring that railway against the Canadian National, and if he finds them in the Canadian National, the country will be saddled. That is why I understand the Prime Minister's difficulty. But whether he gets the trustees from the Canadian National or the Canadian Pacific, they will have to be given a free hand provided they are men of superior intelligence, and I say superior intelligence because I believe in superior men, not in supermen. A trustee must have given proof of his ability and experience. It will not simply do for the Prime Minister to listen to advice that Joe or Tom or Sir Joe this or Sir Tom that is a fit person for trustee. He must judge the trustee by his own accomplishments, and in what field? In the field of railway business, and in that field alone. A man may be successful in other walks of life, he may be a good business man, but he is not necessarily qualified to occupy an important position having to do with the operation of railways. I ask for the appointment of a technician, a man who has had experience in railway matters, who is familiar with the theory of railway building and engineering, and who has a sense of decision.


Sir EUGENE FISET:: A sense of humour.


Jean-François Pouliot: We seldom find a sense of humour on the other side of the house, except upon occasions when hon. members relax. How can the Prime Minister or the Minister of Railways expect satisfactory results from incompetent officials? I am afraid I cannot congratulate them upon some appointments they have made to the bench; I am sure that they must regret what has been done. We know the difficulty with which the government will be faced if it appoints a man from either the Canadian Pacific or the Canadian National railway. If they go outside the country will they take a -man who is familiar only with underground railways, when, as the Prime
Minister has said, the Canadian railways stretch from ocean to ocean? There is a great difference between managing underground railways in London and managing the Canadian National or Canadian Pacific systems. I do not know who have made applications to the government for these positions; as a matter of fact I do not know whether any applications have been made. Furthermore I cannot say who has been recommended. May I tell the government however that if they wish to make a wise choice, one with which they will be satisfied, as the Prime Minister has been listening to one of his supporters during my speech he need only read from Hansard what I have said. In Hansard, of April 18, he will find the suggestion I made.
I have no desire to delay the passage of the legislation, and should the government believe that I have, it would be badly mistaken. If I am satisfied with the measure submitted to the house, and if I receive decent answers to my decent questions I am content to support the government. However the more refusals I have, the more questions I will put. I do not wish to make trouble in the house, but I am firm in my views, representing not only the people in my constituency, but the employees of the railway systems and the taxpayers of Canada who are bound to pay if the revenues from the railways are not sufficient to cover operating expenses.


Mr. SMITH (Victoria-Carleton):: We have had a most wonderful exhibition of lawyers quibbling over distinctions without differences. What does it matter whether wTe call these men trustees or directors? There is no difference. The Prime Minister has pointed out definitely the reason for calling them trustees. Ever since I have been a member of the house the hon. member who has just spoken, and other lawyers, have taken up a great deal of time in discussion.


Mr. SPEAKMAN:: Before that.


Benjamin Franklin Smith: They
quibble and quarrel over matters that are of no real importance. That is one of the worst features of the discussions in this house. This country is in no mood to listen to a lot of foolish quibbling over nothing. My advice would be that some of the lawyers in this house should have less to say.


[Stage Direction]
Subsection agreed to. '
On section 3, subsection (j)-Undertaking.
Jean-François Pouliot: Does that mean the burial of the Canadian National Railway? I suggest the trustees should be named undertakers.
C.NJt.-C.P.R. Bill


Frederick George Sanderson: Tihe minister gave an undertaking to answer a question I asked about fifteen minutes ago.


Robert James Manion: When the hon. member asked the question I made an explanation with which he was not satisfied. What does he wish to know? I shall do my best to answer him.


Frederick George Sanderson: I shall endeavour to put my question as clearly as possible.


Richard Bedford Bennett: I know what the hon. member's question was. Probably I could save time by endeavouring to answer it.


Frederick George Sanderson: If the Prime Minister is a mind reader he might answer it.


Richard Bedford Bennett: The Canadian National system, as such, owns all the Shares of the Grand Trunk Western. That is, they own the whole of the Grand Trunk Western. But our legislative arm does not extend into the United States, except in so far as administration is concerned. Over that, of course the trustees have authority, which they exercise. By virtue of the fact that the shares of the Grand Trunk Western are owned by our road, their control will be complete.


Frederick George Sanderson: In addition to the Grand Trunk Western there are three others.


Richard Bedford Bennett: The Central Vermont- that is in the same position. Perhaps the hon. member will recall that during the days of the late government the suggestion was made that we should not guarantee the securities of the Central Vermont, it being an American road. What we did was to guarantee the securities of the Canadian National Railways, to borrow the money on the strength of the guarantee, and to put the bonds of the Central Vermont into the treasury of the Canadian National Railways.


Frederick George Sanderson: There are two other companies in the United States which the taxpayers of Canada own, namely the Atlantic and St. Lawrence, and the Duluth, Winnipeg and Pacific.


Richard Bedford Bennett: The Duluth road, running from Winnipeg to Duluth was built by MacKenzie and Mann. I believe the original name of the line was the Duluth, Winnipeg and Pacific. When built, control of the road was held by the Canadian Northern Railway Company. When the Canadian Northern became part of our system we secured control, partly by the legislation of 1922 and partly by legisl>Ir. Pouliot.]
lation in connection with the loan of $45,000,000 to the old Canadian Northern Railway. The other is a short road running down to Portland, Maine, and is part of the old Grand Trunk system.


Frederick George Sanderson: That does not answer my question. As a matter of fact I did not put my question. It is in regard to the approximately 2,000 miles of railway that the people of this country own in the United States. My question is, when this act becomes law who will control and manage that 2,000 miles? Will it be the directors who are now in control-I mean the directors of these companies controlling the mileage in the United States-or will it be the trustees? I am aware that under this act the board of directors of the national railway is wiped out, that the trustees step in and take their place. But will the trustees step in and take the place of the directors of these several companies in the United States? Will the trustees be in control over and above the boards of directors? I think I can see that in another country there may be a different board of directors, but will the trustees under this act control that mileage in the United States?


Richard Bedford Bennett: The answer is yes, just as to-day. The 'head office of the Canadian National Railways at Montreal is responsible for the direction in the broad sense of the whole system, including the 2,000 miles in the United States. As far as the personnel of the directorate is concerned, there are directors of the United States roads who are not members of the directorate of the Canadian National railway system. As the minister said, it might be possible for a trustee to be a director of one of the four American roads, and he probably would be. The administration of the trustees extends to the whole system, but it must be exercised directly in Canada and indirectly in the United States.


Frederick George Sanderson: May I ask the Prime Minister another question arising out of the first? Will these trustees have authority, without coming to the parliament, of Canada, to sell out the system in the United States, for example, or any part of it? They might sell the mileage of the Grand Trunk Western. Have they the power to do that under this act?


Richard Bedford Bennett: No.


Frederick George Sanderson: Is the Prime Minister quite positive about that?



IS, 1933

[Stage Direction]
C.N.R.-C.P.R. Bill
Richard Bedford Bennett: With the amendment proposed by the minister.


Frederick George Sanderson: But there is no amendment yet.


Richard Bedford Bennett: But we said that on the second reading we proposed to introduce a provision against amalgamation; it will also provide against sale.


Frederick George Sanderson: If no amendment had been added they would have had the power under this act?


Richard Bedford Bennett: I do not say that. I think not.
Subsection (j) agreed to.


[Stage Direction]
Section agreed to.
On section 4-Nominations and appointments to board of directors to be vacated and three trustees substituted for original incorporators.
Robert James Manion: In regard to section 4, there is a rearrangement of subsection 2 which will make it a little clearer without changing the meaning of the clause. I will read it and then ask my colleague the Minister of Public Works to move it. Subsection 2 will reads as follows:
(2) One of such trustees shall be their chairman. He shall devote his whole time to performance of the duties of his office and shall not be an officer nor after his appointment as trustee become, otherwise than by reelection, a director of any company other than a company which is comprised in national railways.


James Malcolm: Before we deal with
subsection 2 I would like to move an amendment, to subsection 1 of section 4. May I suggest 'that my reason for doing so is that I think it, would be well for the government to treat the House of Commons as a committee acting for the shareholders of the nationally owned railway system? The Prime Minister said he had every desire to remove any semblance of political influence, and speaking on the bill I think at the time it was introduced, and again this afternoon, he referred to the fact that this system so far as its financial position is concerned would be treated as a system in liquidation were it not, for the guarantee of the Canadian people, and that that was the reason why trustees were to be appointed. We do not all hold that viewpoint. I think. But in any business I contend that the shareholders are the ones who appoint the trustees. This question was just as carefully considered by the Drayton-Acworth commission, I think, as it was by the Duff commission If we refer to the re-53719-255
port of the royal commission on railways and transportation of 1917 we find on page lxxxii, section 31, the following recommendation:
We recommend that there be five trustees, three railway members, o-ne member selected on the ground of business and financial experience, and one as specially possessing the confidence of railway employees; that the original trustees be named in the act constituting the board; and that their tenure of office be substantially the same as that of judges of the supreme court.
Whether or not in this legislation the tenure of office is substantially the same as that of judges of the supreme court, the legislation does provide for continuity. It provides that the men shall name their successors. lit is a permanent administrative trust, to use the Prime Minister's expression. No doubt the Draytom-Acworth commission had in mind that should the property be placed under the control of trustees, the right o,f the shareholders required that they should know who these trustees were to be. May I also suggest to the Prime Minister 'and to the Minister of Railways that what I said a moment ago with regard to the type of mam appointed trustee is important. I do not think we need a financial man; the financial problem of the railway is more or less settled by the fact that the govem'ment of Canada will have to pay the deficits. What we want as chairman of the board of trustees is the most efficient railway manager that cam be obtained on this continent; for the problem is one of efficient management. I concur in the view expressed by the hon. member for North Waterloo that *the purpose of this railway is to give efficient and economical service to the people of the Dominion of Canada. If that service can be given through good administration, through careful expenditure of money, and through effecting economies, it will be done by a railroad operator, not by a financial man. In selecting the trustees my suggestion would be that a very capable railway operator be included.
As far as the collapse of transportation is concerned, to which the Prime Minister has referred, I contend that it is no different from the shrinkage in volume of roost businesses at this time. It is as good an index of volume of trade as can be obtained-in fact carloadings are now used as an index dhowing how trade is falling. We cannot entirely predicate this legislation on the emergency that now exists, for that is not going to continue ; if it does, of eourse, the whole situation is beyond repair.
At six o'clock the Speaker resumed the chair and the house took recess.

Hospital Sweepstakes

After Recess
The house resumed at eight o'clock.



