HON. W. L. MACKENZIE KING.

[Stage Direction]
INTRODUCED TO THE HOUSE BY MR. Mckenzie and hon. mr. fielding.
Mr. SPEAKER:: I have the honour to inform the House that the Clerk of the House has received from the Clerk of the Crown in Chancery a certificate of the election and return of the Hon. Willi,am Lyon Mackenzie King for the electoral district of Prince, P.E.I.


Mr. D. D. McKENZIE:: Mr. Speaker, I
have the honour to present to you Hon. William Lyon Mackenzie King, member-elect for the county of Prince, Prince Edward Island, who has taken the oath, signed the roll, and now desires to take his seat.


Edgar Nelson Rhodes: Let the hon. member
take his seat.



PRIVILEGE-STATEMENT BY HON.

[Stage Direction]
J.	D. REID.
On the Orders of the Day:
-Hon. J. D. REID (Minister of Railways): Mr. Speaker, there has been brought to my attention, an article appearing in the Regina Leader of 20th inst. in which reference is made to an alleged meeting between myself and other members of the Government, and Sir William Mackenzie, Sir Clifford Sifton and others at Sir William Mackenzie's private car in Ottawa, on or about October 10. The intention is to endeavour to create the impression that the latter two gentlemen were in some way interested in, or consulted, with- regard to the Government's policy as to the acquirement of the Grand Trunk Railway system. Other papers antagonistic to the Government's policy have sought also to disseminate this idea.
I desire to say that the article in question is a false and malevolent fabricate n from beginning to end. There has been at no time, consultation, conference or any communication whatever, between the Government and either of these gentlemen, directly or indirectly, in any form or manner whatsoever, with regard to the policy of the Government or anything relating thereto. There was no such meeting as alleged, or anything beating the faintest resemblance to it.
Upon enquiry, I find Sir William Mackenzie was not in the city at that time nor for a considerable time before and after. The article ,is nothing more or less than-a disreputable attempt to malign these persons as well as the members of the Govern-
ment, and these and all other attempts to induce the people to believe that the persons referred to are in any tvay associated with, or interested in the Government's policy in this matter, are nothing but vulgar mendacity.

[Stage Direction]
On the Orders of the Day:
Hon. CHARLES MURPHY (Russell):: 1 desire to call the attention of the Government to a despatch which appears in this morning's paper and to ask a question with reference thereto. The despatch in question is a cablegram from Melbourne, Australia, purporting to give a summary of a report which has been made by Lord Jellicoe, and in the course of the message the following occurs:	[DOT]
The report declares that the naval interests, of the empire will likely demand within the next five years a strong far eastern fleet comprising vessels of the Royal Navy East Indian squadron and Australian, Canadian and New Zealand navies. The report suggests that each dominion and India and also Great Britain should hear the cost of vessels specially allocated for the defence of their own harbours. The annual cost of maintenance of the far eastern fleet is estimated at twenty million pounds sterling. Australia's share would he four million.
I would like to ask the Minister of Justice, who seems to be leading the House, if he has any information to give on this subject and if Canada is to be taxed in the way described.


Hon. C. J. DOHERTY (Acting Prime Minister):: The Government is not in possession of any report such as referred to, and I do not think the hon. gentleman need be apprehensive that taxation will be imposed on Canada because of any views that Admiral Jellicoe may entertain, or otherwise than by the action of the Canadian Parliament.



THE TARIFF-CANADIAN MANUFACTURERS ASSOCIATION.

[Stage Direction]
On the Orders of the Day:
Charles Murphy: I wish to' ask the Government another question. The newspapers stated yesterday that a meeting, conference or interview had taken place between certain representatives of the Government and representatives of the Canadian Manufacturers Association. I would like to know whether any demand has been made by that association for an increase in the tariff, and if so what reply has been made to that demand ?


Charles Joseph Doherty: There was no conference whatever bearing in any way on the tariff or any question relating to it.


Charles Murphy: Will the hon. gentleman state the nature of the interview?


Charles Joseph Doherty: The gentlemen desired to make certain representations to the Government with reference to what would, be, in their opinion, better methods to adopt in connection with questions affecting the high cost of living, and so forth. There was no reference to the tariff.


Charles Murphy: They referred to Monday's elections?


Charles Joseph Doherty: They did not mention them.



GRAND TRUNK RAILWAY SYSTEM.


[Stage Direction]
The House resumed the adjourned debate on the motion of Hon. Mr. Reid for the second reading of Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk railway system, and the amendment thereto of Mr. D. D. McKenzie.	'
Mr. F. S. CAHILL (Pontiac):: Mr. Speaker, very little new light has been shed upon this question since it was first introduced into the House, but I presume it is the intention of the Government, when we get into Committee of the Whole on the Bill, to furnish us with certain information, provided they have it.
Last night when the Minister of the Interior (Mr. Meighen) was speaking in reference to the attitude of the Liberal party on the Canadian Northern purchase, he said that the Liberal Administration of 1916 had advocated and supported a policy of arbitrating the value of the stock of that railway and its assumption by the country on the basis of arbitration. He pointed out that my hon. friend the leader of the Opposition (Mr. McKenzie) had stated that when they made the proposal to take over the road it was on the basis that not more than $30,000,000 should be paid for the stock. The Minister of the Interior (Mr. Meighen) also informed the House that the Government of the day loaned the Canadian Northern people $35,000,000-I believe the correct figure is $40,000,000-and that therefore the assets of the company were worth more than they were before this money was advanced to them. In other words, he argues that the more money the Dominion Government loaned to the company the more the stock of that company would be
worth, and therefore his Government was justified in paying $10,090,000 for what was described by the Drayton-Acworth report as worthless stock.
Much has been said, Mr. Speaker, during this debate, and also during the debate in the previous session, with regard to the railway policy of the Liberal party, which many hon. members opposite claim to be responsible for the present involved railway situation in this country. I have been looking up the figures on this question, and I find that during the period from 1896 to 1911-15 years, the total aid granted by the Liberal Administration to all railways in Canada was $48,000,000. That information will be found on page 436 of the year book for 1917. During the period from 1911 to 1917-6 years, the Conservative Administration advanced $37,000,000 by way of cash aid to our railways. In other words, during six years they advanced an amount within $10,000,000 or $11,000,000 of the total aid granted by the Liberal Administration during the much longer period of 15 years. Those figures will be found at page 413 of the year book for 1918. But it may be argued, Mr. Speaker, that it was not the system of cash grants which stimulated so much railway construction, but the guaranteeing of bonds. I find that for the period from 1896 to 1911 bonds were guaranteed to the extent of $85,000,000 by the Liberal Administration; but between 1911 and 1918 $103,000,000 worth of bonds were guaranteed by the Conservative Administration. So that there is apparently no foundation for the statement made by some hon. members opposite that the present railway position is a legacy from the Liberal party.
During the period from 1896 to 1911, 10,000 miles of railway were constructed under the Liberal Administration, or an average of 670 miles per year. Between 1911 and 1917 under the Conservative Administration 13,000 miles of railway were built, or an average of 2,100 miles per year. During the period between 1896 and 1911 the colonization of the country kept pace with our railway construction. According to the Drayton-Acworth report there were 285 people to every mile of railway in this country in 1896. In 1911 the report gives the population at the same figure, but it goes on to say that in 1917 there were only 185 people to every mile of railway. So that the Conservative Government during the period between 1911 and 1917 apparently forgot about colonization and embarked on the policy of guaranteeing bonds and giving cash assistance to stimulate railroad construction all through the country.

Now, Mr. Speaker, much has been said about the folly of the construction of the Grand Trunk Pacific and the National Transcontinental. I was in Saskatoon in 1905, and I remember survey parties of the Grand Trunk Pacific going through to Edmonton, running their surveys from the South Saskatchewan to where the railway was to be constructed to the North Saskatchewan at Edmonton, a territory com-, prising 300 miles of the very finest land, with practically not a settler on it. The Grand Trunk Pacific opened up that territory. The Transcontinental in the East also opened up the magnificent territory running through the province of Quebec and the province of Ontario. But again the policy of this Government was to discourage settlement in that territory, and that discouragement, coupled with the bad railway service, has made it impossible to induce settlers to come in, although there are some 15,000 inhabitants in the territory in- the province of Quebec immediately east of the Ontario boundary living in a very fine country, and it would be an exceedingly prosperous country if the people had proper railway facilities to enable them to take out their products and develop the land.
We are also told, Mr. Speaker, that the Grand Trunk under their agreement with the Grand Trunk Pacific and the Transcontinental were unable to live up to its terms on account of the high cosit of the Transcontinental. I believe the Transcontinental was estimated to cost in the neighbourhood of $60,000,000 odd. The final returns show that the cost was in the neighbourhood of $160,000,000. Well, Mr. Speaker, if this road did cost $100,000,000 more than was originally estimated, could not an arrangement have been made with the Grand Trunk and the Grand Trunk Pacific to assume the liabilities of the road on the basis of the first estimated cost of $60,000,000 odd? If the Grand Trunk Pacific were made to live up to the original agreement with the Government, an adjustment might have been- made on the basis of what they considered in the original estimate was the fair cost of the road. The Grand Trunk then in turn could have been forced to live up to their agreement with the Grand Trunk Pacific in regard to the bonds of the latter which they guaranteed.
No reason has been given why the Grand Trunk was not made to live up to its agreement in respect of the Grand Trunk Pacific. Hon. gentlemen tell us that it would be impossible to live up to that agreement. Well, if it would be impossible to live up to that agreement why do the Government pay $60,-

000,000 to the Grand Trunk Railway Company before they undertake to make that company live up to its obligations in respect to the Grand Trunk Pacific? But they had no intention of asking the company to live up to that undertaking; the Minister of the Interior, who was in charge of the negotiations, states quite clearly that he has no such intention. In his letter of July 11, 1918-which, he tells us, is the basis of the negotiations which we are now asked to complete-he said:
The Government to take over the Grand Trunk Pacific Railway and branch lines and the Grand Trunk Railway Company; to acquire all assets, and to assume all obligations of both "ompanles.
There is absolutely no question of asking the Grand Trunk Pacific to live u,p to their obligations or the Grand Trunk to live up to its obligation in regard to the Grand Trunk Pacific. He goes on to say that the Grand Trunk could not do so, but in the very next breath he says that although the company are unable to pay the $97,000,000 which we claim they owe us, we will pay them $60,000,000 before we attempt to arbitrate the amount of our claim against the Grand Trunk. There is no foundation whatever for the purchase on the basis of inability of the Grand 'Trunk to meet their obligations in respect of the Grand Trunk Pacific agreement; at least, no argument to that effect has been substantiated here.
A fairly good argument, however, has been put up by the ministers in charge of this Bill on behalf of the Grand Trunk. When we refer to the Drayton-Acworth report, which points out that some thirty millions should have been spent on maintenance, up-keep and betterments, and ask what condition the Grand Trunk Railway system is in, they tell us: "Well, the president of the company says that the road is in first-class shape and that the company are able to pay dividends." But the report of these experts, on the basis of which the Government are attempting to purchase this road-and that is the only advice which they have on the subject-states that the road is not in good condition and that it is not in a position to pay dividends. Yet members of the Government tell us, when they bring the Bill before the House, that they have the assurance of the President of the Grand Trunk Railway Company that the road is in first-class order. In -other words, the man who is selling them the gold brick says that it is pure gold,
Mr. Speaker, in Committee on the resolution, I and a number of members on this

side'attempted to get some information from the Government, and the reply that we received was very much like the speech of the Minister of the Interior last night in, which he gave absolutely no information, said very little, if anything, pertaining to the subject, and did little more than attempt to ridicule members on this side for asking for information. On page 41 of the blue-book I find that the total funded debt of the Grand Trunk undertaking amounts to $448,000,000. Add to that the $60,833,000 of 4 per cent guaranteed stock, which has practically become a funded debt, and we get $509,000,000; and if we add to that the current liabilities we get a total of $579,885,000 as the capital sum on which we are agreeing to ipay interest if we acquire this railway system. I am not giving these figures as correct, because no information is available that we can speak of as being correct; but I ask the Government to state what the exact figures are, if these are not correct.
In answer to a question, the Minister of Interior takes up the blue-book and says: "Can the members not read the statement which appears here? There are two sides to it; the totals on both sides are the same." But he does not tell us what the liabilities are, what the assets are or what the totals are. He states that there are notes payable, liabilities amounting to $35,000,000 and another item of current liabilities amounting to $22,000,000; and he says that there are current assets to offset that amounting to $51,000,000. I ask for the details of that item of current assets. Surely a matter of forty or fifty millions is of sufficient importance justify even this Government in satisfying itself whether or not these are real assets. If these assets are liabilities of the different companies that we are taking over
liabilities to the parent company-certainly they would not be a liquid asset in any sense of the word. That is one of the items that I would like to have cleared up.
The Minister of the Interior tells us that the Grand Trunk statement is the statement to accept with regard to the liabilities that we are assuming. But when we assume the liabilities under the Grand Trunk purchase we are assuming all the liabilities of that undertaking, including the liabilities of the Grand Trunk Pacific and the other subsidiary companies; and that is not shown in the Grand Trunk statement. We should have a statement of the assets and of the liabilities of the whole undertaking so that the people will know what this legislation means and what it amounts to.
The President of the Council (Hon. Mr. Rowell) made what I thought was a significant remark in his address the night before last when he said that we must get these railroads all together; that we have one end in the West and another end in the East and that for operating purposes it is absolutely necessary to get them all in with the Canadian National, and that if at any future time we hand it over or dispose of it, it will be a more valuable asset with the Grand Trunk included. Now, that is just what I fear; that when the Government make a huge loss in operation they will hand the system over to some persons, and those persons are likely to be the present operators of the Canadian National railways -the Mackenzie and Mann crowd. The minister said that the national railways should be efficiently managed, and wThen I asked him if they were efficiently managed, he said that they were. But it is common knowledge to any one who has anything to do with the Canadian National railways that they are not efficiently managed. I doubt whether one manufacturer out of ten in Canada would route his stuff over the Canadian National railways in preference to the Canadian Pacific if he had the choice. They are not efficiently managed; they are managed purely and simply for the people who are controlling them-the Canadian Northern crowd, Mackenzie and Mann and Lash and Hanna, who are selling supplies to this company, constructing lines for it and making profits out of it.
In answer to the member for Huntingdon (Mr. Robb) the Minister of Railways stated that in one year the deficit in operating the Canadian National railways has been $15,000,000 and interest charges $19,000,000, and that the Grand Trunk Pacific deficits and interest charges would be not less than $12,000,000, making altogether $46,000,000 that the Canadian people are out of pocket in respect of one year's operation of these systems.
I should like to know how much money is being made by the people who. are handling the undertaking, the people who have the privilege of buying the ties, rails and other supplies of all kinds for this undertaking and who are paying absolutely no attention to the management of the railway except so far as their own interest is concerned. . The condition of the railway has been allowed to run down throughout the country; it is getting in bad odour everywhere it is being operated, and even the operation of the Intercolonial is not as good as it was before it was taken over by the Canadian National railways.
Facing this condition, hon. members say that we must acquire the Grand Trunk.

There is only one purpose for taking that course. One of the ministers- said that it was the policy of the Government since 1911 to have public ownership and management of railways. I did not know that this Government had been in office since 1911; but apparently the President of the Council (Mr. Rowell) was quite satisfied with that -statement, and he said that it was the policy of this Government to own and operate the railways of Canada. But they all balk at the Canadian Pacific; they will not go so far as to acquire that railway. They are quite willing to go as far as building up a competing line to hand over to the Canadian Northern, but they will not go a step further. They are willing to pay any price for the Grand Trunk. If hon. members were honest in their advocacy of public ownership, the first thing they would want to do would be to get the railway at a reasonable and fair price. Prior to the purchase of the Canadian Northern by the Government $100,000,000 worth of unguaranteed securities was circulated. The Government would not furnish us with the information as to who held those securities, which were passed out to friends of Mackenzie and Mann before the purchase was made. The Drayton-Acworth report will tell you that there was against this road $100,000,000 worth of securities more than the road was worth; yet these hon. gentlemen tell us that it was in the name, and for the sake of public ownership that we must pay these exorbitant prices. When we come to the purchase of the Grand Trunk, the same thing occurs. The first thing they do is to advance $60,000,000 worth of stock to persons unknown, but it is intimated in the press that these people must have had knowledge from governmental sources, because the stocks were hound to advance as soon as they were guaranteed by the Government. They did advance, and there is no doubt that some people will, in less than a year make anywhere from thirty to forty million dollars out of this transaction. Why does the Government not reserve that for the people of Canada who are furnishing the money to acquire this railway? What reason is there for giving some people $60,000,000 before you attempt to set a price on the property by arbitration? As regards one item of $40,000,000 or $50,000,000, I do not know whether it is worth a cent or not, and that without taking into consideration anything of the value of the undertaking. We agree to pay the shareholders of the Grand Trunk $60,000,000, 
and then we agree to arbitrate the value, if any, of the property. We release them from their Grand Trunk obligation and from their National Transcontinental obligations, and we give them $60,000,000 and then arbitrate as to the value, if any, of the property. Just because they write across the cheque "for public ownership" the Government think they can issue a cheque for any amount they may desire. The Government are not satisfied with paying these exhorbitant prices; but in order that their friends may be safe, they appoint an arbitration commission. Does the report of arbitration come back to Parliament for the money to be voted? Not at all. The Government by Order in Council take the right to issue a cheque for whatever amount the arbitrators may decide upon. They give power to that arbitration to enable them to pay out to their friends money that Parliament would not give to the Government; that the Government would not dare to come to Parliament and ask the privilege off issuing cheques'for and of spending money without submitting their estimates to Parliament; hut in this case they purpose issuing a cheque for an unlimited amount without the sanction of Parliament. It looks to me as though there was something very urgent about this deal so far as the (Government of Canada was concerned.
The minister stated that the deal was finally completed after prolonged negotiations. The negotiations were cut off after July 11, 1918. The Chairman of the Board of Directors of the Grand Trunk Railway Company said that he did not understand the letter of the Minister of the Interior (Mr. Meighen), and he took it to the Prime Minister of Canada and asked for an explanation. The Prime Minister said that the letter meant the same offer as was made in February of that year, but in that letter there is this paragraph which might be construed differently:
Should the company desire, the guaranteed stock may he treated as an obligation in the same way as the company's bonds.
But the Prime Minister said that that did not mean anything and Sir Alfred Smithers, Chairman of the Board of Directors of the Grand Trunk said that it did not mean anything. The Prime Minister said that the offer was practically the offer made in February of that year, so that the transaction which was brought in the last days of this session was an entirely brand new transaction; it was a transaction based upon an understanding arrived at between Sir Alfred Smithers and the Minister of the In-

terior, an understanding of which Parliament and the country had absolutely no knowledge. There never before was any suggestion that these bonds would be guaranteed first and the value, if any, of the balance of the stock arbitrated afterwards. The suggestion was never made in the Dray-ton-Acworth report, and we are now asked, in the last days of a session that was called for another purpose, to sanction this purchase. The Government come down with a proposal on which they have absolutely no information. They do not know what liabilities the country is assuming; they do not know what the assets amount to; they have no idea whether the road is worth the funded debt or not, nor whether the stock is of any value or not. But they first give $60,000,000 worth of stock so as to make their friends safe before they attempt to arbitrate, and they tell us that they must get this road in order to complete a system with connections at both ends that will b- useful to their friends, the Canadian Northern crowd. The Minister of the Interior said last night that it was impossible to make a working arrangement, as suggested by Mr. Kelly, President of the Grand Trunk, between the Canadian National railways and the Grand Trunk Railway system. In the United States, there is not one railroad running from the Eastern States or from New York clear to the Pacific coast. There are five railways through the Western States, all of them with working arrangements with Eastern railways. There is not in the United States one line owned from coast to coast. Therefore, they are all under working arrangements, and why could we not have a working arrangement if it were in the best interest of the country? The Government were apparently very anxious to bring forward this matter as a public ownership proposition. I for one do not know that I would be very much opposed to public ownership of railways provided that the undertaking were managed by an efficient Liberal administration; but public ownership of railways managed by the present Administration with the assistance and connivance of the Mackenzie and Mann interests is something to which I am absolutely opposed, and I think it will be found that the country will he opposed to it too.


