November 4, 1919

L LIB

John Howard Sinclair

Laurier Liberal

Mr. J. H. SINCLAIR (Antigonish and Guyslborough):

Mr. Speaker, I would not intervene in this debate at this late hour, but I am paired with the hon. member for Lanark (Mr. Stewart) and I will not be permitted to vote. I want to place myself on record as being in favour of this amendment. This stock which has been discussed for the last hour is nothing more nor less than common stock. It may be treated internally by the Grand Trunk as a sort of preferred stock but it has no lien on the physical assets of the road, it has no mortgage behind it and it has no rights in respect to the payment of dividends unless the dividends are earned. We know that

in the last few years dividends were not earned and they were not paid on this stock. What does the Minister of the Interior do? He is to meet the directors of the Grand Trunk to deal with the question and his very first step is to raise the price of the thing that he is proposing to buy. At the time that he was negotiating for this stock it was worth 45, or less than 45. He puts the imprint of the Dominion of Canada on it and he agrees to exchange for it a four per cent bond of the Dominion of Canada thus raising the price of the thing that he is going to buy by at least $20,000,000. That is an improper step for the hon. gentleman to take. It was his duty, representing the Government and people of Canada, to get that stock at the very best price that he could get it for. He has not given the House any fair reason why he should raise the price of the stock that he is proposing to buy for the ratepayers of this country by at least $20,000,000. ,

The right hon. the Prime Minister (Sir Robert Borden) in 1918 took a very reasonable view of this matter. At that time he sent a message to the High Commissioner in London in which he said:

The Government is disposed to assist in every reasonable way the maintenance of Company's credit as is evidenced by the advance of one hundred and twenty-two thousand pounds on July first and by our offer of 12th July last to advance three hundred and eighty thousand pounds to meet fixed charges upon terms which were regarded as reasonable but which the company declined. We shall be glad to have any further suggestions from Smithers as to methods of assistance. There is strong objection in council to any increase of our offer for the following reasons: it is most unwise and undesirable for a government without the report of a commission or board of arbitration or a vote of Parliament to undertake a large annual payment which would represent the capitalization of eighty or a hundrei million dollars. The offer already made is based on the Drayton-Aeworth report which affords a sufficient foundation for Government's proposal. If we go beyond the bounds of that report we have ho certain guide as to what we should propose, Council will not accept either of the offers which Smithers put forward and unless they receive further offer before end of month they still consider negotiations at an end.

The (Prime Minister says there is strong objection in Council to increasing the offer. If we had this strong objection in 1918 to any increase in the offer has anything happened in London or anywhere else to remove that objection? The. Prime Minister says that the foundation is the Drayton-Aeworth report. Have the Government any other foundation upon, which to offer anything in regard to this transaction? No one will con-[Mr. Sinclair.!

tend that the Drayton-Aeworth report gives them authority to guarantee this $60,000,000 of stock. On the contrary, the Drayton-Ac-worth report says that the stock is absolutely worthless or of very small value. That is what the Prime Minister said about the stock. But with these facts before him, in face of the opinion given by the Prime Minister in 1918, and notwithstanding the statement contained in the Drayton-Aeworth report, my hon. friend puts the stamp of the Dominion of Canada on that $60,000,000, unnecessarily, impudently, and it becomes worth almost par, or, as the Finance Minister says, 85.

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L LIB
L LIB

John Howard Sinclair

Laurier Liberal

Mr. J. H. SINCLAIR:

We will, of course, have to redeem it at par when we redeem it later on. There is no justification for it and the minister has not been able to give any. That being the case, the House will do wisely and well to vote for this amendment.

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UNION

Edward Walter Nesbitt

Unionist

Mr. E. W. NESBITT (North Oxford):

Mr. Speaker, I do not think that the question of the enhancement of the value of the stock has very much bearing on the actual value of the stock. As a matter of fact, throughout the world during the last month there has been wild speculation in stocks. We are only guaranteeing to pay four per cent interest on this guaranteed stock. If the London market wants to speculate on that guarantee it is perfectly welcome to do so. We do not have to take that stock at par now. We can in five years, according to the arrangement, give six months' notice and take that stock at par. We have the interest on $2,000,000 to meet at five and a half per cent, and it will be a long time after five years have elapsed, in my judgment, before we will be willing to take up a four per cent stock at par. If we had submitted this stock to arbitration do you suppose that there are any arbitrators who would not allow the value to the stock equal to 60 cents on the dollar? Do you suppose, considering the past history of the Grand Trunk, that there are any arbitrators that would not allow a basis of 60 cents on the dollar for a four per cent stock? The other four stocks that are going to arbitration have advanced in value in the market to an extent equal to the advance in the case of this stock simply because they are going to arbitration. It is simply a matter of speculation. I could tell you of a stock that went up to 405 the day before yesterday, although it is only paying ten per cent. That is General Motors. There are plenty of Canadian stocks which, al-

