May 15, 1916

CON

Edgar Nelson Rhodes (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Conservative (1867-1942)

The CHAIRMAN:

Before the committee proceeds further with the consideration of this item, I wish to -say that on Saturday evening, when this item was under consideration,' the hon. member for St. John (Mr. Pugsley) proposed to this resolution the following amendment:

That after the word " approve " in the third line from the bottom of the particulars of the proposed vote, there should be added the fol-[DOT] lowing words. " Before making such loan the Governor in Council shall require the company to give to His Majesty the King an option to acquire at any time within five years from the date thereof the railways and other property of the company and of all other railways and property included in the Canadian Northern railway system at such price as to the Governor in Council may seem reasonable under existing circumstances."

On the subject of amendments in committee, May, 11th edition, at page 615, says:

Each resolution for a grant forms a distinct motion, which can only be dealt with by being agreed tc, required, negatived, superseded, or, by leave, withdrawn; ... here the power of the committee ceases. The committee may vote or reduce a grant, or may reduce the amount thereof, either by a reduction of the whole grant, or by the omission or reduction of the items of expenditure of which the grant *s composed; but the committee have no other function.

Again, at page 616:

Nor can the committee attach a condition or an expression of opinion to a grant.

The powers of the committee in this connection are so circumscribed that it does not appear that the House itself could give instructions or authority to the Committee of Supply >to propose such an amendment. On this point, I quote May, 11th edition, at page 607:

An instruction to the Committee of Supply cannot be moved, as, following the Speaker's ruling; " nothing can be brought on in that committee of which notice has not been given in detail, by the Estimates laid before the House."

It, therefore, in my judgment, appears to be clear that the amendment of the hon. member for St. John is not in order, and I so rule.

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LIB

William Pugsley

Liberal

Mr. PUGSLEY:

Mr. Chairman, I, of course, cheerfully bow to your decision. My object has, I think, been attained by bringing the motion before the committee and to the attention of the Government,

because, of course, if the Government decided against the amendment, I recognize that I could not hope it would he carried *by the committee, even if you, Sir, had ruled it to he in order. But I would like to call the attention of the Minister of Finance to the fact that the resolution itself provides that the loan shall be secured by a mortgage on the undertaking of the company, such mortgage to contain such terms and conditions as the Governor in Council may approve. I submit that, under the resolution as it is, it will he quite open to the Government to stipulate that the company shall give to His Majesty an option to purchase the Canadian Northern railway system at a price which -may be agreed upon, and I do hope that the idea which I have endeavoured to put forward in the amendment will commend itself to the Government. I hope so for this reason, that there is to-day a rapidly-growing sentiment among the people of this country in favour of the Government acquiring this transcontinental system of railways. That feeling has, of course, been given a very great impetus by the fact that this company has been coming pretty often, I think quite too often, to the country for assistance. When this loan of $15,000,000 is made there will be in the vicinity of $70,000,000 or $80,000,000 which the company has obtained from the Government under conditions which make it apparent that, but for the Government assistance, the company could not have pulled through. The Minister of Finance, in proposing tnis vote, frankly stated that unless the Government gives this assistance to the company it will, in all probability, be obliged to place its railway system in the hands of a receiver. The same statement was made two years ago, when the Government guaranteed the -bonds of the company to the extent of $45,000,000. Now, does it not seem that, the company having been obliged to come again to the Government for an additional $15,000,000, the Government ought to take an option from the company, on reasonable terms, for a reasonable amount, which option could be exercised or not as Parliament in the future might determine. I would not suggest that any injustice whatever should be done to the company. I should think that it ought to be recognized that these two gentlemen, Sir William Mackenzie and Sir Donald Mann, notwithstanding what may be said by their critics, are deserving of a large measure of praise, a large degree of credit, for the enterprise

and foresight they have shown. They have succeeded in building up a great railway system, consisting of some 8,000 or 9,000 miles, traversing many of the richest sections of Canada, a system which in the future must prove an enormous factor in the development of this Dominion. I think that these gentlemen are entitled to all reasonable consideration, and that the' Government ought to deal with them on some equitable basis. But it does seem to me that it would not be fair to the people of this country that the Government should, by continuing to assist this company, take all the risk of the company pulling through and getting in a good financial position in the future. Then, when the day of prosperity comes again, as we all hope that day will soon come again, and if the country should deem it wise to take over this system, the company would be in a position before arbitrators, or before the Exchequer Court, to demand an enormous sum running into many millions of dollars, claiming prospective profits, and compelling the country to pay a very large sum of money indeed for this property which to-diay is practically in the hands of the Government, and which, if the Government were to exercise its powers, it could now acquire for the amount of the securities which,are outstanding against the road.

In 1914 I moved a resolution, the effect of which would have been that the Government would have the right to take over the equity of Mackenzie and Mann, Limited, which means Sir William Mackenzie and Sir Donald Mann, at a sum not exceeding 330,000,000. I was greatly astonished to hear the Solicitor General, speaking for the Government on that occasion, say that $30,000,000 would be no temptation to Sir William Mackenzie and Sir Donald Mann, and that rather than accept $30,000,000 for their equity, over and above all the securities and obligations, they would let the road go into the hands of receivers. I could not believe that statement. I could not believe that the Solicitor General was warranted in making that statement to the House; though when he made it I presume he must have consulted them. But the time has arrived when with the company coming back again for assistance, for the enormous sum of $15,000,000, the Government should come to an understanding with Sir William Mackenzie and Sir Donald Mann, and have it clearly understood that if, within a reasonable period, say within five years, the Government and Parliament

should, in the interests of the people of Canada, take over this road they will affix to it as a condition a reasonable sum at which the equity of these gentlemeu should he acquired for the country.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. R. B. BENNETT (Calgary):

I desire to make a few observations this afternoon on this item. I ventured two years ago to say that I believed that the largest problem in domestic politics was that related to transportation in this country. I still think so. Unfortunately, no recriminations that we may engage in will take from us the question, and no deception will delude us for a moment as to the conditions that confront us. I cannot conceive of any question of greater importance to the country as a whole, and to the individual, than the question which is now before us.

Before I make a few observations regarding the matter, I should like to place myself on record, not in a spirit of hostile criticism, but rather in the way of suggestion, that there should be, if possible, some rule adopted by this Parliament by which railway legislation shall be brought into this House in the first fifteen days of the session. For many years, since 1900, at least, and for many years before that, legislation involving the appropriation by Parliament of millions of dollars has usually been submitted for consideration in the closing days of the session. The result has been that only a few members are conversant with the question, and these few usually make it their business not to disclose what they know as to the real purpose of the legislation introduced. I think something should be done to prevent legislation of this character from being introduced during the last days of the session. I am perfectly certain that this House, at this critical stage, has not had ample opportunity to consider this matter in all its phases. Might I suggest that legislation of this character, involving an appropriation of public moneys for the support of public utilities of the character of railways, should be introduced in the early days of the session, and be left for the consideration of the members, even if it is not passed until the closing days of the session.