Mr. WILLIAM FOSTER COCKSHUTT (Brantford):: Mr. Speaker, before entering upon a discussion of the subject before the House, may I be permitted to extend my congratulations to the new arrival (Mr. Mackenzie King), who is in our midst today? He is a King from Prince, I am told, and we have now the satisfaction of seeing three gallant leaders on the Opposition side. It is a triumvirate of wisdom, because wise men come from the East, it is said, although they sometimes have the wisdom to stay in the West when they get there. We trust that under the guidance of these three hon. gentlemen the Opposition will see new daylight on the railway question.
I hope that the hands of the Opposition have not been tied by the amendment that has been moved. I understand that the hon. leader who has just taken his seat has full knowledge of the amendment, and if he has not I commend it to his early and serious consideration. He is a man who has long stood for the cause of labour and is recognized as a very high authority on many aspects of labour questions, and I could scarcely conceive him giving his full assent to a policy that excludes public ownership from the policies to be pursued in Canada in the interests of labour particularly. Coming, as I do, from a workingman's city, I know that public ownership has been one of the strongest planks in the labour platform for many years. Labour believes that public utilities of all kinds should be owned and operated in the interests of the people, and that appears to me to be a fairly sound plank in the platform of labour. It is several years since I gave my assent to the proposition of ownership by the people themselves of public utilities in the municipal, provincial and Dominion fields, and if there are profits accruing from the operation of these great utilities, which are really using the public resources, they should accrue to " the people who should own and operate these utilities. I think that principle is fairly well accepted now by the larger number of our public men, and of the people of Canada.	*
The Bill before us, Bill No. 33, for the acquisition of the Grand Trunk railway, is one of the most difficult and intricate that it has been my lot to endeavour to make a few remarks upon during my parliamentary career, and I do not blame the Opposition in any sense if they have not fully mastered what is contained within the four corners of the measure now before the House. I have done my utmost on this occasion as on previous occasions to fathom this railway question, and the few remarks I have to offer this afternoon are from the standpoint of a business man who is looking, I trust, to the best interests of Canada as a whole, and trying to see daylight through the ohaos that prevails in the



railway world at the present time. Canada embarked, not to-day, nor yesterday, but several years ago upon a somewhat reckless policy of building railways, and while it may be said that we have not got value for our money I am hopeful that in the long run the optimism and the business acumen that may have been displayed in the construction of these roads will not prove to be altogether wasted, but that the roads will eventually redound to the advantage of the country, and not only serve the people efficiently, but at the same time afford a return to the pockets of the taxpayers of the country who have to support these great undertakings.
The figures that have been presented to the House are so conflicting and confusing that I have had very great difficulty in ascertaining just what this Bill involves. I shall endeavour to give just my own vieiw, holding no one responsible in any sense for any thing I shall say on this question. I have endeavoured to arrive at the sum of the obligations that we are undertaking by this legislation, the amount of the annual interest that will have to be paid, and the questions involved in the operation of this intricate system known as the Grand Trunk Railway of Canada. In the first place this system presents difficulties that do not face any other railway in the Dominion of Canada. I hold in my hand a map showing the ramifications of the Grand Trunk, of its branch lines, subsidiaries, leased lines, and so on, in the provinces of Ontario and Quebec, and in the adjacent states to the east and west in the United States, The whole of it is a labyrinth of railway construction of trunk lines, cross-country lines, and so on, some of them under lease, some of them rented, and some of them merged into one heterogeneous and, I trust, a somewhat homogeneous whole. It is certainly an eye-opener te look at this map and see the various lines that are involved in this system. I have consulted what I consider to be one or two of the best railway authorities who have studied this question, and the views that I give are confirmed more or less by these authorities. Let me give an extract from the report of the Royal Commission, commonly known as the Drayton-Acworth report, showing what they recommend to the Parliament and people of Canada as the best course to take in dealing with this great railway question. (The recommendations are very brief, and I think it is wise for us to bear them in mind at the present -moment, because at the time 
that commission was appointed we believed it was composed of the most able railway men to be found in Canada, and the United States for that matter, because one of one commissioners was a citizen of the United States. Their recommendations are found on page lii of the report and are as follows :
1.	That a Board of Trustees be constituted by Act of Parliament and incorporated as " The Dominion Railway Company."
2.	That the ownership of the Canadian Northern, Grand Trunk, and Grand Trunk Pacific Railways be vested in this company.
3.	That the Government assume responsibility to the company for the interest on the existing- securities of these undertakings.
4.	That the Intercolonial (including the Prince Edward Island) and National Transcontinental Railways be also handed over by the Government to the company.
5.	That the whole of these railways, the Canadian Northern, the Grand Trunk, the Grand Trunk Pacific, the Intercolonial, and the National Transcontinental, be operated by the company as one united system.
This day, are these recommendations fulfilled in your ears,-to use a Scriptural phrase,-because every one of these roads has been acquired, or will have been acquired when this legislation becomes effective, and will be operated under one management. That will give public ownership a chance to show what it can do. With all deference to those who say that public ownership has been an entire failure up to date, in my judgment it is too early to make any such statement, because up to the present time public ownership has never had a fair show in the Dominion. I am surprised that these leaders on the other side of the House, two of them coming from down East, are prepared, so far as we have heard from them, to oppose public ownership, when they were willing to submit to public ownership so long 'as it served the- eastern provinces at a loss to the rest of the Dominion, as has been the case for the last thirty or forty years with the Intercolonial railway.' I do not recall in my twelve or fifteen years' experience in this House ever hearing these gentlemen denounce the public operation of the Intercolonial, because it was serving the Maritime Provinces in many instances at less than cost. I not only make that statement with confidence but I can recall, as can the hon. members recall, that on different occasions hon. gentlemen on the other side of the House have said that when the Transcontinental railway was built it was never the intention of the Dominion to make that railway pay. It was built as an obligation

undertaken at Confederation by the Government of Canada. I have heard that argument advanced with considerable skill by hon. members opposite, who have contended that passenger rates should not be increased to a paying basis, and freight rates should not be made paying rates because it was an undertaking with the Maritime Provinces that this railway should be run for their benefit, no matter whether it was operated at a loss or not. Therefore I say that the results of operation of the Intercolonial for the past thirty or forty years cannot be by any means an evidence that public ownership is an entire failure, even in the case of that railway itself. True, you may ask, Sir, what about the Canadian Northern railway? Well, the Canadian Northern has been in the possession of the Government for nearly two years, but I desire to point out that that railway has not so far had a fair chance to show what it can do, and I believe that we have received good value in its purchase. I have stood by it on every platform where anything to the contrary has been said, and I have yet to see in the debates on that question the opponents of the Canadian Northern get anything but the worst of a contest with any one who is at all acquainted with the terms on which that railway was obtained. It is the cheapest railway on the North American continent, costing about $44,000 or $45,000 per mile. It is well located and has put. on the map many of the towns and cities in the West. These prosperous communities have sprung up because the Canadian Northern went through and built up that part of the country. The Canadian Northern up to the present has been operated by the Government only under war conditions, because, though the war was terminated nearly a year ago, costs of operation are higher than ever they have been, and I think it is well for hon. members to bear this fact in mind, for it is applicable to the situation and is one cogent reason why the Canadian Northern is not paying. It is between the upper and nether millstones, so to apeak. Operating expenses consisting of fuel, labour, material, repairs, eltc., have gone up about 100 per cent within the last five years. During that time we have had two advances in freight and passenger rates, one of 15 per cent, and another of 25 per cent, making a total of 40 iper cent. During this period the operating expenses, as I say, have advanced about 100 per cent, and the railways-this statement embraces the Canadian Pacific railway as well-have not 81 i
been allowed to fix their freight and passenger rates at paying prices in consideration of the high cost of operation that now prevails in Canada. This, therefore, is but a fair consideration to have in our minds when we assert that the Canadian Northern is not paying and cannot pay. This is a factor that cannot be lost sight of; and in my judgment it explains to a very large extent why up to date we have a deficit on the operation of all Government railways. The rates have not been advanced to suit the times. We have been compelled-


Mr. J. A. CURRIE (Simcoe):: The hon. member must bear in mind that there has been an advance of twenty-five or thirty-five per cent.


William Foster Cockshutt: I ha\ already said there has been an advance c 40 per cent, and if the hon. gentleman hac. ieen listening he would have heard my statement. But I say that 40 per cent is i. 1 enough under the circumstances and con. equently we have not got the railways on a paying basis up to the present. It is now pi posed by this Bill to go a step further a. d to supply what has been lacking in the re, -vm-mendations of the Drayton-Acworth repor - that is, the acquisition of the Grand Trui. t proper.


Daniel Duncan McKenzie: Will my hon. friend permit me a question?


William Foster Cockshutt: Assuredly.


Daniel Duncan McKenzie: I know he is a good business man and I should like to know how long he would give the roads !to demonstrate whether or not they will be successful from a financial standpoint?


William Foster Cockshutt: That is a question for the future, but I should judge that from three to five years would be a very moderate period in which to allow these railways to get into sucessful operation in such a way as to reward the business interests of Canada for the tremendous investment in the roads. I think that from three to five years is the shortest time within which the board can get these railways into thoroughly co-operative organization and operation.
Now, Mr. Speaker, I am sure that one of the main reasons why public ownership is not the success that we should like to see it-and this is rather a delicate point, although I think it is only fair to mention it -is that in the eastern portion of Canada ithere seems to be a group of forces that are antagonistic to the principle of public ownership. I should like to commend my good

friend from Cape Breton North, whom I may now call Leader of the Opposition No.
2, although until quite recently he has acted ably as Leader No. 1, on the fact Mr. McKENZIE: Pardon me; Cape Breton North "and Victoria.''


William Foster Cockshutt: I accept the correction. Cape Breton North and Victoria then -not a leader?


Daniel Duncan McKenzie: No.	.


William Foster Cockshutt: Well, I congratulate my hon, friend on the fact that he has done his best during his leadership, and he has handed over a legacy to his successor which it will be difficult to shoulder. However, the hon. gentleman has placed himself in opposition to public ownership. I regret that in the province of Quebec, and to a certain extent in the Maritime Provinces, there is a very considerable consolidation in opposition to public ownership. And I want to say to my hon. friend in all sincerity that if he were on this side to-morrow and leading the Government, he could not get away from the fact that public ownership is here, and here to stay. In the face of that indisputable fact, is it not folly to go on pounding public ownership and depreciating properties that we have bought and paid for and others that we are about to acquire? Surely it is not a nice bird that fouls its own nest, and it is not good patriotism to depreciate	the
securities of one's own country.	My
good friend from Cape Breton North and Victoria must recognize that this country owning as it does already some fourteen to sixteen thousand miles of railway is very [DOT] largely, interested in public ownership, and if he were administering the affairs of Canada to-morrow he could not upset that arrangement. It is here to stay and I beseech him as a true citizen of Canada to cease pounding this property and rather to begin to boost it. The greatest stumbling block in the progress of public ownership is the fact that in some sections of the country there is too much pounding of these railways. The attitude is this: " I told you so. You went into it and we succeeded in making it a loss just as we told you." Is that the kind of citizenship we want in Canada? I trow not. I am free to say to my hon,. friend that when the Grand Trunk Pacific and the Transcontinental proposition was brought before the House in 1903-04, I fought it for all I was worth, both in the House and in the country. I take no responsibility, so far as I am concerned, for the building of that road. I [Mr. Cockshuttj
fought it strenuously, believing that it was going to be a white elephant, as I termed it at that time, and I won out my first election in fighting that particular railway project. I thought it was a very wildcat scheme at the time.
But what is the use to-day in getting up and telling the House that that railway is net worth five cents on the dollar? It is absolutely useless to do so. We have the railway on our hands and it is our duty to make the best of it. Our money is in it and we are not go:ng tc be benefited by abusing and belittling the property. We are not guing to get any money out of it by saying that the enterprise cannot be made to pay. As true citizens, we ought all to take pride in the National railways of Canada. We ought all to set ourseb'es to boost our own property and to endeavour to make a success of public ownership. Success should be the guiding star in this respect of every truly loyal citizen of Canada.
Do not let us say: "We are prophets of evil and we told you so and now fry in your own fat and stew in your own juice, so to speak, and get out of it as best you can." No, that is not the spirit and I ask my good friends in Quebec, and in the city of Montreal particularly, to think this over-Because I have myself received many communications endeavouring to influence me more or less on this question. But my mind has been made up. I said some years ago on the floor of the House that I was in favour of public ownership and I have not yet seen any reason why 1 should change this view. It is true it has not worked- out altogether as I expected nor altogether as I had hoped; but with the rounding out of this great railway scheme, with the purchase of the Grand Trunk and the giving of that loyal support that should be given to a great national enterprise,. there is no reason why, in the no distant future, we should not have a favourable financial showing from the enterprise. I am sorry, Mr. Speaker, as I say, that these hostile influences, particularly in Quebec, should be prevalent to a very considerable extent. I trust that these citizens, who I think are misguided in continuing their opposition, however rightly they may have intended it in the first place, may change their views. I admit that once on a time 1 was opposed to public ownership. But the times change; progress is made; the world becomes more enlightened; and it would be shutting our eyes to all that is reasonable and right if we were to say: "Oh, well, private enterprise lias always been good enough in

Canada to conduct all the railways; it has been good policy even to the extent of the Government handing over lands and money subsidies, and all that, to railways all the time up to date, and what was in the beginning shall be now and continue hereafter." That surely is a shortrsighted policy. Therefore, I trust that our good friends, particularly in the province of Quebec-and now I have in mind the very highly-trained business men and the vast business interests to be found in that province-should change their tune on this question. And when I say that, Mr. Speaker, I want it to be distinctly understood that I am just as friendly as I possibly can be to the Canadian Pacific Railway. I have, both in Canada and abroad, time and again pointed to the magnificent Canadian Pacific as. a monument to Canadian enterprise. I look upon it as the shining masterpiece of organization and of business success in Canada, and probably nowhere in the world has a transportation company achieved as great a success as has the Canadian Pacific Railway. All honour to it.( I have always been its friend. I do not want to be considered anything but its friend now when I advocate the public ownership of railways in Canada. The very first public address I ever delivered, was on the building of the Canadian Pacific railway in the year 1882. I spoke strongly then in favour of the construction of the Canadian Pacific railway; and from that day down to this I have always viewed that tjrtarprise with just pride. I consider *[DOT]fat the management has been most effective, and we all know that railway is looked upon as one of the most wonderful transportation organizations the world has ever known. All honour to the Canadian Pacific Railway; it is not out of any spirit of antagonism that I now advocate that the other railways in Canada be amalgamated into one gigantic property, and operated and developed for the advantage of Canada as a whole.
I do not wish to dwell upon this question of public ownership further but I want to give a few figures as to what I apprehend we are undertaking to spend upon the Grand Trunk railway. It is true that the blue-book that has been placed in our hands, containing the correspondence relating to this arrangement, is a little difficult to understand. Referring, however, to the last page in the book, page 56, you will see there what has been paid in recent years by the Grand Trunk Company to its shareholders. I find that until the years
1917 and 1918 in the guaranteed stock four per cent was paid each year. That amounted to about $2,500,000 in round figures. There had never been a failure to. pay that until the two years mentioned, 1917 and 1918. I think a word of explanation with regard to the reasons why' it was not then paid would perhaps be in order. I understand it is owing to war conditions and very largely to the branch lines of the Grand Trunk in the United States that this result has happened. The McAdoo award fixed the price of labour at a very high figure in the United States, and the Grand Trunk is also subject to the Interstate Commerce regulations which fixed the price of freights to be charged, so that the railway has been, so to speak, between the upper and the nether millstones; it has been ordered to pay high wages and it has had to submit to the ruling of the United States Government as to the amount of freight and passenger rates to be charged which were fixed at less than the Government themselves must have known these railways could be operated at. One reason for that, as I understand it, was to keep down the already high cost of living, because if'the railways had been allowed to advance their freight rates, as they should have been considering the cost of operation about 100 per cent, the cost of living would have proportionately increased and therefore they decided that the Government would have to meet it anyway. As the Government are operating the railways over there they preferred to take this loss themselves and to allow the foodstuffs of the people, and the coal and other commodities that were required, to be carried at actually less than the railways could afford in order that the cost of living to the workingman should not be unduly increased.
Mr. McKE'NZIE: Is the hon. gentleman able to tell us how much the Government increased the railway freight rates over there during the year 1918?


William Foster Cockshutt: I did not catch the hon. gentleman's question.
Mr. McKENZIE *. The Government of the United States operated the railways over there in 1918. To what extent did they increase their freight rates? Does the -hon. gentleman know to what extent the freight rates were increased? .


William Foster Cockshutt: No, I .am afraid I
do not. My information is they increased the rates by very little. The total as handed to me by my hon. friend from Algoma (Mr. COMMONS
G. B. Nicholson) is 40 per cent. I give that on the authority of my hon. friend, who 'is a railway expert, and whose figures I have generally found very reliable. My hon. friend says that 40 per cent is the exact amount of the raise over there, while the rates were raised in Canada 15 and 25 per cent. Wages in the meantime had increased, I suppose, fully 100 per cent. Coal has increased well-nigh 100 per cent, if not more in some localities, and was very difficult to get. The cost of all kinds of repairs required by locomotives and by cars and rolling stock generally increased enormously during that time, so that it is not to be wondered at that public operation of the railroads of the United States has turned out a great financial loss. But those railways were endeavouring to serve the nation in order to enable them to win the war, in order to carry their troops, in order to carry munitions of war, and all the supplies for the troops. These supplies and troops, I understand, were carried at a comparatively nominal figure as compared with what they would have been if the Government had been beholden to private companies and the latter choose to charge a paying rate on all the traffic that those roads had by reason of the war. That seemed to me to be a reasonable statement and I cannot comprehend why my hon. friends opposite should wish to advance the argument they have because the United States has lost one to two hundred million per annum or as one of them said yesterday a million and a half a day. I am not quite sure whether it was a million or a million and a half a day, but that is neither here nor there when the question at issue was between the service to the people ,and the winning of the war, which was the all-important question and to which everything was made subservient during the two years to which I referred.
That seems to me to be a reasonable proposition. But before I was diverted I was setting out to show what I conceive to be the fixed charges that we are obliged to pay under this agreement. In the first place, those charges, as I make them up, are in round figures $11,000,000; that is, interest charges upon advances of one kind and another secured by guaranteed, preference, or debenture stock. Then the Grand Trunk Pacific obligation, from which, I suppose, under the agreement, we will relieve the Grand Trunk; I fix that at about $4,000,000. Then interest on the Grand Trunk guaranteed stock, $2,500,000. In addition, I suppose we are obliged to a certain extent to continue all the bargains the Grand

Trunk has made with various lines in the 'United States with which it is working in co-operation either by lease, traffic agreement, or otherwise. I admit the Grand Trunk has some very entangling alliances with the American roads, and those alliances constitute, to my mind, one of the stumbling blocks in this proposition. I regret that these entangling alliances are a factor in the agreement. I view them with more or less alarm in a way, and still I do not see any reason why the American Government should not treat the Grand Trunk under our control and ownership in as fair a way as it treated the parent company, for which we are now becoming responsible. My figures in the aggregate for interest charges of one kind and another, as near as I can get at them, Mr. Speaker, amount to $18,-500,000-per annum. The Grand Trunk has never failed to earn and pay the $11,000,000, which is more than half of the whole amount. Only for two years, as I showed a moment ago from the last page of the Grand Trunk statement, that is, in the years 1917 and 1918, did the Grand Trunk fail to pay interest on the guaranteed stock, and on the first preference stock it has only failed to pay dividends for four years out of the last fifteen or twenty years, and those four years were war years. So we have reason to believe, Mr. Speaker, that the Grand Trunk will continue to earn enough to take care of a very large proportion, if not all, of these fixed charges. One of our hon. friends opposite, the member for Bellechasse (Mr. Fournier), the other night gave some excellent figures, and I have very little fault to find with them, in which he estimates the .fixed charges at $20,000,000. The difference between us is only $1,500,000 per annum, and as I have endeavoured to arrive at my figures after careful consideration and study, I think they may be taken as a close estimate. With regard to the war years during which the Grand Trunk failed to pay certain of these stock dividends, if it had been allowed to raise its rates, as I pointed out, to the standard at which a business man would say the railway should be operated, we have no reason to believe that there would have been any failure to meet those fixed charges. -
Mr. Speaker, I for one believe that if public ownership in Canada is to be a success we must put it on a business basis and keep it there; a political basis will not do, it Will not pay. Our national railway system must be put on a business basis, and every one using our roads for freight or

passenger service must be willing to pay fair rates, otherwise we can never hope for successful operation. No merchant could afford to sell goods at less than cost and hope to prosper; and no public ownership undertaking can afford to carry freight and passengers at less than cost and have a nice balance at the end of the year. It cannot be done. We must be willing to pay fair freight and passenger rates, and then with sound business judgment and capable management I am very hopeful indeed, Mr. Speaker, of the results that will be obtained in the next three or five years.
My hon. friend opposite, who has up to date been the leader of the Opposition (Mr. McKenzie), made a very interesting speech the other night, and I have perused it with a good deal of sympathy, especially as I found he was more or less confused with figures, the same as I admit I am myself sometimes in viewing such an agreement 's this. We cannot blame the hon. gent-leu if his figures did not all tally with th oresentation made from this side of the	T; '	' "Me question, and
while	'dered good
business to add both out-go	'come together and call the total your in ime, we have the example of the Dominion c overn-ment doing that in trade matters, becat 'e it is well known that the total trade of he Dominion is made up every year in th. 1 way, both exports and imports are addeo together. No merchant, no manufacturer, no business man would be allowed to publish a balance sheet on that basis, but public officials are a law unto themselves. If a business concern floats a stock issue it is bound to show only what it sells, and must not include what it buys as part of its business. So my hon. friend when he made up his figure of $47,000,000 for annual interest was only adding the two sides together. But even then I do not know where he got the balance, because, according to the hon. member for Belle-chasse (Mr. Fournier) whom I have already quoted, our annual interest obligation will be $20,000,000 while my hon. friend (Mr. McKenzie) put it down at $47,000,000 or $48,000,000. I do not blame him. I admit myself that figures are very confusing. But the total was more than double what one of his own followers had estimated it to be, and I am sorry to say in this case the follower was nearer the truth than his leader. That is no reflection upon tKe leader, because followers sometimes are men of very bright minds.


Daniel Duncan McKenzie: Either the one or the other will show a very bad bargain for the country.


William Foster Cockshutt: Not necessarily. If we are able to get in $25,000,000 and only have to pay out $20,000,000, we would have a balance of $5,000,000 to the good; and I do not think it is too optimistic to say that within five years with proper management we will have a balance on the right side. I fully believe we will. But this result can only be secured by insisting upon proper management on strictly business lines and absolutely free of politics.
I want to refer for a moment to the amendment moved by .my hon. friend, because I think that as a great leader, and as this is perhaps his last public act as leader of the Opposition, it is a pity that he -hould spoil a good reputation by handing di wn to posterity a document such as he pre ared as an amendment to the Bill now unde discussion.
It is one thing, Mr. Speaker, to r\ Idle a policy with holes; it is another thin to put a better policy in its place. If all the statements made in the proposed amt id-ment are true, then it was up to the lea er of the Opposition to suggest a better w ty of dealing with the matter. He gives thi 'e reasons why this Bill should not pass; ar i I think it will not be amiss if we refres i our minds as to what those reasons were The amendment proposed is as follows:
That the Bill be not read a second time bul
at the House do come to the following resolu-ti>
n:
'. at the Bill proposes an uncertain but very large addition to the debt of the Dominion at a time when existing obligations, arising out of the War and from other causes, are so vastly in excess of all previous obligations as to give much cause for anxiety on the part of all who are concerned in the financial position of Canada and the maintenance of the public credit.
That a measure of such wide-reaching character and large importance requires a study by the House and the people that cannot possibly be given in the closing days of the session. '
That the present session of Parliament was called for a special purpose which has already been accomplished.
That on Wednesday, October 8 th, the Honourable the Minister of Trade and Commerce, acting as leader of the House in the absence of the Prime Minister, stated that the Government's expectation was that the session would close within the then current week.
That under such circumstances the introduction by the Government of a measure of such great importance as the acquisition of the railway and property of the Grand Trunk Company of Canada is improvident and inexpedient.
That for these reasons the further consideration of the Bill be deferred until a future session of this Parliament.

