May 3, 1918

UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

The country

does know.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

I do not know it.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

My hon. friend is the exception.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. OAHILL:

Would the right hon. gentleman mind telling us?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

I cannot name them off by rote.

' Mr. CURRIE: When the Canadian Northern matter was Ibefore the House on a previous occasion, some hon. gentlemen suggested the advisability of foreclosing and taking the road over as .a Government measure. Against that it was urged by the Minister of Finance that the road would have to do a .great deal of financing on short term notes and that these, if they had to he guaranteed 'by the Government, would become a security of the- Government in the market against other federal securities which might be on the market at the same time. Do I understand that the assurance given to the House that the road would stand on its. own feet and do its own financing without any guarantee by the Government is now to he violated, .and that the Government will now have to guarantee these short term notes and make them obligations and securities of the country on the United States., and other markets5

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

Our liability is not increased. These short term notes are secured by debenture stocks of the company guaranteed by the Government.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

I understand that, but

these bonds guaranteed by the Government have not been sold. A numbeT of these bonds that were guaranteed by the Dominion Government and by the provinces have been put into the banks as. collateral security for money borrowed on the

short term notes that now are being renewed, instead of being distributed among purchasers so that they would become an obligation thirty or forty years from now.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Samuel Hughes

Unionist

Sir SAM HUGHES:

What was the rate of discount?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

Twenty-five or thirty per *cent, if the truth were told. The Minister of Finance gave as a reason for not foreclosing, the fact that the identity of the road should remain as it is so that when short term notes of this kind, or equipment notes became due, the railroad, company itself would renew them without the Government guaranteeing the notes. I understand not only that the Government are guaranteeing the bonds now in the vaults of the bankers, bnt that every one of these short term notes will be guaranteed and also become a Government obligation. We are duplicating the security. Is that true?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

If the Government acquire the assets of the Canadian Northern railway they cannot well disclaim responsibility for its liabilities. It would be a highly satisfactory bargain for the country if we could acquire the assets of the Canadian Northern Railway system and not become responsible for any of its liabilities; but that is absolutely out of the question. Therefore, acquiring the assets of the road by acquisition of the stock, it is necessary that the Government, if the road is not to become bankrupt or be put in liquidation, should see that the road shall not default in the payment of its liabilities from time to time. There are two ways of doing that. One is to raise *money,, in cash and pay the liabilities off as they become due, looking to some opportunity in the future, when the securities which would be freed by that payment could be marketed in New York, London or elsewhere. The alternative is that this Parliament confer on the Government power to give such a guarantee as will extend these short term loans for a certain period, and it is hoped that after the conclusion of the war financial matters will become nearer to normal when it will be possible to deal in a permanent v'ay with these obligations more satisfactorily than is possible at present. That is the meaning of this resolution upon which the Acting Minister of Finance proposes to found a Bill. When the second reading of the Bill is taken up in committer! the Acting Minister of Finance will be prepared

to furnish such further information as may be necessary to make the proposals of the Government absolutely plain.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

Would it not be wise to postpone this legislation until we receive the report of the commission appointed to determine the value of Canadian Northern stock? The many raids of Mackenzie and Mann on the treasury are alarming the people. When the poor man is being asked to pay a tax of ten cents a pound on his tea and coffee, it is not good policy to again bring Mackenzie and Mann near the treasury.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

No one is bringing Mackenzie and Mann near the treasury. Nothing in this proposal has the slightest relation to any such thing. The Government is acquiring the stock, of a great railway system which is passing into the ownership of the people. As a part of this proposal, it is necessary to make provision for the payment of short term loans, (with which Mackenzie and Mann have absolutely nothing to do) after the stock has once been acquired and paid for by the Government.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

Has the stock not already been acquired?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Lorne Richardson

Unionist

Mr. RICHARDSON:

The road will not be taken over by the Government and operated by a commission as proposed in the Drayton-Acworth report until the report of the arbitration now sitting in Toronto is made. That report will probably be strenuously resisted by this Parliament-most assuredly it will by the people of Canada -and the taking over of the enterprise may be postponed for a considerable period. The transportation problem is a most serious one, and is knocking persistently at the doors of Parliament. The people are very uneasy about this matter, it means so much to the country. If we leave it in the air, we may not be able to take possession of this road for one or perhaps two years, and that will postpone the solution of the whole question. The commitments and liabilities of Mackenzie and Mann grow more appalling as the days go by. While the Government acted, perhaps, according to its best judgment in deciding to acquire the road, it has always been my view-and I believe this is the view of a great many of the people-tnat it would have been infinitely better to let this road pass into'the hands of a receiver and let the provinces that made such vast guarantees pay the.price.

If British Columbia, which guaranteed an amount of $79,000,000, chooses to ruin itself, that should be no concern of the Federal Parliament. Let the people of British Columbia, if they choose to elect a Government that is willing to ruin itself at the behest of Mackenzie and Mann, take the consequences. Equally so with all other provinces-

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

Not all the provinces; there is one province which is not enmeshed in the net of Mackenzie and Mann.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Lorne Richardson

Unionist

Mr. RICHARDSON:

I refer to all the provinces that guaranteed bonds to an enormous amount. This great question will not stand the postponement which may be necessary if the view of the Prime Minister is carried out. I do not wish, at the present time, to press for information beyond what the Acting Minister of Finance is able to give. The Minister of Railways (Mr. J. D. Reid) has promised to make a complete statement when he brings down his estimates, and I thought perhaps that would be the time for this Parliament to consider the whole question carefully. Let us have a showdown on the railway question; let us know where we are at with the Grand Trunk Pacific, the Grand Trunk, and the Transcontinental, and let us reach a solution in the interest of the country, so as to allay public feeling which is daily growing stronger.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

The Prime Minister stated just now that when we acquired the stock of the Canadian Northern Railway system, we would appoint our own directors and take charge of the management of the system. We have been repeatedly told in this House by members of the Government that we had acquired the stock, and I think 'before, we vote this money we are entitled to know whether or not we have acquired the stock, who are our directors on the Canadian Northern Railway Board, and in what position Mackenzie and Mann are.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs)

Unionist

Sir ROBERT BORDEN:

We shall give my hon. friend all the information on that on the second reading of the Bill to be founded on this resolution.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Joseph Read

Laurier Liberal

Mr. JOSEPH READ :

There are two things that I wish to know before I can listen intelligently to the discussion. Who disposed of the five-sixths of the stock to the Government, and what is the Government going to do in regard to the remaining one-sixth of the stock?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

On moving the second reading of the Bill to be founded on the resolution, I shall be pleased to give the hon. member the information he desires. The greater portion of the five-sixths of the capital issue of the Canadian Northern Railway Company now held by the Government, Was obtained from Mackenzie, Mann and Company, Limited. I think we have to-day $92,600,000 of the total par value issue of $100,000,000. The arbitrators now sitting at Toronto are endeavouring to ascertain the value of the equity in six hundred thousand shares as provided by chapter 24 of the statutes of 1917. I hope I shall be able to give my hon. friend all the information for which he asks.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink

May 3, 1918