though only paying five per cent, are selling at 85, 87 and 90. The fact that the stock has advanced in value a little 'bit because the Government proposes to buy this road is nothing new. It is purely a matter of speculation. We are put in a far better position, in my judgment, by not arbitrating on the value of this four per cent guaranteed stock. We can pay the four per cent as long as we wish to. We cannot borrow money to take it up at that. If the arbitrators were to set a value on the stock of 60 cents on the dollar we would have to borrow the money at five and a half per cent to take it up, whereas we can carry it for a great number of years if we wish to at four per cent. Some of the members of this House have been anxious to have that time reduced, but in my judgment it will be many years before money gets back to four per cent.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

When my hon. friend says that we will have to borrow money at five per cent he has forgotten that we do not have to do anything of the kind. We pay the new stock at four per cent,

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UNION

Edward Walter Nesbitt

Unionist

Mr. NESBITT:

Yes, that is right.

Amendment, Mr. Campbell, negatived on the following division:

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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

The question is now on the main motion.

Mr. JEAN J. DENIS (Joliette): Mr.

Speaker, three amendments to the motion

for the third reading of this Bill have already been presented and successively defeated, and in rising to move a fourth amendment-however reasonable and fair it may appear to me-I am not deluding my mind with any false hopes as to the fate reserved for it. I know the determination of the Government to pass this legislation at all costs, and I know the strength of the barriers which they have erected between the partisan and narrow attitude which they have unfortunately assumed and the broad, enlightened and national spirit which should have governed this transaction. I am therefore not seeking for a success, which I do not anticipate, although I am in quest of something of no less value than success. My object, and the only success which I hope to achieve, is to fulfil for myself what I consider to be a duty, and afford in the meantime to hon. members who think as I do an opportunity of placing themselves on record as defenders of the prerogatives of Parliament and the rights of the people. If this aim alone, and nothing else, should be accomplished through the instrumentality of this amendment I aver that in moving it I shall not have unduly occupied the time of this House. Mr. Speaker, at this late hour when the House has been sitting since eleven o'clock this morning, I cannot but make reference to the promise which was made by the Minister of the Interior when this measure was presented to us, to the effect that full opportunity would be given hon. members for the discussion of it. I am glad to see that the hon. gentleman is now in his seat and I ask him, through you, Sir, if he still maintains his assertion that full opportunity is now being given to discuss this measure, when the House has been sitting' since eleven o'clock on Tuesday morning and it is now one o'clock Wednesday morning, and there is no thought oE adjourning.

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UNION

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

Unionist

Mr. MEIGHBN:

The longer the time we give the House, the fuller the opportunity.

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L LIB

Jean-Joseph Denis

Laurier Liberal

Mr. DENIS:

They say that irrespective of the merits of public ownership, the peculiar circumstances of the railw-ay situation make it imperative that they should acquire this road, and that those who tare opposed to the principle of public ownership should vote for the Bill in any event because the country is simply bound to take over the Grand Trunk. Then hon. members, in extenuation of their own unenviable position in this matter, are introducing the bugaboo of the Canadian Pacific railway desiring to buy the Grand Trunk, as if this proposition were feasible, and' as if the Government could not compete with the Canadian Pacific railway and take all necessary means to acquire this road themselves. One thing is certain, and that is that the Canadian Pacific railway would never buy a concern like the Grand Trunk at the price which the Government is paying for it. No hon, member need have any fear on that secure, for the Canadian Pacific railway are excellent business men and would not sacrifice their interests in acquiring the Grand Trunk at the tremendous cost which it means to us. The management of the Canadian Pacific railway run their affairs as business men, whereas the Government are going into this transaction purely from a sentimental standpoint. They say that we should acquire this railroad in order that we may have one vast national system, whether it pays or not, and in order, further, that the widows and orphans in England who placed1 their capital in this enterprise shall not suffer. I wonder if hon. members opposite are aware that the greater part of the railroads of the United States have been built with British capital, half of which has been lost in the last fifty years by reason of railway bankruptcies. British capital has been lost to the extent of hundreds of millions in the railroads of the United States, and I should like to know of one instance in which the Americans considered it their duty to save the credit of their country by recouping the British people who had invested their money in those railroads.

