November 3, 1919 (13th Parliament, 3rd Session)

L LIB

Arthur Bliss Copp

Laurier Liberal

Mr. COPP:

My hon. friend from Red
Deer and my hon. friend (Mr. W. F. Maclean) who say " hear, hear,'' may dry their tears of compassion for the widows and orphans in England, for if an examination were made of the company's books we should find that the stocks and bonds which were held perhaps by widows and orphans in the old days have been sold on the market in the last few years owing to the stress of war, and have been snatched up at a low price by gamblers on the stock market *who are now unloading them on the Government. Have we no compassion for the widows and orphans of our own Canada? How many times during the war, and more particularly recently, have our widows and orphans and those who have been left dependent on account of the war been knocking at the doors of this Parliament for as* sistance? What has been the Government's reply to them? Nothing can be done, but the widows and orphans in Old England
must be given $120,000,000 to help them out of a difficulty, to use the language of my hon. friend from Red Deer.
Another reason in support of this legislation was given by the President of the Privy Council (Mr. Rowell). Referring again to Hansard, I find he used these words:
I say to my hon. friend that to suggest that we should liquidate the Grand Trunk Pacific and to ascertain, when it is liquidated, the amount of obligations, is to suggest that one of the crowning achievements of Sir Wilfrid Laurter's political career, as he always claimed, should he discredited and the railway sold on the market.
The thought came to my mind as I read that argument, that if by a miracle the stone could be rolled away from the tomb and the late Sir Wilfrid Laurier appear in the flesh he would be as much surprised as any hon. gentleman in this House at the President of the Privy Council trying in impassioned eloquence to perpetuate his memory and carry out the ideals he stood for in his lifetime. What would have been his views on this measure I cannot say, but during his lifetime, so far as I have been able to follow his career, he had but one aim both in business, in politics, and in his spiritual life, honesty and straightforwardness characterized him in all his business dealings. His whole political life was spent on behalf of the interests of the people of Canada, and in his spiritual life he followed the Light as he saw it. Therefore, I am inclined to think that if he were here to-day he would set himself four-square against this legislation, because I think he would see, as we see, that this Government is attempting to force through Parliament-legislation which is against the interests of the common people of the country.
Another reason why we should adopt this legislation was given by the Minister of Railways. I had not the opportunity of being present when he spoke, but I see by Hansard that he said- that the taking over of the Grand Trunk and incorporating it in the national system, of railways would be of advantage to the Intercolonial railway. Let us just examine that argument. If I understand the English language at all, it is the intention of the Government to form one great system of the Grand Trunk and its subsidiaries, together with the Grand Trunk Pacific, the Transcontinental and the Intercolonial. If that be so, of what-advantage will it- be to the people of Canada if the Intercolonial pays and the Grand Trunk does not pay, or whether any one unit of the system prospers at the
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expense of the rest? It would simply be taking money out of one pocket and putting it in another. So the long and laboured argument of the Minister of Railways made the other evening on that point is without any foundation whatever. He also said that at present the Intercolonial is forced in winter to carry western Canadian traffic to the ocean ports of Halifax and St. John at a loss, because otherwise the Grand Trunk would carry that same freight to Portland at a lower rate. Now what must happen when the Government owns and operates the Grand ' Trunk? It will mean that freight from the West for the seaboard will be carried to Portland instead of to Halifax and St. John. What becomes, then, of the Government's boasted loyalty to the ports of Halifax and St. John, when freight that might have gone to those ports is diverted to Portland in the interests of the National Railway system? The freight will naturally take the shortest route, and will go to a foreign port in the winter instead of to St. John or Halifax.
Still another reason was given why we should take over the Grand Trunk. We were told that the credit of the Dominion would be adversely affected if the Grand Trunk was forced into liquidation. In reiply to that, I can only repeat what I said a few moments ago in regard to stocks and bonds held in England. Surely it is not necessary for the people of Canada to load themselves down with the liability the taking over of the Grand Trunk will involve, simply for the sake of maintaining the credit of Canada in the eyes of financial men in England. There might be some reason in that argument if the taking over of that road did not involve such huge liabilities, but those liabilities do not stop at a few hundred thousand dollars but run up into the hundreds of millions of dollars. In spite of that, the Government asks us to take over the Grand Trunk to maintain the credit of the Dominion in the eyes of the Mother Country.
Another reason given was that if we did not take over the Grand Trunk another great railway corporation in this country would take it over.
Much has been said in the course of this debate concerning the attitude of the Canadian Pacific railway. I do not think, Mr. Speaker, that it is necessary for me to affirm that I hold no brief whatever for the Canadian Pacific Railway Company. I know nothing about their intentions or beliefs, but I am constrained to say that while the Grand Trunk Railway system has been in financial difficulties for some years, until

