June 12, 1931

CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Just as was said, this is a seasonal tariff. The old potato season is past; the new one is about to come. Before it comes, there will be provision for it.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

I am glad the Prime Minister confirms my statement.

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LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

Order in council.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Yes, that is what it is

for.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

There are many ways of

helping the farmer. When I was elected, fences and ditches along the Intercolonial railway in my constituency were in bad shape, and through the good-will and intelligence of the then Minister of Railways, Mr. Dunning, who grasped the situation thoroughly, the law was changed in order that the Intercolonial might be put under the jurisdiction of the railway board in regard to operation. This work has since been done and I was glad to hear the Minister of Railways (Mr. Manion) say the other day that he would follow that wise policy. Amongst other things that were done, submarine telephone cables were laid in order that the farmers of distant parishes might have better communication across lakes and on islands in the St. Lawrence river, and many other works were carried out in order to help the farmer.

In regard to old age pensions, the Prime Minister came to Riviere du Loup and according to the Gazette this is what he said:

He renewed the pledge of the national Conservative convention at Winnipeg as regards old age pensions.

At this point may I relate something which is delightful. During the last campaign my opponent said: "How will the leader of our party succeed in having the old age pension

The Budget-Mr. Pouliot

paid in full by the federal government without any increase in debt, without any more expenditure?" He said, "It is very easy; he will cancel those legations at Tokyo, Washington and London." As regards the mention of Washington, that was surely a lack of foresight, and the same thing may be said of London, because Mr. Ferguson was sent there. My opponent said more than that. There was only one legation left, that of Paris, where Mr. Roy is. When a Conservative candidate returned to his home, he said to his wife: "I have been offered the appointment to succeed Mr. Roy." She said, "Who said that to you?" He said, "Mr. Dube." She said, "What Mr. Dube?" He replied, "The mayor of Riviere du Loup, who is to say a good word in my favour to Mr. Bennett and I might be appointed to Paris."

I quote again what my right hon. friend said at Riviere du Loup:

We propose to pass a law, the first session, to give Canadians a fair chance of competition on equal terms, a fair chance to develop Canada against competitors from any part of the world, said the leader.

This is the Liberal policy.

We propose to do that, the first session, or we will get out of office trying. I ask for your support and there is only one way of giving it -vote for Messrs. Dube and Audet, if you mean to help us build up Canada.

Not build up a station, but build up Canada.

Mr. King cut off the federal grant to aid agriculture; if we come back, we propose to renew that grant, for farmers have the right to know everything that science can teach them.

Let me refer to what was said during the election by my opponent about the Imperial conference. This is something which was also delightful. He said more than the leader of the party. He asked: "Who are

the Conservatives who are to represent Canada at the Imperial conference?" He mentioned the present Secretary of State (Mr. Cahan), who did not go there; the Minister of Railways (Mr. Manion), who also did not go and the Hon. Senator Chapais, who did not go there. One day he said to the people who were present: "Would you not like it better if I went there than he?" pointing to me. I replied: "I never mentioned it." But he was to go to the Imperial conference, and the day before the election he said: "This is the last time I come before you as a private citizen. The next time I appear before you I will be Minister of Labour." I wonder if it is because he has changed his mind that the Prime Minister has asked Senator Robertson, who is a very good man, to take that portfolio.

With regard to the transcontinental railway the speech of the hon. member for Stanstead (Mr. Hackett) on June 5 of this year was answered on July 12 of last year by the Prime Minister when he came home. The hon. member for Stanstead said, as reported in Hansard at page 2348:

How far that eloquent chieftain-

Speaking of Sir Wilfrid Laurier.

-of this parliament was able to lead the people astray when he engaged in public ownership.

This is how the Prime Minister replied, when speaking at Riviere du Loup last July:

Mr. Bennett drew cries of "Shame" from the audience when he contrasted Premier Mackenzie King with Laurier. When the United States had threatened to cut Canada off boundary privileges, Laurier had declarfed that Canada would build two railways of her own. But when protection was asked against American imports, Mr. King had said: "Hush, do not provoke the United States."

The present leader of the opposition is alive; he has to be fought; but Sir Wilfrid Laurier is dead and he has what he deserves -praise.

