May 15, 1905


Mr. EMMERSON moved to strike out section 1 of tlie amended Bill. Motion agreed to. Mr. EMMERSON moved to substitute the following therefor : The directors may annually appoint from among themselves an executive committee composed of at least three directors, for such pur- poses and with such powers as the directors by bydaw determine ; and the president shall be ex-officio member of said committee.


IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

Can it be the case under this legislation that not one of the members of this executive shall be British subjects, that the executive may be composed absolutely of aliens? _

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Charles Smith Hyman (Minister Without Portfolio)

Liberal

Mr. HYMAN.

1 presume so, under the wording of that section. But they must be elected by those they represent, a majority of whom must be British subjects. A majority of the directors must be Bri-t.tish subjects, and it is they who elect the executive and have control.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

But this is another way of having an American directorate over a Canadian railway company. That is the thing we have been trying to avoid, and now we have got it.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

Is it a condition that the executive must be members of the directorate?

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

Yes. The same principle has been followed in the matter of some other Bills that were before parliament, notably, that of the Grand Trunk Pacific, and there was no exception raised at that time. The object of this is to have a committee right on the spot here in Canada, and necessarily they would require to be British subjects residing here.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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?

Mr. W. F.@

(MACLEAN. Now will not the same thing happen in regard to the other Vanderbilt interests in Canada? Take the Canada Southern and roads like that-they will be administered and managed in the same way. The object of the Railway Commission is to have men in Canada responsible to the Canadian people and to the Canadian Railway Commission, and who can be brought J)efore it. Now there will be an executive that you cannot reach, men residing in New York; they may be the board and elected by residents here. The other day the Minister of Railways said the object he had in view was to have somebody in Canada who could be called before the Railway Commission, or before the government's Railway Committee, to make explanations, and who could be held responsible. That was declared to be the policy of the government. Now this executive can be in New York, or can be outside of tills country ; and in a few days it will happen that the Vanderbilt [DOT] interest will ask for the same legislation for ail their 190*

railroads, and once they get in the thin edge of the wedge, they will start buying railroads all over this country and administer them by a small executive in 42nd street station, in New York. If that is the object of the government, they ought to say so.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

It does seem to me that my hon. friend is straining at a gnat in this matter. In all our corporations we have what we call managing directors, they control the routine, and they practically control the entire business of these corporations.

.Mr w. F. MACLEAN. Who do ?

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

The managing directors, under the responsibility that rests with the directorate who appoint that managing directorate. Now here you have under your legislation required that every railway corporation shall have a board, a majority of whom shall be British subjects. Now that majority can control the board, they can control the selection of the executive provided by this section. Therefore, it seems to me that no difficulty can arise. The mere management, the mere directors, the mere train service surely are not of very material moment in this Bill. They are of moment to the company who are interested in serving the needs of the people, and in accommodating its patrons. But the real responsibility for the corporation rests with the board, a majority of whom are British subjects, and this executive must be responsible to that board ; they must be guided by it, and directed by it on every point. Surely there are no Canadian interests that will suffer by reason of this fact, nor would it be good policy to invite capital to come into Canada and to tie it up at every point. I think it is carrying the principle of restriction quite too far indeed for us to refuse to give a Board of Directors, a majority of whom are British subjects, the right to select any one, two or three of their number to manage the everyday affairs of the company.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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L-C

Samuel Hughes

Liberal-Conservative

Mr. SAM. HUGHES.

Are not the managing directors of the Grand Trunk Railway all Americans to-day and have they not been for some years ?

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

I am not personally familiar with the facts but if what my hon. friend says is so I can see no wrong in it.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

But you have given no information whether it is fact or not. It would be well for the government through the Minister of Railways to give to the House some information as to the usual custom on the American side with regard to this question. Even with a majority of the directors British subjects a case might arise where the Railway Commission would require some one of the three composing

this executive to appear before them and if they were foreigners what powers would the Railway Commission have to compel their attendance ?

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

The Railway Commission have ample power to deal with the railway in Canada even if the board live in Omaha. I do not think it is at all material that the members of the board should reside in Canada. We have corporations the members of whose boards almost wholly reside across the Atlantic, but that does not affect the corporation which has its entity in Canada and is controlled by the laws of Canada and by the Railway Commission. The Railway Commission has power over the entity of the railway in Canada regardless of the residence of the directors ; it can stop the railroad trains, abolish a tariff and impose penalties. X might almost say in numberless ways, the Railway Commission have full power to require any railway corporations to fulfil the will of parliament and the requirements of the laws of Canada.

