April 27, 1925

LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Until it becomes active.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

I believe we might carry out a plan by which, instead of having a loss of some $50,000,000 a year we could show a surplus of some $50,000,000. I am sure that will appeal to hon. members, and in a very few moments I desire to go into that a little more fully. That really is my reason for rising to speak to-day.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

A Daniel come to judgment!

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

Thank you. Before doing that, I should like, for the sake of discussing the matter intelligently, to give a number of essential figures in connection with the National railways. First, the investment in road and equipment is about $1,837,000,000. The total assets of the road amount to about $2,074,000,000.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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PRO

Robert Forke

Progressive

Mr. FORKE:

How are those assets figured?

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

That is what has been charged up as the cost. They may not be worth that now. Loans from the government, as I stated a few minutes ago, amount to $560,397,957.64. The interest on the loans is not included in that sum.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

There are other Capital

amounts besides that, not included in that amount.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

Interest on loans by the

government amounted to $31,000,000 last year. The debt to the public of Canada, not the government, but outside bond holders, many of whom the hon. member for South York (Mr. Maclean) says are foreigners, is $913,913,082.80. The fixed charges or interest on that debt amounts to $38,361,704.14. Taking

The Budget-Mr. Euler

then fixed charges of $38,361,704.14 to the public and interest on the moneys owed by the railways to the government of $31,000,000, we have a total in round numbers of $69,000,000 of fixed charges on the National Railways. From this we deduct the operating revenue of $17,000,000, leaving, as I stated before, a net deficit of $52,000,000. I think it is only fair to say at this point that this is not fairly chargeable to public ownership of railways. I will read just an extract from the Toronto Globe which bears on that:

A large part of it represents the mistakes and extravagances of governments and private owners and promoters in the past, and is not based on replacement values. It is announced that the management will submit before long a consistent statement of the case for writing down the capitalization. It will be a highly important question for parliament to decide, as the writing-down process would involve an increase of the national debt. The advantage of lower fixed charges would be that it would give the National Railways a definite financial objective which they might hope to reach within a few years.

I quite appreciate the statement made by the hon. member for Vancouver Centre (Mr. Stevens) some time ago that writing down of the capitalization of the National Railways is not going to wipe out the debt. The debt will remain, of course. That is somewhat elementary, I think, but this will give the National Railways, under public ownership, just the same chance as private ownership would have had if those roads had been organized under a new company and had been conducted as a private corporation.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

It means simply that you are transferring to consolidated fund so much interest that has to be paid, instead of charging it against the railways. The interest there is exactly the same.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

I am not questioning that

at all. We are not going to save any money by doing it, but we are going to give the principle of public ownership as fair a chance as these railways would have under private ownership. These things were piled up under private ownership, and if these railways had been taken over by a privately organized company, the hon. member knows that they would have been reorganized; that these amounts would have been written down, and that they would have gone on with a capitalization more like that of the Canadian Pacific, about which my hon. friend knows more than I do.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

I do not. We would be

simply deluding ourselves into a false position. In other words, we are making a bookkeeping entry and putting on one side certain millions 158i

of dollars and imagining, for it is purely imagination, that as regards the railways we are paying less in fixed charges. That is the point I make.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

I am quite willing "to let the House judge what is desirable. I think the House understands what I mean.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Alfred Edgar MacLean

Liberal

Mr. MacLEAN (Prince):

Will the hon.

gentleman give the House the amount that is carried by private parties in bonds?

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

I gave that before.-$913,913,-082.80.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Alfred Edgar MacLean

Liberal

Mr. MacLEAN (Prince):

What is the

interest paid on that?

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

It is $38,361,704.14.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Alfred Edgar MacLean

Liberal

Mr. MacLEAN (Prince):

What percentage is that?

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

It varies. I cannot give

that exactly. I spoke last year about the duplication and waste involved in the operation of these two great railway systems. I did so at that time as chairman of the select committee on estimates for the National Railways. In our report at that time appeared this paragraph:

Your committee desires to direct the attention of the government to the apparent unnecessary competition and duplication of services between important centres by the Canadian National and Canadian Pacific railways and to suggest that the railways be invited to consider the whole question with a view to elimination, wherever possible, of unnecessary duplication and competition, so as to conserve the revenues and resources of both companies while still rendering adequate service to the public.

We have heard within the last few days- and I think it is gratifying to all members of the House-that the heads of the two national railways, together with their officials, are getting together with a view to eliminating, as far as possible, duplication of services. That is well worth while doing if we are going to continue as we are. But I think there is a better way, and the hon. member for South York and myself, in the debate on the ocean freight rates resolution, made reference to it. Last year I said-and I said it again in the course of that debate-that I had it on the highest possible authority that a saving of from $50,000,000 to $75,000,000 could be made each year if the two railways were amalgamated and welded into one system. I say now-and again I say this upon the highest possible authority-that if the two roads could be amalgamated, there could be saved the colossal sum of $100,000,000 a year. That is nothing less than a staggering statement.

The Budget-Mr. Eider

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

Francis N. McCrea

Liberal

Mr. McCREA:

Which system would do the amalgamating?

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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LIB

William Daum Euler

Liberal

Mr. EULER:

I am coming to that. I know we are going to have a difference of opinion.

Topic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.
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April 27, 1925