It must be remembered that the grades were changed under the Borden administration by people who wanted to destroy the work of Laurier and this is why the transcontinental railway did not serve the purpose it was intended to serve. In my constituency some of the grades are so bad, they have to cut trains in two in order that they may pass with heavy loads.

There was a promise of a junction between Riviere du Loup and the transcontinental railway, but I have heard nothing about it since this pamphlet of promises which I hold in my hand was published.

There is a promise about the development of harbour facilities at Riviere du Loup. I have here the program of the Conservative candidate in my constituency which contains this promise, but according to a certified copy of a resolution that was passed by the municipal council of the city of Riviere du Loup on April 13 last, he voted against it. His party voted not only against it, but against the consideration and study of the matter by experts. This is shown by the report of the vote on page 1031 of Hansard.

With regard to the improvement of the railway shops, I have an order for return dated April 23, in which appears letters from the Conservative candidate, as mayor of Riviere du Loup, to the director of unemployment and to other people, saying that before January 1, owing to his own ignorance, the city of Riviere du Loup did not pay

The Budget-Mr. Pouliot

regular wages or observe regular working hours ^ for the men on the pay list. The Tory candidate was promising better wages and fair hours of work to the workingmen, but he did not even act according to the regulations of the Unemployment Relief Act.

Just a word with regard to the employees of the Canadian National Railways. On June 1, at page 2199 of Hansard, I asked:

1. Is it the intention of the Canadian National Railways to reinstate Mr. Noel Plourde, ex-conductor?

2. If so, when?

The Minister of Railways (Mr. Manion) said, "Answered," but my right hon. friend the Prime Minister (Mr. Bennett) said:

Mr. Speaker, this question reads; "Is it the intention of the Canadian National Railways to reinstate Mr. Noel Plourde." Surely we have reached the stage where such a question should not be asked.

Mr. Pouliot: I should not like to ask a question which causes discomfort to the cabinet.

Mr. Manion: The cabinet has nothing at all to do with the question.

The point is that the Minister of Railways was ready to answer; he had received the answer from the Canadian National Railways, but my right hon. friend prevented him from giving the answer to Hansard.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

For the information of

the hon. gentleman I may say that the answer would have been that the matter was in the hands of the railway and not in the hands of the government.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

I understand that very

well, but the answer came from the railway to the minister, and the minister was acting in accordance with the answer.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

No, that was the answer of the railway; they were not going to disclose their business.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

I am glad my right hon. friend is giving the answer to-day; it was worth speaking about.

There is also another matter, with regard to the appointment of workingmen on the recommendation of the Conservative candidate, on the ship Mikula, which is operated by the Department of Marine. One of these men was convicted for stealing apples, so I would ask the Minister of Marine if he has insured the furniture of the ship against theft, or if he intends to use the ship as a galley for convicts or ex-convicts. I have a copy of the judgment in the case, the minister is not here, but I will send it to him to-night. This man who was recommended, took the place of other people with a better record.

Now I come to a very dear subject, the Riviere du Loup station. Speaking in Brandon, my right hon. friend the Prime Minister made a statement with which I entirely agree, except for the blame which he tries to place on the previous administration; as an enunciation of principle his statement is perfect. He said:

I want to say that the Conservatives in power will give the Canadian National management a stronger support, and a more disinterested support, than they have had under the King administration.

If the right hon. gentleman had said s strong and disinterested support, and left it at that, I would have agreed with him entirely. He continued:

There will be less log-rolling and interference; the management will be better able to carry out their policies without politicians butting in and trying to stop them.

I have in my hands a copy of the Canadian National Railways Magazine of June, 1930, which contains a picture of Sir Henry Thornton laying the corner stone of the new railway station in Hamilton. On that occasion he said:

This new station, of which I have the honour to lay the corner stone, is but a vision of the past come true; and it is a permanent testimonial of the work that has been done. It is true that there is no such thing as satisfaction, completion, or finish, for achievement only spurs us to greater endeavour and to greater progress. Therefore, to you veterans I can only say "thank you" and tell you that you have made traditions of which we are all proud and which we hope to emulate in the future.

