KING OF BELGIUM NOT TO VISIT CANADA.

[Stage Direction]
On the Orders of the Day:
Rt. Hon. Sir GEORGE FOSTER:: Several days ago I was asked whether an invitation had been extended to Their Majesties the King and Queen of Belgium to visit Canada, and if so, whether it had been

accepted. I was not able to say at the time whether the invitation had been accepted or not. An invitation has been sent, and Their Majesties regret very much that owing to the shortness of time at their disposal on this continent they will not be able to visit Canada as they would very much have liked to do.



GRAND TRUNK RAILWAY SYSTEM.


[Stage Direction]
House again in committee on Bill No. 33, respecting the acquisition by His
Majesty of the Grand Trunk Railway System. Mr. Boivin in the Chair.
The CHAIRMAN:: When the committee rose last night we had adopted clause 2 of the Bill.
On clause 3-provisions of agreement.


Mr. J. D. REID:: The hon. member for Chateauguay-Huntingdon (Mr. Robb) asked me in regard to the equipment of the Grand Trunk, and the following is a statement showing the equipment in service as of June 30, 1919:
Grand Trunk Railway System.
Equipment in service, June 30, 1919.
Company.
Grand Trunk Railway Company, owned..	..
Cincinnati, Saginaw and Michigan, owned.. .. Grand Trunk Western Railway, owned	 "	"	"	" leased	
Total	
Detroit, Grand Haven and Milwaukee Railway,
owned	
leased	
Total	
Toledo, Saginaw and Muskegon Railway, owned Pontiac, Oxford and Northern Railroad, oWned St. Clair Tunnel Company, owned	
Total system	
We could only estimate the value of the equipment; but if you take all the cars, roughly at, say $3,000 each-and that would be a very low estimate when you consider that a large number are passenger cars- that would mean about $140,000,000 for cars, and if you take the locomotives roughly at, say $30,000 each, that would mean about $40,000,000 for locomotives, or a total of about $180,000,000 for equipment on the road. The total against this in equipment bonds is $5,491,000.
I think that answers my hon. friend's question, except that he wanted to know what part of the equipment was owned by Blai^ & Company and what, part by the Columbia Trust Company. The officials tell me that they have not that information separately for, these two firms. Blair & Company and the Columbia Trust Company only have a mortgage on the equipment. That is included in the $5,491,000. I am told that quite a number of the engines with Blair & Company's plate on have been paid for and are now owned by the Grand Trunk. I suppose the plate is not taken off when the engine is paid for, which
Freight	Pass.	Work	Total	Loco-	Horsecars.	cars.	cars.	cars.	motives.	Power.37,158	1,007	2,201	40,366	1,124	1,438,6346	4	10	3	2,0065,337	68	75	5,480	162	131,020645	49	694	5,982 '	68	124	6,174	43	23	32	38	8	6,2311	3	4	44	23	35	102	3	4	4	11	11	5	6	22	1	3	4	6	4,50043,205	1,107	2,377	46,689	1,303	1,582,391
is apt to give the impression that the engines are owned by Blair & Company.


Mr. ROBB:: The minister is satisfied that the locomotives with the iron plate bearing Blair & Company's name are the property of the Grand Trunk, subject in some oases to bonds being outstanding against them?


John Dowsley Reid: Yes.


James Alexander Robb: And there is a possibility that the name of Blair & Company appears on locomotives in respect of which the bonds have been redeemed?


John Dowsley Reid: Yes.


James Alexander Robb: Does the minister understand that the Grand Trunk system have sufficient locomotives and cars for their operations?


John Dowsley Reid: I understood when discussing the question of equipment last session that the Grand Trunk, taking into account the equipment that we had purchased, had practically sufficient locomotives and cars for their road. Of course, every year a certain number of engines become useless or obsolete, and have to be replaced. That

is charged to operation, but in this blue-book it is under tne head of capital account.


James Alexander Robb: I have noticed during the past six months that a number of trains on the Grand Trunks are hauled by locomotives on which is printed "-Canadian Government Railways'' or " National Transcontinental." Are these locomotives loaned or leased to the Grand Trunk?


John Dowsley Reid: The hon. member will remember that during the war we purchased a large number of engines, a certain number of which we leased to the Grand Trunk. That is a common practice between railways. The Grand Trunk pays a rental for the engines, practically on the same basis as the equipment trust plan. That accounts for the name being on the engines.


James Alexander Robb: Does that mean that the
Grand Trunk have not sufficient locomotives of their own Are their locomotives tied up in the yard, or why is it that they have to lease locomotives from the Government?


John Dowsley Reid: During the war the Grand Trunk was short of engines, and could not get engines built as Government orders took up all the space in the shops. So we leased locomotives to the Grand Trunk on a rental basis which will pay for the engines in a certain time. The Canadian Pacific has also leased engines from us, and we have leased engines from them. At the time these engines were leased to the Grand Trunk, that road had not sufficient engines for their traffic. We could not use these engines if we took them back now, as we have enough already. They represent an investment on which the Government is getting interest, and is being repaid the principal. When iwe take over the road, they will be part of the whole system.


Mr. McKENZIE:: I think it would be
more satisfactory if the minister would deal with the Grand Trunk proper, and then with the subsidiary companies. Yesterday the President of the Council, as well as the Minister of Railways, told us that we were not so very much concerned "about the subsidiary companies, because we were not undertaking to guarantee their liabilities, 'and we could see later on whether they would be a desirable undertaking or not. But the minister in his statement to-day gave the number of locomotives and cars and other equipment for these sub-

sidiary companies as well as the Grand Trunk.


John Dowsley Reid: No. The statement I read showed the number of cars for the Grand Trunk system proper. The equipment for any subsidiary companies I mentioned was given separately.


Daniel Duncan McKenzie: But the minister named some of these subsidiary companies. What I think the committee would like to know is the exact standing of the Grand Trunk proper, as to its rolling stock and everything belonging to it. Then we could have the same information for the subsidiary companies separately.


John Dowsley Reid: That is exactly how the statement I read was made up. I gave the freight cars and locomotives for the Grand Trunk proper, and for half a dozen subsidiary companies.


Daniel Duncan McKenzie: I notice on page 15 of the blue-book a cablegram from the Prime Minister referring to the Grand Trunk. I have quoted it on a former occasion. The substance of what he says is that there should be some definite information in connection with the Grand Trunk system before any further negotiations for its purchase take place; that the Government have nothing except the Drayton-Acworth report. Has the minister any later report on the condition of the Grand Trunk as to its roadbed, locomotives, freight and passenger cars and everything belonging to the system? To give the Prime Minister's exact words:
It is most unwise and undesirable for a government without the report of a commission or Board of Arbitration or a vote of parliament to undertake a large annual payment which would represent the capitalization of eighty or a hundred million dollars. The offer already made is based on the DTayton-Acworth report which affords a sufficient foundation for Government's proposal. If we go beyond the bounds of that report we have no certain guide as to what we should propose, etc.
Now, this report is getting somewhat old. The road has been operated continuously. Evidently the company have all along contemplated the desirability of selling, and naturally, like other people, they would not lavish expenditures on the road when they were trying to get clear of it. I think the people would like to know exactly how the matter stands now. Has the minister any report on the condition of the rolling stock and everything else that we are taking over?


John Dowsley Reid: We have no other report than the annual reports that are sent to

the department. In the cable the hon. member will see that the Prime Minister states that this offer is based on the Dray-ton-Acworth report, and it is for the commissioners to look into the condition of the road and make any investigations that are necessary.


Mr. VIEN:: I understood the minister the other day to say that he had a letter from 'Sir Alfred Smithers to the effect that the rolling stock and equipment was in perfect condition. Is that right?


Mr.  J. D. RETD@: I had a letter from Mr. Kelley, president of the road, which I read a few days ago, and which is on Hansard.


Thomas Vien: To whait effect?


John Dowsley Reid: I cannot recall the precise language of the letter, but I may tell the hon. gentleman that Mr. Kelley informs me personally, as well as in the letter in question, that the condition of the Grand Trunk Railway system will compare favourably with any other road on the American continent, and I have every reason to credit that statement.


Thomas Vien: What amount has the Grand Trunk Company expended for maintenance of the rolling stock in the last few years?


John Dowsley Reid: That information is all contained in Hansard, and I shall be pleased to ascertain the page for the hon. gentleman's benefit.


Thomas Vien: Is the minister satisfied that the equipment and rolling stock of the Grand Trunk Railway Company is in perfect working order?


John Dowsley Reid: From the statements
that have been made to me by officials of the Grar 1 Trunk railway, and from information I have gathered from the officials of our own system, I believe that the condition of their equipment and rolling stock will compare with any of the other systems in Canada.


Thomas Vien: The minister evidently differs from the Minister of Finance ('Sir Henry Drayton). It is a well-known fact that during the war and for the last few years the Grand Trunk has not spent a very large amount on the rolling stock and equipment of the line. In 1916 the Minister of Finance, who was then president of the commission appointed by the Government to inquire into the matter, made this statement:
Further, the Grand Trunk Railway has not been and is not being- adequately maintained No depreciation fund has been created for equipment. Mr. Chamberlin's view, as shown by his evidence, is that 5 per cent on the cost of the equipment ought to be annually charged under this head. He says :-
" Take engines and cars, they are either
worn out or out of date in twenty years."
This item, according to his evidence, would have required an annual sum of $2,750,000. He also states:-
"If we had $25,000,000 now, It would put
us in fine shape."
The Vice-President of operation, Mr. Kelley,-
The same gentleman whom the minister quotes

has direct responsibility for the plant. On Mr. Chamberlin's evidence being put to him he agreed with it.
So that Mr. Kelley, the president of the company, whom the Minister of Railways quotes as an authority in regard to the condition of the road, in 1916 agreed with Mr. Chamberlin in the statement that it would take $25,000,000 to "put us in fine shape." The Minister of Finance at that time stated in his report that the Grand Trunk Railway had not -been and was not being adequately maintained. Moreover, he says:
On the single item of " rails " the " cash expenditure required to restore normal conditions "-
Not for purposes of extension or improvement, but purely and simply to restore normal conditions.
-is reported as $5,312,142. The cost of restoring 'ballast to normal conditions is reported as $2,434,000.
With reference to the deferred renewals in Canada amounting to over $6,000,000, it appears that they have accumulated during eleven years, 1906-16. During this period, in spite of the requirements of the property, and the claims of public safety, $36,0-00y0'0'0 were paid out in dividends.
Summarizing the evidence given by Mr. Chamberlin and Mr. Kelley, the minister in his report states:
The $21,000,000 dealt with above represent the money which The responsible officers of the company estimate to be required to put the existing plant into good normal condition. This is a revenue liability. But the existing plant is quite inadequate for existing traffic and requires large additions, for which new capital must be raised. The estimates of necessary capital expenditure submitted to us are as follows:
Requirements for rolling stock,
shops and. machinery	 $26,150,000
Requirements for automatic -block signals (main line in Canada
only)	  3,533,000
Requirements for installing rock
ballast crushing plant	 467,500
Total	!	 $30,150,500
Putting together revenue and capital expenditure, we find that the Grand Trunk railway, in the opinion of its own officers, requires over

$51,000,000 spent upon it to put it in a position to meet the requirements of its to-day's business. We see no reason to expect that under existing conditions this necessary money will be ' provided.
The opinion of the Minister of Railways is thus in direct conflict with the studied statement of the Minister of Finance, who made a full investigation of the physical condition of the road and its equipment in 1916, when he said that it would require $51,000,000 merely to put the road in normal condition. The Minister of Railways asks Parliament to support .this Bill, which has for its object the purchasing of the Grand Trunk-if it can be termed a purchase- and does not know himself what the present physical condition of the road is.
He tells us that he has nothing else in his hands than the annual reports sent to the railway department by the railway company; he tells us that he has nothing but the letter from Mr. Kelley who, in 1916, made several startling statements, and he tells us that he has no further knowledge than the knowledge that he acquired by travelling on some sections of the road. I submit that is not the information that the House is entitled to receive and I do not think the Government is justified in recommending such legislation before it has gone fully into the physical condition of the road and has further knowledge to acquaint Parliament with.


John Dowsley Reid: Notwithstanding all that the hon. member has read in the Drayton-Acworth report about the condition of the road at that time, Sir Henry Drayton having taken all the evidence, here is what he recommends, page 87:
that a new public authority, a Board of Trustees be incorporated by Act of Parliament as the "Dominion Railway Company''-.
We have done that in regard to the Canadian National railways-

and that the Canadian Northern, Grand Trunk and Grand Trunk Pacific be transferred to this body.
On the next page, 88, section 40 of the Drayton-Acworth report, the commissioners
say:	^	-
We recommend that the entire share capital of the Grand Trunk, guaranteed, preference and ordinary, be surrendered to the trustees in exchange for an annuity based on a moderate out substantial proportion of $3,600,000, the average sum paid as dividend in the last ten years; and that this annuity should increase by forty or fifty per cent after the first seven years.
That is the recommendation of the present Finance Minister (Sir Henry Drayton). I go farther and say that now that he is a

member of the Government he is not only as strong to-day as he was then hut much stronger in the 'belief that we should acquire that road and make it a part of the Canadian National Railways system. On these terms he is a 'party to it and very strongly in favour of it. Possibly the equipment might not have been in as good condition at that time as it is to-day. Barge sums have been expended. There is a statement on Hansard, page 1145, showing that large sums have been expended from that date up to the present time on the improvement of the equipment. Therefore I submit that the Drayton-Acworth commission having recommended that we acquire the road and the report of President Kelley at the present time stating what the equipment is, we are justified in taking it over, believing that the equipment is in good shape, and that we are also justified in carrying out the suggestion of the commission that we take over the road on the lines recommended by them.


Daniel Duncan McKenzie: The minister quoted
section 40 on page 88:
We recommend thaf the entire share capital of the Grand Trunk, guaranteed, preference and ordinary, be surrendered to the trustees in exchange for an annuity based on a moderate but substantial proportion of $3,600,000, the average sum paid as dividend in the last ten years: and that this annuity should increase by forty or fifty per cent after the first seven years.
That would include all the stock except the debenture stock. We have it perfectly clear that this report recommends that all the stock foe taken over except the debenture stock.


John Dowsley Reid: It recommends that we take it over on this basis and in addition pay the interest on the debenture stock.


Daniel Duncan McKenzie: That is not what they say. They recommend that all the stock be taken over and that we pay a lump sum which the company can divide up as they like among the different stocks. There can be no misunderstanding between the minister and myselif. I asked him the question clearly: Did they recommend the taking of all the stock except the debenture stock? I understood the minister to say "Yes." If that is not so, I would be very glad to get an explanation from the minister.


John Dowsley Reid: We have the guaranteed, first, second and third preference stocks and the common stock. There is in addition to that the debenture stocks or bonds.


Daniel Duncan McKenzie: I am not talking about that. I am asking if we are leaving that stock out.


John Dowsley Reid: 
Daniel Duncan McKenzie: There is n.o need of going into a long discussion. I am asking exactly w'hat stocks are recommended to be taken by the Government in this section 40 and what stocks are left out. That is all I am asking. ]_do not require any explanation at all.


John Dowsley Reid: What we are taking over?


Daniel Duncan McKenzie: Not what we are taking over, but what this recommendation is. What do they recommend us to take over?


Mr. MEIGHEN:: They recommend that we take over the guaranteed, the three preference stocks and the common stocks, and that we pay for these five stocks an annual amount, commencing with a specified payment of $3,600,000, to be increased later on by forty or fifty per cent. We take over these stocks, commencing with the $2,500,000, and arbitrate as to what shall be paid above , that. Taking over these stocks, we necessarily, and, as the Drayton-Acworth report recommends, take over the property subject to the debenture stock or bonds. There can be no question about that.


Daniel Duncan McKenzie: , This stock, upon which we guarantee to pay four per cent in perpetuity, is included in this proposal contained in section 40?


Arthur Meighen: Yes.


Daniel Duncan McKenzie: We are not doing what they recommend us to do. They lump the whole, stock together, taking them all.


Arthur Meighen: That is- the five stocks.


Daniel Duncan McKenzie: Taking the five stocks. They say: Take the five stocks and we will recommend that we pay a lump sum and then let the directors divide it amongst these stocks as they deem proper. Instead of that, we are singling out one set of stocks and saying: We will pay in perpetuity four per cent on that stock and arbitrate upon the others. That is not what they recommend. You are taking a different course altogether.


Arthur Meighen: It is put in a different way, but in effect it is the same thing, because anything that was paid out would go necessarily to the guaranteed stockholders.


Daniel Duncan McKenzie: That is a matter for the directors.


Arthur Meighen: No, we found that it was not a matter for the directors until they received their dividend of $2,500,000. It was shown very clearly to the Minister of Finance, as to every one else, that the guaranteed stockholders had first claim on the capital in liquidation and had first claim on the revenues during operation; consequently anything paid in respect to the five stocks had to be applied to the guaranteed stock any way until the claims of the holders of this stock were satisfied. These are the recommendations of the Drayton-Acworth report, read.in the light of the exact facts, and this is just what we are doing.


Daniel Duncan McKenzie: I do not agree with the minister at all. The Drayton-Acworth report-which is the confession of faith of the Government, and upon which they base their whole operations and say everything they are now doing depends-tells them in section 41, which the minister was pleased to refer to, to do one thing and they are doing another thing entirely. I do not think it can be understood by any hon. gentleman in this House that taking a substantial, or moderate proportion of $3,600,000 and paying that over annually to the directors for the first seven years, and telling them:	" Divide that between your stocks
just as you please, it is none of our business, you can put it on any stock you like, but we are only obligating ourselves to pay you a moderate or substantial proportion of $3,600,000," is what the Government are doing, but it is the recommendation in the Drayton-Acworth report. Instead of doing that we take four of five stocks, which the Government say should come in, and we leave another stock out and we agree to pay upon the one which we leave out $2,500,000 a year-almost as much on the one stock .as the Drayton-Acworth report says we should put upon the whole. The Government say: "But $2,500,000 is a substantial amount of $3,600,000." It is a substantial amount. That is all the Drayton-Acworth report expects us to pay altogether but we pay that sum upon one set of stocks and we take the responsibility for what the arbitration may say we will have to pay upon the balance. I am not as much criticising that as I am criticising this: The Government cannot blow hot and blow cold upon this thing. They cannot take shelter behind the Drayton-Acworth report and at the same time fail to do what the Drayton-Acworth report recommends. That is the position I take.


Mr. FOURNIER:: On October 16, I made in this House a detailed statement of all the obligations and charges of the Grand Trunk railway. That statement was based on the Grand Trunk Railway Company's annual report for 1917, Moodie's Analysis of Steam Railroad Investments, information contained in Hansard, and railway statistics and it is set forth at pages 1145, 1146, 1147 and 1148-49 of Hansard. The hon. member for Royal (Mr. H. H. McLean) repeated the figures from the same statement and the Minister of Railways declared they were not correct. He asked in what respect they were incorrect, and the minister artistically declared, " It is not so at all. I do not agree with it at all."
Since then my figures have not been challenged but the Minister of Railways yesterday submitted a new statement. I shall not deal with the whole of the liabilities set out in that statement but only with the annual charges. If my hon. friend will look at his own statement to be found on page 1443 of Hansard I will ask him this question: What does he propose to do with the lake Superior branch bonds to the amount of $301,320 annual interest?


Arthur Meighen: As the hon. gentleman knows-I will tell him if he does not-the lake Superior branch was leased by the Grand Trunk Pacific to the Government About four years ago at an annual rental of four per cent on the exact outlay for construction, and the lease runs for, I think, 999 years. The branch was made part of the Government's system long ago, so this transaction has nothing to do with that.


Charles Alphonse Fournier: What is my hon. friend going to do with the second mortgage series (A an B) $806,700, annual interest?


Arthur Meighen: Those A and B series of mortgages are Grand Trunk Pacific obligations, that is to say that is the money out of which the Grand Trunk Pacific was built. I am sorry to say the obligation will have to be assumed and with the hon. member I very much regret it was ever incurred.


Charles Alphonse Fournier: Then the Minister of Railways made a statement yesterday that the rentals for leased lines were $340,666. In the Grand Trunk annual report for 1917, page 32, the annual rentals for leased lines appear as $776,030.


Arthur Meighen: I could not give an explanation without looking into it. It is just possible, however, that other lines then under lease may be now acquired by stock

ownership and will appear on pages 39 and 40 in that list.


Charles Alphonse Fournier: What about the Collateral Trust Company five per cent? There is an annual interest there of $11,250 according to the report of the Grand Trunk for 1917.


Arthur Meighen: I presume those are
equipment trust bonds which would appear in the statement at page 40. The hon. gentleman must have heard the statement of the Minister of Railways to-day in which equipment to a total of $180,000,000 odd was shown to have charged against it some $5,000,000 of trust bonds. We thought it worth while to take that equipment leaving it with the $5,000,000 trust bonds against it. And besides the trust bonds are all shown in the statement of assets and liabilities appearing as a balance sheet.


Charles Alphonse Fournier: Does that include the
New England Elevator Company first mortgage, 3J bonds, also the Montreal Warehouse Company four per cent bonds of $1,000,000, with an annual interest charge of $40,000?


Arthur Meighen: Those are all included
in the statement of liabilities.!


Charles Alphonse Fournier: Why does it not appear in the statement of annual interest charges?