HOSPITAL SWEEPSTAKES

[Stage Direction]
The house resumed from Tuesday, April 11, consideration of the motion of Mr. Power for the second reading of Bill No. 67, with respect to hospital sweepstakes, and on the proposed amendment thereto of Mr. Carmichael.
Mr. G. D. STANLEY (East Calgary):: I
shall not prolong the discussion of this matter to any great length. When the hour for private and public bills expired the other night I had stated that this bill as presented introduced gambling pure and simple, and I further contended that hospitals would not be benefited by the financial assistance derived from this particular form of raising money; that is to say, they would not benefit in the long run.
May I now take a moment or two to review briefly the development of gambling, particularly towards that gambling on the smaller scale. If we follow the history of gambling in the old countries we shall recall that for a considerable time competition in horse racing involved a large amount of gambling, but that was on a different plane altogether from the sort of petty gambling which is introduced in this bill. As time went on the habit spread among a large section of the people and they began to gamble on the racing of dogs, hounds. This went on until gambling was engaged in on a still smaller scale, so that next we find people gambling on the racing of jack rabbits, then on the leaping of bullfrogs, and on a still minuter scale on the racing of cockroaches across the table or the floor, indeed, gambling on the ability of fleas to outdistance one another. In this bill we have gambling on an even more insignificant plane, because the chief virtue in the competition here is the ability of a person to draw a piece of cardboard out of a hat. There is something to be said for the person who wishes to place a bet on the ability of one horse or some other animal, to beat another in a race, but anyone who wants to be reasonable will agree I think that the ability to guess successfully the drawing a card out of a hat is not one of great significance.
This bill undertakes to legalize gambling and it undertakes to legalize the pettiest forms of the practice; and what is still worse, to my mind, it undertakes to justify this by associating it with a certain form of charity. In other words, we are endeavouring to give to this petty form of gambling of which I am speaking a virtue that does not inhere in it. The

bill before us introduces this form of gambling, and in order that the habit may become nationwide it provides that the provinces throughout this country may participate. Moreover, the process is to be a continuous one. No period of the year will be free from the spectacle of some part of the country indulging in this form of gambling. Again, it sets one province against another. They enter into competition, and the competition is that one province will be able to extract most money out of the others. It will therefore be a competition between provinces. It will be seen from the provisions of the bill that throughout the year at some time or other one province will be invaded by the others, if its intention is to be carried out.
One of the arguments put forward on behalf of the bill is that we shall be able to go into the United States, a neighbouring country, and there extract from the people, by this particular form of petty gambling, money to be brought here to maintain our Canadian institutions-an obligation which surely is ours as Canadians. Further, and perhaps lastly, the hill undertakes to put the Canadian provinces and Canada as a whole in a competing class with those other countries which have already degraded in this way their forms of raising of money for charitable purposes. Personally I am convinced that the hospitals will not benefit by obtaining money in this manner; it may assist them immediately but in the long run they will be distinctly the losers.
One tiling that was rather curious to me was the attitude taken by the sponsor of the bill the other night. He condemned in very severe terms the method of financing the sale and purchase of wheat, a method which is recognized and has been recognized for years as essential in the handling of this product, recognized by all commission agents on both sides of the water, recognized by farmers who sell the grain, and recognized generally by all those engaged in the handling of it. True, there is an element of uncertainty. There is an undertaking to protect the purchase of wheat against what may happen to it in future sale. We can call that gambling or not, and I am not going to enter into a discussion of that question at the moment. What was anomalous however was that the sponsor of the bill, who condemned that well recognized and well established form of business in this country as in every other country, should now turn round and extol the virtues of this particular form of petty gambling. Truly, he has strained at a gnat and swallowed a camel. For my part I cannot see any virtue in the

Hospital Sweepstakes
bill. I cannot support in any way the raising of money in this manner for any purpose and above all I must refuse to support the raising of money in this way for the assistance of hospitals. In my opinion, as in the opinion of most people who are in closest toudh with hospital administration, it would be detrimental to the cause of these institutions.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker, there is a point of view in regard to this bill held by very many people in Canada, indeed I think by the majority of the Canadian people. I wish to present that point of view, and I do it more gladly because I believe it is held by the great majority of my own constituents. The sponsor of this bill-I do not know just how serious he was in making the statement-stated that there were many hon. members of this house who would indulge in the practice of gambling if they w^ere not deterred by the fear of being brought before their local churches or exposed in their local newspapers. That to me seems to be an admission that there is a very strong popular sentiment in this country against the principle of this bill. Is it not right tiiat public opinion should prevail in a matter of this kind? Sometimes questions arise in this house upon which a member must judge for himself; sometimes on questions of fact, in connection with which a member has had better opportunity of informing himself than have his constituents, he must assume responsibility for acting according to his own judgment; the time will come when he will have to render to his constituents an account of his stewardship and receive their approval or condemnation. But this bill does not involve a matter of that kind; it is not a question of fact, it is a question involving the well known opinions held by a large number, in fact, as I believe, by the majority of the people of Canada. I believe that this parliament would be violating the trust reposed in it if it endorsed this bill. If there are any members who feel that they are under strong moral compulsion to support the bill; if there are any who feel that to support it is with them a matter of conscience, I have no more to say so far as they are concerned; but I do not think any hon. member will seriously contend that there is any such moral compulsion or that his conscience requires that he should give the measure his endorsation.
I do not intend to discuss the question of private gambling. I have my own personal views on that matter, and my own practice is in harmony with those views. But we should remember that it is not a question of private 53719-255$
gambling that is involved. I am not going to read a lecture to the members of this house, who are adult men and one woman of mature years.


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER:: Shame.


Samuel William Jacobs: Withdraw.


John Livingstone Brown: I will take back the latter part of my statement. As I say, I am not going to read a lecture to the members of this house, as I do not think it would be my place to do so at this time. I have my own views as to the pernicious effects of even private gambling, but it is not private gambling we are dealing with in this bill. What we have to deal with is the matter of organized or, if you like, commercialized gambling. That is the difference which many people seem to fail to appreciate. It is not a question of making a private bet as to what horse, what hound or what rabbit can run the fastest; the principle involved in this bill is the providing of facilities for people to indulge in the practice of gambling. It is not part of the business of this parliament to provide means for people to indulge in their propensities for gambling. Laws against gambling have been placed upon our statute books because it has been well recognized from the experience gained in the past that the practice was one which affected not only the private lives or morals of men but the public interest. Because it has that effect upon the public wellbeing, this country in common with others has seen fit to pass laws against any organized form of gambling.
For the information of those who say that this is a matter which concerns only the conduct and morals of the private individual, I should like to read an extract from a news item which appeared in the Winnipeg Free Press of April 7. It reads:
Alexander Ramsay Ross, former accountant of the University of Manitoba, was sent to Stony Mountain penitentiary for three years by Magistrate R. M. Noble in provincial police court Thursday.
He pleaded guilty to theft of $14,279.85 _ of the university funds, the defalcations dating back to October, 1931, and continuing to March 21, this year.
In a pica for leniency advanced by C. Tapper, junior, it was pointed out that Ross had given valuable and efficient service to the university since his appointment in 1923, and until the present trouble arose had always borne a good reputation. The real cause of his downfall was "playing the ponies," Mr. Tupper declared. "Legalized race track gambling, and an army of local bookmakers had got the greater part of the stolen money," counsel advised the court.
A further fact stressed was that Ross had received a substantial cut in his salary-it
Hospital Sweepstakes

had been reduced from $4,500 to $3,600 a year -at a time when his client had entered into heavy obligations in connection with the purchase of a home. "Ross always intended to return the money," Mr. Tupper suggested, "but like most others who start to gamble with other people's money-he could never make the 'killing' for which he hoped."
Will anyone say that that is simply a matter of concern to the particular individual involved? Is it simply a private matter that this man should have appropriated over $14,000 of university funds? Surely this action brings it within the realm of matters which concern the public. Our statute books contain a law which legalizes gambling on race tracks by the pari-mutuel system, and in 1923 a proposal to make that practice illegal was voted down by a majority of this house. This parliament must assume a measure of responsibility for the loss incurred to the public by the misappropriation of funds by this young man. It is not simply a matter of private concern, it is a matter of concern to the public when we are to decide whether o>r not we are to organize institutions to enable men to indulge in their passion for gambling.
Now let us turn to the bill itself, on which the hon. member for East Calgary (Mr. Stanley) has made some comments along the lines I had in mind. This bill gives to the attorney general of any province authority to sanction the institution of a sweepstake in that province, but there shall be only one sweepstake in any province in any year. Perhaps those who framed the bill thought they were making a great concession when they said there should be only one sweepstake in any one year, but we can easily see what that would mean. It would simply bring about a succession of sweepstakes, one province vying with the other as to which would get the money. But there is another feature to it. Suppose only one province in the dominion wanted to establish a sweepstake; for instance, let us suppose that the good old province of Ontario had an attorney general who would sanction the promotion of a sweepstake. Let us suppose that every other province was opposed to the idea. In that case you would give to the attorney general of that one province, whether it was Ontario, Manitoba or any other province, the right to foist this institution upon the people of the whole Dominion of Canada. It is provided in the bill that agents shall not be appointed outside the province m which the sweepstake is organized, and I think it is provided also that advertisements for the sweepstake shall not appear in newspapers or magazines that are published outside the province. What does
fMr. Brown.]
that amount to? It is a well known fact that many of our leading newspapers have a dominion-wide circulation, so the fact that agents could not be appointed outside the province and that advertisements could not appear in magazines or papers published outside the province would not prevent these sweepstakes from being advertised over the length and breadth of Canada, and this could be done in spite of any opinions that might be held in eight of the nine provinces. To me that seems a very great weakness in the bill. There is a section in the bill which reads:
Nothing in this act shall prevent the sale outside of Canada by the committee or its agents authorized in writing so to do, of tickets for sweepstakes as authorized to be conducted in accordance with the provisions of this act.
I suppose so far as the sale of tickets outside of Canada is concerned you might as well pass a law trying to prevent the sun from rising to-morrow morning, but I presume the thought was that it should not be illegal to pay money to those outside Canada who might win a prize.


Mr. HANSON (York-Sunbury):: Attracting a little foreign capital.


John Livingstone Brown: With regard to attracting foreign capital I am heartily in accord with the sentiments expressed by the hon. member for East Calgary. I think we would be demeaning ourselves if we should say to the people of the United States: "We want to support our hospitals by giving you a chance to win a prize in a sweepstake." It seems to me that would be putting our dominion on a very low level.
I do not think it is necessary for me to take very much time to make clear my sentiments in regard to this matter. The sponsor of the bill made some reference to the Senate and he advanced another argument -though I do not think he could have been altogether serious-to the effect that the majority in the Senate was of necessity composed of wise and experienced gentlemen of high character, and that therefore we should pass the bill also. I am not going to cast any reflections on any member of this house or of any other chamber whose conscience may compel him to support this measure, but in connection with the action of the other house there is one point to which I should like to direct attention. In these days there is a disposition on the part of some to assume that all humane and philanthropic instincts are concentrated in some new party. There is-, a disposition also to assume that all concern

Hospital Sweepstakes
for the moral and economic welfare of the country is located in some new party, I should like to point out, because I think it is worth pointing out to the people of Canada, that the leaders of both parties in the other house opposed this bill. I am happy to believe that if this matter should come to a division in this house it will be opposed by the leader of the government and by the leader of the official opposition, no matter what the other parties may do. I think it desirable that this condition of affairs should be called to the attention of the country, and I am happy to do so at this time. We cannot afford to altogether ignore the higher principles which govern men in their relations one to another when we are dealing with these things in parliament. The Prime Minister himself has recognized that fact, and in a splendid speech a few days ago the right hon. leader of the opposition recognized the need of giving attention to some of those things which move men to action. A short time ago the former minister of Trade and Commerce (Mr. Malcolm) used these words:
I am firmly convinced that the greatest trouble facing the world to-day is the result of a narrow spirit of selfishness, the constant thinking of monetary interests. In every dispute that arises, in every debate, economics are being placed ahead of humanity.
I should like to quote also the report of an incident that took place in the British House of Commons not so very long ago, when Mr. George Lansbury, leader of the Labour opposition, put to the House of Commons his party's latest vote of censure on the government on the score of the government's failure to deal with unemployment:
With trembling voice the old warrior of labour addressed the house in these terms: "This old world is in its present condition because we have all been living the wrong way. We thought that we did the best for ourselves by only thinking of ourselves. We believed that the aim of life was what we got and not what we gave. I believe that the British parliament and the British nation, if they really believe in the gospel and in doing to others as they would be done unto, could lead the world in a new campaign. We can do it if we have the will, but it must be done on the basis of working in the service of one another, and none of us asking from the world more than we are prepared, according to our ability, to give back to the world.
That is a very striking phrase which might be used in connection with this bill. Mr. Stanley Baldwin, Conservative ex-Prime Minister, replying for the government, said:
I am sure that the right hon. gentleman need make lio apology to the house for the concluding words of his speech. I know that they will find 'in echo in many hearts throughout the house.
Perhaps with these examples before us, Mr. Speaker, I may 'be excused if I appeal to the members of this house to take cognizance of those things which have their effect upon human life and which play a part in developing humanity to the highest level. It would be my earnest hope, Mr. Speaker, that this house might defeat this bill without a division.


