July 21, 1931

INDUSTRIAL AND INTERNATIONAL RELATIONS

CONCURRENCE IN SECOND REPORT OF SELECT STANDING COMMITTEE


Mr. F. W. TURNBULL (Regina) moved concurrence in the second report of the select standing committee on industrial and international relations.


LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

Would my hon. friend mind informing us just what the recommendations are?

Topic:   INDUSTRIAL AND INTERNATIONAL RELATIONS
Subtopic:   CONCURRENCE IN SECOND REPORT OF SELECT STANDING COMMITTEE
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CON

Franklin White Turnbull

Conservative (1867-1942)

Mr. TURNBULL:

The report of the committee appears in the votes and proceedings. Briefly, the committee did not agree that there was any money spent in Canada on war, that the expenditures of the Department of National Defence were not war expenditures. Secondly, the committee was of the opinion that professorships and scholarships were not practicable to establish, first by reason of the expense entailed, and second by reason of difficulties of legislative jurisdiction as between the provinces and the Dominion. The third recommendation of the committee is that books on inter-imperial and international relations should be added from time to time to the library in the Department of External Affairs, and the fourth recommendation commends the League of Nations Society in Canada to members of parliament and to the people of Canada generally, and suggests continued support thereof.

Topic:   INDUSTRIAL AND INTERNATIONAL RELATIONS
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PRO

Agnes Campbell Macphail

Progressive

Miss AGNES MACPHAIL (Southeast Grey):

I do not agree, Mr. Speaker, with the first two recommendations of the committee.

I do not agree with the statement of the committee that expenditure for national defence and cadet training is not money spent on war, because I think that defence when there is no war is really war in an inactive period or a native war. I do not agree with those two recommendations, and I shall say no more about them.

The committee also is of the opinion that scholarships and chairs on international relationships are not feasible partly because of the expense necessary for the establishment of the chairs, and partly by reason of the question of legislative jurisdiction as between the provinces and the Dominion. If scholarships and a chair in even one university would do anything at all to prevent war, I think we could very well afford it because we have spent huge sums and are still spending very considerable sums on defence. I do not agree that we cannot afford to spend the money necessary for the establishment of international professorships and scholarships. The other reason against such establishment given by the committee is the constitutional difficulties in the way. So long as we have a Royal Military college the money for which is voted by this parliament, the college being under federal jurisdiction, so long as the federal parliament is voting sums of money for technical education and cadet training or military education in schools, I do not and will not agree that there is a constitutional difficulty. Besides that we have the Minister of Justice in the late government (Mr. Lapointe) and the Minister of Justice (Mr. Guthrie) in this government, as well as eminent professors of international law at McGill and Toronto universities, all saying that the constitutional difficulty can be got around. I think, therefore, we can conclude that whatever the reason is that we do not go forward with scholarships at the moment, it is not the reason given in the report. My opinion is that we are not interested enough, and the moment that we are, we shall find ways of spending money for scholarships on international relations.

The third recommendation of the committee deals with the extension of the library of the Department of External Affairs and the making of that library available to research students. That recommendation is an admirable one, and I think it may be the beginning of a sort of summer school to which students ol this particular subject can come and study. It may be that in the near future they may have the help of a librarian or professor, or someone who knows the work there.

Industrial Relations Report

The fourth clause of the committee's report is a pious wish for the success of the League of Nations Society in Canada. That is possibly better than nothing, but I am not so sure that it is much better than nothing, though I agree with it as far as it goes. That is all I care to say at the moment.

Topic:   INDUSTRIAL AND INTERNATIONAL RELATIONS
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LAB

James Shaver Woodsworth

Labour

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

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Motion agreed to. Railways and Shipping Report


