May 15, 1916

LIB

Frank Oliver

Liberal

Mr. OLIVER:

I did not specify the railways. What I mentioned particularly was that there had been a yearly increase in productive area and in production in the West, and that that increase in production and in productive area did not continue

after 1911. I did not allude to the railway traffic at all.

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LIB
CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

And I only read from

page 39 of the statement to show that in 1911 we had reached a higher point in railway earnings per mile than at any time before or since 1907, and that there was a steady increase every year until 1915. I merely mention that in passing as it seems to bear upon the observations which the hon. gentleman made.

There can be but two ways by which we can effect improvements in our present system. One is by practicing economy. In relation to economy, I will not deal with that at any greater length than to say that I believe the railways in question can be managed much better than they have been in the past, because the Canadian Pacific Railway Company was last year able to show economy amounting to many million dollars that enabled it, with a shrinkage of 25 or 30 per cent in gross revenues, as the hon. Minister of Finance said, to show a very large net return, almost in keeping with the previous year. Everyone who lives in the West will bear me out when I say that the most drastic economy can be effected in relation to the Canadian Northern in the East, and that great benefit will accrue to the West by better facilities for the handling of freight, *because freight facilities are demanded in western Canada, and most railway men are constantly engaged in the study of how to bring the handling of freight to the highest state of perfection.

I have had letters from almost every part of the western provinces during the past few months, complaining of the handling of traffic by the Canadian Northern. My hon. friend from Assiniboia (Mr. Turriff) has had the same sort of letters, and I doubt not that my hon. friend from Edmonton (Mr. Oliver) has had the same. Every one of us have received complaints of the slow movement of freight. While there has been congestion of freight, and no ears, these unnecessary duplications of "services go on in eastern Canada. Where is the traffic to come from? Economy in service can effect some improvement, but the reorganization of the railway system of Canada, the saving of the taxpayer from the demands that are made upon him an-

nually, can be brought about only in one way, and that is by increasing traffic. Increased traffic in the East 'must largely mean passenger traffic, because there can be no great increase for some years to come in freight traffic, but in the West, colonization and settlement are the two things that must bring about increase in traffic. Linked up with the transportation problem is the problem of settlement and colonization. After this war there can be no material progress, no material move towards prosperity until such time as we settle our lands with suitable persons and increase the population of this country, and that increase of population will mean that we shall thereby be adding traffic to the railways, so that the solution of this problem of transportation ultimately must rest with the men of western Canada and with the development of that great country west of the lakes. I care not how much discussion may be indulged in as to what passenger facilities are required here or there. So far as the West is concerned, in the hands of the producers of the plains, and not with the residents of the cities and towns, rests the solution of this problem, for until such time as the great body of mileage that is now unproductive, that is now not being utilized to the extent to which it can be utilized, is supplied with traffic, although there may be congestion at this or that point, in the ultimate analysis you find there is not sufficient traffic for all those roads to take care of. There is a limit to the traffic production of 8,000,000 people, and that limit has been nearly reached. This year, with lessening crops, and with lessening traffic, there will be lessening returns.

Let me point out some figures that have been prepared by a gentleman who is now engaged with the Economic Commission, and that show what we have in the West at the present time. We have a population in the four western provinces of 2,212,576. In Manitoba 56 per cent of the population is urban and 44 per cent rural; in Saskatchewan, 27 per cent is urban and 73 per cent rural; in Alberta, 40 per cent is urban and 60 per cent rural; in British Columbia, 55-4 per cent is urban and 44-6 per cent rural. We have a total of 955,653 people in the towns and 1,256,923 people in the rural parts of the four western provinces. Let us look at the railway mileage:

CMr. R. B. Bennett.]

Railway mileage.

Miles.

Manitoba 4,576

Saskatchewan 6,011

Alberta 4,153

British Columbia 4,378.9

Total 19,117.9

That is, in these four provinces we have more than half the railway mileage of Canada-and with a population of less than two and a half millions of people. How does that work out with relation to the population?

Relation of Railway Mileage to Population.

Total. Rural.