This is a nice speech for the laying of the corner stone of a station.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

I think perhaps the hon. gentleman had better delete that reference from his remarks; it is not in order to introduce the name of the Governor General.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

I am not referring to the Governor General; I am referring to Sir Henry Thornton. To proceed with the station at Riviere du Loup, two ministers of the crown said the Conservative candidate had worked hard for that station. I asked them questions and found that the. Solicitor General left for the Imperial conference on September 23 and returned on December 12, and he said he had not in the meantime communicated by letter, wireless, cablegram or wireless telephone with any person in connection with the proposed construction of the new railway station at Riviere du Loup. This answer of the Solicitor General appears in Hansard of June 5. The answer of the Minister of Railways, which appeared in Hansard of May 2S, stated that he left Ottawa op October 1

The Budget-Mr. Pouliot

and' oame back on October 11, and in the meantime did not communioate with anyone with regard to the proposed new station. The other ministers whom the Tory candidate met in Ottawa on October 7 last were the Postmaster General (Mr. Sauve), the Minister of Marine (Mr. Duranleau) and the Minister of Public Works (Mr. Stewart), and when I asked them for information they refused to answer, because they said, of their oath of office. The hon. member for Argon-teuil (Sir George Perley) was appointed acting Minister of Railways on October 7, by order in council. On March 31 I asked the following question, which appears in Hansard:

Was he appointed acting Minister of Railways in order to refuse to sanction the construction work at Riviere du Loup?

Mr. Manion: Certainly not.

That was a good answer, but on the very day of his appointment as acting minister the Canadian National Railways returned the cheque to the tenderers, saying the Department of Railways and Canals had refused to sanction the construction of the station. That, was while the Solicitor General and the Minister of Railways were out of Ottawa, and both of them pretty far away. On June 1 I asked this question:

What was: (a) the date; (b) the number: (c) the subject matter of each.order in council submitted to him while acting as such, to the privy council during that period?

The answer was that there was one order in council dated October 8, 1930, in fact October 9, P.C. 2370, with regard to orders for an addition to the station at Levis, Quebec. He refused to sanction the construction of a station at Riviere du Loup, though he was not appointed to do so, and in fact he approved of an addition to another station at a place no more important than Riviere du Loup. Through the courtesy of the Prime Minister I have a copy of that order in council, and I wonder whether, on the recommendation of the new board of directors of the Canadian National Railways, the money voted by parliament for the station at Riviere du Loup was spent in virtue of an order in council on the addition to the station at Levis.

I do not wish to be rude to any hon. member of the house, but on April 16 last, at page 650 of Hansard, an hon. member accused me of playing vaudeville with the station at Riviere du Loup. I am sorry the right hon. Prime Minister has left the chamber, but I will ask the Minister of Fisheries (Mr. Rhodes) to convey my message to him. That very same hon. member was on the train with me one day going from Ottawa to Montreal and he said, "I am {Mr. Pouliot.]

. very sorry I cannot speak English; otherwise I would tell these facts to the government." I mention no name, but anyone referring to Hansard will realize whom I am speaking of. It is pretty hard to speak both ways in and outside of the house. Take for example, Mr. Speaker, a respectable Conservative paper like the Mail and Empire. What does that paper say on June 10 with reference to the photographs of Riviere du Loup station, laid on the table of the house? Let me quote;

The photos, he stated in an interview to-day, show what words cannot bring. They make clear, he said, the holes in the present station's roof and the way the water runs into the waiting room from a flanking hillside every time it rains-and it rains plenty in Riviere du Loup.

If Mr. Pouliot is able to table the pictures, as he claims is his right, without being ruled out of order, no member of the house, he declared, will be able to plead ignorance of the true state of affairs beside the tracks at Riviere du Loup.

I have here the correspondence that has been laid on the table under reference No. 242, the correspondence exchanged between the Minister of Railways and the Conservative candidate. The file is not complete: some of the letters are here but others are missing. No letter from that gentleman to the minister is produced, the explanation being that it is marked personal. I believe I have sufficient time to read one of the letters not marked personal-and I would observe, by the way, that one wonders what the personal letters must be like. This letter, which is a translation, reads:

Riviere du Loup,

January 17, 1931.

Mr. Arthur Lalonde,

Secretary,

Post Office Department.