RAILWAYS AND SHIPPING

MOTION FOR CONCURRENCE IN THIRD REPORT OF SELECT STANDING COMMITTEE


Hon. J. D. CHAPLIN (Lincoln) moved for concurrence in the third and final report of the select standing committee on railways and shipping, owned, operated and controlled by the government. Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, before this document is relegated to the limbo of things futile I should like to say a few words about its subject matter. The Canadian government is engaged in a rather large way in the business of transportation both on land and sea. On land the Canadian National Railways own and operate 23,668 miles of first track steam mileage in which are included 3,342 miles of eastern lines. Eastern lines are defined by the Maritime Freight Rates Act of 1927 as those lines lying east of Levis, Quebec. From July 1, 1927, the rates on those lines have been reduced by 20 per cent, and the government has made up the difference. The Canadian National Railways also operate 187 miles of electric lines. At sea they operate a coastal service on the Pacific coast of six vessels; three of them in the triangular service between Vancouver, Victoria and Seattle; two other ships are in the island service; two ships, the Dalhousie City and the Northumberland, on lake Ontario are operated under the name of the Niagara, St. Catharines and Toronto Navigation Company. They operate also two vessels plying between Chicago and Depot Harbour, a car ferry between Chicago and Milwaukee, a car ferry between Piotou and Mulgrave and two car ferries between Borden and Tormentine. The Canadian Government Merchant Marine owns a fleet of thirty vessels; a few years ago there were 60 vessels. The total tonnage at the present time is 239,170 tons. The Canadian National (West Indies) Steamships Limited operate twelve ships between Canada and the West Indies with a total tonnage of 60,592 tons. The government owns and will soon operate the Hudson Bay railway with a mileage of 510 miles. My purpose in reciting these facts is to acquaint the country with this great enterprise and its cost during the last twelve years. The amounts which I shall give are disbursements which have been made either in cash or credit by the Canadian people since April 1, 1919. I may say that at the moment those disbursements amount to $1,663,675,517.61. I have before me the details of this sum. In cash we advanced to the Canadian National Railways between April 1, 1919, and March 31, 1923, $389,743,789.34. From April 1, 1923, to December 31, 1930, we advanced $57,482,652.91, making a total of $447,226,442.25. We guaranteed the bonds of the Canadian National Railways to the extent of $569,609,027. Included in that amount are $77,000,000 of retirements. In addition to this new capital we have secured to the railways $216,207,141.67, by guaranteeing the interest in perpetuity on the Grand Trunk railway guaranteed and debenture stock. Moreover we have guaranteed as to capital and interest Canadian National Railways debenture stock, of which there now remains outstanding $30,559,114. There has also been purchased equipment, for which equipment trust notes have been issued and remain outstanding to the amount of $94,680,000. These notes are not guaranteed, but the conditions under which they were issued make the country entirely responsible for them if the railways continue to operate. Under the Maritime Freight Rates Act there has been paid to the Canadian National Railways $7,897,360. The requirements of the Canadian National Railways for deficits, acquisitions and betterments for the present, year are $120,000,000. I wish to say on that score that the amount estimated was $104,000,000. It was admitted, however, by the railway management when before the committee that although the estimates were prepared in April they were already $13,000,000 short. I think in view of present conditions it is a conservative estimate to place those requirements for the present year at $120,000,000. Furthermore we are pledged for $48,250,000 after this year's program of construction is completed; that includes branch lines, terminals at Montreal and the hotels at Saskatoon, Jasper and Vancouver. With regard to the Canadian Government Merchant Marine, we were told that if this business were wound up to-day it would have cost the people of Canada $81,222,769.90, without allowing anything for interest. The 'deficit on the Canadian Government Merchant Marine, if we assume that it will be this year what it was last year, will be $588,500. We invested in the Canadian National (West Indies) Steamship Company $9,804,715. The deficit on that service last year was $523,136.98, and it is fair to assume it will not be less this year. This makes no allowance for interest. Our investment in the Hudson Bay railway is something like $45,000,000, but since 1919 we have put into the Hudson Bay railway and terminals $31,756,417.


UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. SPENCER:

Does the hon. member think the last item should be debited against the Canadian National Railways?

Railways and Shipping Report

Topic:   RAILWAYS AND SHIPPING
Subtopic:   MOTION FOR CONCURRENCE IN THIRD REPORT OF SELECT STANDING COMMITTEE
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CON

John Thomas Hackett

Conservative (1867-1942)

Mr. HACKETT:

If the hon. gentleman

were listening he would not ask the question. There also has been spent on the ear ferry at Prince Edward Island $2,500,000. Under the Maritime Freight Rates Act there has also been paid $2,922,891 to railways other than the Canadian National. These different items make a total of $166,367,551,761.