1 mile to. 1 mile to

Manitoba

116 51Saskatchewan 115 84Alberta

120 72British Columbia

114 45Four Western provinces.. 116.3 66

This does not take account of certain miles of railway in British Columbia not yet completed. Now, if this House and this country will keep these facts in mind, it will assist in the realization of the vastness of the problem that confronts the Canadian people. It means this-that we must get into the West more people. For there is no chance of 66 people ever being able to produce or consume traffic sufficient to maintain a mile of railway the average cost of which in Canada is between $40,000 and $45,000, ^ and the fixed charges upon which will amount in the aggregate to nearly $2,000;-sixty-six people cannot contribute $2,000 a mile net, which really means after all the production of $6,600 a mile. People cannot produce at the rate of $100 each for the purpose of maintaining the railways, for that is what it comes down to. So, this problem of transportation is indissolubly connected with the colonization and settlement of western Canada; and I say to the Minister of Finance, unless some policy is outlined by which these plains are settled year by year and day by day, you will have a demand made upon 4 p.m. the tax-payers of this country to pay a deficit upon the operation of these railroad systems. There are the facts that stare us in the face; and it requires courage, determination, imagination, and a vision of the future that is to be to deal with them as they should be dealt with. We must settle this country, for until the country is settled the transportation problem will not and cannot be settled. In the eastern part of Canada, I believe, you have only one method by which you can possibly hope to succeed in solving

the problem, and that is by increasing largely your passenger traffic, and you can only do that when you have roads sufficiently strong to take care of these passengers. I have 'long had a dream that the terminal facilities at Halifax might be used by bringing, let us say, the Mauretania to that port to ascertain what time she can make in carrying passengers from Liverpool destined for Chicago and other American cities; and then have well-equipped trains such as we have provided in some cases, to see how many days quicker we can land passengers in Chicago, Minneapolis, St. Paul and other western points, than can possibly be done by way of New York. In that way we may be able to develop passenger traffic for our railways. But we cannot look to that alone for a solution of the railway problems. It is borne in upon my mind-that, when, out of thirty-five thousand miles of railway in the whole Dominion you have nineteen thousand miles west of the Great Lakes, the problem must be dealt with in the West; and, that being the case, it is incumbent upon those who have the power and responsibility, to see to it that our population is increased by a vigorous immigration policy.

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LIB

William Pugsley

Liberal

Mr. PUGSLEY:

I am very glad to hear the hon. gentleman come to settlement of the West. Will he state briefly what are his views of a progressive policy for settling the West?

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I have a well-defined

idea on that subject, but the statement of it in this House might not serve any useful purpose. It would be only a statement of the ideas of one person.

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Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

No, not very influential. I wish he were. I will go this far-any settlement policy to be effective in this country must have reference both to the East and to the West. I am not one of those who believe that when this war is over you will find people flocking into this country. I believe that the darkest days of this country's economic history in the near future will be, first the period of readjustment to follow the war, and after that the period of reconstruction. When the war is over, and our soldiers are paid off and return; when dislocated industry is being adjusted from the manufacture of munitions; I believe you will find a time of very great depression in this country, a time that will require the greatest courage and determination on the

part of all of us to meet. After that will come the reconstruction period, and that, in my judgment, will be not of rapid development. There are two reasons why it should come slowly. The first is, that the settlers we shall get-into the country will be of limited numbers, and the second is that the economic strain which we shall have undergone will be so great as to prevent us from readily finding large sums of money for the purpose of the undertakings necessary for a large inflow of people. I do not know that I should take up time to talk about this, and perhaps the hon. member for St. John (Mr. Pugsley) will excuse me if I do not enter upon the question at length, because I do not think that the presentation of the views of one individual upon an abstract question will serve any useful purpose. I have said that I have well-defined ideas of how this is to be accomplished, and I have also said that the carrying out of the policy necess'ary to accomplish the end will require great courage, great determination, some imagination, and a vision of the future that is greater than the present. I believe that the abandoned farms of the eastern provinces can be settled. Upon these farms I would settle men who have lived out of doors for the last two or three years, men who will be glad to come here with a little money, to seek educational advantages for their children, and who desire to'escape high taxation and to continue to live under the British flag. These men will settle in the East. But the younger men, more vigorous, with a spirit of adventure, and who want to be in the open, must come to the West. And in coming they should be given the assistance of the state, with money to go upon the land and to find for them agricultural implements. We must provide modern facilities to make this the best country to live in in the world; because, unless it is better than other countries, other countries will get the settlement that we need. For we know that settlement does not always follow the flag. We know that after the Boer war thousands of men went to the United States who should have come to Canada. And they went there because we could not offer them the facilities that were offered them elsewhere. We must have rural tele- [DOT] phones, good means of highway transportation, and some community life -such as can only be brought about by putting the state behind it all. No policy of colonization can be made efficient or useful or worthy of the

name of a policy, that does not put behind it the power of the state. I am sure I shall be excused, if for no other reason than because of the difficulty with which I speak from making further observations on the subject.

