November 4, 1919

DISPOSAL OF WHEAT CROP.


On the Orders of the Day:


L LIB

Archibald Blake McCoig

Laurier Liberal

Mr. A. B. McCOIG (Kent, Ont.):

Mr. Speaker, I wish to read a telegram which I was just going to send over to the leader of the Government (Sir George Foster). It is addressed to myself and reads as follows:

Chatham, Ont., Nov. 3/19.

.Millers refuse to huy wheat at Chatham. I have obligations to meet. Find out what action the Government purposes taking- to assist farmers in disposing of their crop.

Topic:   DISPOSAL OF WHEAT CROP.
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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

It seems to me that this has to do with a question of policy. If the hon. member wishes to submit, a question, he should do so, although I have grave doubts whether he ought to take up a. matter of this kind on the Orders of the Day.

Topic:   DISPOSAL OF WHEAT CROP.
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L LIB

Archibald Blake McCoig

Laurier Liberal

Mr. McCOIG:

I am willing to abide by your ruling, Mr. Speaker, but this is a matter of supreme importance to the people of the southwestern part of Ontario. As the telegram states, these people have many obligations to meet and they are unable to sell their wheat crop.

Topic:   DISPOSAL OF WHEAT CROP.
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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

Will the hon. member put his question? He has not yet done so.

Topic:   DISPOSAL OF WHEAT CROP.
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L LIB

Archibald Blake McCoig

Laurier Liberal

Mr. McCOIG:

What action do the Government propose to take in view of the fact

that they have regulated the price of wheat and- the millers refuse to buy it? It seems to me that the Government should be able to give the producers of wheat some light on this question. They are tied up with their crops; they are unable to dispose of them, and they have obligations to meet.

Topic:   DISPOSAL OF WHEAT CROP.
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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

The hon. member has put his question; he may not discuss it.

Sir -GEORGE FOSTER: If the hon. member will send me the telegram and give me a chance to cogitate over it for a few moments, I will try to give him an answer.

Topic:   DISPOSAL OF WHEAT CROP.
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PRIVILEGE-STATEMENT BY MR.

MIDDLEBRO.


PERSONNEL, OF SOfLI>IEBS' CIVIL REESTABLISHMENT COMMITTEE. On the Orders of the Day:


UNION

William Sora Middlebro (Whip of the Conservative Party (1867-1942))

Unionist

Air. W. S. AIIDDLEBRO (Chief Government Whip):

I rise to a question of privilege. I notice that in the Toronto Star of last evening Colonel Currie, in addressing a meeting of the United Veterans' League at Toronto, is reported as follows:

In .pointing out that the Government had no intention of having gratuities recommended, the Colonel said that the Whips were sent out to sound out each member as to his views on gratuity; and in the formation of the committee they made sure that there should he no member favourable to the scheme.

I should like to say that I did not, and so far as I am aware no Whip on the Government side did, sound any member with reference to his views on the question of granting gratuities. More than that, I did not, and so far as I know no Whip on this side of the House did, interview any member in any shape, manner or form as to whether that member was or was not in favour of gratuities. Therefore I say that the statement of Colonel Currie has no foundation whatever in fact. I should like to point out that in the formation of these committees the Opposition was consulted. There were seven members of the Opposition on that committee. These members were nominated by the Opposition; the Government had nothing to do with their membership on the committee beyond the acceptance of their names as submitted by the Opposition. I should like to point out also-because the article is more or less a reflection upon the personnel of the committee-that it is composed first., of its chairman, a cabinet minister, Hon. Mr. Calder; next, Colonel Hugh Clark, parliamentary secretary of the Soldiers' Civil Reestablishment Department; next of seven returned soldiers; next a member of the Op-

position an ex-cabinet minister who was for four years a prisoner in Germany; next of one man who had a son in the Plying Corps; next a man who had a son in the Medical Service at the front; next a man who had two sons overseas, one of whom made the supreme sacrifice, and next a man who had three sons overseas, all of whom made the supreme sacrifice. Of the remaining members of the committee not one has a son of military age. Some have no sons at all. So far as I am aware not a single member of the committee had a son of military age who was not overseas or in the firing line.

Topic:   PRIVILEGE-STATEMENT BY MR.
Subtopic:   MIDDLEBRO.
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UNION

John Wesley Edwards

Unionist

Mr. J. W. EDWARDS (Frontenac):

Mr. Speaker, permit me to say that as one of the members of that committee I was never approached by any whip in regard to my attitude on the question of gratuities, nor did I know that I was a member of the committee until my name appeared in the resolution adopted by the House.