now I have heard nothing of any attempt on the part of the Canadian Pacific railway to open negotiations with a view to securing control of that system. We have some evidence in support of this assertion. I grant you it is not absolutely unquestionable evidence, because we are all doubting Thomases to a certain extent and cannot always credit everything we hear and read. But we have the very direct and emphatic statement made, by the president of the Canadian Pacific railway a few nights ago in Montreal, when he was speaking in furtherance of the Victory Loan campaign. He informed the people of this country that the great Canadian Pacific railway had never contemplated or considered the possibility of attempting to acquire the Grand Trunk, which wrnuld be of no advantage to the system of which he was the president. Indeed, Mr. Speaker, knowing what little I do of that great corporation and the officers who direct its affairs, I should be inclined to think that they would rather do as they are doing now, namely, buying Victory Bonds at five and a half per cent interest from the Government and taking the securities of the Dominion of Canada and loaning the money to the Government to carry on this railway enterprise that they are putting through this House to-day. The manage'-ment of that great concern realize that it is far better for them, from the money-making standpoint, to operate their road in competition with the world, and when they make their money to hand it over to the Government and take Canada's securities bearing interest at five and a half per cent. I think, Sir, that my hon. friends opposite are merely putting up straw men and knocking them down with considerable ado when they attempt to introduce the Canadian Pacific railway into the discussion of this subject, and to express altogether unwarranted fears . that that great corporation will take over the Grand Trunk to the detriment of the country. The question whether or not the Canadian Pacific Railway Company requires this road is one that does not in the least perturb me, and I do not believe that the people of the country have any fear that they would attempt to acquire it. The only tangible and serious reason that the Government have advanced for taking over the road is that of necessity. They say that it is essential to acquire the road in order to complete their transcontinental sytem so that the system may be of the highest advantage to the people. I do not know just all the connections the Grand Trunk Rail-