I do desire to reiterate and to press upon the attention of this House the fact that the transportation question cannot be settled other than by the West, because, fortunately or unfortunately, 20,000 of that 35,000 miles of railway are there, with a population so sparse that we have one mile of road to every 66 of our rural population. That being so, I am giving my support to this measure at this time because I btelieve that it means the end. Two years ago I was frank in stating that I did not believe that it meant the end. It is no joy to any man to be right if being right means that his country suffers thereby. I have no joy in relation to that, but I am profoundly concerned about one thing, which I press upon this Government and upon my hon. friend the Minister of Finance: that no time be lost; that there be no procrastination and no delay; that this commission of the biggest men that' money can buy at once get to work and report to the Canadian people as to the possibilities of co-ordination and co-relation of the various units that comprise the railway systems of this country, so that, if possible, the traffic that is now being developed and may be developed, may be made productive and so that there may be no further calls upon the Canadian taxpayer. I am certain, however, that the Canadian taxpayer will not continue to pay unless some return be made to him either in the way of lessened freight rates or by his ownership of the facilities by which his trade is being transported. I want to be able to arrive at a conclusion, with my mind at least seized of all the facts, therefore I do urge upon my hon. friend the selection of the best men that he can get-men of experience, of knowledge, of vision; men who, looking to the West, will see not merely a few scattered homesteads and a few miles of track, but a great vision of the mighty influx of the human race that will one day pass over in that direction and occupy this land, for whom facilities have been supplied far in advance of the needs, far in advance of what the requirements are to-day. The constant demand that has been made on Governments being met by constant acquiescence, not refusal, has created a condition in which we find more

facilities than we have traffic to take care of, although now and then, by reason of the spreading out of those facilities, there are not sufficient cars to take care of the traffic which develops at particular points. That but accentuates the force of the argument that I have been endeavouring to make. If such a commission does that, having a proper audit made by men of international reputation who will ensure to me that the money which we are voting is used for the purpose of protecting the credit of the Canadian people and' not otherwise, and that the revenues which are paid by the people of this country are used for the purpose of carrying their traffic to the seaboard; if and when that is done, I am satisfied that when we come back-if I had my way it would be a special session for the consideration of this subject only-free from the fetters of restraint imposed upon men who vote to support a cut-and-dried policy -what we will do as representatives of all the Canadian people to work out a great policy, having regard to the present and looking also into the future, will redound to the credit of this Parliament and of the people who are represented here.

I apologize for having trespassed so long upon the time and patience of the committee in compelling it to listen to my remarks, made under very difficult physical conditions. There is much that might and should be said with relation to figures, but they are lessons of the past. The future problem is what must be dealt with under the conditions that now exist. Recrimination or self-deception or regrets will not get us away from the fact that the condition that confronts us is one of the most difficult that ever confronted Canadian statesmen, and that it calls for the co-operation and the united effort of every man who sits within this Chamber, whether he sits on the side of the Opposition or supports the Government.

Hon. GEORGE P. GRAHAM (South Renfrew) : I assure the hon. gentleman who

has just taken his seat that he need not apologize for the length of his remarks. He has devoted a good deal of study to this question, as is evidenced by the manner in which he has presented it to the committee, it is one of the problems, and my hon. friend has dealt with it in a manner to which no person can take objection. I regret that I was called out and did not hear his remarks in their entirety, but I shall read them in Hansard with a great deal of interest, and

I will keep them among the few Government books that I do keep, because the hon. gentleman has given us a great deal of information that is worth while. The gist of it is this: whatever our views may be, Sir, the successful solution of our railway problems depends on the results of our endeavours to fill up the western country and make traffic for our transportation facilities. That', in short, is what confronts us. The problem before the country is to devise a scheme to bring immigration or its management up to date, so that the lands of the West will be occupied and developed and so that proper returns may come to the country from that development.