Topic:   PRIVILEGE-STATEMENT BY MR.
Subtopic:   MIDDLEBRO.
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UNION

Hugh Boulton Morphy

Unionist

Mr. H. B. MORPHY (North Perth):

I may be allowed to say in this connection that the matter is entirely new to me. I was never approached directly or indirectly by a whip or anybody else; I did not know that I was being put upon the committee.

Topic:   PRIVILEGE-STATEMENT BY MR.
Subtopic:   MIDDLEBRO.
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UNION

John Wesley Brien

Unionist

Mr. J. W. BRIEN (Essex South):

I concur in the remarks that have been made by those who have spoken before me. I was not approached by any one and I did not know that I was on the committee until the (personnel of the committee had been announced.

Topic:   PRIVILEGE-STATEMENT BY MR.
Subtopic:   MIDDLEBRO.
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GRAND TRUNK RAILWAY SYSTEM.

BILL PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.


Consideration of the proposed motion of Hon. J. D. Reid (Minister of Railways) for the third reading of Bill No. 33, respecting the acquisition of the Grand Trunk Railway system, and the proposed amendment thereto of Mr. Fielding, resumed from Monday, November 3.


L LIB

Louis Joseph Gauthier

Laurier Liberal

Mr. LOUIS JOSEPH GAUTHIER (St. Hyaeinthe-Rouville):

Mr. Speaker, I have not taken much part in this discussion; I did not want to look as if I was desirous of embarrassing the Government by putting questions that they would not like to answer. But it has been my intention before this Bill is disposed of, to register my formal protest against the acquisition of the Grand Trunk Railway system under the present circumstances.

It is true that the question having been debated for quite a while it is very hard for any hon. member to offer new considerations. But I wish to express my personal views; I wish to take a stand for which I intend to be responsible before the people of the country.

It has been said that it is the duty of the Opposition to oppose. I say that it is the duty of the Government to enforce their decision with their majority, and I have no complaint to offer because the Government sees fit to press the passage of this Bill. They will be responsible for it; all that we on this side have to do is to offer fair criticism in order that the public may know that there is an Opposition in this House and that it is ready and willing to do its duty.

I submit, Sir, that the acquisition of the Grand Trunk by the Government is going to impose upon the Government a duty in connection with railway operation which will be more onerous to the Government than it was to the Grand Trunk Railway Company. That is the first point I wish to make.

It 'has been stated by the Drayton-Acworth Commission that $21,000,000 -had been paid to the shareholders by way of dividends which amount should have been invested for the maintenance and the equipment of the road. Since the submission oi that report it has been affirmed by experts that this amount of $21,000,000 has been increased to $51,000,000. I contend that if the Government- acquire the Grand Trunk Railway system they will be compelled to invest in that road $51,000,000 which ought to have been invested in it for maintenance and equipment, but which was divided among the shareholders. This puits a very onerous burden upon this country when the road is taken over by the Government.

But there is another point. On the amount of $180,000,000 which is to be submitted to arbitration the Grand Trunk Railway Company never paid a cent by way of dividends. It is stated that the stock representing this amount is valueless.

I am not a professor of the English language, but I would not be disposed to agree with this expression. This stock may be worthless as a dividend producing proposition; but it is not valueless, because the shareholders have invested $20,000,000 in this amount of $180,000,000. If the Government offers for arbitration this amount of $180,000,000 on which the Grand Trunk Railway system have never paid a cent of dividend, what will be the result? In this

country we have had experience in regard to arbitration in connection with a railway. There was in Canada a railway system known as the Canadian Northern, and when we decided to purchase 60,000 shares of that system, shares in, which not a cent had been invested, the people of this country were compelled to pay for that stock a price exceeding $10,000,000. This is the point I wish to make to the House and to the country. If in purchasing the shares of the Canadian Northern, in which shares not a cent has ever been invested, we have been compelled to pay more than $10,000,000, what will be the decision of the arbitrators when they put a value on $180,000,000 of stock in which $20,000,000 have been invested? It is a fair conjecture to say that we shall be compelled to pay twenty times the amount that we have paid for the Canadian Northern stock, and why not? The Grand Trunk Railway system is a system in operation; it is a going concern; $20,000,000 have been invested in that stock which has been worthless as a dividend producing proposition; but the value has been placed in that stock, and I am afraid that when the arbitration is over, we shall be compelled to pay to the new or to the old shareholders a sum equivalent to at least twenty times the amount that we have paid to the new or to the old shareholders of the Canadian Northern Railway system. For these two reasons I claim that the acquisition of the Grand Trunk by the Government of this country will impose upon the Government a burden more onerous to them than it has been to the Grand Trunk Railway system and its directors.