way system has, nor have I any precise knowledge as to what advantage will accrue to the Transeoptinental system as a whole by reason of this undertaking. To be perfectly fair, however, I must admit that if any substantial benefit can be proved there is some argument in defence of the acquisition of the road. But we must consider all the surrounding facts in connection with the whole matter. The Grand Trunk Railway Company in 1903 entered into an arrangement with the Government of that day for the building of the Transcontinental railway divided into two parts -one was the Grand Trunk Pacific from Winnipeg West, and the other, the Transcontinental from Winnipeg East, having its terminus at Moncton. They entered that contract after very careful consideration and with their eyes wide open, and they must have realized the extent of the obligation they were undertaking. This work was carried on till 1911 when present Government took office. Shortly after the completion of the roads the Grand Trunk Railway Company at once threw up their hands and said they could not operate them. Now, if the Grand Trunk, with its experience of fifty or sixty years of railway operation in Canada, found themselves, with the Grand Trunk Pacific in the West and the Transcontinental in the East, unable to operate their system as a paying proposition, the question naturally forces itself upon us, how do the Government expect to take exactly the same lines and make them pay? If the Grand Trunk, with their wealth of railway experience, could not do it how will the Government do it? As a matter of fact, the company absolutely threw up the sponge and refused to attempt the operation of the road, and it strikes me that there is very flimsy ground for argument on the part of the Government that exactly the same railway system, with all its branches and terminals, which the (Grand Trunk found it utterly impossible to make a profitable enterprise, will be operated on a paying basis by the Government. Now, I submit, Mr. Speaker, that all the facts in connection with this proposition should be ascertained and made public, and before the country is pledged to this enormous undertaking it should be proved beyond the slightest possibility of doubt that the acquisition of the road will not only be a means of assisting the Grand Trunk Pacific and the Transcontinental but that it will help to put the entire Government system of railways on a paying basis, and that as a result no incubus will be placed on the shoulders of the Canadian
people. That is the only fair ground for the Government to take in attempting to acquire this road. The railways should be made to pay and not create a deficit year after year. I venture the assertion that if not all, at least a large number of- hon. gentlemen supporting this measure do not fully realize the liability that we are assuming. We on this side have sought for information. I do not know what private information the Government have vouchsafed their followers, but from what I can gather from Hansard no two statements byministers have been identical in regard to the liability we are undertaking at this juncture and until we have absolute knowledge in that respect and know that this legislation will not impose a financial burden upon the country, then I say that it behooves every hon. member to vote circumspectly and not be led blindly to support this measure merely because it has been introduced by the Government. Surely we ought to know exactly what our obligation will be. But instead of getting that 'information. my hon. friends opposite are brought blindly to the standard oi the Government and will support this Bill whether it is a proper solution of our railway difficulties or not.
The question has been asked: Why the
great haste? My hon. hon. friends opposite say there has been no haste, that this has been in the air for sometime; that the negotiations have been proceeding and that therefore there has been no haste. But that does not bear out the statement made by the hon. the President of the Privy Council (Mr. Rowell) the other night in reply to my hon. friend from Shelburne and Queen's (Mr. Fielding) when he said that the reason why they wanted to put this Bill through this session was that if it were delayed the people of the country would become aroused. Why? I grant you there are occasions when the people become aroused unnecessarily and if they had not become aroused unnecessarily in 1917 hon. gentlemen would have not been in power to-day to force this measure through Parliament and to impose on the people this awful burden. But after all it is pretty safe to trust the people and instead of rushing this measure through Parliament in such great haste it would be well to allow this matter to rest and to let the people have an opportunity of considering it and realizing what their responsibility is. It would be well for them to realize that we are placing upon their shoulders a larger obligation than the country had prior to 1914. We are placing upon the shoulders of the people an added

debt of anywhere from $600,000,000 to $700, 000,000. My hon. friends say: We do not want the people to understand the situation or they will become aroused and their attitude will be changed if we wait until another session of Parliament. The people would become aroused and their feelings would be reflected in the votes of their representatives. Necessarily the Government are afraid to have the people speak as they should speak on this question as well as on many other great questions that come before this Parliament.
I said a few minutes ago that I believed there was a very large percentage of hon. members supporting this measure who did not realize, or know, what the liability of the people will be under the measure which they say they are loyally supporting on this occasion. I tried my best here one evening to get a statement with regard to that liability from the Government. I interrogated the President of the Privy Council who at that time had charge of the measure in committee. After he had beclouded this issue hour after hour, telling us about the guaranteed bonds, the preferred stock, the common stock, the guaranteed stock apd all the other kinds of stocks, I said to him: "If you were going to draw your cheque to pay all the liabilities that Canada is assuming under this measure, what would that cheque amount to?" He said "I cannot tell." Then he referred to the amount of stock that was to be arbitrated upon. I said "Leaving out of consideration altogether the amount of stock that must be left to arbitration under this agreement, what will the liability amount to?" He said "Then, there is a question of the $60,000,000; I cannot tell exactly; it may he large, or it may he small." I said "Give as nearly as you can what the exact liability will be," and he gave it. I took down the statement of the liability as given to me and it will be found in Hansard. The total, as given by the President of the Privy Council, amounted to $527,931,074.32. Now that is outside altogether of the $180,000,000 which is the par value of the stock that is to he arbitrated upon. What the result of that arbitration will be I cannot tell and my hon. friend the President of the Privy Council naturally could not tell. But the whole liability taking the $180,000,000 at par will amount to $707,931,074. Therefore I feel that I am well within the mark when I say that this liability and obligation which we are laying upon the shoulders of the people will at least be between $600,000,000
and $700,000,000. Would the people of Canada, if they knew the facts, really support such a measure to place upon their shoulders an additional liability of between $600,000,000 and $700,000,000? I do not believe they would. Would they assume that debt for the satisfaction of enabling the Government to say "We own the greatest mileage of any railway corporation in the world?" They must realize that this enterprise has been a losing speculation from the very start. Before we undertake this new responsibility it is only fair that we should halt, consider and realize what it means to the country to place this additional burden upon the shoulders of the people.
The ex^Minister of Finance (Sir Thomas White), in the statement he made to this House when the resolution upon which this Bill was founded was in committee said: "We grant that this is a great liability but we must realize that it is only a marginal liability." That is a mere play upon words. The man in the street must understand it. Although this may be a marginal liability, it means that we must pay the interest for five years, now that the-Bill has been .amended, or in perpetuity on this whole amount. While it may be a marginal liability and we may never be called upon to pay more than the interest, (nevertheless the liability is there and the people must he responsible for the annual interest on this huge amount of money in addition to all other amounts to which we are obligated and eventually they must pay this amount out of the treasury of Canada to the Grand Trunk Railway system or whoever owns the stock and bonds when that payment is made. Our hon. friends say that they have based then-whole case, that they have drafted this Bill, are putting it through Parliament and are acquiring the Grand Trunk railway system, upon the recommendations contained in the Dxayton-Acworth report. If that is so, and if they are as particular in carrying out the terms of the report as they profess to be, immediately they secure control of the Grand Trunk they must expend $51,000,000 for betterments and improvements before the railway is in a position for successful operation. Let us look at that report for a moment. We will find1 on pages 33-34 a statement of the amount that must be expended for betterments and equipment and the commissioners wind up by saying:
Putting together revenue and capital expenditure, we find that the Grand Trunk railway, in

