October 23, 1919

UNION

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

Unionist

Mr. J. D. REID:

Perhaps that is what the hon. gentleman meant, but he expressed it in such a way that any member of the House or any private citizen who reads his statement might think that the Government were handing all that equivalent stock over and paying four per cent interest on it, and if I had not answered my hon. friend the people would have believed that was the .case. The member for North Cape Breton and Victoria (Mr. McKenzie), when he was speaking the other day, said that if we took over this railway system the Government would be pledged to pay in perpetuity a sum by way of annual interest on the total liabilities of the Grand Trunk, which would include all those stocks. Had the Minister of the Interior not replied to this statement, it would have gone out to the country as correct. Now, that is the answer with reference to the stock.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

May I see whether we are absolutely agreed on this main point? As I understand the minister now, these stocks that have been referred to are to be valued by arbitrators.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

Yes.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

They are the stocks that the Government is going to put into the vaults. That is what the Government is getting; that is all that the Government is getting.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

What else do.they want?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

Then suppose the arbitrators say that the value of these stocks is nothing, the Government gets nothing.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

They get the stocks.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

Just so; they get nothing. If the arbitrators give the stocks a value of a million dollars or ten million dollars, then the Government hands over to the owners of that stock a Government-secured stock, guaranteed at four per cent rate of interest; so that the Government gets nothing at all.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

That is simply absurd. The hon. member states that if the arbitrators decide that the four stocks I have mentioned are worth nothing, we shall get nothing. Well, I will tell you what we do get in that case. In the first place, we get absolute control and ownership of the Grand Trunk Railway system without paying anything for the stock- That is one thing we get. -

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

Where is the ownership in that?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

Well, wait until I finish telling you what we get. The Drayton-Acvrorth report showed that during the ten years prior to the war the average annual interest earned and paid on the stocks that we are now arbitrating was $1,100,000, or $11,000,000 in ten years.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
L LIB

Samuel William Jacobs

Laurier Liberal

Mr. JACOBS:

What was the dividend percentage?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

It is mentioned in the Drayton-Acworth report; the hon. member can find it there for himself. Now, the Government was willing, the people of the country were willing, to continue paying that $1,100,000; so that if the arbitrators say that this stock is worth nothing we not only get ownership, control and operation of the road and get the stock for nothing, but we save $1,100,000 per annum more than is involved in what we are now proposing,

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

May I put this question? I am quite prepared to admit-

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
?

Some hon. MEMBERS:

Order.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
L LIB

Georges Henri Boivin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Laurier Liberal

Mr. DEPUTY SPEAKER:

The hon. member (Mr. King) will have to limit himself

to a question, and it can only be asked if the hon. minister consents.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

I am willing to allow the hon. member to put a question.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. KING:

I think it is important to make clear the distinction between control and ownership. The minister speaks about the Government owning the Grand Trunk Railway system. In that event will the minister tell the House what is the meaning of this clause in the Bill:

The present guaranteed stock and the new guaranteed stock-

That includes all the capital stock and debenture stock.

-or any part thereof, may be called in or re deemed by the Government, at par, at any time after thirty years from the date of the appointment of the said Committee of Management, on six months' notice, by advertisement, to the holders thereof.

Where is the " ownership " of property which cannot be acquired for another period of thirty years?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
UNION

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

Unionist

Mr. J. D. REID:

I must frankly admit that it is pretty hard for me to convince the hon. member on any of these matters, but perhaps I might try to do so. The hon. member's question Is: Where is the ownership, because the guaranteed stock is held practically as a debenture stock, whoever it may be held by, also where is the ownership, because the stock that we issue is in the hands of the public? I will try to explain to him vdiere the ownership is. The guaranteed stock, whoever it may be held by, and the new stock that may be issued, will simply be held as security on which they will get interest without their having any say as to operation or sale, without being able to interfere in any way with the operations of the Grand Trunk and with knowledge of the fact, that the Dominion Government have the right under this Bill to sell or otherwise dispose of'any portion of the road. We have the stock transferred to us; we own the first, second and third preference stock and the common stock; and instead of borrowing money at 5i or 6 per cent in order to pay the award, we are simply giving them as collateral security for the first, second and third preference and the common stock, an issue of non-voting stock. That is as well as I can explain the matter to the hon. member, and I think that will satisfy the public as regards public ownership. The hon. member, if I understood him aright, argues that because we own only the stock, we really do not own the railway and can do nothing with it. We

now own all of the stock of the Canadian Northern railway. Might I ask the hon. member if he now considers that the Government are really the owners of the Canadian Northern system?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink
L LIB

Samuel William Jacobs

Laurier Liberal

Mr. JACOBS:

Unfortunately, yes.

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL, PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
Permalink

October 23, 1919