What has been the result of nationliza-tion in this country in connection with our railways? We own actually about 14,500 miles of railway, and the deficit for this year is nearly $18,000,000. If you add to these 14,500 miles of railway that we own, another 7,000 miles, you are going to face a deficit of at least one-third more than the deficit for the current year. So that you will have to pay first of all $51,000,000 to replace the amount that has not been invested by the Grand Trunk; then you are going to pay interest on the common stock which has never paid a cent of dividend, and you are going to load this country w'ith an annual deficit on our railways of at least $25,000,000 a year. This is no extravagant statement. In the United States, with its dense population, with manufactures in every city and town, with the immense increase that was made in

freight and passenger rates on the railways in that country-and it was claimed that last year the United States railways under government operation showed an increase of $865,000,000 in rates alone-what was the result? The result was a deficit of $850,000,000. With this immense country of Canada, thinly populated, with cities and towns situated far apart from one another, with the difficulties of operating our railroads during the winter season, is it possible to expect that we are going to make a success in operating these 22,000 miles of government-owned railways in this country when the American Government made a failure of their own railway administration during the time of the war when it was necessary to commandeer the railways in order to help the Americans to win the war, to transport as fast as possible soldiers, munitions and merchandise? Even after increasing the rates, the American Government have had to face a deficit, and they intend to give the railways back to their former owners. Yet this Government have decided to try again a policy that has proved a failure in the United States. .

Many things have been said in regard to the Grand Trunk Railway system, and I wish to put my views and suggestions on Hansard. I hold no brief for anybody; I speak on my own responsibility, and I intend to do my duty as I think I should do it. In 1903, the Grand Trunk Railway system entered into an agreement with the Government of this country. The Canadian people were to build 1,450 miles of railway from Winnipeg to Moncton, thus opening up new areas for colonization, and this occurred at a time when two new provinces had been given their provincial rights. The old provinces were asking for better terms, and the Government of the day decided that, instead of giving them better terms in the-way of subsidies, they would open up the undeveloped parts of the old provinces in order that with their own finances, they might be able to colonize and develop the old provinces. The Transcontinental was-built, but it was understood that after a certain period of time the Grand Trunk Railway system would lease it at a certain rental. The Grand Trunk Pacific and the Grand Trunk Pacific branches started building the parts of the road that they were compelled to build. In 1911, there was a change of Government, and a commission was appointed, and the result was that the Transcontinental was degraded. We have paid for that commission more than $60,000 to depreciate property belonging to the peo-

1G74

pie of this country, and we have rewarded the two commissioners. What has been the result? The degrading of the Transcontinental was done without Consulting the Grand Trunk who were to pay the rental of the railway after it had been completed. The Grand Trunk made out a case so strong that the Government of the day decided that the lease that was to exist between the Grand Trunk and the Government of Canada should be cancelled, and the Government took over the Transcontinental. By the degrading of the Transcontinental the Government have prevented the Grand Trunk from making connections with the Grand Trunk Pacific, and the Grand Trunk being unable to meet their obligations, the Government have appointed the Minister of Railways as receiver for the Grand Trunk Pacific.

The Grand Trunk Pacific may foe looked at from a different angle, but the fact remains that this was an undertaking entered into in the interests of the country by the Government and a private company. If the Transcontinental has been degraded it is the fault of the Government and not of the Grand Trunk, because the company was no party to the degrading of the road. Without the connecting link of the Transcontinental between the West and the old Grand Trunk system it was impossible for the Grand Trunk Pacific to operate successfully. By degrading the Transcontinental the Government cut the system in two. Is it fair for the Government, after altering the conditions of the contract they entered into with a private company, after changing the conditions of operation, to say to the company: You. must sell your road to the Government, and must accept our terms. The bargain for the Grand Trunk Pacific was entered into by the company in good faith, and was carried out as well as they could. It is not their fault that the Transcontinental was degraded. You cannot charge the company with the war, which has altered economic conditions generally. The Government claims that the only remedy is to buy outright the stock of the Grand Trunk Railway system. Just consider our financial position, Mr. Speaker. We have deficits every year and have to call on the people to subscribe loans. We are floating a Victory Loan now, and expect to get at least 1500,000,000. That loan has not yet been subscribed, but already officials of the Government are stating publicly that after it is subscribed there will have to be another appeal to the people for subscriptions.

[Mr. Gauthier.!