Arthur Meighen: It does appear in the
statement I have before me at present and it is in the other statement given by the minister yesterday and is before the hon. gentlemen now. The annual interest obligations are also fully set out in the blue-book which we have had before us now for about a week,


Charles Alphonse Fournier: One parting shot and
I am done with this branch of the subject. We have been told by the Government that we have no alternative than to take over the Grand Trunk railway. In the light of the figures which have been furnished to us and all the explanations which have been given I take issue with my hon. friends and I say there is an alternative. I do not think the Government should have gone to the Grand Trunk, as it has been shown here they have done, and said: " Come here, we want you." The Government should have introduced a little business sense into this transaction and the alternative they could have employed was to use ordinary business principles. Here we are with the proprietors in England owning a railway in Canada-some of them preferred shareholders, others ordinary share-

holders, and others bondholders, hut all having security.
Instead of offering such an agreement as this the Government should first have found out whether the Grand Trunk is obligated to the Grand Trunk Pacific. I believe it is a point of law whether the Government has broken its contract with the Grand Trunk in that regard. Now, if the Grand Trunk is obligated to the Grand Trunk Pacific, it is evident that the Grand Trunk cannot pay and that if something was not done it would go into the hands of a receiver. I frankly admit that to allow the Grand Trunk to go into the hands of a receiver would lead us nowhere. The alternative is this: the Government should have required the 'bondholders of the Grand Trunk to forego their interest for 2 years and allow to continue, say, fifteen or twenty years. This would have resulted in the releasing of a large amount of cash, and then we could have handed back the Grand Trunk Pacific, the Government owning the minority stock. The Grand Trunk people should then have been told: "You have to help us in this thing ", Hon. members opposite have tried to cast an odium upon members on this side; they have endeavoured to substantiate the argument that we are opposed to public ownership. That is simply a blind to deceive the people. My sympathies are not with the bondholders in England; they are with the Canadian taxpayers. That is my sugges-tioh, then, as to what should have been done; no sound business man would say otherwise. The way that we are proposing to treat these 'bondholders in England smells of Max Aitken's pudding; it is simply an abomination.


Arthur Meighen: The hon. gentleman remarked something about our not paying anything on the stocks for a time and then he said that we ought to do something with the Grand Trunk Pacific. I did not catch what he said as to what ought to be done with the Grand Trunk Pacific.


Charles Alphonse Fournier: I said that if the bondholders would forego their interest for a period of 2 years and allow to continue, say, twenty years, as would be done in any business, an amount of cash would be realized for the Grand Trunk and we could hand back the Grand Trunk Pacific.


Arthur Meighen: Does my hon. friend refer to the bondholders of the Grand Trunk Pacific?


Charles Alphonse Fournier: No, to the bondholders of the Grand Trunk.


Arthur Meighen: It is the hon. gentleman's suggestion that they should forego their interest for twenty years?


Charles Alphonse Fournier: That is a business suggestion; that is a business principle.


Arthur Meighen: Wpll, it is really unfortunate that the hon. member is not Minister of Finance; he could borrow money for nothing. I had my hopes raised-I must say, unnecessarily raised-when the hon. member got up and announced that he had an alternative policy to suggest. For weeks I have been waiting hopefully and anxiously for some such suggestion, and knowing the hon. member to be a courteous gentleman I was quite sure that we were in for something at last that would give us food for thought.
Now, his alternative policy is this: He says first that we should have found out whether the Grand Trunk was bound to the Grand Trunk Pacific. Well, I am glad to be able to inform the hon.
4 p.m. member that we did find that out and that we found that they were bound. In fact, we never had any doubt about that since away back in 1903; so on that point the hon. gentleman's soul may rest at ease.
Then, he says, we should also ascertain whether or not the Government had broken its contract with the Grand Trunk. We .-found that out also. We found that the Government had broken no contract; that it had fulfilled, and more that fulfilled, all its contracts, but notwithstanding the utmost goodwill and co-operation on the part of the Government the enterprise so unfortunately launched by hon. gentlemen opposite fifteen years ago cannot be saved. So as far as that goes the hon. member and I are on the same ground: All that he asks that we find out was attended to in due time; there rests no doubt whatsoever on the subject.
He says also that the debenture holders -the bondholders, as he describes them-* of the Grand Trunk should forego their interest for twenty years. Well, that would be very nice indeed for us. But what reason has the hon. gentleman to think that debenture holders who have drawn their interest every year since the debenture was issued-who drew it even during the last two years of war-would be ready to forego their interest when they know that they can run the system and pay the interest on the bonds? It would be a very happy thing for Canada if we could get people to give us money for nothing or pro-

perty for nothing; if that were the case we would not to-day be trying to float a Victory Loan at five and a half per cent. Of course, another way would be to ask the company to hand us over the road for nothing. That also would be very good, but it was not along lines like that that the hon. gentleman and his friends proceeded in 1903 or 1904, or, indeed, ever in history. In a word, the phantasma that the hon. gentleman has before him does not indicate that he knows the real essence of the solution of a complicated business problem. What has the Government before it in the way of investigation and report? What has it in the way of the opinion of expert men to warrant its saying to those who have the first mortgage on the whole Grand Trunk system: " Stand without your interest for' twenty years?" We anchor our policy to an expert report, which hon. gentlemen have been lauding and commending for the last two or three years, including, I think, the hon. member himself (Mr. Fournier). This report says that the debenture holders are entitled to and can collect their interest. It says also that all those above, the holders of the proprietary rights of the company, are entitled to an annual payment from this company of a substantial payment of $3,600,000- which sum they have drawn on an average for ten years-and to an increase of that substantial proportion within a few years by forty or fifty per cent. We base our policy upon that; we do not base it upon any mere miasma; upon any suggestion that people are going to make presents to this country that they do not have to make. We are not actuated by sympathy for the Grand Trunk shareholders or for any one else; we are actuated by principles of decency and justice. We do not feel that we should arbitrarily decide that property owned by other people is worthless. We had a lecture on that subject from my hon. friend (Mr. J. H. Sinclair) last night; he said that such a course would be arbitrary and ruthless, or words to that effect. We feel that when we acquire property which we believe it to be in the interests of the country to acquire under the present unfortunate conditions, we ought to submit to judicial determination, if we are not able to agree upon it, the question of what that property is worth.


Daniel Duncan McKenzie: The Minister of Railways the other night referred to a subject which is worthy of careful thought and consideration-the question of taxation and municipal assessment as affecting this system.

All of the property is assessable in the different cities, towns and villages in Canada through which the road passes, and I. should like to know what value for assessment purposes the different assessors have put upon the Grand Trunk itself apart from the Grand Trunk Pacific or the subsidiary companies in the United States and what taxes the Grand Trunk paid last year in the different cities, towns and villages. Clause 3 gives us perhaps wider scope for dealing with the different phases of the transaction than any other clause of the Bill. The minister says that he is going to hold this property in a certain receptacle which he is going to call the Grand Trunk Railway Company, 'but he says that everything in that receptacle belongs to the Government to all intents and purposes, and he resents the idea that any one should say that it is not absolute government ownership. Although the minister claims that this property belongs to the Government, nevertheless we are going to ignore section 125 of the British North America Act, and we are going to pay taxes on everything in that receptacle belonging to the company. If that is part of the bargain, that is something that the people of Canada who have to pay the taxes ought to know. They ought to know how much taxes they have-to pay. They should not pay any, but the minister 'says that he is going to make a present to all the municipalities through whose lands these roads run. He does not pay the taxes; the Canadian people pay them. We want to know what is the size of the present that he is going to have the people of Canada make to the wealthy city of Montreal, the equally wealthy cities of Toronto and Kingston, and all the other wealthy towns. How much have my poor fishermen in Nova Sootia to contribute to the city of Toronto? How much are the people of Canada going to pay illegally? I say "illegally," because section 125 says that if we own a property as government property, we pay no taxes on it. But the minister broke in the other night to allay a false report as he called it that was going abroad, and he said that the country was to pay taxes on this undertaking. We want to know the extent of his liberality to people who live along the track of the Grand Trunk.


John Dowsley Reid: I think the question
of the hon. member is absurd. He states that the Government intend making a present to these municipalities. The hon. member knows that tifcm Grand Trunk railway system is in exactly the same position as the Canadian

Pacific or the Canadian Northern; it has always paid taxes. Does he mean now to say that we should take away from the municipalities a right that they have had in accordance with the laws of this country that -a private corporation should be taxed. This is a private company, the stock of which we are purchasing, so that we are the owners through the stock system. The hon. member thinks it a terrible affair that we are not going now to deprive these municipalities of the taxes the company has been paying and to put this company in a different position from that in which the Canadian Pacific has been in the past. The taxes paid by the Grand Trunk are given in the 'statistics contained in the blue-book on railway statistics and amount to $799,377.90. The taxes paid by the Grand Trunk Pacific amount to 349,963.19, and those paid by the Grand Trunk Pacific branch lines to $23,794.02. The hon. member thinks it a crime now that we should not act under the British North America Act and deprive these municipalities in the several provinces of these taxes. The Government should carry out the policy of paying the taxes just as the company has done in the past and as it is entitled to do under the law. The company pays taxes just the same as before. The Canadian Northern Railway Company last year paid taxes, as appears on page 73 of the Railway Statistics, amounting to $434,488.02. The hon. member asked as to the assessed value of the Grand Trunk system. I have not that here. 1 suppose we could get that, but what difference does it make in this transaction? This is not a question of the assessed value.


Daniel Duncan McKenzie: It would be some evidence. So far we have none.


John Dowsley Reid: I know that the Grand Trunk system as it runs through my constituency is assessed for only a few thousand dollars, whereas it is worth probably ten times as much. That would not be a fair way to value the system. In my constituency all rural land and town land are assessed for only a portion of the value. We have got into this whole railway muddle, as I may call it, simply on account of *the action of the Government supported by hon. gentlemen opposite. I do not believe there are in the House many members who do not remember the history of the railway situation. I remember it myself as it was discussed in this House and I have it on Hansard. Let me just give this information to members of this House, who perhaps do not know how this affair started and what position we are in, simply on account of
the hon, member for Cape Breton North and Victoria (Mr. McKenzie) and others on that side who supported (he Minister of Finance (Mr. Fielding) of that day. I do not blame the members behind him so much for this reason that they had a Finance Minister in whom they had confidence. Let me tell the committee how the matter started when the Minister of Finance made his statement in 1903.


Daniel Duncan McKenzie: What has that to do with this question?
Mr. .1. D. REID: It has a great deal to do with it. On August 12, 1903, the then Minister of Finance (Mr. Fielding) said with reference to this transaction:
If we had a surplus of $13,725,706-and we have it and more-and if, instead of investing that in the various purposes of Government, if, instead of doing the various things which the House has authorized, if, instead of reducing the debt of the Dominion as we shall do during the present year-though I do not make any great boast of that-if, instead of applying this money in any of these ways, you take that sum and give it to a trust company or insurance company accustomed to dealing with annuities, to invest it at 3 per cent per annum payable half-yearly, I undertake to say, on the authority of an actuary, that they could pay every cent of obligation we assume under that contract.
What has 'happened? On the strength of that what position are we in to-day? The members behind him believed that- he had gone into the matter and that he was making a statement that was correct.
Let me explain the position we are in. In the first place we had to complete the Transcontinental railway. That has cost the country up to date including losses on operation $250,000,000. The interest on that even at only four per cent means an annual loss of $10,000,000 to this country. In addition to that, we are losing annually $6,000,000 on the Transcontinental on account of operation. That makes $16,000,000 every year which the people of this country are liable for on that one transaction. In addition to that hon. gentlemen opposite launched out on the Grand Trunk Pacific railway and forced the road to go through to the coast. The Government have up to date advanced to the Grand Trunk Pacific by way of loans and Interest on same, advances by the Receiver, and so forth, $64,010,608. In addition to that there is a balance due the Canadian Government railways by Grand Trunk and Grand Trunk Pacific operating accounts of $1,040,346.79. The following table shows what we have invested in the Grand Trunk Pacific:

Total amount in Grand Trunk Pacific up to date, say, Dominion,
Government cash, loans, etc...$ 64,010,608
Guarantees	 [DOT] [DOT] [DOT]	76,574,181
140,684,789
Grand Trunk Railway guarantee.. 72,301,253 Local Government guarantees.. [DOT][DOT]	16,786,440
..	229,772,482
Add, implementing	 6,263,710
235,976,198
Subsidy, $6,400 per mile on Lake
Superior Branch, 190.70 miles. . . .	1,220,480
Advances as per statement	 235,976,198
237,196,678
Grand Trunk Railway say they have also advanced on branch lines	 11,019,686
Development Company, hotels, steamships and lands	
248,216,364
11,820,668
Advances by Grand Trunk Railway to Grand Trunk Pacific Saskatchewan railway	
260,037,032
214,500
260,251,532
Divided as follows :-
Dominion Government Guarantees
and Loans	- * [DOT] [DOT]
Local Government	
Grand Trunk Pacific	
Subsidy from Dominion Government Advances by Grand Trunk Railway to Grand Trunk Pacific Development Company and branch lines Implementing	
140,684,789
16,786,440
72,301,253
1,220,480
22,840,354
6,203,716

So instead of it costing us $13,000,000 as Mr. Fielding announced, the people of Canada have invested $260,037,032 in the Grand Trunk Pacific. The interest on that even at 4 per cent is about $11,000,000. There is also an annual loss on account of operating the system of about $6,000,000 more during the present year. That means the people of this country have to pay $17,000,000 every year on account of the Grand Trunk Pacific. All this money was invested because of the leader of the Liberal Government of that day and his Minister of Finance assuring their followers and the people of this country that the road would cost only $13,000,000.


Mr. RICHARDSON:: Do you mean to say they were responsible for all this?


John Dowsley Reid: The Liberal Government were responsible for every dollar of it. They forced the thing through, and we are in the position we are in to-day in consequence. We are trying to save the wreck that they made of the whole railway situ-
ation. We are trying to link up with the Grand Trunk in order that we may have a complete system and stop the losses that are occurring on account of having a jug-handled system through the policy of the leader of the Government and the Minister of Finance of that day. That is the situation. How can we make this road pay if we have not connections in the East, in Ontario and Quebec? Without those connections it is impossible for us to continue. The Grand Trunk system which we are taking over has been able in the past to pay dividends, and is now, and I believe in the future will be able not only to pay the dividends which it has paid in the past, but that the interchange of traffic between what is now the Grand Trunk system and the Canadian National system will not only help the Grand Trunk very materially and the National system, but will decrease the cost of management. Surely the only remedy for the railway situation in which we find ourselves to-day is to take over this road in order, at all events, to make ends meet instead of having to ask Parliament every year to make good an operating loss of $8,000,000 or $10,000,000 on the Grand Trunk Pacific and of at least $6,000,000 on the Transcontinental. For the life of me I cannot see any reason why this proposed legislation should not go through, unless the policy of hon. gentlemen opposite is, as I believe it is, and as was advocated by my hon. friend (Mr. McKenzie), to let the road go into the hands of a receiver. He knows just as well as I do that that means the road will go to the Canadian Pacific Railway. If we refuse this offer now, the Grand Trunk can or will make an agreement with the Canadian Pacific Railway, who will take the Grand Trunk over. I have heard this argument made by hon. gentlemen opposite, by the leader of the Opposition, for one, I believe: The Canadian Pacific will have to come to this Parliament for legislation before they can take over the Grand Trunk.


Mr. MACKENZIE KING:: Hear, hear.


John Dowsley Reid: The leader of the Opposition, the real leader of the Opposition, says, Hear, hear. He says the Canadian Pacific could not take over the Grand Trunk without first coming to this Parliament for legislation. Let me tell him that the Canadian Pacific has taken over railway corporations in the past and steamship companies. Public opinion at the time would not stand for it, but the Canadian Pacific managed to get other parties to secure the stock indirectly. Some holding or trust company would secure the stock, and ap-
/

parently to the outside world the Canadian Pacific would be fighting this holding company which it really controlled. After a while it would leak out that the Canadian Pacific owned and controlled the other company. They'have got it, and that is the end of it. The policy of the leader of the Opposition, or of the two leaders of the Opposition at the present time is this: First, wait for time. Now waiting for time means handing over the Grand Trunk to the Canadian Pacific. Secondly, they say: If you cannot do that, let the road go into the hands of a receiver. That also means going into the hands of the Canadian Pacific. I think it would be better if the hon. gentlemen would come out in the open and say: We want these roads to go under the control and operation of the Canadian Pacific.
So far as I am concerned, my position is this: We cannot continue to operate these roads at such a. loss. The people of this country would not stand for it. We can only continue to operate the roads we have by taking over the Grand Trunk. By consolidating the roads I am confident we can operate them successfully and in the interests of the public.


Thomas Vien: At present rates?


John Dowsley Reid: If we appoint a competent Board of Management comprising men of the highest ability we can operate them at present rates and make just as much money as the Canadian Pacific Railway. The Government should appoint six or eight men who have had an extensive experience in the conduct of railways and who should be given an absolutely free handi, untrammelled by interference either from any private member of Parliament or from outside public, in order to operate the system in the most economical manner possible. Under such a management I have no doubt whatever that the system could be made a success. There can be no difference in the management of the railways as between a private corporation and the Government if men of the same standard of ability and business acumen are appointed in either case.


Mr. EULER:: The other evening, in reply to a question from' myself, the minister stated that the management of the road would be entirely reorganized. I gathered from that statement, perhaps incorrectly, that new men would be appointed. Probably the minister will now give me a more definite expression of intention when I ask him this question: Does that intended reorganization imply that the men who are
now managing the road will be retired altogether, or does it simply mean that there will be some juggling?


John Dowsley Reid: It is hardly fair to expect me to answer that question offhand. What I do say is that we shall combine in one system the Canadian Northern Railway, the Grand Trunk Railway and the Intercolonial Railway, three large systems, and that there should be appointed at least half a dozen of the very best railway men to operate the combination. Personally, I am sure that from the three systems we should foe able to select those men. In any event, their appointment will be decided when the proper time arrives. I do know that on the Intercolonial railway we had a number of excellent men who undoubtedly would be able, from their great experience, to operate a railway system successfully, and I have also come in contact with some of the ablest men in connection with the Canadian Northern railway and the Grand Trunk railway. However, if by any possibility we cannot obtain suitable men from these systems the Government is in a position to secure them no matter from what source they may come. Hon. gentlemen opposite are apprehensive; they think the Government cannot make a success of the system. Well, that is merely a reflection on the members themselves; for, unless there is interference on the part of members of Parliament, there should be absolutely no difference between the management under a private corporation and under the Government if equally competent men are appointed to administer the affairs of the system.
Mr. iBURNHAM: Is it not true that in a magnificent speech the minister established the fact that Parliament, by various means, made an appalling mess of the whole situation from the beginning?


John Dowsley Reid: What I have said in
this House is that the appalling mess in connection with the railways was a legacy inherited by this Government from the Government of Sir Wilfrid Laurier, and we are struggling to the utmost of our ability to make the best of the situation. By consolidating the railroads we shall relieve the country from the large annual loss which it has had to bear as a result of the disjointed condition of the Canadian railways. My candid opinion is that by a vigilant oversight of the operations of the system, and under the economical management of competent men who know their business,

freight rates will he kept down, and in future, as the population increases, the people will enjoy cheaper rates instead of suffering, while millions of dollars are made by a private corporation. If we get control of the railway and have a consolidated system there is no doubt that we shall be able to compete with the Canadian Pacific Railway, not injuring that concern, for that would be the last thing I should want to do. They can work harmoniously with our system in the interests of both railways and also .of the people at large.


Mr. BURNHAM:: Would it not be well
for the United Farmers, who will be represented here in a few days, to be consulted in this matter?
Mr. MoKENZIE: The' section before the committee, Mr. Chairman, is section 3, which consists of five lines. It reads:
The said agreement shall contain provisions for the defining of the companies, properties and interests, comprised in the Grand Trunk system, and, including the terms and provisions hereinafter set forth, may contain such other terms and conditions as the parties may agree upon.
With all good nature and in a spirit of indulgence, may I ask upon what part of the section the Minister of Railways has been speaking in his lengthy speech?


John Dowsley Reid: Perhaips the hon. member will allow ime-


Daniel Duncan McKenzie: Order. Is there any single particle or line in that section that can justify this harangue to which we have been treated?


John Dowsley Reid: I can justify it for this reason: Last evening the leader of the Opposition asked me if it would be understood that on this or any other clause general questions might be raised or discussions entered into. I said " yes ", and for that reason I was, I think, perfectly in order.


Daniel Duncan McKenzie: On that assumption, the minister may continue indefinitely until, according to his own' declaration the other night, he will "want to go. home." He may be quite willing to go home before he is through with the inquiries that will be made of him. We have heard a speech which was canned from last night, and is being delivered to-day. I wish to call the minister's attention to one paragraph in the speech delivered on the 16th of October by the ex-Minister of Finance. When the Tory party is in a close comer before some committee and want evidence to show that they have no money, they call upon the ex-
Minister of Finance to establish the fact. On the other hand, when they come before Parliament and it suits their purpose to say that they have money, they call upon the same hon. gentleman to corroborate them.
We had Sir Thomas White as a witness here the other day proving that they did have money, and in making his speech, at page 1111, he said:
It is idle to inquire what political party, if any, is responsible for that state of affairs. It is also idle to inquire what share of responsibility should be borne by political parties.
Sir Thomas White says that both parties are responsible for the railway condition existing in Canada to-day. The Minister of Railways cannot shift that responsibility; whatever share of responsibility is to be borne by either party must be borne by it. That was the purpose of the speech of the ex-iMinister of Finance; that is what he says. In view of the fact that the ex-Minister of Finance comes here and tells us that it is idle to be talking about the condition of things, why should the Minister of Railways, who heard that speech and who invited this hon. gentleman to come here to help him out7 to prove that we have money on this occasion, although a few days ago they called him to prove that we had none, try to put all the responsibility on the Liberal party? The other day 1 pointed out that every phase, every step of the policy of the Liberal party was submitted to the people of this country and that they had given it their approval. I simply ask the minister if he will take the same course. If he will there will be no criticism. We will let this Bill go right through if he will agree that it shall not go into effect until a general election has taken place, and the people have had an opportunity of passing judgment upon it.