Arthur-Lucien Beaubien: Mr. Speaker, before the bill passes I should like to offer a few comments. In the first place, I do not think we are going to make angels by legislation. People gamble anyway, whether you legalize it or not. It is a gamble when we come into this world; it is a gamble when every member of this house presents himself before the electors, and when you go out of this world that is the most serious gamble of all.
I am very sorry, Mr. Speaker, to have to disagree with my hon. friend from Lisgar (Mr. Brown) for the first time since 1921, but I do so sincerely. I like taking a chance myself, and I do take a chance. I would ask, is there any member of this house who does not take a chance? We all do it, and we have to do it to carry on our everyday activities. If any hon. member wishes to tell me that he has never taken a chance, a gambling chance, if you like, I shall sit down and be glad to hear from him.
I remember many years ago when prohibition was the cry in this country, and what happened? Finally every province followed the old province of Quebec in putting prohibition legislation on its statute books. The provincial governments went into the liquor business themselves, and began making profits, and the result was that the taxpayer who did not drink had his taxes reduced although he did not save very much more by that. But every province has gone into the liquor business and is benefiting to the extent of millions and millions; of dollars, which is used in order to reduce taxes.


James Dew Chaplin: Would the hon. member name one province in which the taxes have been reduced?


Arthur-Lucien Beaubien: What did you do with the profits that the province of Ontario made?


James Dew Chaplin: Where is the province that has reduced its taxes?


Arthur-Lucien Beaubien: If you did not have that profit you would have to increase your taxes; that is only natural. I think the Canadian people are prepared to take advantage of the millions and millions of dollars made from the sale of liquor. Then why should I not
Hospital Sweepstakes


Robert James Manion: Hear, hear.


Arthur-Lucien Beaubien: There is evil in gambling, yes; there is evil in drinking; there is evil in many other things that we do; but gambling exists, and I am in favour of this bill. Whether it is framed exactly as I should like I do not know. I venture to say that there are many members of parliament who have sweepstakes tickets in their pockets right now. Undoubtedly gambling exists; then why not control it to a certain degree? Do not brand people as criminals because they take a chance; for they will take it anyway. There are many people in this country to-day who are in favour of sweepstakes. There are many who feel that many of our charitable institutions and hospitals, which the hon. member for East Calgary mentioned, are not going to be able to continue to function unless they find some means of raising funds. Will my hon. friend from East Calgary undertake to find people who will contribute to keep our hospitals going? I read in the papeTs only to-day that the free clinic, one of the most important branches of the general hospital in Winnipeg, is closing because of lack of funds. That clinic is saving life after life with its free treatment to the people of the city of Winnipeg, but those people will be deprived of that clinic unless money is forthcoming from some place.

Do -not let us 'be hypocrites. Let us be frank. We gamble. Let us control it. Let the people take a chance, and let it be legal for them to do so, because they will take a chance anyway. I intend to support this bill.


William Richard Motherwell: I assure the house at the outset that I Ch-all not speak long. I do not see why we have not had a vote on this question long ago. It is my desire, in case the predictions of an hon. member come true and we decide this question without a vote, to show now which side I am on. First, I am against this bill, and for several reasons. I entirely disagree with the principle. Secondly, I am glad to have the opportunity of voting with my opponents across the floor, for it is very seldom indeed that I get the opportunity. I am prouder than ever of this house to think, rightly I believe, that -the leaders of 'the three groups in this house are against .this bill. I know the Prime Minister (Mr. Bennett) dropped a -hint some time ago that he was against it; I know -that my own leader is against it, and I believe that the leader of the group to my left is against the bill also. It is a rare occasion for me to have the privilege of voting with all three, and I want to embrace that opportunity, in addition to opposing this bill on general principles.
I am not going to pass any strictures on the source from which this bill came, or on its sponsor who introduced it into this house excellently, from his viewpoint-and I think be -believes in what he said-or on the other chamber, except to remark -that had that noble old character, the laite Sir George E. Foster, been still with us, this bill would not be here to-night. He was always on the side of beneficent social legislation such as this bill decidedly is not.
My hon. friend from Provencher (Mr. Beaubien) rather startled me. Gambling will 'be with us anyway, he said. Well, murder will be with us, and has been with us ever since Cain slew Abel. Shall we therefore legalize murder? Stealing and perjury have been with us ever since the days of Ananias and Sapphira. Shall we therefore legalize these atrocities? I know my hon'. friend from Provencher does not mean what he says when in effect, he talks in that way. He was good enough to say that this is the first occasion upon which he has disagreed with the hon. member for Lisgar. Surely he made an unfortunate choice when he decided to disagree on a -measure of this kind.
I should like to comment in regard to the unavoidable partnership of gamblers and

Hospital Sweepstakes
hospitals, as it appears in. the bill, a circumstance which is most objectionable to me. For many years at was my privilege to administer the hospitals and public health of the province of Saskatchewan. Naturally for that reason I became keenly interested in hospitals. To my surprise I learned during those years that many men and women who took veiy little interest in other philanthropic or church work were intensely devoted to and interested in the maintenance of hospitals. It is a type of work which appealed strongly to some people, in fact to the extent that it almost became their religion. I am afraid if we associate with those people others who secure money in this questionable fashion we will to a very substantial extent dry up that beneficent source of revenue.
I believe we should encourage the promotion of individual giving towards hospitals. Those who have never been in a hospital is indeed in one respect most fortunate, but they have missed some valuable lessons which can be learned only in hospitals. Doubtless some have not learned the joy of giving towards those who are less fortunate and find themselves sick in hospital afflicted with one sort of ailment or another. Therefore I am of the opinion that anything which will discourage philanthropic and free giving towards hospitals should be frowned upon.
I have another reason for objecting to the bill. On a former occasion in this house I made the mistake of voting for a relatively harmless proposition. I believe it was not as bad as this one, but inasmuch as I had the example of the Churches to follow I thought I was quite safe in voting for the introduction of a mild form of gambling into our exhibition associations.


Charles A. Stewart: You introduced it.


William Richard Motherwell: No, it was in the criminal code, and was under the supervision of the Minister of Justice. I supported this relatively harmless measure, and now for the first time I wish to make public the recantation of my attitude taken at that time. In those days I was younger and less guarded, and like the hon. members for Provencher (Mr. Beaubien) and Quebec South (Mr. Power) have done now, I made a mistake. For reasons which I shall not enumerate I am not now going to repeat that mistake. I should be much happier to support a restrictive measure against gambling than the one now before the house. Of all times under the sun
to open up and increase facilities for gambling, this is the worst I can imagine.
Undoubtedly there are many hon. members in the house who are not averse to gambling, who may not be averse even to this type of gambling, which is pure chance. Perhaps in normal times they would support the measure before us. However I believe their best judgment will tell them that the excessive spirit of gambling and chance during the last twenty or twenty-five years is one of the reasons why people in Canada and in other parts of the world find themselves faced with the ghastly depression in which we are now weltering and wallowing, and from which God only knows when we will recover. Surely to increase facilities for gambling would at this time particularly be nothing short of a crime.
I submit my views to the house without any intention of offending, and without criticizing any hon. member whose views may be different. However I feel that if we in this chamber opened up further channels for gambling the electors of Canada would think we had gone plumb bughouse. This is not a matter of speculating on the wheat pit. A man well versed in market conditions has some knowledge of world prices of wheat, and general conditions, and his knowledge and skill stands him in good stead. But when we have something that is a pure game of chance, a lottery, at which any kind of dub can make a lucky try, we have the most vicious and objectionable type of gambling.
Then, in regard to the man who gambles on race horses, I could make a few comments. By the way, that matter came to my notice in the Department of Agriculture and has been a legacy bestowed upon every minister for some time back. If a man has some knowledge of horses, information concerning the owners and jockeys, and knows that they will not sell him out, he has a better chance of winning. Therefore skill and expert knowledge of horses may help him.


James Dew Chaplin: They only think they
know.


William Richard Motherwell: This legislation involves nothing but pure chance, a shaking of the dice, a lottery. Of course we realize there is chance in horse racing, but we must admit that knowledge of good horses, information as to their records and previous performances, and the honesty of the owner and jockey, give one a chance of winning.


James Dew Chaplin: Especially if you have a
dupe book with you.
Hospital Sweepstakes


William Richard Motherwell: I do not pretend
to know all about it, but I am familiar with some phases of the matter. I do know that one most capable man in the Department of Agriculture went to the terrible bow-wows largely as a result of gambling while administering the aet. I do not believe the virus permeated my being at all, but there is a chance of younger men being affected. Consequently without further ado I wish to ally myself with those hon. members who have spoken against the bill, and with the leaders in the house-if I surmise correctly that they are all against the measure. I shall vote with great joy against any bill of this nature, and against any attempt deliberately and by our own hands and voices to increase the facilities for gambling at this critical period in our economic history.


Ian Alistair Mackenzie: Mr. Speaker, I intend to detain the house only two or three minutes. Possibly my position in regard to this bill is the most difficult experienced by any hon. member, because I find from the report of what transpired in another place that my constituency voted by five to one in favour of a measure similar to the one now before us. Therefore it is a question whether my duty as a member from a Canadian city should come into conflict with my own judgment.
With the indulgence of the house I shall inflict upon hon. members two short quotations from Burke's famous speech to the electors of Bristol. Possibly from his remarks on that great occasion I may find a reconciliation between my judgment and what might be construed to be my duty. He said:
Certainly, gentlemen, it ought to be the happiness and glory of a representative to live m the strictest union, the closest correspondence, and the most unreserved communication with his constituents. Their wishes ouo-ht to have great weight with him; their opinion high respect; their business unremitted attention. It is_ his duty to sacrifice his repose, his pleasures his satisfactions, to theirs; and above all, ever' and in all cases, to prefer their interest 'to his ?wm But, his unbiased opinion, his mature judgment, his enlightened conscience, he ought not to sacrifice to you; to any man, or to any set of men living. These he does not derive from your pleasure; no. nor from the law and the constitution. They are a trust from Providence, for the abuse of which lie is deeply answerable. Your representative owes you not his industry only, but his judgment: and he betrays, instead of serving you, if he sacrifices it to your opinion.
Again the second quotation is:
Parliament is not a congress of ambassadors from diflerent and hostile interests; -which interests each must maintain, as an agent and advocate, against other agents and advocates; 
but parliament is a deliberative assembly of one nation, with one interest, that of the whole; where, not local purposes, not local prejudices ought to guide, but the general good, resulting from the general reason of the whole. You choose a member indeed; but when you have chosen him, he is not member of Bristol, but lie is a member of parliament. If the local constituent should have an interest, or should form an hasty opinion, evidently opposite to the real good of the rest of the community, the member for that place ought to be as far. as any other, from any endeavour to give it effect.
And so, Mr. Speaker, although my riding has voted in support of a measure similar to this by a majority of five to one, my judgment compels me to vote against it.


James Shaver Woodsworth: I will not detain the house very
long, I think almost everything has been said that it is necessary to say. I am opposed to the principle underlying this bill, because it seems to me that gambling is essentially the idea of getting something for nothing, and I take it that at this time above all others we ought not to encourage that spirit in the people. However, I must say that I cannot get up any very great enthusiasm about voting against the bill, simply because there are on the statute books other pieces of legislation which legalize gambling. There are in practice a great many institutions carrying on a species of gambling. In the business world we have our real estate exchanges and grain exchanges and stock exchanges, on which there is practised what is in my judgment virtually gambling. Therefore it seems to me ridiculous that we should go after the little man, perhaps the poor Chinaman who plays a game of fan tan, and these larger and much more dangerous forms of gambling should go on unchecked.


Benjamin Franklin Smith: You are
in favour of it?


James Shaver Woodsworth: No, but I say I am almost tempted, on account of the general injustice of the thing, to vote in favour of it. Sometimes one .is tempted to do that. On the other hand, if one votes in favour of this particular measure it means the extension of the area, and the creation of a certain sort of vested interest that makes it much more to fight against the general evil. So while I protest very decidedly against the discrimination involved in voting down one particular kind of gambling alone, while this house is making no effort whatever to get rid of other types of gambling that are much more serious, at the same time in view of the considerations I have outlined I feel that I must vote against the bill.

C.N.R.-CFJt. Bill


Mr. PETTIT:: I was paired with the hon.
member for Kamouraska (Mr. Bouchard). Had I voted, I would have voted for the amendment.


Mr. GIROUARD:: I was paired with the
hon. member for Richmond-Wolfe (Mr. Lafleche). Had I voted, I would voted against the amendment.


