May 30, 1921

L LIB

Thomas Vien

Laurier Liberal

Mr. VIEN:

It is a bond secured by a

trust deed covering a mortgage. The situation is this: The Grand Trunk Company

receives $22,000,000; the Grand Trunk owes the Government $22,000,000. Will that be simply a book-keeping entry?

Topic:   SUPPLY-BERRY AND CURRANT BOXES
Subtopic:   REVISED EDITION. COMMONS
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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

That is all; no money

changes at all. We say to the Grand Trunk Railway: "Give us a mortgage on your railway to settle your guarantee, and when you sign that mortgage and it is duly recorded, we will credit the Grand Trunk Pacific and wipe it out."

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L LIB

Lucien Cannon

Laurier Liberal

Mr. CANNON:

Why vote the money at all?

Topic:   SUPPLY-BERRY AND CURRANT BOXES
Subtopic:   REVISED EDITION. COMMONS
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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

We have to vote this in order to pay the mortgage on the Grand Trunk.

Topic:   SUPPLY-BERRY AND CURRANT BOXES
Subtopic:   REVISED EDITION. COMMONS
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L LIB

Lucien Cannon

Laurier Liberal

Mr. CANNON:

The Grand Trunk belongs to the Government. This year we have passed additional legislation to have absolute control of the Grand Trunk, and besides that the Government have appointed a new board. As I said before, the choice of the chairman, Sir Joseph Flavelle, was a very bad one.

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

The worst one.

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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L LIB

Lucien Cannon

Laurier Liberal

Mr. CANNON:

The vice-president is the former president of the Grand Trunk, Mr. Kelley. Now, if he is a good man, he should have made a success of the Grand Trunk, and if he is bad he should not be on the hoard. Another member of the board, Mr. Mitchell, is financial expert of the Canadian Northern. His performance on the Canadian Northern is not a great recommendation for placing him on the Grand Trunk. All that aside, however, the Grand Trunk is ours, and I do not see why the Government should come and ask us to vote $22,000,000, and take a mortgage on our own property. Why should they obtain from a company which is ours a mortgage which, according to the minister himself, has absolutely no value, because it ranks after all other mortgages, seeing

that the Grand Trunk cannot meet their liabilities. If it is simply a book-keeping matter, why should not the Government arrange it with the company instead of coming and asking Parliament to vote millions which are not needed. Do not let the country be called upon to vote $22,000,000 if this is only a book-keeping matter.

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UNION

Michael Steele

Unionist

The CHAIRMAN (Mr. Steele) :

Mr. Cahill moves that item 126 be reduced by $22,000,000. Is the committee ready for the question?

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

There is no hurry

about putting that question, Mr. Chairman. We are assuming, for the sake of argument, that, by reason of the award of the arbitrators, there will be some money coming to the Grand Trunk Railway. It would be interesting to know what the submission says about the deductions that are to be made in the award. The member for South Simcoe (Mr. Boys) came bravely to the assistance of the minister, and I do not think he came a minute too soon. He tells us that there is no need to worry about this matter because everything will come out of the award. If the Minister of Finance (Sir Henry Drayton) is within my hearing, he will remember that a former Minister of Finance promised us, as can be found in Hansard, that all the liabilities of the Grand Trunk, either by reason of direct loans or guarantees, would be deducted from the award if there should be enough to meet those deductions. For myself, I should like to see that submission. The paper by which this matter was submitted to the Board of Arbitrators would be interesting to the committee because the whole award wil be governed by the language of that submission. The Grand Trunk people may sell that award before it is made; it is quite possible for them to sell it to any one who might want to buy it as a matter of speculation. If it is sold, it will be bought on the terms of the arbitration deed, so I think it would shorten the discussion and settle the doubts in the minds of a good many members on this side if we saw the submission, to know what control the Government has over the award as to deductions. If that submission provides that the Government, in meeting the terms of the award, have the right to cut out of it the amount the Grand Trunk Railway owes them, we need not worry about this book-keeping, and there will be no sense in voting this money. If the money goes to the Government

through this award they can credit the company with it on their books and square it up; it is not such a very difficult thing to have done. It seems to me that it is a very peculiar transaction to advance $22,000,000 to ourselves-because it is to ourselves-and take a mortgage from ourselves so as to square it in some fanciful manner of book-keeping upon the books of the country. I do not understand it. I would say to the minister that we should see this submission deed of arbitration. No doubt a copy of it is in his department because it is through his department this whole business is being handled. Possibly the Department of Justice has something to do with it but the Minister of Railways is no doubt, kept apprised of what is being done. I think therefore it is a reasonable proposition to ask for a copy of the submission deed so that we will know what provision the Government made to protect themselves in connection with this award.

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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

All the papers in connection with the avrard were submitted to Parliament and laid on the Table. The very document the hon. gentleman refers to has been laid on the table of the House. I am sure hon. gentlemen will agree with me that one object is to have this claim established against the Grand Trunk itself.

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L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

Did you not get the

guarantee of the Grand Trunk?

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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

We have the guarantee of the Grand Trunk, but this is a liability against the Grand Trunk Pacific.

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L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

Who will sign this deed?

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

Which deed?

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L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

This mortgage.

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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

It will be signed by the proper officers of the Grand Trunk Railway system.

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L LIB

Frank S. Cahill

Laurier Liberal

Mr. CAHILL:

Who will sign the deed of mortgage, Sir Joseph Flavelle and the new beard?

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UNI L

John Flaws Reid

Unionist (Liberal)

Hon. Mr. REID:

The hon. gentleman asked who will sign the deed! The president and secretary generally sign it after being authorized by the board of directors. To-day the president is, I understand, Mr. Kelley. He will sign the mortgage and will do so after being duly authorized by the board of directors. That is done in the case of every company.

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

The minister will

pardon me. He gave us to understand that 264

we have to deal with the Grand Trunk as we found it on the first of February 1920 when we took it over.

Topic:   SUPPLY-BERRY AND CURRANT BOXES
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UNI L

May 30, 1921