Arthur Meighen: Was that done in 1903?


Daniel Duncan McKenzie: Certainly, the agreement was brought down and immediately the House was dissolved and the Government went to the country.


Arthur Meighen: The agreement was
passed and the whole deal was considered ahead; everything was completed. That was the beginning of a new project involving outlays-this is merely a union of projects now built.


Daniel Duncan McKenzie: Will the minister say that this does not involve an outlay, an expenditure, the payment of the money of the people?


Arthur Meighen: Outlays that will have to be made in any event.
Mr. iMcKENZIE: Not at all.


Arthur Meighen: Certainly; this is a union and therefore an economy.
- Mr. McKENZIE: There is no necessity for this union. Hon. gentlemen speak as if they had no roads in Ontario. They have two main lines running right through this great province; they have the Canadian Northern and the Transcontinental railway. Will it be said that it is necessary to make a success of Government ownership in Ontario to. have three parallel lines with their branches? That is the position that exists here to-day. If the hon. gentleman says it is necessary I never heard any such argument before. There is nobody saying to-day but that the Intercolonial is quite capable of looking after the traffic along that line. There is no need-there cannot be-of adding this particular line to the Intercolonial because the Minister of Railways says that every part of this system is to be used in a business manner. When he is asked if freights are to be routed to St. John or Halifax, he says that will be entirely for the management; the management will have to do all that; I have nothing to do with it. But a few days later he finds that there is an election in Carleton, N.B., that he has a candidate in the field, that he is sending three ministers down there to speak for that candidate. He makes a speech in this House and he says: " I will see to i% that traffic is routed to the Maritime Provinces. I would like to see the agent who would go out for Grand Trunk freight and divert it to Portland, if I am alive. I will see to it that he is dismissed, not next day, but that night; I will not wait until next day." The Minister of Railways in one breath is going to put the whole business into the hands of the most competent railway man he can find in America, and in the next breath he says that he must do it himself, that if freight is diverted in the slightest degree he will dismiss the officer of the road who allows it.
The intention of the Minister of Railways is to get one huge railway monopoly under his control entirely for political purposes. But my simple, innocent question was this: "Are we going to be paying taxes on this road after it becomes a Government railway?" He breaks forth in fury over the heterodoxy when I suggest that Government property should stop paying taxes. Does the Intercolonial pay any taxes? He
must answer that it does not pay one cent of taxes anywhere from Sydney to Montreal. Wherein does it differ then from any other road that is owned by the Government? The people are going to reason this thing out. The minister will not tolerate for one moment to have it said that the method or practice by which he is getting hold of these roads does not give him Government ownership. This road is either owned by the Government or it is not. If it is owned by the Government it should not pay taxes. If it does not belong to the Government of course it will have to pay taxes. There are parts of the Intercolonial railway that at one time did not belong to the Intercolonial. There was at one time a road called the Eastern Extension owned by a private company running from New Glasgow to the strait of Canso. It was subject to local laws and paid taxes. But somewhere around 1882, 1883, or perhaps as late as 1885, it became the property of the Government and a part of the Intercolonial. Did that section of the road pay any taxes after that? Not one dollar. It was made a part of the Intercolonial and it became free from taxation. That is a case in point exactly. If the Eastern Extension Railway Company ceased to pay taxes when it became the property of the Government, what is the logic by which the Grand Trunk, when it becomes the property of the Government, is to continue to pay taxes? There is no sense in it, there is no law for it and it is absolutely in violation of the constitution if it is done. One would think that I was making this law. It is section 125 of the British North America Act which enacts that any Government property either in a province or the Dominion, shall not pay taxes.	-
This getting hold of the stock of the Grand Trunk or Canadian Northern is simply a means to an, end. We are not buying that stock because we want to have it. We do not want it. It is no good, it does not pay any dividend, it is not an inviting speculation for the Government and they would not buy a dollar's worth of it for the sake of owning the stock. It is a way they take of owning the railway.


Some hon. MEMBERS:: Hear, hear.


Daniel Duncan McKenzie: Very good. Then last year they owned the railway, the rolling stock, and everything about it, and they took possession of it. Therefore, if,we are to believe their argument, is it not, to all intents and purposes, exactly in the same box as the Intercolonial railway? There



is not a shadow of a difference between them except, as I said before, we are going to hold the Grand Trunk in this receptacle called the Grand Trunk Railway Company, and we are going to hold the Canadian Northern in the receptacle called the Canadian Northern Railway Company; we own everything that is in both those receptacles, according to hon. gentlemen opposite. Therefore, the law that applies to govern-mentowned companies or government-owned property applies here and we should not pay any taxes at all. Now hon. gentlemen try to make a great deal of fuss about conditions on the Intercolonial railway. Those who know the history of this country are aware that Nova Scotia, at all events, was not anxious to come into Confederation and never wanted to do so. People would think that we Nova Scotians shoved ourselves upon Confederation and that we came begging, upon favourable conditions with respect to the Intercolonial railway. Not at all; we were coaxed into Confederation. The Intercolonial was offered as an inducement to come in and we were assured that we would always have certain rights and conditions in regard to that road that would compensate us for what we were losing. Hon. gentlemen know that before Confederation the Maritime Provinces dealt largely with the United States. We sent our coal there free of duty; we sent our fish there free of duty; we had a magnificent trade with the United States. All of that was cut off when we entered Confederation with a tariff wall and we were joined to Quebec and Ontario. In respect to the goods that we sent and received by water we were told that we would have the same convenience back and forth on the Intercolonial. That was the condition under which we came into Confederation and under which that road was built. Now, if the Government of Canada is living up to a certain extent to the terms of Confederation and the terms with regard to the Intercolonial, why should I be told by the President of the Privy Council, when I speak about paying or not paying local rates upon this railway, "Oh, when you beggars in the Maritime Provinces pay your freight rates properly then it will be time enough for you to talk about what is being done on the Intercolonial." That is not common sense from a member of the Government. We are under no obligation and we are looking for no favours in this matter- we are looking for constitutional rights and constitutional privileges. I say to the Government that when millions upon millions of dollars worth of [Mr. McKenzie.!
property are owned by the people of the Dominion from the Atlantic to the Pacific and the Canadian Constitution says that that property shall not pay any taxes, the Government has no business to make the people in Nova Scotia, New Brunswick, Prince Edward Island and Quebec pay taxes on other property outside of their own when on like kind of property in their own provinces they pay no taxes at all on government owned property. That is why I asked the minister the question " What taxes shall we have to pay on the Grand Trunk and upon the Canadian Northern?" Hundreds of thousands of dollars, possibly millions of dollars, are to he paid altogether-I do not know how much the Canadian people will have to pay out of their own pocket, out of the earnings of these roads- when the constitution of the country says they shall not pay one cent. What is the Minister of Railways blowing and blustering about as to the cost to the country to build one particular road or another? That is not an answer to my question. I want to know clearly and distinctly how he proposes to get out of the provision of the Constitution which provides we shall not pay any taxes upon government owned property? He says that we shall go on paying those taxes as is now done. If he says we are going to pay the taxes, then he must admit that we do not own the property, because it is a right or a prerogative, of the Crown, if you please, that it shall not be taxed-anyway, the Crown shall not tax itself. There is where the principle came in that government property is exempt from taxation. Wise, or unwise, it is the law, and nobody ever found any fault with it. If that provision is in the Act and if it applies to the Intercolonial railway, I see no good logic, reason or law, why the same principle should not apply to every mile-of railway that the Government of Canada will own in this country.


Georges Henri Boivin: The attention of the Chair has been called to the fact that an hon. member who spoke a few minutes ago was not in order. I take it for granted that the committee have now arrived at the time when hon. members do not consider that a general discussion of the Bill should be allowed upon every clause. The clause under discussion, as already pointed out, relates to the provisions of the agreement. I hope that hon. members addressing the Chair will follow rule 13 of the House, which reads:

Speeches in Committee of the Whole must he strictly relevant to the item or clause under consideration.


James Alexander Robb: With all due deference, Mr. Chairman, to your ruling, which we do not dispute, the Minister of Railways, who is in charge of the Bill, has just made the statement that it is well understood both sides should, in connection with this clause particularly, have a free and full discussion of the railway situation in 'Canada.


Georges Henri Boivin: It would not be proper for the Chair to enter into a controversy with an hon. member, but I may be permitted to point out to the hon. member for Chateauguay-Huntingdon- that it was the leader of the Opposition who drew my attention to the fact that the rule was not being observed. In any event, the Chair and the committee cannot be bound by any agreement made between a minister of the Crown and the leader of the Opposition. The matter is entirely in the hands of the committee and an agreement of that kind could only be carried out by unanimous consent.


John Hampden Burnham: It seems to me, if I might make the observation, that we are losing sight of the fact that those who take the most vital interest in the provision under discussion are the people of this country. The Canadian people have got to pay the taxes; they are the ones who must bear the burden; and for my part, as a patriotic Canadian and as a man who never expects to get back to this House-
Some hon. MEMBERS; Oh, oh.


John Hampden Burnham: -I nevertheless unhesitatingly say that although it may mean suicide to myself, we ought to go to the country and let the people speak on this question.


William Lyon Mackenzie King: Last night 1 drew the attention of the Minister of the Interior to the extraordinary wording of this section and the unlimited powers which it gives the Government. I should like to read the section and ask if the minister has drafted the amendment which I understood he was to prepare and submit to the House to-day. The section reads:
The said agreement shall contain provisions for the defining of the companies, properties and interests, comprised in the Grand Trunk System, and, including the terms and provisions hereinafter set forth, may contain such other terms and conditions as the parties may agree upon.
In reading that section one would notice that the reference to " terms and provisions
92i	*
hereinafter set forth " is in the nature of a parenthetical clause, and if the sentence were read with that clause transposed it would run as follows:
The said agreement shall contain provisions for the defining of the companies, properties and interests, comprised in the Grand Trunk System, and may contain such other terms and conditions as the parties may agree upon, including the term's and provisions hereinafter set forth.
I think the minister will agree that he is asking Parliament to give the Government far too much latitude in connection with the agreement. Before I propose any change in the clause by the striking out of some of its words, I should be glad to hear whether the minister has an amendment to offer.


Arthur Meighen: I stated yesterday that
I thought it might be well to amend the clause by providing that the terms and conditions of the agreement should be consistent with the terms and conditions set forth in the Bill. The intention is that the agreement shall be only so much more complete in detail as is necessary to carry out the strict intent of Parliament, and anything making that effect clearer I should be very glad to accept. I have not prepared an amendment, but I suggest that these words be added:
Such other terms and conditions not to be inconsistent with the provisions of this Bill.


James Alexander Robb: In refusing the request of the leader of the Opposition that the agreement be placed on the Table, the Minister of the Interior is taking a course directly opposite to that which was taken by his leader (Sir Robert Borden) in connection with the Grand Trunk Pacific legislation. On March 14, 1904-I quote from Hansard of that year, volume 1, page 7- Sir Wilfrid Laurier, then Prime Minister, moved:
That the speech of His Excellency the Governor General to both Houses of Parliament of the Dominion- of Canada, be taken into consideration on Monday next.
Mr. R. L. Borden, of Halifax, the leader of the Opposition, then said:
Before the motion is adopted I would like to bring to the attention of the right hon. gentleman (Rt. Hon. Sir Wilfrid Laurier) the fact that reference is made in the speech to an agreement between the Government and the Grand Trunk Pacific Railway Company, or gentlemen representing that company; and I would like to know if it is the intention of the Government to place that agreement upon the table of the House before the address is taken into consideration? As this is a subject of considerable importance, I should think it only right that tne House should have the advantage of perusing the agreement before we enter into consideration of the speech from the Throne.

My hon. friend will notice that the leader of the Opposition of that day proposed to hold up the Address until the Government had brought down that agreement in detail and laid it on the Table, so that the representatives of the people might see it. Sir Wilfrid Laurier replied as follows to the remarks of the leader of the Opposition :
Sir Wilfrid Laurier:	I may inform my hon.
friend (Mr. Borden, Halifax) that the message he refers to will be laid on the Tab'e before the end of this sitting.
That is all we are asking to-day; that the agreement be .placed before the representatives of the people.


Arthur Meighen: I have not had time to look over that debate, but I am indebted to my hon. friend (Mr. Robb) for bringing the incident up; for it clearly sets out the principle that governed Parliament then and that governs Parliament now. The speech from the Throne was brought down and in it there was a statement that Parliament would be asked to ratify an agreement already entered into by the Government. The leader of the Opposition (Sir Robert Borden) of that day said: "Before we are asked to ratify an agreement which has -been entered into, we had better see it, because there is nothing in the speech from the Throne which indicates what the agreement contains." In that case, had the agreement not been brought down, there would have been nothing before Parliament on which to base a discussion-not even the principles of the agreement, to say nothing of its precise terms. It was only common sense that an agreement entered into should be laid before the House if it was to be discussed, because, I repeat, the speech from the Throne embodied nothing at all that could be the basis of a discussion in Parliament. But here we 'have everything. Here we have what the agreement is to contain, all that is felt to foe essential; and there is another great difference as well: Parliament has the privilege of adding anything that it may desire. Everything is before Parliament; the door is open. In that case the dqor was closed; the agreement had been signed. The difference between the two cases is really so great that they are hardly comparable.


James Alexander Robb: My hon. friend forgets that authority had been given at the previous session of Parliament for the making of a certain agreement. The Grand Trunk people subsequently came before the Government and asked for a change in that agreement and Parliament was called to give the Government authority to ratify the change.

Mr. iMEIGHEN:	Very good; was it not
well that Parliament should know what the proposed change was? The speech from the Throne did not say to Parliament what it was. But we say to Parliament, in this Bill,/what the agreement is to be; this (Bill contains the agreement. It does not contain the necessary details that must be embodied in an agreement, but it contains the essential principles thereof and may contain any detail that Parliament wants it to contain. But in the case the hon. gentleman mentions, Parliament had nothing at all before it to discuss-merely the fact that there was a change in agreement to be brought down. Parliament had been asked to authorize the Government to enter into an agreement and Parliament agreed to do so; is not that just the same as her%J Parliament had given the authority, just as Parliament is being asked to give the authority now.


James Alexander Robb: Yes, and the Government
of the day refused to change that agreement until they came before the representatives of the people for authority to do so.


Arthur Meighen: Certainly, and when we enter into an agreement under exactly the same conditions, having been authorized by Parliament to do it, not only must we refuse to change or amend it without the authority of Parliament; vve absolutely could not do so; we would be legally powerless to change it. So with the Government of that day; any change would 5 p.m. have been wholly ineffectual until Parliament had approved. It is just the same in this case; we can make only that agreement which we are authorized to make, just as the Government of that day could make only the agreement that it was authorized to make. Subsequently the agreement was changed, but, as I have said, the alteration was wholly ineffectual until it had been ratified by Parliament.	.


William Lyon Mackenzie King: May I direct the minister's attention to what seems to be an exact parallel? The Treaty of Peace was an agreement drawn and signed by the parties to it. It was thought necessary, after that agreement had been signed, to summon this session of Parliament for the .express purpose of ratifying it. There were two distinct acts: First, the act of drawing the agreement and having it signed; second, the calling of Parliament together for the purpose of giving its approval to the agreement. Now, all that gentlemen on this side are asking is that what the Government found it necessary to do in connection, with

a treaty relating to questions outside of .Canada, they do in regard to this question particularly affecting our own country-one of the most important questions that this Parliament has ever had to consider.


Arthur Meighen: The hon. gentleman's
parallel is rather destructive of his argument. Was there any prior authority on the part of Parliament to enter into the Treaty of Peace? Had there been, what would have been the need of ratification? If Parliament, before the Treaty of Peace was made, could have laid down the lines and the essential provisions of the treaty, that would have been a far greater privilege on the part of Parliament than that of subsequent ratification, when alteration would be difficult if not impossible. Here the facilities for alteration are right before us. Have I made it clear? Had Parliament been able to authorize in advance the provisions of that treaty, Parliament would have had a free hand and would have been in a much stronger position than it was in with the mere right of ratification. In this case, there shall be no need of ratification afterwards because we authorize before.
In the case brought up by the hon. member for Chateauguay-Huntingdon (Mr. Eobb) where Parliament was asked to authorize making an agreement along certain lines, the Government made the agreement along those lines. Was that a flouting of the people's rights as the hon. gentleman lectured us? Were the people's rights flouted at that time? Having made the agreement along the lines authorized by Parliament, did the Government of that day come before Parliament and ask for ratification of that agreement? They came to Parliament only when they sought authorization; they never came back for ratification of an agreement that they bad been authorized to make.


William Lyon Mackenzie King: I think I read to the hon. gentleman the clause containing the agreement in relation to the National Transcontinental railway. That clause expressly provided that that agreement came into effect only when it was ratified by this Parliament. I suggested a clause in identical terms to be inserted in this particular Bill and an agreement made under it. The minister refused to accept it.


Arthur Meighen: The agreement provided that it came into effect only when ratified by Parliament; it could not provide otherwise. So far as the agreement was made in advance, it could come into effect only when ratified by Parliament.
That was done in one case to which the hon. member for Chateauguay-Huntingdon referred in which the agreement was made in advance. There are two ways of doing this, and both have been practised many times, but we must be governed by circumstances. One method is just as good, just as equitable and just as frequently, if not more frequently used than the other. Indeed, the almost universal practice is for Parliament to lay down the main lines and principles, and then the details following out those principles exactly are worked out by the Governor in Council.


William Lyon Mackenzie King: I should like to draw the minister's attention to the other point of which I spoke last night, namely, that after the agreement had been drawn up by the Government and the Grand Trunk, the Government still reserves to the shareholders of that company the right to ratify that agreement, but the Government denies a similar right to the representatives of the people in this Parliament.


Arthur Meighen: Because we lay down
the lines of the agreement. Surely that is a stronger position than being asked to ratify it after it is made. We lay down the lines; the shareholders have not been consulted at all. We lay down the lines of the agreement, everything essential in it and everything we want.


William Lyon Mackenzie King: There is a difference between laying down lines and general principles and laying down specific terms.


Arthur Meighen: Let the (hon. member bring forward any terms he wants to suggest.


William Lyon Mackenzie King: Everything that is laid down in a general way by this Parliament, everything that is done under this Bill if it becomes law, will be known to the shareholders of the Grand Trunk Eailway Company before they are asked to give their consent to that agreement. We on this side contend that if the Government is going to reserve to the Grand Trunk shareholders a right, it should of necessity reserve, the same right to the people of Canada. What becomes of Parliament, of responsible government, of any of the provisions which have been made in the constitution for safeguarding the Tights of the people, if private shareholders and corporations are to be given privileges that the people's own representatives in Parliament are denied?


Daniel Duncan McKenzie: The very striking
difference between the two positions, that

is, between what took place in 1903 and what is taking place now is this, and to my mind it is very important. We are having put through this House now what is called an enabling Bill giving to the Government certain powers to do certain things, for instance, to make an agreement -with the Grand Trunk Railway Company, 'but the terms of the agreement and the agreement itself are not before us at all. We are, therefore, saying to the Government simply: Go and make an agreement, whatever agreement you think proper to make. It is true there are certain general principles laid down in the Bill.


Arthur Meighen: Very definite principles.


Daniel Duncan McKenzie: But we give the Government a free hand to make an agreement, which will come into effect just as soon as the shareholders are willing to accept the conditions.


Arthur Meighen: No free hand about it.


Daniel Duncan McKenzie: 
Arthur Meighen: I move to amend clause 3 of the Bill by inserting after the word "conditions" in the fifth line of the said clause, the following words: "not inconsistent with the provisions of this Act."


Mr. DEVLIN:: That amendment does not mean anything; it means simply that no agreement could be drawn up that would be inconsistent with the provisions of this Bill, or that if any agreement were drawn up inconsistent with the provisions of the Bill, it would not be a legal agreement. It is a huge farce of an amendment. There is no other way of qualifying it.


Arthur Meighen: I may tell my hon. friend that the leader of the Opposition (Mr. McKenzie) said last night that this would be a considerable improvement.


Emmanuel Berchmans Devlin: If my hon. friend feels happy over anything he may get from the leader of the Opposition, I certainly do not begrudge him his few moments of happiness.


Arthur Meighen: I believe the leader of the Opposition is right on that point, and I am glad to have the opportunity of commending his suggestion.


Emmanuel Berchmans Devlin: A very happy disposition must he coming over my hon. friend for him to say the leader of the Opposition is right. Surely that must be classed as another improvement. The contention that is made on this side with regard to clause 3, if I have followed the discussion aright, is that the Government should not have the power to put in the agreement other terms

and conditions which may not be known to the people of Canada, and secondly, that the people of Canada have the same right as the shareholders of the Grand Trunk. The minister says: " It is all right. It has been done in the past.' Many things have been done in the pasit that must not be repeated in the present, and certainly will not be repeated in the future.


Mr. M. CLARK:: Hear, hear.