Mr. YERVILLE (Translation):: I was
paired with the hon,. member for Quebec-Montmorency (Mr. Dorion). Had I voted I would have voted against the amendment.


Mr. ROBERGE (Translation):: I was paired with the hon. member for Kingston (Mr.Ross). Had I voted I would have voted against the amendment.


Mr. FERLAND (Translation):: I was paired with the hon. Solicitor General (Mr. Dupre). Had I toted I would have voted for the amendment.
Main motion (Mr. Power) as amended agreed to on the same division.



CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL

[Stage Direction]
1 he house resumed consideration in committee of Bill No. 37, respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific railway system and for other purposes-Mr. Manion.- Mr. Gagnon in the chair.
James Malcolm: When the house rose at six o'clock I was making a few remarks with regard to an amendment which I proposed to offer to subsection 1 of section 4 of the bill. I had just pointed out that when the Drayton-Acworth commission sat in 1917 they had also, as did the Duff commission, recommended that trustees be appointed to administer the national railway system. Clause No. 31 in the 1917 report of the royal commission on railways and transportation recommended that there be five trustees and that these be named in the legislation. I had pointed out that, as the Prime Minister himself had said, if this railway were a private company it would be treated as though it were in liquidation, and as the bonds of this public company were guaranteed by the dominion it was advisable to appoint trustees to administer the affairs of the railway. I had further said that if the trustees were to be appointed, the House of Commons, representing, as the members do, the shareholders of the system, should be the body to appoint the trustees, or a receiver or liquidator, or whatever term we chose to apply to these three men to whom we were giving full charge of the system.
The legislation provides two things that remove from those who are to administer the system much of the responsibility. First of all it removes the financial difficulties, because it provides that any deficits that occur are to be met out of the public treasury. I suggested to the Minister of Railways that in selecting the chairman of the board of trustees, it would appear advisable that he should select
C.N.R.-C.P.R. Bill

the most able railway administrator he could secure on the continent, for the reason that if success is to come to the railway system all that can be expected of the board of trustees is efficient and economical management. The financial problem is being handled by the Minister of Finance of this dominion.


Richard Bedford Bennett: The statute says, by the chairman.


James Malcolm: If there is a deficit the minister has to find it.


Richard Bedford Bennett: But the budget is the
trustees' budget.


James Malcolm: Secondly, the success of the system will be predicated very largely upon the policies of the government of Canada. We all realize, whether we wish to blame it on the government in power in this country or on governments in power in other countries, that restrictive trade policies the world over have done much to diminish tonnage not only of railways but of ocean shipping companies. Such policies have done much to decrease the volume of business transacted. The men appointed by the government to administer the policies of the railway will have nothing whatever to do with the policies of the government, and any deficits that occur will be provided for by the Minister of Finance.
My suggestion therefore, and it is only a suggestion, is that the chairman of the board should be a railway operator. If the government is prepared to consider the advisability of sharing with other members of the House of Commons the responsibility for the appointment of trustees, so that it can truthfully be said-what the Prime Minister indicated-* that the object is to remove as far as possible any accusation of political partisanship. I believe that the amendment which I propose to submit would free the government from the possibilities of any such charge. If the government could decide upon the men it desired, the amendment could be offered at such time as the minister was prepared to make the selection. The section now reads:
The governor in council may vacate all nominations heretofore made to the board of directors of the national company pursuant to section 3 of the national act-
That means that they may dismiss existing directors.
-and may appoint in the place and stead of and in succession to the incorporators of that company three trustees whose powers, rights, privileges, immunities, duties, responsibilities and restrictions shall be as in and by this act provided.

My amendment is to strike out the word "may" in line 28 and substitute the word "shall", and to strike out all of lines 31 and 32 and substitute therefor the words, " and hereby appoint as trustees the following". The amendment would therefore read: That section 4 of part I be amended by striking out the word "may" in line 28 and substituting therefor the word "shall", and by striking out all the words in lines 31 and 32 and substituting therefor the words, "and hereby appoint as trustees the following". I have left the lines blank. I do not know whether, in submitting an amendment, it would be in order to insert names; I do not presume to submit names to the government. If the minister thinks that he can accept such an amendment I will submit it; otherwise I propose to let the matter stand. I leave it to him whether I shall submit it or not.


Robert James Manion: I know that the hon. gentleman offers the amendment in the best of good faith and I have every respect for his submission. At the same time there are a number of reasons why the amendment cannot be accepted. Let me deal with a few of the suggestions my hon. friend has offered. In the first place, as regards substituting the word "shall" for the word "may", I understand that it has adways been the custom to use the word "may" with respect to the governor in council. That is a small matter, but I just mention it in passing. In that case, generally speaking, the word "may" means "shall".
_ Another point made by the hon. gentleman was that the chairman of the board of trustees should be a first class railway operator. In passing may I point out that at the present time we have not only one but a number of good railway operators connected with the Canadian National Railways. I have heard the most complimentary references made to Mr. Ilungerford and the other officers of the railways and I submit that the splendid work which they have done in the past indicates conclusively that they are capable of operating the railway in excellent manner. My own opinion-I am expressing this just the same as the hon. gentleman expressed his opinion- is that rather than a railway operator, what we need is someone who will be competent to supervise the general policies of the road. Without meaning to be critical of the past, I believe that had there been greater supervision from the financial standpoint of the management and the capital expenditures of the road, it would have been better. The hon. gentleman also suggested that we should choose someone from this continent. Without attempting to make any political capital out of the

C.N.R.-C.P.R. Bill
reference of my hon, friend, may I say that my feeling is that if possible, and I think it is possible, we should obtain a man from this country. I have no desire to reflect upon the suggestion made by the hon. gentleman that these men should be named in the bill itself, but there are two reasons why I do not think that would be possible. The first is that the bill is not yet law, and the second is that when the bill was introduced both the Prime Minister and myself took the attitude that we would be ready to consider amendments suggested by hon. members. I think we have proven our good faith by submitting two amendments along the lines suggested by hon, gentlemen opposite. Until the bill is law and we know its terms, we could not very well approach outstanding men in Canada with a view to asking them to take this position. We would first have to know that the position was created and we would also require the general support and advice of the House of Commons as a whole. In view of these considerations it is not possible for the government at the moment to indicate just who should be appointed to these positions. I make that statement quite frankly and because of these facts the suggestion which my hon. friend has made, in good faith I know, is not acceptable to the government at the present time.


William Lyon Mackenzie King: Mr. Chairman, the former Minister of Labour, the hon. member for Kenora-Rainy River (Mr. Heenan) had an amendment which he intended to offer. He has been unavoidably prevented from being here to-day, and, as a former Minister of Labour, not as leader of the opposition, I should like to move an amendment which indicates views which I very strongly entertain. It is my opinion that at least one member of the board of trustees should be a person who would be regarded as representing labour upon that board, whether the board be made up of three, five or whatever other number of members may be decided upon. It will be for the government to decide just how many members shall compose this board, but I believe that, at this time, when industry the world over is undergoing a change, and when there is a very strong feeling against monopoly of control on the part of capital of great industrial enterprises, every effort should be made by a representative body such as this house to see that the classes immediately and mostly affected in industry are accorded a voice in the formation of industrial policy. I know it will be argued that, because this board may have the unpleasant duty of cutting down services, causing the number of men employed to be reduced, and possibly reducing wages and the like, it would be inadvisable to have someone possessing the confidence of labour upon the board. From my point of view, the reasons I have just mentioned are the strongest that could be advanced for having someone in the confidence of railway labour upon this board. I believe that working men are quite as reasonable as any other class in the community, when it comes to what relates to conditions of employment much more reasonable in fact, than are any of the others who have to do with the shaping of working conditions. I believe that the whole railway policy would be carried out in a finer spirit if organized labour were represented on the board which was to determine that policy. Being given information with respect to the extent and nature of business the world over, and other like considerations, the representative of labour upon the board of trustees would be able to form an intelligent view of the situation in a better manner than would foe possible in any other way. His support of any measure which involved a reduction of wages, the lessening of staff or matters of a similar nature, would carry considerable weight with the great body of railway employees. Whether the board is to be composed of three of five members, as the bill now stands, a majority, which must include the chairman, is required in order to have any decision of the board prevail. In these circumstances, there would always be at least two members who may very properly be regarded as representing the capital investors and the community generally, and, for that reason, the interests of investors or the public generally would be in no danger of being sacrificed at the hands of the one representative commanding the confidence of labour.
I should like to mention to the committee that it was the Drayton-Acworth commission which made originally the recommendation that there should be a board of trustees. I think they recommended that this board should consist of five members, but whatever the number they certainly recommended that there should be one trustee selected as especially possessing the confidence of the railway employees. That commission was appointed by hon. gentlemen opposite, it was appointed by the government of the Right Hon. Arthur Meighen. It heard evidence from all parties and came to the conclusion that, whatever the number of trustees might be, one should 'be selected as especially possessing the confidence of the railway employees. I am not submitting that this representative should necessarily be a railway employee, to be chosen from the ranks of the
C.N.R.-C.P.R. Bill

employees of the railway. I am following the exact wording of the Dray ton-Aeworth recommendation.
Another reason for making su-ch an appointment is the fact 'that ait the present time labour is represented upon the board of directors. As hon. members know, the president of the Trades and Labour Congress of Canada is one of the directors of the Canadian National Railways, he having been appointed by the late Liberal administration and continued as a director by the present administration. I venture to say that if the directors appointed by the present administration or those appointed by the previous administration, or the officers of the railway were asked whether Mr. Tom Moore had been helpful or otherwise as a director, the answer most emphatically would be that his services had been of great value to all who are concerned with the management of the railway and the shaping of its policies. It seems to me that, having established the precedent of giving labour representation upon the board of directors, it would, apart from all else, be a great mistake to take a backward step by now doing away with that representation.
I would urge further that in these matters the government ought to set an example to industry generally. I do not think representation by someone commanding the confidence of railway employees should be confined to the national system; I believe the Canadian Pacific might well adopt a similar policy in respect to its board of directors and that all large industries might well do the same. I believe also that, if industry does not do so it will be all the worse for the investors in the long run. If there is not a natural evolution by the gradual broadening of the representation of all classes immediately concerned in industry on the boards that control industrial policies, there is nothing left but a kind of action which would not commend itself to any deliberative body such as this.
Furthermore, in railway matters it is allimportant to have good-will and a good spirit prevailing throughout the system. There is nothing that can more effectually impede the satisfactory working of a railway than a lack of confidence on the part of the employees with respect to the policies by which they are governed. In that regard I believe that the railway as a financial institution will be benefited materially if labour is given representation on the board.
In conclusion may I say that I regard labour as a partner with capital in all industrial enterprise; certainly in railway enterprise labour is an essential partner. May I point out that our railways employ larger numbers of men

than most of our industries, and that men who enter railway service as a rule go into it for life. They invest their lives in that form of service, but they invest them again in a way even more immediate. Railroading is a hazardous buiness; there is not a man who goes out on a train who does not from that moment to the end of his journey take his life in his hands and all that his life means in the home from which he comes. Men who are giving their lives to industrial service in that immediate way ought to be represented on any board of trustees or directors which has to do with fashioning the policies under which they are obliged to work. So, Mr. Chairman, I would move that section 4 be amended by adding after the word "trustees" in line 32 the words:
-one selected as especially possessing the confidence of railway employees.
I hope the minister will find it possible to accept that amendment.