Now, Mr. Speaker, I do not think these figures can be controverted; in fact I have culled them from the records of the company and of the department. But it is one thing to hear and quite another thing to comprehend them. We all know that there comes a time when language utterly fails us. We know that the symbols of speech when used to express either facts or phenomena that are beyond our personal experience do not convey very much to us. It will be recalled that after the Franco-Prussian war when France, the richest nation of Europe, was condemned to pay to Germany $1,000,000,000, or 5,000,000,000 francs, it did not mean very much to anybody, because 5,000,000,000, or even 1,000,000 francs, was so far beyond the experience of the, ordinary individual that it conveyed no definite idea. But when the gold began to move from France to Germany in carload lots, then the people understood what it meant, a carload was something within their grasp; then they realized the enormous indemnity which their country was called upon to pay.

This is the difficulty which confronts one when he attempts to explain something that is beyond the experience of his audience; it is the difficulty of the schoolmaster; it is particularly the difficulty of the clergyman. Who has not listened to laboured efforts on the part of clergymen attempting to describe the celestial sphere, or the beatific vision, or the deity or something else that has never been heard or seen? I recall once hearing a clergyman say in an attempt to describe the endlessness of eternity, that if a mountain which rose high above the plain were worn down level with it by the brush of a swallow's wing which passed over it once in a thousand years, then eternity would only have begun.

I think the Canadian people find themselves in a somewhat similar difficulty when attempting to comprehend, to understand, to grasp the full meaning of the indebtedness that has been placed upon them in the last twelve years. When one is confronted by this difficulty he resorts to indirect and possibly to inadequate means; he resorts to comparison, to anything that may illustrate, even indirectly, the point which he is trying to make. With that end in view may I point

out that in the first forty years of confederation we added to our national debt at the rate of only $7,000,000 a year, so that on the fortieth anniversary of confederation we had added but $280,000,000 odd to the original obligation. Yet during the last thirteen years we have added to our national liabilities something like $130,000,000 a year for the purposes of transportation alone. For the last year of which the record has been completed the total expenditure of the government of Canada for all services was but $383,000,000, including something over $25,000,000 of capital expenditures. Yet the Canadian National Railways alone-and I may say to the hon. member for Battle River (Mr. Spencer) that a few moments ago I was not speaking exclusively of the Canadian National Railways, I was speaking of the venture in transportation on land and on sea, of the Canadian government-yet the Canadian National Railways alone spent last year, not $380,000,000 which the nation spent to carry on its work, but $421,071,409. The total pay-roll of the government of Canada in all services was but $90,808,425.71, whereas the Canadian National Railways paid out in Canada alone $159,675,000 for wages. The total number of employees of the Canadian government last year was 44,000, of the Canadian National Railways 100,678. The carrying charges in the form of interest on the funded debt due from the Canadian National Railways to the public at the end of this year will be $60,000,000, and in 1919 it was but an insignificant figure. On the eve of the war the total expenditure of the government reached the unprecedented figure of $144,000,000 a year. Yet the railways required from this country in new capital in 1929, $144,670,459 and $148,000,000 in 1930. I have cited these figures not for the purpose of arguing that any or all of these amounts have been improperly spent. I am attempting merely to make the point that the business of transportation as carried on by the Canadian National Railways is a far greater business in dollars and cents, in enterprise, in salary and in number of employees than is the business of administering Canada itself. And what precautions have we taken, as a people and as a parliament, that this administration be carried on as it should be? When moneys are spent by governments they are very carefully scrutinized; estimates come before the committee of the whole and sometimes hours are spent in discussing just how a few hundred dollars should be spent. Very frequently one avails himself of that opportunity to discuss how a few hundred dollars have been spent. When ways and means reso-

Railways and Shipping Report

lutions come before parliament they are debated very carefully, yet when we called into existence the Canadian National Railways the very first thing we did was to kill the watch dog. By the statute which brought the Canadian National into existence we eliminated any interference or supervision by the auditor general, who is sent into every department of government to scrutinize, to check up and to certify as to the exactitude and propriety of every cent of expenditure. Yet when it came to the Canadian National Railways; in which we have billions of dollars invested, we utterly failed to exercise the most elementary prudence.