There is no problem perhaps that is engaging the attention of thoughtful men in England more than the making effective of that system of democracy which is embodied in our representative institutions, whether we call them legislatures or parliaments. At the present time, the com-

municating link between the private member in this House, and practically in every House of Parliament in the British Dominions, and the Government, which initiates legislation and under our constitution, which appropriates public moneys for public purposes, is the caucus. How inefficient that is, it is unnecessary for me to state. There is not a man in this House who does not know that the caucus is a wholly inefficient method of communication between the private member and the Government which initiates legislation. The theory of the constitution that a cabinet is a Committee of the House of Commons or of Parliament is an excellent theory, but the tendency of our history has been, for the last 50 years, to increase and strengthen and magnify the powers of the cabinet, while destroying and minimizing and lessening the authority of the private member. Any student of the political history of England during the past 50 years is conscious of that fact. In England they have been endeavouring by various methods to overcome that difficulty. They realize that not only has the power of cabinets become greater, but that .the supreme authority of the Prime Minister in the cabinet has become greater. I think it was Mr. Paul who in his political history of England pointed out that fact with great authority and with great power.

There must be some method, short of that, which is used in the United States, by which the cabinet has no representation on the floor of Congress at all, and where every member has the power to initiate legislation of a far-reaching character-there must be some method by which the power and strength of democracy can be maintained, and, at the same time, the cabinet system of government, which we have as a Committee of Parliament responsible for initiating legislation, is maintained. I make these observations because I think there is no subject which better illustrates the point than that to which I am alluding. It is absolutely impossible for the members of this House to grasp in all its magnitude the issues that are involved in this railway legislation. It is perfectly absurd to expect that in a few days men can appreciate all the bearings which this legislation may have on the future of this country.

Fortunately, to-day, we can at least feel that what we are asked to do does not commit this country ,to any permanent policy as some of us regret we have been committed to permanent policies in the past. What

we are doing to-day we are doing because it is necessary; because there is that necessity which knows no law, and to which we must at all times yield if we are to maintain the credit of the country, which is a matter of paramount importance. I make these observations because conditions and not thories confront us. Might I analyse.in a few passing sentences what these conditions are. Wfe have a vast area, one of the largest countries in the world, as large as the United States of America, and larger; half a continent, stretching from the Atlantic to the Pacific, from the 49th parallel to the Arctic regions, with a population of less than 8,000,000. and to-day, whether we like It or not, we have over 35,000 miles of railway. I suppose this House is aware that only four countries of the, world have a greater railway mileage than Canada, namely, the United States of America, British India, and the Empires of Germany and of Russia. In railway mileage we rank fifth among the nations of the world. The mere statement of that fact, coupled with what I have already said as to our limited population and the immensity of our area, will at once bring home to every member of this House the magnitude of the problem that confronts us. And if we look further into that problem we, find that we have in this country practically four great systems of railway: the Government-owned system,

which we have had since 1867, and which had its origin in what might be called one of the terms of Confederation-the derivation of the word " Intercolonial " itself indicates the purpose and intent that was in the minds of those who created that system of transportation. To the Intercolonial railway has been added, during the intervening years, many miles of road. The railway has been extended to Montreal; that was certainly a necessity, and was one . of the first acts of hon. gentlemen opposite when they came to power. Its branch lines have in some cases been built, and in others acquired, by taking over small feeders in the Maritime Provinces. There are still in the Maritime Provinces some small lines that have not yet been taken over, which cost but little, and which, in my opinion, should be taken over before any other lines are taken over. I make that observation because of personal knowledge of the conditions.

Next, we have the Grand Trunk system. That system, as has been pointed out by many, was never conceived with the idea

of occupying the place in the transportation business of this country that it does to-day.' This road, originally extending only from Portland to Montreal and Toronto, was pushed through to Chicago, and has gradually absorbed, during all these years, a large number of smaller roads, and its unfortunate financial position has been brought about not through the operation of the eystem itself, but because in taking over other small lines it has frequently paid larger prices for them than should have been paid, and very often has guaranteed obligations that were wholly incommensurate with the value that was being received by the system. Speaking broadly and generally, that is how the Grand Trunk system has been built up. In connection with the Grand Trunk we have the Grand Trunk Pacific system, about which I shall make a few observations later on; dealing with them both under the term Grand Trunk system.

It may not be known to all the members of this House, but the fact is that practically every dollar in thd Grand Trunk system is British money. Except for a small loan made upon the New York market within the last two years there is not a dollar in the Grand Trunk system that is not English money. I do not know whether hon. gentlemen are aware of the fact, but it was certainly a surprise to me to learn that over $100,000,000 in the Grand Trunk system has never seen a cent of dividends. I believe that the security holders of that company number now 90,000 persons, most of whom live either in the British Isles or in British possessions scattered throughout the world.

The next system, in point of time, is the Canadian Pacific railway. Of that system it is only necessary to say that it is one of the richest, most powerful, with the most diversified interests of any ' corporation in the world.

The last system in point of time is the Canadian Northern. It is true that the Grand Trunk Pacific was launched after the Canadian Northern, but I am dealing with it as part of the Grand Trunk eystem. The Canadian Northern system, as I pointed out two years ago, owed its origin

to the ambition of a couple of gentlemen for whom apparently the hon. member for St. John (Mr. Pugsley) has a very warm feeling to-day, and as to whom I will not say anything other than to point out, and point out in stronger terms as I proceed, that any

proposal to take an option on the Canadian Northern and pay these gentlemen a single dollar for their charters would meet with the just disapproval and condemnation of every Canadian; for to commit this country to paying them a single dollar would do violence to every principle of reason and every dictate of common business sense.

As I pointed out two years ago, the Canadian Northern system has grown up gradually, extending its ramifications from the province of Manitoba westward to the Pacific, and now eastward to Montreal and Quebec. As to the policy that actuated the gentlemen who built that road, I am not concerned to-day. I have had my say as to that, and I am reminded of the words of a very great exponent of principle who said, " Not Heaven itself can change the past. What has been, has been." And he closed with these words; "And I have had my day." That may be true also. These, then, are the systems of railway that we 'have in Canada to-day.

Then there are scattered throughout the country some small lines in the lower provinces, quite a few independent lines in Ontario and Quebec, and a few in the far West, but these latter are closely associated with the Great Northern system in the United States. In the East, the Michigan Central, the Wabash and the Pere Marquette connect with their termini at Chicago, Buffalo, or on the Atlantic seaboard.

That is the situation. I have heard a great deal said as to who is responsible for it. But all the talk in the world as to who is responsible for this situation will not relieve us from the condition that now confronts us. If there is one thing this war has taught us, it is that recriminations do no good; we have learned that at least. On this point I would only say that there is, I think, a certain definite principle that may be laid down that will fix the measure of responsibility as between the Liberal and Conservative parties. A party that initiates legislation must assume responsibility for it, and unless the other party in the House opposes, it must share with the initiating party the responsibility. So I have already pointed out that the government owned system of railways was part of the arrangement by which we reached Confederation. The extending of the Intercolonial to Montreal was part of the policy of the Liberal party, and to them must be given the credit, and they are glad, I doubt not, to accept this responsibility.