the opinion of its own officers, requires over $51,000,000 spent upon it to put it in a Position to meet the requirements of its to-day's business. We see no reason to expect that under existing conditions this neecssary money will be provided.
To put that road into a proper operating condition the Drayton-Ac-worth report s-ays that there must be an expenditure of $51,000,000
That at least is not a marginal liability; that money must be raised and taken out of the revenues of the Dominion and placed at once in betterments and improvements of that railway to bring it up- to the standard where it will make effective the very reasons given by the Government for taking the system over at the present time. Naturally, the next question one would ask is, what .are we getting for this liability we are assuming? In other words, what is the system really worth? There can be only one answer and that answer must be given in a straight businesslike way. The only straight businesslike way to find the worth of a railway is to take stock or an inventory of the physical assets of the road- the condition it is in and the state of the -cars, the engines, and all the equipment of that road; and upon a valuation of it find out what the assets of the road are worth. When that is ascertained, what is the next thing to do? What would any ordinary commonsense business man do if he wanted to purchase the Grand Trunk system? He would go with railway experts of recognized ability in whom he had confi-[DOT] dence and inquire into and put in black and white what the assets of this road were worth. Having done that, what would his next duty be? He would-if the company were indebted to him as they are indebted to the Dominion Government-take the company's liabilities, and everything on .which they must be responsible. He would then deduct those liabilities from the physical value of the enterprise and the balance would be the amount that was due to the Grand Trunk system. I tell hon. gentlemen opposite that has not been done, and until it is done you cannot get the proper value or the proper worth of this system. That is the only fair, reasonable and proper course to follow and that is what is suggested by the amendment of my hon. friend (Mr. Fielding). We must have this information, and we must get it in a reasonable way, before wq, as members of this House, can honestly cast our vote in support of a measure such as this. I contend we have not at present that information upon which we can base a proper opinion and acting
upon that opinion cast our votes intelligently in this matter.
Having pointed out to the House the financial burden this transaction means to Canada and to the people who have to pay the taxes and meet the interest on this obligation, I am naturally brought to the question of the present financial situation in Canada. Hon. gentlemen have a pretty good general knowledge of what this financial situation is; but the people of the country have not the same general knowledge. The financial standing and the debt of Canada, and the obligations this country has to meet have been discussed many times in this House and in the press, but it is only discussion after all. To-day, we are fortunately in a different position, and for the first time,, so far as I have been able to gather, we have an authoritative statement of Canada's financial situation made-not by a member of Parliament merely, not by any politician, not made by a Minister of Finance who politely glosses over some of the Government's shortcomings-but made
under oath as to what our financial burdens are at the present time. The Chairman of a Special Committee that has been sitting for the last four or five weeks thought it the proper thing, in reaching findings and coming to conclusions regarding the matter submitted to that committee, to have a financial statement presented and he called the ex-Finance Minister as a witness. That hon. gentleman came there and made his statement under oath. He told us that the gross debt'of the Dominion was far above $2,500,000,000. He estimated what the assets were and placed them against the gross debt and then told us that the net debt of the Dominion a few months ago was $1,950,000,000. He also told us that we were indebted to the banks to-day to the amount of $225,000,000 on short term notes; and that the sum of $300,000,000 expected to be derived from the Victory Loan, now being floated would be practically all used and would go to pay our present short term indebtedness to the Canadian banks. The ex-Minister of Finance went further: he told us that between now and the 31st <of March, 1921, the Domiilion would be forced to borrow for capital expenditure alone, outside of the ordinary revenues required to meet ordinary expenditure, a sum of at least $800,000,000. That, Sir, would bring the gross debt of Canada-taking the hon. gentleman's own figures, and provided they are not swollen by larger amounts, which I am forced to