When we created this vast corporation, which constitutes the greatest mass of property brought under centralized control in Canada, and one of the greatest masses of property subject to unified control in the world, what precautions did we take? We put it into the hands of a manager, and over that manager we put a board of directors. Who constitute that board of directors? Honest gentlemen? That is conceded. Honourable gentlemen? Oh, yes. Good railway men? I am not certain how many of them know a hay rake from a hand car. What qualifications have they for the high office which they hold? There may be some exceptions but many of them have not, either by experience, by training or by aptitude the necessary capacity or opportunity to protect the country's purse. In my humble estimation if there is one thing more futile than the board of directors of the Canadian National Railways-more futile, be it understood, for the purpose for which directors are supposed to exist, which is to direct, to control, to supervise and to safeguard the interests of the shareholders, who are the people of Canada-it is this select committee on railways and shipping which, in a few short sittings, is supposed to check up the millions of dollars annually spent and make a report on the actions of the management and the board. If it were not so tragic it would be amusing. That a people who pride themselves on their enterprise and who have taken their place in the sun should, in a matter of business, be so absolutely lacking in the elements of common sense is 'beyond comprehension.

Topic:   RAILWAYS AND SHIPPING
Subtopic:   MOTION FOR CONCURRENCE IN THIRD REPORT OF SELECT STANDING COMMITTEE
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CON

Charles-Philippe Beaubien

Conservative (1867-1942)

Mr. BEAUBIEN:

May I ask the hon.

gentleman a question? Was he restricted in any way before that special committee, either in asking questions or in making any inquiry he desired to make, even though he was not a member of the committee?

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CON

John Thomas Hackett

Conservative (1867-1942)

Mr. HACKETT:

We have gone on with this noble experiment, as it has been called

by some of its protagonists, for nearly thirteen years, and I submit that there are two or three facts which are absolutely incontrovertible. The first fact is that there is not in Canada sufficient business to maintain these railways in the state of efficiency in which they are operated at the present time. The second is that we cannot go on paying into the coffers of this company, to make up deficits, to acquire betterments and build extensions, a hundred to a hundred and fifty million dollars a year. The third is that the management has failed in the task which was allotted to it. The management was set up for what purpose? It came here to solve our railway problem. Has it done so?

Topic:   RAILWAYS AND SHIPPING
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?

An hon. MEMBER:

Yes.

Topic:   RAILWAYS AND SHIPPING
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CON

John Thomas Hackett

Conservative (1867-1942)

Mr. HACKETT:

Yes? Any hon. gentleman who thinks our railway problem has been solved may select for himself a place in either category, that of the innocent or the ignorant. Any man who has seen our debt increased by $1,600,000,000 in the last twelve or thirteen years; any man who has seen the dead weight imposed upon the people increased to $60,000,000 a year in the payment of interest on funded debt alone and who thinks a solution has been found does not commend himself, I submit, to the good judgment of the people of the country.

I admit that the service provided by these railways is good; I admit that the personnel, the equipment and the road bed have all been carried to a high point of efficiency. But I consider that the capital expenditures and some of the administrative charges have been injudicious, lavish and incurred without any regard to our needs or our capacity to pay. Show me a single venture in the Canadian National enterprise that has succeeded according to the rule of profit and loss. There has not been a single venture, be it the hotels, the triangular or the coastal service on the Pacific, the Canadian Government merchant marine, or the Canadian National West Indies service, that has yielded one cent of profit.

I know that my hon. friend who sits opposite, the hon. member for North Waterloo (Mr. Euler), has said forsooth that public ownership of public utilities has a greater and higher purpose than that of profit: it is service, and service at cost. I ask, at what cost? The hon. gentleman possesses a serenity which I admire; but he is also capable of talking with his tongue in his cheek; when he asserted the other day that he wanted service at cost, and then proceeded to throw the cost out of the window-

Railways and Shipping Report

Topic:   RAILWAYS AND SHIPPING
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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I do not think the hon. member is justified in making such a remark with reference to the hon. member for North Waterloo-

Topic:   RAILWAYS AND SHIPPING
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?

An hon. MEMBER:

Let him go on.

Topic:   RAILWAYS AND SHIPPING
Subtopic:   MOTION FOR CONCURRENCE IN THIRD REPORT OF SELECT STANDING COMMITTEE
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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

-and I must ask him to withdraw the statement that the hon. member "is capable of talking with his tongue in his cheek."

Topic:   RAILWAYS AND SHIPPING
Subtopic:   MOTION FOR CONCURRENCE IN THIRD REPORT OF SELECT STANDING COMMITTEE
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July 21, 1931