Emmanuel Berchmans Devlin: My hon. friend agrees
with me. Let me put it this way: The Government is .acting as solicitor or counsel for the people, charged by the people to draw up the agreement with the Grand Trunk. Another counsel is empowered by the Grand Trunk shareholders to draw up the agreement for them. The Government say to the people, their clients, "We will draw up the agreement according to the powers that you give us, but as your counsel will have the right to put in the agreement other terms and conditions as we may deem wise." The people say to the Government: " But we want to read over that agreement before we attach our signature to it." Counsel, the Government, replies: " No. You are empowering us to sign your name and you will not have the right to read over the agreement. Then the people say, " The shareholders of the Grand Trunk, the other parties to this agreement, will have the right of reading it over before their signatures are affixed to it. Why should we not have that power?" The Government answers, " Because we may require to put in other terms and conditions which we cannot tell you of at present, but which will not !be inconsistent with the power you give us to sign your name."
I put it to the Government, is it fair to put their clients, the people of Canada, in that position? Should not the people of Canada be on exactly the same footing as the shareholders of the Grand Trunk, the other parties to the agreement, and have the right to lead it over before their signature is attached? I may be wrong, but I take it that that is what was in the mind of the leader of the Opposition when speaking. I can very readily understand, him saying that the words suggested " Not inconsistent with the provisions- of this Act " are an improvement, because the Government -before did not even want to give the people of Canada the right to say that nothing should be put in the agreement except what was consistent with the provisions of this Act, Now the Government say to the people: " Wc will not put in the agreement any terms and
conditions which are not consistent with the powers which you give us, but we will put in other terms and conditions than those perhaps with which you are familiar. We take it that the power you have given us to sign your name empowers us to put -in other terms and conditions in the agreement, which you shall not see or know of before you become bound thereby." I think the position which the Government is asking the people of Canada to assume is an unjust position. It is a position that no private individual would be asked to assume, and we should apply the same rule to a body of individuals that we apply to an individual. The body of individuals -in this case is the people of Canada.


Arthur Meighen: First, with regard to the amendment. It might conceivably be argued, and I have no doubt that this is what was in the mind of the leader of the Opposition last evening, that as the clause reads at present the power of putting in other terms and conditions, being cumulative, did not forbid terms and conditions even differing from the terms and conditions here. As that might conceivably be argued, possibly not effectually argued, it is certainly an improvement to put those words in. Now the hon. gentleman says that we should have done as was done in connection with the Grand Trunk Pacific in the 1903 case, the only -case, as I am informed, but not as was done in the second case-I am looking into that to be sure I am right. He says we should have done what was done in 1903, have had the agreement made, and then brought it down to Parliament for ratification. That is one method; this is another method. Let us examine which is the best from the standpoint of Parliament, and this is very important. When you come down to Parliament with an agreement signed and sealed for ratification what is the function of Parliament? It is to take that agreement as it is or to let that agreement go. Parliament's hands are virtually tied, because the Government of the day is committed. It has signed and sealed all the terms and details and Parliament has no say at all. It is a case of Parliament taking it or leaving it. That was one of the main criticisms levelled at the -plan of the Government in 1903. We have no desire to emulate the course pursued in 1903 any further than is constitutionally necessary. In this case we have followed the other plan, which has been frequently adopted. Parliament has everything before it; there is nothing in the world kept from Parliament-. Parliament can in-

sort, can add, or subtract. The whole field is before Parliament. We lay down here certain provisions. It is for Parliament to add to them or strike them out. Is that not a far better position to put Parliament in than to come here with a hard-and-fast agreement, with everything cut-and-dried, and say to Parliament: "There is the agreement. We have made it and it is for you to turn us out or leave us in. Take the agreement just as it is, or leave it just as it is." I submit that much the better position to put Parliament in the position Parliament is in to-day, where Parliament has a free hand to insert more clauses than are here or to take from clauses which are provided to be enacted in the agreement.


Mr. FIELDING:: Does the hon. gentleman claim that Parliament is absolutely free now to deal with this agreement in any way it pleases other than by dismissing the Government? The hon. gentleman has stated that all the material parts of the agreement are set forth in tihe correspondence, which amounts to an agreement with the Grand Trunk *Company. Does he claim that he can put aside all that correspondence and that we can do anything we like, with the freedom which he suggests? We can only do it by dismissing the Government.


Arthur Meighen: Probably, if the Government could not accept the suggestion of Parliament, it might have to go. But the Government can accept the suggestions of Parliament.


William Stevens Fielding: Not if they are at variance with what the hon. gentleman has already contracted for.


Arthur Meighen: We have entered into nothing binding with the Grand Trunk Company in any sense whatever. There is nothing in the nature of a final agreement such as the hon. member entered into in 1903. Parliament may now make suggestions which may he quite acceptable to the Government. It may make suggestions which might prove quite acceptable to both the Grand Trunk and the Government; or, on the other hand, suggestions which might be acceptable to us and not to the Grand Trunk, and we are at liberty to assert that the Grand Trunk would not be bound to accept them. Parliament is free. It is infinitely freer to-day than it was in 1903. Parliament has the case presented to it in a form which I think it will appreciate,. and is in a much better position than it occupied in 1903, when all it could do was

to accept the Government's proposition as it was, or let the thing go altogether.


William Stevens Fielding: The hon. gentleman has entirely changed his ground. Throughout the debate he has been telling us that all the essentials of the agreement with the Grand Trunk are before us, and that the Government have come to an understanding with them. Now he practically tells us that there is no understanding with the Grand Trunk and that we are free to do as we like. That is	an	absolute change	of ground.


Arthur Meighen: There is no obduracy on either side. Possibly something can be suggested in the public interest which would be acceptable to them, hut no door is shut against them. If Parliament sees fit to make any suggestions it is perfectly at liberty to do so. Is not that a good position for Parliament to be in? We could not come before Parliament any sooner, and we are very glad that we did not come later. We did not go to the extent to which my hon. friend did:, and get the thing into such a shape that the pruning knife could not be applied, everything being hard and fast, cut and dried, leaving Parliament with nothing but an option to accept the proposi-'tion or let it go altogether. There is no difficulty now in the way of Parliament's making any amendment it deems desirable. Any amendment offered may be acceptable to the Grand Trunk or it may not, and we may insist on it even if it is not acceptable to them. What freer position could Parliament be in? It is true the letter is signed, but that does not say that there cannot be any alteration if Parliament insists upon it, nor that there cannot be any modification, that may he acceptable to both sides. That is absolutely the right position for Parliament to be in.


William Stevens Fielding: The minister has repeatedly stated that we have the agreement before us in all its essentials, and now he says that there is no agreement and that we are free to do what we like. I must say that such an entire change .in the attitude of the hon. gentleman is astonishing.


Arthur Meighen: There is no change.


William Lyon Mackenzie King: The minister has divined correctly what was in my mind last night. 1 suggested that the language here was much too wide. The clause reads:
The said agreement shall contain provisions for the defining of the companies, properties and interests comprised in the Grand Trunk System, and. including the terms and provision hereinafter set forth, may contain such other terms and conditions as the parties may agree upon.

I pointed out that that gave power to introduce into the agreement any terms irrespective of the provisions of this Bill. The minister has realized the force of that contention and has suggested a 'modification of the clause hy adding the words, "not inconsistent with the provisions of this Act." To that extent there is an improvement. But the hon. member (Mr. Devlin) has also caught what was in my mind and what I think is even more important than the suggestion which the minister has made, and that is, that these words, "may contain such other terms and conditions" together with the minister's addition, are altogether superfluous if the agreement is to he limited to the terms and conditions stated in the Act. The minister tells us that the Bill includes everything that will go into the agreement.


Arthur Meighen: I did not say that; it includes the essentials.


William Lyon Mackenzie King: Oh, well, there.


Arthur Meighen: There is a contingency covered in the letter which is before Parliament, of October 9, which is not in the Bill but must necessarily go into the agreement. Suppose it is discovered after the arbitration award is made that there has been some undisclosed liability which has later turned1 up; provision must be made against such an event. That is the sort of detail that goes into the agreement, although it does not require to be set out in the Bill. If this committee thinks it worth while that a clause embodying even that detail should be put into the Bill there is no objection.


William Lyon Mackenzie King: I think it
would be desirable to embody just as much as is necessary. We have, two positions. The minister first tells us that the Bill contains all the terms and provisions that will go into the agreement.


Arthur Meighen: The essential ones.


William Lyon Mackenzie King: He now qualifies it by adding the word, "essential." I should like to know what provisions other than the essential ones are necessary. What is the necessity of putting into the agreement provisions that are not essential?


Arthur Meighen: 'There are provisions that go to carry out the evident intent of a Bill which Parliament passes, just as regulations are made by a department, approved by the Governor in Council, to carry out the intent of a Bill authorizing that department to do certain things. It is exactly
the same thing here. There is no difference either in principle or in method.


William Lyon Mackenzie King: I think Parliament would be better secured in its rights if the minister would eliminate altogether the unnecessary words in this section: " May contain such other terms and conditions," together with his own suggestion, " not inconsistent with the provisions of this Act."


Arthur Meighen: If that were done the Government would be absolutely precluded from making any provision to safeguard the interests of the country. Take the Canadian Northern agreement which was authorized in the same way. I assure the hon. gentleman that if he goes through the terms of that agreement he will find every detail following out the general authorization of the Act. Every one of those details is inserted to safeguard the interest of the public. Would it have been wise to have forbidden that to be done? That is a matter that can be done after a most careful legal examination of the whole thing. The principles and terms, specific as you wish to make them, are here or can be put here. But it would be surely an act of folly to disarm the Governor in Council from making whatever safeguarding provisions may be necessary in the agreement.


Mr. TRAHAN:: The Minister of the Interior the other day, in answer to my hon. friend (Mr. Campbell) said that the agreement would not take effect until every shareholder of the Grand Trunk had surrendered his voting power.


Arthur Meighen: Every guaranteed stock shareholder.


Arthur Trahan: Later on, in answer to a question by the hon. member for George Etienne Cartier, he said that no provision had so far been made for granting a delay to the shareholders in surrendering that voting power.


Arthur Meighen: No delay has been provided.


Arthur Trahan: No delay has been provided and the hon. gentleman stated that the delay would be a subject to be taken care of in the agreement itself. Is that right?


Arthur Meighen: What page is that?


Arthur Trahan: Hansard page 1132. I respectfully submit that the question <Jf the delay which will be granted to the shareholders to surrender their voting power is

an essential part of the agreement. If by the obstinacy of one shareholder the agree-*men can be destroyed or impeded, it is essential that this Parliament should put into the Bill specific delay which would he granted the shareholders. It was said to this House that the number of shareholders was very large-more than 100,000. The Government must enter into negotiations through the intermediary of the Grand .Trunk to get the surrender of their voting power. It may take a very long time, and the uncertainty as to the control taken by the Government will last very long. I would like to know if they have arrived at any decision upon this question of delay. How long do they wish to allow the shareholders to surrender their voting power? The question to which I refer is quoted at page 1132 of Hansard, second column. The hon. member for Nelson (Mr. Campbell) says:
What would be the situation if some of them refused to surrender their voting power?
Mr. Meighen:	Until that is done the agreement would not take effect.
Are we to be in the dark as to the time at which the agreement will take effect? Is it not essential for this committee to have a specific clause put into the Bill so that the people will know that at a certain day the bargain will be closed? If this clause is not put into the Bill, there is no bargain and we are without knowledge as to the time when the bargain will be completed. The Governor in Council may grant, one, two, three, four, five, or ten years to the shareholders to surrender their voting power. Without that the agreement will not have effect, according to the words of the Minister of Interior himself and I submit it is an essential part of the agreement.


Arthur Meighen: I am not surprised that the hon. gentleman asks the question because I do not think my statement in answer to the question of the hon. member for Nelson (Mr. Campbell) was in the clearest possible form. The fact is this: The guaranteed shareholders must surrender their voting power but it would seem to me that the legal, effectual, execution of the agreement by the company would constitute this surrender of the voting power. In any event the Government take no risk whatsoever for the reason that in clause 4 there is the following proviso:
Provided that concurrently with such guarantee of dividends and interest upon the present guaranteed stock and the present debenture stocks, respectively, the voting powers at meetings of shareholders of the Grand Trunk .now

vested in or exercisable by the holders of the said stocks respectively shall cease and determine absolutely.


Arthur Trahan: That is confiscation.


Arthur Meighen: No, there can be no
confiscation because they must be parties to the arrangement by the effectual execution of the agreement on the part of the company. As soon as they have agreed that the agreement shall take effect their consent is obtained and immediately we give our guarantee and in pursuance of that agreement their voting power dies at once. They have authorized us to give that guarantee by themselves approving of the agreement. Is that clear to the hon. member?


Arthur Trahan: I understand that the
agreement must be submitted for the approval of the shareholders and that by a vote of the majority-perhaps you may require two-thirds; I am not sure of that- clause 4 will be applied?


Arthur Meighen: Yes.


Arthur Trahan: There is in this clause a sort of confiscation of the vested rights of the shareholders who compose the minority and who may be against the surrendering of their voting power. Supposing there are 30,000 shareholders constituting a minority who do not want to surrender their voting power, does the minister say that by virtue of clause 4 which provides that their rights shall cease absolutely, there is not a sort of confiscation? The minority are against surrendering their rights. The minister says that by clause 4, in view of the position of the minority, their rights will cease absolutely when the majority shareholders have so decided. Is that right; is that just? I respectfully submit that it is not, and that the minister was more nearly right when he said the other day that we should induce the minority to surrender their voting power. He said that this inducement was to be offered in order that the transaction should not be impeded or absolutely destroyed by the obstinacy of some shareholders. Evidently he has changed his mind to-day.
IV'fr. MORPHY:	Is it not the universal
practice in every joint stock company or corporation for the by-laws to provide that in voting upon a question the majority shall rule?
If it were not. so and the minority were to receive special consideration it would be impossible to carry out an agreement with such a corporation, or company. Absolutely the only way, to my mind, that mergers, or unions-, or transfers of interests,

can possibly be brought about is by following that principle.


Arthur Trahan: I have seen many cases in the courts where the shareholders constituting the minority have taken action to set aside the decision of the majority. The law that a majority shall rule is very well in the case of the administration of public affairs where you have voting at general elections, but when it comes to company law there are provisions which protect the rights of the shareholders constituting the minority.


Mr. MORPHY:: Are there such provisions in this company, I would like to ask the hon. gentleman?


Arthur Trahan: The general law, the common law, is there.


Hugh Boulton Morphy: Oh, no.
Mr. TRAHAN. You must protect the rights of every one. You cannot, by the common law, force a shareholder to sell his own property; and if by law you take the means of forcing a lot of shareholders to sell their property, that is a sort of confiscation. It is against this injustice that I protest and1 say that clause 4 is not just. I say that the question of the delay to be granted to the shareholders to surrender their voting powers should be determined in this Bill. Now, has the minister any idea of the delay which the Government intends to grant to the shareholders for the surrendering of their voting power?


Arthur Meighen: The hon. gentleman's point is, first, we have no right to say to the minority shareholders, who may desire to refuse to surrender their voting power (the majority having agreed):	"We give
our guarantee and your voting power is gone." Well, I submit just what the hon. gentleman (Mr. Morphy) has said, which is the law, as I understand it, applicable to these shareholders and to all others: the shareholder of a company must allow that his rights are circumscribed by the statute governing his company and by the by-laws of that company. Is that not correct? So that if either the statute or the by-laws provide that the minority shareholders are hound by the will of the majority, or the minority to the extent of a third are bound by the will of a two-thirds majority, then if that two-thirds majority or bare majority, as the case may be, decide on a certain course, a minority shareholder has no right to complain, because that was the condition of his taking the stock; he is only
doing what he agreed he must do when he became a shareholder. He must submit to the by-laws and the statute governing the company, and if that provides that shareholders shall have a right by majority vote to do a certain thing that is the reason he must do that certain thing and he has no right to complain. The by-laws or the statute must so provide or the agreement cannot be effectually executed, and unless it is eSectually executed it amounts to nothing at all. Now, answering the hon. gentleman's second question, he appears to think that because we arbitrarily say:
" Your stock amounts to nothing, so far as voting power goes after we give our guarantee," we are asking them to agree to give up something for nothing. I am glad the hon. gentleman mentioned that, and I am glad it occurred to his mind, because it affords me an opportunity to again refer to a point that was raised by way of complaint to the agreement by the hon. member for Shelburne and Queen's (Mr. Fielding), when the subject came up first. That hon. gentleman said1: " You have added some appreciation to the guaranteed stock by the impression of the Government's guarantee." That is correct, there is a measure of appreciation, but in return we are getting just what the hon. gentleman (Mr. Trahan) refers to; we are getting a surrender of the voting power.


Arthur Trahan: Well?


Arthur Meighen: So in asking them to do that we are not asking to confiscate anything at all. We get a measure of appreciation, but nothing like what the hon. gentleman (Mr. Fielding) said it was, because 4 per cent guaranteed stock to-day oould not be argued to be worth more than about 69.


William Stevens Fielding: How much?


Arthur Meighen: About 69. That stock with the Government's direct guarantee, may appreciate 2 to 3 per cent, or possibly more, but we are selling Government 5J per cent at 100. A 5J per cent at 100 is just the same as a 4 per cent at 72 and a fraction; if the hon. gentleman will figure it out. Now, the hon. gentleman knows that a Government direct bond is better in the market than a Government guaranteed bond by about 3 points, so there is no way of arguing it would be worth over 69. That is assuming we will be selling Government bonds, for instance, at 100, which we are not doing. Therefore I say there is an appreciation, I always said that frankly to the committee. There is an appreciation; it could not be
14G8

avoided, tout in return for it we get a quid pro quo-we get a total surrender of the voting power.


William Stevens Fielding: First, with regard to the four iper cent guaranteed stock. Within a very recent date in London 4 per cent stocks of colonial governments-and the Canadian Government is a good colonial Government notwithstanding the persons who compose it at this moment; the Canadian- Government stands iwell financially and we all desire it shall toe so-colonial governments' 4 per cents have been quoted in the London market within- a recent date- I am not giving the exact date-as high as 90, and even as high as 93 and 94. The second point in the hon. gentleman's argument is, that if we do not pass this transaction in-.the shape in which he proposes it we cannot get possession of the voting stock of these people. If it is a vital matter that we get the voting s-tock there is- a very easy way to get it: let us offer a reasonable settlement to the Grand Trunk people, a fair and just and generous settlement-for I again s-ay I do not desire to see them squeezed-and if they decline to accept it, there is the very simple process open of putting them into liquidation, and in- that case there is good justification for doing so.


Arthur Meighen: The hon. gentleman says it is only recently that four per cent colonial government stock stood at 90. Similarly, it is only recently this four per cent guaranteed stock, without any government guarantees, stood at over 100.


William Stevens Fielding: I venture to say that if my hon. friend will look up the Stock exchange quotations of the latest date, he will find there are some colonial government stocks bearing four per cent interest which are quoted as high as 90. I quite agree there is a distinction between government stock direct and government guaranteed stock. My hon. friend is right, there is a little difference, tout making allowance for that, this guaranteed stock is going to be worth a great deal more than my hon. friend admits.


Arthur Meighen: We would be very foolish to sell five and a half per cen-ts at 100 if we could sell four -per cents- at anything above 72.


William Stevens Fielding: We are dealing with the stock quotations in the London market. The stock we are dealing with now is not being sold in Montreal or Ottawa [DOT] it is stock quoted in the London -market and

the quotations of colonial government four per cents in that market are perfectly fair for the purposes of analogy.


William Lyon Mackenzie King: Before this
clause carries let us see just what it is proposed that we should enact. Getting rid of all superfluous words, -we find that this is the purport of the section:
The said agreement .... may contain such other terms and conditions not inconsistent with the provisions of this Act.
Who is to determine whether these "other terms and conditions" are or are not inconsistent with the provisions- of the Act?


Arthur Meighen: The Governor in Council.


William Lyon Mackenzie King: In other words, the Governor in Council reserves that right to himself, but is unwilling to permit Parliament to expre-ss any opinion in the matter.


Arthur Meighen: We are absolutely willing; we are inviting the hon. gentleman to give us a term and a condition.


William Lyon Mackenzie King: Is the minister -prepared to say that before this agreement goes into force he will have it presented to Parliament, either at this or at a subsequent session, and allow Parliament to determine whether or not the conditions it contains are inconsistent with the provisions of this Bill?


Arthur Meighen: I have fully and carefully stated my position on that point.


William Lyon Mackenzie King: Will the minister state it again so there may be no misunderstanding?


Arthur Trahan: The minister has not answered the question that I put to him. I asked whether it was the intention to insert in this Bill a special clause specifying the length of the period within which the voting power could toe surrendered by the shareholders.


Arthur Meighen: No; in that res-pect my answer to the member for Nelson (Mr. Campbell) could not be said to be quite right. I do not think that we need provide any period of delay or any reference to this matter in the agreement, because the moment the agreement is executed and the guarantee given, the voting power falls by virtue of the statutory enactment; it is gone.	.


Arthur Trahan: It is confiscated, then..


Arthur Meighen: It is all gone.


William Lyon Mackenzie King: The minister was to re-state his position on the matter? to which I referred; will he do so now?


Arthur Meighen: I can. only say that we cannot bring the agreement down until it is complete, and I do not know when it will be complete. When it is, there will certainly be no delay in bringing it down.


Daniel Duncan McKenzie: The letter which the Minister of the Interior read to the House on the 10th of October is said to contain all the terms of the bargain. In reply to that letter the president of the road wrote the following under date of October 10:
I have taken communication of your letter of the 9th instant, relative to the proposed acquisition by the Government of Canada of the control of the Grand Trunk Railway system, which correctly embodies our understanding on the subject.
Everything that is in the bargain as agreed upon between these two gentlemen is found in the letter of the Minister of the Interior bearing date October 9, which is replied to by the letter which I have just read. All the terms of the bargain, then, were known to both parties on the 10th of October last; why is it now necessary to give to the Governor in Council power under this section to make other terms that [DOT] are not set forth in this correspondence? That is the effect of this section of the Bill. The last line and a quarter of the section is a distinct and separate sentence by ifc-self; you must import the word "agreement"-before the word "may," so that it will read:	,
The agreement may contain such other terms and conditions as the parties may agree upon.
Now, why do we open the door to other conditions or terms of agreement than those mentioned in the letter read by the minister on October 10, and of which we know nothing? The minister should agree to strike out all the words after the word "forth" in the second last line; then we would have a clear and distinct enactment enabling us to carry out an agreement the terms of which are set forth in the letter to which I have referred.
At six o'clock the House resumed and then took recess.
After Recess.
The House resumed at eight o'clock, and went again into Committee on Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk Railway system.-Mr. Boivin in the Chair.