Robert James Manion: I shall not traverse the ground covered by the right hon. gentleman, because the question was discussed in a very general way on the second reading of the bill. At that time, however, I did point out-we were dealing with the Duff commission, but I think the same observation applies to the appointment of trustees-that it is a little difficult to choose a representative of one class without remembering other classes who are affected also to a great extent by our railways, notably the agricultural class. For example, I pointed out that at the peak there are not more than 200,000 men employed on all the railways of Canada whereas there are more than a million agricultural workers in this dominion, including farmers and workers on farms. As the agriculturist is affected in his purchases by a tax, that is, a freight rate, on practically everything he buys, he also is very greatly affected by the operation of the railways. If class representation is to be given on a small board of trustees such as this the agriculturist might well and justly take the attitude that he also has a right to representation on the board.
I merely mention this as one difficulty which might arise. There is another point, however; it is that the Canadian National Railways Act itself contained no clause providing that labour should be represented on the board, though as a matter of fact the governments of the past all appointed someone as representing labour, as my right hon. friend has said. I submit that a matter of this kind should be left for decision to the government appointing the trustees, and that their hands should not be tied by such an amendment. In



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other words, I believe the government should be left as untrammelled in carrying out this act as other governments were left in the carrying out of the Canadian National Railways Act, to which as a matter of fact Part I of the present act is an amendment. So I do not believe the committee would be wise to accept the amendment proposed by the right hon. gentleman. There may be other reasons that could be advanced but those happen to come to my mind at the moment.
William Lyon Mackenzie King: 
Abraham Albert Heaps: I very much regret the attitude taken by the Minister of Railways with regard to this amendment. Even though he could not accept it I think at least he might have given it a little more sympathetic consideration than he appeared to give in his reply. The hon. gentleman tried to justify his position by the fact that there was no representative of labour on the Duff commission.


Robert James Manion: Nor of agriculture.
Mr. HEAPS'. I think that was one of the regrettable features of the Duff commission. There was distinct class representation in that commission; that was evidenced by the minister's remarks when he introduced this measure dealing with our railway problem. At that time the minister said that the two appointees, the one from the United States and the other from Great Britain, had been placed on this commission in order to give confidence to those holding the securities of the two railway companies If that is not class representation I do not know what it is.


Robert James Manion: I corrected that later on; I said these men were not appointed as class representatives. They were appointed to give confidence to those people in the two countries holding bonds and securities to the value of hundreds of millions of dollars, but they were not put on as representatives of those people.


Abraham Albert Heaps: They were appointed in order to give confidence to the bondholders in those countries. A representative of labour on that commission might have given just as much satisfaction to our own people, and I think the government of the day should have been just as much concerned in giving satisfaction to our own people as in giving satisfaction to people living in other parts of the world. This evening the Minister of Railways said that he hoped in some way to go back on that former attitude of the government and that when the board is appointed the government will not go beyond the confines of this dominion in selecting them. I am in hearty agreement with that attitude, and I wish that it had been adopted in regard to the Duff commission itself, instead of appointing two gentlemen from outside of this country for the express purpose, in my estimation of recommending that we do something which they found it impossible to do themselves, for I see in to-day's papers that the Delaware and Hudson Railway, of which Mr. Loree is president, is in somewhat the same position as the Canadian National Railways. Yet this same gentleman comes to us to tell us how to settle our railway problem when he is not in a position to settle his own.


Richard Bedford Bennett: I think his road paid a dividend last year.


Abraham Albert Heaps: To-day's papers report a loss of $45,000,000 for the road.
In 1927 at the Conservative party convention held in Winnipeg a plank was written into their platform in favour of giving labour representation on these commissions appointed
C.N.R.-CP.R. Bill

by the government. I am sure that the Minister of Railways is not going to go back on that plank which was adopted at the Winnipeg convention only a few short years ago. I hope that that recommendation was something more than mere window dressing. The workers on the railways will be very much disappointed at the attitude adopted by the Minister of Railways this evening when he does not hold out any hopes, in my estimation, of giving labour representation on the board of trustees, which will have control to a very large extent of the railways and will have some say as to the conditions under which railway men shall work.


Robert James Manion: The hon. gentleman has no right to say that I held out no hope whatsoever. I said that the government should not have its hands tied in regard to this matter. Speaking of window dressing, may I with all respect suggest to my hon. friend that there is no group in this house who do so much window dressing as he and his friends. Their whole attitude here and everywhere is one of window dressing, appealing to class all the time. That is the attitude my hon. friend is taking now. Not only in this house but on the hustings the whole attitude of that party is one of appealing to class, of setting class against class, so when it comes to window dressing I think I might learn a lot from my hon. friend. As regards the remark of the leader of the opposition in regard to the danger to life of the railway men themselves when running a train, that is true, but the passenger on the train also runs a considerable risk.


William Lyon Mackenzie King: But the passenger is on the train one day, while the railway man is on the year around.


Robert James Manion: My deputy points out that there are more accidents on the highways than on the railways, and I believe he is right although I have not the figures at hand. I do not think the government's hands should be tied in regard to matters of this kind. When the appointment of the trustees takes place the matter will have to be considered by the government and the responsibility taken by the government. The door is not shut by any means. The question will have to be considered from all angles. It has not been considered as yet, I say quite frankly.
Amendment (Mr. Mackenzie King) negatived.
Subsection 1 of section 4 agreed to.
On section 4, subsection 2-Chairman.


Mr. ELLIOTT:: This subsection provides that one of the trustees shall be chairman and shall devote his whole time to the per-

formance of the duties of his office, and shall not be an officer of any company other than a company which is comprised in the national railways. I wish to submit to the committee an amendment to answer the suggestion made there that one of the trustees only, the chairman, shall devote his whole time to the performance of the duties of his office. The implication is that he alone of the trustees shall devote his full time to the duties of his office. I submit that with the amount of money that the people of this country have invested in these railways, their immense importance and the service that they give to the people, if the board is to be limited to three trustees they should not only be the best men obtainable but all three trustees should give their whole time to the work. The Canadian National Railways Act provided that there should be from five to fifteen directors, and actually I think there were seventeen directors, and seventeen I think for the Canadian Pacific. Now, when the number is being limited to three, I submit not only that they should be the most capable men who can be obtained but that they should give their full time to the work. I do not know that there is any great object in taking up too much of the time of the committee in discussing this matter, as there are other matters to be discussed, and I therefore move that subclause 2 of section 4 be amended by striking it out and substituting therefor the following:
One of such trustees shall be the chairman Each trustee shall devote his whole time to the performance of the duties of his office and shall not be an officer of any company other than a company which is comprised in national railways, and shall not during his tenure of office as trustee become a director of any company other than a company which is comprised in national railways of Which he was not a director at the time of his appointment.


Robert James Manion: I *would suggest that subclause 2 of clause 4 stand with the amendment which has just been proposed, on the ground that this is a question which we think is worthy of consideration. The Prime Minister this afternoon, speaking on this very question, mentioned that he thought it might be well that the three trustees for the first year at any rate give their entire time to the work. In view of that and my hon. friend's remarks I would therefore suggest that the subclause stand with the amendment which has been moved, and we will come back to it probably to-morrow, in the meantime giving further consideration to it. It might be advisable that for the first year, or possibly longer,



IS, 1933

[Stage Direction]
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the three trustees should give their full time to the work, and so, Mr, Chairman, I propose that this subclause stand and that we proceed with the bill.
Ian Alistair Mackenzie: Has the government decided to maintain only three trustees?-because I find a great deal of opinion in favour of five.


Richard Bedford Bennett: We intend to stick to three.


Charles A. Stewart: Why should there be discrimination against the individual who is at present or who formerly held a position of director?


Robert James Manion: Why any discrimination against a present director?


Charles A. Stewart: Yes.


Robert James Manion: There is no discrimination against them. I have put myself on record here and elsewhere in regard to the splendid work they have done. However there is an opinion that there should be three trustees in charge of the road; there is no discrimination being shown.


James Malcolm: Under the bill as drafted a director of the Canadian Pacific Railway could be appointed, but he could not become a director after he was appointed.


Robert James Manion: He will not be appointed.


James Malcolm: The minister might add the word "director" the first time the word "officer" is used, to make the correction that is necessary. He might be a director of the Canadian Pacific Railway and still be appointed, but he could not become a director after he was appointed.


Mr. POWER:: The minister should put in some phraseology which would indicate that upon becoming a trustee a man should resign his directorship in other companies, because there is nothing to prevent his retaining his directorship in other companies. There is, however, something to prevent his becoming a director after he has become a trustee.


James Malcolm: He could not be an officer, but he could be a director of any company when he was appointed.


Mr. NEILL:: I should like to call the attention of the minister to that part of clause 2 section 4 which reads, "and shall not be an officer of any company." As I take it, an officer is a paid servant, other than a director. There is no provision saying that he shall not be a director. It should read, "and shall not be an officer or director of any company."


Robert James Manion: We had intended moving an amendment to that clause. The Minister of Public Works had it before him, but in view of the amendment of the hon. member for West Middlesex (Mr. Elliott) I thought perhaps we could leave it until we had decided upon that point. I shall take up the suggestion now made regarding a director of the Canadian Pacific Railway and see how it fits in. I suggest that the clause stand, and that we proceed with clause 5.


The CHAIRMAN (Mr. Gagnon):: Subsection 2 of clause 4 will stand.
On section 5, subsection 1-Salaries.


Charles Gavan Power: Subsection 1 of section 5 reads:
The trustees shall be paid by the national company such salaries as may from time to time be fixed by the governor in council, and if any trustee is in receipt of a pension from any railway company he shall not be entitled to receive or to be paid such pension during his term of office.
I should like to follow that section by an amendment to the effect that the trustees of the national company shall be paid by parliament out of the yearly estimates. I submit that is the only way we can have control over the trustees. Personally my great objection to the bill is that essentially it is an emergency measure to deal with an emergent situation. We are making the persons to whom the operation of the act is to be entrusted practically irrevocable directors, and unless some control is retained by parliament I believe we will defeat the intention of the Canadian people. As the section reads the trustees shall be entitled to be paid from the earnings of the road. They need not come to parliament for their saLaries, and are not responsible to parliament in any way. If an amendment were moved along these lines, namely by striking out the words, " national company " in the first line and substituting therefor the words, " out of moneys voted by parliament in the annual estimates " I suggest that then the conduct and administration would be subject to the control of the shareholders who, after all, are the members of parliament representing the people of Canada, the owners of the road.


Robert James Manion: Is that an amendment?


Charles Gavan Power: Yes.


Robert James Manion: In the first place I suggest that the amendment is out of order, because it would be putting charges upon the parliament of Canada, something a private member cannot do. It would be placing upon the parliament of Canada the necessity of paying

C.N.R.-CP.R. Bill
the trustees. However I merely mention that objection; the chairman may consider the amendment and give his ruling thereon.
The hon. member stated that the trustees are not in any way subject to the control of parliament. I do not agree with him, because if he will look at section 12 he will find the following:
The annual budget of the national railways shall be under the control of the trustees. Amounts required for income deficits, for interest on obligations outstanding in the hands of the public, for capital expenditures and for refunding or retirement of maturing securities shall be submitted by the trustees to the Minister of Finance for the consideration of the governor in council prior to presentation to parliament. Income deficits shall not be funded.
That clause includes practically every need of the Canadian National Railways, and to my mind by that clause the parliament of Canada will have just as much opportunity as it has to-day, if it so chooses, to investigate the expenditures of the national railways. That is the way it strikes me. Then section 14 provides the annual report must be made to parliament. It states:
The trustees shall make a report annually to parliament setting forth in a summary manner the results of their operations, any cooperative measures. plans or arrangements effected pursuant to this act,-
And so on. Those two clauses make them subject to parliament. To my mind those two clauses make them responsible to parliament.


Some hon. MEMBERS:: No.


Charles A. Stewart: We are not dealing with section 12, but the minister has referred to it. I should like to be assured as to whether or not parliament has any control over the receipts of the road.


Ian Alistair Mackenzie: Not the
slightest.


Charles A. Stewart: After all,
that is the main source from which the trustees will operate-the revenues of the road.


Robert James Manion: They have no control over the receipts, perhaps, but when they come to parliament under section 12 and ask for money-


Charles A. Stewart: For specific purposes.


Robert James Manion: But those specific purposes cover all the needs of the railroad.


Some hon. MEMBERS:: No.
[Mr Manion.]


Charles A. Stewart: If the section means that the revenues of the road come under review, then of course the minister is correct. But if not, if we are merely to vote deficits and capital requirements, then we have no control over the trustees at all.


Charles Gavan Power: There are only three purposes for which they may come to parliament, -first, to get amounts required for income deficits, secondly for interest on obligations outstanding in the hands of the public, and third for capital expenditures and for refunding or retirement of maturing securities. Those matters shall be submitted by the trustees to the Minister of Finance for the consideration of the governor in council, prior to presentation to parliament. The section is not quite clear as to whether or not they have to come to parliament. The statement is made that the Minister of Finance reviews the amounts required. This may be only a formal presentation, and we may be told now, as we have been told for years

and I am not blaming the minister particularly-that it is not in the public interest to give out the information. The trustees are representing the people of Canada. We should have some kind of control over their actions, and I submit the only control we can have is by voting their salaries.