A few days ago, when these railway Estimates were placed before the House, I pointed out that the manner in which they were submitted to us robbed the members of their right to deal with them in a practical manner. I was laughed at by some hon. gentlemen on the other side. I pointed out that they should have been introduced by resolution, as is the ordinary method, so that any member on either side could move an amendment. No restriction, no qualification can be placed on these grants, and I claim that that is not fair to members of the House. The Government meet and decide what they will do, but the rest of us represent the people just as much as do the members of the Government. I repeat that the manner in which the granting of this aid has been introduced precludes any motion on the part of any one on either side of the House to vary, to qualify or to place restrictions or impose conditions in respect of this proposed aid. That is not fair. The Government say to us: you have to take the responsibility of putting this road into liquidation without any condition, or you have to grant this aid. After the ruling to-day, which, Sir, was absolutely according to the rules of the House, I am firmly convinced that these items were not brought in in this way accidentally; they were brought in to put it beyond the reach of members to impose any condition upon the granting of this money. I wished to move an amendment providing that if we granted this aid the Government should take over a sufficient amount of the common stock of the Canadian Northern to give the people control, so that we could .say what must be done with this road when the time came. I think it is unfair that I am precluded from proposing that amendment. I am not going to argue the matter"; what is the use?

As a member of this House who has given some attention to railway matters, I realize that my hands are tied. I might just as well sit down. I am absolutely helpless unless I am prepared to vote to strike out the item, which I am not prepared to do.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

Would it not be sufficient if 25 per cent of the stock were lodged with a trust 'company and we had a voting power? This would give us control of the corporation and would be sufficient for our purposes.'

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

I would not object to that; what I want is not the stock for its value, but for its voting power, so that when the time for decision arrives the people of Canada, through the Government, will have control. But, as I say, I cannot move the resolution because the manner in which the legislation is brought in precludes my proposing an amendment. The only thing I can add is to urge the Governor in Council to make that a part of the conditions which they have power to impose, when they come to grant this aid. I have not the power. I say that the decision of the chairman, which was absolutely correct as I pointed out to the House the other night, makes it impossible for any member on either side of the House to have anything to say about this grant in a practical way, unless he is prepared to move that the item be reduced or be struck out. Under those conditions I feel that my duty has been performed. Had I the right, I would move one resolution, perhaps two. One that I would move I have just outlined, and that is, that in some way the Government should take control of the stock, so that when the time for a final decision comes, it would be in a position to practically dictate what the terms would be, and the company would be compelled, yes, I think, would be willing to be compelled, to leave it to a reasonable Government to say on what terms this road would be taken over. I protest again at this unusual method, of presenting this matter to Parliament, one which has never before been followed in this Parliament, at least in my time. When in other sessions aid to railways has l?een proposed, the measures have always been brought in in the usual form, by resolution; and then any member in this House could move any amendment he liked as to conditions, and these amendments could be discussed. But under this new method under which both these items

have been presented to the House, we are absolutely precluded from moving any amendment, and no member, no matter what constituency he represents, has the right to do anything practical in reference to these votes of money. [DOT]

One word more: The question of the

nationalization of railways has been discussed in this House. Personally I am free to say that I am not afraid of the nationalization of railways; but if I were going to do it, I would nationalize all railways and not a portion of them, for reasons which I shall not. stop to discuss now. One great reason is that the systems ought to be brought in under the same conditions, and should be placed under the same management, if we are to

take over the control of any of

them. Mark you, the taking over of one or two might be the initial step towards taking them all over. I repeat that I am not the least alarmed at the prospect of the nationalization of railways. I have lived for a good many years in a town where the lighting system and the waterworks have been taken over by the municipality; and while we have disagreed as to details in many things, I must say that the management has been just as good, it not a little better, than under private companies, and the people have always felt that, whatever money was expended, it was their money and it was their business; and the public have taken a greater interest in the management of these public utilities than they did when they belonged to private companies. Then we have the work of the Hydro-Electric Commission in Ontario, which has been Government of a great public utility. That commission has served, and is serving, a useful purpose. I say, without any hesitation, that I believe the establishment of that commission and its working out has brought about the betterment of conditions 20 years sooner than this betterment would have been brought about had there been no Government control of this great public undertaking. I have no fear of the nationalization of railways. It will have to be a complete proposition embracing them all, if it be done at all. Perhaps, as I have said, taking over one or two at a time might be the initial step towards further enlargement of the national system until it would embrace all existing systems. But I do want to make my position clear that I am precluded as a member of this House from moving a resolution that I desire to move,

imposing conditions on both these companies when we are granting aid to them.