Georges Henri Boivin: When the committee rose at six o'clock, the House was considering clause 3 and a proposed amendment by the Minister of the Interior (Mr. Meighen), which reads:
That clause 3 of the Bill be amended by inserting after the word "conditions" in the fifth line of the said clause, the following words: "not inconsistent with the provisions of this Act."


Daniel Duncan McKenzie: I do not know whether I am in order, but I wish to move as an amendment to the amendment to strike out all the words after the word "forth" in the fourth line of the clause, as well, as the .words of the proposed amendment. The clause would then terminate with the word " forth."


John Dowsley Reid: I think the hon. member was present when the Minister of the Interior explained that it would be impossible to accept an amendment of that kind; that it would not be in the interest of the Government to do so, and one of the reasons given was this. In the agreement that may be made, the Government intend inserting a clause similar to that stated in the letter, as follows:
Should the Government, within three months after the making of the award, claim that there existed any liabilities of the Grand Trunk or of any* company comprised in the Grand Trunk system which were not disclosed to the Board of Arbitrators prior to the making of their award, the Government may within such period *of three months, apply to the Board of Arbitrators to amend their award, and the board may thereupon decide whether such liabilities existed and were disclosed to them, whether the amount of their award would or would not have been affected thereby, and the amount of the deduction, if any, to be made in respect thereof; and may amend their award accordingly.
In other words, without the words that are in that clause, the award would be final as soon as it was made. There is nothing in the clause that would allow the arbitrators to increase the award, but that clause was inserted in the letter as a protection to the Government. Some liabilities might turn up that were not disclosed before the arbitrators made their award and which, had the arbitrators known of them at the time, would have led to a lower award being given. If the Government are able within three months to show that there are further liabilities which would reduce the award, they have the right to go to the arbitrators and ask for a reduction of the award. If the amendment of the hon. member is accepted and these words are stricken out, the award would be final, and the country might suffer

a serious loss in consequence. The clause refers only to deductions in the award and not to increases.


Daniel Duncan McKenzie: I quite agree that there should be in the Bill a condition just exactly to the effect of the clause read from the letter, because it appears to he a concise condition that can be embodied in legislation. That condition is, that if anything is discovered within so many days after the filing of the award, that was omitted or overlooked, it is possible to go back for an amendment of the award. I see no reason why that should not be in the Hill if it is intended to be of any service at all, and ,1 would agree at once if it was necessary Jo have a clause added covering that ground. .Then we would know precisely what we are dealing with. What we are objecting to is *to have used in the Bill any loose language which may involve more than the committee iContemplates. My amendment is simply that the clause shall read thus:
The said agreement shall contain provisions for the defining of the company's properties and interests, comprised In the Grand Trunk system, and, including the terms and provisions hereinafter set forth.
I intend that the clause should' stop there. I have no objection to embodying the terms set forth in the letter as >a part of the arrangement because we have the letter and we know what it contains. But I object to saying to this Parliament and to the people of Canada that this agreement "may contain such other terms and conditions as the parties may agree upon." That does not seem sensible. What is the good of coming to us for terms, and then put in the Bill a provision that no matter what we may say in the Bill, the agreement "may' contain such other terms and conditions as the parties may agree upon"? That is not restricting the parties in any way, and they can do just as they please without coming to Parliament. That is why I am moving to strike out the words which give that wide latitude to the parties after they leave Parliament altogether.


Mr. MOWAT:: I would; have hoped that my hon. friend would not find it necessary to move this amendment because it seems to me a direct challenge or dispute of the good faith of the Government. The only way we can carry on business is by a certain amount of trust amongst honourable men, and this clause appears to me fairly good drafting because it is giving power to plenipotentiaries so to speak, the executive, the Government, to carry out this agreement in accordance with the general

terms of the Bill. Any objections which my hon. friend now expresses seem to be got over by the amendment moved by the Minister of the Interior, that is to say, that the agreement shall not be inconsistent with the terms of the Act. In all agreements made by governments it is essential that an executive body-should be appointed to carry out the terms. Parliament is not sitting from day to day, Parliament adjourns for months at a time; and the whole thing might be held1 up by reason of the amendment which my hon. friend moved. That is to say, the plenipotentiaries, the ministers, would not be clothed with proper power, but rather with a scant language which might hamper them in carrying out the agreement. Everybody in this House knows that when a man gives a power of attorney to his friend or his banker, that power of attorney, in order to allow business to be carried out as it is intended and without restrictions and unnecessary limitations, goes very much further in its terms than is absolutely essential. In mining matters, for instance, and in all essentially big business affairs, a person who is given power of attorney will not act nowadays unless the power of attorney if in ample terms, although if it was carried out in bad faith some one might say the person giving the power of attorney would be almost selling his soul. But here we have a very important public agreement with power given to the Governor in Council to carry it out, and it is inconceivable to me that the Government should add anything that was not agreed to by Parliament if this Bill becomes law. To add to the Bill the terms proposed is a direct challenge of the good faith of the Government and I, for my part, hope that the amendment will not carry.


Arthur Trahan: The Minister of Railways has given an example of the other terms and conditions which may be put in the agreement. He referred to a provision mentioned in the latter relating to reduction of the award. Are these the only other terms contemplated by the Government?


Arthur Meighen: My hon. friend wants to know if the terms contained in the letter are all that are contemplated? '


Arthur Trahan: Yes.


Arthur Meighen: Not necessarily. I cannot say, because I do not presume to be the draftsman of the agreement. I cannot mention any special thing that is contemplated nor any special thing that is not. Anything contemplated is merely to cover some

specific contingency or event not specifically provided for in the general terms; just as is done, for example, when Parliament authorized a guarantee of bonds upon the security of a trust deed to he entered into between the parties and containing terms and provisions that are appropriate in the circumstance. I doubt if there has been a year since Parliament opened when a similar authority has not been given. If the hon. gentleman will look at the legislation passed previous to 1911 by the Government that, I suppose, he admired, he will find that the bonds of the Canadian Northern railway running from Winnipeg through Northern Ontario, amounting to $35,000,000, were guaranteed by Parliament and that the legislation authorized the Government to enter into a trust deed agreement for the security of the bonds, the whole terms of the agreement to be made satisfactory to the Governor in Council. Does that strike the hon. gentleman, dumb?


Arthur Trahan: It is not the same thing.


Arthur Meighen: No, it is far more general. No terms were laid down there at all, the whole thing being left to the Governor in Council. There are other examples of that kind, but it is not worth while hunting them up, they are so numerous. In 1910 the whole terms that protected the Government were authorized to be left to the Governor in Council by Parliament. In the legislation before us only the details are left to the Governor in Council, so that wherever something has been left out or is not adequately covered or safeguarded it can be embodied in the agreement. There is nothing at all in that inconsistent with the terms of the Bill, which are the essential guiding principles of the agreement. If the hon. gentleman will look at chapter 7 of the statutes of 1903, which happens to be before me, he will find another example of the kind I have mentioned: " The kind of securities to be guaranteed as aforesaid," it says-this was providing for a guarantee of the Canadian Northern railway in that year by the Government of the late Sir Wilfrid Laurier-" and the forms thereof and the forms of the mortgage." Everything upon which the whole loan rests was left to the Governor in Council. What is the hon. gentleman smiling about? Does he mean to say that a mortgage security for millions of dollars is not an agreement of importance? It could scarcely be more so. The terms of it, the care with which it is drafted, the caution with which every possible defect is guarded against-nothing
could be of more consequence than these matters but they are all left to the Governor in Council without even a guiding principle. Yet the hon. gentleman stands aghast because after laying down guiding principles in this case we leave the details to be worked out by the Governor in Council.


Daniel Duncan McKenzie: The Minister of the
Interior has told us repeatedly that the negotiations in connection with the taking over of the Grand Trunk have been in progress for the last two years or more, and that no member on this side of the House should be surprised at the terms because they have been well known for the last two years and there is nothing new about them. If it be true that for the last two years the Government have been negotiating for this purchase and that on the ninth day of this month they sat down after two years' deliberation and put the terms of agreement in a letter I think we on this side of the House have a right to suppose that the terms are really there. We are told by the minister who wrote the letter and who drafted the terms after two years' deliberation that the terms are there and that the president of the company, the other party to the agreement, writes on the 10th of October: " Yes, I have read your letter," and' it is implied that he has examined the terms, that he knows all about them, and that the letter of the minister does contain all the terms. Now, that Government which has carried on these negotiations and embodied the terms in a letter comes to this Parliament for authority to carry out those terms. We would expect them just to ask for power to carry through the agreement which they have reached and put in writing and to which they have subscribed their name. There could be no great objection to their asking for that power, but they are not satisfied with that. Not only do ' they ask for power to carry out that agreement, but they say: You will give us power not only to carry out this agreement, but also to make any other kind of agreement that we like that may be arrived at between the two parties. The Government are not satisfied to stand by the agreement signed on the 9th of October and submitted to this House on the following day. They say: We want full latitude to change our minds and make other agreements and other terms altogether, and we want power in reserve to make that agreement on the strength of the carte blanche that is given to us by this Parliament." Now, we are not satisfied with that. We say that in a big and critical transaction such as this, involving almost

incomprehensible money liabilities for the country, involving payments of money every year, the people of Canada, who pay the money, should know exactly what sort of an agreement they are entering into, and should know it through the voice of their representatives in Parliament.
That is why we on this side say that the power should be specific and that there should be no room for speculation. If the ministers have something further let them take time to consider it and come before Parliament when they have reached a definite understanding as to what powers they do require. Let them put it in the form of legislation and we will consider it. It is futile for us to spend our time deciding what the powers shall be and at the conclusion of our labours leave unlimited scope to the Government to do whatever they please. According to the argument of the minister and my hon. friend (Mr. Mowat) we might as well say in half a dozen lines: The Government of Canada shall have power to purchase the Grand Trunk railway on such terms and conditions as they may deem advisable. After all the verbiage that we have in this Act, we wind up section 3 by saying that the'agreement may contain "such other terms and conditions as the parties may agree upon." If it is the intention of Parliament to restrict the agreement within certain bounds, the legislation should state so specifically. But it does not, because the Bill, gives them wide latitude. When this Bill is passed the world is before them and they can make smell terms as they deem fit. I think we should so frame the measure as to keep the bargain within the terms of the letter. It is not unreasonable to say, after two years of negotiation both in the Old Country and in Canada, that the Government have reached an understanding, not hurriedly but as a result of mature consideration, and we have the right to assume that everything they agreed upon is contained in that letter. We have been discussing this subject for some ten- days and if there has occurred to the ministers anything that is not in the letter and which should be in it, we have the right to know what it is. The Minister of Railways since eight o'clock has told us something in regard to the letter, about some mistake that might occur in connection with the hearing before the arbitrators, and that there must be power to go back of the arbitrators for ratification of the award if necessary. I think that that should be in the Bill and in the agreement based upon the Bill. It is certainly a matter of very 
substantial importance. If the award is. to be opened after the arbitration has been closed, there should be some statutory authority for that course. I am sure there would be very strenuous opposition on the part of the company to opening the award if it were satisfactory to them, and there should be no question about the authority for that action. If that proposition is in the letter and is not embodied in the Bill it could very well be argued afterwards that the letter was never intended to be acted upon, otherwise it would have been carried into the Bill.
I know of no argument that would appear stronger to a court. If the Minister of Railways lays any store by the proposition he made a moment ago he should put it in the Bill and it would free the legislation, so far as that particular point is concerned, from its present looseness.


Thomas Vien: The example cited by the Minister of the Interior is hardly similar to the clause under consideration. He told us that similar legislation had been enacted in 1903 in respect of aid to the Canadian Northern railway. In the statute cited by him the nature of the security that was to be given for the bonds, the part of the line which was to be mortgaged in security for the bonds, the lien and the rank of the lien, and everything else, was provided for. Nothing was left to the decision of the Governor in Council except the form of the trust deed. It was simply a matter of wording. In this Bill not only the wording ol the agreement is left to the Governor in Council, but the Bill says that the agreement shall contain provisions for the defining of the companies, properties and interests comprised in the Grand Trunk system. So that the Governor in Council and the company may decide as to what will be transferred to the Government. Thus there is a vast difference between the legislation in 1903 and this Bill. While I am on this subject, I may ask the Minister of Railways to inform the committee who owns the Toronto Terminals Company. Is it part of the Grand Trunk Railway system and will it be transferred to the Government by the proposed agreement?
Mr. MBIiGHEN: I do not see much relation between the latter part of the hon. gentleman's speech and the first part of it.
, Mr. VIEN: It is just one instance.


Arthur Meighen: My information is that the Toronto Terminals Company is owned by the Canadian Pacific railway and the

Grand Trunk jointly. So much for that. *The hon. member professes to find a vast difference between the instance that happened to be under my eye when I spoke, of Parliament giving the Governor in 'Council authority to insert terms and provisions in an agreement, and this instance. He says that in the agreement of 1903 there was stated in the Act the line that was to be mortgaged. Well, in this case, the whole subject matter is here, namely the properties of the Grand Trunk system. That is what we get, and we cannot alter the agreement in that respect. But a dozen or two dozen other provisions including sub-provisions must be embodied in the agreement. The only difference is that in 1903 the power granted the Governor in Council was infinitely more ample and much less circumscribed than this. And the 1903 case does not stand alone. I challenge the hon. gentleman to produce a single statute since then that does not include the same thing. I have the statute of 1908, passed by the Government of Sir Wilfrid Laurier, granting if anything wider powers than were given in 1903. There is no use in argument if the hon. gentleman does not see that the authority is far more ample in those cases than in the one immediately under review. I am not finding fault with the statutes of those years. Similar statutes have been passed since the Government of Sir Wilfrid Laurier went out of power, and I doubt if there is a year since that time that similar statutes have not been passed.
It is the custom, and usually the power is much more ample than is asked for here. But hon. gentlemen' want something to complain of and they have kept this House all afternoon and evening professing themselves to be shocked because Parliament is asked that the Governor in Council be empowered to make such subsidiary and auxiliary terms and provisions as are consistent with the terms and provisions herein set cut and which are necessary to carry out these terms and provisions. Does my hon. friend imagine that there are terms in a trust deed that are not set out and provided for in the statute authorizing the trust deed? Did he ever see a trust deed? A trust deed is as thick through as your little finger. It is filled with terms and prolusions from beginning to end none of which is even mentioned or referred to in the authorizing statute.


Thomas Vien: Notwithstanding the information given by the minister, I maintain that the Bill under consideration is altogether different from the statute passed in 1903.
The minister has a way of discussing things. He indulges in sneers. He was very much vexed the other day because we had ventilated suspicions that were widely circulated among the public, and he accused us of casting slurs on the members of the Government. The minister can hardly get on his feet without sneering at hon. members -not alone at gentlemen sitting on this side; I remember that last session he said to one of the hon. members for Ottawa: Surely the hon. gentleman's power of reasoning must have deserted him. Yet he was addressing one of his friends. Now he asks fne: "Did you ever see a trust deed?" I will not venture to say that I am as intelligent, as clever, as well trained in law or business as the minister. I will not boast of such things, but I hope I can discuss intelligently a measure before this House without being sneered at by the minister. It is a habit of his; it is second nature with him.


Arthur Meighen: Will the hon. gentleman be good enough to tell me what my words were from which he deduces a sneer? I want to he courteous to the hon. gentleman.


Thomas Vien: You asked me with a smile-


Some hon. MEMBERS:: Oh, oh.


Thomas Vien: There is no joke in that. I find that some of the applause behind the minister is the applause that welcomed remarks of the Minister of Railways the other night that were not worthy of any applause. I am now telling the minister that he asked me with a sneering smile whether I had ever seen a trust deed. I believe that any serious man in this House would take that as a sneer. There is nobody in this House who has had any training in business, and particularly a lawyer with a certain number of years (practice, but has seen a trust deed and knows what a trust deed is. I have seen a number of trust deeds. I know what they are and I will tell the minister that, notwithstanding his sneers, if he will patiently listen and look carefully into the matter, he will find a certain difference between the statute of 1903 and thp Bill now under consideration. That statute determines the rank of the mortgage on the property, determines that it shall be a mortgage on certain parts of the line, determines everything that is necessary to provide a first-class security for the bonds which are given up to the Government as security for its guarantee. Then, in so far as the form of the trust deed is concerned, it was left to the Governor in Council to deter-



mine, namely, the date of the guarantee as authorized, and the forms thereof; the forms and terms cf the mortgage and the time and the manner of issue. These are the conditions ordinarily contained in a trust deed. We determine when the obligations are going to be repaid, what shall be the rate of interest and various other clauses which the trust deed shall contain. In 1903 these matters were left to the Governor in Council. But the Governor in Council could not say that only one part of the line would be mortgaged. That was provided foT by statute. The Governor in Council could not say that there would be a second mortgage when the statute said that it should be a first mortgage. Everything essential to the security of the Government was absolutely provided for, leaving the wording and the ordinary clauses, which are the consequence of the trust deed, to be determined by the Governor in Council later on, so as not to relate in the statute everything contained in the trust deed which is as bulky as the minister has mentioned. But here in this Bill there is very much more than the form, the terms of the mortgage, the time of issue of the security, and the form and manner of the guarantee. Section 3 provides:
The said agreement shall contain provisions for the defining of the companies, properties and interests, comprised in the Grand Trunk system.
I contend, Sir, that before many courts of justice this can be interpreted as giving to the parties to the agreement the right to determine which companies or properties or interests shall be handed over by the company and shall become the property of the Government. If we have the right- to determine and define which companies, properties and interests are comprised in the Grand Trunk Railway system, the same right is given to determine and define which properties, companies or interests shall not form a part of that- system. It was in connection with this that I asked- the minister a question as to the terminals of the Grand Trunk in Toronto. Everybody was led to believe that the terminals in Toronto weic being built by the Grand Trunk and that the Canadian Pacific bad some arrangement with the Grand Trunk for using them as a union station. The House has not been told what interests are going to be defined as being transferred to the Government at the same time as the Grand Trunk Railway system. The minister 
appeared to think that it was irrelevant to the matter now under consideration. I maintain that if you provide in a section of the Bill now before the committee that the Government and the company shall have the right to define what companies, what properties, and interests are handed over with the Grand Trunk system, it is absolutely relevant to ask if the Toronto terminals are going to be transferred with the other properties and defined as forming part of the Grand Trunk railway system. The minister declares, "I do not know, but my information is that the Toronto terminals are jointly owned by the (Canadian Pacific and the Grand Trunk". We are desirous of knowing what will be defined as forming part of the Grand Trunk railway system and whether it would not be feasible to insert in the Bill a full definition, so that nothing will be left to haphazard in any agreements which may be entered into, which may have the result of eliminating part of that system. For example, a short time ago, I think it was yesterday, the point was discussed why the Grand Trunk Company had not. included in their financial statement for the last few years the receipts and the net earnings of the Canadian Transfer Company. I understand that that company, although it is owned by the Grand Trunk, is left as a separate concern, and the results of its operations were not shown in the Grand Trunk financial statement. I do not see that there would be any great difficulty in the Government so defining the Grand Trunk Railway system in this Bill that the public will know what it contains and nothing will be left for further definition by the Government and_the company in any subsequent agreement.


William Lyon Mackenzie King: I should like to supplement the remarks of the hon. member (Mr. Vien) in reference to the repeated comments from hon. gentlemen opposite [DOT]as to the absence of legal understanding on this side. I would like to say to the ministry that the people of Canada are growing a little fearful of cabinets that are composed so exclusively of lawyers; and if it is a little difficult for members on this side to appreciate all the legal technicalities that appear in this Bill, they will please remember that to the average man legal technicalities are in the nature of barbed wire entanglements which conceal the real intent and meaning. What we on this side are anxious to do is to get the real meaning of this transaction before the country. We want to get that meaning in a form which

the people will be able to appreciate, and the circumstance that we on this side are not mostly lawyers, as hon. gentlemen opposite are, is one which I think the ministry will be well advised to omit mentioning in the future.


Thomas Vien: Will the Minister of Railways tell us what the share of the 'Grand Trunk in the Toronto Terminals is, and what share belongs to the Canadian Pacific?


Arthur Meighen: The shares are equal, and the information is already set forth in the statement to be found on page 1446 of Hansard.


Georges Henri Boivin: Is the committee ready fcr the question?


Some hon. MEMBERS:: Question.


Arthur Trahan: I wish to return to the question which was discussed before recess concerning the fixing of a delay to be granted to the shareholders of the company to surrender their voting power.


Georges Henri Boivin: The hon. member's question would be much more in order when clause 4 is reached. In asking his question this afternoon the hon. gentleman referred to clause 4 and he would be perfectly in order when that clause is taken up.


Arthur Trahan: I do not want to discuss your ruling, Mr. Chairman, but I may state it was the Minister of the Interior, in answer to a question of mine, who referred to clause 4.


Arthur Meighen: I had to do that.
f'.r TRAHAN: The question I desire to put to the minister is whether the fixing of the delay to be granted to the shareholders to surrender their voting power is to be contained in the " other terms and conditions that the parties may agree upon"? The minister, in his reply, told the committee that the Government did not intend to insert such a clause in the agreement. The reason he gave was that according to clause 4, as soon as the agreement was approved by the majority shareholders " the voting power of the shareholders of the Grand Trunk now vested or exercisable by the holders of the said stock respectively shall cease and determine absolutely." I wish to say that there is quite a r'^-'rence be tween the interpretation given t:iis afternoon by the Minister of the Interior and the one which he gave the other day. In my humble judgment the minister was right the other day and was not so correct in his statement this after-935
noon. If the committee will look at the proviso of clause 4-


Georges Henri Boivin: Order. I understood the hon. gentleman a few minutes ago to accept the ruling of the Chair, but he is once more discussing clause 4 which is not yet before the committee.