Robert James Manion: If the hon. gentleman will permit me to deal with section 12, it seems to me that section covers practically everything. For example, amounts required for income deficits, that is the difference between the net operating income of the railway and the interest owing to the public on the bonds of the railway-


William Daum Euler: The time might come when there will be no deficits.


Robert James Manion: If the time ever comes
when the Canadian National Railways will require no assistance for income deficits, it seems to me that would be an ideal condition for the Canadian National Railways to reach, and it would then be well for this parliament to keep out of the business and let the management operate the road without any interference.
But to get back to my argument, I say that the provision for looking into the cause of the deficit would cover practically every branch of the railroad's affairs. True, as to certain information being given to parliament, I presume whatever government is in power would take the same attitude as has been taken in the past; there is certain information that the railway management say it is not in

C.N.R.-C.PJI. Bill
the railway's interest and therefore not in the public interest to divulge. I presume the same attitude will be taken in the future. But the section also refers to amounts required for interest on obligations outstanding in the hands of the public, for capital expenditures, and for refunding or retirement of maturing securities. To my mind that covers every possible branch of the railway's affairs, and the parliament of Canada will have it in its power to go into these details as far as they ever have in the past; with this exception, recommended by the Duff commission, that the officers of the railway should not be brought before the parliamentary committee. But that is no reason why we should not bring the trustees before the committee and have them give a report.
Then section 14:
The trustees shall make a report annually to parliament setting forth in _ a summary manner the results of their operations . . .
That would deal with the same question. I submit in all seriousness and sincerity that to my mind, as far as parliament wishes to control the financial arrangements of the railway, it has all power to do so under sections 12 and 14.


Charles Gavan Power: Taking the minister's own
argument, as to these matters which he says come under the control of parliament-which argument I am not prepared to admit-they are income deficits, interest on obligations in the hands of the public, capital expenditures, and retirement of maturing securities. Not one of those things do we dare refuse to vote. It is pointed out to me that in the first paragraph it is provided that the annual budget of the national railways shall be under the control of the trustees. We dare not refuse to vote the income deficits; we dare not refuse to vote the interest on obligations in the hands of the public, for if we do the road is bankrupt, and if so the country is bankrupt,-


Robert James Manion: Is not that true at this moment just as it will be in the future? But we do look into the accounts.


Charles Gavan Power: But if we have the trustees here before us having their salaries voted, we can criticize them. As representing the people who own the road, the shareholders of the road, we can say that the actions of the trustees are not conducive to the best administration, that our property is not being well managed.


John Thomas Hackett: We can say that anyway.


Charles Gavan Power: But we cannot do anything about it.


John Thomas Hackett: Just as much as you ever
have.


Charles Gavan Power: Could parliament to-day, if it desired, refuse to vote the salaries of the directors or the management?


Robert James Manion: No, the directors are not paid by parliament.


Richard Bedford Bennett: The president was, under a contract made by order in council, but the money had to be provided by the railway.


Eugène Fiset: I think the Prime Minister makes a mistake. The salary of the president was paid out of income.


Richard Bedford Bennett: That is what I said.


Charles Gavan Power: The point is that these men are to be given extraordinary power. They are vested with ownership and control-practical ownership; the Prime Minister himself said they were to act as receivers in bankruptcy-


Richard Bedford Bennett: Not in bankruptcy.


Charles Gavan Power: These men must be controlled by someone, otherwise they can play ducks and drakes with the property of the people and no one in this house can prevent it. The government itself cannot. The people of Canada have no way of taking their own property out of the control of these three men. I think that is an abnormal state of affairs in a country that prides itself on being a democracy. Unless in some way we provide that they shall be obliged to come before parliament to have their salaries voted we shall be setting up in this country something which not only we but probably future generations will greatly regret, because these men through the method of appointment are practically self-perpetuating. During the course of the debate on the second reading the Prime Minister pointed out that it was quite possible that following a referendum an amalgamation of the two railroads might be brought about. But these directors, so long as there were assets in the Canadian National Railways to pay their salaries, would remain, and we could not do anything about it except by an address of both houses. No political party, no majority of the people of Canada could remove these trustees.


Robert James Manion: Does my hon. friend suggest that under section 12, if this House of Commons asked the trustees or some of them to come before a committee of this house, as I expect it will, to discuss the reasons why they needed this money, they could refuse?

C.N.R.-C.r.R. Bill


Charles Gavan Power: I am talking about their salaries now. The only way we could get rid of them would be to stop paying their salaries. That is the only way I can see to get rid of these men if they were not performing their duties properly, or if the people of this country decided that an act which we are now passing, though it may be proper to put into effect during a time of emergency, was not a proper measure for the administration of our national railways at another time. If the emergency disappears we may not need these trustees, but we cannot get rid of them. We have no control over them unless we vote their salaries.


Richard Bedford Bennett: I think the hon. gentleman might have started the rest of my observation, that this parliament has power to repeal this statute next session, and the trustees would then cease to hold office. A parliament that enacts can always repeal. If it were found that the trustees abused their power, did not properly discharge their duties, I have no doubt that no government would hestitate for a moment to take the necessary action to repeal the whole statute.


William Daum Euler: Suppose the Senate refuses?


Richard Bedford Bennett: I said parliament.


Charles Gavan Power: Does the Prime Minister
suggest that in order to get rid of the trustees we should repeal the whole act?


Richard Bedford Bennett: Repeal the section. It
is nothing new in parliamentary practice ; it has been done frequently and will continue to be done. Whether or not it gives ground for a claim for compensation is another matter. There is pending now before the privy council an appeal taken by a former member of the appeal courts from a judgment of the Supreme Court of Canada because as a result of legislation passed in 1930 an office was abolished and it was contended that there was a right to compensation. This parliament must be reasonable, this committee must be reasonable. We are facing what I think is very properly described as emergency in transportation matters. Parliament may desire to add to this bill ait another session, and I cannot contemplate the desirability of the committee wrangling over the salaries paid to the trustees. I believe that in the case of one of the great institutions of this country an effort was once made by a shareholder to ascertain what salary was paid to the president, and the directors declined to give the information. Only last week the government of the province of Ontario declined to make known the salaries paid to the hydro commissioners. The general prin-

ciple followed in British countries has been noit to discuss among the shareholders the compensation paid to the officers of the enterprise. But there always has to be included * in the reports to the Interstate Commerce Commission in the United States, and in this country to our Board of Railway Commissioners, I think, a statement of what the salaries are. The usual method taken by shareholders when they are dissatisfied with their officers is, at the annual meeting, to pass a vote of non-confidence in their directors; and that means that, although the directors retire by rotation, as they do in most companies nowadays in order to preserve continuity of policy, nevertheless, a motion of censure passed on directors has usually resulted in the disappearance of that board by resignation. I do not apprehend that there is any difficulty in a matter of this kind.
I do not think that we want to go over a bill of this character with a fine comb for the purpose of seeing that every possible contingency should be anticipated.


William Daum Euler: Why not?


Richard Bedford Bennett: The answer is obvious.
What we are trying to do is to lay down a principle and embody it in the form of a statute, and you can test any administrative statute of this kind only in the light of experience; so that if it is found defective at this or that point, parliament, which meets every year and is only for a few months not in session, can take proper measures to remedy such defects. I for one would not contend for a single moment that this is perfect legislation. It embodies the recommendation made by the commission-we will leave out altogether the question of the merits of that commission-and an effort has been made not to make it a contentious, narrow party measure but rather to ensure that there should be the freest opportunity for members of the committee to indicate where improvements might be effected-not, shall I say, to have narrow constructions placed on a broad measure of public control, but in the broadest possible sense to suggest where an improvement could be made here and an improvement there.
Dangers are foreseen with respect to amalgamation, and I for one am perfectly willing that the committee should take whatever steps it might think adequate to protect against that. Then there is the question of the abandonment of lines. Having lived in the west I know exactly how hon. members feel about that, the fear that there might be

C.NJi.-C.P.R. Bill
placed in the hands of some group the power to destroy branch line facilities. I think we have met that; what the minister said this afternoon completely meets that situation. And there are other suggestions of a like character. But when you get down to the question of arrangements between the employer and the employee, the trustees of the company, we have given large powers to the trustees, and this is the ground on which the commission took their position. They said: If you are to avoid the difficulties and pitfalls of political control and pressure, if you are to make this measure at all effective, you must hedge it round with such safeguards as will endeavour-we will put it that way at any rate-to secure public ownership of a great utility. When I hear the hon. member for North Waterloo talking about amalgamation of all lines under public ownership, with the history we have behind us, it seems to me that makes the whole thing a laughing stock, because the history we have behind the system is unfortunate in the sense that it has not worked well.


William Daum Euler: And what is the history of
privately-owned railroad companies all over the continent, including Canada?


Richard Bedford Bennett: The history of the private railway in this country is an amazing history. There is $120 of cash for every $100 of shares outstanding. It is the one company in all the world about which that can be said; and in point of efficient management-


An hon. MEMBER:: Why doesn't it pay dividends?


Richard Bedford Bennett: It is not paying dividends; it is not paying dividends on preferred shares. But no one suggests that this is due to any other fact than the lessening of traffic. During the great period of expanding traffic for the railways, the Canadian National system, which came into being, after the late government assumed office, by the passing of an order in council after the judgment of the privy council in the Grand Trunk arbitration, and during the years following, in which there was a tremendous expansion involving the building of railways, branch lines and facilities, the commission finds that through it all runs the red thread of extravagance. Hon. gentlemen opposite dislike that, because they say that it is a criticism of themselves. Now, I do not think that the commission meant that, and I am not putting it in that light to the committee to-night. But everyone who is familiar with railways does admit that it is a fair 53719-2561
statement. We are so constituted in this young country, however, we take our politics so seriously at times and become so unwilling-


Charles A. Stewart: That cannot be blamed on the national railways alone. It can be applied to both railways.


Richard Bedford Bennett: Not the red thread of extravagance; that was applicable to one and not the other.


An hon. MEMBER:: No, both.


Richard Bedford Bennett: But the point is that one had an accumulated surplus of $100,000,000 or thereabouts and could afford to do things which the other could not, and you cannot compare incomparable things. For instance, the Pennsylvania system was able to do things which neither the old Wabash nor the Erie could do. And the Milwaukee, up to a certain point, was a most prosperous road and' could do things that the Northern Pacific and: other roads could not do.


Edward James Young: But extravagance is always; extravagance.


Richard Bedford Bennett: Yes, but it is always' relative, having regard to resources and the ability to extend your earnings in proportion to your extravagances, if you call them extravagances. I think I can say that I am less a sinner with respect to these matters than any member of the committee, because I have a singularly consistent history with regard to the railway situation in this country. The hon. member for West Edmonton knows what my position has been. I have been as critical of the one as the other, and in 1908, standing in the Lyric theatre in Calgary, I made the statement that in my belief we were signing the death warrant of the successful conduct of transportation in Canada by endeavouring to build a third transcontinental in this country. I had no hesitancy in making that statement, and I have never changed my view. But now we are dealing with an emergency; we are grappling with a situation in which recrimina^-tions serve no purpose-


James Malcolm: Hear, hear.


Richard Bedford Bennett: -and do not advance matters one bit. As to the suggestion that we should ask this parliament annually, with respect to these trustees, to discuss the question of their salaries, I am sure the hon. gentleman who proposes it knows that he cannot place a charge upon the country; it can be done only through the government. And the suggestion, it seems to me, is a negation of every principle that has hereto-

C.N.R.-C.FJt. Bill
fore governed in matters of this kind. The fact that it is the negative of everything that has been done does not prove that it is wrong, but you must show affirmatively that it has great merits to warrant its adoption, and there is no merit I can see that would warrant us in concluding that these trustees should have their salaries fixed by parliament annually. I do not think we could get the type of men we want for the position if we followed that course.