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They should have extended the Intercolonial further to the Great Lakes, by taking advantage of the opportunity they had of acquiring the Canada Atlantic; there is no doubt about that. The price paid for the Canada Atlantic by the Grand Trunk was at least $1,000,000 too great.

The responsibility for the Grand Trunk rests with pre-Confederation men like Hincks, Macdonald, Cartier, and other men who lived, moved and had their being in this country prior to 1867, had much to do with shaping the course and guiding the destinies of that road.

I understood the hon. member for Edmonton the other day to make some observations that would lead me to believe that he thought the attitude of the Conservative party after they came into power

had something to do with the illfortune that has overtaken the Grand Trunk Pacific and the National Transcontinental. I should like to say this; In my opinion the Liberal party must assume the whole responsibility for the Grand Trunk Pacific. The hon. member for St. John quite realized that when he rejoiced in this ill-fortune, because he said that it reflected great credit upon the Liberal party; he did not say so in those very words, but that is what he meant in the ultimate analysis. So far as the Grand Trunk enterprise is concerned I happen to remember the late Mr. Hays and his party coming west to look over that country before determining what the policy of the company should be. I remember that the Board of Trade and others of us met them at Calgary, and I went on to Banff with them, and spent Sunday there. I know something of the dreams they had, something of their hopes and expectations, and certainly what they now have on their hands does not in any sense represent the hopes and expectations they then held. It is only fair to say that at that time these gentlemen believed-at least they so expressed themselves-that the great cities and towns of eastern Canada where manufacturing was being carried on vigorously, and where traffic was being produced in large quantities, and which were served by the old Grand Trunk, should be linked up with the prairies of the West, in order that the Grand Trunk could share in the great development that must inevitably take place in that country.

I believe at that time that these gentlemen would have been quite satisfied to project their line to Winnipeg and Edmon-

ton, and make adequate connections in the East 'by using existing facilities or by extending existing facilities, and ultimately carrying their road through to the Pacific. Unfortunately, however, the proposal submitted/ to Parliament bore no resemblance at all to the proposal which these gentlemen had in mind and which they desired Parliament to pass. I suppose it is a matter of public knowledge that the late Mr. Hays placed himself on record as to what he asked the late Government to do, and that, as a matter of fact, the late Government diid not do it. It is sufficient for my purpose to say that, as that legislation was initiated by the Liberal party and as it was opposed by the Conservative party of that day, the Liberal party in this country must take the responsibility for it. That is a fundamental principle of our constitution. Had the Conservative party agreed to and accepted that legislation, it would have been equally blameable, because one party must initiate legislation and the other party may oppose or support.

The National Transcontinental, built at an expenditure by the Canadian people of $152,000,000 up to the present time, was built largely for political purposes. It is my belief that hon. gentlemen opposite, then in power, had hopes or expectations that that road would one day be useful; but in the light of the knowledge we now possess-and I do not altogether blame the Government of that day, and I am going to say something as to that in a moment- it must be apparent that to build that road from Winnipeg to Quebec, to- span the St. Lawrence by a bridge and continue it to Moncton, New Brunswick, under the conditions that existed (commencing, as my hon. friend the Minister of Finance said last year, to build the chimney first and the house afterwards), was little short of a manifestation of absence of all business judgment. I believe hon. gentlemen opposite think that now; they must think it, they cannot get away from it; but I do not go so far as to blame them entirely for that. After carefully studying this railway matter during the past year, the best conclusion that I can arrive at is that all of us-and I mean the people of Canada as a whole-were somehow infected at that time with a disease which came from overspeculation and optimism run riot, or run mad. There was no real warrant for the building of the Grand Trunk Pacific and the National Transcontinental in the way in which it was built, having regard to the

Canadian Northern, than there would be for an endeavour to create, for instance, a House of Lords in this country, and I have never been quite able to understand how strong-headed business men permitted themselves to be led into building that road. I have never yet heard any explanation from anybody that would either justify it or excuse it. I had the' hardihood, on a public platform in my community, to give my opinion in regard to the matter, and I remember that I was very severely criticised by my own friends, and was told that I was lacking in faith in my country and was filled with a spirit of pessimism. So, in the ultimate analysis, under our democratic institutions, the people themselves must aocept the responsibility for the conditions that exists, and neither the Opposition nor the Government is vitally concerned, because no Government would have initiated the legislation in the terms in which it was initiated except upon the demand of the people manifested by resolutions passed by boards of trade, municipal councils, farmers' unions and associations, and merchants throughout the country, who were all asking for the building of railroads, wholly oblivious to the fact that those railroads must be paid for; who gave no reasons, simply demanding the building of railways and the spending of money, reckoning not the evil day when the cost would have to be borne, caring not except for what they called the development of the country and the maintenance of a fine spirit of optimism.

Let us pass to the Canadian Northern, which was partially commenced at that date. I have never yet heard an adequate explanation for the building of it, although I havie heard, from two gentlemen who are now no more, a reasonable explanation. I have never yet been able to understand how the right hon. leader of the Opposition ever permitted those two roads, the Canadian Northern and the Grand Trunk Pacific, to be built. I remember, in 1905, the Canadian Northern system reached the city of Edmonton, and I remember something of the rejoicing that took place because it was built through to that point. Then I remember that, instead of amalgamating those two systems into one, or instead of by some method preventing the Grand Trunk Pacific from parallelling the Canadian Northern, they launched the Grand Trunk Pacific system and permitted the Canadian Northern to push forward its enterprise by branch lines, which were

perfectly justified; but they also, in 1911, placed upon the statute books of this country, in fulfilment of a resolution which passed this House, an Act by which they declared in the preamble, and in the terms of the resolution, that the Canadian Northern was to be a transcontinental system reaching from the Pacific to the Atlantic, just as in similar terms they had made a similar declaration with relation to the Grand Trunk Pacific. Surely that will stagger any one who merely sits down and thinks of it. Less than 8,000,000 people, just when times were beginning to get bad in 1911, permitting the ex-Minister of Railways and Canals to introduce and have passed through this Parliament, legislation giving to the Canadian Northern railway $35,000,000 to bring its system from the head of the lakes east, when we all know that the expenditure of a much less sum than that would have brought efficiency to existing facilities and caused no such embarrassment as that which now confronts us.

I have been asked by a hundred business men-and I am sure every other hon. member has been asked the same thing- what explanation can you give for this? The reasonable explanation-^and it is a very simple one- is that an election was-coming on. We ought to face that proposition very frankly; and, what is more, that is a case in which both parties must accept responsibility, because the Conservative party of that day, sitting in Opposition, did not oppose that $35,000,000 grant to the Canadian Northern railway; they did not challenge it. The records show that, and the Conservative party must accept responsibility with the Liberal party, because if the one party initiated this legislation, it is a case in which the other party did not oppose, and, not opposing, must share the responsibility. Why did the Conservative party not oppose this legislation? I suppose the obvious answer is-because there was an election pending. Therefore you have an election forcing upon the people of this country a grant of $35,000,000 to bring the Canadian Northern railway east from Port Arthur.