Under such conditions is it fair to say to the people of this country: We are not going to cut down our expenditures or curtail our extravagance, but shall go on as before, and further, we are going to ask you not only to make up our annual deficits, but to buy a road which is unable to make both ends meet; -you must put up the money. Not only is the bargain unfair to the Grand Trunk system and onerous for the Government, but it is unfair, and this is my third" point, to the people of this country.

I want hon. gentlemen to remember when I speak of the Canadian Pacific that I hold no brief for that company, but there is this argument to offer. We are proud of the Canadian Pacific Railway Company. It is a wonderful railway organization, the greatest in the world. Does any one suppose that the Canadian Pacific railway, when the Canadian Government is its competitor, will foe able to maintain its system in that state of efficiency of which we are so proud to-day? Although the National Railway system is operated by an independent board we all know who is responsible for its administration. I am not here to discuss that board, but I say it is impossible for a government-owned system to be administered as a private-owned system would be. We shall have to secure traffic, and the government-owned system will encroach on the rates, will give greater facilities, and break through the traffic regulations of this country, and who will suffer by that? The Canadian Pacific, because to meet the competition of the government-owned system they will have to do what the government-owned system does. The result will be that the dividends of the Canadian Pacific will be cut down, and the efficiency of the road impaired, and who will suffer from that? The people of Canada. If the Government were really anxious to make an experiment in the nationalization of railways I would look with more favour on a project to acquire the Canadian Pacific. If the Government are really in favour of public ownership, let them take over all the railways in Canada so that there will be no unjust competition. Just have one system. I do not know that it would be a paying business, hut you would have to risk that. If the Government want to experiment in the nationalization of railways let them buy roads which are on a paying basis, and not simply roads that are bankrupt or about to fail. Why in the name of

everything that is holy should the Government pick up only the railways that are unable to meet their obligations, and leave alone the railways that are operating successfully? I cannot understand that. It may be that the money-makers who would like to buy the shares of the Canadian Pacific would have to buy them in the open market and would have to pay a much bigger price than for Canadian Northern or Grand Trunk stock, because the Canadian Pacific is a paying road. To take over the Canadian Pacific would be a more sound policy for the Government to pursue, but it is the Grand Trunk system that is going to he acquired.

I cannot help smiling when I hear or read in Hansard the arguments made from the Government benches that the Grand Trunk is required as a feeder or connecting link for the national system. Now a connecting link cannot pay better in the hands of the Government than in the hands of a private corporation. If it has proved a failure in the hands of private owners I wonder what will be its fate in the hands of a commission appointed by this Government, when it is acquired under our presept peculiar financial circumstances, and in view of the burdens which the Government of the country will have to shoulder. In conclusion, Mr. Speaker, let me say that I have expressed my views on this subject not with any hope of influencing a single vote, hut rather to convince hon. members opposite if it be at all possible to do so, that there are more sides than one to a question and that every subject can be debated with perfect equanimity of mind and a sound and unbiased conscience.

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

Joseph Archambault

Laurier Liberal

Mr. JOSEPH ARCHAMBAULT (Chambly-and Verchferes):

Mr. Speaker, I feel that 1 would be derelict in my duty if, before the vote is taken, I did not make a nonpartisan and earnest appeal to the members on both sides of the House in an endeavour to save Canada from an agreement which in my opinion is fraught with possible catastrophe and national bankruptcy. In order to make myself perfectly clear in my opposition to the Bill now under discussion, I desire at the outset to enunciate the reasons which I intend to develop in the course of a few remarks I shall make on the subject. These reasons are: First, in my opinion the Bill embodies what I may term an amphibious project, which is not public ownership but which retains all the risks and disadvantages of public ownership, eliminating many important features and advantages appertaining to such policy; second, although I believe in public ownership in theory, and although in practice it might be a good policy in other spheres of action, yet experience teaches us that in railroad matters it has been and is bound to be a failure; third, even if public ownership of railroads were a successful policy, the finances of the country do not permit the expenditure involved in the proposed agreement; fourth, there are at least two alternatives which are better than the proposed agreement now before the House; fifth, the agreement in itself is bad and it should be amended or postponed for further information and more mature consideration; and, finally, public opinion does not demand this undertaking, on the contrary, it is protesting against the proposition.

