May 27, 1935

CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

The government would

take a lien on the equipment itself. The usual procedure is for the Canadian Pacific Railway or the Canadian National Railways to pay a certain proportion, frequently twenty-five per cent, of the cost of the equipment. Equipment trust notes are then sold on a fifteen year basis to cover the other seventy-five per cent, and the notes are paid off gradually over that period. Instead of following that method, it may be decided that the government will purchase the equipment and take back a lien which would be paid on the same basis as the equipment trust notes; instead of its being paid to the holders of the notes, it would be paid to the government.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LIB

William Daum Euler

Liberal

Mr. EULER:

In all probability the loan

would not be repaid for a period of say fifteen years?

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

We have not gone into

that detail, but I imagine it would be repaid on the same basis as the equipment trust notes. The railways would not like to be placed in a more difficult position with the

government than they would with the holders of equipment trust notes. So far as equipment is concerned, this bill is largely enabling legislation. We are providing different methods by which we can accomplish this end and the details will have to be worked out with the railways. With the exception of the matter which we have just been discussing, .which was suggested by the Canadian Pacific Railway, these matters were all suggested by the Canadian National Railways.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Ambrose Upton Gledstanes Bury

Conservative (1867-1942)

Mr. BURY:

I understand the effect of this bill is to enable the Canadian National Railways and the Canadian Pacific Railway to issue securities for the purchase of rolling stock and equipment and that there is nothing in the bill to oblige either railway to take advantage of its provisions. I should like to be confirmed in the further understanding that the decision as to the proportion of the money which will be allocated to the purchase of new rolling stock and to repairs will rest entirely with the railway companies. I assume that this decision will be determined by the repair facilities which the railway has. The city of Edmonton is particularly interested in any repairs which may be done under this proposal, as the shops in that city are all repair shops. The Northern Alberta Railway is operated jointly by the Canadian Pacific Railway and the Canadian National Railways, and its shops are all repair shops. I imagine I am correct in assuming that any decision in this connection will rest entirely with the railways themselves. The railways will first decide whether or not they will take advantage of the provisions of this bill and then make the allocation of the moneys as between the purchase of new equipment and the carrying out of actual repairs.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I think the hon. member has a clear grasp of the matter. The railways will not be forced in- any way to participate in this proposal, but I may say quite frankly that they are anxious to participate. I expect that there will be additional questions asked in connection with the shops, and if my hon. friend will permit I shall defer answering his question for the moment so that I will not be repeating myself unnecessarily.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I have three or four questions I should like to ask. First, from whom came the request for legislation of this kind? Did it come from the Canadian Pacific Railway, from the Canadian National Railways, or from the contract shops? I think we should know definitely who made the request for this legislation.

Public Works Program

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

The hon. member must have been out of the house when I answered the question, speaking from memory. Frankly, I was not too definite about it and I am not too definite now.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

That is one reason for my asking.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

The whole proposal started so long ago that I am not sure who really put it forward, 'but I have an idea that it originated with the equipment companies themselves, that they did some pressing to get the work. They had had no work for practically five years-for over four years certainly-and they proposed it. They discussed it with the railways and the railways on a certain basis were agreeable, the original proposal being that the government of Canada should pay one-third and they the other two-thirds over a period of years, because they felt that on that basis it would be economical for them to get this equipment. Since then this proposal, as incorporated in the bill, has been offered as a substitute and it is claimed by those who have looked into the matter and calculated the actual amounts, capital and interest on the investment, that in the long run the proposal is very much the same as the proposal originally suggested. At any rate, both railway companies are anxious to have it go through at the present time.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Is there any need at present for this equipment?

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Has not that been customary?

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

Of course there has always been a certain amount of borrowing but not to the extent that there has been recently. He was in my office and discussed the matter with me and I have a statement dealing with another point which I shall give to the committee in a few moments. He took the attitude that from an economic point of view so far as the railways are concerned this proposal is advantageous to'them. I said to him, "You did not make that perfectly clear to the corn-92582-195

mittee," and he replied, "I shall have another statement to submit to the committee clearing up the point." He said that he had answered offhand. He is now of a different opinion. The committee meets to-morrow and he can be asked that question; he will deal with it. Both railways, however, are of the opinion that this is an advantageous proposal.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I have been informed that it has been the practice of the railways on the North American continent to meet in conference from time to time and decide what amount of new equipment will be required and what proportion will be declared obsolete and scrapped. Is this proposal the result of any such conference?

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I have not heard of that.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I am informed that that is the practice, and if the proposal comes from the equipment companies I can understand it because, again, I am informed that at least in some of the American companies certain highly placed officials have financial interests in the large equipment companies and naturally desire as frequently as possible to secure new equipment. I think that we as Canadians and as a parliament ought to know very distinctly whether, as the minister says, pressure has come largely from the equipment companies. I take it that the proposal is primarily for new equipment rather than for repairs. What kind of new equipment is needed? Is it high powered engines and steel cars; what precisely is the type of equipment contemplated?

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I do not believe there is anything whatever in the suggestion which my hon. friend1 has made on the strength of information which someone has given him. I did say that the equipment companies proposed it originally and quite legitimately. After all, they had been doing a large business with the railways of the country and their business had gone to pieces; for four years or more they had done practically nothing. It seems legitimate therefore for them to look for business. The American equipment companies have nothing Whatever to do with it, and1 I do not believe there is anything in the suggestion that in some way the equipment companies got the railways to go into a deal which was not advantageous to the railways themselves.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
Permalink
LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I did not say that.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I do not say that my hon. friend made that charge, but from what he has said one might infer that those who gave him the information rather implied it.

Public Works Program

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

What I said was that the central association practically decides what proportion of stock will be required and what proportion will be declared obsolete.

Topic:   PUBLIC WORKS PROGRAM
Subtopic:   WORKS, 'UNDERTAKINGS AND GUARANTEE OP RAILWAY EQUIPMENT SECURITIES TO CREATE EMPLOYMENT
Permalink

May 27, 1935