William Lyon Mackenzie King: The Prime
Minister has been speaking with reference to the question of salaries, and I gather from his remarks that he has been defending the point of view of secrecy with respect to the remuneration to be paid officials of the railways. I am diametrically opposed to that view. The time has come when the more publicity there is with respect to public expenditures, and especially where they relate to a need for effecting economies, the better for all. The Prime Minister has used, particularly in relation to salaries, the expression, which is found in the commission's report, of the red thread of extravagance running through various expenditures. That red thread would not have been there had not the practice been followed of regarding as sacrosanct certain privileges surrounding those who hold great financial positions of one kind or another. If the present and the recent past has removed anything, it has removed this halo from the heads of great financiers. It has been made perfectly clear that there is no greater fiction in the world than the idea of the superman in business or finance, whether it be banking, railroading or any other form of industrial or commercial enterprise. I believe that this committee would be helping along a much needed reform if it insisted that instead of secrecy there be publicity with respect to all these matters of salary.


Richard Bedford Bennett: It has.


William Lyon Mackenzie King: During the present debate the Minister of Railways made reference to certain salaries which he found were being paid to some of the officials of the Canadian National Railways. Personally I was astounded when I learned what some of those salaries were. Throughout the time I was Prime Minister I had no knowledge of what some of those salaries were, there were two reasons why I did not have that knowledge. The first was the avowed policy of the late administration, to allow the railway to be managed by the board of directors without any political interference. As far as I was

concerned, during the entire time I was in office I never sought directly or indirectly to influence the national railways with respect to any of these matters. The other reason was that, as mentioned, we also followed the practice of replying to many questions respecting salaries which were asked from time to time by stating that this information should not be given to parliament unless the railway itself was willing it Should be given. It was alleged that in making public this information an advantage would be given to its competitor. I think that practice was all nonsense. I believe the competitor as a rule knows exactly what is being paid. The practice amounts to a conspiracy between the competitors for their mutual advantage, as against the public interest or the interest of the particular concerns. I believe we should insist upon publicity in connection with all salaries. If it can be best had by having them reviewed in parliament, let it be done in that way. I am not referring merely to the salaries of the trustees, I am referring to the salaries and allowances paid to officials and others who have to do with the management and operation of the railways. If we could set an example in that regard we might be furthering a great reform which would be of immense service at the present time to this and other countries. I believe that such a reform will be insisted upon more and more in all countries. After all, there is very little about Which the average individual has not to give a public accounting. In connection with his personal income and matters of the kind he has to make a declaration which is sent into a government office. True enough it is protected, but the information is open to the Minister of Finance and the members of the government as well as to certain officials, if they wish to pry into affairs of this kind. There is hardly anything in which there is not full publicity with respect to the private means of individuals, why then should there not be publicity with respect to salaries which are paid out of the public treasury?
I think it is largely a false distinction to draw a line between those amounts which are paid out of the receipts of the railways and those paid out of the public treasury. What the latter amounts to, is determined by the former. The other day the committee was discussing the question of finding some means of compensating for the time they were out of employment, or until they could obtain other employment, the men who would be thrown out of employment as a result of economies effected. It was argued in the com-

C.N.R.-C.PJI. Bill
mittee, and ruled by the chairman that such a motion was out of order because if carried it would impose a burden upon the public treasury. The intent of the motion was that the money required should come out of or be a first charge upon the receipts of the railways themselves. After all, amounts which parliament will have to make good When meeting any deficit will always bear a relationship to the receipts of the railways, so in this discussion we should not try to draw too sharp a line between what is going to be a matter	of	expenditure	coming	under	theheading of what the railway itself provides from its revenues, and what is going to be a matter	of	expenditure	coming	under	the
heading of what this parliament will have to provide. It seems to me that the matter of the budget as a whole is one of national concern and ought so to be viewed.
May I say this further word? Either this parliament is supporting a policy of government ownership and control, or it is not. If the ministry feel that the time has come when we should not have government ownership and control, let them say so and bring in a measure to that effect. Let them abolish public ownership and control and turn the railways over to a private concern. If the ministry feel that they wish to retain government ownership but do not wish to have public control, let them bring in a measure to that effect, and say distinctly that they are through with the public control of railways. This important matter should not be camouflaged, and it seems to me that that is what is being done by this bill. The ministry is taking the railway property which is owned by the people of Canada, and turning it over to three private individuals to do with as they please. They are saying to these three individuals: You run this railroad as you please, independent altogether of the parliament of Canada and the approval of the governor in council. Where is there a scintilla of public control in that? It is government ownership with private control of the most exclusive type. It is giving a monopoly of control to three men, a monopoly of control and power which does not exist with respect to any other railway in this or any other country in the world. So far as the Canadian Pacific Railway is concerned, the operating forces are subject to the policies laid down by the directors who are considerable in number. We are discussing having only three directors while the Canadian Pacific have something like seventeen. May I here in passing point out something which I think should have been mentioned before? The provision for a large number of directors is one
which was put into the original statute by hon. members opposite. If there were too many directors appointed by the late government, it was 'because the late government took the act as they found it, and appointed directors to the number which was provided by the statute as passed by the previous administration.


Richard Bedford Bennett: As a matter of fact, we increased it so as to give representation to all.


William Lyon Mackenzie King: Yes, the number of directors was increased from fifteen to seventeen by the present government. What I am pointing out is this: In this particular measure the government is proposing to give complete control to three persons. If the railway were being handed over to another company, a purely private concern, to run, there would not be anything like the absolute private control which is provided for in this particular measure. Such a company would require that at least its shareholders should know What its directors were doing. Under this measure, this parliament, which represents the shareholders of the National railways, is parting absolutely with its control, unless in some way the budget and its details can be brought here to receive both discussion by and the approval of parliament.
I rose more particularly to speak in connection with the publicity which should be given to expenditures, particularly those made in the form of salaries, and I would like to conclude by reemphasizing this point. I believe that we in parliament would have escaped some of the criticism which has been made if we had had a provision in our original enactment to provide for giving to parliament the fullest information with regard to all expenditures made in the form of salaries. If this is an error which has been made in the past, let us not repeat it by following a practice which will make for even greater secrecy with respect to the expenditure of public money.


William Daum Euler: Mr. Chairman, I want to
assure the Prime Minister and the members of the committee that I have no desire to be unduly critical of the provisions of this bill. I would not be making any reference to the subject of the discussion this afternoon were it not for the fact that the Prime Minister referred to the matter of amalgamation. In answer to a question which he asked this afternoon, I said that I was in favour of amalgamation under public and not private ownership. Perhaps I should have said what was in my mind when I spoke on the second

C.NH.-C.P.R. Bill
reading of this bill, but I will do so now. I realize that amalgamation could not come at the present moment, but when it does come, it should come under public and not private ownership. Just in passing, I may say that I have no desire to deal at any length with this particular phase of the matter, but in my opinion amalgamation will have to come. This government will have to face that problem just as it will have to face some other things which so far it has not had either the inclination or the courage to face.
Something was said about the reference by the royal commission to the red thread of extravagance which had run through the Canadian National Railways. I do not want to make any invidious comparison but I think it is known to everyone that the same description could be applied to the operations of another railway. If the red thread of extravagance did in fact run through the operations of the Canadian National Railways to any extent, it also ran through the operations of the other railroad.
Now with regard to the clause under discussion and the suggestion made by the hon. member for Quebec South, I would say that I am in favour of that only in case the government refuse to accept what seems to me the reasonable alternative. The suggestion advanced by the hon. member for Quebec South is that by having the salaries voted by parliament we would have some measure of control over the board of trustees. I think we should have some measure of control over that board. I do not particularly favour this method, by having parliament vote the salaries, and just here let me say that I am one of those who would like as little interference as possible with these trustees when they take over the management of this railway. But I want to point out that if the bill goes through as it stands now the House of Commons or the government itself, and I am speaking now of the cabinet, has no power whatever to get rid of that board if it should desire to do so. The members of the board will be appointed for terms of seven years, and there is no means provided for dispensing with their services except by the vote of both houses of parliament. If we have any belief whatever in democratic government I think the control of the board should rest not with 'both houses of parliament but with the House of Commons or the executive itself. That is the point I desire to make.
It was Stated during the debate on the second reading, I think by the Prime Minister, that the board of trustees could not spend a sou without the consent of the governor in

council. I think the Prime Minister was wrong in that statement; perhaps he did not mean exactly what he said, because this parliament and this government have absolutely nothing to do with the expenditure of the operating revenues of the railway. They are perfectly free to do as they please with revenues amounting to $150,000,000 or $160,000,000, and that was the case under the old dispensation.


Richard Bedford Bennett: I think the hon. gentleman has not correctly quoted me, I wras dealing with capital expenditures.


William Daum Euler: 
Richard Bedford Bennett: Just one word in reply, Mr. Chairman. It is not often that the right hon. leader of the opposition and myself are in accord. If the right hon. gentleman gathered from what I said that I believed in secrecy with regard to everything connected with public companies he was entirely in error. I have expressed myself very freely during the last two years or so with respect to that matter. There have been wrecks of companies in this country which, if this parliament had possessed jurisdiction, certainly would have been heard of; I say that to the right hon. gentleman now. It is true they happened under circumstances which precluded the possibility of this parliament exercising control, but I am wholly in sympathy with the effort that has been made during the past few weeks by those interested in one corporation to obtain information as to how the money they paid into that corporation was invested. Certainly I am of the opinion that publicity is the surest cure for many of the corporate evils that have grown up in the world in the last few years. About that there is no doubt;
I am wholly in accord with that view. I have expressed myself perhaps too freely in that regard, in the view of some of my old time personal friends. But I put this to the committee, and I put it very fairly: it is an altogether different thing to throw into this house the discussion from year to year of the salary you are going to pay a trustee. Knowledge must be given, of course, but to say that this parliament is to vote that sum implies that the Minister of Finance will introduce it as an estimate, and if he introduces the salaries of the trustees as an estimate why should not that practice be followed in regard to the rest of the officials of the railway as well? That would negative the very object this bill has in view. Section 12 provides that the annual budget of the national railways shall be under the control of the trustees.


Eugène Fiset: Does not the Prime Minister think the wording of this clause is obscure? The very fact that you mention the annual budget suggests that such a budget should be presented to parliament. In the discussion on the resolution I think that was why the Prime Minister left us under the impression that the annual budget of the Canadian National would be submitted to the house.


Richard Bedford Bennett: the courts, so I shall do no more than merely direct attention to it. This parliament has the right to repeal any of these sections ait any time if it so desires.


William Daum Euler: But not the House of Commons.


William Lyon Mackenzie King: The House of Commons has not the power.


Richard Bedford Bennett: The House of Commons, no. It is rather difficult to understand any hon. member of this house, and I think the leader of the opposition will agree with me, suggesting that there are not two houses of parliament.


William Daum Euler: I am not suggesting that.


Richard Bedford Bennett: The suggestion is that
one constitutes parliament; it does not. There are three estates of the realm.


William Daum Euler: We all know that.


Richard Bedford Bennett: The Commons, the Senate and the crown. The hon. gentleman may know it, but he certainly did not say it. What he said was that the House of Commons should determine these things.


William Daum Euler: That is exactly what I
meant.


Richard Bedford Bennett: That it wias the only
body that should deal with these matters. Now parliament is the body that deals with them, and parliament consists of two chambers, not one, and I do submit when it is suggested that one body should usurp all the functions of parliament, that that is a mistake. Why is it that the tenure of office of judges has been surrounded with the conditions which have been applied thereto?


William Lyon Mackenzie King: They administer the law; they do not make it.


Richard Bedford Bennett: But I say that this is an endeavour to put the administrative trustees in a position where they at least could feel that they could exercise independent judgment without having to respond to political convictions.


William Lyon Mackenzie King: They are doing much more than administering.


Richard Bedford Bennett: No, they are only administering in the large sense, because administration involves all the functions mentioned in the bill. They are essentially the directing administrators as trustees of this property.