The Conservative party on the defeat oi the Liberals -succeeded to these legacies. My hon. friend from Edmonton (Mr. Oliver) does not usually make unfair statements, but the other day he said that the Conservative party's attitude towards the Grand Trunk Pacific and the National Transcontinental had been in a sense respon-

sible for the evil days that had overtaken those enterprises. I wonder whether he has paused to think what the Conservative party did. In January, 1912, I was in the city of London, England, and the broker for the Dominion of Canada, speaking to me in one of the banks, said: " I suppose Canada will not disregard her obligations with relation to the Grand Trunk Pacific." I was happy to say to him, as any Canadian would have said: " Governments may

change, but the obligations of the State continue." So, instead of the Conservative party doing anything to embarrass the Grand Trunk Pacific or the National Transcontinental, they did quite the opposite; they placed upon the statute books from year to >ear, provisions whereby the time for completion was extended in order that that railroad might not show its continuing deficit upon operation, but might possibly, with changed conditions and improved times, be able to meet its obligations.

So far as the National Transcontinental is concerned, I am sure that there is not a member of this House who does not know, not only that the Grand Trunk Pacific could not have taken over the National Transcontinental, but that to have suggested that they should do so, as we see now in the light of their then financial position, would have been to have added to their deficit three per cent upon the cost of that road, which would have been not less than $5,000,000 a year.

There is the situation: the National Transcontinental was still unfinished; the Canadian Northern nor the Grand Trunk Pacific were not built through to the Pacific coast; the Canadian Northern rights in relation to the $35,000,000 available for construction east had been established; the building of branch lines over the prairie had made much progress; and signs were showing of the financial depression that followed. What was to be done? For my own part, I have no hesitation in saying that had I been dictator I would have stopped the building of the Canadian Northern railway east of the lakes; I would not have assumed the responsibility of guaranteeing the 31 per cent on the $35,000,000; I would have stopped the building of the road;-and more, I was going to say this to the House and will say it now, that, in my opinion, many miles of track on the National Transcontinental must be taken up and put in some other place where they will serve some useful purpose. It was under these conditions that Parliament

granted cash subsidies to the Canadian Northern Railway, they voted them year after year. I had not hesitation in saying what I said two years ago. We should not have done it. As I now see it,

I was derelict in my duty in not then pointing it out. But we voted those subsidies. It is impossible for any member of this House to say truly that this Parliament is primarily responsible for the carrying of the Canadian Northern to the Pacific. With an optimism which is not properly described by that name, the province of British Columbia guaranteed the securities of the Canadian Northern, and the road was built from the Yellowhead Pass to Kamloops and from Kamloops to the coast. It parallels the Canadian Pacific at some points and the Grand Trunk Pacific at others.

As to the prospects, there is no local traffic that can be developed for many years to come that will pay the interest on any mile of its track. It has good grades and curves; it has every quality to make a railway, except one, and that is traffic; and it will take some time, under existing conditions, before traffic is forthcoming. This Parliament voted cash subsidies to assist in its completion. I do believe that possibly there was a situation when, finding the road in the position it was in, with the province of British Columbia only responsible, when it would have been better to leave it as it was until we could take -stock of the situation, until we could see if by some system of re-arrangement we could find a way to piake something out of the road crossing the mountains. But recriminations and retrospective views in the light of present knowledge do not assist us. Two years ago we voted a guarantee of $45,000,000 to the Canadian Northern upon representations of fact which, I, have no doubt, were believed, but which are now shown to have been absolutely erroneous. To-day we are confronted with the appalling situation of the Canadian Northern in default and the Grand Trunk Pacific, practically insolvent. What are we going to do?

It has been pointed out that there are three courses any, of which we may pursue: we may take them over to-day; we may assist them; or we may put them into the hands of a receiver. [DOT] For my own part,

I have never hesitated in my belief as to what should be done. I have listened to all the arguments that have been given and

they have not changed my mind. In my opinion, we ought to let both roads go into the hands of a receiver. That sounds very serious, and in the minds of many it is an absolute impossibility. I can only point out that eighty per cent of the railroads of the United States have been in the hands of receivers; and one-seventh of the railway mileage of the United States Nis now in the hands of receivers. There is only one way by which you will get rid of all the accumulated water and of all the difficulties that belong to taking over these systems, and that is by a receiver or by a reorganization which has the effect of a receivership.

Look at the Grand Trunk Pacific for a moment; I will not deal with it at length. The Grand Trunk Pacific has three kinds of securities; those guaranteed by the Government; those guaranteed by the Grand Trunk; and its own class of securities. Those guaranteed Iby the Government place upon us a responsibility which we must discharge in times of stress and strain, as well as in times of prosperity. And I trust that in any balance sheet of the public accounts which the Minister of Finance may put out hereafter, he will show at the foot of the page " contingent liabilities," because no statement of the finances of the Dominion is a correct and complete statement that does not show the contingent liabilities that belong to us by reason of our guarantees. So, we have to pay the interest upon the Grand Trunk Pacific guaranteed securities for its lines in the mountains and on the plains, for which we hold a mortgage. We must pay this, whether we wish to or not, we must pay this to maintain our place among the nations of the world and our credit in the markets of the world; we must do this, or, ourselves become insolvent. As to the securities guaranteed by the Grand Trunk Kailway Company, my hon. friend from South York (Mr. W. F. Maclean) pointed out that we should take over this railway to-day; but I should like to point out to the House and to the country that we are confronted with the guarantee of the Grand Trunk Railway system its guarantee upon the bonds of the Grand Trunk Pacific. For my part I am not prepared at this moment to say that the tax-payers of the Dominion of Canada should be substituted for the shareholders of the Grand Trunk Railway. It may be that when we have before us all the information to enable us to deal with this matter as adequately as we should, the

common sense and wisdom of the House will conclude that it is better that we should ourselves be put behind the securities of the Grand Trunk Pacific by accepting the obligations of the Grand Trunk system, by relieving them, and taking over the system as a whole. But to-day, for the Grand Trunk Pacific, there is the guarantee alike of the Dominion of Canada and the Grand Trunk Railway system behind it; and until such time as the obligations of the Grand Trunk have in some sense been settled with relation to the Grand Trunk Pacific, I do not think that this House would he discharging its duty to the people by now taking the system over. It is all very well to say: there is $15,000,000 due to the Grand Trunk by the Grand Trunk Pacific, and $15,000,000 due to the Grand Trunk Pacific Development Company, and that we have only to take over the stock. That is very true; it is a simple thing to acquire the Grand Trunk Pacific. But in the acquisition of that road, we substitute for the guarantee of the Grand Trunk Railway system-a guarantee given thoughtfully and after careful consideration by the shareholders duly assembled in London to deal with the matter-the guarantee of the tax-payers of the Dominion of Canada. I want to know that adequate safeguards have been provided, that we have proper agreements with regard to traffic that will secure us against the building up of towns and ports outside the Dominion of Canada, before that is done. It is for that reason that I gladly vote a sum of money to enable a proper investigation to be carried on in order that we may know, in the light of expert information and advice, just what can be done to save a situation which is very acute. So much for the Grand. Trunk Pacific, in so far as taking it over at the present moment is concerned

