May 26, 1913

SUPPLY.


House in Committee of Supply. (Mr. Deputy Speaker in the Chair.) Railways and Canals, chargeable to capital -Intercolonial railway-air brakes, to improve triple valves of, $7,150.


LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

Would the minister say on what principle the improvement of air brake valves is chargeable to capital? I do not wish to be discourteous nor do I wish to limit the minister in his answer, but I would rather he would net tell me that the old Government did the same as this. I know that. I am asking for information, and I would like to know on what ground or principle the previous Government and governments before that Mr. ROGERS. -

and the present Government have charged (these things to capital. It seems to me it would be a great consolation to the people of Canada if they really could know what is the condition of the Intercolonial railway. The minister comes down to the House and says : I have a surplus of $500,000; or he comes down and says there is a deficit of $300,000 or $400,000. During the last three or four years there have been what are called surpluses. But we know that there has been no surplus in fact. If all were charged up that ought to be charged up against income, there would be a deficit, as a matter of fact. The minister may say that other roads keep their books in the same way. That may be

true. But I would like to know on what principle such expenses a3 these are charged to capital. If he would tell us that, we should have a better chance to judge of what is the real position with regard to the Intercolonial railway. It .will not make any difference to the people; they have to pay it anyhow, whatever it is; and if they could know what the actual position is, it would be so much the better. In many cases it is claimed they are not paying high enough rates on the Intercolonial railway. I think that that is not true. But it seems to me it would be better to understand the basis of these so-called surpluses, and if the minister would give us this information it would help.

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE :

I have not here the amount charged to capital.

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LIB
CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

I will have the

figures later. The same system is adopted on the Intercolonial railway as is adopted on other roads in America-in the United States under the Interstate Commerce law. Nothing is charged to capital on the Intercolonial railway that would not be charged to capital on other roads. As to the bookkeeping, I suppose the surplus is ascertained by deducting the expenses and cost of upkeep from the income. I think that anybody can see the results from the figures of income and expense year by year.

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LIB
CON
LIB

Frank Broadstreet Carvell

Liberal

Mt. CARVELL:

The minister says that they charge up running expenses and upkeep. If they did that, it seems to me that we should have different returns from what we have.

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

No, the hon. gentleman ha3 misunderstood me. We charge to capital just what others would charge-the

Canadian Pacific railway, for instance. They charge their running expenses just as we do; they are compelled to do so under the law

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

I admit that. But 1

want the minister to tell me on what principle the Government charges to capital sums that are spent in the running and upkeep of the road.

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CON
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

Let us see. Here in the next item you have an estimate for the strengthening of bridges. Is not that keeping up the road?

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CON
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

What is it for, then?

If I have a farm and have to build a road through one portion of it, that is to keep up my farm is it not? And if I have a plough and mowing machine that wear out and have to buy new ones, that is keeping up the farm, is it not?

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

But if you have a

bridge that is sufficient for the small engines and trains of twenty years ago and you want to strengthen it and improve it to suit modern traffic, that means that your road is that much better. With the expenditure the hon. gentleman speaks of, his farm would be worth more on capital account, would it not?

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

As the hon. gentleman asks me the question, I can only say that his answer is not a proper one, according to my view of the case. While it is true my farm is worth more, yet I make the expenditure because it is necessary to carry on my farm. If I keep charging up to capital all that I put into the farm, I shall soon find myself bankrupt, although every year my bookkeeping may have shown a surplus. I do not want the minister to think I am finding fault with him. He is doing what other Governments have done. But I want to know the principle upon which it is done. I would like to have it so arranged that the showing of a surplus on the Intercolonial railway would mean that the people of Canada are getting back some return on the money they invested in the road. But we know that to-day that is not the fact. I suppose that in the last ten years the road has, every year been behind from a million to seven or eight million dollars, if you charge to upkeep what you ought to charge. But the supporters and newspapers of the Minister ol Railways come out with the bold statement- just as did the supporters and newspapers of his predecessors-that owing to the splendid management there is a surplus on the road. But on what principle is this kind of bookkeeping carried on?

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

Would it not be a proper charge against capital, if you had a bridge that cost $100,000, and you were going to strengthen and improve it to 'carry heavier trains?

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

I do not think so. If

the conditions of traffic change so that the strengthening of that bridge becomes necessary, it seems to me that the road ought to be in a position to make that change without a charge against capital. But under our present system that is charged up to capital, and a surplus is shown where there is really a deficit.

Any farmer, merchant or businessman could show surpluses in the same way. But if any such man attempts to fool himself, he is going to be undeceived before very long.

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May 26, 1913