The hon. member for North Bruce (Mr. Malcolm) said that the chairman should be a railroad man. The statute provides that the operating official of the road as distinguished from the executive head of the road shall be the operating man. The executive head of the road, the chairman of the board of trustees, the man who discharges with relation to this undertaking what is discharged by the executive committee, for instance, of the great transcontinental railroads of the United States, which have their head offices in Omaha or Kansas City, but their executive committees in New York-they have their executive offices in the city of New York, why? Because the financial concern of a railroad enterprise is of such paramount importance. This statute contemplates that the operating official-the name used is president, which might lead to some conflict of view; I do not know that it is the best word that could be used; some other word might be more apt

is the man who is responsible for operations. But so far as the board of trustees is concerned, its functions must necessarily be largely concerned with what you might call the financial picture as distinguished from the other side of it. When you hear talk about the humanities of the situation, the fact is that the humanities of the situation are dealt with by the operating head of the road and by the men themselves. Everyone who knows the history of railroads is aware of the fact that in their unions the men have established safeguards to protect themselves in the most ample manner, and the relations between them and the road itself are usually dealt with at conferences between the men and the president and the officials of the operating section of the road. You see in the paper, for instance, that the heads of the union organizations have met such and such operating officials, and if they are unable to agree, they have a board. So this is an effort at least to meet an emergency situation in which the Canadian people are called upon to pay something over one million dollars a week.


James Malcolm: Quite so, an emergency situation.


Richard Bedford Bennett: Quite so, and in this emergency the board is to be appointed-


James Malcolm: But the legislation provides for permanent appointments, for the trustees acting continuously.


Richard Bedford Bennett: It certainly does.


James Malcolm: The emergency is not
going to be everlasting.

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


Richard Bedford Bennett: No, but you co-uld not
in a bill give any form or shape to a policy if you limited its application to a particular period of time. I think the hon. member is too familiar with business not to say that is so; particularly when dealing with a large public utility, that one of the dangers in endeavouring to limit the time in which a policy is to be operative is that by so doing you defeat your own end. But the main concern of this board of trustees, I would once more urge upon the committee, which the commission had in mind was to endeavour to secure such administration of this property as would relieve the taxpayers of Canada from paying one million dollars a week.
The other side of it, the humanity side of it which has been mentioned, is left largely to be dealt with by the president and the various officials of the road in conferences with the unions, such as have always taken place and at which adequate measures have been taken for safeguarding the interests of all who might be concerned.
But the great concern of this legislation is to endeavour to provide a body of men of such competence as will ensure that these continuing deficits will vanish. That is the story as I appreciate it and as it has been put to me, and as I understand the whole purpose for which the commission was created and the action taken.
Coming back to the amendment, I submit that it is not the proper form of an amendment to be moved in this house because it asks to put a charge on the revenues of the dominion. The leader of the opposition says that you cannot sharply divide where deficits begin and surpluses end, but we all know the difference between operating revenues and operating expenses, and included in the operating expenses are the salaries of the transportation officials, not. only transportation in the narrow sense but of all those who constitute the personnel operating the railway. It would be an anomalous situation if we appointed a board of trustees and provided that they shall be paid by parliament although operating a system whose revenues under the law they control. I think it is not only out of order to suggest that an amendment be moved by a private member which charges the Finance minister with introducing in parliament an estimate, which is altogether improper as I understand the constitutional workings of our law, but it goes further and would precipitate into this house a discussion from time to time as to whether or not we shall vote to these men every year a sum of money for salaries. Their salaries will undoubtedly be known to everybody. The government under the statute must take the responsibility for fixing those salaries. If they are too high the house will censure the government; if they are not adequate we shall not be able to get the trustees.


James Malcolm: When I spoke on the
second reading of this bill I said that my principal objection to the legislation was that the Prime Minister had distinctly pointed out what he always points out when he arises, that we are dealing with an emergency, and yet the bill which is to deal with an emergency appoints trustees who cannot be dismissed. If the Prime Minister or the Minister of Railways would incorporate in this legislation a fixed period of time, say five years, within which these men were to be given absolute power, I would support that phase of the legislation very freely, but I do point out to the Prime Minister and to the minister that in this legislation we are just continuing the system we had before under the old act, the system which was criticized in the last parliament, the system by which the directors can spend every dollar of operating revenue which they receive and spend it as extravagantly as they see fit. No one is of the opinion that railway tonnage will remain at its present low level. Everyone believes that general business conditions will improve. When they do improve, and the operating revenues of the railways are sufficiently great, not only should interest be paid to the bondholders, as it was in one or two successful years under the leadership of the late Sir Henry Thornton, but there should be provision for substantial payments towards those moneys which the parliament of Canada has advanced. I contend under this legislation we are appointing these men permanently, and giving them exactly the same power as Sir Henry Thornton had. I contend that this is an emergent situation. Probably if it were private business it would be in liquidation, and if it were in liquidation it would be in the same position as some American roads in connection with which receivers have been appointed. Yet, being guaranteed by the people of Canada, these bonds have to be met; the road being the property of the Canadian people it cannot go into liquidation. Therefore the only alternative is to appoint, one, two, three, four or five men, whatever number the government decides upon, to act as trustees. I object strongly to these trustees being appointed for a continuous period of time. They are not like judges; there can be no comparison between them and judges. A
C.N.R.-C.P.R. Bill

judge is appointed to administer the laws which this parliament makes, and all parliament has to do is to change that law. These men are appointed to administer a great national utility, and to administer it with such a free hand that every dollar of revenue they receive may be spent in operating expenses. This parliament or government has no control over them, unless both houses of parliament agree, which is not very likely. I have no doubt the hon. member for Quebec South would withdraw his amendment if these men were appointed for a definite period of years- say five years.


Charles Gavan Power: I admit I am surprised at
the attitude taken by the Prime Minister in connection with observations which have been, made from this side of the house. He complains that we have been unduly critical. He urges us to bless this bill, whether it be good or bad. He will recollect, at any rate I know the Minister of Railways will, that when the bill was introduced he besought our cooperation.


Richard Bedford Bennett: And I did it again tonight.


Charles Gavan Power: We are endeavouring to
give co-operation. On the last occasion when the bill was presented we suggested certain amendments which were discussed and which were accepted to-day. To-day we are pointing out-


Richard Bedford Bennett: Two of them were promised before the house ever went into com-nnittee. It has taken six hours to talk about them.


Charles Gavan Power: I am now discussing an
amendment which provides that the Board of Railway Commissioners shall have some control over the 'tearing up of branch lines. To the best of my knowledge-and I followed the debate on this bill very closely-there was no such promise made.


Richard Bedford Bennett: It was stated section 23 applied; that must relieve any doubt.


Charles Gavan Power: It was argued at great
length by the Prime Minister that section 23 did apply. Evidently he is not quite sure of it. We will now find some of the theories laid down by the Prime Minister with respect to ithe board of trustees of which he is not quite sure, either. A great many of us are not quite sure that we agree with him on the position he takes. He has said the proposal we were making was something new. Since when is it new for the parliament of Canada to have oontrol over moneys ex-

pended and derived from the taxpayers? Since when is it new for the House of Commons to know what salaries are being paid for the administration of its property?


Richard Bedford Bennett: No one has said there
is any objection to knowing what they are.


Charles Gavan Power: Surely the Prime Minister
is not serious when he tells us we ought to be satisfied to know what they are. After all our duty as members is to see that the moneys raised from the taxpayers are spent in the interests of those taxpayers, and our further duty is to oontrol the expenditure of that money. If there is anything new in the present situation, then it is a new position which is now being created. These men mentioned in the bill are called trustees; we are told they are not directors. As the right hon. gentleman pointed out, directors are elected annually. If shareholders are not satisfied with the directors they do not reeleot them. As a general rule trustees are under the control of a court. In 'the present instance, however, we have an example of a new species of administrator. We are setting up a railway dictator, or possibly three railway dictators. We are giving them seven yeans in which to operate, and providing that of their own volition their offices may be self-perpetuating. We are giving them practically perpetual control over property belonging to the people of Canada. The Prime Minister 'has said we may repeal the act. I know, and we all know, that the very moment any proposal is made to repeal the act or to repeal that section of it, we will be told that the national honour is at stake. Section 7 of the bill states:
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.
I suggest this is a contract which the parliament of Canada enters into with trustees, and by that contract we cannot remove them. Let us suppose that two of the trustees wish to reduce their salaries, but that the third man declines, and states, "There can be no reduction of my salary." We could not do it, and the other trustees could not do it. A change could be made only for assigned cause and on address of the Senate and House of Commons of Canada. I submit the proposal which we are making, namely that the salaries should in some way be within the control of the House of Commons of Canada, is reasonable and logical, and is not new. There is nothing revolutionary about it, and the suggestion represents one of the fundamental rights of parliament.



C.N.R.-C.P.R. BUI

[Stage Direction]
The Prime Minister states he wishes to place these men above all suspicion of political interference. In that connection I wish to repeat what I said on another occasion, namely that the Duff commission did not find that under the former regime, or the present one, officials were interfered with either by ministers or by members of parliament in connection with the detailed operations of the road. I assume that if the new trustees to be appointed are men of as high calibre as those who were made directors, those trustees will not be interfered with, either. But the serious political interference comes in when branch lines are unloaded, and that interference can be carried on when the trustees are appointed and when-
Richard Bedford Bennett: There are not any branch lines left; they have all been taken up.


Charles Gavan Power: When the matter was under discussion before I pointed out that there was the Temiscouata railroad, and the Pacific Great Eastern, which is worth about $50,000,000.


Robert James Manion: Without the sanction and guarantee of parliament they could not take over a railway.


Charles Gavan Power: That is the point I am trying to make. Parliament could foist on these trustees any branch line railway now independently existing in Canada.


Robert James Manion: Not if the trustees did not wish to take it.


Charles Gavan Power: There is nothing to prevent the introduction of a bill providing for the payment for the Pacific Great Eastern or the Temiscouata railway of so many million dollars, and saying that this railway shall belong to the Canadian National system.


John Thomas Hackett: Do you believe in parliamentary government?


Charles Gavan Power: I do, but the argument of the minister was that we are appointing these men for seven years, making them dictators so that they will get away from political interference. What I am endeavouring to make clear is that the political interference which may have bedevilled this road in the minds of some hon. gentlemen opposite and of a section of the public is political interference which put branch lines over on the Canadian National; not that which might interefere with detailed operation, such as the appointment of a watchman. These trustees are not getting us away from political interference in the harmful sense; that is the point I am trying to make. If they are not going to do
any good to the road other than keep some member of parliament from a back concession from having one of his friends appointed brakeman or having someone appointed to sweep out the Union station here, if that is all we are going to appoint dictators for, I submit that one year is enough, or perhaps six months. That is the position I take.


William Lyon Mackenzie King: Mr. Chairman,
I do not know whether the committee are aware that this provision, namely that the trustees shall not be removed except by an address by both houses of parliament, is something which was not in-any way recommended by the Duff commission. It is a provision put in by the present ministry, or at their instigation. The Duff commission does not make any suggestion of the kind. The self-perpetuating feature of the trusteeship comes from the Drayton-Acworth commission report, and in that connection the remarks of one of those commissioners are very significant. Mr. Smith, one of the commissioners, used these words as part of his report to parliament-*


Robert James Manion: He was a minority.


William Lyon Mackenzie King: Yes, but it is interesting to see what he said:
I am unable to join my colleagues in their recommendations. They propose that practically all of the railways in Canada, except the Canadian Pacific and the American lines, shall be turned over to a corporation to be managed by a board of trustees appointed by government. They insist that this board is to be permanent and self-perpetuating. I do not know by what means one parliament can bind its successors to a given policy, especially in so simple a matter as changing the organization of a government board. My friends seek to avoid government ownership and operation, in fact condemn it as inadvisable, but propose a plan which contains so many elements of danger in the direction which is sought to be avoided that I am unable to join them.
I direct the attention of the committee to what is there said about the desire to avoid government ownership and operation. Mr. Smith's friends on the commission, the majority, according to the other commissioner, wished to avoid government ownership and operation, and to make it impossible, and according to Mr. Smith one of the means taken to make it impossible was to make the trustee board self-perpetuating. I submit that as long as we have government control or purport to have it and are going to endeavour to carry it out, we should not enact legislation which is definitely designed to make government control impossible.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Questions
[Stage Direction]
Wednesday, April 19, 1933