Arthur Trahan: I am not discussing clause 4 at all.


Georges Henri Boivin: Order. The hon. gentleman should submit to the ruling of the Chair.


Arthur Trahan: I am trying to establish this point: That it is necessary to insert a clause fixing the delay to be granted to the shareholders to enable them to surrender their voting power.


Georges Henri Boivin: ..Order. If the hon. member proposes to add a clause to the Bill or desires that a clause be added, the rules of the House are very clear. All new clauses should be proposed when the clauses already contained in the Bill are disposed of. So that even on that ground he would not be in order.


Arthur Trahan: I will say


Georges Henri Boivin: Order. I would not like to be obliged to name the hon. gentleman.


Arthur Trahan: The Chairman does not know what I am going to say, and yet he declares he will have to name me.


Georges Henri Boivin: Order.


Arthur Trahan: This is the point I wish to make: We are discussing clause 3 under which it is provided that the agreement shall contain provisions for the defining of the companies, properties and interests comprised in the Grand Trunk system, and including the terms and provisions hereinafter set forth.
It is provided also that the agreement shall include "the termsi and provisions hereinafter set forth," and that it "may contain such other terms and conditions as the parties may agree upon." What I wish to know is whether the words "such other terms and conditions as the parties may agree upon" involve the fixing of a period of delay to be granted to the shareholders for the surrender of their voting powers. In this connection I wish to quote from page 1132 of Hansard for the purpose of reminding the committee of what the Minister of the Interior said on a previous occasion regarding this point:


Mr. GAUVREAU:: 
Arthur Meighen: Was there not a resolution by the labour men of Montreal?


Mr. L. A. LAPOINTE:: I have read the resolution of the labour men of Montreal and I respect their opinion, but they only say that they are in favour of public ownership at the proper time. They do not petition the Government of the day to pul through this transaction as the Government are doing to-day, and I challenge the Government to prove the contrary.


Arthur Meighen: What is the proper
time?


Louis Audet Lapointe: Not the present moment. They say that they are and have been for many years in favour of public ownership, so that it is not a surprise to my hon. friend that they should be in favour of public ownership, but now that they have an idea of the financial condition of the country, they do not press this so much to-day, and I do not think they have sent a resolution to the Government. I challenge the Government to show one resolution in favour of this proposition and I will sit down.
Sub-amendment (Mr. McKenzie) negatived.


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 4-Government may guarantee payment of dividends upon present guaranteed stock, interest upon present debenture stocks, and dividends upon an issue of *non-voting capital stock of amount, determined by board of arbitrators:
Mr. CASGRAIN:: As I read this clause, the very first two words strike me forcibly. The clause reads:
As part of the consideration for such an acquisition.
That seems to say that we have a part there which is explained in paragraphs (a), (b) and (c), but it might convey to certain people the impression that there is some other consideration than those that may be explained in this clause and succeeding clauses of the Bill, a consideration that may be given by the Government in further payment for acquisition of the road. I should like to have from the minister some explanation as to what the words " as part of the consideration '' means. It seems by this that we bind ourselves to pay as part of the consideration such and such dividends. What is the other part?


Arthur Meighen: 
Arthur Meighen: Yes.
Mr. MeKENZIE: At page 88 of the Dray-ton-Acworth report, section 40, the commission tells the House and the Government:
We recommend that the entire 6hare capital of the Grand Trunk, guaranteed, preference and ordinary, he surrendered to the trustees in exchange for an annuity based on a moderate but substantial proportion of $3,600,000, the average sum paid as dividend in the last ten years; and that this annuity should increase by forty or fifty per cent after the first seven years.
Will the Minister of Railways or the Minister of the Interior explain this departure? Why did the Government not follow the entire proposal contained in section 40 and leave all the stocks to be dealt with as proposed by the Drayton-Acworth report?


Arthur Meighen: With further reference to the remarks of my hon. friend (Mr. Casgrain) I think on reflection that the clause is right as it stands. This clause merely provides the power to guarantee. Clause 6 provides the power to issue a new stock to take the place of the three preference stocks and the common stock after the arbitrators' award; so the execution of the power to guarantee is in a sense a partial payment, the balance being the issue of the new stock. Of course, the whole liability is the guarantee; that is true. I really do not see very much use for the words, but I think that what the draftsman had in mind was that clause 6 provided for the issuing of a new stock which took the place of and was payment for other stocks.	*
I have answered the question of the leader of the Opposition this afternoon, and I am sure I cannot improve on the explanation I then gave.


Daniel Duncan McKenzie: I do not remember any explanation at all. We were talking about it, it is true. I Teally think this question is of importance. We are told by the Government that they are relying entirely for information on. the Drayton-Acworth report. The Prime Minister in that cable in the blue-book which I have frequently quoted said that the Government should not take any steps in connection with acquiring the Grand Trunk property without some basis for every step they took. Now when we on this side of the House take that position, the Government say: We have the Drayton-Acworth report. Now the section of the Drayton-Acworth report which I read a few moments ago specifically says that five classes of stocks

will be satisfied or paid for by the division between them of a substantial part of $3,600,000 for the first seven years-from now on, say,-which amount could be added to as justified by conditions. Now that is not what is being done. The five stocks are not treated together. We are not going to pay the company merely a substantial portion of $3,600,000, but a great deal more, and when I ask why one of the stocks was taken out of the plan suggested by the Drayton-Acworth Commission, and 4 per cent interest guaranteed on it for all time to come, which alone gives the company more than is recommended in section 40, I can get no answer from the minister. I want to know for myself, and I think for the people I represent, what is the cause of this change of mind on the part of the Government. During the whole course of the negotiations up to the time the Prime Minister sent the cablegram to the High Commissioner in which he said the Government did not have any other information except the Drayton-Acworth report, and since, the Government have been relying entirely upon that report. Now they are travelling outside of that report and making a different bargain altogether, and when I ask what I regard as a serious question entitled to a proper explanation I am told by the Minister of the Interior that he said something about it this afternoon. Surely there must be some good reason why the Government departed from the recommendations of the Drayton-Acworth report, and made a different proposal which is not supported by any report from anybody. We are told It is all right. You can ask as many questions as you like. But we do not get any explanation. There is no explanation for this, except that the Government is making a very much better bargain for the Grand Trunk than the Drayton-Acworth report recommends. For some mysterious [DOT]reason the Government finds it necessary to [DOT] call on the people of this country to pay more money to the owners of the Grand Trunk than was recommended by the Drayton-Acworth Commission of experts whom we appointed and paid to inform us what we should pay for this" road. The Government might as well be honest about it and admit at once that they are travelling entirely outside the Drayton-Acworth report and are acting on their own information and on their judgment. Do not let it be said any more that they are following the recommendations of the Drayton-Acworth Commission,

because they are absolutely departing from the section I have read. It does not require any profound lawyer to see the difference, nor any profound knowledge of the manipulations of stocks and bonds. When we on this side of the House ask why things are not explainable we are told: " Oh, you are not familiar with the manipulation of stocks and bonds. If you were you would understand all about it." I believe I know as much about stocks and bonds as the ordinary citizen of this country. The farmers, the miners, the lumbermen, and the general public do not know very much about stocks and bonds, but they do know when they are making a fair deal and a good bargain. I submit to the minister that he is not making the bargain which the Drayton-Acworth Commission recommended, or we would not be in the position we are in to-day. I do not think the Grand Trunk would think of accepting the proposal of the Drayton-Acworth Commission, They played their cards very much better, and are getting a lot of money out of this country for which they are giving no adequate return. As the minister refuses to give me any answer I can only submit to the people of the country that the bargain the Government is now making is a new departure which finds no justification in the report which they quote as an authority.


Thomas Vien: Clause 4 makes no provision for the taking over of the whole of the capital stock of the Grand Trunk before the Government undertakes to guarantee the interest on the bonds, on the guaranteed stock, and on the new guaranteed stock. Is it to be understood that the Government will guarantee interest in proportion to the amount of stock turned in, or has the entire capital stock to be handed over before anything will be done under this clause?


Arthur Meighen: I do not know if I
have accurately caught what is in the hon. gentleman's mind, but if I have, the answer is this. So far as the guaranteed stock is concerned, it is fully provided for in this clause. That is to say, the surrender of its voting power is all that is to be done on the part-of the shareholders. That takes effect immediately the guarantee is given. As regards the preference stocks, the provision for their handing over is contained in clause 9 of the Bill, particularly subclause B, and also-in clause 11. I do not apprehend that it will be of advantage to the committee to discuss that phase of the hon. gentleman's question at this juncture.


Thomas Vien: I want to know whether the Government at present has assurance that the whole of the guaranteed stock as well as all of the 'preferential and common stock can be handed over to the Government, or will any of it remain outstanding?


Arthur Meighen: It can all be handed
over, of course. The agreement must provide that it shall be.


Thomas Vien: I do not see any clause in
the Bill to that effect. Section 2 says:
For the acquisition by the Government of the entire capital stock of the Grand Trunk, except the four per cent guaranteed stock of the'Grand Trunk, etc.
This gives the Government power to acquire the entire capital stock, but it does not say, that they can exercise that power in respect of a portion of the stock.


Arthur Meighen: Clause 11 covers the
matter fully. Certainly what the Government has to do is to acquire all. There is no power to acquire merely a part and let it go at that. Clause 11 enables the Government to execute that authority which Parliament now vests in them.
Any orders of the Governor in Council which the Government may deem requisite to vest in the Government any of the preference or common stocks not transferred to the Government or its nominees under the terms of this Act, or requisite to vacate any office of director, or otherwise to carry into effect the terms and provisions of the said agreement may be made and passed with the effect specified in any such Order in Council.
That is t-o say, if after the arbitrators have given their award some shareholders hang back and do not send in their, stock to be exchanged for the new non-voting certificate, all that the Government has to do is to pass an Order in Council, declaring it all vested in the Governor in Council, and then it becomes of no value whatsoever in the hands of the owners except for the purposes of surrender.


William Lyon Mackenzie King: 
Arthur Meighen: No. We do not take the stocks at the valuation fixed. The stocks are surrendered and a new non-voting stock bearing four per cent is issued in its stead.

The holders get that instead in such proportion as the arbitrators decide.


William Lyon Mackenzie King: The Government gets the stock surrendered?


John Dowsley Reid: Yes.	.


William Lyon Mackenzie King: Who issues the stock that is to bear the four per cent?


Arthur Meighen: The company.


William Lyon Mackenzie King: The Government get the stock that is surrendered and the company issue the new stock that the Government guarantees.


Arthur Meighen: Yes.


William Lyon Mackenzie King: That is different from the impression created by the remarks by the President of the Privy Council (Mr. Rowell) as reported on page 1403 of Hansard, October 24. A question was asked by an hon. member as to this stock, and the President of the Privy Council replied:
Mr. Rowell:	It is not watered stock. It is
stock got and paid for by issuing what is called a new four per cent guaranteed stock. That is the Government security which we issue in payment, rather than paying cash.
" We," if it means anything, means the Government and not the company, unless the Government and the company are one and the same thing. The minister proceeds :
The stock which we take in and deposit in the treasury is the stock which controls the road, and it will retain the standing it has to-day.
Mr. Euler: But it would have no actual and inherent value because new stock, to the actual inherent value of the system as determined by the arbitrators, is to be issued to the present holders.
Mr. Rowell:	It has whatever value we pay
for it, presuming, of course, that the arbitrators fix a fair value.
This is the sentence to which I wish particularly to direct attention: The minister says, "We pay for that stock by issuing a new security." I contend that the impression of that language upon the mind of any one is that the Government issues new security. Now I understand from the Minister of the Interior that it is not the Government but the Grand Trunk that issues that stock. Am I right?


Arthur Meighen: What I said is precisely correct. It is the Grand Trunk that issues the security guaranteed by the Government. The leader of the Opposition will, I know, reflect with sorrow, as I do, that many members of the Opposition get the two confused and refer to the Company as the Government, claiming that because the

Company owns the property we own it. No doubt the use of loose language of that kind on the part of the Opposition may possibly for the moment have misled the President of the Privy Council.


Joseph Philippe Baby Casgrain: I understood the Minister of the Interior, in reply to my hon. friend (Mr. Vien) to say that if certain stock was not handed in at a stated time an Order in Council would be passed declaring it to be the property of the Government. This procedure would appear to me to be in the nature of expropriation or confiscation. But the ministers who have charge of this Bill have all along stated that it was not the intention of the Government to confiscate any stock. In any event, how could an Order in Council passed by this Government be made effective as against people holding stock in a foreign country, England for instance? I understand that most of the shareholders reside in England, and if I mistake not the head office of the company is situated there. We may legislate for ourselves even by Order in Council-a method which has been abused within the past four or five years -but I do not think that our jurisdiction will go further. Legislation may emanate from the Imperial parliament in certain cases affecting ourselves, and we have suffered in this respect in the past. But I do not think it is within the power of this Parliament to pass Orders in Council affecting people outside of this country.


Arthur Meighen: It is somewhat amusing, of course, to have to answer charges of over-generosity one minute and of confiscation the next, but I shall try to adjust myself as well as I can to the circumstances. The Grand Trunk Company is a Canadian company, notwithstanding the fact that its head office is in England. I am sure the hon. gentleman would not for a moment suggest that a Canadian company, merely by moving its head office out of Canada, could escape from the requirements of Canadian law. The stock of any Canadian company is subject to the jurisdiction of the proper constitutional authority in this country.
The railway company is subject to our jurisdiction if the company is incorporated by the Parliament of Canada. There is no confiscation in respect of an order declaring the stock of a Canadian company to be the property of the Crown, provided the owners of that stock by legal process agree that such may be done. They do so agree by legal methods when they execute the ar-

titration agreement which is' to be prepared.


Thomas Vien: Where is the transfer office for the shares of the Grand Trunk?


Arthur Meighen: The quotations are
made in New York and London and I presume they have transfer offices in both places. I heard a few moments ago the ' charge that one of us had1 said that the Opposition knew nothing about stocks and bonds. It was a mistake. I said I did not know much about stock markets myself. I was in that charging myself with ignorance so that I hope I will be forgiven.


Thomas Vien: Does the minister say that an Order in Council passed under the authority of this Act could vest in the Crown shares held and transferred in the books of the company in England?


Arthur Meighen: In any event they agree to do it in advance under the agreement. But even should they not, if I am asked my opinion-and I give it in all humility- I would say that the Parliament of Canada in that regard would be supreme.


Thomas Vien: I have the greatest respect for the opinion of the minister as a lawyer, but I differ from him in that regard. I think that the Canadian Parliament could not vest in the Crown the authority which the Bill purports to give and that if an Order in Council should issue vesting in the Crown the shares of the shareholders who refuse to hand over their shares when such transfer is made in England-and the head office of the company is in England-such Order in Council could not be effective. The purpose of my question is to know whether the Government has the assurance now that all the shareholders of the company will be willing to hand over their shares. I understand that Sir Alfred Smithers has had several meetings of his shareholders in England. He probably has had conversations or communications with the .shareholders. I would like to have that assurance. I do not think it would be feasible to give to the Governor in Council authority to pass an Order in Council to practically expropriate such shares. I do not say it would be an abuse because if we admit the principle of the Bill I think we must admit all the powers which are necessary to put it into effect. If the Bill goes through I would sooner have the authority vested in the Crown, if we can give it, because I do not think it would be in the interests of the country
to have a certain number of shares vested in the Crown and a certain number still outstanding in the hands of shareholders. But I have serious doubts as to our constitutional right, by Order in Council to expropriate- for it is tantamount to expropriation-the shares of those who refuse to hand their shares over.


Mr. J. H. SINCLAIR:: When this matter was under discussion the other night I ventured to ask the Minister of the Interior some questions about it. I pointed out to him that I had seen in the press that there are some 180,000 shareholders of the Grand Trunk holding preferred, common and guaranteed shares. These shareholders are not all in England; some are in Holland and other countries on the continent of Europe. It is very important that the Government should have some distinct understanding with the Grand Trunk that they would be in a position to deliver these shares when the Government was ready to hand over the guarantees provided for in this Bill. We have had no assurance so far from the .minister that the Grand Trunk has given any understanding of that kind to the Government. We learned from the minister the other day that he did not have any such understanding. What strikes me very forcibly is the difference between the opinion which my hon. friend expressed the other day when we discussed this same question and the opinion he expresses now. He now tells us that this Government can secure this stock by Order in Counoil, which is equivalent to confiscation. That is not what he said the other day when I raised the question. I pointed out to him that these shareholders might not surrender their stock and that part of the .property might stand in the name of shareholders located in different European countries. I also said that I did not think that the confiscation of these shares would be tolerated by the governments of the European countries in which these stockholders live. My hon. friend made this reply:
X am very glad to hear the sentiments in general that animate the hon. gentleman. X thoroughly agree with him that it would be entirely wrong on the part of this Parliament to pass a law which would confiscate the property of any person simply because we, or, indeed, some institution or commission appointed by us, declared that stock was of no value.
That was the opinion of my hon. friend two days ago. But to-night he informs the committee that if this difficulty does arise the Government will pass an Order in Council to practically confiscate the stock.


Arthur Meighen: No, I do not change one hair's breadth from what I said on that occasion. The hon. gentleman was perfectly right then and I expressed my concurrence with the opinion that we should not, because we come to that conclusion ourselves, or because of some commission appointed by us, comes to the conclusion, arbitrarily declare that the stock is of no value. I have heard that suggested many times by more or less irresponsible hon. gentlemen but never by the hon. member (Mr. Sinclair). I took occasion to commend the sentiment that he expressed. We are not doing that now. We are not doing anything of the kind. If we are doing it now we did it in the Canadian Northern case, because we took exactly the same power, and exercised the same power in that case. There were some stocks in that case which were outstanding, which the parties did not bring in and we had the power to declare them our property and that power was exercised in regard to certain shares. There was no confiscation there and there will be none here. The Companies Act provides as respects ordinary Acts coming within that statute, that where there is a resolution of the shareholders passed in accordance with the provisions of that Act the other shareholders must abide by the terms of the resolution. There are similar clauses either in the chartering statute or in the by-laws passed under the chartering statute providing that the majority of the shareholders-possibly a. two-thirds majority-may bind the rest of the shareholders. We shall ask them to do so in this agreement and we shall ask them to legally execute this agreement [DOT] In that case, just as in similar cases, the minority shareholders are bound. Consequently there can be nothing in the way of an arbitrary deciding of values, nothing-far from it-in the way of confiscation, because what we do is by them agreed to in accordance with the provisions of the law defining what shall be an agreement on their part. I stated before, and I state again, we merely provide for the case of shares, perhaps in the hands of persons who never attended a meeting, but there is nothing done that the company does not agree to and that each shareholder does not agree to, in so far as his agreement is necessary by the law under which he holds his shares.


John Howard Sinclair: I presume the minister has examined the Grand Trunk charter and the law to which he refers that will enable a majority meeting of the stockholders of the Grand Trunk to pass that

resolution. Will the minister give us the section in the charter of the Grand Trunk Company that authorizes that step to be taken?


Arthur Meighen: No, I could not give the section; it may possibly be in the by-law under an authorizing power of the statute. There must necessarily be such or the company cannot execute the agreement, and they contemplate dealing with it. Surely they would not do so unless they had the power to deal with it.


John Howard Sinclair: The minister is not certain there is such a section.


Arthur Meighen: Oh, there must be.


John Howard Sinclair: The minister thinks there must be, but he does not know?


Arthur Meighen: I cannot give the number of the section, but there certainly must be one. The company would be absolutely powerless in many circumstances if they did not have such a statutory power as that.


Arthur Trahan: Does the minister assert that there is a provision in the company law which authorizes the corporation to force one of the shareholders to transfer his shares? If so, what is the section?


Arthur Meighen: I would rather not say that as a matter of law the majority shareholders can compel other shareholders to transfer their shares. I cannot see that it is of very great importance; it may be that they can. Very frequently that is provided for by by-laws which the company themselves enact. But whether they can or not in any event the arguments of hon. gentlemen merely show that this is the only way to go about it. The object we have in. view is to establish a tribunal to determine the value, and having determined the value in a fair and square way, then to give the Governor in Council the power to carry out the exchange on that value. There is nothing confiscatory, nothing arbitrary, about it at all. The shareholders are given what the stock is worth. We are protected, because immediately the determination is made we have the power to declare that that stock is ours and the shareholder becomes entitled to his dividends on the voting certificates that are issued in exchange.


Arthur Trahan: Suppose a majority of the shareholders of the Grand Trunk vote the agreement and the matter goes to arbitration, but the minority shareholders do not wish to exchange their shares for the amount of the award. Can the Government

compel those minority shareholders to transfer their shares?


Arthur Meighen: Yes, I have expressed that opinion previously and I repeat it now. Nor do I think it is unfair on the part of the Government to so compel, 'because we are getting a fair value established by arbitration.	"


Daniel Duncan McKenzie: We are dealing with a very important point of law and with property rights. The minister says that we can compel the transfer of these shares. We are taking for granted that many of these shareholders live beyond Canada. At all events, for the purpose of my argument, I am presuming that some of these shareholders live in England, Scotland and Ireland. Some of them perhaps live in France, and may refuse to transfer their shares. Let us say there is only one shareholder in France and that he has a thousand shares. He hears of this agreement but he holds on to his stock and refuses to transfer it. I ask the minister what can we do in this Parliament that would have any binding effect upon that citizen of France who owns a part of this property? So far as I have any knowledge we have no control over his person at all. This question is as old as the hills and it has always been enforced by the courts in England, in the event of the person who owned the property living in the country, that they would subject him to contempt, and would bring an action for specific performance. In that case, all the powers of the court can be exercised because the person lives in the country and is within the jurisdiction of Parliament and of the courts. But if the citizen who owned the property was beyond its jurisdiction, the court would be absolutely helpless-there would be nothing to do except agree with the man. Now here we are passing legislation which we say is going to expropriate the shares of a man who lives beyond the jurisdiction of this Parliament and beyond the jurisdiction of our courts, and we decree that an action shall be brought for specific performance. Our legislation enables the Minister of Railways, representing the Crown, to bring an action for specific performance; but we could not give any such authority as against the man beyond the confines of Canada. Our legislation would be absolutely without power; we could not authorize the courts to do that and we cannot do it ourselves. The principle is that we can exercise jurisdiction over the person of the man who owns property while he is within the jurisdiction of our courts and within the
jurisdiction of Parliament; but when he is beyond those confines and his property with him, we are absolutely hopeless, as I understand the law, except to have recourse to negotiation and agreement.