Dear Sir,

Re: Isle Verte R.R. No. 1 This mail service has been asked by Mr. J. F. Pouliot, before the elections, it has been granted, mail contract awarded, more than 50 per cent of the residents have bought boxes.

To-day, it is not working, Mr. Pouliot accuses me to have stopped this service. Meantime I would not be a bit surprised to learn that he is the guilty party. The officials of your department are still his friends. He can make them act.

Why, after having decided this matter the mail service is not in operation? Because the government has changed and the officials of the department do their best not to grant us anything we ask.

Yours truly,

Chs. E. Dube.

I protest against any communication of that character for it is utterly false and unjust for the civil servants.

The Budget-Mr. Nicholson

A communication from the Minister of Railways to the clerk of the city of Riviere du Loup on November 6 was to this effect: "Your city was not proposed in a special way when the question was presented." This means everything, because the Conservative candidate was in Ottawa when the question was decided by the acting minister.

Now, Mr. Speaker, I submit that my county has been discriminated against. The reason is obvious: they wanted to punish the good electors who voted for the Liberal candidate. But they did not realize that at the same time they were punishing their own friends. The gentleman to whom I have referred, the Conservative candidate, wrote an article in his own name, in Saint Laurent, in October last, in which he made this statement: "I have not been elected; I have no promises to fulfil." That will give the house an idea of the way in which my constituency has been treated. I have been asking for returns to orders made in this house, and I have got some crumbs from the table of the rich, for which I am thankful. May I suggest that a square meal would be welcome-all the orders I have been asking for. In conclusion, Mr. Speaker, I wish to quote the following excerpt from May's Parliamentary Practice, twelfth edition, page 564:

If parties neglect to make returns in reasonable time, they are ordered to make them forthwith: or so much of returns as lxas not been made. If they continue to withhold them, they are ordered to attend at the bar of the house; and unless they satisfactorily explain the causes of their neglect, and comply with the order of the house, they will be censured or punished according to the circumstances of the case.

I wish to be lenient, but at the same time I desire to have at the earliest possible date the answers which I have been expecting. I shall be thankful to the government when they bring down these returns, and I am sure that when they realize the true facts of the situation they will be disgusted with the local Tory tactics in my county and will put a stop to the present state of affairs.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. G. B. NICHOLSON (East Algoma):

In rising to address the house briefly on the resolution proposed by the Prime Minister (Mr. Bennett), it is not my purpose to discuss at length more than one subject, and that is the effort that is being made throughout the country and in this house to fasten on the government and on the Conservative party the charge of endeavouring to undermine the Canadian National Railways. In dealing with this matter I intend to put before the house some information which I think will convince all reasonable people that 22110-164

it is the men on this side of the house, and those who are willing to examine closely into Ihe expenditures of the Canadian National Railways, in order to ascertain exactly what the position is and what circumstances have led up to the present situation, who are in reality the friends of the system itself.

The Canadian National Railways came into existence as a result of a situation with which this country was confronted in 1917, 1918 and 1919-a situation brought about by the fact that the parliament of Canada had utterly failed in its duty in the years from 1904 up until that time. I am not going to weary the house by traversing everything that took place. I am not going to endeavour to fasten upon one political party or the other responsibility for that situation. The fact remains that it was the parliament of Canada, as a parliament, by reason of its docile attitude to the proposals put before it, proposals in themselves utterly and completely unsound, that placed us in a position, in those years I have mentioned, 1917, 1918 and 1919, which compelled us to take over the roads and endeavour to amalgamate them into one system.

The hon. member for Shelburne-Yarmouth (Mr. Ralston) in the course of this debate, referred to one or two matters which I shall consider. The- hon. gentleman referred to securities in the long-term bonded indebtedness of the Canadian National Railways which he said dated back to 1875 and some of them, I believe he said, to 1850. And the hon. member for North Waterloo (Mr. Euler), referring to the sum of 8604,000,000 in the balance sheet of the Canadian National Railways for 1930, representing direct advances by the government of Canada, stated that those advances were made prior to the taking-over and amalgamation of the lines. Before I conclude I shall endeavour to show the fallacy of these two statements.

I have in my hand a copy of the Toronto Globe of Saturday, June 6, 1931, in which there is an article that illustrates the campaign that has been going on all over the country since August last in relation to these railways. This editorial is headed, "The Inquisition Under Way," and there appears in it this statement:

Premier Bennett in his budget speech provided a text for the special committee on national railways and shipping, which has commenced a probe of Canadian National affairs.