I jail to find in that amendment anything constructive. The hon. gentleman gives three reasons why he would not do it, but he does not tell us how we are going to get out of the woods. We are facing a condition which is not of the Government's seeking; it is a condition which has come down to the Government as a legacy largely from my friends opposite. Let them not forget that, because they can never get away from their responsibility for the Grand Trunk Pacific undertaking, which was the main cause of the crippling-yes, almost the annihilation-of the old Grand Trunk proper when it tried to put into execution a bargain into which it entered with hon. gentlemen many years ago. We tried our best to save them from it, but the Grand Trunk has failed to fulfil its obligations, and for years the Government has been operating the Transcontinental at a loss because the Grand Trunk, which had undertaken to pay three per cent on all the money invested in that road, failed to come forward and fulfil the contract when the road was finished. So that the operation of the road by the Government was not of the Government's own choice; it was because of the bargain which hon. gentlemen opposite, who were at that time in power, made with the Grand Trunk and because of the inability or the lack of desire on the part of the Grand Trunk to carry it out. Later the Grand Trunk commenced the operation of the Grand Trunk Pacific from Winnipeg' to the Coast; it has been operated for some years, and always at a loss.- I do not think that in any single year it paid operating expenses, and certainly it has not been able to meet any of its interest obligations. That condition, therefore, was not of this Government's seeking; it was a legacy left by hon. gentlemen opposite. This Grand Trunk matter is now up for settlement, and action upon it cannot be postponed. Knowing that, the hon. gentleman tells us where the proposal is all wrong, but he does not give Us the slightest constructive thought as to what we are to do under the circumstances. I think, therefore, that he- will be condemned throughout the country-at any rate by those who know that this situation has been forced upon the Government and was not of their own seeking. The chickens have been a long time coming home to roost, but they have come home, as we prophesied many years ago-as far back as 1903-04 when the Grand Trunk entered into this wild-cat scheme, along with the Government, of building the Transcontinental and the Grand Trunk Pacific. That scheme was a
!Mr. Cockshutt]
white elephant and everybody knew it; it was a political railway from the s-tart; it was not destined to pay. It was fifty years in advance of the times and of the requirements of the country in all that northern section. Whatever may be said with regard to its operation in the West, I believe that that part of it can be made to pay, provided there is proper management, where the line does not too closely parallel the Canadian Northern.
Of course, we are blamed for assisting the Canadian Northern. But who -began the main assistance which was given to the Canadian Northern? It was not hon. gentlemen who are now on this side. The grant given by the Laurier Government some ten or twelve years ago of $35,000,000 in respect to the northern section above lake -Superior was the beginning of our serious troubles in connection with the Canadian Northern. From that time on it was inevitable that the interests of the Government of Canada and the Canadian Northern Railway -system should be so linked up that they could never he separated. It was not within the bounds of possibility that the Canadian Northern could relieve itself of its immense obligations in respect of the aid given to it by the Government, so that two years ago it came into our hands. The Intercolonial was already there. The Grand Trunk Pacific is now in the hands of a receiver, and is about to come under Government control. The Transcontinental has been in the hands of the Government for some time, and now we are to have the Grand Trunk. The Grand Trunk is an old parent company for which I have a great deal of sympathy; but I do not want to see the country get soaked in the terms embodied in this measur-e. There are one or two features of the measure that I am not very clear about and that I do not like very much.
Section 6 is one which gives me cause for hesitation and uncertainty; it provides for the method of arbitration. It is proposed by that section that the B-oard of Arbitration- shall consist of three judges. Now, I have a great respect for the Bench and for our courts of justice, but on- a question such as this I would rather take the opinion of a great railway -man or an excellent business man than- that of a judge; and I say that without any disrespect, I do not think that we should .have three judges on the Board of Arbitration-. I look upon that provision -as a weak spot in the Bill.


Mr. ROWELL:: My hon. friend is under a misapprehension. The Bill does not provide for three judges; it simply provides that in case the two arbitrators who are appointed, one for tihe Government and one for the railway, do not agree, a third is to be appointed by two judges.


William Foster Cockshutt: The section uses the word "judges". It says:
The value, if any, of the first, second and third preference stocks and the common or ordinary stock of the Grand Trunk now issued and outstanding to the face values above mentioned (hereinafter together called the "preference and common stock ") shall be determined by a board of three arbitrators, one to be appointed by the Government, one by the Grand Trunk, and the third by the two so appointed, or, failing agreement, by judges to be designated in the said agreement.
Now, the alternative is all judges, as I understand it. If that is not correct, then I am glad to know that a business man or a railway man may be selected.


Newton Wesley Rowell: My hon. friend is in error in assuming that the alternative is all judges; the provision is that the third is to be appointed by two judges.


Mr. FIELDING:: And the third need not be a judge.


Newton Wesley Rowell: My impression is that the provision in the letter which was read to the House is that the third shall be a judge. I am speaking from recollection.


William Stevens Fielding: The Bill does not say so.


Newton Wesley Rowell: The Bill does not say so, but my recollection is that the letter which contains the basis of the proposal so provides. But the other two need not, and probably would not, be judges.


William Foster Cockshutt: I am glad to know that there is something in that, but I do not think it quite covers my point.
Is there any reason to suppose that the Government are not going to appoint a judge? I do not see any reason for supposing that they are not going to appoint a judge, because the Government, as a rule, appoint judges. I do not suppose the leader of the Opposition (Mr. McKenzie) would object to a judge being appointed, but I do not think that in a railway arbitration a judge is the very highest class of arbitrator so far as values are concerned. What I want to see appointed is an arbitration board that is going to take into consideration the value of the line, the location of the line, where its traffic is going to be lasting. For instance, you might build a branch line of lailway into a wood country, and for ten
years, while the timber was coming out, that road would be a paying one; it would, perhaps, be paying a considerable profit. But when the timber was all out, the line would be something of a scrap heap. We want men with an initial knowledge of what will develop traffic, who will go over the line in order to find out what permanent traffic is to be expected from it. That having been ascertained, you will then know that the road is well planted. In addition to that, I would want to know the quality of the road. While a judge is an excellent man in a court room, I do not know whether he is as good a judge as to the values of ties, rails and things of that kind, as a railway man. There is nothing in the Bill that says that the Government shall not appoint a judge, nor that the company shall not appoint a judge, and there is nothing to show that two judges having been appointed will not agree on a third judge; I should think that they would be likely to agree on a third judge. Unless we know the kind of arbitrators to be selected, I do not think the explanation that has been given is conclusive. It is distinctly provided that if the two arbitrators fail to agree on a third, two judges will then appoint a third arbitrator, and he is likely to be a judge also. Therefore, I do not like the proposition. Perhaps I misread it, and I hope that the interpretation placed upon it by the President of the Council is correct, hut I fear it will be an objection similar to what we have had many times in the past.
Further, in the acquisition of the Canadian Northern, a limit was placed beyond which the award could not go, and that limit was $10,000,000. I know I shall be told: You cannot go into an arbitration and, at the same time not go into it; if you are going to submit your case to arbitration, you must submit it, and you must pay the award. But, as the Government in the Canadian Northern ease, fixed a limit of $10,000,000, I would have felt some more assurance in my mind if the Government had, in this arbitration, fixed a limit beyond which we could not go even if it were fairly high. Then the country would know what is involved in this whole purchase which otherwise it does not know and cannot know, perhaps for years to come. That appears to me to be a very crucial question right there in the Bill, and as a business man, I have forebodings that public ownership again is going to be'soaked more or less with values that do not exist. I do not say that to crack the Bill; I am going to support it because I do not see

that there is anything else to it, especially as my hon. friend opposite (Mr. Cahill) gave us no alternative proposition. But Tiaving said that, I do not know why I should shut my eyes to things that may be stumbling-blocks to myself and others, and that is one of the stumbling-blocks I find in the measure. I should like to have the assurance that at least one business man or one railway man will be on that arbitration board. I do not think that is an unreasonable request, and whether this has been tried or not, I do not know, but it appears to me that a limit should be fixed which the Grand Trunk themselves could not oppose and beyond which the country could not go in paying for the road.
We are assuming immense responsibilities in its purchase; there is nothing else to do but to face them and to raise the financial requirements to carry the deal through. But that having been said, that is no reason why we should not get one hundred cents on the dolla'r for every dollar that we put into the undertaking; and as a business man and as a man who is in favour of public ownership I say that a worse blow cannot be given to public ownership than to . overpay for properties that the Government is acquiring and then to expect that the country is going to get value in the result. It cannot be done; we must get value, *and public ownership is not given a fair trial until you buy your properties at a fair market value which is to be determined by their earning capacity. The dividends that can be earned upon the road are the only criteria that we have of value. I may be told that the Grand Trunk cost $134,000 per mile, but I want to see where the assets are, where the dividends are coming from on that $134,000 per mile. As a business man, I think it is our duty to look into this and to see that too high a price is not paid for the road.
I have spoken longer than I intended, but I have not touched the fringe of the subject. It is so intricate and more or less involved that I do not wish to multiply figures. My intention was-and I hope I have made that clear-to show to the House about what our financial obligations would be, and I have shown that they will amount to about $18,500,000 per annum, or supposing that my hon. friend - opposite is correct, about $20,000,000 per annum. We are not very far apart. Those are the annual charges, and if you capitalize them at 5 per cent, you have pretty well arrived at what the oapital will be, at the obligations that will rest upon the country and that will have to be met. Although

they are mortgages at present, they are on the property, they are fixed charges that you have to meet, and they will not be removed until you pay out the capital for them so that you must not say that we are risking simply the interest; we are also becoming responsible for the principal. There is no doubt about that. If you buy a house with a mortgage on it, you take the house with the mortgage, and the mortgage remains on the house until you liquidate the capital involved in the original amount. It will not do to say that the mortgage is only so and so and that I have to pay five or six per cent on that, amounting to $200 or $300 a year; you have to take the capital on which this is the interest, and that is the obligation that rests upon the country. I figure that we shall be involved in a capital liability which musit some day be met, that will run up into the hundreds of millions of dollars. I do not shut my eyes to that. I am not sure that the hon. member for Pontiac (Mr. Cahill) was very far wrong in the capitalization that he gave. As I read the Drayton-Acworth report, the capitalization will run into the neighbourhood of $400,000,000 or more, so that there is a very heavy financial, obligation in the acquisition of the Grand Trunk. But we are face to face now with the proposition that the Grand Trunk is unable to continue to run the road and to meet its financial obligations with regard to the Grand Trunk Pacific. In other words, it is unable to meet' its liabilities, and it is to-day practically insolvent. Some hon. gentlemen may say: Why not put it under the hammer? We have never seen any railways of that kind go under the hammer in Canada, and I hope we never shall. If it should be allowed to go under the hammer, there is only one possible bidder in Canada so far as I know outside of the Dominion Government, and you all know who that is without my mentioning the name. The people of Canada would not view with equanimity the control of two great railways by a single corporation, no matter how high-minded the board might be. We want competition; we have spent hundreds of millions of dollars in this country to get it, and now that we are on the threshhold of obtaining one of the greatest assets in the way of railways that Canada can get, for the development of trade that binds the east to the west and the north to the south, are we going to let this offer slip through our fist into the hands of a private corporation? I cannot see that that would be sound business.

Though I have some misgivings with regard to some features of the measure I have been forced to the conclusion that there is nothing else for the Government and the country to do but take over the Grand Trunk at the best possible bargain that can be made, and then have all the national railways consolidated under one management. I would put the finest men that can be got in Canada in charge of the management of the road, and have them told by this Government and the country that they are expected to operate the national system of railways to the best advantage of the people and to give financial results of which we need not be ashamed. ' So far as I can see, there is nothing else for us to do, and therefore I endorse the Government's proposal and trust that this legislation will pass.


Hon. WILLIAM LYON MACKENZIE KING (Prince, P.E.I.):: Mr. Speaker, the
hon. member who has' just taken his seat (Mr. Cockshutt) has been so kind as to allude in generous terms to the confidence which the electors of Prince have placed in me in choosing me to be their representative in this House. I must thank him for giving me thL opportunity to acknowledge publicly that great trust. He has also referred to the exceedingly difficult task which has fallen upon me in the obligation which will come in the course of time to assume the leadership of the Opposition in succession to my hon. friend from Cape Breton North and Victoria (Mr. McKenzie), who has led the Opposition during the past two sessions. No one is more conscious than I am of my many limitations adequately to discharge the obligations of that position. I am thankful to my hon. friend for the example which he has set me, and I have asked him, in order that it may be possible for me the better to acquire familiarity with the procedure of the House to acquaint myself with the matters that are coming before Parliament, if he will continue to lead the Opposition for the remainder of the 'present session, and he has very kindly consented to do so.
It is as the member for Prince that I should like to speak on the amendment which is before the House. I designedly say as the member for that constituency, because it is one of eight or ten constituencies which ought to be represented on the floor of this House in such an important discussion as the present, but which for obvious reasons have had no representation in this Parliament through the whole of this session. I contend that that of itself
is a reason why hon, gentlemen opposite should not press with such undue haste the enactment of this legislation at this time. Surely, if Parliamentary Government stands for anything, it does stand for the right of the people of the country to have their voice healrd through their representatives in the halls of Parliament. There are eight vacancies, I think, existing ait the present time throughout the Dominion. In the constituency of Assini-boia there has been no representation for nearly two years. Are not the farmers of Assiniboia entitled to have their voice heard here in regard to the important measure which is before Parliament at the present time? Are not the electors of the constituency of Victoria and Carleton, in New Brunswick, similarly entitled to be represented here? Are not the electors of the constituency of North Ontario entitled to representation here and to their voice on this important measure? Are not the electors of the constituency of Glengarry entitled also to representation here, and the electors of Quebec and Kamouraska, in Quebec, and the electors of Victoria, in British Columbia? From one end of this country to the other we have constituencies with no representation in this Parliament, and yet the Government without giving any real reason to the country, persists in driving ahead with this measure, which has been described by one of the ministers of the Crown as the most important transaction which the Parliament of Canada has ever had to deal with.


Mr. SHEARD:: May I ask whether the constituencies of Gaspe and Maisonneuve are represented here during this debate?


William Lyon Mackenzie King: I will answer my hon. friend. Only some ten days ago the leader of the Government, I think it was, assured this House that by the end of last week or the week previous the proceedings of Parliament would be at an end for this session. That assurance by the leader of the Government was accepted in good faith, and the representative of the constituencies mentioned, with another hon. member, arranged to take their passage across the ocean on a mission which they had had in imind for some time previous. If, therefore, these constituencies are not represented here at this, moment, it is not the fault of the members of those ridings, but it is due exclusively to the fact that they accepted in good faith, as they had a right to accept, the assurance given them by the leader of the Government. That is also a very strong reason why, when the Government through

That represents the Grand Trunk Railway property as it is held by the different shareholders and the debenture holders. All of that stock may be divided into two groups in accordance with what is proposed in this Bill: The first, stock which is to be retained by the present owners, and the second, the stock which is to be exchanged-not to be acquired absolutely by the Government of this country with the obligation ending there but to be exchanged. Something is to be given in return for it, another form of stock of actual or greater value, with a dividend guaranteed at four per cent by the Government. Let us see how that measures up with the idea of government ownership. This is what is proposed in clause 4:
As part of the consideration for such acquisition, the Government may agree to guarantee the payment of :-
(a) Dividends payable half yearly, at four per cent per annum, upon the present guaranteed stock;
(to) The interest upon the present debenture stocks as and when payable, in accordance with the terms thereof.	-
In other words, the four per cent guaranteed stock and all that is described here as outstanding debenture stocks remain, exactly as they are to-day, in the possession of the people who own them, and what the Government proposes to do is to agree to pay these holders of capital and debenture stocks the dividends which up to the present time they have had to look to the Grand Trunk Railway Company for.


William Foster Cockshutt: May I ask the hoft. gentleman a question, not with any intention of interrupting him? Suppose I buy a house from him. I have not the whole of the money but pay two thousand dollars down and give mortgage for the balance of two thousand. The mortgage is made out to my hon. friend and the deed stands in my name. Whom does he consider the owner of the house?


William Lyon Mackenzie King: I would answer my hon. friend by asking him this question: Where is the deed that the Government gets for this property? The Government gets no deed for the property which they are assumed to be acquiring or purchasing. The property remains in the possession of the people who already own it.


Some hon. MEMBERS:: No, no.


Some hon. MEMBERS:: Not by any
means.


Some hon. MEMBERS:: Certainly.


William Lyon Mackenzie King: 
William Foster Cockshutt: Not immediate!/


Mr. STEVENS:: Perhaps the hon. mendu't will permit me a question?


William Lyon Mackenzie King: By all means.


Henry Herbert Stevens: The possession or control of the property will rest in the voting stock, and the debenture stock and guaranteed stock, which is non-voting, cannot be claimed to have possession. Am I correct?


William Lyon Mackenzie King: 
Mr. MIDDLEBRO:: Will the hon. member permit me a question?


Some hon. MEMBERS:: Sit down.


William Sora Middlebro: My hon. friend has asked a question and I am merely attempting to answer him. What is the difference between


Some hon. MEMBERS:: Sit down.


Some hon. MEMBERS:: Order.


William Sora Middlebro: What is the difference between debenture or any other stock and an actual mortgage of property where the holder of the stock has no other interest in it than to receive the dividend on the stock, without any voting powers whatever? We say that the holders of the stock are simply mortgagees without the power of management in the concern, and all we have done is to assume the right to pay them off.


An hon. MEMBER:: Don't make a speech.
Mr.	'OT>WAKER:	I wish to inform the hon. gentleman (Mr. Middlebro) that the statement he has made is not a question.


William Lyon Mackenzie King: I am addressing my remarks at the moment to the question of ownership. I am taking up the question as to .whether this is in the nature of a transaction of government ownership and I am answering by pointing out-and if I am not correct in so doing, I would like hon. gentlemen opposite to tell me-that all this retained stock remains in the possession of the people who have it at the present time.


William Sora Middlebro: Just as a mortgagee.


William Lyon Mackenzie King: It remains in the possession of the persons who have it at the present time, but the difference is this:	Instead
of the payment of dividends on all that stock being made by the Grand Trunk Railway Company, the Government of Canada hereafter will have to guarantee and make every bit of the payment at greatly enhanced values.


Sir SAM HUGHES:: Can the holders of this stock to which the hon. gentleman has made reference sell that stock?


Daniel Duncan McKenzie: Why not?


Samuel Hughes: I am asking the
question.


Daniel Duncan McKenzie: Certainly they can.


Samuel Hughes: Can they sell it?


William Lyon Mackenzie King: 
William Foster Cockshutt: I would ask the hon. gentleman would he approve of the Government of Canada borrowing money at five or five and a half per cent and paying off these stocks that are only carrying four per cent, because then we would own the stock?


William Lyon Mackenzie King: This is not a good time to borrow money. The Government will he well advised if it does not enter into any more schemes for borrowing money than are necessary. What is needed above everything else in this country to-day is economy and some regard for public expenditure. It is the wanton extravagance of this Government, more than anything else, that has exasperated the people of this country.


Mr. McCREA:: The Government does not know anything about that.


William Lyon Mackenzie King: What is this agreement for?
I have said it is not an agreement to purchase the Grand Trunk, it is not an agreement to acquire public ownership. Notice this: The word used all the way through the Act is the word "acquire." That word "acquire" may mean anything. I think in legislation which it proposes the Government should be careful in placing before the country exactly what is meant. I say this is not an agreement in the nature of purchase either of properties or of stock. Stock that is brought in to the country under an arbitration does not represent value acquired by the country for, as I have said already, there is given in exchange for it a four per cent guaranteed stock.
Now, just in passing. The hon. member (Mr. Cocksliutt) referred in his remarks to the way in which that exchangeable stock was to be arbitrated and he took exception to the fact that judges were to be named as the arbitrators. I would like to ask the honourable the Minister of Railways, who I am glad to see opposite, if he would tell this House just why a certain change was made. I notice in the letter that was written to Sir Alfred Smith ers on October 9th and signed by Mr. Meighen, Minister of the Interior, and which is placed on Hansard at page 1023, setting forth conditions to which Sir Alfred Smi there, as president of the Grand Trunk, had agreed, there is -the following in reference to the nature of that arbitration :
The value (if any) to the holders of the first second and third preference stock, and the ordinary or common stock, shall be determined by a board of arbitrators consisting- of three persons, one to be appointed by the Grand Trunk, one by the Government, and the two so appointed to select a third, or failing agreement, the third to be selected from among the judges of the Superior Courts in Canada.
Now, notice this. We have something definite here, we have some little guide a.s to who is to be the arbitrator in this matter because it will be on the third arbitrator's decision more than that of any other that the whole question of what the country is to pay for this stock will turn.
-failing agreement, the third to be selected froni among the judges of the Superior Courts in Canada by Sir Louis Davies, Chief Justice of the Supreme Court of Canada, and Sir Walter Cassels, Judge of the Exchequer Court of Canada, acting together.
There are two gentlemen whose names are known and respected throughout the Dominion, and it was agreed that they should name the third arbitrator. Now, in the Bill as brought down that course has been departed from altogether, as my hon.

friend from Brantford (Mr. Cockshutt) pointed out. Section 6 of the Bill reads:
The value, if any, of the first, second and third preference stocks and the common or ordinary stock of the Grand Trunk now issued and outstanding to the face values above mentioned (hereinafter together called the "preference and common stock'') shall he determined by a board of three arbitrators, one to be appointed by the Government, one by the Grand Trunk, and the third by the two so appointed, or, failing agreement, by judges to be designated in the said agreement.
What I want to ask my hon. friend is: Why was a change made from the original proposal which Mr. Smilhera wua prepared to adhere to, by substituting for the two judges whose names are mentioned therein a clause which leaves us entirely in the dark as to who the third arbitrator is to be selected by, or who the third arbitrator is to be?


Mr. J. D. REID:: It was not necessary to set that out in the agreement. Mr. Srnith-ers, representing the Grand Trunk, and the Government agreed that the two gentlemen named should designate the third arbitrator. When the Bill gets into committee if it is necessary to word the clause differently, there is no objection to its being done.


William Lyon Mackenzie King: Will the minister give the House an assurance that when the Bill goes into -committee it will be worded m accordance with the terms of that letter?


John Dowsley Reid: In accordance with the two names I have mentioned?


William Lyon Mackenzie King: In accordance with the
terms of the letter that passed between Mr. Meighen and Mr. Smithers.


John Dowsley Reid: Will the hon. gentleman read the letter that he referred to of July, 1918?
Mr. KIN'G: I am referring to the letter of October 9, 1919, just two weeks ago, which is set out in Hansard at page 1023.


John Dowsley Reid: The letter is in this
form:
The value, etc., shall be determined by a board of arbitrators consisting of three persons, one to be appointed by the Grand Trunk, one by the Government, and the two so appointed to select a third, or failing agreement the third to be selected from among the judges of the Superior Courts in Canada by Sir Louis Davies, Chief Justice of the Supreme Court of Canada, and Sir Walter Cassels, Judge of the Exchequer Court of Canada, acting together.
I have no hesitation in saying that the Government will embody in the agreement exactly what is in that letter. If it is not

in the Bill it will be in the agreement, and I give my assurance to that effect. Is that the answer?
Mr. KIN-G:	That is satisfactory. That
improves the -situation to this extent, that in the. Bill as it was presented to the House the amount of money which the country becomes obligated to pay for this stock was to be determined largely upon the words of one gentleman-unknown, who was to be chosen by judges-unknown, the country to pay for the -stock it is obtaining an amount-unknown.