With regard to the Canadian Northern, I am not going to deal at length with figures to-day, because .they are only painful to read and my voice is bothering me very greatly. What aTe we going to do about the Canadian Northern? My hon. friend the member for St. .Tohn (Mr. Pugsley), says that we should take an option for its purchase. The crux of the Canadian Northern situation may be very simply stated. It has $107,000,000 of provinoially guaranteed securities and $101,000,000 of Dominion guaranteed securities; that is, $208,000,000 of guaranteed securities of the provinces and the Dominion. That means that the people of this Dominion must protect the credit of the Dominion or of the provinces

to the extent of the interest on those sums of money. In addition to that, whether we will or not-it is now too late to look back except to take stock of it-we have promised to pay the interest on $45,000,000 Dominion guaranteed securities for two years and on $35,000,000 of similar securities for three years, and British Columbia has promised to pay the interest on an enormous sum involved in the construction of that road to the Pacific for a period of three years. So these sums must be met anyway.

According to the figures that we have before us, something like $147,000,000 of unguaranteed Canadian Northern securities are outstanding. How are they secured? They are secured primarily by lodging with a trust company the certificates of .title to Canadian Northern properties called subsidiary companies. There are the Lake Superior terminals, there is the telegraph system, there is the express system, and in addition they are secured, of course, by a charge upon the Canadian Northern system. It is true that two years ago we put $45,000,000 behind that again. I think we could afford to lose the $45,000,000 now rather than put ourselves behind that; I think that must be apparent to every thoughtful Canadian. The problem is a simple one with the Canadian Northern. You say you will not have a receivership, because it would hurt our credit. Then I ask this question: how are you going to adjust that $147,000,000 of unguaranteed securities? You have your federally-guaranteed securities, your provincially-guaranteed securities; now you have your unguaranteed securities. I, for one, will protest as long as I have a seat in this House against the substitution of the Canadian taxpayer for the 'Canadian Northern with relation to these unguaranteed securities. I will not become a party to the people of this country being told that they must insure and guarantee unguaranteed securities. If men in England bought $25,000,000 of income certificates of the Canadian Northern and paid par and more for them; if they bought $147,000,000 of unguaranteed 4 per cent perpetual debenture stock and paid par for it, that is their business. But I do protest against the substitution of 8,000,000 Canadian people behind an unguaranteed security of any railroad company. I go further. Not only is it unsound business, unsound in principle and in detail; I say further that it puts a premium upon watering railroad securities and stocks. A point to which I shall presently direct attention is this: If we are to take over this Can-

adian Northern railroad, or if we are to prevent a receivership occurring; if we are to act the part of the receivers; if we are to reorganize the system, then we must proceed to reorganize even as the receivers of the Wabash reorganized that road two years ago; even as the receivers of the Frisco .system, are now endeavouring to reorganize that system; even as the receivers of the Book Island system are now endeavouring to reorganize that system. We must proceed upon business principles, and if these 4 per cent unguaranteed securities are to. be taken care of by this country they can never be taken care of on the basis of making them worth 100 cents on the dollar. I am not adverse to any system of reorganization by which these securities would have some value placed upon them; but I would deprecate greatly any endeavour to substitute for the Canadian Northern Bailway system, which was the security upon which they were sold, the collective credit of the people of this Dominion. That is the reason why it, seems to me that we must go further than we have gone; we must do that very shortly, in order that an opportunity may be afforded by the lodging of these securities with a trust company, or otherwise to bring about some scheme of reorganization, because I think the time is gone by when men of business and intelligence, sitting in this House, should be frightened by the word " receivership." It is a great bogey, this word " receivership." All it means is that you put somebody in who takes charge of the property to conserve it and savie it for the people whose money built it.

I would just like to say this to the hon. member for St. John, who talks about the magnificent undertakings that have been carried forward by Mackenzie and Mann. The Canadian Northern Bailway Company is a corporation owing its origin to this Parliament. It was created by nothing more or less than a statute that gave corporate powers and existence to two or three men. and clothed them with the responsibility on the one hand and the opportunity on the other of building a transportation system. They organized themselves as a corporation, and with one hand they borrowed hundreds of millions under that name, and with the other hand they paid it to themselves as contractors, to build what we now have

a railroad. That is the story, just as tersely put as I think it can be put. And, mark you, the money that was borrowed with the one hand was, with the ex-

ception of the $140,000,000 to which I have referred, borrowed upon the collective security of every man in the Dominion or in the provinces. In the one instance it was the collective credit of the people in the provinces, and in the other of the Dominion as a whole. And with that money they, under another name and with the corporate existence which is given to them in another place, are building this transportation system and handing it over to whom? To the people whose money built it? To the people whose credit built it? To the people who made it possible? Not so. Year after year they have come .back to us and asked us to give them more money to continue the operation of something that they themselves did not create nor build, but which owes its very existence and continuance to the collective credit of the people of this country. We are unable, however, to get a receivership, because the attitude of the Minister of Finance, may, after all, be the correct one. Moreover, in a period of war we must accept the inevitable; the opinion of those who are charged with financial responsibilities and the obtaining of large sums of money with which to carfy on the war should at least be respected to the full. So, conceiving that the hon. Minister of Finance is right and that I am wrong, what are we to do? We are confronted with this situation; we must either assist the road or let it default, and since we are not to let it default, for the reasons which the minister has given, then we must help it.

What are the conditions upon which I, speaking as a western man, am willing to help save the credit of this country? To me the conditions are very simple. First of all, any loans made to these roads must be demand loans. I would not permit myself to become a party to a single dollar more going to either of these systems unless it be upon demand. Because, as my hon. friend who has just taken his seat knows, that if loaned upon demand you may demand it to-day and go to action to-morrow; or you need not demand at all but commence action for payment.

Mr. PUGSLEY *. Which you would not do.

Mr. BiENNETT: I do not know whether or not my hon. friend's remark reflects his own mind; but, speaking for myself, i'f the systems were conducted as they have been, I would not hesitate to commence proceedings to-morrow morning. First of all, then, a demand loan. That insures for me absolute control of the situation; I know when it is a demand loan that I at least have control. I know when it is a

demand loan that I can call, and

by calling it I can get my money back, or take possession. If the days of prosperity come to-morrow or the day after, then so much the better for us; we shall get our money back, and in a period of years we shall have made good the $45,000,000 loaned two years ago to the Canadian Northern and the $25,000,000 loaned the Grand Trunk Pacific. First, then, a demand loan. I have no hesitation in saying that, so far as a loan, if it must be a loan at all, is concerned, we must do this.