Now, that special committee on railways and shipping is the representative body of this house which is inquiring into details of expenditures made by the Canadian National

The Budget-Mr. Nicholson

Railways, which expenditures are to be covered by direct vote of this parliament. Yet, referring to that committee, the Toronto Globe, in an article indicative of what is talcing place throughout the country, taking its cue from statements made by hon. members in this house, describes the work of the committee as an inquisition, because before voting millions and tens of millions of dollars parliament presumes to make an inquiry as to what this money is being spent for or why it is asked for.

Let me say at once that so far as I am concerned, and so long as I remain in this house, I intend if I can to find out why parliament is asked to vote money for any purpose whatsoever; and I intend particularly, if I can, to ascertain why it is that so much money is required for this enterprise we call the Canadian National Railways. I conceive it to be the duty of every member of this house, the friends of the. system itself, to go the extreme limit in finding out what the position is, suggesting if they can the remedy, and paying special attention to the expenditures that are now being made and the sums which are asked for.

I 'have in my hand the balance sheet for 1030 of the Canadian National Railways, and it shows the total liabilities as $2,531,000,000 in round figures; it shows that there have been approximately $1,350,000,000 added to the liabilities of the system since the lines were taken over in ioi7, 1018 and 1019. Reverting for a moment to the statement made by the hon. member for Shelburne-Yar-mouth regarding the long-term funded debt dating back to 1875, I would say that a statement of that character made by whomsoever it may be is merely an effort to throw sand in the eyes of the Canadian people.

hen the Canadian Northern lines were taken over by the Canadian people the value was fixed by arbitration, and that value was such that the obligation assumed was $384,000,000 in round figures. The common stock, representing the investment of those who were behind the railway, of a par value of $100,000,000, was wiped out entirely with the exception of $10,000,000.

When the Grand Trunk Railway was taken over under the legislation of 1010, there were approximately $211,000,000 of securities wiped out as being of no value. I have before me the total cost of these lines, including the cost of the Transcontinental and the Intercolonial railways, which cost is $1,106,237,620.72.

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LIB

Eugène Fiset

Liberal

Sir EUGENE FISET:

Is that the actual cost paid by the government?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

No.

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LIB

Eugène Fiset

Liberal

Sir EUGENE FISET:

And not the cost charged to the railway in our bookkeeping entries?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

That is the cost charged to the railways at the time they were taken over. If my hon. friend desires to obtain this information, he can-

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LIB

Eugène Fiset

Liberal

Sir EUGENE FISET:

That is just what I thought. The hon. gentleman appeared before the committee and asked for information and he was given that figure of $10,000,000 paid for the Canadian Northern, and the information that hundreds of millions of dollars had been added to the debt.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

My hon. friend will have an opportunity to make a speech, either in this debate, if he has not done so already, or upon some other occasion, at which time he can deal with this subject. I have just forty minutes at my disposal and while I am quite willing to answer a question I do not intend to give up any of my time in order to permit another hon. member to make a speech.

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LIB

Eugène Fiset

Liberal

Sir EUGENE FISET:

The hon. member should be accurate.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

If any hon. member desires the exact figures he can obtain them in Hansard of 1018, when they were given to the house by Sir Robert Borden. I cannot give the house the exact page, but they will be found in Hansard of that year.

The Intercolonial railway up to that time had cost $137,000,000 in round figures, the Transcontinental had cost $173,000,000, and the Canadian Northern Railway was taken over under arbitration at a value of $386,000,000. For the information of the house let me say that that last figure represents $38,000 per mile for the system. The Grand Trunk Railway was taken over under arbitration at $216,000,000, and let me repeat again that there were more than $211,000,000 of securities wiped out. The Grand Trunk Pacific was taken over at $192,809,000. The total cost to the Canadian people at the time these lines were absorbed was $1,106,000,000. The liabilities to-day amount to $2,531,000,000, excluding anything for interest on the construction of the Transcontinental or the Intercolonial railway.