Newton Wesley Rowell: Will my hon. friend permit me a correction there? The Bill is framed upon that letter, which is the basis of the agreement. It did not require that all the terms should be embodied in the Bill. There never was any intention to depart from it, and the Bill is not a departure from it.


William Lyon Mackenzie King: I would say to the honourable the President of the Council, with all deference, that I think it should he stated in the Bill, and I hope the Government will see that the Bill is amended in a manner which will make it perfectly clear that that course is to be followed. I understand from what the Honourable the Minister of Railways said that that will be done.
But the situation, important to observe, is this. Here is stock, the value of which up to a couple of weeks ago could have been [DOT] ascertained fro-m a stock list. In view of the fact that the Government has brought forward this measure to guarantee interest payments on the Stock that is to be given in exchange, all this other stock is going up, up and up. It is all important, therefore, it seems to me, to fix a definite date with reference to which the arbitrators are to base their estimate of the value of the stock. Is that the intention of the Government?
Mr. J. D. R'EID: The hon. gentleman has reference, of course, to the stocks that will be the subject of the arbitration?


William Lyon Mackenzie King: That is it.


John Dowsley Reid: Certainly, a date will be fixed in the agreement. The hon. gentleman should of course know that.


William Lyon Mackenzie King: Will the Minister of Railways undertake to say that the date to be fixed will be a date prior to the time at which the Government's Intention in this matter was made known to the public?


John Dowsley Reid: It is not fair to ask a question of that kind. But I will say this to the hon. gentleman: When the date is

being fixed the Government will protect the interests of the people by setting a date of which no advantage can be taken.


William Lyon Mackenzie King: I appreciate what the hon. minister has said about fairness.; it is the element of fairness that I am trying to consider. The public of this country as a party to this transaction, are entitled, it seems to me, to the greatest element of fair play. Now, a good deal turns, it seems to me, upon the date to be fixed, and in fairness to the public, I submit that the Government ought to assure Parliament immediately that the date with reference to which the valuation of these stocks will be considered will be a date prior to the time at which the intention of the Government in the matter of this transaction was made known to the public. Without that assurance the whole transaction becomes one which seems to have reference very largely to the stock market, rather than to the interests of the people. It is important in these transactions that the interests of the people in matters concerning payments out of the revenues of the country should be freed from the possible influences of stock transactions inimical to the national interest.
Now, Mr. Speaker, I have pointed out that this measure is not for the purchase of the Grand Trunk properties; it is not even a measure for government ownership. What [DOT]is it then? It is nothing more than an agreement for the transfer of the management of the Grand Trunk Railway system to the gentlemen who, as my hon. friend from Pontiac (Mr. Cahill) described them, are managing the Canadian. National Railroads at the present time, and who were controlling the Canadian Northern system before it was taken over by the Government. That is all that this measure is-plus this one other important feature. It is also a measure to enhance the value of the stock of the Grand Trunk Railway Company. That is all. Those are the only two things that are accomplished in this Bill. There was no need of an agreement between the Government and the Grand Trunk as to the acquirement of the stock; that is something the Government could have arranged with the stockholders if it had wished to do so. But when it comes to the question of relieving the Grand Trunk of its liabilities it was necessary to enter into an agreement, and that is the purpose of this whole measure. It is a Bill to foist on the people of Canada all the liabilities of the Grand Trunk Railway system and of the Grand Trunk Pacific, and to give in return for an exchange of management to the shareholders of the Grand Trunk Railway Company an enhanced value for their stock. I say to my hon. friends they have no right to proceed with a transaction of that kind at this stage of the session. I say we have a right to expect the Prime Minister here in his seat in discussing this question, and. I ask my hon. friends opposite to defer the enactment of legislation such as this, which is going to bind the country for another generation, until the Prime Minister can be present in his seat in Parliament.
If the Government wish to make a working arrangement between the Canadian National Railways and the Grand Trunk Railway system, they have it in their power to effect it.
The ostensible purpose as put forward in the Bill is that a committee of management shall be formed as soon as the agreement is ratified to operate the Grand Trunk system in harmony with the Canadian National railways. A great deal is being said about the merits of bringing these two systems together. Well, every one will admit that it is desirable that these two systems should operate together; the one supplements the other. If they are not supplementing each other in such a manner as will best serve the interests of the country, this Parliament can find a method of bringing such a condition about. Parliament is all-powerful in effecting any arrangement which it thinks best in the interests of the people; and I say that in order to effect a working arrangement between these two great systems which will make the whole system, as it were, serve one big national interest, it is not necessary to go so far as this measure goes; it is not necessary to saddle this country with the liabilities of the Grand Trunk and the Grand Trunk Pacific and at the same time give additional value to the stock of the shareholders over , across the seas.
There was one remark' made the other evening by the ex-Minister of Agriculture, the hon. member for Marquette (Mr. Crerar), which I should like to read, because I think it is all-important that he and those who agree with hinh should understand just what this transaction amounts to. I quote from page 1211 of Hansard, which contains a report of the debate on October 20:
An argument has been put forth by the directorate and management of the Grand Trunk that it should he relieved of any liability in connection with the Grand Trunk Pacific, In the face of all the circumstances I think it is impossible for this Parliament to concede that position for a moment-
Mr. Rowell:	Hear, hear.



Well, the whole purpose of this Bill is that the Grand Trunk shall be relieved of any liability in connection with the Grand Trunk Pacific; it simply turns over to this country all the liabilities of the Grand Trunk in regard to the Grand Trunk and the Grand Trunk Pacific. The member for Marquette could not have appreciated that fact when he made his speech. Like many others throughout the country and, apparently many in this House, he was under the impression that this measure was based upon a carrying out of the principle of government ownership; that it was being introduced with a view of freeing the country from certain liabilities pertaining to one of the biggest corporations. As a matter of fact, this measure does the very thing that I have described; it simply loads the country with these liabilities and gives in return to the Grand Trunk shareholders an increased value and guarantee dividends for their stock.
Now, Sir, I have nothing further to add except this-and I say it with realization of its full import. The Government are the trustees of the people of this country. They are the trustees of the public funds and the use that is made of them not only in the present; they are trustees also for the generations that are to come. This measure, it seems to me, loses regard of the full sense of obligation of trusteeship which the Government should have in respect of its duty to the people at this time. It loses regard of the obligations iof the Government towards those who come after. By this Act the Government would make it impossible until the year 1950 for the people of Canada to get complete possession of the railway systems of this country if that should be their desire or to acquire ownership of the Grand Trunk properties then, except at a greatly increased cost. The Government have no right so to bind the people for the future.
The Government brought this session of Parliament about for a particular purpose; that purpose related to the Treaty of Peace. That purpose has been fulfilled, and it is not right that the Government should at this time introduce the measure which is now before the House. Moreover, the Government was elected, by means that were very questionable, for a purpose; and what was the purpose? The winning of the war. Does any hon. gentleman say that the war has not been won? Does any hon. gentleman say that the purpose for which the Government was elected has not bgen fulfilled? The purpose being fulfilled, then, by what right does the Government continue to hold

office? They were not chosen by the people to put through a Bill of this kind on behalf of the shareholders of one of the biggest corporations in the world; they were chosen for an entirely different purpose. I say to hon. gentlemen that in accordance with right and proper constitutional procedure, the only course open to them is to drop this measure altogether, for the present at least; give the representatives in Parliament here assembled a chance to go back to their constituencies and confer with the people and get their views. Then this measure can be discussed when Parliament reassembles in February; the representatives of the people will be able to deal with the matter with due regard to the wishes of their constituents. In the meantime, opportunity will have been given to the people to understand the nature of this transaction. I say that Parliament has no right to usurp the rights of the people in regard to a great transaction of this kind and to decline to give the people an opportunity to inform their representatives in Parliament of their wishes in the saatter.
What we nee 1 in Canada to-day is more control of Parliament by the people and of the executive by Parliament. This measure shows, as no other measure possibly could show, how far we have been getting away from constitutional government in Canada. The time has come to call a halt; the time has come when members of Parliament ' should have regard for the people's wishes and when the representatives of the people in Parliament should control the executive.


Mr. G. B. NICHOLSON (Algoma, East):: May I at the outset be permitted to join with the member for Brantford (Mr. Cock-shutt) in expressing my congratulations to the hon. member for Prince (Mr. King), who has just taken his seat- in the House as leader of the Opposition? Perhaps I may be also permitted to say that I feel disposed to express my disappointment at the performance to which he has treated the House on this his first appearance since he was elected as member for Prince and leader of the Opposition. Some of us were looking forward with some degree of hope at least that upon entering the House the hon. gentleman would be able to clear up some of the mists which have apparently been hanging over the eyes and intellects of hon. members who sit around him in connection with the matter of the Grand Trunk purchase, or the taking over of the Grand Trunk system. But having listened to him intently; having taken notes of what he said and given attention to what he has

read; having examined the deductions that he made from the things which he read, I have reached the conclusion that the light which he has on the railway situation in Canada, particularly the light which he has had in regard to the proposal now before the House, is not very much brighter than the light which has been exhibited by the hon. gentleman who has been keeping his seat in this House warm for him during this session and the last.
The hon. gentleman has undertaken to show to this House-and without question with the intention of convincing the country, if he can-that t-he taking over of the Grand Trunk Railway system under the terms of the agreement outlined in the Bill now before the House will not constitute and will not consummate an act of public ownership. He bases his argument in support of that-and I must confess I was utterly amazed to hear him do ito-on the fact that the Government undertakes to continue to pay or to be responsible for the interest on the bonded indebtedness of the Grand Trunk railway. Will the hon. gentleman who, I presume, knows something about financing large institutions in this country, undertake to say that because the Canadian Pacific Railway Company agrees to pay the interest on its bonded indebtedness to the people who have purchased and own those bonds, the Canadian Pacific Railway Company or the shareholders of that company, are not the owners of the system? Would those who cheered so lustily for the statement	of	the	hon.	gentleman when hesaid	that	this	would defer for	a period ofat least thirty years the possibility of public ownership in this country say that, because a corporation pays interest on its bonds, it does not own the institution, upon which those bonds have been issued? The proposition of the hon. gentleman is 'so obviously absurd that it seems to me unnecessary	to	take	up	even a	moment ofthe	time of	the	House	in arguing
against it. What this Bill purports to do and what the agreement authorized by this Bill brings into effect is nothing more or less than this: The Canadian people take possession, of the Grand Trunk Railway of Canada, subject to its bonded indebtedness and in accordance with terms that will be determined by a board of arbitration that is set up by this Bill. Just as soon as that board of arbitration has given its award, ownership of the Grand Trunk railway, as ownership is understood by any man who understands anything about the
82J
matter, .passes absolutely to the Canadian people. The illustration given by the hon. member for Brantford (Mr. Cockshutt), in asking the hon. gentleman a question, illustrates the point exactly. The fact that a man has a mortgage on his house, that he may have a certain liability resting on the property that he owns, does not interfere in the least degree with his ownership. It is the title that passes. It is the Canadian people who will own, control and operate the Grand Trunk Railway of Canada.. They will do just exactly the same as any other owner; they will do just the same as if the Grand Trunk passed from the hands of one company to another; they will continue to carry the obligations that the Grand Trunk must always carry, and they will own the system. I almost came to the conclusion, as I heaTd the hon. gentleman leading up to his argument, that he was going to put forward as a basis for his conclusion, the theory that the only way by which the Canadian people could become owners of the Grand Trunk railway would be by utterly repudiating the bonded indebtedness. If that be the position he takes, why then, all right, we are on ground that we can discuss. If it be the feeling of the hon. gentleman that the Canadian people in taking over the Grand Trunk should repudiate the bonded indebtedness of that railway, that they should undertake to say to the bondholders of the Grand Trunk railway: We are not going to give you even the right to foreclosure under a mortgage, but we are going to- cancel the indebtedness-if that be his position, there is at least some degree of reason in it. He can be placed in the .same class as all those who believe in the confiscation of everything in the shape of real and physical property. If that be his position, the House and the country will clearly and definitely understand it. But if he proceeds to argue that when we purchase a property, when we agree to pay to the man who holds a mortgage on that property, the interest on his mortgage until such time as the mortgage is liquidated, as a result of that we do not get ownership, then he takes a position that cannot be justified and that he cannot defend before any man who understands anything about business transactions or the control of any institution of this description.
Let us see what will be assumed when we take over this railway. The Drayton-Acworth report, that we have heard a great deal about in this House and that every

member must agree went into the whole question of the physical condition and values of railways in Canada more thoroughly,
I presume, than any other commission or body that has ever investigated railways in this country or possibly on this continent, says that, the Grand Trunk railway ' cost-that is its value at the time the report was made-$127,000 per mile. The bonded indebtedness that the Government of Canada for the people of Canada -assume under the agreement constitutes an obligation against the * Grand Trunk railway of $49,000 per mile, and not one cent more. The Government says: We will pay the interest on the guaranteed stock and the bonded indebtedness, and we will leave to arbitration what, if anything, shall be paid in lieu of the first, second and third preference stock and the common stock of the Grand Trunk railway. In reality they practically wipe out one-half of the value of the Grand Trunk railway as set forth in the Drayton-Acworth1 report, leaving to arbitration what, if anything, shall bp paid for a sum of about $60,000,000 worth of first, second and third preference stocks, and in doing that they base their position on 'the Drayton-Acworth report that in itself stated that in their judgment there should be paid for the first, second and third preference stock a sum substantially approximate to $3,600,000 per annum for seven years, with a substantial increase at the end of seven' years.
I do not wish to detain the House at any length, and I am not standing here as one of those who are at all enthusiastic with regard bo public ownership of railways. On many occasions in this House I have made my position with regard to that clear, but we are dealing, not with a theory, but with an actual condition. The leader of the Opposition-I will accept the suggestion thrown out by the horn, member for Prince (Mr. Mackenzie King), and I will refer to the hon, member for Cape Breton North and Victoria (Mr. McKenzie) as the leader of the Opposition-has moved an amendment to this Bill and has spoken on it at some length. The hon member for Shelburne and Queen's (Mr, Fielding), who sits alongside of him, spoke also on this Bill at length. Now we have had the hon. member for Prince (Mr. King) speaking this afternoon at length. Has any one of the three intimated to the House or the country any alternative to the proposal made by the Government? What is the alternative that these hon. gentlemen suggest? It is simply: Wait, drift, dilly-dally with this question that has been pressing this country 
for two and a half years. How has it been pressing? What is it that has brought the country into the condition in which it is? If my memory serves me correctly, the hon. gentleman was a member of the Government which brought about the condition that makes it absolutely necessary for the Government of Canada to take over this Grand Trunk railway. The hon. gentleman speaks of the people of Canada relieving the Grand Trunk of all its obligations in connection with the Grand Trunk Pacific. It has been a matter of amazement that any hon. member sitting on that side of the House who supported the Government which backed up the Transcontinental and the Grand Trunk Pacific should ever come to stand Up and utter even the words " Grand Trunk Pacific " in this House.
It is the iniquity of the Grand Trunk Pacific and the Transcontinental that has placed Canada where she is to-day in regard to this railway situation, and'which makes it absolutely necessary that we take over the Grand Trunk railway in order that by some means or other the people of Canada may be relieved of carrying a burden that can never be borne unless the National Railway system is rounded out. Will the hon. gentleman or any one else on the other side of the House tell us what he would do with the Grand Trunk Pacific and the Transcontinental without the Grand Trunk railway? Will they tell us?
The hon. gentleman speaks about traffic agreements and a gentleman's arrangement between railways, and all that sort of thing. Some of us know a little about the operation of railways, not very much, but we have given the matter some little thought, and I ask any practical railway man who has been close up to the management of a railway, what kind of a job could be made of operating the Grand Trunk Pacific and the Transcontinental under a traffic arrangement with the Grand Trunk. Where would we land? In just one of two positions: We would still further bankrupt the Grand Trunk Pacific and the Transcontinental, anid they are bankrupt now, or we would bankrupt the other road. We would be operating them in the first place at a double overhead cost of management, equipment, terminals and all that kind of thing, and in the end we would be working simply on the basis of a gentleman's agreement. Take, for example, the history of the United States railways and you will find that these " gentleman's " agreements have not been very effectual in making it possible for United States railways to operate successfully. There is only

one way in which public ownership of railways in this or any other country can be made a success, and that is by rounding out the system as it should be rounded out, spending a sufficient amount of money to develop the system as it requires to be developed, and then operate it strictly .under a business management, with a tariff for both freight and passenger traffic that will make it possible for the railways to operate without placing indirect taxation on the people of the country to support them.
Coming back to the question of what we are going to do with the roads that have been foisted on us by the Government of the hon. gentleman (Mr. Fielding) and those who supported him in this House, what are we going to do with the roads we now have if we do not take over the Grand Trunk? Will some hon. gentleman tell us how we are going to operate them? As a matter of fact, whether we take over the Grand Trunk or noit, we are up against this in connection with the Transcontinental, that some one will have to operate it for the next twenty years at a loss, but that is not the case in connection with the Grand Trunk Pacific, so far as operating expenses are concerned because it is within the hounds of possibility that it can be operated so as to make both ends meet. It is true that if we are going to deal fairly with the Canadian people as a whole, we can never look forward, and I use the word "never" advisedly, to having the Grand Trunk Pacific or the National Transcontinental earn interest on the money that has been sunk in those two roads, because there has been no equivalent value produced for the expenditure of that sum. I think the hon. member for Pontiac (Mr. Cahill) said this afternoon that it would be a fair proposal to say to the Grand Trunk: We will give you the National Transcontinental on the basis of $60,000,000, the original estimated cost. As a matter of fact, the National Transcontinental has cost about $215,000,000, and the Grand Trunk Pacific $260,000,000 or $270,000,000. Where did the money go? Not into the construction of the railway-not for one moment. It would be utterly impossible to trace where the money did go to, but any one who has investigated the matter for a single moment knows that the money did not go into the railway. Consequently, it would be unfair to competing railways or the people of Canada to expect the road to earn interest on anything more than its actual value, which is about 35 or 40 per cent of what it is supposed to have cost.	.
Something has been said during this debate with regard to arbitration. The hon. member for Prince (Mr. King) was apprehensive ' that the country might get the worst of it in connection with the arbitration. Reference has also been made to the arbitration award in connection with the Canadian Northern. It is true that the arbitrators in that case found a value that the Drayton-Acworth Commission did not find. Whether they were justified in their finding or not, I am not going to argue. The position I have always taken is not to question the integrity of the judges on the bench of this country. I believe the arbitrators acted honestly. They may have been mistaken. Whether they were or not, I say that when the Canadian people got the Canadian Northern at the price they paid for it under that arbitration, even though they assumed all the obligations of the Canadian Northe. a, they got the best railway bargain that h, s ever been handed over the counter in this country. They got the cheapest rai'way that has ever been produced in this country, because the road was built by railway n. n and built honestly. The money all wei into the railway, and not into the pockeh of political friends of those who were behind the railway. Those are the facts.
There is one other point: What would happen if we did not take over the Grand Trunk railway? If the Grand Trunk Pacific, which the country has to take over because we have guaranteed the bonds to an amount greater than the value of the railway, and if the Transcontinental and the Canadian Northern are to be a successful system, one of two things is necessary. We must acquire eastern connections, either by purchase or by construction. Which are you going to do? It has been stated on the floor of this House that it would cost $100,000,000 to round out the Canadian Northern and the National Transcontinental in Eastern Canada. It will cost nearer to $200,000,000 to construct terminals and a gathering system in Eastern Canada that will make the operation of the National Transcontinental a success. When you have spent that $200,000,000, what have you got? You will have a reckless duplication of lines, which is what has bedevilled the whole railway business of this country. Would that be a wise policy to pursue, instead of acquiring lines that are already in existence? The hon. gentleman has referred to the necessity for economy. Would there be very much economy in the Canadian people undertaking to construct another set of terminals in the city of Toronto, for in-

stance, or in Ottawa, or in any of the towns throughout Ontario and Quebec, and duplicating lines already in existence throughout these provinces in order to make more difficult the profitable operation of the lines now there? Instead of doing that we should begin with eliminating some of the lines we now have, and one of the things that will be necessary before government ownership or any other kind of ownership can be a success is the elimination of certain of these non-productive competing lines that never were necessary and should never have been constructed.
In conclusion, if any hon. member in this House, or any business man outside of it, be he a railway man or not, will show me a way by which this railway burden that has been imposed on the people of Canada can be carried, other than by acquiring the Grand Trunk and rounding out the National Railway system and operating it as a public utility, I will be ready to hold up both hands for it.
If the hon. gentleman (Mr. King) can find any group of financiers in this country, either the Grand Trunk financiers or any others, who will take these burdens oft our shoulders, co-ordinate the railways, and give to the people the service they should get from them, then I would be willing to write off all the money that his friends pocketed but of the construction of the Transcontinental and the Grand Trunk Pacific and turn the whole thing over to them for nothing. That is the position I would take, and it is a perfectly logical position. But faced as we are with this tremendous burden from which we cannot escape and which was imposed upon us against the will of the people and notwithstanding the protests of those -who were best fitted to know what the railway situation was, what are we going to do to-day? I say to my hon. friends: Come forward with some alternative proposal that possesses intrinsic merit and show the Canadian people sane leadership in the endeavour to get out of the wilderness into which they were led by the hon. gentleman (Mr. King) and his friends in connection with this whole railway business.
At six o'clock the House took recess.
After Recess.