Mr. SPROUT,E. We had a case only the other day in the Telephone Committee which bears upon the subject. The committee, if we may accept what appears in the papers as correct, invited the manager of the Grand Trunk Railway to come before them. He said that he could not come and that they had better get the vice-president, who made a similar reply and said they should get Mr. McGuigan, but Mr. McGuigan said he could not come. Suppose the president, the vice-president and the managing director were all in the United States, the question which suggests itself to me is what power would the Railway Commission have to insist on one of those members coming before that committee.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

At that rate where will we stop ? You would have to oblige the railway company to have all their employees Canadians as the commission might require the presence of an employee other than a director. Not only would require them to be British subjects but all resident within the limits of the jurisdiction of the Railway Commission. It is perfectly absui'd.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Not at all.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

At the present moment what jurisdiction has the Railway Commission over directors residing for instance in England ? No jurisdiction at all: And to

render nugatory all the processes and endeavours of the Railway Commission the directors even if they were all British subjects would simply have to cross the line and go into a foi-eign country to escape the jurisdiction of the commission and render the acts of the commission absolutely impotent. The whole disposition of The Railway Act seems to me to be going very far under the policy which we ought to adopt Mr. SPROULE.

of encouraging foreign capital. I do not think that the fact of the majority of the directors being British subjects is any assistance at all to the government or to the Railway Commission in carrying out the principles of the Railway Act. Anyway in this case it is only an executive committee, and I believe that without this disposition of the law the directors of this company could name an executive committee, but even if they could not why should we not give them power ? The executive committee is named by a majority of British subjects and I think it is carrying the idea of loyalty a little far to adopt such a restriction as is now proposed.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

I want it understood that I am not objecting ; I only desire to get the information to which I think the House is entitled, so it can understand what power the Railway Commission has and whether there is any necessity for that executive committee or not, and whether the appointment of that executive would in any way retard the Railway Commission. I think the government should be able to give that information.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

That question is purely a question of law as to what power the Railway Commission has, I am not the keeper of the law conscience that has been referred to in this House.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

You ought to know the railway law.

Mi-. EMMERSON. I know just exactly how far, in my judgment, the powers of the Railway Commission go, and I know that in the exercise of these powers it is not necessary to have directors either British subjects or l'esidents of Canada. Some hon. gentleman may dispute that statement but it is a statement of fact based upon an interpretation of the powers of the commission, which of course is a legal question. It seems to me that the powers of the Railway Commission can be carried out without the directors being British subjects or without their residing in Canada.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

The Minister of Railways does not apprehend what he is doing. He is making it clear that any gi-eat foreign railway interest can, if it desires, acquire all the railways in Canada and put their administration in the hands of an executive sitting in New York. That is the object of the Vanderbilt interests at this moment ; they want to get a small admission made in connection with this small railway, so that they can put the principle into effect in regard to all the railways in this country. They will not allow the ad-ministi-ation of their railways in the United States to be placed in the hands of a small executive sitting in London, Ottawa, or Montreal ; they keep that authority in their own country and we should treat

them as they treat us. This is a vicious principle that is being introduced 'by this legislation. The international complications that arise in the world to-day largely arise out of the administration of foreign capital in a country toy a board of directors outside of that country, and there is nothing President Roosevelt takes so much interest in as backing up boards of directors living in his own country and exploiting some foreign country with their capital. He says he is the 'big policeman of this continent to compel all the governments in North America to carry out their commercial obligations and to respect the rights of United States corporations having interests in. these countries. If you pass this legislation you are forming the ground work of international complications ; you are opening the door for the administration of Canadian railways by a small executive committee sitting in New York and you are giving that power to the great Vanderbilt interests who will extend it and extend it until they take over all our railways. It is not good national policy, and it is not in line with the statement made by the Minister of Railways in this House last week. I am where I was last week, but he has changed his view. He now tells us that Canada has no national policy in maintaining in her own hands the control of the railways in this country. True, the Canadian Pacific Railway has an executive of three, but that executive is in the city of Montreal, and the proposition now before us is that this Ottawa-New York line shall be administered toy an executive of three sitting in the city of New York.

Mr. EM'MERSON. Selected toy a board, the majority of whom are British subjects.

Topic:   PRIVATE BILLS.
Subtopic:   OTTAWA AND NEW YORK RAILWAY COMPANY.
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May 15, 1905