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE (Minister of Finance) :

It appeared to the Government that it was not necessary to proceed by resolution with this Bill as was done in 1914 when the mortgage of $45,000,000 was given to the Canadian Northern Railway Company. This legislation-because it is legislation notwithstanding that the loans are embodied in the Estimates-provides for the. issue of no securities. It is a simple money loan, a lo,an of $15,000,000 upon conditions set out in the Estimate. No. securities are to be issued, no complicated legislation is necessary; and it seems to me, arguing the matter from the standpoint of the right of the Government to introduce this legislation in this way, it is simply a question as to whether or not those proposals are properly in the Estimates. I do not think that the Chairman or the Speaker of the House would rule that these items in the Estimates are out of order. If they are in order, then the Government is clearly within its rights in bringing down, these loans in the Estimates, as has been done.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

Does my hon. friend remember the Scripture quoted by the hon. Minister of Trade and Commerce (Sir George Foster) the other evening, "All things are right; but all things are not expedient"?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

If the Minister of Trade and Commerce quoted Scripture, I would pay more attention to him than to my hon. friend in doing so. There is no reason why the suggestion of the hon. member for Assiniboia (Mr. Turriff), the hon. member for St. John (Mr. Pugsley), and the hon. member for South Renfrew (Mr. Graham), should not be discussed, notwithstanding that no power of amendment exists in Committee of Supply. The hon. member for Assiniboia raised the matter the other night. He asked:

Whether, if this vote of $15,000,000 for the Canadian Northern carries, he intends to ask them to hand over to the Government, in addition to the 40 per cent of the common stock of the company that the Government now owns, additional stock to the amount of say $15,000,000 or $20,000,000.

That is the idea the hon. member for South Renfrew (Mr. Graham) has in his mind.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

Either that or the proposition of the hon. member for Calgary (Mr. Bennett); I am not particular.

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William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

At all events, the idea is to obtain control of the stock of the company. The hon. member for Assiniboia went on to say:

I suggest this not because I consider that this stock would be of any particular value, but in order that the Government might be ready to handle the situation and be in a position to avoid being taken by the throat in connection with the matter in the future.

I desire to draw attention in this connection to the legislation of 1914. Under that legislation, in event of default on the part of the Canadian Northern' railway in the payment of interest upon its securities, or in the event of a receivership, which would be in event of default, then this Government has the power, as that legislation is existing to-day, to appoint a board of directors of the Canadian Northern Railway Company and of its subsidiary and constituent -companies to enforce its security; to

-declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of thd Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall be and become absolutely barred and foreclosed, and the same shall thereupon be vested in His Majesty in right of the Dominion of Canada, any statutory enactment or any rule of law or equity to the contrary notwithstanding.

The effect of that enactment, which is in existence to-day, is that, in the event o-f default on the part of the Canadian Northern Railway Company, so far from the Canadian Northern Railway Company being able to take this Government by the throat, the Government cam demand that the directors of the Canadian Northern Railway system resign their offices, and the Dominion Government may appoint directors in their places, may take complete control of the Canadian Northern Railway system; and may foreclose the equity of redemption of the Canadian Northern rail-' way and deal with that equity of redemption as Parliament may see fit, in the interests of the people of Canada. That was the legislation brought down in 1914 in connection with the guarantee which we then gave upon the $45,000,000 securities of the Canadian Northern. In so far as my hon. friend from Assiniboia (Mr. Turriff) has declared that the Canadian Northern railway can take this Government by the throat and control the situation, I desire to draw his attention, and the attention of the hon. member for South Renfrew, to the legislation to which-I have referred.

250 .

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LIB

John Gillanders Turriff

Liberal

Mr. TURRIFF:

Would that not mean that the Government would have to take foreclosure proceedings? That would take at least a year, if not more. It would mean, if the Canadian Northern people fought the ease, a long, tedious legal struggle, whereas the whole trouble could be avoided and the Government could be put in a position to act quickly and thoroughly if they controlled this stock. When my hon. friend the Minister of Finance gave the grant of $45,000,000 and the guarantee in 1914, he took over $40,000,000 worth of stock. Now that the company comes for another $15,000,000 more, why not take over another portion of the stock?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

My hon. friend still misunderstands the legislation of 1914. So far from any delay being open to the railway company, under that legislation the Dominion Government can at once appoint boards, take possession, and administer the system by these boards. It has as full power ^s if it had all the stock of the Canadian Northern railway and its subsidiary and constituent companies.

I come to the amendment which my hon. friend from St. John (Mr. Pu-gsley) had in view. No point of order was taken by myself, or, so far as I know, by any other member of the Government. The point of order was raised by -the Speaker himself'. Personally, I had no objection to the amendment; in fact, I came to the House to-day prepared to discuss it, because it had not occurred to me that it was out of order. The Chairman is, however, clearly right, and no amendment is possible under the rules of the House, but that does not preclude us from discussing the merits of the amendment which my hon. friend from St. John had in view. In that amendment he suggested:

Before making such loan the Governor in Council shall require the company to give 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 system at such price as to the Governor in Council may seem reasonable under existing circumstances.