Mr. L. A. LAPOINTE (St. James):: Mr. Speaker, in rising to speak on the question before the House I am not going to repeat the many (good reasons given by the speakers on this side who have preceded 
me against the acquisition of the Grand Trunk at the present time and under the existing circumstances. I desire not so much to express my own views as to put on record the resolutions and protests of the Montreal Board of Trade, the Chambre de Commerce and the Canadian Manufacturers' Association against this transaction. My desire is mainly to place before the House and the country the views of these great commercial organizations, composed of eminent business men, with respect to this transaction. The announcement of the Government's policy with respect to the Grand Trunk came as a surprise not only to the city of Montreal, but to the whole country, because nobody expected the question would come up at the present session. As a result of the strong opposition to the Government taking over the Grand Trunk railway which is expressed by the business men of Montreal, the Board of Trade met on the 16th of October and passed a resolution demanding that the Government halt in its present proposal. That resolution was Worded as follows:
That this special general meeting of the Montreal Board of Trade, having in view the result of Government operation of railways both in Canada and the United States, and the heavy financial responsibility assumed by the Dominion Government in connection with the railways already taken over by it, which, added to a public debt, enormously increased by war expenditure, necessitates a heavy burden of taxation on the country, strongly protests against the proposed acquisition and operation by the Government of the Grand Trunk Railway system.
Also resolved that a special delegation be appointed by the Board Council to present this resolution at Ottawa, and secure all information possible regarding the railway situation.
The above resolution was moved by Mr. George Sumner and seconded by Mr. Lansing Lewis, and fifteen minutes after its introduction was unanimously passed by the attendance of over two hundred business men at that meeting. That indicates that all these business men had a thorough grasp of the situation, appreciated the circumstances of the case, and understood what was involved in the Government's policy of acquiring and operating railways.
In moving the resolution, Mr. Sumner said:
Why should this great question, involving all Canada be hurried through in the closing days of a session of Parliament?
Is it politics and votes that are sought-or why are the Canadian people to be led blindfolded into the fatal policy of more government controlled railways? Has not Canada been bled for a generation by deficiencies of the I.C.R. ?
Have we not before us the huge deficiencies

in recent years through the management of railways by the Government of the United States and Great Britain?
The newspapers say the G.T.R. had an operating surplus qf $1,543,000 for the past six months. Is there one man in this room who believes that the Government could have operated the G. T. R. for the past six months and shown a loss of less than $3,000,000?


Mr. BURNHAM:: Does the hon. gentleman and his clients not believe in government control? It they do, is it not true that in case the railways which are controlled object to that control and wish to give up, the Government must he prepared to own the lines?


Louis Audet Lapointe: Really, Mr. Speaker, I will not undertake to answer a question that more nearly resembles a speech than anything else. My hon. friend entertains theories of his own and some of those theories excite surprise among his fellow-unembers. The hon. gentleman is welcome to his theories but at present I am not speaking about government ownership or nationalization. I am explaining why this transaction should not be carr'ed through at the present time, and I am quoting the opinions of business men of Montreal in support of that view. To resume now with my quotation from Mr. Sumner's speech at the Board of Trade meeting:
Montreal is the great centre through which flows the produce of Canada, and if the Government would take their advice from men of experience in railways instead of looking to the West to catch votes, they would keep themselves out of trouble.
That is very plain. Mr. |Sumner said further:
I am told that there are very great errors in the Dray ton-Acworth report? Why are they not pointed out? For instance the statement that cost of equipment was added to capital, 1 am informed, is not true. Why are not the facts about what is written off and in development brought out?
Why the great hurry to acquire the Grand Trunk?
The Canadian Government has loaned money or financed the purchase of wheat and cheese for Great Britain, and also various products of Canada that are being shipped to Roumania.
Why not give a helping hand to the G.T.R. so that her pressing debts may be paid and her equipment improved? Then wait a few years until Canada gets over this horrible war's effects and until the whole country can think and work calmly.
The Government of former days subsidized the Grand Trunk Pacific. Then came a new Government that subsidized the Canadian Northern. Who is at fault for these two railroads being built from Edmonton to the Pacific?
In view of these facts, why should not the Government take over the Grand Trunk Pacific
and pay its debts and relieve the G.T.R., and thus enable it to become a credit to Canada.
It appears to me that such help to the Grand Trunk would put them in a position where the railway could, under reasonable rates of freight and proper traffic arrangements with the Grand Trunk Pacific, relieve Canada of a calamity of further Government-run railway. At the same time, there would be fair prospects of paying dividends to the English owners.
Does the Government expect that taking possession of, or tying up the Grand Trunk, will help the Victory Loan? It is the common talk of the street-Not one dollar for the Victory Doan, if the Grand Trunk is taken over or throttled.
That question comes from a gentleman who is respected in Montreal and who is not a French Canadian, but a good Englishspeaking Canadian.
The reasonable plan is to form a working agreement for freight and passengers between the Grand Trunk in the East and the Canadian Northern and Grand Trunk Pacific in the West, and thus enable all these roads to earn dividends.
Characterising the Canadian National railways as a "wooden railway, run by wooden heads," Mr. Lansing Lewis, in seconding the resolution flayed those who sought to nationalize the Grand Trunk. While the motion, he said, did not contain "enough pep," he was willing to second it and support it.
Lansing Lewis, speaking on the resolution, said it seemed to him rather a ladylike one, and if he had had anything to do with it it would have been a little more definite.
This is a most vital question and one on which the board should express itself very distinctly. It is not fair and just that such a big question should come before the country, and that the Board of Trade should not be heard from. Is it not selfish to leave a poor old government to struggle with this question alone? Are they possessed of the business acumen which we naturally look for in a congregation of such men as I see here to-day?
Are we to leave all legislation to the west, where the Board of Trade is a very wise one? The boards of trades in various cities are often foolishly jealous of one another, but I know the Montreal Board of Trade does not want to boast as having the whole say in this matter and we passed a resolution in July last that was very good. He hoped they would not think him discourteous if he said that the question was such a big one that it required a meeting of the whole board to express its opinion rather than simply the council alone.
Continuing his remarks, Mr. Lewis asked what had been the result of the resolution. He did not think that any of them had seen any results except that the Government were going to do exactly the thing they did not want them to do. It was by their actions that they showed what was in them. They knew what happened to resolutions, stacks of resolutions were being proposed and carried every day, with an extra quantity on the first of January, but they must

show that they meant what they said in order that the resolution had any effect.
" When you want a thing done you must go to the Government and tell them what you want done and get some attention," declared Mr. Lewis, " That is the only way we car. get attention. X>o you realize the position of the Montreal Board of Trade? It is in the metropolis of Canada, the head of commerce, hanking and everything else. We must enlist the interest of all the boards of trade throughout the Dominion on this Dominion question, for we want their assistance. A person by the name of Wilhelm Hohenzollern caused to be injected into the German people a very viscous bias, and we know the result. Another person in the province of Ontario seems to be playing much the same game, and entirely turning the heads of our people in Ontario, but that borders on politics.
''I have pored over the newspapers and have not heard a single man who pretends for a moment that our government or any government in any country can run a railroad.
"I don't want to allude to that ridiculous railway that is said to run between here and the lower provinces, the laughing stock of Canada."
Mr. Downey: "It is the wooden railroad. I christened it that years ago."
Mr. Lewis: "Yes, the wooden railroad run by wooden heads. Any government-run railway means increased taxation, but for some reason members of parliament who have taken the oath to serve the best interests of this country are preparing to vote for It and we are paying those gentlemen $2,500 each to put us in the hole."
I do not think that he alluded to members on this side of the House, because we are making a fight on that.
If you really mean what this resolution says so very daintily, I do ask you to express yourselves in such a way that the council will feel that it is necessary for them to take such steps as will induce the Government to realize that the Board of Trade of the metropolitan city of Canada looks on this project with the greatest horror as being one that is bound to bring disaster and which should be avoided in every possible way.
That represents my view exactly; I could not present it any better than it is given there.
Mr. A. A. Ayer was the next speaker. He said:
-that Montreal ae an individual city through Which poured the commerce of the country should have the biggest voice In determining whether or not it was best to take over the Grand Trunk railway.
And he went on to give good reasons why the resolution that had been presented should be adopted.
Mr. James Cleghorn, Vice-President of the Board of Trade, then made the following statement:
As a member of the council I would just like to say a few words in reply to Lansing Lewis. Mr. Lewis had a feeling that we should

recommend that something be done. We sent a recommendation to the Prime Minister last July. At that time no person had any idea that this was to be sprung upon us and only one week ago the Prime Minister informed the House that the session would end in another week. Not even the members of the Opposition at Ottawa had enough information to discuss this important question. They are asking for a delay until next session in order that they may acquire the proper information so as to find out if the statements of this present Government are facts, and that the taking over of the railway is the only way out of the situation.
In looking at the papers we find that the Minister of Hallways t lade a statement that if this deal goes through we will have 21,780 miles. The largest system of national ownership in the world. That is what astonishes us. We have heard about the Intercolonial. It is a crime the way that road has been operated and it fills us full of fear when we hear about this proposal.
It is useless therefore to expect your council to put a definite proposition before the Government. That would be impossible. We have not the proper figures upon which to work. We are told that we will not have to pay any money but the country nevertheless will be responsible for the deficits and the annual fixed charges if this deal goes through and we cannot tell what this is going to cost us. The council has been alive to this matter. Last week we sent a telegram to the Acting Prime Minister protesting against the scheme.
Among the other speakers were Messieurs William Galbraith, F. W. Covert, W. P. Downey, Huntley Drummond and John Baillie, -President of the Board of Trade. I will not read the complete list of names, because there were over two hundred at that meeting.
On the 20th of this month this resolution was presented to a committee of the Cabinet by a delegation consisting of Messieurs John Baillie, Huntley Drummond, A. A. Ayer, W. B. Miller, Herbert Molson and George Sumner. The delegates were introduced by Senator Smeaton White to the committee of the Cabinet, which consisted of the following members of the Government: The Acting Prime Minister, Sir George Foster; Mr. Meighen, Mr. Rowell, Mr. Doherty, and Senator Robertson. With regard to what took place on that occasion, the Montreal Star says:
The hearing took place behind closed doors and the delegation, judging by their reticence, were evidently completely tied up as to what transpired.
The members of' the delegation who afterwards were questioned as to their views of the situation declined to make any statement.
Sir George Foster said that the delegation presented two resolutions expressing the sentiment not only of the council but of the whole Board of Trade. Of course, we do not know what took place, but this despatch-Whether the gentleman

who sent it to the iStar was inspired I do not know-says this:
There is no question that the Government has things pretty well lined up to secure the . passage of the Bill. For months many powerful .and influential interests have been insisting upon the acquisition of the road and the presence here of heads of the Canadian Northern and of a certain politician, who had much to do with the formation of the Union Government has afforded evidence of what was in the wind.
That is what I endeavoured to say the other day to the President of the Council (Mr. Rowell), namely, that something of that kind was said,-that there was a man behind who was holding the strings and influencing the Government in trying to push this deal through the House.


Newton Wesley Rowell: I will give my hon. friend the answer made in this House this afternoon by the Minister of Railways (Mr. J. D. Reid), namely, that the statement is absolutely false, manufactured out of whole cloth by the interests which are opposing the policy of the Government, a policy which is in the public interest.


Louis Audet Lapointe: Who has manufactured that anyway?


Newton Wesley Rowell: The supporters of my
hon. friend on this motion.


Louis Audet Lapointe: Let the President of the Council (Mr. Rowell) remember that the Star is a friend of the Government, not mine, and I am to-day putting all these things before the House for a certain purpose. I want my hon. friends opposite to be sure that they will be sincere and not hypocritical at the proper time. The same despatch continues:
Montreal's delegation to-day, though representing the greatest body of business men in the Dominion, thoroughly convinced of the peril of nationalization, was as the voice of those crying in the wilderness. They were received courteously but that is all that they got. However, the impelling force behind the deal and the Government, evidently, is an acquiescent party prepared to utilize its prestige and influence to see it through without regard to any disastrous consequences it may entail.
There is no way of getting out of this. That is to say, our hon. friends opposite will not take any reasons or arguments; they are ready and they have decided to pass this measure, and in proof of that I have only to quote these words of the acting Prime Minister (Sir George Foster) to the delegation:
" The measure is before the House and will be pressed to a conclusion," said Sir George Foster, acting Prime Minister, to the delegation from the Montreal Board of Trade.
We are losing time in discussing this matter, but we will do our duty up to the last moment to show that wj* are sincere on this question. I have given the protest of the Board of Trade, but let hon. gentlemen remember that there is another Board of Trade, the Chambre de Commerce, as we call it, of the city of Montreal which represents the French business men of that city and which includes many English-speaking members as well. In the Gazette of this morning it is reported that they met and passed a resolution. The article in the Gazette reads:
Opposition to the proposed purchase by the Government of the G.T.R. was voiced at a special general meeting of the Chambre de Commerce yesterday and a resolution of protest was adopted with one dissenting voice. The resolution, brought in by Mr. C. H. Catelli, cloirman of the committee on transportation, which, at the last meeting, was instructed to study and report on the G.T.R. question, is as follows: '
This is the resolution:
Whereas the national debt of Canada has reached such a figure that the resulting taxation jeopardizes the chances of competing, in Canada as wel as abroad, with foreign producers;
"Whereas the manner of acquisition of the Grand Trunk Railway system proposed by the Government is a most onerous method;
Whereas the Government might, perhaps, *without acquiring the railway, secure the right of way over the Grand Trunk lines which could insure to the Government transcontinental lines the necessary feeders;
Whereas experience, in Canada and elsewhere, has demonstrated that a democratic state cannot operate a railway as economically as a private company;
La Chambre de Commerce of the district of Montreal declares its opposition to the purchase of the Grand Trunk Railway system by the Government of Canada according to the resolution presently before Parliament;
And expresses the opinion that later it will be found expedient to devise a method of transferring to a private company all the Government lines.
The report of this meeting in the Gazette is in part as follows:
In moving the adoption of the resolution which he had submitted, Mr. Catelli stated that the committee in its study of the question had concluded that if the deal were proceeded with there were only two methods of taking over the system, sequestration and acquisition by arbitration. He ventured the opinion that sequestration was out of the question, as the road had been able to pay dividends. His opposition to the arbitration method was based on a quotation from the Hansard which tended to show that the awards of the arbitration board would be final and not subject to appeal.
Not even subject to a report to this House after the arbitration. That is to say, the representatives of the people will have

nothing to say as to the decision given by these gentlemen from Toronto-because 1 expect that three Toronto men will be the experts on this question; there is no doubt about that, because I may say, en passant, that when somebody who wants to have his property expropriated has already one man on the arbitration board, it is very easy to get a second. The article continues:
Mr. Catelli submitted that this procedure would be unbusinesslike, particularly as practically no information as to the reasons for the proposed acquisition had been laid before the people by the Government.
Mr. J. N. Cabana, in seconding the resolution, declared that the question was one of the most serious which had ever come before the country. He briefly outlined the history of the G.T.R., and attributed its failure to achieve more favourable results to the fact that the directors of the road were all in* England and thus had at best only a detached interest in this country. He alluded to the deficit of the Canadian Northern under Government administration and called upon his hearers to imagine what the deficit would amount to if all these roads were taken over. Mr. Cabana suggested that all three transcontinental roads should be placed under common control of a private company. He thought that a more practical plan than that of Government acquisition was needed.
Another big manufacturer in the city of Montreal, Mr. Alfred Lambert

thought it extraordinary in a democratic country such as Canada that such a situation should arise as the Government attempting to put through such a deal without furnishing the people with the most minute details as to reasons for, and people behind, such proposal. He said that the spread of Bolshevistic tendencies in this country was greatly deplored, especially by the Government, but declared that the Government, in pursuing such a policy as that which it had adopted with regard to the G.T.R. deal, was going farther than any other agency in propagating Bolshevism. He even intimated that the people, if this course of procedure were persisted in, might take over the reins of government themselves. While not opposing the principle of nationalization, he thought that a full light should be thrown upon the matter.	'
There was only one dissenting voice, and that was as to the manner of taking over the shares. A copy of this resolution has been sent to every hon. member of this House, so no doubt the Government have received copies.
The Canadian Manufacturers' Association are also opposed to the Government's proposals. So unanimous in their opposition to the Grand Trunk railway deal, proposed by the Federal Government, that they decided that discussion was unnecessary, and believing that the reasons for their opposition were so obvious, the Quebec Division of the Canadian Manufacturers' Association passed a resolution against the

scheme at their first annual meeting last night, to the accompaniment of a determined and solid vote and hearty applause. The resolution reads:
"In view of the grave financial responsibilities already assumed by the Government of Canada, through the acquisition and operation of railroads, which responsibilities add to a public debt enormously increased by war expenditures, and which will necessitate a heavy burden of taxation on the country.
"And in view of the actual results of such government operation of railroads both in Canada and in the United States.
''Be it recorded that the general meeting of the members of the province of Quebec division of the Canadian Manufacturers' Association held in Montreal on October 1'6, places itself on record with the Dominion Government, as unalterably opposed to the contemplated acquisition and operation by the Dominion Government of the Grand Trunk railway."
The motion was introduced by F. W. Stewart, the vice-chairman of the division. Mr. Stewart said that at a meeting of this kind the question of the Grand Trunk purchase should be taken up as one of the most important issues facing the country to-day.
Without further comment he read the motion as given above, and it was greeted with applause'on all sides. He then called for a seconder and Lieut.-Ool. W. J. Sadler responded, but without making any comment upon the proposed resolution. The chairman called for expressions of opinion but there were none offered. He then put the motion and called for a show of hands in favour. A veritable forest Of hands sprang up, and when an opposition vote was called there was none. The resolution was declared carried unanimously. The president instructed the secretary to wire the resolution at once to the acting Premier and the Minister of Railways.
No doubt the Government have received that protest also.
I also wish to read a few extracts from editorials in the Montreal Star, which will no doubt appeal to hon. gentlemen opposite. The editor of the Star is addressing them, not us, because he thinks the members of the Opposition are doing their duty to the country in this matter. He talks very straight:
*But the deal itself, above and apart from all its possible graft,-
Did hon. gentlemen opposite hear that? Is there any possibility of graft in this transaction? The editor of the Star, at all events has his suspicions:
iBut the deal itself, above and apart from all its possible graft, is pregnant with disaster. Not only does it add hundreds of millions to the debt, not only does it commit the country to annual millions which will never be earned, to necessary capital expenditures for maintenance running into scores of millions, and to tangled Grand Trunk legal liabilities in the United States amounting to scores of millions more, but as -at present before the House it commits the country definitely to the greatest

and most dangerous experiment in public ownership the world has ever seen.
In another Star editorial I find this:
If the country is let in for this deal, hastily and without a prepared avenue of alternative When the inevitable disaster impends, we shall be led near to national ruin, if not over the brink. This population cannot bear the burden of debt and deficits, the burden of waste and graft,-
Again the word " graft " is mentioned:
-the burden of political domination by the huge machine which the administration of a great transcontinental traffic system by politicians will thrust upon us.
The Minister of Railways has undoubtedly read these words with care, and, astute as he is, he must .read between the lines. The article goes on to say:
But so rigid are party bonds, even under the coalition, that there are apparently none in Ottawa to make a fight for the public welfare in so desperate a difficulty except for party reasons. But whatever the underlying motive, there is sound common sense back of the Opposition demand for slow progress and careful consideration of every step in this portentous project.
Not later than yesterday the Star 'said:
Democratic principles are completely disregarded in the present proposal that Parliament shall accept in a few days a highly complicated proposition prepared in secret conferences extending over many months. It comes out of a survival from the times of war exigency of that dominance of the executive, properly exercised when the Hun thundered at the gate, but to-day both unwise and undemocratic, a shocking reversal of British practice and an abominable denial of primary public rights. To all intents and purposes, there is to be staged at Ottawa a spectacle of taxation without representation, for a blindfolded chamber could not pretend to translate into effective influence the feeling of the people in regard to this scheme. A bold injection of the element of hurry places both the House of Commons and the people in the hands of the schemers.
Schemers, Sir! I do not know that such a word would be countenanced were it not for the fact that I am quoting an article. The rules of the House, however, protect me and if the cap fits any hon. member on the other side he can vvear it.
-a situation entirely to the liking of docile parliamentary pawns,-
Observe, Mr. Speaker, some hon. gentlemen on the other side are described as "docile parliamentary pawns." These are not my words; I am quoting them.
-fraught with the gravest dangers to the country, as all men of independent mind are aware.
I read in the Citizen of this morning the following:
Deficit reported on Canadian Northern railway operation. Total $17,011,875 up till Dec. 31 last under government ownership.
The President of the Privy Council (Mr. Rowell) said that this question had not been anticipated at the time it was stated that prorogation would shortly take place. He said that the agreement had been suddenly submitted to the Government. The agreement was dated October 9, but the correspondence began in March, and the advice to the Grand Trunk concerning the receiver was contained in a communication dated March 7, 1919. Now, the question we cannot refrain from asking ourselves is, what transpired between that time in March and the middle of October? The letter of the 24th March, which it is said was "handed to' Sir Thomas White by Mr. H. G. Kelley," conveyed the intelligence that the negotiations were completed. What happened since then? At page 1021 of Hansard on October 10 the Minister of the Interior says:
I need not read the cables themselves for the reason that if my memory is correct they have already been produced and are embalmed in Hansard ; but further for the reason that they are embodied in the letter dated 11th July, 1918, addressed by myself to Sir Alfred Smith-ers, President of the Grand Trunk Railway Company. This letter was written after thorough consideration and review on the part of the ministers then overseas, and after full conference with members of the Government at home. That the re'rrd may be properly based, I shall read that teller which is as follows:
That letter is dated July 11, 1918, and refers in part to the conferences that had been held, but I want to know what led to that letter of the 9th of March, and by what process Mr. Smithers had come to the conclusion to submit this proposition to the Government with a view to arbitration, when there had been no previous hint of any kind. Until I am convinced to the contrary, I shall believe that the decision to hand the matter over to the Government was arrived at long ago and that the Government was just waiting until the last moment to spring it upon the House.
The Prime Minister has stayed away and has not compromised himself; and Sir Thomas White, who is responsible for a great deal of this trouble, is no longer Finance Minister. His successor has not had very much experience in Parliament as yet, and I do not think he will be able to offer a strong defence of this bargain. If I understand correctly the vote is to be taken to-night and that hon. gentleman has not yet spoken on the question although he should be here to defend this bargain


John Dowsley Reid: 
John Dowsley Reid: Let me tell my hon. friend what we get. In the first place, the original debenture stock is simply a mortgage; there is not any question about that. The hon. gentleman knows that, for it was stated in this House, that what we will get is the script of the first, second and third preference stock and the common stock, which will be all handed over and deposited in the vaults of the Dominion Government in Ottawa. Now as to the guaranteed stock-and I can anticipate what the hon. member was going to ask me. That guaranteed stock has a voting power the same as any other stock, but that voting power is taken away and it is simply treated as the original debenture stock-we pay the interest on it in perpetuity, but we "have the right at the end of thirty years, if the Government of this country feel that that stock is more valuable, to take it over and pay for it. Therefore, in the meantime that stock is deprived of its voting privileges and simply becomes a bond issue.


William Lyon Mackenzie King: I am sorry to interrupt the minister, but I would like to have this point clearly understood. His remarks, as I gather, now imply that what the Government gets in this 4 per cent guaranteed stock is the right to purchase it thirty years from now?