Arthur Meighen: The question the hon. member discusses is, of course, purely a legal one, and both he and I should apologize to the leader of the Opposition for taking up the time of the House upon it; but I will venture again to express, with all deference, what I myself regard, as the law on the point. He says that the owners of these shares are outside of Canada, they are domiciled in England, or in Holland, or in some other part of Europe; consequently, there is no way by which we can enforce a surrender of the shares. He is quite right, I think, in saying that we have no remedy as against the owner of the shares-that is, no remedy, as we call it, in persona. But we have a remedy in this, that what we wish to attach to ourselves, and release from the shareholder, is Canadian property.


Daniel Duncan McKenzie: The share is not Canadian property.


Arthur Meighen: Oh yes, because it is
a share of a Canadian company.


Daniel Duncan McKenzie: We do not agree in that. I submit that when a share is issued and the stock paid for and passed to the person concerned, it is as much his property as a twenty-pound note.
Mr. MEIGH'EN: Certainly it is his property; that is to say, he is the owner of it, but it is a Canadian property. For example, were he the owner of a piece of land along the right of way of a railway that we were projecting, the property would be Canadian property owned by this man who is over in Holland. But the hon. member would scarcely argue that in such a case we could not have the right of way because we could not expropriate property owned by a man in Holland. It is just the same here only that the property is a share certificate issued by a Canadian
10 p.m. company and consequently as a property is subject to the jurisdiction of Canadian laws. We exercise that jurisdiction in rem by saying: We may declare that that voting certificate of a Canadian company is our property, and we pay to the man in Holland or in England such sum for it as the award of the board of arbitration may warrant.


Arthur Trahan: There is a difference, Mr. Chairman, between real estate and personal property. I submit that the shares of a

company are either real estate or personal property. If they are personal property, there is an axiom of law which says that personal property follows the person- mobilia sequuntur personam. I fancy that that rule applies to property of this kind; it applies to shares which are personal property.


Arthur Meighen: Assuming that the
share certificates are personal property, that is, that the proprietary ownership of the company is personal property-assuming that-the property is, nevertheless, Canadian personal property. What represents it may be held corporeally over in Holland, but the stuff is here. Suppose there is a personal property here, say some furniture, and the bill of sale or whatever may represent it is over in Holland; that personal property here is subject to the jurisdiction of the proper legislature in this country. Similarly, the ownership of the share, that personal property represented by the certificate is subject to our jurisdiction though the man who holds the paper representing the ownership of that property is in Holland. The share certificates of a Canadian company are subject to Canadian jurisdiction. I venture to think that the bon. member, with the training that he has had and the predisposition that he has in the matter of safeguarding Canadian autonomy and Canadian rights, would be about the last to argue that either the Canadian Federal Parliament or a Canadian Provincial Parliament should be powerless with regard to the disposition of property in a Canadian company.


Mr. OOCKSHTJTT:: A large amount of revenue is derived by the Grand Trunk system through the operation on its lines of Pullman sleeping cars. Whether the Pullman people are shareholders in the Grand Trunk or whether they get their profits on a mileage basis or otherwise, certainly a proportion of the earnings of the road are required to pay them for the operation of these cars. I understand that the Canadian Northern, the Intercolonial and the Canadian Pacific own and operate their own sleeping cars, but the Grand Trunk Railway Company operate Pullman cars which are the property of a company in the United States. These cars are operated over all the lines of the Grand Trunk, and I believe that fares are collected upon them by the servants of the Pullman Company, though I arq not sure as to that. It would be interesting to the committee to have a statement as to what arrangement there is

between the Grand Trunk and the Pullman people; how the revenues derived from the operation of these cars are distributed, and how long the arrangement has been in existence. If we know exactly how these revenues are disposed of, complications may be avoided later.


John Dowsley Reid: Just at the moment I cannot give the hon. member the information, although I have in mind what I understand to be the arrangement. However, if the hon. member will let the matter stand for the present, I believe that I will have the information within the next few minutes and I will take an opportunity of giving it to him.


Mr. GASGRAIN (Translation):: 
Hugh Boulton Morphy: Order. I should like to direct the attention of the hon. member to subsection 5 of rule 13, which says:
Speeches in Committee of the Whole must he strictly relevant to the item or clause under consideration.
I have listened very patiently to the hon. member; I think I have understood pretty well the force of his remarks, and I do not think it is compatible with that rule that he should discourse for a long time about the opinions of newspapers and that sort of thing on the^ general question and not at all touch the question before the House at the present time. I would ask him in his future remarks to confine himself as closely as possible within the meaning of the rule.


Charles Eusèbe Casgrain: Mr. Chairman, I have to bow to your ruling, but I shall take the liberty of asking you this: Considering the question the hon. member from Brantford (Mr. Cockshutt) has put, am I not allowed to answer him and to call upon the Government for some Teasons, some explanations....


Hugh Boulton Morphy: Order. I do not think the question asked by the hon. member for Brantford (Mr. Cockshutt) was really in order, and so I would request that it be not too far pursued; otherwise, I shall have also to ask the hon. member to be short in his remarks and to come to the question.


Joseph Philippe Baby Casgrain: Are we
to understand that the hon. Minister of Railways, having answered the question put by the hon. member from Brantford in the manner he did, holds that no member of this House has the right to protest against the course of the Government, particularly the hon. Minister of Railways, against his inefficiency, his lack of capacity, I would even say his lack of knowledge as to the subject matter of this discussion. That is what I am coming to.
I stated that the hon. Minister of Railways was unable at this stage to give the necessary explanations which we have the right to expect from him. Even the friends of the Government, hi.s own followers, think they are themselves fairly and conscientiously entitled to call upon him to give those explanations.
I was saying a moment ago that friends of the Government, partisan newspapers, the Gazette and the Star, in Montreal, as well as their confederates, protest against the taking over of that railway by the Government on account of the large increase in the public debt which it will entail, and that, under such circumstances, the Government should not proceed any further nor set public opinion at defiance. What happened in the province of Quebec, in 1914, when certain charges were made against the Government of that time by Messrs. Beck, McNab and Nichol, who were then managers of a newspaper in Montreal? When those accusations were levelled at the Government charging them with embezzlement, they brought the accusers before the bar of the House and compelled them to prove their charges.
Should not the Government do likewise to-day and compel the editors of those newspapers to substantiate the charges set forth or implied in the editorials which we have read?
It would be interesting to get explanations upon that print at the bar of this House from Lord Atholstan and hon. Senator White, as well as from other friends of the Government who caused their advent to power in 1911 and 19i7; it would also be interesting to peep behind the scenes and to get the names of all those 'concerned, of all the friends of the Government who are so insistent upon the passing of this measure as soon as possible.
If the Government do not dare to let us know, it is because they are afraid those charges are "well founded, they are fearful of their judgment and of public opinion.


Arthur Meighen: The House will be perhaps somewhat amazed to know that one portion of the hon. gentleman's speech was a complaint that we were making too rapid progress with this Bill.


Hugh Boulton Morphy: Carried.


Mr. DENIS:: I was up, Sir, when you said "carried."


Hugh Boulton Morphy: I will let the hon. gentleman say what he wants to say on the next clause. Does the hon. member wish to discuss clause 4?


Jean-Joseph Denis: Yes. I beg to say that I was uip when the word "carried" was pronounced, hut you did not see me.


Hugh Boulton Morphy: I will wipe out the word.


Jean-Joseph Denis: 
Arthur Meighen: 
Jean-Joseph Denis: If the liabilities of the company are not to be increased by the amount of the new stock, we must admit either that the new stock should be looked upon as having no value, except in so far as title in the actual shareholders is concerned, or else we must recognize that the old stock which will be handed to the Government will cease to have its value. If the new stock is a liability against the company, and if the old stock also remains a liability against the company, we cannot escape the conclusion that the liabilities of the company are increased by the amount of the new stock.


Arthur Meighen: The old stock is no liability against the company; it appears as a book-keeping entry on the liability side, but the stock of the company is not a liability of the company in the sense that it must pay anything. As long as the hon. gentleman knows what is being done, it matters^ very little about the mere charging of it. The fact of the matter is that the owners of all these stocks, the three preference and common, will get instead of their shares whatever value the arbitrators determine they are worth, and they get that value in the shape of Government-guaranteed stock. That is all there is to it.


Jean-Joseph Denis: To make my point more clear


Arthur Meighen: I see the point all right. There is a big addition to the stock issue. We could, of course, cancel all the stock that comes to us, but that would not put us any further ahead or any further behind. We have the old stock, and what we pay for it is a charge against the company.


Jean-Joseph Denis: Let us suppose that in years to come the company's earnings are sufficient to pay interest on all the stocks, common stock included. Is it not true that at that particular time the liabilities of the company will have increased, because it will have to pay interest on all the stocks
actually outstanding as well as on the new guaranteed stock?	.


Arthur Meighen: That is all right. After interest has been paid on the new guaranteed stock, if there is anything left, interest is paid on the stock that we have, and to that extent the whole transaction is clear profit to the country. What better way could it be?


Jean-Joseph Denis: I do not see what benefit it would be to the country.


Arthur Meighen: Because the country will be out nothing. Its guaranteed stock is all taken care of by the company, and the country will "be in" to the amount of the dividends it receives on the stock. All we give in this matter is a guarantee, but if the interest is taken care of by the primary debtor, the company, anything that we get after that by way of interest on the old stock that we own is just so much velvet, as the saying is.


Thomas Vien: The question has not yet been settled whether the guaranteed stock can or cannot receive further dividends beyond the 4 per cent guarantee. Would it share in whatever additional profits of dividends might be distributed? There is nothing in the Bill to say that the shareholders shall be deprived of any further dividends if the road earns them.


Arthur Meighen: The guaranteed stockholders?


Thomas Vien: The new guaranteed stockholders.


Arthur Meighen: The new guaranteed
stockholders cannot get anything beyond the four per cent. What would give them a right to anything further? Subclause (c) of clause 4 says clearly that that is all their stock calls for, and that is all they can get. The stock we issue in exchange represents no voting power and no ownership; the voting power and the ownership remain entirely with the Government.


Jean-Joseph Denis: I think we established last night, and even before, that the Government on account of committing itself to $216,000,000 and over in this transaction has a direct interest in this company and that forever in the future it will have to back up the company should that backing be needed, and that the concern will practically belong to the Government when this transaction is consummated. Technically it may not be right to say that the road will be the property of the Government, but

practically it will, because 'the Government will have to back it up whenever it is necessary to do so. Consequently the assets land liabilities of the road are the aSiSets and liabilities of the Government, and we are interested to know whether or not the company is increasing its liabilities by issuing this new Stock. Apparently the liabilities are increased, because the old stock which is now a current liability will remain in the future, as it is now, an obligation for which the company will be responsible. Then, in addition to this old stock, we shall have new guaranteed stock. The minister says that stocks are not liabilities of a company.


Mr. A. K. MACLEAN:: What would the hon. member do with the common and preferred stock? ,


Jean-Joseph Denis: I would have the Government issue bonds to the people to the amount of the award, and the bonds could be exchanged against the stock. The Government would give its bonds, and the stock of the company would remain the same.


Alexander Kenneth Maclean: This is practically a bond that the present holders are receiving. It is stock which will rank prior to common shares.


Jean-Joseph Denis: I do not know why the Governmenit is taking this devious course instead of simply exchanging the bonds of the Government against the stock. For we are buying the stock; we are buying the first, second and third preferred stock for the amount of the award.


Alexander Kenneth Maclean: And issuing what is a guaranteed stock for iit.


Jean-Joseph Denis: I would issue the bonds of the Government.


Alexander Kenneth Maclean: There is no difference between bonds and guaranteed stock.


William Stevens Fielding: If this were a transaction between two railway companies it would be quite clear that the Bill is loading up the concern with a lot of watered stock. You are going to take $180,000,000 of old stock and buy it up at a reduced price, let us hope, and issue new stock for it. They both represent the same thing, and if you leave both stocks afloat, then you are watering the stock in a huge way. If it were5 simply a transaction between two railway companies it could not be allowed. I do not think it makes any difference, because when the Government gets the stock, whether they cancel it or put in the safe, the result is the

same. If they cancelled it, of course, that would be the end of it, and it would also be practically the end- of it if they put it in the safe, for there is no reasonable probability that it would pay a dividend, and if it did the Government would get the dividend.


Alexander Kenneth Maclean: If it were cancelled there would have to be some means of issuing new common stock to give the voting power to the company.


William Stevens Fielding: It is quite evident that there are two sets of stock representing the same property. You are going to buy $180,000,000 of preference "and common stock by issuing another stock. If you let them both stand you are loading up the company with watered stock, and if it were a transaction between two companies it could not be done. But practically speaking, this stock that is called in, whether cancelled or not, does not really amount to anything in the result. It is a mere matter of accounting. It may stand as a liability. If it ever earns dividends the Government, being the owners of the stock, will get the dividends. I do not think we need be alarmed about that aspect of the question.


John Howard Sinclair: Clause 4 strikes me as being the most objectionable clause in the whole Bill. The Government represented to the House and the committee that the Grand Trunk Company had to come to them for assistance, and that it was necessary to introduce this Bill to save the company and continue the operations of these railways. If this Bill were not introduced, it was said, there would be a financial collapse of the Grand Trunk. Now, I submit that it was not necessary for the Government to take $60,000,000 of common stock, largely watered, and place their stamp on it, making it worth four .per cent perpetually. Why was it done? No minister has given the House an intelligent reason for that action. It was not done in order to get the contract, because the Government had ample means of forcing the contract. The Grand Trunk Company was indebted to the Government. They were unable to implement their guarantee in respect of the Grand Trunk Pacific, and the Government could have put them into liquidation if it chose. The Government cannot therefore claim that they were forced to guarantee $60,000,000 of worthless stock and put their "stamp on it, making it perpetual bonds at the rate of four per cent. I do not say the stock was altogether watered, 'but we know that it was largely so.


Arthur Meighen: Will the hon. gentleman give some reason for saying that the stock was watered in any degree whatever?


John Howard Sinclair: My hon. friend has not told the committee what it sold for in the first place.


Arthur Meighen: It sold at par and over par. The first stock was issued for the Great Northern Western railway, amounting to about $5,000,000. The rest sold at par and over par, and there is not one drop of water in all the stock. The hon. gentleman is merely talking at random.


John Howard Sinclair: It has not been worth par for many years. If my hon. friend would refer to the stock quotations to be found in the reading room of the House he rvould find that not long ago it was selling at 45 and a few days ago at, I think, 50.


Arthur Meighen: What difference does it make what it re-sells at? Stock that originally sells for cash at par can have no water in it. The money goes into the company. It may be that because the dividend rate changes the stock goes down' in value, but that does not put water into the stock. So that the hon. gentleman is talking without the book and at random in trying to convey the impression that there is any water whatever in the stock.


John Howard Sinclair: This is the first time the minister has made that statement.


Arthur Meighen: No, no.	[DOT]


John Howard Sinclair: The guaranteed
stock of the Grand Trunk was under 50.


Arthur Meighen: The hon. gentleman is
referring to the guaranteed stock. We did not have any question about the guaranteed stock at all. There was no water in that. It was sold in the open market and I do not know of any being sold below par. The whole of the money went into the company, so there cannot be any talk about water in it.


John Howard Sinclair: I accept the minister's statement in that particular. But I say that at the time he made this contract this stock was selling at less than 50. Does he deny that?


Arthur Meighen: I do deny that.


John Howard Sinclair: This statement
is based on a quotation in the Economist published in September. I think the minister will accept that as being very good authority.


Arthur Meighen: It was down, but not below 50.


John Howard Sinclair: When this stock was selling a few weeks ago in London at 50, why should the Government step in and guarantee it at the rate of four per cent perpetually? What is the reason that this should be done? My principal objection to this clause is that we are involving the country in a perpetual guarantee for $60,000,000 of this stock. It is quite true that it had the guarantee of the Grand Trunk, but it had no guarantee that gave it the position of bonds. It had not paid any dividends for the last two years because dividends were not earned by the company. If the company continued to fail to earn dividends the stock with the Grand Trunk guarantee would not be worth any more in tiie market than it was worth at that date.
My hon. friend has constantly impressed upon the House the Drayton-Acworth report, and we have been told repeatedly by him that the Government is proceeding on the recommendations made in that report. We find at page 65 of the report the following statement:
We regard the entire share capital of the company as being intrinsically of hut small value at the present time. On the basis of present value of maintainable income the fair compensation would be very small.
In the face of thaf opinion my hon. friend undertakes to give the guarantee of the country to a stock which he admits himself is only worth 50 cents on the dollar, and he proposes to make it worth 80 or 90. On that question of value my hon. friend made a statement this afternoon that four per cents were only worth 721 in the London market. I took occasion subsequently to look at some of the London papers to see whether that statement was correct or not. I found the following in a paper called "Canada" dated September 20, 1919: Canadian Finances.
Among the Canadian securities business has been fairly brisk. The gilt-edged issues of the Dominion have been maintained. The 4J per cents hold at 95 and the fours at 78. The 3$ per cents are steady at 71.
My hon. friend told us this afternoon that 4 per cents were holding at about 721 whereas the London papers say they are holding steadily at 78. There is a considerable difference between the statement of the Minister of the Interior and the statements which I find in the London papers. We can argue then that this 4 per cent guarantee given by the Government makes this stock worth 78 in the London market, and if that is so in the case of $60,000,000 worth of stock, we are incurring a very heavy liability amounting to many



millions of dollars which we are placing on the backs of the people unnecessarily. It should not be dione. Therefore, I propose an amendment. The section reads:
As part of the consideration for such acquisition, the Government may agree to guarantee the payment of:-
(a) dividends payable half-yearly, at 4 per cent per annum, upon the present guaranteed stock.
I move:
That section 4 be amended by striking therefrom subclause (a).


Arthur Meighen: I am sorry the hon. member (Mr. Sinclair) has taken so little the significant warning of the hon. member for Temiscouat'a (Mr. Gauvreau) who sits beside him. This has been answered until I know the House is completely tired of it, but I suppose that I shall have to inflict myself again upon the House. I did give the House-it must be over a week ago-the quotations that were before me at the time showing what the guaranteed stock was selling for then. My recollection is that it was 55 but I am not quite certain. I stated then, and I state again, that the present guarantee necessarily does appreciate the value of the stock. I stated this afternoon that the direct 4 per cent bond issue would sell at 72 on the basis of our Victory loan issues. I reckoned that the guaranteed bond issue would be three or four points lower, so that we could not say it would be worth more than 68 or 69. That is absolutely right. The hon. gentleman says that he has quotations of 4 per cent bonds in London selling at 78. That is quite possible. There are many things that these depend on. One important feature is the date of maturity, and these bonds may be near their maturity. The nearer they get to maturity the more they go up in value.


John Howard Sinclair: This is perpetual.


Arthur Meighen: But is there one the hon. gentleman quotes perpetual?
Mr. ,1. IT. SINCLAIR: That would raise the value of it.


Arthur Meighen: No, it would diminish the value.


John Howard Sinclair: Not at all.


Arthur Meighen: Suppose a four per
cent bond is within a year of maturity, and money it worth 51 per cent, would not that 4 per cent bond be worth 95, 96 or 97?


John Howard Sinclair: Not as much as if it had ten years to run. My hon. friend
TMr. Sinclair.]
can look at the present quotations of the 51 per cent Government bonds of Canada and he will find that the bonds which are to be payable in 1933 are selling at a higher price than the ones which are coming due earlier.


Arthur Meighen: Because the rate is
higher. I do not want the hon. gentleman to get unnecessarily into a hole and he should not be too positive. If you take a low rate of interest, below the normal rate, below the rate that brings the stock to par, money is worth about 5i per cent, and a Canadian bond issue is worth 721, that means that a 51 per cent bond will sell at 100. Take another bond issue at a lower rate, say 4, or 3 per cent, the longer that bond issue the less it is worth; the shorter the bond issue the more it is worth. If it is within a year of maturity it is worth nearly par. But if you have a 7 per cent bond issue, the longer it has to run the more it is worth, and the shortor it has to run the less it is worth.	_
It is only because the hon. gentleman did not think the matter out that ne ventured to contradict what I said. I do not know what the hon. gentleman was quoting, but it is very probably a bond issue and if it is anything at all but a perpetual bond it has likely only a short time to run.


John Howard Sinclair: I may tell the
minister that the information is not given in the quotation but I would be glad to give it to him.


