February 11, 1927

LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

The old Grand Trunk?

Topic:   SUBSTITUTION OF CANADIAN NATIONAL FOR GRAND TRUNK PACIFIC SECURITIES
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UFA

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

Yes, as to whether it went into a receivership or what the procedure was.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

My hon. friend is imposing upon me a rather difficult job.

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UFA

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

The minister need only give it very briefly''. I want a point cleared up for my own satisfaction.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

It occurred, of course,

long before I had anything to do with the matter. If I should err in giving an historical review I am subject to correction by gentlemen who were members of the House at the time. The former Grand Trunk was taken over by the government of Canada as the result of arbitration proceedings. Those proceedings decided the amount, if any, that should be paid for the junior stocks, and the road-the former Grand Trunk-is now the absolute property of the government of Canada.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

Of the Canadian National Railways.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

Of the Canadian National Railways, which in turn are owned by the government of Canada, subject to public charges. What I mean by public charges are such bonds .issued as are outstanding and which embody obligations to the public secured by the property.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

And the rental charges.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

And the rental charges.

What was arbitrated was the value of the preferred and common stock in the old Grand Trunk, the stock being acquired by the Canadian government.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

I should like to know if thi3

clause is in harmony with the provisions of the trust mortgage which secured the bonds in question.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

There was no trust mortgage.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

I think there was.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

No.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

If there was not, then it seems to me this provision is more far-reaching. I refer to the words which appear at the top of page 2 of the bill:

All the terms and provisions of the scheme of arrangement shall be binding on all holders of Pacific stock, whether assenting to or not assenting to the scheme of arrangement-

If there was some document which gave certain rights which could be exercised notwithstanding the wishes of the minority, that would be all right; but if there is no such

Grand Trunk Pacific Ry. Co.

right it seems to me there is very grave doubt about it, and it may be an interference with property and civil rights as well. I thought the minister made some reference to a statutory mortgage.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

No, statutory stock.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

Then I misunderstood the

minister. Is it the fact that this arrangement will absolutely deprive these people of rights which they undoubtedly have? I am not seeking to object to the legislation, but the thought comes to me which was first raised by the hon. member for Winnipeg North Centre (Mr. Woodsworth). The thought was in my own mind at the time but I imagined it was overcome by virtue of some arrangement with the Pacific bondholders themselves when they purchased the bonds.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

There is.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

If there is such an arrangement that would satisfy me absolutely on the point.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

Look at clause 9, subsection (a) of the scheme of arrangement on page 7 of the bill.

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CON

William Alves Boys

Conservative (1867-1942)

Mr. BOYS:

Then, as I understand it, that scheme of arrangement is one that was made without the assent of the eight per cent. My point is this: Where do you get the right to interfere at all with the acquired rights of the eight per cent? We know quite well that there are clauses in mortgages securing bonds which give rights where there are certain majorities, but it seems to me that feature is absent here. If it is, what I should like to be enlightened upon .is whether it is proper to deprive these eight per cent, or whatever the percentage is, of their rights, and is it not an interference with property and civil rights?

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February 11, 1927