Then, having made a demand loan, what is the next condition I insist upon, so far as I am concerned? The rate of interest, the terms, Having been settled, I ask that this country shall have absolute control of the distribution of that money; in other words, I want the Minister of Finance to be responsible to this Parliament for every dollar of it. I do not want this money to pass through the exchequer of these people, for them to do with as they please; I ask the Minister of Finance to accept the responsibility for its expenditure, for and on behalf of the people, who make the loan. He will say to me, I suppose: " Why should I accept this responsibility? I am only lending money." It is more than lending money. We are saving bankrupt enterprises from destruction, and because we are endeavouring to save our credit we are not putting a receiver in charge. But the Minister of Finance, sitting here to-day, is to me the receiver of the system, and as such I ask and I expect, and if I am permitted to live will demand, that he shall see to the distribution of every dollar of that money-every cent of it. I want to know that every dollar of it is used for the purpose for which this Parliament is voting it. I want to know that every cent of it is used for the purpose of meeting the demands which have arisen, and which must be paid by reason of fixed charges accruing -for the purpose only of preserving the credit of this country.

Then so far as the Canadian Northern is concerned, there is a large question-this is the third demand that I make upon my friend the Minister of Finance. The operating revenues of the Canadian Northern Railway far exceed its operating expenses. According to its estimate, which has been laid upon the table of this House, the Cana-

dian Northern Railway* for the year ending 30th June, 1917, will have, apparently, a net revenue of nearly ten millions of dollars. I say to you, Sir, that I protest against Mackenzie and Mann being left in charge of that ten millions of dollars.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I protest against the men who have been guilty of the misrepresentation they have, between their statement of two years ago and their statement of to-day, being left in charge of the operating revenues of that system. They are not worthy of being left in charge of the operating revenues of that system. I do not trust them. The people of this country do not trust them. The people of this country will not for a single moment submit to taxation being put upon them to save this system from going into the hands of a receiver if, Sir, it is proposed to leave these * men in charge of the operating revenues of that road. I am satisfied that that must not be done. I want to point out to this House that this vote, which we are making here to-day, means a tax for both railways upon the people of 'Canada of $3 for every man, woman and child in it, for the purpose of meeting the interest charges and demands that may be made upon us by reason of the default of these railway systems. There are worse things than default in payment of money, and it seems to me that, when this record is written in the history of this country, the default in corn-man sense on the part of the Canadian people will be in evidence quite as much as the default in payment of interest. Now, having taken stock of the situation, realizing where we are at, I believe that I but voice the opinion of" the community in which I live when I say that we demand that these men'shall not be left in charge of the operating revenues of that Toad.

I am not casting any reflection upon the operation of railways; I am not a railway man. But I wish to give one illustration of the wasteful methods of these men in the operation of this road. The hon. gentleman from Assiniboia (Mr. Turriff) spoke the other day. Doubtless he and I frequently go down to the station to take the train for Toronto. Sometimes we take the Canadian Northern train; sometimes we take the Canadian Pacific railway train. That train on the Canadian Northern between Ottawa and Toronto has no more license to be there, no more license to be running there than there would 'be for run-

ning a train from here to Kamchatka. It has no license whatever. Any man in this House knows that.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

The reason is this: there is a sufficient number of trains without this one, to meet the demands of night traffic between Ottawa and Toronto. The Canadian Northern is operating a day train between these points. I have passed through the night train and counted the passengers, night after night, for the purpose of satisfying myself what the revenue may be. I know how many passengers are necessary for a train to pay operating expenses. The maintenance of that train means nothing more or less than a fixed chaTge upon the revenues of that road; and, as a matter of fact, that money should have been spent in building freight cars to 'supply the Goose Lake system, of which my hon. friend spoke the other evening, to haul out the farmers' grain. That is what I mean.

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Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Why would the hon. gentleman not take off the Canadian Pacific Railway train?

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

The Canadian Pacific

Railway train is operated by a system that shows a surplus of $20,000,000 and was there first.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I hope my hon. friend is not so lacking in intelligence as to make a remark of that kind seriously.

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Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

I do not ask you to submit me to any impertinence. Of course, we will stand almost anything from you.

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Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

The hon. gentleman is an advocate here for the Canadian Pacific Railway.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

At least, my hon. friend, who occupies that proud position for the Canadian Northern Railway, has been able to show that animus which actuates him. I am not an advocate of the Canadian Pacific Railway.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I want to say once more that I am unfortunately in the position of sacrificing a large sum of money per annum because I was, and am not now, an em-

ployee of the Canadian Pacific Railway. I have sacrificed more money per annum than the hon. gentleman ever earned in his profession in a year for the purpose of being here rather than being an advocate of the Canadian Pacific Railway. I simply say that the duplication of unnecessary railway facilities is best indicated by the running of that train between these two points. There are four trains a day on the Canadian Northern railway between Toronto and Ottawa: one leaving each point at noon, arriving at the other point in the evening, and one leaving each point at 11 o'clock at night, arriving at the other terminus the next morning at 7.30 o'clock. The local service is not taken care of by the night trains; that is obvious. How did the Canadian Pacific Railway-and I thank my hon. friend for reminding me of it-reach its present position? Just in the manner indicated by my hon. friend from Edmonton (Mr. Oliver) the other day-by making its service consistent with the demands of the travelling public. That is how it was done. When I first went West the train between Calgary and Edmonton ran three times a week; it went up one day and came back the next. My hon. friend from Edmonton will say it was a poor train. It was a poor train. And yet it was by the maintenance of that service that the Canadian Pacific Railway was able to permit the system between these two points to exist. Had it run night trains, as it now does, there would, of course, have been a deficit as between the operating expenses and the revenue. But it did not run night trains until three years ago. But getting back to my illustration, you have on the Canadian Northern a beautiful Pullman train leaving here at 11 o'clock at night. May I remind my hon. friend from St. John that every one of those cars would put 20 freight cars upon the plains, where the profitable business of that road Comes from. In other words, according to the best computation that I can make, each of these two night trains between Ottawa and Toronto, would involve an initial expenditure at least equal to the cost of one hundred 1,000-bushel freight cars. I leave it to the hon. member for Assiniboia (Mr. Turriff), who is much more familiar with these facts than I, to say whether or not one hundred freight cars would not handle 100,000 bushels of grain; and whether the moving of 100,000 bushels of grain would not help to relieve the congestion in that country. In constant service between the grain-producing centres of

Alberta and Saskatchewan and the head of the lakes, these cars would produce five times the revenue that will be produced in the next five years by the operation of the night trains between Ottawa and Toronto.

net the money tnat my hon. friend from Perth (Mr. Morphy) wants the system to get, I want it to get by carrying the freight that is lying there to be carried by reason of the development of the country which the railway was built to serve. The people of the West realize that the expensive passenger equipment and service is being maintained at a loss. I do not care what the company says, or what their traffic returns show. I have the evidence of men who have gone over the system for the purpose, and the Board of Railway Commissioners will give you the actual statement. It is a losing service, and the 100 freight cars that could be built, with the expenditure necessary to maintain them, would move 100,000 bushels of wheat out of the congested areas, and be productive. What we demand is that this- system be no longer managed by the men who created the existing conditions, but by men who will be responsible for meeting the traffic demands of western Canada, and who will see that the money is not diverted for other purposes. I think it is only fair to ask that.