In conclusion, Mr. Speaker, I desire to say that the amendment which I shall propose has not for its object the defeating of the Bill, nor does it seek to prevent the country from becoming the owners of the Grand Trunk. It is simply an act of wisdom, providing that before signing the check for this property we shall see the entries in the books. Before we sign the check for $500,000,000, we want to see that everything is all right and that the arbitrators whom we (have appointed have come

to a proper decision. If the award is unsatisfactory we may discard it, and if it is satisfactory we may endorse it. Let me say that this amendment is not a challenge to the Government or to any one who desires that this. Bill should be passed. It is simply a measure of precaution, I therefore move, seconded by the hon. member for North Waterloo (Mr. Euler):

That all the words after the word " that " in the main motion be struck out and the following substituted therefor:

" Bill No. 33 be not now read a third time but that said Bill he referred back to the Committee of the "Whole House with instructions that they have power to amend same by adding at the end of section 6 thereof the following words:

" No award of the arbitrators shall be final and valid until it has been approved of and ratified by the Parliament of Canada."

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UNION
L LIB

Georges Parent

Laurier Liberal

Mr. GEORGE PARENT (West Quebec):

Mr. Speaker, being from Quebec city it goes without saying that I am not sectional. I am one of those who happened to be a member of this House in 1904, the year when the question of the Grand Trunk Pacific, which had been dealt with by Parliament during the previous session, was a subject of discussion all over the country. I am one of those who at that time supported the 110

policy which we advocated before the people of this country of having a line of railway running from the West to the East, from the Pacific to the Atlantic in order to carry Canadian trade through Canadian ports. We believed that such a policy would meet the views of the people and serve the best interests of the country. Many of the hon. members who, I notice, are sitting on the other side of the House now, have 'been advocating that policy on the hustings and I was very much surprised when it came to the vote a little while ago to observe that they voted against that policy after they had heard the speeches of the hon. the Minister of the Interior (Mr. Meighen) the hon. the Minister of Railways and Canals (Mr. Reid) and the hon. member for Algoma (Mr. Nicholson). Can it be that they are sincere in to-day advocating a policy which is directly contrary to the policy of the Liberal party which they supported in 1904 and 1908? I am one of those who are naturally inclined to believe that when the people say that a certain thing should be done that is a reason for doing that thing, and that we cannot do wrong if we go back to the people and say that we have carried out their views. I do not understand why these men who have been advocating that very same policy for such a long time should come here to-day and vote exactly contrary to the convictions which they supported before the people of this country in 1904, 1908 and up to 1911, I said that I was not sectional, and I am not; but there is one thing I believe I have at heart, and that is to see Canadian trade going over Canadian routes and -through Canadian ports. If there is one thing that I can say for the policy of the Liberal party it is that it meant the gathering of freight from the West and its shipment through Canadian ports. That is the policy that I would like to support. I am sorry to say that as a result of the policy that the Government is adopting all that the Liberals had in view is going to be thrown to the winds. I can easily understand that private companies such as the Grand Trunk, the Canadian Pacific and the Canadian Northern, if it were still in existence, can divert traffic whgrever they like. It is their own business, subject to a certain degree of Government supervision. But when I see that the Government itself proposes to undertake the control of railways, with a view to diverting trade from Canadian ports to American ports I am at a loss to understand how such a policy can be justified. What do the people want? They

want to have our own ports developed. You may leave railway operation to private companies, but you must control them and prevent them from diverting the traffic to the detriment of our own ports. But how can the country support a Government that wants to divert our own Canadian trade from Canadian, ports and send it to American ports? That is what the present Government is doing. Here is the situation: The Grand Trunk for years past has been se'nding all its trade through Portland, an American port. It has in the United States many hundreds of miles of railway. These lines will be owned and controlled by the Government, and in view of the necessity of returning some revenues the Government will have to send the trade over there. It will be an enormous detriment to the Canadian people and to our ports to send our trade to American ports. I am against that policy. There are on the other side of the House some important men coming from the Maritime Provinces. I believe that they are no more sectional than I am. I see the minister-I do not know what department he represents (Mr. A. K. Maclean)-who comes from the Maritime Provinces. Not only would he not adopt that policy, but he would do anything he could ,to defeat it if he were really representing the views of the people of the Maritime Provinces. There is another point which to my mind is also important. Whether the Government seeks to conceal itself behind this shadow of the Grand Trunk Company or not, the fact remains that by controlling the stock it controls the company. That may bring about international complications.

I can see at no far distant date where labour conditions in the United States will be different from what they are in Canada and there may be in the former country certain organizations, comprising thousands of employees, holding different views from those which may be entertained by Canadian labour. Complications may in that way arise, and also from many other causes. The United States Government would then be under the necessity of protecting thdir own citizens on the other side of the line, bringing about international complications and with what other results? Those we do not know, but if certain of the jingo element in this country entertain a fear lest there be annexation, there cannot be any better means of bringing about that result than the policy which the Government are now advocating. For these reasons, I beg to move, seconded by the hon. member for Dorchester (Mr. Cannon): fMr. Parent.!

