October 16, 1919

L LIB
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

The editorial says:

The general feeling of opposition to public ownership in Quebec, which is, largely responsible for the opposition of the Liberal party to the acquisition of the Grand Trunk, is utterly at variance with the feeling of Liberals in Ontario and the western provinces. The people of Ontario, irrespective of party lines, are strongly in favour of the coupling up of the Grand Trunk with the Canadian National system.

I believe that fairly represents the opinion of the people of Ontario and Western Canada.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

That is the opinion of one man sitting behind a curtain at a little desk in the Globe office. We do not know who he is at all.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

Quite so, but as the

paper supports my hon. friends on the other side of the House it is an indication of the feeling in Ontario. This is the feeling in Ontario and Western Canada-I do not profess to speak for the feeling of the province of Quebec

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

The Globe does not always speak for Ontario, I am sorry to say.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

No, sometimes it is right, and sometimes it is wrong. In this case I believe it is right.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

The editorial proceeds:

The country hae on its hands a great mileage of unprofitable railways on the borders of settlement which may not in our time earn interest upon the capital Invested. The only hope of preventing a continuous drain of the national revenue for the payment of railway deficits is by the incorporation in the National railway system of a road such as the Grand Trunk, which taps the rich traffic-producing areas of Quebec and Ontario, and has an established long haul traffic between the seaboard and the interior of the United States and Canada.

I believe that statement fairly represents the feeling of the great majority of the people of Ontario and Western Canada, ir-

respective of party. Liberals and Conservatives alike recognize the national necessity of acquiring this road, and are prepared to support the policy of the Government in acquiring it. There are only three possible alternatives. First, the liquidation of the road. The Grand Trunk could go into a receiver's hands as the Grand Trunk Pacific has, that is a possibility, because the Grand Trunk has admitted it cannot continue to discharge its obligations in respect of the Grand Trunk Pacific. I do not believe the people of Canada are prepared for that or desire to see it brought about. Second, there is the possibility of the road going into the hands of the Canadian Pacific. I do not believe the people of Canada are prepared to have their whole railway system in the hands of one corporation, no matter how efficient that corporation may be.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

The people of Canada

are not prepared to have the whole transportation system of this country from the Atlantic to the Pacific in the hands of any one corporation and be subjected to the control that that corporation might exercise over the people by controlling all our transportation system. The third course is government ownership, the taking over of this road by the Government. Those are the only three courses open, and the last one is the one in the national interest and I believe has the support of an overwhelming majority of the people of this country.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I asked, with the very best intentions and with a sincere desire for information to be enlightened, as to how much we have to pay in order to put this new road, if we are going to acquire it, in the same position as the Intercolonial. I mention the Intercolonial because there is no difficulty in understanding the situation there. The road is owned by the Government and there is no claim of any kind against it. My hon. friend (Mr. Rowell) made a very clever speech, as he always can make, but, as we say in common parlance in Nova Scotia, kept away from the pig as far as he could. On page 39, if I can trust my knowledge of figures, I find _ that we have to pay $504,629,211.93. We have to pay that anyhow before we have the road clear.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Newton Wesley Rowell (Minister presiding over the Department of Health; President of the Privy Council)

Unionist

Mr. ROWELL:

No, my hon. friend will

see that included in that figure is all the preference and common stock. There is $116,000,000 of the common stock alone, and the first, second and third preference,

amount in all to about $63,000,000 or $64,000,000. So that you commence with $184, 000,000 taken off. We do not have to pay that. All we will have to pay is whatever the arbitrators may fix as the value of that $184,000,000 or $185,000,000 of. stock. You take that off to start with.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Arthur Meighen (Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

And then take off the current liabilities and the advances to controlled companies. All these things are balanced on the other side. They are just cross entries. Even in the case of the Intercolonial there are current liabilities, but there are current assets against them. The same is true here. There are current liabilities of some $22,000,000, and on the other side current assets of some $51,000,000. So that we do not have to pay out of the Treasury of Canada that $22,000,000. If we wanted to clear the road off, which we could not likely do as the bonds are perpetual, we would have to pay the $35,000,000 odd, the $5,000,000, the $173,000,000 and the $60,000,000.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

What is this item of $43,000,000? Would that include the claim of the Grand Trunk against the Grand Trunk Pacific on account of advances?

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Arthur Meighen (Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

Scarcely, because it is an asset.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

I am referring to the claim of the Grand Trunk against the Grand Trunk Pacific.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
UNION

Arthur Meighen (Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

I do not know what

the details of that $43,000,000 are but I presume it would include any claim provided it was not a set-off. It will also include cash on hand and amounts owing for other than traffic. In a word, the company's gross earnings in a year would be somewhere in the neighbourhood of $60,000,000. At any single time there are tremendous current assets. A detailed statement could be given of the $43,838,000 current assets, showing just what they are. Perhaps it is in the book, but if it is not the statement can be secured.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

That is very important. It is quite an item, and if that $43,000,000 is merely an offset against the Grand Trunk Pacific it would not he considered as an asset in connection with the assets of the Grand Trunk, because there would be no possibility of collecting it. Another item is outstanding traffic accounts, $1,500,000. That would be freight receipts not in yet; but the $43,000,000 could not be current traffic items. It is a large amount. If it

means Grand Trunk Pacific obligations it is of very little value in this transaction, and when you talk about liabilities you must take into account the Grand Trunk Pacific liabilities.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink
L LIB
UNION

John Dowsley Reid (Minister of Customs and Inland Revenue; Minister of Railways and Canals)

Unionist

Mr. J. D. REID:

The information that

the hon. gentleman asks for I will have for him to-morrow, but I hardly think it would be fair to take the last season's operations in connection with the Intercolonial, the Grand Trunk Pacific and the Canadian Northern and use them as arguments as indicating the position of any of these railways in normal times. During last year all of the railways were subjected to very high operating costs owing to the McAdoo award. The increased cost of labour was very high. It was not only the labour; it was fuel and every item- that one could mention in connection with the operation of railways, and the cost was very much higher than in normal times.

And the freight rates were not increased. In fact, if I remember rightly, part of the time, I think it was last year, as a result of the McAdoo award and other causes, the cost of operating the roads was increased, whereas the freight rates were not increased at all. It would hardly be fair to take the cost of the operation of those roads f-or the past year and on that basis judge what is likely to happen in the case of the Grand Trunk, the Canadian- Northern, and the Grand Trunk Pacific in the future. So far -as the Intercolonial is concerned, prior to the war it was doing very well. The same condition was true of the Grand Trunk and the Canadian Northern, but for reasons I have stated conditions last year were abnormal and it should not be taken as a fair year in discussing this matter.

With reference to the Grand Trunk railway I want to emphasize this point: I have taken the matter up with the president of that company personally and have had him

state in writing the condition of the Grand Trunk Railway system. That letter is as follows:

Montreal, October 16, 1919.

Replying to your Inquiry of this morning: the Grand Trunk Railway system, including both Canadian and American lines, is in excellent physical condition, in respect to track, bridges, and buildings, and will, in the immediate future, require only normal expenditures for its maintenance. The same remarks apply to the condition of its motive power and equipment. The condition of the Grand Trunk Railway system in these respects will compare favourably with that of any railroad, either in Canada or the United States, having the same character and density of traffic.

Yours faithfully,

OSgd.) Howard G. Kelly.

Topic:   QUESTIONS.
Subtopic:   $ 97,301,252.86 COMMONS
Permalink

October 16, 1919