That is to say, my hon. friend from St. John had this in view, that, before extending this aid, by way of loan, the Governor in Council should now fix a price at which it would be open to the Government to take over the Canadian Northern system, and that in reaching a conclusion as to that price they should refer to the existing circumstances. I would point out to my hon.

friend that he is dealing there with the equity of redemption of the Canadian Northern Railway Company. Of course, so far as the terms of his amendment go, it would be possible for the Government to, fix a price, $380,000,000 or $400,000,000, or more, but included in that price, of course, would be the debt which the Government would have to assume in taking over the system. My hon. friend will agree that as there are liabilities amounting to some $380,000,000 upon the Canadian Northern system, what the Government would have to do would be to practically fix the value of the equity of redemption of the Canadian Northern railway system in its undertaking; in other words, to fix a fair price upon the value of the stock. That is what the amendment of my hon. friend comes to, and the question arises as to whether it would be wise for the Government, dealing with this matter as it is now dealing with it, to fix a price at which it would be within the power of the Government within the next five years to take over the Canadian Northern Railway system. It has to be pointed out that at present the Government holds 40 per cent of the stock of the Canadian Northern, that is to say, $40,000,000 out of a total issued capital stock of $100,000,000. My hon. friend from Assiniboia says that there is no value in the stock, but he and my hon. friend from St. John (Mr. Pugsley) are evidently at variance as to that, because it is perfectly clear that my hon. friend from St. John, by reason of the suggestion that the Government should fix an option, has in mind that there is value in the stock of the Canadian Northern to-day. He is at variance with the hon. member for Assiniboia, who says that the stock has absolutely no value, and whose suggestion was that the Government might be better able to control, through a majority interest in the stock, the administration of the Canadian Northern Railway system.

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CON
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

Yes, purely voting. I have pointed out that the holding of a majority interest in the stock is not necessary to enable us to control the Canadian Northern Railway system in the event of default, and if we took over to-day the administration of the Canadian Northern Railway Company, no default having taken place, we should not only have to provide this $15,000,000, which we are providing by way of a loan so as to meet the temporary obligations of the Canadian Northern system, but we would also have to take upon

ourselves the burden of financing the Canadian Northern system during the present war and hereafter.

Hon, gentlemen will have observed from the statements laid before the House the position of the Canadian Northern-$92,000,000 of maturities this year and next year, and obligations current. The sum of $15,000,000 is the minimum amount, upon receiving which by way of loan the Canadian Northern will be able to finance the obligations which it has still to meet during the present and the coming year. The Government is not at this moment proposing to control the operation of the Canadian Northern, because if it did propose to control it, it would have to undertake the burden of financing the Canadian Northern system. The proposals of the Government are to assist the Canadian Northern Railway Company and the Grand Trunk Railway Company by way of loans of minimum amount, upon receiving which, the two railway companies will be able to continue their operation during the present war. It is a temporary measure designed to enable these two companies to go on as solvent concerns, until we can make the investigation to which I alluded in my speech upon the occasion of the House going into committee on this subject, until we can make an investigation into the whole of the Canadian railway situation, so that we can substitute for the temporary policies which have been adopted during recent years a permanent policy which will, we hope, solve the whole railway situation.

To come back to the question of taking an option, under the legislation of 1914, in the event of default, the Government may foreclose, and it will then be for Parliament to say whether they will pay anything for equity of redemption or not. It will be open to Parliament to say: We

shall pay something or we shall pay nothing. There is another feature. Not only do we control the situation through the legislation of 1914, but, as pointed out by the hon. member for Calgary, we absolutely control it by reason of the fact that this $15,000,000 loan is a demand loan, and being a demand loan, we hold a stronger position than if we held a majority of the stock of the Canadian Northern Railway Company because the rights of a creditor are higher than the rights of a shareholder. The company not being able to meet his demand, the creditor absolutely controls the situation. So that from a strictly legal standpoint it is not necessary that we should have a majority of the stock of the

Canadian Northern railway in order to control the administration of that road in case of default.

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LIB

William Pugsley

Liberal

Mr. PUGSLEY:

Is it intended to exercise the right of calling in this $15,000,000 in case of default?

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May 15, 1916