John Dowsley Reid: Yes.


William Lyon Mackenzie King: That is true. But the Government does not get the stock at the present time?


John Dowsley Reid: We do not. have the script transferred to us.


William Lyon Mackenzie King: No, certainly not.


John Dowsley Reid: And I can tell the hon. gentleman in a Aninute why we do not want to buy it now.


William Lyon Mackenzie King: What becomes of government ownership then?


John Dowsley Reid: I will tell the hon. gentleman why. It is simply because that stock, for which one hundred cents on the dollar was paid by those who hold it, earns 4 per cent, and if we bought it we would have to pay 5j or 6 per cent.


William Lyon Mackenzie King: I do not wish to make too
many interruptions, but I think it. will help us to understand exactly what the Government is getting.


John Dowsley Reid: Anything I can do to convert the hon. gentleman I shall be quite happy to attempt.


William Lyon Mackenzie King: 
John Dowsley Reid: Yes.


William Lyon Mackenzie King: And when the Government
gets that stock and puts it into its vaults it gives to the holders of that stock an equivalent value in Government guaranteed stocks bearing interest at four per cent which the Government cannot for a period of thirty years purchase from them.


John Dowsley Reid: The hon. member is
absolutely wrong; he knows he is wrong when he makes that statement, and I will tell him why. With regard to the first preference stock, $16,643,999.78; the second preference, $12,312,666.50; the third preference, $34,884,534.95 and the common stock, $116,583,124.44-I repeat that script for that stock will be transferred and placed in the vaults of the Dominion Government. But the hon. member suggests that the Government will then issue equivalent stock and pay interest on it at the rate of four per cent. He must know that that is not correct. These four stocks are submitted to the arbitrators for valuation. The hon. member tries to make the people of Canada believe that we are taking over that common stock, for instance, amounting to $116,583,124.44, and issuing equivalent script and handing over four per cent interest on it

in perpetuity to the shareholders of this company.


Some hon. MEMBERS:: No.


William Lyon Mackenzie King: Let me make myself perfectly clear. What I say is this: The Government proposes that its arbitrators shall say what the value of that stock is. Then the Government proposes to give to the holders of that stock a Government stock carrying a guarantee of four per cent and to place it beyond the power of the holders of that stock to have the stock purchased by the Government within thirty years. When the minister says that the Government is getting a certain value in stocks which it is putting into its vaults, that statement is misleading inasmuch as the Government gives back what the arbitrators say is the equivalent value of that stock.


John Dowsley Reid: I wish to make it plain, I do not want there to be any misunderstanding as between the leader of the Opposition and myself. The arbitrators will place a -value-" if any," mind you-upon the stocks that I have just mentioned, and then the Government will issue stock for the amount at which the arbitrators value this stock, and on that stock the Government will pay four per cent. Now that is entirely different from what the leader of the Opposition said.


William Lyon Mackenzie King: That is all that I have said.


John Dowsley Reid: Perhaps that is what the hon. gentleman meant, but he expressed it in such a way that any member of the House or any private citizen who reads his statement might think that the Government were handing all that equivalent stock over and paying four per cent interest on it, and if I had not answered my hon. friend the people would have believed that was the .case. The member for North Cape Breton and Victoria (Mr. McKenzie), when he was speaking the other day, said that if we took over this railway system the Government would be pledged to pay in perpetuity a sum by way of annual interest on the total liabilities of the Grand Trunk, which would include all those stocks. Had the Minister of the Interior not replied to this statement, it would have gone out to the country as correct. Now, that is the answer with reference to the stock.


William Lyon Mackenzie King: May I see whether we are absolutely agreed on this main point? As I understand the minister now, these stocks that have been referred to are to be valued by arbitrators.


John Dowsley Reid: Yes.


William Lyon Mackenzie King: They are the stocks that the Government is going to put into the vaults. That is what the Government is getting; that is all that the Government is getting.


John Dowsley Reid: What else do.they want?


William Lyon Mackenzie King: Then suppose the arbitrators say that the value of these stocks is nothing, the Government gets nothing.


John Dowsley Reid: They get the stocks.


William Lyon Mackenzie King: Just so; they get nothing. If the arbitrators give the stocks a value of a million dollars or ten million dollars, then the Government hands over to the owners of that stock a Government-secured stock, guaranteed at four per cent rate of interest; so that the Government gets nothing at all.


John Dowsley Reid: That is simply absurd. The hon. member states that if the arbitrators decide that the four stocks I have mentioned are worth nothing, we shall get nothing. Well, I will tell you what we do get in that case. In the first place, we get absolute control and ownership of the Grand Trunk Railway system without paying anything for the stock- That is one thing we get.	-


William Lyon Mackenzie King: Where is the ownership in that?


John Dowsley Reid: Well, wait until I finish telling you what we get. The Drayton-Acvrorth report showed that during the ten years prior to the war the average annual interest earned and paid on the stocks that we are now arbitrating was $1,100,000, or $11,000,000 in ten years.


Mr. JACOBS:: What was the dividend percentage?


John Dowsley Reid: It is mentioned in the Drayton-Acworth report; the hon. member can find it there for himself. Now, the Government was willing, the people of the country were willing, to continue paying that $1,100,000; so that if the arbitrators say that this stock is worth nothing we not only get ownership, control and operation of the road and get the stock for nothing, but we save $1,100,000 per annum more than is involved in what we are now proposing,


William Lyon Mackenzie King: May I put this question? I am quite prepared to admit-


Some hon. MEMBERS:: Order.


Mr. DEPUTY SPEAKER:: The hon. member (Mr. King) will have to limit himself
to a question, and it can only be asked if the hon. minister consents.


John Dowsley Reid: I am willing to allow the hon. member to put a question.


William Lyon Mackenzie King: I think it is important to make clear the distinction between control and ownership. The minister speaks about the Government owning the Grand Trunk Railway system. In that event will the minister tell the House what is the meaning of this clause in the Bill:
The present guaranteed stock and the new guaranteed stock-
That includes all the capital stock and debenture stock.
-or any part thereof, may be called in or re deemed by the Government, at par, at any time after thirty years from the date of the appointment of the said Committee of Management, on six months' notice, by advertisement, to the holders thereof.
Where is the " ownership " of property which cannot be acquired for another period of thirty years?


John Dowsley Reid: I must frankly admit that it is pretty hard for me to convince the hon. member on any of these matters, but perhaps I might try to do so. The hon. member's question Is: Where is the ownership, because the guaranteed stock is held practically as a debenture stock, whoever it may be held by, also where is the ownership, because the stock that we issue is in the hands of the public? I will try to explain to him vdiere the ownership is. The guaranteed stock, whoever it may be held by, and the new stock that may be issued, will simply be held as security on which they will get interest without their having any say as to operation or sale, without being able to interfere in any way with the operations of the Grand Trunk and with knowledge of the fact, that the Dominion Government have the right under this Bill to sell or otherwise dispose of'any portion of the road. We have the stock transferred to us; we own the first, second and third preference stock and the common stock; and instead of borrowing money at 5i or 6 per cent in order to pay the award, we are simply giving them as collateral security for the first, second and third preference and the common stock, an issue of non-voting stock. That is as well as I can explain the matter to the hon. member, and I think that will satisfy the public as regards public ownership. The hon. member, if I understood him aright, argues that because we own only the stock, we really do not own the railway and can do nothing with it. We

now own all of the stock of the Canadian Northern railway. Might I ask the hon. member if he now considers that the Government are really the owners of the Canadian Northern system?


Samuel William Jacobs: Unfortunately, yes.


William Lyon Mackenzie King: Does the Government pay dividends to the stockholders?


John Dowsley Reid: That is not the question.
Mr. MACKENZIE KING. That is what they are doing by this measure. That is quite different from this.


John Dowsley Reid: I want to ask the hon. member again this: The Dominion Government own the stock of the Canadian Northern Railway Company with bonds against it just the same as in the case of the Grand Trunk. Will he say now that we do not own the Canadian Northern railway? He cannot say that; he knows he cannot say it. The hon. member this afternoon argued, if 1 understood him aright,-and he is doing so now-that in taking over this stock, we are not really getting government ownership. During the course of his remarks this afternoon, I must frankly say that I was waiting very anxiously to see whether he was in favour of public ownership or private ownership, but he did not commit himself. I should like to ask him now. Are you in favour of public ownership?


William Lyon Mackenzie King: If the minister is unable to frame a policy, I am quite prepared to take the responsibility of framing one when the time comes.


John Dowsley Reid: I should like to ask the hon. member another question.


Georges Henri Boivin: The hon. minister is certainly not in order in putting questions to an hon. member who has already spoken and who has exhausted his right to speak.


John Dowsley Reid: Have I the privilege of asking him whether he would consent to a question or not?


Georges Henri Boivin: It could possibly be done with the unanimous consent of the House, not otherwise. A similar ruling was given last night by Mr. Speaker, and I must respect that ruling.


John Dowsley Reid: I bow to your ruling, Sir. The only point I wish to make is this, namely, that we now have in this House a leader of the Opposition who, in my opinion, is afraid to stand up and say

whether he is or is not in favour of public ownership. As regards the present transaction, every hon. member opposite, with the exception of the leader of the Opposition, has endeavoured to impress upon the people that this side of the House in adopting the policy of taking over this road is entirely committed to public ownership. He is the only one of the whole party who is endeavouring to persuade the people now that the other members on the opposite side are all wrong; that it is not public ownership at all; that we really do not own the railway. Is it not a nice spectacle to see the leader of the Opposition in his first remarks in this House as leader take a position of that kind?
It is not a question whether the members of this House are in favour of public ownership or not; it is a question whether the Government are going to take over this road or let one of two or three things happen. I only wish that you, Sir, had not ruled that I could' not ask the hon. member one or two more questions, because I would like to know which one of these two or three alternatives he would be willing to adopt. In the first place we are face to face with this proposition, and it is all on account of the policy of hon. members on the Opposition side when they were in power, and the leader of the Opposition (Mr. King) who was at that, time a member of this House, is also responsible for the railway tangle in which we find ourselves at the present time. I will tell the hon. member why we must decide to-day whether the Government will take over this railway, not because of public ownership but in the interest of the people of this country, or, whether we will let the Grand Trunk go in another way that would prove disastrous to the Canadian people. I will tell him why we are in this trouble. The Grand Trunk railway, the Canadian Pacific railway and the Canadian Northern railway were all at one time doing well and prospering, with great futures,in this country. What happened? In 1903, the Grand Trunk wanted to get into the Great West, just to get a connecting line into Saskatchewan and Alberta. I was here at the time and I know what I am speaking about. I saw Mr. Charles M. Hays, and he declared he did not want to go further than Saskatchewan and Alberta, but the Government of that day-and the hon. member who is now leader of the Opposition was one of those responsible in the matter-insisted that the road must be built from Moncton to Winnipeg and from Edmonton to the Pacific.

The company agreed to do that and the Government of that day told Charles M. Hays, and led the people of this Dominion to believe that it would not cost this country more than, I think, some $13,000,000.


Mr. TOBIN:: Mr. Speaker-


John Dowsley Reid: I will not allow any more interruptions. Mr. Speaker, I want, with all respect to the hon. member to say this. I am prepared now to let him or any other hon. member on the other side of the House ask me a question if the leader of the Opposition will let me ask him one. The leader of the Opposition (Mr. King) sits quiet and makes no reply to my question.


Edmund William Tobin: He said-


Georges Henri Boivin: Order.


Edmund William Tobin: I just want to put the minister right.


Georges Henri Boivin: The hon. member has no right to interrupt the minister, who has the floor, without his consent.


John Dowsley Reid: Now let me tell the members of this House and the public just what the leader of the Opposition did to ge*' as in the railway muddle we are in at the present time.


Edmund William Tobin: He was not in the House then.


John Dowsley Reid: He was a minister in the Laurier cabinet, and advocated his leader's policy consistently. Hon. gentlemen opposite were responsible for the building of the Transcontinental, and they told the Grand Trunk company and the people of this country that it would cost only some $13,000,000, but when they got through and were ready to hand it over to the Grand Trunk they found it had cost over $200,000,000, on which the Grand Trunk by the terms of the agreement had to pay interest in perpetuity after seven years. Was not that enough to make the Grand Trunk or any other railway company throw up its hands? The construction of the Grand Trunk Pacific was carried on simultaneously. The Grand Trunk guaranteed the bonds of the Grand Trunk Pacific believing that the late Sir Wilfrid Laurier and his government would carry out their policy. But when the Grand Trunk Pacific was completed and the Transcontinental was ready to be handed over, the Grand Trunk were faced with the liability, if they took over the road, of interest after seven years upon $200,000,000 to $217,000,000, instead of upon $13,000,000. It was impossible for the Grand Trunk to operate successfully with a
liability of that amount. The Grand Trunk was faced with a liability of $8,000,000 or $10,000,000 per annum if they operated the Transcontinental .railway, and it was absolutely impossible for them to succeed on those terms. They had also guaranteed the Grand Trunk Pacific securities to an enormous amount, and they had pledged that they would pay no dividends on the old Grand Trunk stock if the Grand Trunk Pacific did not earn the guarantees the Grand Trunk had given. They are therefore in the position to-day that they cannot pay their shareholders any dividends, if earned, until the Grand Trunk's guarantees in respect of the Grand Trunk Pacific are met, and the Grand Trunk is also liable for the deficits on the Grand Trunk Pacific. How under Heaven could the Grand Trunk live with liabilities of that amount? Yet to-day the leader of the Opposition, if I interpreted his remarks correctly, and those behind him, advocated that we keep the Grand Trunk Pacific, the Canadian Northern and the Intercolonial, and release the Grand Trunk from all of its liabilities and let it continue to operate or be taken over by the Canadian Pacific. That is such an absurd proposal that no government could accept it and remain in power.
Faced with this position, what could the Government do? It is not a question whether we want public ownership or not. We have the Canadian Northern, with its lines in Western Canada superior to the Canadian Pacific and the Grand Trunk Pacific put together. The Canadian Northern lines in that territory cannot help but pay. The Government of the late Sir Wilfrid Laurier allowed the Canadian Northern to extend its line from Port Arthur east, and this put the road practically in the same position as the old Grand Trunk, the western lines becoming liable for the amount guaranteed in respect of the extension to the east. Unless the Canadian Northern can get feeders in Eastern Canada it is in a hopeless position. The Grand Trunk Pacific from Winnipeg to Port Arthur is in a similar situation. It has no lines in Eastern Canada gathering up traffic to be taken West, Then in Eastern Canada we have the Grand Trunk system with no connections in the West, but with better facilities for gathering freight in Ontario and Quebec than the Canadian Pacific, or the Canadian Pacific and the Canadian Northern combined. Would it have been fair to the people of Canada, who have put so much money into the Canadian Northern



and the Grand Trunk Pacific initiated by the Government of the late Sir Wilfrid Laurier, for this Government to say:	We
will not force the Grand- Trunk-I use the word "force "-to join up with the other roads and complete the national system? Whether the road is operated by the people of Canada or by a private corporation it will be in just the same position to compete for traffic with its rival, the Canadian Pacific. Yet the leader of the Opposition this afternoon tried, for a political purpose, if I may be pardoned for saying so, to make a certain portion of the public believe that we are taking over the road simply because we believe in public ownership. He knows that is not the case. He knows we have no alternative to taking over the Grand Trunk if we want to save that road, as well as the Grand Trunk Pacific and the Canadian Northern, and in years to come give the people of this country the cheapest freight and passenger rates it is possible for any railway to give.
The leader of the Opposition also stated that this was neither public ownership nor private ownership, but was simply transferring the road to the present management of the Canadian Northern system. Perhaps he did not say so in so many words, but I got the impression that he was trying to* lead the public to believe that we were handing the road over to Mackenzie and Mann.


Some hon. MEMBERS:: Hear, hear.


John Dowsley Reid: My hon. friends say " hear, hear," which shows that I am interpreting the hon. gentlemen's remarks correctly. Now let me say to the leader of the Opposition, what I said this afternoon, that neither directly nor indirectly in any shape or form have Mackenzie and Mann been concerned in the management of the Canadian Northern or the Canadian Government railway system, and the hon. gentleman knows it. And when he or any other member of this House makes the statement in this Chamber or otherwise gives it publicity, that Mackenzie and Mann have either interfered in or discussed the operation of the Canadian Government railways with any member of this Government, from the Prime Minister down, he is making a statement that is absolutely false and unfounded. I want to emphasize that fact, because the allegation has been thrown across the floor of the House that Mackenzie and Mann were operating the road.


Samuel William Jacobs: What about Mr. Lash?


John Dowsley Reid: Mr. Lash is a solicitor like the hon. member himself and is glad to earn any money he can in the shape of solicitor's fees.


Samuel William Jacobs: I should like to know-


Some hon. MEMBERS:: Order, order.


Samuel William Jacobs: May I ask my hon. friend a question?


John Dowsley Reid: Yes.


Some hon. MEMBERS:: Order, order.


John Dowsley Reid: The hon. gentleman may put his question.


Samuel William Jacobs: I should like to know from the minister if Mr. Lash is advising the Government in this transaction?


John Dowsley Reid: Mr. Lash is one of the best railway lawyers in Canada, and is as respectable and honourable a man as the hon. member himself. His word is as good and his honour as unsullied as the hon. gentleman's, and he is advising the Government on this question.


Samuel William Jacobs: I asked the question merely to secure information, and not with any intention of reflection on that gentleman's honour.


John Dowsley Reid: 
Daniel Duncan McKenzie: We did not manage their road; it was their own management.


John Dowsley Reid: The old Grand Trunk Railway system has not been managed, probably, as well as it would have been if it had been under a Canadian directorate, but even with the management over in England the hon. member knows that the Grand Trunk railway was always able to pay the interest on the debenture stock, amounting to $7,000,000, the interest on the guaranteed stock, and $1,100,000 on the stock to be arbitrated. So even under what my hon. friend terms the bad management of the Grand Trunk it was able to earn those dividends. The only difference between my hon. friend and me, Mr. Speaker, is this.
I say the Grand Trunk people were deceived when they were assured that it would only cost $13,000,000 to build the Grand Trunk Pacific; that is where the bad management came in, and not in the operation of the railroad. If we will just separate the Grand Trunk Pacific from the old Grand Trunk, the latter will not only pay the interest on all of these stocks that I have mentioned and which are the subject of the proposed arbitration, but it will earn a surplus in the future as in the past. In taking the Grand Trunk over, the liability that the hon. member for Cape Breton mentions of some $10,000,000 or $11,000,000 on the capital will be no liability, because that interest was earned in the past and will be earned in the future, and by transferring Grand Trunk traffic to our Canadian Government Railway system and our western traffic to the Grand Trunk we shall effect a saving in operating cost which, I believe, in the next five or six years, as was stated by some hon. member this a-

ternoon, will enable our Government railway system to make both ends meet.
I want to mention once more the Halifax and St. John situation. The hon. member for Cape Breton, more-I believe for political reasons than by way of argument, tried to emphasize the fact that we have spent millions of dollars on Halifax and millions of dollars on St. John, and that all this vast expenditure will be worthless, for we are now going to build up Portland. That is the effect of the hon. gentleman's statements. Let me repeat again, Mr. Speaker, that so far as Halifax is concerned, it was put in the position by the Government of that day that it got no benefit in any way from that traffic agreement with the Grand Trunk railway. By taking the Grand Trunk over we are in a position to give more business than we ever did to Halifax, to operate a fast Atlantic service in connection with Halifax, and to take people to any part of Canada-to Quebec, Ontario or the West, on lines owned, operated and controlled by the people of this country. That is the position we are putting Halifax in. So far as St. John is concerned, the hon. member knows that we have within the last month or two -I cannot remember the exact date-made a connection with the Transcontinental from McGivney Junction into St. John, and we are in a position to carry traffic from Ontario or any other part of Canada right into the city on an equal basis with the Canadian Pacific Railway.
The hon. member and other hon. gentlemen on his side of the House have emphasized the fact that the old Intercolonial has not paid in the past. And by the way, when the hon. member from Cape Breton urged so strongly that we should keep to private ownership, I noticed he did not say to the Government, "Sell the Intercolonial. We are tired of public ownership." He would be the last man to say that, for if he ventured to voice such an opinion he would never be re-elected. But, Mr. Speaker, we have been handicapped in the past by having the Intercolonial railway carrying traffic from Montreal to Halifax on the same basis as from Montreal to Portland, the reason being that the Grand Trunk railway and the Canadian Pacific railway squeezed the Intercolonial into this position : They said, " We can carry freight from Montreal to Portland for so much per mile, and we will give you only the same amount for carrying it from Montreal to Halifax as we would earn to Portland." Now, if a carload of freight starts from [Mr. J. D. Reid.l
Edmonton and goes to Halifax or St. John, the Intercolonial will get its due share of its earnings, in other words, pro rata rates, and it will show a profit probably instead of a deficit.
So far as the Intercolonial is concerned I want to take issue with the hon. member for Cape Breton. He insinuated that the Intercolonial was not run on a basis similar to that of a privately owned road. I want to say that, so far as I can see not only while I have been Minister of Railways, but under my predecessor's regime at least, and I believe still farther back, the Intercolonial has been operated by men who are as good railway men as any on the Canadian Pacific railway or any other railways in Canada, and I want to say that about the Intercolonial railway employees also.	_
I say that it is managed as economically and that it is as free from political interference as is the Canadian Pacific railway. There is no doubt about that in my mind.


Daniel Duncan McKenzie: Why didn't you make any money, then?