Any hon. member who knows anything about this matter must admit that at that figure of $1,106,000,000 the railways cost too much. There was a liability involved which the railways could not properly be expected

The Budget-Mr. Nicholson

to carry. There should have been written off at that time $265,000,000 in order to put the lines at a proper valuation. Any hon. member who desires to go back into the records can ascertain what the estimated cost would be to bring these lines up to standard. I will not weary the house with these details because they are available to any hon. member.

Taking the liabilities as they stand to-day, they show that the long-term funded debt, unmatured, amounts to $1,168,000,000, the loans from the Dominion of Canada amount to $604,000,000, appropriations in aid of construction, $17,000,000, government grants, $403,000,000, current assets and liabilities deficit, $15,000,000, and interest due the dominion amounting to $322,000,000.

The hon. member for North Waterloo (Mr. Euler) in his urgent defence of everything which has taken place from that time on made the statement that this $604,000,000, representing the advances made by the Canadian people, were advances made, as I stated a moment ago, at the time the railways were absorbed by the Canadian people. The balance sheet of 1923 was the first balance sheet given to the public by the Canadian National Railways which set out what its obligations were and hon. members will find in the statement of assets and liabilities that the total advances made up to that date by the government of Canada, including interest on the total sum, amount to $580,000,000 in- round figures. The sum advanced by the government of Canada up to date, including interest, is $926,000,000, and as I proceed I will attempt to show the house how a large portion of this amount was expended.

Between 1918 and 1922 it was expended on the Canadian Northern, Grand Trunk Pacific, National Transcontinental and the Intercolonial, and in the years 1920, 1921 and 1922 on the old Grand Trunk. Perhaps the hon. member did not have this information but I can scarcely conceive why he should not have it because he was a member of this house in 1918 aifd 1919 when the whole matter was under discussion and he knew at that time the exact condition of affairs. Between 1918 and 1922 there was expended by the then management of the Canadian National Railways on betterments, rolling stock, equipment and so on the sum of $115,293,589;. there was expended by the committee of management, provided for by the act of 1919, the sum of $31,513,176.56 during 1920, 1921 and 1922. The total expenditure up to that date on betterments of all character amounted to $146,000,000 in round figures. That expenditure was made inclusive of the

22110-164i

expenditures made by the committee of management of the Grand Trunk. From 1922 until 1930 there was expended $437,000,000 for the same-purposes; $146,000,000 in the former period and $437,000,000 in the latter.

I have in my hand the report of the Canadian National Railways for 1922, signed by Sir Henry Thornton as president and chairman, and I ask permission to quote one paragraph therefrom. The report is signed by Sir Henry Thornton as president and chairman and is dated April, 1923:

Oil behalf of the board, I would like to state that after inspection of the main arteries of the system, we find that the work undertaken has been well performed, and that the expenditures have been well applied. While the demands for capital expenditure on a system of such extent in a growing country, as the former board stated, are never ending, yet it may now be said that the three groups of lines, until recently the Canadian National Railways, enter the consolidation in excellent physical condition, and operating at a high mark of efficiency as regards actual performance or movement of traffic and other factors controllable by management. Apart from certain well known cases of duplication the lines are well located and in exceptional position to successfully perform the transportation demands of the country. The problem as far as the lines covered by the report is concerned, is how sufficient traffic may be developed to carry the overhead and maintenance expenses. As far as transportation costs go, an economical performance is being made. Under tbese circumstances the margin for improvement with the present light volume of traffic is largely dependent on circumstances beyond the control of the management.

I would ask the house to note particularly what follows:

On some of the older sections there are still improvements that should be undertaken, but in the main the lines are modern in character and w-ere built or have been brought up to standards which are ahead of actual traffic requirements, except under stress of seasonal movements.

That was the president of the Canadian National Railways in April, 1923. There bad been expended by the former management during 1918, 1919, 1920, 1921 and 1922, in the case of the first group, and in 1920, 1921 and 1922, in the case of the second group, $146,000,000, and from that date until the present the sum of $437,967,226 on a road that in road-bed and equipment and everything else required for the handling of traffic had been brought up to date. I submit this question: Is it any wonder that the Canadian

people are asking when this is going to end? Is it any wonder that the members of this house who are anxious to preserve the national railways, and to prevent them becoming such a burden that the Canadian people cannot carry them, should be making im

The Budget-Mr. Nichobon

quiries as to why these expenditures have been made and if they have all been necessary. So far as I am concerned, Mr. Speaker, I have no hesitation in standing in this house and saying publicly-I will say it anywhere

that in my humble judgment many of the expenditures which have been made have been wholly and completely unjustified, and if the Canadian National Railway is to be made a success, if we are ever to get to the place where the load will be taken off the back of the taxpayer, it will be when this parliament scrutinizes every single dollar that is asked for and finds out whether that dollar is going to provide some asset that will carry itself by providing additional traffic.