Let us now briefly and dispassionately examine these six reasons, having in mind the fact that when each and every one of us entered Parliament he took a solemn oath to vote not for party purposes, but according to his conscience, and only in the best interests of Canada. I said, Sir, that this project was amphibious: ni chair ni poisson. It contains all the risks and disadvantages inherent in public ownership, but discards many of the essential features and advantages of that policy. I might have used a more modern and up-to-date expression created recently by the Minister of the Interior (Mr. Meighen), who has largely piloted this Bill. I might have said " amphibiological." But, Mr. Speaker, as I am not speaking " in code," the word amphibious conveys adequately the idea I wish to express. The term "amphibious" is applied to animals or plants which can exist either in water or on dry land and which generally do not thrive to any marked degree of success in either element. Figuratively and economically speaking, it may be applied to a man or a policy having all the ear-marks of a well-defined character, but lacking many of its essential features. This amphibious character is very seldom a success; and it is always a failure when it embodies all the disadvantages of the policy it feigns and takes no cognizance of the advantages which attach to that policy. The ministers who piloted this Bill have made efforts to impress the House with the idea that the agreement embodies real public ownership of railroads, and I shall deal later with the danger of this policy. In the meantime let us examine the advantages of public ownership which are left out of this Bill. In the first place, according to the minis-

ters, the Grand Trunk will never be in our name; we shall never be the real proprietors. We may possess at a certain moment the majority of the stock, but the Grand Trunk Company will remain as a company and an entity. By not having the railroad under the name of the Canadian National Railways we deprive ourselves of a very great advantage in the shape of advertise- ' ment. It is true that the people will know that we have the controlling interest, but the road will still be run as the Grand Trunk railway and will not attract Canadian trade to the same extent as if it were known as part of the Canadian National railways. The second advantage, which is not embodied in the Bill, and which appertains to public ownership, is the fact that under this policy the state can enact uniform legislation favourable to its own railways and of great assistance towards their success. The Grand Trunk has something like two thousand miles of road in the United States. It controls thirty-three companies with stock amounting to some fifty-one million- dollars. These companies in the United States will escape our legislation and jurisdiction, with its benefits. Furthermore, of these two thousand miles both ends will be subject to foreign law, operated under the administration of the American railroads; and it is not likely that the American people will favour a railroad controlled by a foreign government and running in the United States in competition with American lines. Therefore these lines of the Grand Trunk which are at present running in the United States under a deficit will be further jeopardized by antagonism and unfriendly legislation. When we were discussing the resolution in committee, I raised the point that Canada, or His Majesty, could not own and operate railways in a foreign country because it is an absurdity in international law that the sovereign can be subject to the legislation and the laws of a foreign country. The Minister of the Interior who answered my question gave me two reasons. The first was that, although admitting the soundness of my argument in theory, the fact remained that the United States Government were operating railways in Canada. That was no answer at all because the United States Government does not operate any of its own railways in Canada. The New York Central and Delaware and Hudson are privately owned railways that have been taken temporarily by the Government of the United States for operation. There is no similarity between the fact that the United States Government is .

operating temporarily private-owned railways in Canada and the fact that we would go into the United States and operate our own railways. It makes all the difference in the world. If the New York Central or the Delaware and Hudson should violate the orders of the Canadian Railway Commission, or if by chance an accident should occur rendering either company liable in damages, -surely action would be properly instituted against the New York Central, or the Delaware and Hudson, and not -against the United States Government in view of the fact that it is not the United States Government which is operating these roads in its own name but that they are simply being operated for private companies.

But, says the minister, in his second answer: "We will not own the Grand Trunk railway lines in the United States but we will only own the majority of the stock." I admit that -legally and technically the contention of my hon. -friend is well founded but, although on this side of the House we were considered disloyal in 1911 because w-e wanted to enter into a trade agreement with the United States, I must say, Sir, that we d-o not relish the idea of the Dominion of Canada expressing the subordination of its will to a foreign power and to a government bureau of that foreign power. We believe we are right in our contention that the subordination of a private-owned company or corporation to the laws of a foreign government is not the same as the Government of Canada subordinating itself in any manner to the same power.

This operation by Canada of its railways in the United States -has another aspect which concerns the -friendly relations between Canada and the United States. It is well known that the acquisition by Japan of -a railway in Manchuria and the operation of that railway is looked upon with intense disfavour in China and may bring about trouble between the two nations. How will the 110 million people of the United States view the control by the Dominion of Canada of a company owning American territory approximately 2,000 miles in length and 60 feet in width in the States of New Hampshire, Maine, Vermont, Massachusetts, Connecticut, Michigan, Indiana and Illinois consisting of the right of way necessary to enable the Dominion of Canada to reach two of the seaports of New England, Portland and New London as well as the great city of Chicago. Will that make for friendly relations?

Topic:   GRAND TRUNK RAILWAY SYSTEM.
Subtopic:   BILL PROVIDING FOR THE ACQUISITION OF THE SYSTEM BY THE GOVERNMENT.
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November 4, 1919