You ask, how is it to be accomplished ? It is to be accomplished in two. ways: (1) by the appointment of a board of directors, and (2) by the appointment of adequate auditors. These are the two methods by which I propose to meet the difficulties to which I have directed attention. Left in charge of the $15,000,000, these men would do what they have done in the past. We want not local auditors, not men who have merely good reputations in the particular communities in which they live, but men of international reputation, men who will be responsible in the largest sense of the term for the audit of the railway system, men of large business training and experience who., by reason of their great position in the business world, will enjoy the esteem .and confidence of the Canadian people.

So far as directors are concerned-I can only speak for some of us in the West- we ask that those appointed, and I think the Minister of Finance said he would give us three directors, be not dummy directors, not men who will not direct, but men who will be able by reason of their skill, experience and knowledge of railways, to see that the money of the road is used foT

the purpose of supplying facilities to the public. After all, the obligation of this railway system is to do what? It is to supply the people with an efficient transportation service, and the demand for that will not be met unless there be appointed directors who have the requisite knowledge, and who will be responsible for the effec-. tive administration of the system.

The next safeguard which we ask, and it is not too much to ask, in view of the circumstances, is that no new work should be commenced that would commit the system to great expenditures. I agree entirely with the observations that have been made as to what has been going on in various parts of Canada with regard to the launching of new enterprises connected with this system. We ask, and we have a right to ask, that the money lying in the banks upon the guaranteed securities of the Dominion and the provinces should be used for the purpose of completing the roads for which they were loaned, because we are bound as a matter of law to that, and further, that no new undertakings be commenced. A few years ago, they launched a vast steamship enterprise; they launched a system of hotels, and they 'have also on hand great terminal enterprises. We must insist, and I ask the Minister of Finance to see to it, that no new expenditures are made until such time as we have had an opportunity to consider them

I go further. The last demand is that there should be an adequate commission for the purpose of ascertaining all the facts connected with these and other railway enterprises. It is not sufficient to say to this House that you are going to appoint a commission. If a commission is to be appointed, it should be appointed before the end of this month. It should be appointed before the month of June, because there will remain only the months of June, July, August and September in which it could carry on its work. It must be a commission, if possible, of men who do not reside in Canada. I do not believe i that you can get in Canada men who would not be more or less influenced by local conditions and circumstances, or who would take a disinterested view of the matter, and present a report of a disinterested character upon which we could act. My hon. friend from Perth (Mr. Morphy) referred to the attacks that have been made upon me at various times, the suggestion being that I am partial to the Canadian Pacific railway because I once acted as their legal adviser. These attacks reflect a state of mind TMr. R. B. Bennett.]

common in this country and one which might find expression in any report made. We do not want men who are likely to be influenced by the Canadian Pacific railway, by the Grand Trunk railway, or by the Canadian Northern. What we ask is that you get the biggest men that you can get for money on the American continent, for the purpose, not of studying the Canadian Northern and Grand Trunk enterprises, but of looking over the whole railway situation of this Dominion and of determining how the 35,000 miles that are now in Canada can be so co-related and so co-ordinated that they will be of the greatest use to everybody, and that we will get out of them the money to meet the charges against them.

I do not think it is unreasonable or unfair to ask that the commission get to work at the earliest possible moment. I have talked with a gentleman who has travelled over Canada and he informs me that 2,500 miles of railway in this country should be torn up, because they are of no good and never will be of any good to the people. By coordination and by co-relation, by linking up this piece of system or that branch line with a new main line, by using the branch lines of the Grand Trunk or Canadian Northern, by using the lowest grade of this road here and another there, we may be able by a system of co-operation to save many miles of railway from destruction. Should a man ask for more than that; can he ask for less? It is not too much to expect that a commission composed of such men, would be able to do invaluable work for this Dominion, and would be able to bring in a report which would enable us to arrive at a conclusion in relation to the whole matter when Parliament met again. But it is not for any commission to determine the policy of the Canadian people. That must be determined by themselves. I do not believe that the railway question has ever been as seriously considered by the Canadian people as it should be, and I think that when a report, such as I have indicated, is ready, we should have if possible a special session of this Parliament to deal with this whole matter. I have advocated that privately, and I repeat it publicly. I believe that Parliament should be called together, if possible, without the Government assuming the responsibility [DOT]for the carrying out of this or that policy. There should be placed on the table of the House a report such as I have indicated, and we should sit together in special session

and determine once and for all what we shall do with regard to a matter which is of great importance to the Canadian people. It would be a report made by men of outstanding position in the railway world whose knowledge and experience would command the respect and esteem of the Canadian people. There should be a financial report that could be read and understood by every hon. member of this House. I would supplement that report, if I had my way, with the annual reports of the Canadian Pacific Railway, Canadian Northern and Grand Trunk systems of the 30th June, 1916, and let the members of this House study the situation which demands the greatest possible care on the part of every person. Then there is left the question, what shall be done after that? I am not going to say whether or not I believe that government ownership would serve best the interests of this country. I am not here to say whether I believe in the nationalization of all Canadian railways. What I have been struggling for for years -and, so far as I am concerned I will not be content until I get it-is the necessary knowledge to enable me to arrive at an opinion on this question. A former president of the United States, President Taft, in a recent address pronounced himself as strongly opposed to government ownership of railways, as strongly opposed to the nationalization of railways in the United States. The hon. member for Edmonton (Mr. Oliver) the other evening said he was not sure that it would serve as a useful purpose in this country. The hon. member for South York (Mr. W. F. Maclean) was sure that it would be a panacea for all our ills. I am not sure; I have not definitely made up my mind. I have recently looked through the traffic returns of all the great railroads and am satisfied of one thing: the economies that could be effected in operation if the railroads of Canada were nationalized would amount to a stupendous sum. The surplus revenues of the Canadian Pacific railway are very great, for the fixed charges of that road, last year were only $10,000,000; and when you remember that their fixed charges were only $10,000,000; while the fixed charges of the Canadian Northern were $15,000,000 per annum, you can get some idea of the burden that would be placed upon us if we dealt with this question in every phase and took into consideration every road that has been built and will be built in Canada. So I am not here to declare either for or against public ownership. But what I ask in the strongest possible terms is that we should not procrastinate in the creation of this commission. We should deal with these matters in the earliest possible moment, and should receive a report that will command respect, that will be the last word of authority on the subject. There are great men in the United States who have been employed by the great railroads for a similar purpose-by Mr. Hill and the late Mr. Harriman, for instance-men of transcendent ability in railroad work, and who have done much in the reconstruction work of railroads in the United States. In addition to that, there are great financial men who would be able to give their assistance in the preparation of a report that would enable us to understand, first of all, the physical value of the Canadian Northern and Grand Trunk Pacific system-the replacement value-and, secondly, their franchise value, if any. We should also have prepared by proper solicitors a statement of the legal position and of the securities that have been issued by these roads, together with recommendations as to how they can best be dealt with.

