February 11, 1927

SUBSTITUTION OF CANADIAN NATIONAL FOR GRAND TRUNK PACIFIC SECURITIES


Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved the second reading o,f Bill No:. 57, respecting the Grand Trunk Pacific Railway Company and respecting the Canadian National Railways.


UFA

Robert Gardiner

United Farmers of Alberta

Mr. ROBERT GARDINER (Acadia):

I

desire to point out that this bill has just been distributed and we have had no opportunity of going into the provisions contained in the bill. When the matter was before the House yesterday afternoon very important questions were asked the minister upon which he did not care to express an opinion in a public way. Would it be agreeable to the minister to permit this legislation to go before the special railway committee in order that they might be able to go into the matter more fully and report to the House? There are many important matters of Which we have no knowledge. A very large sum of money is involved in the bill and furthermore there is a principle which we should recognise and we should see to it that we know what we are doing before we go any further.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

The government is

desirous of permitting the fullest possible explanation, of the bill and its terms. The method proposed by my hon. friend will, I am afraid, take a very great deal of time, and we should bear in mind that this arrangement has been before the public of this country and of the old country, in detail, for a period of months, and that the principle, indeed a large measure of the detailed arrangement, was embodied in the resolution discussed yesterday. Will it meet my hon. friend's wishes if we proceed to-day to take the second reading and consider the bill in committee, with the understanding that we leave the bill in committee until Monday, in the meantime permitting any inquiries to

212 COMMONS

Grand Trunk Pacific Ry. Co.

be made of myself or of the officers of the department by any member who may be interested in further explanation which cannot be given here?

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Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Johnston in the chair. On Section 2-Scheme of arrangement with holders of four per cent debenture stock with Grand Trunk Pacific Company confirmed.


PRO

Archibald M. Carmichael

Progressive

Mr. CARMICHAEL:

It would be

impossible for hon. members to read the whole section While the chairman reads a short synopsis. None of us happens to be acquainted with the contents of the bill, and I fail to see how we can carry it intelligently until we know what the sections contains. If we are to proceed with the bill to-day and pass it clause by clause, should we not have the clauses read?

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UFA

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

It would be very helpful to the committee and might save time if the minister, who I am sure is very familiar with this bill, would have the clauses read, and if there is anything vital in the clauses he might make a very brief statement to the House.

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LIB

John Frederick Johnston (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Clause 2 reads:

2. Notwithstanding anything in any of the acts relating to the Grand Trunk Pacific Railway Company (hereinafter called "the Pacific Company") or to the Canadian National Railway Company (hereinafter called "the National Company") and except where inconsistent with this act the scheme of arrangement set out in schedule "A" to this Act, and hereinafter called "the scheme of arrangement", to be made with the holders of the four per cent debenture stock of the Pacific company (hereinafter called "Pacific stock") issued pursuant to chapter one hundred of the statutes of Canada for the year 1906 and chapter one hundred and twenty-three of the statutes of Canada for the year 1913, is hereby duly confirmed and declared to be valid and binding upon all persons and companies affected thereby, or interested or mentioned therein, in every respect as if the Scheme of Arrangement had been enacted hereby; and the said persons and companies are hereby authorized and required, subject to the provisions of this Act, to observe and carry out all the terms and provisions of such scheme of arrangement according to the true intent and meaning thereof.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

I think the explanatory

note opposite the section in the copy of the bill which is in the hands of every member of the committee is about all that is required by way of explanation. This makes effective the scheme of arrangement later set out.

IMr. Dunning.]

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UFA

George Gibson Coote

United Farmers of Alberta

Mr. GOOTE:

A question was raised

yesterday with reference to line 19 where it says:

Declared to be valid and binding upon all persons and companies affected thereby or interested or mentioned therein.

Does not the question naturally arise here as to how this agreement is to be made binding on every individual holder of the debenture stock? Or will that point be covered later?

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

The particular point to

which my hon. friend refers arises directly on the next section.

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UFA

Donald MacBeth Kennedy

United Farmers of Alberta

Mr. KENNEDY:

Does not the passing

of this section involve the passing of schedule A? I should like to hear an explanation of the meaning of that schedule before this section is finally passed.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

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LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

Am I right in my understanding that the bondholders are satisfied to take a certain two per cent rather than rely on an uncertain four per cent whenever the Grand Trunk may be able to pay it; and that the bonds will be retired in thirty years with the two per cent paid into the sinking fund?

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

Yes.

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CON

Thomas Edward Simpson

Conservative (1867-1942)

Mr. SIMPSON:

Will the debentures be

retired at par, or how is the price to be fixed?

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

That is an important

question. The arrangement for the retirement of the debentures is that the proceeds of the sinking fund shall be applied each year in the purchase of debentures, the purchase to be made by tender. That is to say, any debenture holder will be at liberty to offer his debentures each year to the sinking fund trustees, to be paid for out of the sinking fund. But there is a further provision that at the end of ten years the debentures shall be retired from time to time at par.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

Mr. Chairman, in what rank will these new bond obligations stand in relation to the other obligations of the company?

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

So far as the company

is concerned, the question of priority does not arise because the new obligation will be guaranteed by the government of Canada.

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LIB-PRO

John Millar

Liberal Progressive

Mr. MILLAR:

Has any serious objection

been taken to this scheme on the part of the stockholders who have not accepted it? Is there any organized objection to it?

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February 11, 1927