believe will be the case-on 31st March, 1921, to $2,750,000,000. Now, just as an illustration and a comparison, let us go back to the year 1914. Our net debt then was about $350,000,000 but it has since been increased to $2,400,000,000. Deducting the available assets it shows we have increased the public debt of Canada in six years by $400,000,000 per year, or over a million dollars per day. Yet hon. gentlemen opposite, and those who are responsible for this measure, lightly talk about assuming an added burden of $700,000,000 and treat it as lightly as though it were -only 700,000 cents. I may be over-pessimistic but I realize what this awful burden upon the people of Canada means, and I protest sincerely and in the strongest manner possible against this Parliament adding to the present financial obligations of the Dominion a further sum of seven or *eight hundred million dollars to satisfy a few gentlemen who are ambitious to unload their stock and obligations upon the people of this country in the interest of the English stock and bondholders of the Grand Trunk Railway Company.
I want to refer for a moment to the question of public ownership. A great deal has been said during the course of this debate about public ownership and private ownership. I gather from the remarks of hon. gentlemen opposite that they wish to place upon members of this side of the House the responsibility of being opposed to public ownership. Well, Sir, if the question of public ownership was involved in this issue I would be very glad to grapple with it and to take what I believed to be a proper stand upon it, just as I take what I believe to be a proper stand on the question now before the House. But there are two kinds of public ownership and of private ownership. There is a vast difference between the public ownership and operation of a tram line, an electric light plant or a telephone system in a city, town, village or municipality, and . the public ownership and operation of a transcontinental railway with twenty-two thousand miles of rails and thousands upon thousands of employees. I contend that the operation of railways by the Government has not proved successful. I regret to have to say that, Sir, because I have always been in favour of the operation of the Intercolonial railway as a government-owned system. At the time of Confederation it was promised to the people of the Maritime Provinces that we should have this railway and that it should be owned and operated by the Government in the interests of the people of
tMr. Copp ]
that part of the country. But I am bound to say that during all this time the Intercolonial railway has not been so operated as to make it a paying proposition. True, in some years there have been fairly large surpluses, bub if we follow the railway statistics from the beginning of the operation of the road down to the present day we shall find that there have been more deficits than surpluses; moreover, no interest has been paid on the original capital expenditure involved in the building of the road. Who is to blame for that? The evidence that we have in connection with the Intercolonial is against government ownership of the Grand Trunk. We have had fifty years' experience in the government operation of the Intercolonial, under both forms of Government, Liberal and Conservative-yes, and we have had it under a Union Government, and God knows that the conditions have been worse under that Government than they ever were. One man said to me: "It was bad enough when we had a Tory Government or a Grit Government, but when you get the worst of both together, the common people have a mighty poor show." This combination, made up of bon. gentlemen, who, in their modesty, term themselves the very best of both parties, has failed to make the Intercolonial a success, and if I may be allowed to venture a prediction, Sir, we shall find that in the years to come they will make a greater failure of the operation of the system that they are now taking over and amalgamating u ith the railroads at present under Government ownership to make a transcontinental system. I say that they will meet with greater failure and that greater disadvantage to the people of Canada will be involved than was the case in connection with the operation of the Intercolonial.
Much has been said by hon. gentlemen opposite as to the responsibility for the present railway situation. I believe that no session of the House has passed since I first became a member of it without somebody saying that the Liberal party was responsible for this railway tangle. That assertion has been put forward many times during the progress of this debate, in strong and emphatic language. I do not propose to take up the time of the House in any attempt to refute these statements, but if I may be allowed I would like to refer to some remarks made in this House by the exMinister of Finance (Sir Thomas White) when he discussed this question. I think that the ansvrer which he gave to this argument is much better than any I could give.