In connection with the question of physical value, I should like to turn for a moment to the last condensed balance sheet of the Canadian Northern railroad system. This values the railway and equipment of the Canadian Northern railroad, as on the 30th day of June, 1915, at $430,052,428.55. Let us compare that with the Canadian Pacific railroad. You will find _in Poor's Manual a statement of the Canadian Pacific railway system, and it is one well worthy of consideration, because, with all its vast mileage of railway, aggregating 14,000 miles, with all its steamships and lands, it carries its railway and equipment at only $503,584,725.07 (Poor's Manual, 1916, page 1499). When you reflect that the Canadian Northern railroad system is carried in their balance sheet at over $430,000,000, and the Canadian Pacific railroad, with all its equipment, at $503,000,000, or only $73,000,000 difference, you can form some adequate conception of the real situation in regard _ to the railways of this country. Nothing could more clearly indicate the character of what has been going on during all these years than these two sets of figures. Take that in conjunction with the figures that were put on Hansard the other evening by the hon. member for Lambton (Mr. Armstrong), comparing the Canadian Nor-

them Railway caTS per mile with the Canadian Pacific Railway's, and showing that the Canadian Pacific, with some 14,000 miles for traffic purposes, owns something like 87,000 freight cars, 2,781 passenger oars, and nearly 8,000 service cars, as compared with a system which shows not one-third of that equipment, yet whose railway and equipment is declared on its books to be only worth $73,000,000 less than the Canadian Pacific Railway and with several thousand miles less track. That, it sei ms to me, is something to which the attention of the country cannot be too strongly directed, and I should like the figures placed in possession of every member of this House, together with a copy of the annual statements of the Grand Trunk Pacific, the Canadian Pacific Railway and the Canadian Northern Railway for the year ending June 30, 1916; so that hon. gentlemen might study these figures in the light of the report of the commission and determine how economies may be effected such as will, by co-relation and co-ordination, enable us to save, if possible, the Canadian taxpayer from further demands on his purse.

I should like hon. gentlemen also to bear in mind the obligations of this road which carries its railway and equipment at $430,000,000. On the 30th of June, 1915, the assets of the Canadian Northern were represented in round figures to be worth $562,000,000, while the Canadian Pacific Railway's assets were valued at $931,000,000 only, of which nearly $100,000,000 was in cash and active securities. Does not that suggest to thq House the necessity for the most watchful care in relation to the expenditure of the revenues of the Canadian Northern Railway and of the moneys we are advancing?

But that is not all. Two years ago, you will find in the Sessional Papers for 1914, representations were made by Mr. Hanna, vice-president of the Canadian Northern Railway, over his signature, as to what would be the earnings of the Canadian Northern Railway system for the year 1916. He estimated that the gross earnings for 1916 would be in round figures $54,000,000, and the net earnings $15,000,000; for 1917, gross earnings $61,000,000, and net earnings $17,000,000; and for 1918, gross earnings $67,000,000, and net earnings $20,000,000. Now I find by the documents that were laid upon the Table of the House the other day that the estimated gross earnings for 1916, instead of being $54,000,000, as represented by Mr. Hanna two years ago, are now ee-

timated by him at $34,900,000, and the net earnings at $9,770,000 instead of the $15,000,000 that he estimated two years ago. In view of that the country may well question whether the glorious prophecies of Sir Donald Mann as to the traffic of the future will be realized, and whether, let us eay in 1917, the gross earnings of the company will be $61,000,000, as Mr. Hanna estimated them to be in 1914. This year he says they will be $41,000,000. In 1914, when he was after $45,000,000, he estimated that the gross earnings for 1917 would be $61,000,000, and this year, when he is after only $15,000,000, he estimates that the gross earnings will be only $41,000,000, or $20,000,000 less. Then as to 1918, he estimated in 1914 that the gross earnings would be $67,000,000 and to-day he estimates that they will be $47,000,000, a shrinkage of $20,000,000, and so on for 1919 and 1920, and as regards the net earnings in the same ratio.

There is one other matter I should like the House to consider. There are outstanding, according to the figures placed upon Hansard by my hon. friend the Minister of Finance and the documents we have before us Canadian Northern railway liabilities to the amount of $492,000,000- $107,000,000 and $101,000,000 and $149,000,000, then $92,000,000 .of apparent debt then $17,000,000 for equipment, besides $25,000,000 which we have outstanding for income -bonds, or nearly $500,000,000 of securities outstanding, outside of capital stock which is another $100,000,000. Think of that in the light of the fact that the total value given of the railway and equipment is only $430,000,000. It is no wonder that people are asking: Where are we going to get off if this thing continues? There is a limit to the resources even of the Canadian people; there is a limit to the power of the Canadian taxpayer, and I say, in all seriousness: This country cannot continue

year after year putting up money to meet deficits that arise in the operation of railroads owing to the promoting tendencies of the contractors who build them. Hence,

I rejoice that the Minister of Finance has seen fit to appoint three directors on the Board of Directors of this road. If they are dummy directors like our present director on the Grand Trunk Pacific, who is a station agent at Levis, they will not be very valuable, but if they are men like Sir Thomas Tait, who gave the best of his life to the Government railroads in Australia, then I know that not one dollar will be diverted from its proper source, and that

every dollar that comes from the system Will go back into the system or in payment' of its just debts.

There are other figures of tremendous interest. My hon. friend from Edmonton (Mr. Oliver) said the other day-and he seemed to think it was true, I think he believed it absolutely-that since we came into power in 1911, there had been a shrinkage in railway earnings, and he attributed that to the fact that the people of this country were not as prosperous as they were before. All I can say is that the railway statistics show quite the opposite. I wish every hon. member would study the volume issued by Mr. Payne every year, and if my hon. friend will turn to page 32, he will find that the railway earnings per year in Canada have increased since 1911; that on the 30th of June, 1911, they reached a higher point than they ever reached before; that they increased since then; that the number of passengers and tons of freight carried per mile until this past year also increased. A summary of the whole railway situation is given on page 39, and it indicates that for the year ending the 30th June, 1911, the gross earnings per mile were $7,430.45; the operating expenses per mile, $5,158.85, and the net earnings per mile, $2,271.64. In 1912 the net earnings increased; in 1913 they increased and in 1914 they increased, but in 1915, they showed a falling off, so that instead of there being a diminution in the traffic returns of the railways as to the number of passengers or as to the tons of freight carried per mile, or as to the revenue per mile, either gross or net, there has been a constant increase since the 30th June, 1911, until last year.

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LIB

Frank Oliver

Liberal

Mr. OLIVER:

Is the hon. gentleman

saying that I made some allusion, in the remarks I made the other night, to railway traffic since 1911?

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

The remark that I understood my hon. friend made was that unfortunately, shortly after the Conservative party come into power, there was a shrinkage in the prosperity of the country, and that that shrinkage affected the railroads.

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May 15, 1916