Mr. Speaker, the Government of Canada, in 1914, lent the Canadian Northern Railway $45,000,000, and took as security $40,000,000 of the common stock of that company, out of its total capital of $100,000,000. In 1917 the Government purchased the balance of the common stock of the company, namely, $60,000,000, at a price to 'be fixed by arbitration, the arbitrators being 'bound not to pay more than $10,000,000. The Government, by thus becoming owners of the whole of the capital stock of the. company, should become absolute owners of the property. But a considerable portion of the mileage comprised in the Canadian Northern railway was acquired by that company through the purchase of the stock, and in some cases only the majority of the stock, of other companies, which had built smaller roads, such as the Halifax and Southwestern, the Quebec and Lake St. John and the Great Northern of Canada.
The hon. Minister of Finance (Sir Thomas White) recognized this situation when he introduced the 'legislation in 1917 to purchase the balance of the Canadian Northern stock. Speaking of the mileage represented by subsidiary companies-Hansard, page 4807-he said that tfie stocks of these companies held by the public, in which Quebec people are interested, included:
Canadian Northern Quebec (including Great Northern of Canada and Northern Consolidated Holding
Company) for $2,405,400
Quebec and Lake St. John Railway. . 521,200
A further examination of this shows:
Quebec and Lake St. John Railway Stock.
The total issue of stock by that company is $ 4,524,000
Which is held by
MacKenzie and Mann interests $4,019,140
City of Quebec 220,500
English shareholders 152,800
Quebec people 131,560
The city of Quebec originally held $450,000 of this stock, for which it paid par, but surrendered 51 per cent of its holdings in .
1900 to London people, so as to help the company to obtain new capital.
Great Northern Railway of Canada.
Total capital seems to be 95,500 shares of $100 $9,550,000
Great Northern Common Stock.... $ 913,000Great Northern Debenture Stock. . 650,700
Canadian Northern Quebec, Common
Canadian Northern Quebec, Statutory
The holders are:
Northern Consolidated' Holding Company, Toronto $5,064,600
National Trust Compariy, Toronto;
British Empire Trust Company,
City of Quebec 200,000
Shareholders in. Quebec, Boston,
New York and other places 2 295,400
But, of the capital of the Northern Consolidated Holding Company, which holds in trust the majority of the above stock, only 45,759 shares are held by the National Trust Company. The paid up capital of the Holding Company being 61,815 shares, there remain 16,056 shares, which are held by people in Quebec, Boston and other places. These 16,056 shares are 25-97 per cent of the capital of the Holding Cqmpany, so they should he entitled to 25-97 per cent of its assets. Therefore, 25-97 per cent of the $5,064,600 of stock of the Canadian Northern Quebec, held toy the Northern Consolidated Holding Company, are the property of individual shareholders outside of the Toronto interests. This would amount to $1,315,200. If to this we add the stock held by the city of Quebec, $200,000, and that held by individual shareholders not in the Holding Company, $2,295,400, the result is $3,810,600. These figures prove that of the total stock issues of the Great Northern of Canada and the 'Canadian Northern' Quebec, amounting to $9,550,000 of paid up stock, representing the ownership of these .roads, no less than $3,810,600, or nearly 40 per cent, is the property of individual shareholders, outside of the Toronto interests. From the foregoing it would seem to be equitable that the city of Quebec and the individual shareholders who own the minority stock of the Quebec and Lake St. John Railway for $504,800, and of the Great Northern of Canada and Canadian Northern Quebec for $3,810,600, making a total of
$4,815,400, should share ratably, as stated in their /petition, in what the Government may pay or may have paid, tor the common stock of the Canadian Northern Railway, of which these roads now form part. Otherwise the minority shareholders should be entitled to a separate accounting by the Government, and share of annual profits for the mileage of the actual sections represented by their stocks, the mileage being about 500 miles.
It seems to me, Mr. Chairman, a 'very proper question to ask: The Government having purchased the majority shares of the Canadian Northern, why could not they have purchased the minority share for which the citizens and the city of Quebec subscribed? These shares, as it stated in the petition to which I have just referred, were purchased by private individuals and by the city of Quebec, and instead of acquiring them, the Government limited themselves to acquiring the shares held by Mackenzie and Mann. I submit, therefore, that the Government should give the most careful consideration to the request that has been made on several occasions for the purchase of this minority stock.
Topic: THE RAILWAY SITUATION IN CANADA.
Subtopic: STATEMENT BY THE PRIME MINISTER AS TO THE CONTEMPLATED POLICY OF THE GOVERNMENT.