John Dowsley Reid: I have just explained the reason why; it is pretty hard to get the hon. member to understand anything. I am having the same trouble that the Minister of the Interior (Mr. Meighen) had the other day. He tried in every way to put the hon. member right, but he did not succeed; and when the Minister of the Interior failed in that respect I could hardly succeed.
The leader of the Opposition (Mr. King) came into this House and joined with other hon. members opposite in the complaint that we have brought this Bill in at the end of the session. A few days ago the member for North Cape Breton and Victoria (Mr. McKenzie) pointed out that at a certain stage in the session the Acting Prime Minister (Sir George Foster) had intimated that * we hoped to prorogue at the end of that week or during the following week. Because the Acting Prime Minister said that the hon. member for North Cape Breton said:
" Mr. Speaker, we want to go home; surely you are not going to ask us to sit here another week or two weeks to pass this Bill. We want to go home, no matter what happens; the country and the railways can go to the mischief; please let us go home and do not proceed with this Bill." And the leader of the1 Opposition himself, on the first day that he takes his seat in the House and in his first speech, says to the Government : " I have sat in the House only one day, but we want to go home. It will be

awful if I have to sit here any longer; please let me go home." That was the position of the leader of the Opposition. That hon. gentleman has been here in Ottawa; he knew what was going on, and as he did not have to concern his mind with legislation he had ample opportunity to evolve some policy which he could bring before, the House and say: " There is the policy that I want the people of this country to adopt in connection with the operation of railways." But instead of that, Mr. Speaker, his only policy is this: " Please let us go home; we have been here too long."
There are several other matters that I would like to touch upon, but I have; already spoken much longer than I had intended to speak. But may I point out this in closing: In his first speech to-day the leader of the Opposition made, so far as I can remqmber, only two points. First, he tried to convince hon. members and the people of the country that even though we got all the stock of the Grand Trunk; even though we got the control, management and operation of the road; even though we got complete possession of it and were in a position to sell it or dispose of any portion of it, take up rails or anything we liked, we were really not getting ownership of the road. Second, " Please let us go home." Having answered those two points, I do not feel that I need take up the time of the House in discussing any other points in connection with this proposal. It has been very hard to make the leader of the Opposition and the member for North Gape Breton and Victoria understand anything in connection with this railway other than my reply to the two points which I have mentioned; I think, therefore, that I will now resume my seat.
Mr. 8. W. JACOBS (George Etienne Cartier) : I wish to congratulate the Minister of Railways (Mr. J. D. Reid) upon the lung power which he has shown. After the Tittle trouble that occurred on Monday night in his electoral division, I did not expect him to have such recuperative powers.


John Dowsley Reid: We won in my county; that is the only county I was in, and we won.


Samuel William Jacobs: I can now understand why it was that my hon. friend's candidate won; the hon. gentleman has a reputation for winning wherever he goes. In addition to demonstrating his lung power, the minister has shown a woeful want of accuracy in some of the statements which he has made this evening. Of course, these statements
were made for a certain purpose and it seemed to delight the gentlemen on this side of the House, or at least a certain number of them; for I noticed that some of his remarks did not seem to meet with the approval of the erstwhile Liberals who now sit on his side at whose door he wishes to lay the responsibility for the railway complications which we have to deal with to-day. The applause seemed to come from the oldtime Tories, who can understand the hon. gentleman's style of oratory and appreciate it, perhaps more than we can.
The minister made some most astonishing statements in regard to imported matters, which I think ought not to be allowed to go unchallenged. But before I go into that I should like to say a word or two with regard to the anger which he exhibited at the very mention of the name of Mr. Z. A. Lash. Mr. Lash is a gentleman for whom I have great admiration. ,He is a practising member of the Bar in very high standing; he is widely known as one of the most astute lawyers of this country. I asked the minister whether Mr. Z. A. Lash had been consulted with regard to this Bill and his answer was that Mr. Lash was a respectable attorney and that if he had been consulted, he, the minister, could not see that very much damage had been done. Well, perhaps the minister will permit me to read a word or two from a standard work " The Railway Builders of Canada" by Professor Skelton of Queen's university; and in doing so I am not going to make any reference which will impugn the characterof Mr. Lash. This is what I wish the hon. gentleman to hear and inwardly digest. It is at page 184 of this work, speaking about Mackenzie & Mann:
William Mackenzie had also carried through much work for this company. In 1886 the notable partnership of Mackenzie and Mann was formed. The firm built the Calgary and Edmonton, the Qu'Appelle, Long Lake and Saskatchewan, the Canadian Pacific short line through Maine, and many minor railways. They developed capacities which made each the complement of the other-Mackenzie, a master of finance, and Mann as successful in extracting a subsidy from a politician as in driving ahlad the work of construction. Later Z. A. Lash, a * shrewd and experienced corporation lawyer, joined them, and the three, with able lieutenants, carried through their ambitious plans without more than momentary pause, until within sight of the goal.


Mr. LALOR:: What is wrong about that?


Samuel William Jacobs: That is why I ask the hon. gentleman whether Mr. Zebulon A. Lash had been consulted in connection with that deal, and I gather from the reply that he had been consulted and that he

has been in consultation with the Government ever since.


Mr. KEEFER:: Why should he not be consulted?


Daniel Duncan McKenzie: He is a partner to Mackenzie & Mann.


Samuel William Jacobs: There is no reason in the world why he should not be consulted. There is no reason in the wide world why Sir William Mackenzie and Sir Donald Mann should not be consulted.


John Dowsley Reid: I simply want to say to the hon. member that Mr. Lash was consulted as a legal adviser because he was considered to be one of the best railway lawyers in Canada, and because he is consulting lawyer for the Canadian National railways.


Samuel William Jacobs: Another startling statement was made by^the minister. Of course, he was delivering a stump speech in the *House, and we will overlook some of the remarks which he made in the heat of the moment when he was working up his friends to a state of enthusiasm at the wonderful speech he was making attacking our new leader (Mr. King). He made the extraordinary statement a few minutes ago that he would dismiss any agent who goes outside of his own territory to route freight over United States railways. This is what he said yesterday when a question was put to him by the hon. member for Guysbor-ough:
Mr. J. H. Sinclair:	The policy of the Grand
Trunk, as I understand it, has always been to make Portland, Me., the Atlantic terminus for their traffic. What is the view of the Minister of Railways with regard to that? Does he intend to continue that policy?
Mr. J. D. Reid:	So far as I am concerned,
as I stated a few minutes ago, when we took over the Grand Trunk Railway system we would have one great national system of railways, and we must get the very best men available to manage this system' and they must of course adopt whatever policy they think is best to ensure successful operation.
To-night he tells us that any man who adopts a policy of that kind, looking to the United States, will be forthwith dismissed from his employ. Last year when the question of. the Canadian Northern was up, we were told that that railway was to be taken completely out of politics; that it was going to be placed in the hands of Mr. D. B. Hanna and a directorate, and that the Canadian National railway was taken out of politics and neither the minister nor any other person connected with the Government had the remotest intention of interfering with this company and the

management of the line. Yet, now the minister stands up and' bluntly and coolly tells us that he is going to dismiss any person who will route freight over United States lines, and his friends on his side cheer him to the echo.
Another extraordinary statement made here to-night by the Minister of Railways is this, that the poor old Grand Trunk railway was fooled by the former Liberal Government into believing that the cost of this railway would be $13,000,000, and it subsequently cost $200,000,000. Did you ever hear of such a thing as that-astute railway men, builders of a great line of railways across the continent, were fooled by Sir Wilfrid Laurier-and his friends into believing that this railway would cost $13,000,000 when it subsequently cost $200,000,000, and that for that reason we ought to show consideration to the Grand Trunk railway! These are only a few choice morsels that I culled while the minister was going along at the rate of sixty miles an hour.
The minister told us that this agreement embodies the report of the Drayton-Acworth Commission, overlooking the fact that for the last three or four weeks every man in this House has been carefully studying that report. He knows as well as, if not better than, any one else in this House that the Drayton-Acworth report was in no way followed. The Minister of the Interior (Mr. Meighen) told us a few days ago, when introducing the Bill, that they wanted the Grand Trunk to come to terms on the basis of the Drayton-Acworth report, but they refused to do so, and consequently the Government were compelled to go very ibuch further than they expected and the result was that this bargain was entered into which was in no way what that report suggests.
There is another astonishing thing in connection with the Government, and it is this: The former Minister of Public Works, Hon. Mr. Carvell, has been an antagonist of public ownership of railways for many years. In fact, during the whole of his political life, Mr. Carvell, in season and out of season, in this House and out of it, on every public Occasion,'in his public utterances has declared himself as being against public ownership of railways. He left this House and the Government a few days ago, and what has become of him? He has been made chairman of the Board of Railway Commissioners, the board which holds in the hollow of its hand the whole of the railway problem of this country.

And yet this Government tell us that they are in favour of public ownership when they appoint the greatest antagnoist of public ownership to the most important railway position in this country.
It will be interesting also to find out the views of the Minister of Marine and Fisheries and of the Naval Service (Mr. Ballan-tyne) with regard to this question of public ownership. He has not hesitated to declare on many public occasions whathisviews are. I do not know whether he has done that in the House, but his views are well known. Has he been consulted on this matter? No person knows. What has happened to the hon. member for St. Antoine (Sir Herbert Ames) who, instead of being at Geneva, should be in his seat to-day to protect the interest of the city of Montreal and of the Board of Trade of which he has been for many years the idol? Where is the Minister of Justice (Mr. Doherty) who represents St. Anne's division in the etiy of Montreal and who is also one of the darlings of the Board of Trade of that city? Where are these people? An echo answers "where"? Therefore, it falls on us, the second: line of defence, to take up the cudgels for the Montreal district, for the city of Montreal, which has within its confines over ten per cent of the entire population of this Dominion and which, perhaps, contributes in income tax 35 or 40 per cent of the entire amount received by the treasury of this country from that source. It is necessary for us to say a word or two for those organizations that have been passing resolutions but have received such scant courtesy at the hands of the Government.
I should like to say a word or two with regard to the bargain which has been entered into by the Government and the Grand Trunk Railway Company. The Bill before the House commits the country to a liability equal to one-quarter of the national debt. I wonder whether hon. gentlemen in this House really stop to think of the magnitude of the proposition which is before us. One-quarter of the national debt is involved in this proposition, and yet it is being rushed through, and why? I will tell you why, Mr. Speaker. The President of the Council (Mr. Rowell) told us the other day why it is being rushed through. I have not his exact words before me, but he stated that he was afraid of an organized opposition to defeat the Bill. We take the ground that a matter of this magnitude ought to be discussed throughout the length and breadth of the land, on the hustings and in every public place. The President
of the Council takes the ground that it is not in the interest of Canada to allow the opposition to this measure to be organized, and that is one of the chief reasons, he says, why this Bill is being forced, through the House to-day.
I wish briefly to pass over the contract which is about to be put through by the Government. This is what it proposes to do: The Government guarantees the $60.000,000 of what is called the "guaranteed" stock, which immediately upon the Government's imprimatur being placed on it becomes worth, as the hon. member for Shelburne and Queen's (Mr. Fielding) pointed out the other day, 80 or 90 cents on the dollar. In addition to that we take over the bonded indebtedness deben-. tures amounting to about $153,000,000. Finally, we take over about $185,000,000 of common stock which is to be valued by a board of arbitrators appointed in the manner indicated in the Bill. Now what we have reason to fear is that the arbitration board may put upon this stock a value altogether beyond what it is worth, and we say that the Government should .make some provision in the Bill providing for the manner in which the stock shall be valued. The arbitrators may be asked by this company to value the stock on the basis, for instance, of the cost of duplication of the road at present prices, that is, the cost of equipment, rolling stock, and so on, or they may be asked to take into consideration the potential possibilities of the road after the country is better developed than it is now. If the arbitrators are going to do that, we have very good reason to be apprehensive as to the amount we shall be called on to pay. We know what happened in connection with the Canadian Northern, when $60,000,000 of stock belonging to Mackenzie and Mann or their transferees was valued by the arbitration board at nearly $11,000,000 and that amount of the money of this country was paid over to these gentlemen. Now I put to the Government this question: If stock which never cost the owners one single penny, representing merely so much water, is valued by an arbitration board at $11,000,000, how- much will the people of this country have to pay for stock which actually cost $185,000,000? That is a question which I put to the Government. We ought to see to. it that safeguards are inserted in the agreement whereby the arbitrators will pass upon the value of the stock from the standpoint of the condition of the road to-day as a going concern, and not

taking into consideration the cost of duplication or the potentialities of the road when it becomes further developed. There is no such provision in the agreement, and the stock goes before the arbitrators to be valued in the same way as the Canadian Northern stock was dealt with.
I do not want to say very much on the question of public ownership, not that I am afraid to express my views, but it seems to me that the question does not enter into this discussion. We'have this railway. -It has, been decided to take it over, but it ought not to be taken over on the terms which were made by the company and the Minister of the Interior (Mr. Meighen). We say first that the $60,000,000 of what is called " guaranteed " stock should have been submitted to arbitration for valuation in the same way as the first, second, and third preference and common stock. Why was this stock not submitted to arbitration in that way? As I understand it, the Dray tom Aeworth commission recommended that this stock should also be valued, and there is no reason in the world why it should not be valued in the same way as the other stocks. We are in a position to deal with this company as we like. We are the creditor and they the insolvent debtor, and who ever heard of an insolvent debtor dictating to his creditors the terms on which he will surrender his property? The property belongs to the Dominion of Canada. The Grand Trunk have defaulted on their bonds in respect of the Grand Trunk Pacific, and consequently it is for us to take over the read and make our own terms with the company. But we find the Minister of Railways (Mr. Reid) in a charitable and indulgent mood when the pockets of the people are concerned, and not his own private pocket. He spoke of the old Grand Trunk, using the word " old " as a term of endearment and affection, I suppose. Dear old Grand Trunk ! Good old Grand Trunk ! The people put their money into this company in good faith, the minister says, and we should see they get everything they can out of it. If that 'be so, why not pay the Grand Trunk every dollar that was paid in by the various stockholders? Why not pay them this $700,000,000 or $800,000,000? Why stop at $250,000,000, if they are the dear old Grand Trunk, and it is necessary that the credit of this company should be kept up in England? The fact is the Grand Trunk went into this deal originally in the same way as other people do. They expected to do well out of it, but it turned out not so good as they expected. Is that

any reason why the money of the taxpayers of this country, not the private money of my good friend the Minister of (Railways -for he is too astute a gentleman to part with his money unless he gets value for it-but the money which belongs to every man, woman and child in this country, should be turned over to these foreign investors? None whatever, unless as a matter. of charity. I say that charity begins at home, and we must be just to our taxpayers before we are generous to strangers, and the sooner the Government learns that the better it will be for them.
The reason which it seems to me impels the Government in embarking on this grand coup is to provide themselves with something to go to the country at the next election. Their platform is pretty well broken; it is somewhat wobbly, and needs new planks. The President of the Council rather let the cat out of the "bag the other day when he assured us that west of Ottawa there was not even a fraction of the people who were against public ownership. He wants to give the people what they want. I think he wants to provide for my good friend the Minister of Immigration and Colonization (Mr. Calder) so that he may be able to go home. At present that lion, gentleman finds it somewhat difficult to land safely in the West, but if he comes home bringing the bacon-I ask pardon of my Christian friends-he wall be perhaps more welcome than if he came empty-handed.
Now, Sir, this talk about government ownership which has been thrown across the floor of the House for the last week or ten days is something upon which I do not intend to dwell. I just put it to my good friends on the other side, if they think the Canadian Pacific railway would have been the success it is if it had been managed by the Minister of Railways, who would immediately dismiss an employee if he routed freight on a United States railway. How long do you think the Canadian Pacific railway would last under such conditions?
I have in my mind's eye a picture of Lord Shaughnessy, as president of the Canadian Pacific railway, standing on the carpet in front of the desk of my good, amiable and unassuming friend the Minister of the Interior (Mr. Meighen). I also have visions of Mr. Beatty calling to see the present Minister of Railways and learning from the vast storehouse of knowledge which this minister possesses, something about the running of the railway. The thing has only to be mentioned for us to see the absurdity

of it. And yet these gentlemen will insist upon declaring that government ownership is the best thing for the country.


John Dowsley Reid: Does my hon. friend take the position that in acquiring the railway it is really government ownership, or does_ he take the position of the leader of the Opposition that it is not government ownership?


Samuel William Jacobs: I take exactly the position of the leader of the Opposition, and for this reason: If I buy a house for $25,000 and it has a mortgage of $50,000 on it, I do not own that house until I pay the $50,000,.because when the mortgage comes due the creditor can foreclose. Now, Mr. Speaker, there seems to be a great deal of vacillation on the part of members of the Government with regard to this question of public ownership. I have not heard the Minister of Militia and Defence (Mr. Mewburn) in his seat loudly proclaiming the virtues of government ownership. I have not heard the Overseas Minister of Militia (Sir Edward Kemp) in his seat declaring himself in favour of government ownership. I should fancy that a man of his experience would be able to enlighten the House to a very material degree upon this question. But nothing of the kind has transpired. The people who are anxious for government ownership are those who 'Want it as a means of being returned again to power at the next election, and who feel that they can carry the West on this question and nothing else. Some criticism was made in this House this evening by the hon. member for St. James (Mr. Lapointe) on the conduct of the Government in reference to the treatment of the Montreal Board of Trade. I think it was the Minister oi. Trade and Commerce (Sir Geo.rge Foster), who is acting at present as Prime Minister, who received the Board of Trade delegation and told them that the Government had taken a stand and was not going to retreat from it. If hon. members will remember, I asked the acting leader of the Government whether he had received a letter from the Montreal Board of Trade protesting against the acquisition of the Grand Trunk. He replied that he had received a letter of that kind, and when I asked him what answer was made, he fell back on a famous line in " The Raven He said that the letter had been acknowledged, "Only this and nothing more". Well, Mr. Speaker, I make hold to say that when the hon. gentleman's friends present themselves to the members of the Board of Trade seeking the sinews of war which are always necessary in times of great
stress the reply of the members of the Board of Trade may be another passage from " The Raven ": " Quoth the raven, never more ".
May I as a parting word commend to my friends on the opposite side a remark or two made by the present Minister of Finance in the famous Drayton-Aoworth report and give them that thought to take home with them and slumber on. I would refer to page xliv of the sessional papers Nos. 20C-20G, Vol. LII, No. 12, 1917, under the heading, " Government Operation Discussed and Rejected":
We are instructed to consider the acquisition of the Canadian railways by the State, and the possibility of their operation in connection with the Intercolonial. We do not recommend this course. In our judgment it is not in the interests of Canada that the operation of its railways should be in the hands of the Government. We know no country in the world, where a democratic state own and operates its railways, in which politics have not injuriously affected the management of the railways and the railways have not had an injurious influence on politics.
Of course, I wish to say in parenthesis, other countries probably did not have at the head of their railway departments a gentleman of the astuteness and railway ability of our present Minister of Railways. No doubt that is why they failed. To continue :
We do not think government ownership of the Canadian railways would tend to reduction of rates, tout rather in the contrary direction.
My hon. friends from the West will note that.
For the carriage of one ton of freight one mile the Canadian shipper pays at present on the average three-fourths of one cent. On the railways of New South Wales, the oldest and most important Australian state, where the railways have been in government hands from the outset, the Shipper pays well over two cents. But we see no cause to enlarge here on such general considerations. There are several reasons peculiar to Canadian conditions why state ownership and operation should be avoided.
I am sorry the Minister of Finance did not tell us what were these reasons " peculiar to Canadian conditions." They might be interesting. On page xlix I read, under the heading " Possibility of Forming a Commercial Company Discussed ":
Assuming, then, that the Canadian Northern, Grand Trunk, and Grand Trunk Pacific must be united into one system, and that this system must remain entirely separate from the Canadian Pacific railway, we have considered the possibility of forming a new company on a commercial basis, to which the operation of


Mr. F. F. PARDEE (West Lambton):: Mr. Speaker, I intend to detain the House for a very few moments, but there are some things which it seems to me ought to be brought to the attention of the country before this debate closes.
Let me say at the beginning that this is not the time to declare for public ownership or otherwise. As the Minister of Railways has very properly said, it is not a question of whether or not we want public ownership but whether we have got to have it in this particular ease. The fact, Sir, is that as regards public ownership on this particular question the Government are at the end of their tether and they say they must take over the road willy-nilly. That is the trend of their argument. Therefore, the question is not whether we are in favour of public ownership as a concrete proposition or not, but whether this House deems that in its judgment this is a fit and proper

bargain to make in taking over the Grand Trunk railway. Before I go further there is one thing 1 would like to point out; The hon. member for Algoma (Mr. G. B. Nicholson), if I understood his remarks aright, and the Minister of Railways also, led the House to believe that the railway muddle is wholly due to the policy pursued by the Liberal party in 1903.


Some hon. MEMBERS:: Hear, hear.


Frederick Forsyth Pardee: "Hear, hear," the hon.
gentleman says. In 1903, declares the Minister of Railways, the Grand Trunk Railway Company wanted to get into the West and in order to meet that want the Liberal party presented railway legislation which they deemed to be in the best interests of the country, and the Grand Trunk Pacific adventure was entered into. Let me point this out: that if the Grand Trunk Pacific arrangement was bad-which I am not admitting in any way whatever-if the construction of the Grand Trunk Pacific was improperly undertaken, the Conservative party at that time under its leader, Sir Robert Borden, also advocated in the strongest possible terms the construction of another road, as an alternative to the Grand Trunk Pacific, to meet exactly the same end. So that, whatever may be said with respect to the Grand Trunk Pacific railway, there is this to be offered in extenuation of any- fault there may have been in the arrangement entered into, that the Conservative party at that time also considered another transcontinental railway to be necessary.
So far as this bargain is concerned, I am not arguing against public ownership in any way whatever, I express no opposition to public ownership; but I say that to my mind there are three fatal objections to the proposed arrangement. In the first place the Minister of the Interior declared that it was the largest transaction that had ever been brought before the Dominion. That is so, without a shadow of a doubt, and therefore I maintain this is not the proper time to bring down such legislation as this. This session was called for a specific purpose. That specific purpose has been fulfilled; and today I assert, and I believe the people will Back up the assertion, that the only reason for bringing down this Grand Trunk legislation now, was to afford some reasonable and fair excuse to extend the session beyond the period of thirty-one days. Sir, there is another fatal objection to the proposition and it is this; The other day when introducing the resolution upon which this legis-
OCTOBER 23, i919
lation is founded, the Minister of Railways was asked the question, " In what condition is the road?" to which he replied: " I am informed it is in very fair condition."


Daniel Duncan McKenzie: " First-class condition," he said.