Speaking of Canada's railway systems, lie said, Hansard, page 1111:
In the first place, I think every one in this House would be disposed to agree with the general proposition that Canada has been seriously over-built with respect to transcontinental railways. That is abundantly evident in the duplication of extensive and expensive lines which have been constructed during the past fifteen or more years. One has only to consider the situation from Winnipeg west t# the Pacific coast, or for that matter, from Toronto to Montreal in which three lines parallel each other /or great distances, almost within a stone's throw of each other, to reach the conclusion without doubt or hesitation that there has been most serious duplication in the construction of Canada's transcontinental railway systems. It is idle to inquire what political party, if any, is responsible for that state of affairs. It is also idle to inquire what share of responsibility should be borne by political parties, and I have said in this House before that a share of the blame, if blame is to be imputed, rests upon both political parties in this country.
The ex-Minister of Finance, who recently parted company with these same gentlemen who denounce members on this side and attempt to place upon them the blame and the responsibility in connection with the present railway situation, says that it is idle to talk in that way, because both political parties are equally to blame, if blame there be in regard to the overbuilding of railways and tire serious situation in which we find ourselves to-day.
I am not particularly familiar with the situation in regard to that part of the Transcontinental system known as the Grand Trunk Pacific, which extends from Winnipeg west. I am not here to say whether or not it was the proper thing for this country to build the Transcontinental railway; I do not know. But I do know this, Sir, that in the early part of the war, at the time when the United States remained a neutral country, we would have found it impossible to transport our troops, our ammunition and our munitions of war from the West through to the winter ports of Halifax and St. John had we not the Transcontinental railway to assist us in that great work.
If it cost $150,000,000, that amount was well expended in the assistance which it gave to the Government and the country in transporting troops and munitions during the first two or three years of the war.
May I be permitted for just a moment to refer to the effect that this propesition will have upon the ocean ports of the Maritime Provinces? I may be accused of being sectional, but I am prepared to accept that responsibility. We of the Maritime Provinces are possibly somewhat jealous of the few little favours that we have received
from the Government during the fifty years of Confederation. We have in the Maritime Provinces, two great natural ports in particular of which we are very proud and which we hope to maintain and develop as we believe they ought to be maintained and developed. A few evenings ago the Minister of Railways (Mr. J. D. Reid) referred to this matter, and the hon. member for Guysborough (Mr. J. H. Sinclair) asked him a question in regard to the operation of this road and as to the effect it would have. The answer made by the Minister of Railways was that in the operation of this system we must get the very best railway operating men possible, it does not matter where they come from, and this railway must be operated along business lines without political or other interference. That being so, if this system is to be operated in a business way by business men, by railway operators of wide knowledge and experience, what conclusion must we arrive at? If I may be allowed to repeat the illustration again, if it is going to cost more to take freight originating in any portion of the western country and coming down to Montreal, to Halifax for shipment from that port than to Portland, what must the business railway operating men say? They will say: We cannot take it to Halifax, we we will take it to Portland because that is a shorter haul and the cost will be less. That being so, the ocean ports of the Maritime Provinces must necessarily lose a large volume of the business, and the money expended by the Government in the development of those ports to date must be to a large extent rendered unnecessary as they will not be used, and those ports will suffer as a consequence. I realize that the operation of this road through American territory must of necessity draw trade away from the ports of the Maritime Provinces, and we shall find our produce, our products and our ocean traffic going through foreign country channels by the operation of this road, according to the statement of my hon. friend.
The Minister of the Interior (Mr. Meighen), the other night in quite a heated discussion, referred to this matter, and he made some suggestions or insinuations as to what was prompting the Opposition in opposing this Bill. May I refer to Hansard, and I have been somewhat at a loss, in reading this, to understand just what the minister means? Personally, I do not desire to engage in acrimonious debate or to make suggestions or insinuations in reference to hon. gentlemen opposite; nor do I

Topic:   QUESTIONS.
Subtopic:   GRAND TRUNK RAILWAY SYSTEM.
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