I took the liberty of saying to this house in 1919, and I repeat it now, that there is one way and one way only in which the Canadian people can operate this railway successfully and allow it to earn its operating costs and sufficient to carry the capital obligations which the lines should carry, and that' is to fix the capital at a point where it becomes a proper charge against the line, and put a management in charge-it may be the present management: I am making no criticism in that regard because I know many of the operating and construction officers of the Canadian National Railways, and I know that there is no finer group of men on this continent; they are virtually the same men who spent .$146,000,000 between 1918 and 1923 and who spent it in such a way as to cause the president of the Canadian National Railways to make the statement which I have just quoted and which appears at page 10 of the annual report for 1922-and say to them that they must operate the lines just the same as if they were operating them for a private company.

To pass on, because I do not want to delay the house too long, at pages 5 and 6 of the report of the Department of Railways and Canals for 1925, I find it stated that from the date the lines were taken over, from the time of the act of 1919 taking over the Grand Trunk, the following sums have been advanced:

Loan and advances from government $103,578,182 33

That is part of the $604,000,000.

Two bond issues of

$25,000,000 each $ 50,000,000 00

Equipment notes

12,000,000 00Advances from Canadian National Railway Company

24,899,157 62Total

$190,477,339 95

That is the total presumed to have been put into construction or betterment or equipment on the Grand Trunk Railway up to 1925, the sum of $190,000,000 odd, representing a capital charge of $58,000 per mile.

Yesterday in the railways and shiping committee I took the liberty of asking a few questions, and before doing so I made this statement, that information I had secured caused me to know that the capital value of class one railways in the United States, double track, triple track and quadruple track, ran from $90,000 to $125,000 per mile, varying according to the density of the traffic. The capital liabilities of the Canadian Pacific Railway, which is the nearest comparison we can get to our own lines, represent a charge of $70,000 per mile. The Grand Trunk was taken over in 1919. It was in somewhat of a rundown condition. Everybody knows that, but apart from that it was the best constructed line in the Dominion of Canada and the northern United States. It was a double track line from Montreal to Chicago. Its equipment was not up to date, but there have been advanced to the road since it was taken over the sum of $58,000 per mile, according to the report of the Department of Railways and Canals. Now I submit this to the house, that the sum of $58,000 per mile could not have been and has not been properly expended on the lines of the Grand Trunk Railway, and as a result the Canadian people are carrying a burden to-day that they have no right to carry, and the success of the Canadian National Railways is jeopardized just to that extent.

I pass on. If the lines had been valued at the time they were taken over, with $265,000,000 written off, they would have had a value of $841,237,629.72. There has been added to that approximately $584,260,815.68 in capital charges, making a total of $1,394,498,445.40. The present capital liabilities are $2,531,331,405.85, leaving a difference of $803,000,000, which has gone somewhere, if the balance sheets are correct. If you undertake to write the capital down to where it properly belongs, to a point at which the lines can be expected to earn a return on the money, the very outside figure that you could put it at would be $1,462,000,000, or say $1,500,000,000. If it was necessary for us to write off $285,000,000 in 1919 to bring the roads down to a proper value it will be necessary for us to " write off now approximately $1,000,000,000, which the Canadian people themselves must carry exclusive of the railways, and I say that in my opinion the sooner that is done, the better. The duty of the government and of

For example, in the two years 1929 and 1930 the sum of approximately $250,000,000 was added to the obligations of the Canadian National Railways. I do not know what the sum will be for 1931. I venture to say that in the next two yeare another $200,000,000 will be added. Is it not time some definite, positive step was taken to bring such a condition to an end?-because the Canadian people cannot much longer carry the load.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 12, 1931