Frederick Forsyth Pardee: I want to ask hon. gentlemen, suppose they were buying even a horse or an automobile unsight unseen and the only recommendation they had was that it was in very fair condition, would they dare to buy either one without a valuation and without a thorough looking over? Where is the valuation in this case? The ex-Minister of Finance the other day told us that we must recollect that we are buying this road on a marginal liability. Well, if we are buying it on marginal liability have we not got the right to ask the fullest particulars be brought down to show the people what margin they are getting for the money they are putting out? Why, Sir, there is one item alone of $43,000,000 of bills receivable. Up to this day I have not seen in Hansard, nor have I heard, one single particular of what that $43,000,000 consists of. Is it a good or is it a bad item? If you are assuming a marginal liability have you not got the right to know the value of your assets? The $43,000,000 in question may not be worth a dollar. If such is the case that fact should be taken into consideration by the arbitrators in fixing the value of the stock that the people of Canada have got to pay for. We have absolutely no valuation, absolutely no particulars in, with respect to what we are buying. If ever the accredited representatives of the people entered into a bargain that they knew absolutely nothing of, they	are doing	so	today in the purchase of the Grand Trunk railway. Moreover,	Sir, I
make this assertion, and I say it is positively correct. The Minister of the Interior declares, "We must be generous to the English shareholders." Well, We are ta-day entering into an arrangement to pay the English shareholders the interest on stock that we are guaranteeing-stock that those shareholders are not getting a dollar on and. that we are making good for them. In view of these facts. I say that the bargain entered into is not a well-considered one and that it is utterly lacking in those particulars that are necessary in order to deal with it intelligently. Therefore, I say that the only right and proper thing to do, so far as this bargain is concerned-and without at this time going into the question of any further particulars-is to have the fullest valuation made of the assets, of the
leases, of the bills receivable, of money owing, of all the liabilities of the Grand Trunk Railway Company. Information as to every one of these items should be submitted to the House, and until such time as that information is in. our possession we have absolutely no right to commit this country to the huge amounts that we are committing it to in the purchase of this road. The Minister of Railways to-night, with his usual acumen, went into many facts and many figures that were far from germane to the subject under discussion. He beclouded the issue in every way that he possibly could. He brought a mass of what he supposed to be facts and figures bearing upon this matter; but kept very carefully away from the absolute meat in the nut, namely, what the people of Canada are getting for the moneys the Government propose to expend on this railway.
I repeat again, Sir, that until such time as these particulars have been brought down, until such time as hon. members and the people are fully informed as to the exact amount of liability they are assuming, and as to the exact amount of advantage that may accrue to them from the assumption of that liability, this House has no right to pass this measure, but it ought to be deferred for further consideration by the House and by the country.


Mr. G. W. ANDREWS (Winnipeg Centre):: Mr. Speaker, before recording my vote on this important subject, I desire to say that unless the leader of the Government can in some way postpone this debate until after the report of the Special Committee on Soldiers' Civil Re-establishment is brought before this House, I shall have to vote in favour of the amendment. My reasons for this decision, Mr. Speaker, are not because I am opposed to public ownership. The Germans made an unqualified success of state operation of railroads, and what German men can do Canadian men can do better. But, rather, my reasons are to be found on page 943 of the proceedings of the Soldiers' Civil Re-establishment Committee, No. 15, of Friday, October 10, 1919. My hon. friend the Minister of Immigration (Mr. Calder) and Chairman of that Committee, in winding up the proceedings of taking evidence, made the following statement:
I am sure that every member of the committee appreciates the spirit of Mr. Waistell's remarks to-night. We have recognized throughout the entire investigation that on the part of those associated with Mr. MacNeil there has been a desire at all times to co-operate with and assist the committee in every way possible. We have a very difficult problem to solve, one of the most

difficult, I dare say, that Parliament has had before it for many years.
These are the weighty words of the Chairman of that Committee, Mr. Speaker. Further down on the same page he .said:
1 can assure you' that personally I have learned a great deal, and in saying that I am sure I speak for every member of the committee.


Georges Henri Boivin: Order. The hon. member is not in order. Until a committee makes its final report to the House, it is irregular to refer to its proceedings in the course of a debate.


George William Andrews: I submit to your ruling Mr. Speaker. I hope you will pardon my ignorance. The words I have quoted will be found in due course in the report when it is submitted, although this portion of the evidence came into my hands in the usual way and I thought every member had 'a'copy. The words were uttered at a public meeting at which the press were present. However, Sir, I have gathered from my observations during this debate that no matter what happens the taking over of the Grand Trunk will cost this country a good deal of money. My hon. friend from Brantford (Mr. Cockshutt) who, in my humble opinion gave the clearest statement that I have heard on the entire subject, this afternoon stated that it would cost $18,500,000 a year. Now, the successful re-establishment of our soldiers will involve a considerable amount of money, Mr. Speaker, and $18,500,000 will re-establish quite a number. If you will advance that money to them in loans I think they will pay you 5 per cent for it, and be glad to. Arad I want to say this before taking my seat, that I sincerely hope this country will be able to successfully re-establish the Grand Trunk and the other railroad systems of this country, and I also hope that they will be able to re-establish the soldiers; but if it ever comes to a showdown between the Grand Trunk that failed and the soldiers that won, I am going to put my money on the men that won the fight.


Mr. W. D. EULER (North Waterloo):: Before I enter upon the subject under discussion, Mr. Speaker, I would like very briefly to convey to the leader of the Opposition (Mr. King), who has taken his seat this afternoon, my most cordial congratulations. I say that with particular pleasure because, as may not be known, the hon. gentleman is a native of the city which I have the honour to represent in this House, and I view his promotion with all
[Mr. Andrews.!
the greater pleasure on that account.
Now, Sir, I enteT upon this discussion with a certain reluctance, largely because of the fact that I do not entirely agree with some of the views and conclusions that have been drawn by hon. members on this side of the House. It has been stated that the question of the nationalization of the Grand Trunk railway is not a matter of public ownership at all. I cannot view it in 'that light. And I would like to say at the outset, for myself at least, that I am entirely and absolutely a believer in the principle Of public ownership-in the principle of public ownership in general and in the principle of nationalization of railways in particular. I come from a city where that (principle is pretty much an article of faith with every one. In that city the ownership of public utilities has been a great success; there has been no failure whatever in connection with it. While it may be a far cry from the successful public operation of the smaller utilities in a city such as the one I come from to the operation of a national utility, it is, after all, some encouragement for me to believe that the same principle would be successful in the larger national field.
It has been argued that the matter of taking over the Grand Trunk is not in itself a matter of public ownership. Technically that may be correct. But I would like to point out this, and I think it has been lost sight of very largely in the discussion, that the object of public ownership is not the making of profits; it is the service that may be rendered to the public. Ownership in itself is not the consideration. It is important only because of the fact that it gives control of operation, and by that means the power to give service. I think under the Bill which has been presented there can be no real doubt that the Government will have absolute control of the operation of the Grand Trunk. I believe, Sir, that many hon. members have no conception of the growth of public feeling in favour of public ownership of the great public services and the great natural resources of this country. I believe that the people are tired of continually paying out millions to private corporations for the operation of public utilities and more especially of railways.
The people of Canada have, I believe, paid fully one billion dollars in one way or another to the railways, of this country; they have paid enough money to the railways to build the roads, and yet we do not own them to-day.

I believe further that the people of this country will go a great deal further in the direction of public ownership than we have gone up to this time; I believe that they will go beyond the nationalization of the railways. I am not going to enlarge on that now, but I hope that will be the case.
It would be impossible to exaggerate the gravity of the financial condition in which this country now finds itself, but I would not like to admit that the acquisition of the Grand Trunk' Railway system under proper conditions, on a fair basis and on fair terms would necessarily aggravate the seriousness of that position.
Now, we have two groups, as I take it, that are opposed to the nationalization of railways, or to the nationalization of the Grand Trunk, the matter which is before us to-night. One group consists of those on both sides of the House, who do not believe in the principle at all; they believe for various reasons that private ownership of railways is preferable to public ownership. The other group consists of those who do favour the principle, and perhaps this group may be subdivided into three classes, The first class embraces those who theoretically believe in public ownership but have not the courage of their convictions when it comes to applying the principle on the larger national scale. Then there are others who claim that the time is inopportune for the acquiring of the Grand Trunk; and I will deal with that very briefly in a moment. Then we have the third group, consisting of those who think that the present project is a very bad and a very poor bargain for the people. I should like for a moment to examine these objections.
Some who are opposed to the entire principle of nationalization and believe in private ownership are of that mind because their private interests are concerned-interests which are not'consistent with those of the public. The larger number fear that in the case of the nationalization of the Grand Trunk there will be political manipulation ; that the road will be used for political advantage and that there will be consequent inefficiency of management resulting in large financial loss.
I admit at once that unless the Government, if it takes over the Grand Trunk, creates an absolutely efficient board of management the project will be a sad financial failure. If it*is decided to take over the road I would get the very best railway men in the world; I would not care where they came from, and I would pay the price. I
do not see why men who understand the railway business, men who are the best in their own particular line, cannot give the same kind of service to the country that they can give to a private corporation, provided they are not interfered with by those who are higher in authority.
I admit that it takes a good deal of faith to believe that the policy of interference for political purposes will not continue. But if you obtain the right kind of men-men with backbone, men with a sense of responsibility and with a fair amount of patriotism-they will not allow themselves to be interfered with in the performance of what to them must be not only a work for remuneration, but a matter of public and patriotic duty.
During the last session, when the incorporation of the Canadian National Railway Company took place, I voted against that Bill because I felt at that time that the Government was not acting in the interests of the country when it retained in the management of that road the men who had already made a failure of the Canadian Northern, I believe that to-day. I have no particular criticism to make against the gentleman who was then very freely criticized, the president of the road. When a man does not make a success of one undertaking I think it is fair to assume that he will not make a success of another undertaking which is much larger. If I believed that when the Grand Trunk is incorporated into the Canadian National Railway system the National railways would remain under the control of the present management, that would be sufficient justification fur opposing the acquisition of the Grand Trunk, because you would be starting out with practically no chance of success. I was very glad to read in Hansard, therefore, the following remark made by the Minister of Railways a few days ago:
There is another matter that I wish to mention in connection with this great railway undertaking. When these two railway systems are operated as one system it will be absolutely necessary for the Government to select a management and a staff of the best men that can be found, no matter where they come from, to operate this whole new complete system, and those who are decided upon must assume this responsibility.
I gather from that-and I would like to be corrected by the Minister of Railways if I am wrong-that it is his intention to appoint a new board to manage the enlarged national system.


John Dowsley Reid: The hon. member is
absolutely right. I made that remark the

other day, and if I can use any other words to make the expression stronger, I wish to be understood as doing so. I repeat that so far as I am concerned this road will be operated by the best railway men that we can get, no matter where they come from. The intimation or insinuation of an hon. gentleman opposite-I think it was the member for North Cape Breton and Victoria (Mr. McKenzie)-that the management of these railways would be turned over to the present management was absolutely wrong. The whole board will be reorganized and a set of railway men will operate the system entirely independent of myself or any other man.


William Daum Euler: I understand, then, that it is the intention to reorganize the whole - board?


John Dowsley Reid: Certainly.


William Daum Euler: I am very glad to have that assurance from the minister. Just a word or two with regard to the danger of financial loss under government ownership. The real reason, I think, why some railways in Canada have been losing money is that there has been no co-ordination of our railway services. If the Grand Trunk is taken over we shall have the Canadian Northern and the Grand Trunk, each one weak where the other is strong. I know that that point has been mentioned in the Drayton-Acworth report, but I think it should be dwelt upon in view of the argument that public ownership of railways will necessarily result in a heavy financial loss. In the West the Canadian Northern is well supplied with branch lines, but it is weak in Eastern Canada and especially in Western Ontario, of which I have more intimate knowledge. On the other hand, the Grand Trunk has insufficient branch lines in the West but it has lines running into practically every town, village and hamlet in Ontario.
These two roads can be organized to form a complete system, I see no reason why they should not be at least fairly successful at the outset, and develop ultimately into a well-paying proposition. While I am on that point, I should like to mention another feature which is of much importance to the people of the province from which I come, the province of Ontario, and especially to its western portion. In that section of the country public ownership has made great progress. We have made a success of it on a smaller scale in most of the towns and cities. We are now entering upon the building of what is known as radial lines of railway, publicly-owned, In order to do that,

unless the Grand Trunk is nationalized, it will be necessary to duplicate many lines which are already in existence. If the Grand Trunk is nationalized, the people of Ontario would like to see the branch lines which are already there, which are not operated as they, should be (many of them with only one or two trains a day) placed under the control, of those who would electrify these roads, save a great deal of duplication, and render a tremendous service to the people of Ontario.
Duplication, of which I have already spoken, is another cause of losses. There is only one remedy that I can see for that, and that is the placing of all these roads, including the Canadian Pacific, under one . national control, and 'then relentlessly cutting out duplication wherever it may exist, saving the unnecessary overhead expenditure and maintenance of parallel lines and all the rest of it. Then I believe the national roads would have a fair chance of financial success.
During last session and again during this session I was disappointed and surprised to hear the ex-Minister of Finance (Sir Thomas White) make the remarkable statement that it was well to take over-I am perhaps not using his exact words, but this was his meaning-the Canadian Northern, which was. a losing proposition, to take over the Grand Trunk now, which is perhaps, to some extent, in financial difficulties, but to leave the Canadian Pacific alone, 'because it is a paying institution and is a prosperous and well-managed road. The only conclusion to draw from that is this, that it is the business or the duty of this country to take over the lame ducks and to leave the prosperous and paying institution in the hands of private interests. I am personally sufficiently a believer in nationalization of railways to say that if it be at all possible, I would also include the Canadian Pacific railway in the national system.
Others say that the time is not opportune for taking over the Grand Trunk. That may be true. I for one cannot see that there is any immediate likelihood, perhaps not for a generation, of .Canada's being in any very much better position to take over the-road than it is at the present time. We are loaded down with a tremendous debt. There is no reason for believing that we can get rid of these obligations for a very long time to come. -In the meantime, I presume, it will foe with this road as it has been with others, namely, that if they lose, we pay; if they win, they keep

the profits to themselves. If we are obliged to pay anyway, we may as well own and control the road.
Another alternative that has been mentioned is to allow the Grand Trunk to go into liquidation, and then if we wish to nationalize it, to buy it in at bargain figures. Perhaps that argument is sound. When private interests fail to make a success of their business, the Government or the people of Canada cannot be expected to come to their assistance, and possibly the same rule should govern in the case of the Grand Trunk and the Grand Trunk Pacific. But I believe, after all, if a fair and just bargain can be made for the purchase of the Grand Trunk, it will be preferable to take it over in that way rather than to allow it to drift into bankruptcy, with all the inconveniences that come from interference with a great public service such as is provided by a great railway system.
I come to the last point and I shall be very brief. I wish to refer to the claim that we are making a very poor bargain on the basis which is proposed in the Bill before the House. I do not know whether this is going to be a good bargain or not, and I question -whether any hon. member on the other side or on this side of this House is able to express a really reasoned opinion whether we are going to make a good bargain or not, because there is so much uncertainty connected with the terms presented to us now. I am entirely in favour of the acquisition of the Grand Trunk and the incorporation of it with the national railways if that can be done on the proper terms, and anything I may say is not to be considered as in any way a retreat from that position. I am in favour of nationalization of the Grand Trunk.
I will, however, say this, that after looking over the blue-books and the financial statements that have been placed before the House, it appears to me that there is a good deal of ground for the amendment that has been moved by the leader of the Opposition, that we have not had, and we cannot have sufficient time, merely, by debating the question in this House, to come to a really reasoned conclusion as to what we are actually doing in connection with the acquisition of the Grand Trunk railway. I know that the Minister of the Interior has said in this House in regard to that criticism that the Government is willing to stay here and debate this question as long as may be necessary; but I say in all seriousness that I do not believe that it is possible to arrive at a correct estimate of
the situation merely by making speeches on one side and then on the other side of the House. A question of the magnitude of this kind involving hundreds of millions of dollars ought to be discussed not only .by the newspapers, but the people ought to be given an opportunity to think it over, to talk to their representatives in Parliament, and thus permit us finally to arrive at some sort of reasoned conclusion with regard to the matter. For that reason, I am inclined to favour the amendment. We should thus have two or three months thoroughly to investigate and to digest the information. Then, next session, in January or February, we could deal with it intelligently.
I would, just for a few moments, refer to the terms themselves as I gather them from the Bill and from the balance sheet as submitted by the Grand Trunk railway. We are taking over the assets and the liabilities of the road. Those assets consist of property and equipment of a value of $434,990,999. There are other sundry items amounting to some $25,799,381, and outstanding ac-courits in one item amounting to $43,838,831 as to the details of which, as the hon. member for Lambton (Mr. Pardee) said, we have absolutely no knowledge whatever. That makes a total, if we take it at its face value, of $504,029,211. The liabilities consist of the funded debt of $216,207,138 upon which we guarantee to pay perpetually 4 per cent per annum, further bonds of some $18,184,738, an advance by the Canadian Government of $15,142,633, equipment notes and loan of $5,344,207, and notes payable of $35,548,235. Then there are current liabilities amounting to $22,801,474, reserves amounting to $3,455,344 and advances to controlled companies $7,286,995. We are, therefore, agreeing to assume a responsibility as regards liabilities of $323,970,767. I am taking that from the statement in the blue-book. Upon $290,426,958 of that, there are fixed charges that this Government undertakes to pay.
Deducting $323,000,000 of liabilities from $504,000,000 of assets there remains a nominal balance to be arbitrated upon of $180,000,000, covered by three preference stocks totalling $63,000,000, and common stock of $116,000,000. Where my misgivings come in, so far as the bargain is concerned, is in connection with the arbitration on this $180,000,000 of stock. I am not so particularly concerned over the ability of the Grand Trunk to take care of the fixed charges, so far as the present guaranteed and debenture stocks are concerned. From the past history of the Grand Trunk, ac-



cording to their statements, I am inclined to think they would be able to take care of those fixed charges. According to the rates of interest given, they would amount to something like $12,500,000 per annum.
I understand the hon. member for Brantford (Mr. Cockshutt) has fixed it at something like $18,000,000. Of course, to the $12,500,000 must be added any possible amounts that the country may have to pay because of certain guarantees which the Grand Trunk has made in respect to other companies. I am quite willing to accept the figures of my hon. friend from Brantford, $18,000,000, although they are somewhat higher than I had thought. I repeat it is possible, and I believe that under proper management it is probable, that the Grand Trunk will be able to take care of those charges.
The great objection I have to the proposal as it stands is this: I am afraid to entrust to any three men, no matter how competent they may be, the determination of the value of the $180,000,000 of preferred and common stock which is to be referred to arbitration, and to bind this country without further reference to Parliament. I think the responsibility in the end must devolve on the Parliament of Canada to say what amount shall be paid. While I am going to vote for the amendment, which would give us more time to study and discuss the matter, I do not for one moment intend to vote for anything that would tend to sidetrack nationalization of the Grand Trunk on proper terms. I say that if the arbitration award did not become effective until after it had been approved by the Parliament of Canada, I should vote for the main motion. I do not suppose the Government will vary its Bill on account of anything a member of the Opposition may say, but I wish to reaffirm this: In a project of this magnitude, which involves the people of Canada in a possible expenditure of at least $180,000,000, for which I believe there is very little value to-day, and a total investment of half a billion dollars, I believe that Parliament should pass upon the award of these three arbitrators before it becomes effective.
There are two things that should be considered, and which may even affect the ability of the Grand Trunk, after it is acquired, to pay the fixed charges of which I have spoken, and they are these: We are affected by the Grand Trunk Pacific entanglements. I do not know exactly what that liability involves, tout it is going to be very great, and it ought to be taken 
into consideration when the value of the $180,000,000 of stock is toeing considered. We have further the statement in the Drayton-Acworth report that some portion of the dividends which have been paid in past years, amounting to something like $21,000,000, should not have been paid, but should have been spent on the road, and thus have been a charge on the revenues.
I apologize for having spoken at this length, but I desired to make my position plain. I am for the nationalization of the Grand Trunk. I believe it would toe in the interests of the people if we could give it the fullest possible thought and discussion. I have not yet heard any reason advanced why the interests of the country would suffer if discussion was allowed in the interval between now and the next session, when the whole matter could toe debated in the light of the knowledge we may ourselves elicit and that may be obtained through discussion in the press and elsewhere. Finally, I urge that the award be not effective until the Parliament of Canada has passed upon it.
In conclusion, I do not intend, nor do I desire, to give any vote that will place me in the position of opposing nationalization of the Grand Trunk or any other railway on proper terms.


Mr. POWER:: I was paired with the hon. member for South Waterloo (Mr. Scott). Had I voted I would have voted for the amendment.
Mr. J. fl. SINCLAIR: I was paired with the hon Minister of Trade and Commerce (Sir George Foster). Had I voted I would have voted for the amendment.


Mr. A. McGREGOR:: I was paired with the hon. member for Megantic (Mr. Tur-cotte). Had I voted I would have voted against the amendment.


Mr. FOURNIER:: I was paired with the Minister of Militia (Major-General Mewburn). Had I voted I would have voted for the amendment.


William Sora Middlebro: I was paired with the hon. member for Chateauguay-Huntingdon (Mr. Robb). Had I voted I would have voted against the amendment.


Mr. GREEN:: I was paired with the hon. member for Victoria, Alta., (Mr. White). Had I voted I would have voted against the amendment.
Main motion agreed to on the same division reversed, and Bill read the second time.
On motion of Hon. J. D. Reid the House went into committee on the Bill, Mr. Boivin in the Chair.
On section 1:


Mr. BUREAU:: May I ask when the minister intends to resume the consideration of this Bill in committee after the adjournment to-night? To-morrow is Friday and there will not be very many members in the House. Could we not leave this matter until Monday evening?


John Dowsley Reid: I discussed the matter with the chief whip of the Opposition and we thought there would be no objection if we dealt with the Bill until about six o'clock, when we could take up some other business, resuming the Bill on Monday.


Jacques Bureau: The trains leave between four and five o'clock in the afternoon, and if you discuss this Bill until six o'clock any hon. members who desire to leave in the afternoon may be unable to do so if they are anxious to take part in the discussion of this matter.


John Dowsley Reid: There will be a good many members here who will be desirous of speaking on the Bill.


Jacques Bureau: We would like to be present also to take part in the discussion.


Henry Herbert Stevens: May I point out that practically all the members, from west of the Great Lakes remain here continuously throughout the session and never get home to see their families or touch their business? Hon. gentlemen from Ontario and Quebec as well as from the extreme East should have some consideration in the matter.


Jacques Bureau: There is other business that could be taken up. We have concluded this debate earlier than we might have done, and in so doing we have made a concession. We are not asking anything extraordinary in the request that further consideration of this Bill be postponed until Monday. Hon. members would not suffer, and in the meantime some other business might be proceeded with. The various bye-elections take place on Monday and many hon. members will no doubt be absent.


John Dowsley Reid: I move, Mr. Chairman, that the Committee rise and report progress.


Jacques Bureau: Will the minister kindly give an answer to my request?


John Dowsley Reid: I can only repeat that I made an arrangement with the chief Opposition whip and I think we had better let the matter stand as agreed upon between us. To-morrow we shall see if there is any other business that we can do, and in the meantime we shall proceed with this Bill until six o'clock.
Progress reported.	.
On the motion of Hon. Mr. Doherty, the House adjourned at 12.20 p.m.
Eriday, October 24, 1919.