That the said Bill be not now read a third time, but that the House do come to the following resolution:

That the Grand Trunk Railway system which the Government proposes to acquire, comprises many miles of railway lines on American soil;

That the Grand Trunk Railway Company has diverted most of its traffic from Canadian port's to its United States terminals:

That a continuance of such policy by the Canadian Government would be injurious to Canadian trade and detrimental to our national welfare ;

That the ownership by the Canadian Government of the American section of the Grand Trunk railway would involve this country in international troubles respecting labour administration and public policy;

That for the above-mentioned reasons, the acquisition of these lines means a serious danger of the annexation of Canada by the United States;

That the House is of opinion that before taking action towards the acquisition of the railway referred to the Government should give an immediate assurance to this House that it does not intend to divert Canadian trade from Canadian ports by taking over that portion of the Grand Trunk railway situated and operated in the United States.

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UNION

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

Unionist

Hon. Mr. REID:

Lost on the same division.

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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

Shall I declare the amendment lost on the same division?

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?

Some hon. MEMBERS:

No, yeas and

nays.

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UNION

Hugh Boulton Morphy

Unionist

Mr. MORPHY:

Mr. -Speaker, may I ask if that is an amendment to the motion for the third reading of the Bill?

Amendment, Mr. Parent, negatived on the following division:

Messieurs :

Argue, Arthurs,

Armstrong (Lambton), Best,

Blair, McGibbon (Muskoka),

Bolton, McGregor,

Boyce, Mclsaac,

Brien, McQuarrie,

Buchanan, Maharg,

Burnham, Manion,

Burrell, Marshall,

Calder, Martin,

Casselman, Meighen,

Chaplin, Merner,

Clark (Bruce), Morphy,

Clarke (Wellington), Mowat,

Clements, Munson,

Cooper, Myers,

Cowan, Nesbitt,

Crowe, Nicholson (Algoma),

Cruise, Pardee,

Davidson, Porter,

Davis, Redman,

Douglas (Strahcona ), Reid (Grenville),

Douglas (Cape Reid (Mackenzie),

Breton S. & Rich.), Richardson,

Edwards, Sexsmith, [DOT] [DOT]

Euler, Shaw,

Finley, Sifton,

Fripp, Sampson,

Griesbach, Smith,

Guthrie, Steele,

Halladay, Stevens,

Harold, Stewart (Hamilton),

Harrison. Sutherland,

Hartt, Thompson (Weyburn),

Hay, Thompson (Hastings),

Henders, Thompson (Yukon),

Hepburn, Thompson (Qu'Appelle)

Keefer, Tweedie,

Kennedy, Knox,

Long. Lalor,

Mackie (Renfrew), Lang,

Maclean (Halifax), Wallace,

MacNutt, Wilson (Saskatoon),

McColg, Wright-87.

Reid (Mackenzie) Richardson '

Sexsmith

Shaw

Sifton

Simpson

Smith

Steele

Stevens

Stewart (Hamilton)

Sutherland

Thompson (Weyburn) Thompson (Hastings) Thompson (Yukon) Thomson (Qu'Appelle) Tweedie Wallace

Wilson (Saskatoon) Wright.-84.

(The list of pairs is supplied hy the Chief Whips.)

. Messieurs :

Borden

Doherty

Green,

White, Sir T. Wilson, G.

Stacey

Stewart (Lanark)

Kemp

Mewburn

McCurdy

Spinney

Scott

Drayton

Fraser

Blake

Crothers

Bowman

Allan

Crerar

Cronyn

Hughes

Rowell,

Loggie Charters Chabot Charlton Foster, Sir G.

Demieux

Marcil

White (Victoria) McMaster Beland Baldwin Sinclair, J. H.

(Antigonish)

Trahan Verville Chisholm Sinclair (Q.)

Powers

Lavigueur

Gladu

Jacobs

Ethier

Ross

Lesage

Leduc

Cardin

DuTremblay

Bureau

Truax

Devlin

Gauvreau

Turgeon

Motion of Hon. J. D. Reid (Minister of Railways) for the third reading of the Bill agreed to on the same division reversed, and Bill read the third time and passed,

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ADJOURNMENT UNTIL THREE O'CLOCK WEDNESDAY.

UNION

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

Unionist

Hon. Mr. REID:

As we have sat rather late to-ruight, I move:

That when the House do adjourn this day, it stand adjourned until Wednesday at three o'clock in the afternoon.

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UNION

Edgar Nelson Rhodes (Speaker of the House of Commons)

Unionist

Mr. SPEAKER:

This motion, of course, can only be entertained by unanimous consent. i

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Motion agreed to. On motion of Hon. Mr. Reid, the House adjourned at 2.30 a.m. (Wednesday). Wednesday, November 5, 1919.


November 4, 1919