Arthur Meighen: It is likely of the character I have mentioned, because if the hon. gentleman will take his pencil and figure out if a 5} per cent is worth 100-and mind you, you have to create a tremendous organization and carry out a great campaign indeed to get it sold at that figure, but suppose it is really worth 100 in the market -then a 4 per cent will be worth 72 and a fraction just as I said this afternoon. If the bond is of short date it will be worth more, but we are giving our perpetual security here and our perpetual security, issued at four per cent, could not sell at more, even if it were a direct security, than 72 and a fraction. But, it is indirect and could not be worth more than 68 or 69.' The other issue was sold at I think, about 55. The difference is appreciation, it is true, but there is no way of avoiding it because any payment at all on the stock must be first applied on that bond issue, because they have priority [DOT]-priority as to principal in the event of liquidation, and priority as to interest all the time as a charge against revenue. Now that being so, once it is agreed that $2,500,-

000 shall be paid for the whole five years on guaranteed, the three preference stocks, and common, that means that the guaranteed stock must get the whole thing; it could not be avoided. But we get something in return, we get from the holders of these guaranteed stocks a surrender of their voting power. Why, it is only three or four hours since we were charged by an hon. member opposite with confiscation-that was the complaint against the Government in connection with this transaction. I defended the measure by saying that the impression of the guarantee of the Government caused an appreciation in the value which the shareholders got in lieu of the surrender of the voting power, so that taking it all in all it was fair and no more than fair. The point the hon. gentleman raises was fully considered, the difficulty he has intimated was carefully reviewed, but as we had undertaken to pay $2,500,000-an offer which they turned aside and refused for a year and-a-half-and as the owners of these bonds had to get all the first money, and as we were, in making that offer, carrying out strictly the Drayton-Acworth report, there was no way of avoiding that appreciation. We would have preferred not to do anything to appreciate the value of anything that we do not get consideration for, but we do not suffer directly or indirectly -it is only a fair payment made in accordance with the Drayton-Acworth report.


William Stevens Fielding: I have been over this point so often that I must apologize for allucjing to it again, but I must make an observation or two in reply to what the hon. gentleman has just said. There are a few facts here which we should clearly bear in mind. In the first place, it is evident, and has been stated repeatedly, that this guaranteed stock was quoted on the London Stock Exchange a short time ago at forty-five. I gave a quotation of forty-eight on the 18th day of September, and it was stated that there had been a " burst," to use a stock market expression, which had advanced it to that point. Now, if any private individual had wanted that stock he would have gone about it in a simple way. He would have gone to the holders and made them a public offer through brokers and said: " This stock is worth forty-five and we are willing to give you something more than that figure. We will be liberal and give you something even higher than that, something over the market value, as an inducement to sell." The hon. gentleman might very fairly say:
94 i
" But they will not sell." Very well, all the Government had to do was to leave the stock with them and say: " We do not want to confiscate your stock. We offered you something over the market value, we offered you a premium. If you do not want to sell it, all right; keep it and we will protect you in your present rights. Whatever interest, whatever dividend, is earned on that stock you will get and if no dividend is earned you will not get it." When I raised that point the hon. gentleman said-and I am sorry I have to repeat the same argument,-" In that case there could not be a merger of the various interests," He was entirely wrong, as I pointed out at the time. All these companies have subsidiary organizations. Why, the Grand Trunk Pacific, as he knows, is a separate company from the Grand Trunk, and there has to be a separate accounting for its earnings. He knows that the Central Vermont, with which we are dealing, is a subsidiary of the Grand Trunk and there has to be a separate account kept of its earnings. It is a common thing in the history of railroading to keep account of the earnings of one branch of the railway separate from another. There is nothing remarkable about it. The Minister of Railways to-day has an agreement with the Government of New Brunswick, in connection with the national system of railroads, under which a certain percentage of the earnings is taken for the provincial government and a certain percentage for the Dominion Government. Therefore the argument that under the arrangement I propose, you could not create a merger, is entirely wrong. There is nothing in that argument-any railroad man in the world would tell you that, There may be some little difficulty in doing it, but it is a common thing in the history of railroading to keep separate accounts for different branches or different-sections of a road. Now if the owners of that stock were not content to sell it, were not content to take the market value and even take a handsome premium on the' market value, it would have been the easiest thing in the world to have said, "All right, keep the stock, and if there are any earnings coming to you, you will get them." That would have been a fair' businesslike proposal and that is what would have been done if it had been a transaction between private individuals. Now we come to the question of the value of the stock. I have said that in my judgment-not at the moment but when financial matters are readjusted-the stock on which we impress

the guarantee of the Government of Canada will be advanced from 45 to 85 or 90. There is at present a financial depression and I do not say that you could sell it for 90 to-day; but I believe 1 am fairly within the mark, and gentlemen familiar with London financial affairs will say, that at no distant day when things get settled down, that stock will be worth 85 or 90. But suppose it is not going to be worth that? Suppose it is only going to be worth about 70? The difference between 45 and 70 is 25 points. Twenty-five points on $60,000,000 means a clear sheer waste of the public money of the Dominion of $15,000,000. There is no escaipe from that; it is absolutely beyond argument. If any argument could be put up against that 1 have yet to hear it. The merger argument is answered; my hon. friend must see that was wrong. "Ah," he says, "but there is the voting power." That implies that we were dependent upon the Grand Trunk people to get the voting power. That is not the situation. The Grand Trunk Company is-I do not want to say a bankrupt company, that is a harsh phrase-in default with the Government, and the Government * are not bound to be dictated to by the company. The Government are 'bound to be fair to the Grand Trunk and then say, '-1i you are not content with a fair arrangement all we can do is to have you go into -the hands of a receiver," and where would their voting power be then? Bo that on every point it seems to me this is a most wasteful and improvident transaction. In my judgment it is clearly a sheer waste of at least twenty-five or thirty millions of dollars of the money of the people of Canada; and even accepting the statement of the hon. gentleman himself it is a sheer waste of at least $15,000,000 of the money of the Dominion, no penny of which was necessary to be paid.


Arthur Meighen: The hon. gentleman
presents his old theory as an alternative?


William Stevens Fielding: Surely.


Arthur Meighen: When we have made the Grand Trunk shareholders an offer, leave them with their stock if they did not accept it?	[DOT]
How would the offer be made? How would he reach the hundred thousand shareholders? In the next place, presuming that we reached the alternative, that they did not take it, and we left them with their shares, have they not the voting power? They are part proprietors. In the first announcement that went out as to the tvans-

action that was arranged certain newspapers got the idea that just that thing was done. The Toronto Globe, fearing that the guaranteed stock was being left in the hands of these tens of thousands of people with whom we were going into partnership in the running of the Grand Trunk, published a denunciatory article. So did a western paper. But it was not done The hon. gentleman thinks it would be all right for the Government of Canada to share proprietorship of the road with thousands upon thousands of shareholders over in England; to share control with them; to be compellable to send them notices of meetings and all that before we could do anything in connection with the road. A more absurd position could scarcely be conceived.
Now, I repeat with all the emphasis in my power that merger is absolutely impossible if we have to account to the shareholders of the Grand Trunk. It may be possible with a single road, because that is not merger at all; that is not what merger means. For example, only part of the stock of the Duluth and Western is owned by the Canadian Northern system, of which we own the stock; consequently .there has to be a separate accounting of the operations of the Duluth and Western. But that is an easy matter; that is just one single little line. We are not closing off anything in connection with it; we are operating it just like any other, and of course, we are doing justice to the minority shareholders of that line. The Central Vermont is in virtually the same position in respect of the Grand Trunk; it is one single line and the Grand Trunk accounts to the minority shareholders of that line-there' is no difficulty there. But here is a whole system, the whole Grand Trunk system. It is true that we can keep account of its operations; that is not the difficulty, and I have never pointed that out as a difficulty. The difficulty is this: Suppose we decided that it was in the interests of economy, now that we are owners of the Grand Trunk, to close the line between Toronto and Ottawa, would we be able to do it? We find at the end of the year that we have no four per cent for the guaranteed stockholders, and they ask us : " How is this?" "Well," we tell them, "we did not earn it. Here are the 'accounts.; we did not earn it on your system." But they say:: "You closed off that line and you diverted all its earnings into the Canadian Northern, the competitor of the Grand Trunk between Ottawa and Toronto. It is very easy for you to tell us that you have no

dividends for us when you closed off our line in order that your other lines might pay better." That is one illustration. That is what merger means; that is the advantage of merger-and all that we throw away, deny ourselves the right to. do, if we are under an accounting obligation to the shareholders of the Grand Trunk. Nothing could be clearer than that. It is very different when you start to merge a system. The merging of a system means the lopping off if lines where the whole combined system can be made to pay better as a result; it is the utilization of the facilities of one for the benefit of the other. That is impossible if you must fairly account to the shareholders of the system merged.


William Stevens Fielding: : I do not think my hon. friend will succeed in persuading any experienced railway man that there is any serious distinction as a matter of principle between the keeping of accounts of a road seven miles in length and the keeping of accounts of a road one thousand miles in length; as a matter of principle it makes no difference.


Arthur Meighen: No difference at all so far as keeping the accounts is concerned; there is no difficulty in that.


William Stevens Fielding: : Well, keeping the accounts is all that is necessary in order to render to the stockholders the dividends that they earn. My hon. friend introduces into the matter the Toronto Globe article. It would have been just as appropriate if I had introduced the interesting articles from the Montreal Gazette and the Montreal Star, but if I did so my hon. friend would say that my remarks were not to the point. I have not done it, but my hon. friend drags in the Toronto Globe and says that it/ has said something about how the Grand Trunk might be treated. I am not responsible for the Toronto Globe; I propose to discuss this question simply and solely as a business proposition and on its merits.
When the hon. gentleman speaks of all these difficulties of accounting I say that his argument is absolutely unwarranted. Every large railway concern in Canada has its subsidiary companies; and while I do not say that there is no difficulty, I do say that the difficulty is easily overcome. I again remind my hon. friend that sitting beside him is the Minister of Railways, who is pledged to render a separate accounting of the St. John Valley railway, taking for the Government of Canada only a cerain percentage and giving a certain percentage to the stockholders, who are
the Government of New Brunswick. If it is possible to do it in that case, it is possible to do it in a larger way; that is plain.
The hon. gentleman talks about injustice being done the shareholders. Surely there can be no injustice if you offer these people the market price and more than the market price. If they do not want it, and you say: "Well, gentlemen, we leave it in your hands and we will protect your interests," I cannot see any injustice in that. If the Grand Trunk shareholders are unreasonable; if they demand things which are utterly unfair and unjust, the hon. member has his remedy. We are the creditors of the Grand Trunk Railway Company, and upon application the Grand Trunk Railway Company'can be put in the hands-of a receiver just as easily as the Grand' Trunk Pacific was put in the hands of a receiver. That done, what becomes of alii this voting power?. Why do we need to make sacrifices to get the voting power, when we could get it by the other method? I am not advising that the Grand Trunk be puit in the hands of a receiver, but I say that it is a perfectly open coures for us. If the Grand Trunk people were not willing to be fair; if they would not receive a generous and fair offer in the right spirit, then we would be justified in putting the road in the hands of a receiver.


Arthur Meighen: I hope the committee will permit me again to direct the attention of the hon. gentleman to what I thought I had emphasized and jmade clear-that I did not contend for a moment that there was any difficulty in accounting. Keeping the accounts is a very easy matter; the difficulty is in the operation. We could easily account and show what the profits were, but the answer might -come: "You operated the road to serve other roads"-[DOT] that is what merger means.


William Stevens Fielding: If you put them in the hands of a receiver, they would cease to have the power to make difficulty at all; the receiver would deal with the matter.


Arthur Meighen: Noiw, we are at the point exactly; it is a case between receivership, and no receivership and the hon. gentleman can take whichever horn of the dilemma he chooses. Certainly the remedy of receivership is always open, but the road of receivership is the road to the Canadian Pacific. Would the hem. gentleman argue for a moment that the Government of Canada could buy at receiver's sale?


William Stevens Fielding: That is a legal question; I am not going to answer it.


Arthur Meighen: It is more than a legal question. Where would the Government of Canada be if the Grand Trunk was in the hands of a receiver -and went to sale? In the first place there would be several sales. There are, I suppose, fifty different companies ; there would be fifty different receiverships, some of them in the United States. What-is the position of the Government of Canada so far as buying at a receiver's sale in the United States is concerned? Is the Government going to ask Parliament for a blank cheque in order to go to that sale -and bid whatever sum a competitor may run him up to? Would the hon. gentleman be ready to give that blank cheque to the Government? What a howl *would go up from hon. gentlemen, opposite if such a thing were proposed-and a howl that would have the right to be heard in the country, because I never heard of a Government asking for such authority as that; there must he a limitation. Well, now, if we cannot go and buy there, who else will? Just whoever wants the lines. And who is likely to want the lines?


John Howard Sinclair: WTiy does the hon. gentleman say that a number of receivers would be required? I understand that the Grand Trunk Railway Company own stock of certain subsidiary companies, hut that stock is an asset of the Grand Trunk which would go into the hands of the receiver of the Grand Trunk. If the Grand Trunk owns a thousand shares in the Central Vermont and you were winding up the - Irand Trunk, it would not follow that you would wind up also the Central Vermont.


Arthur Meighen: Exactly; it would not follow at all; the bondholders of the Central Vermont would wind up the Central Vermont.


John Howard Sinclair: They might.


Arthur Meighen: 
William Stevens Fielding: Whenever the minister drags in the Canadian Pacific I know how utterly hopeless he feels as to the effect of his argument. I know he would not bring in the Canadian Pacific if he felt he had a strong position. In reply to that we have only to state that the Canadian Pacific Railway Company cannot get possession of this road unless it comes to the Parliament and gets authority.


Arthur Meighen: All right,


William Stevens Fielding: All right. Then why does the minister say again and again: If *we do not do this thing, the Canadian Pacific is going to get possession of the Grand Trunk? He knows that that is an unsound argument, founded neither in fact nor in reason.	,


Arthur Meighen: I mean that the hon. gentleman is right in stating that we have to come to Parliament. That may be the case if they come and buy in their own name, but that is not the case if they form a subsidiary, company, as they have done frequently and as many a firm does. In that case, they do not need the authority of Parliament. But presuming that they do and they say that they are ready to bid and the Grand Trunk says that they are ready to sell and Parliament says, "We will not let you," what in that event is the duty of Parliament? To take the Grand Trunk at its own price? To stand between a buyer and a seller and say: We will not let the one buy and we will not let the other sell, but we will take the property ourselves at whatever we say it is worth? Is that the duty of Parliament? Therefore', any other result of a receivership such as government purchase, becomes impossible, and Canadian Pacific absorption is the only result. No, hon. gentlemen do not like this reference to the Canadian Pacific. They do not like the Canadian Pacific mentioned in connection with this matter, but the Canadian Pacific is the great Canadian entity that could undoubtedly use this road to advantage, and if we refuse to negotiate and allow it to go the way of receivership, it goes to the Canadian Pacific, and the bald truth has to be. stated.
Mr; FIELDING:	I am glad to be in
agreement with the minister in his statement that we have driven him to the Canadian Pacific argument. We have driven

him to it because on the merits of the question the Government cannot argue the case at all, but they have to drag in the Canadian Pacific. There is one great patent fact which will stand before the country, namely, that the Canadian Pacific railway cannot get possession of one mile of the Grand Trunk railway except through the intervention of this legislature approached in the proper manner.


Arthur Meighen: Or a subsidiary company.


William Stevens Fielding: must be. It is the great mother of all the individual citizens. That is the invariable rule of a nation in dealing with individuals. If that be so, if that were so-and I know it would be if the Old Country were having a transaction with her own citizens in this manner- I contend that we are big enough to follow that splendid example and to look at this thing not from the narrow point of view of the price of the stock in the market, but from the point of view of those who invested in this undertaking because they believed in Canada's good faith, and from the narrower point of view of our own selfinterest in the future. I put that before my hon. friend (Mr. Fielding) as an argument in which the Canadian Pacific at least does not participate. As to this talk of $ 15,000,000 or $20,000,000 being wasted, I want to tell him that if it was $120,000,000 that was necessary to be spent to keep up the good name of Canada, that would not be waste from my point of View. I want to appeal further to my hon. friend. I heard with the greatest pleasure his expression of a belief which was in absolute accord with the belief which I myself had expressed in a session not long ago that in time this great country will be big enough to sustain these roads. He defended, and I sympathized with him in his defence, what the Government did of which he was a member. I share with him absolutely that faith in the future of Canada, but I should lose that faith if I allowed myself to descend to this niggling method of bargaining with those who very often are widows and need their dividends to keep them going. Investments made on the good faith of our country require that we should approach them in a mood of justice, yes, of justice, but of fairness, and I would even add of generosity.


William Stevens Fielding: With nearly everything my hon. friend has said I can cordially agree, but let us come down from the clouds and be practical. The English business man, especially the Englishman in the London market, is a very practical person, and the widows and orphans who have bought this stock in by-gone years have probably passed away. The stock, I venture to say, in the past six months has fallen largely into the hands of some of those Jews in London, whom my hon. friend would not have us take as models to follow in bargaining. Therefore, I think that the $15,000,000 or $20,000,000, or possibly $25,000,000, of money which is going to be wasted in this ease will not go into the hands of

the widows and orphans, but into the hands of the London speculators who have been buying this stock at low market rates and waiting for the Government of Canada to put the stamp of the Government guarantee upon it, which will give them all this money.
There is one other point I wish to make. My hon. friend speaks of a niggling proposal. My suggestion was that we should not tie these people down to the market value of the stock, though there would be no injustice in that. The Englishman does not expect any "baby act" in the average business transaction. He does not expect more than the market value in anything. My proposal was that we should offer these people five or ten points above the market value. What would that mean? It would mean a clean gift of $6,000,000 of the people's money over and above what the market value demanded, and my hon. friend says that is a niggling policy.


Michael Clark: I only rise to point out, in a single sentence, that among the other defects of my hon. friend's present attitude of mind, there is very gross inconsistency because, after all, if it be the good faith and the credit of Canada that we are bargaining for, there is not much difference between the price of $6,000,000 that he puts on that and the $15,000,000 or $20,000,000 which he alleges that I do.


Arthur Meighen: It should be added in justice to the stockholders that it is altogether unfair, altogether erroneous, and I think worse, to allege that the stock has changed hands as the result of anything that has gone on in this country. Stock in Great Britain is bought for purposes of investment, and not for purposes of exchange on the stock market. Only such stock goes on the market as somebody has to sell as occasion demands. I have endeavoured to find out the amount that has changed hands, and it is very, very small. There necessarily are quotations because some little amount reaches the market, but the stock is held in the main just where it has been held, in some cases for the last ten, twenty, thirty and even forty years. That is the information from the directors of the company. The percentage that changes hands is almost negligible, and the percentage that has changed hands recently, I venture to say, and will confirm it later, is practically negligible. All this impression sought to be made by my hon. friend (Mr. Fielding) and others that there is stock jobbing by some persons near the Govern-

ment to any ^extent whatever is a false impression, an unworthy impression, and I am sorry my hon. friend (Mr. Fielding) is associated with it.


William Stevens Fielding: This is the second time that the hon. gentleman without a shadow of foundation has represented me as saying that persons near the Government have been engaged in stock jobbing. He has no'' shadow of foundation for that statement, but he has made it in this debate as he has made so many others just to bolster up a case which cannot be defended on its merits.


Arthur Meighen: At all events, stock
jobbing by some persons somewhere.


William Stevens Fielding: I made no reflection
on the Government except as to the improvidence of their bargain. I am the last map in this House who would cast any reflection on the integrity of any minister. I had no thought of anything of the sort. I say that this transaction has afforded an opportunity for speculation. The hon. gentleman says that stocks are bought in London, not for speculation but for investment. My hon. friend is certainly dreaming. In the London market, as in every other market, wherever there is an opportunity of making money stock is changing hands. I do not know what amount has been bought recently, but I venture to say that onoe this thing is through and the Government stamp is on this four per cent guarantee the stocks will be sold. Nevertheless, whether they are sold or remain in the hands of these people, there is no doubt .the Government are paying for these stocks millions of dollars beyond a fair market value.


Louis Audet Lapointe: In view of the
persistency of my hon. friend (Mr. Meigh-en) in stating that the Canadian Pacific is behind any opposition to this legislation,
I should like to call his attention to a speech made by the president of that company, Mr. Beatty, in the presence of Lord Shaughnessy and all the great millionaires , of .the city of Montreal at the opening of the Victory Loan campaign in this city last week. After Sir Henry Drayton had spoken on the Victory Loan, Mr. Beatty stated that the Canadian Pacific railway had absolutely nothing to do with the opposition to this legislation, and I accept his word. He stated that the Canadian Pacific could not buy the Grand Trunk railway without the permission of the Government, and in any case they did not want it, because it would mean that in many places they would be simply paralleling their own lines, and in
a way setting up an opposition to themselves. Speaking rather sarcastically of the Drayton-Acworth report Mr. Beatty expressed his surprise that a great lawyer like Sir Henry Drayton had produced no better arguments in his report. He then went on to say that they were not there to discuss railway matters but the Victory Loan, and to show that the Canadian Pacific wanted to help the country meet its obligations he announced that that company was going to take $20,000,000 of bonds; which they have done.
When the Government refuses to pay any attention to the president of the Canadian Pacific I aim bound to ask myself if there are not outside interests behind this transaction. It is said that t)he Canadian- Pacific Railway Company was anxious that the receiver should be appointed, but the ministers have given no proof in support of this assertion. Does it not -appear to you, Mr. Chairman, that the Minister of the Interior should realize that one receiver would be quite competent to deal with the whole system? Of course, he does, but he endeavours to make us believe, if we were so credulous, that fifty or seventy-five receivers, or as many as there -are lines, are necessary. He said also that it would be impossible to keep the operating accounts of these several lines. Well, if that be so, it only proves that- his employers are incapable, and should be summarily dismissed. Now, Mr. Chairman, I desire to have it distinctly understood that the -Canadian Pacific Railway Company exercises no influence on me, and so far as the. ownership of Canadian railways is concerned, I may say that when the Government undertook to- acquire the Canadian Northern, I stated that I would be in favour of public ownership on condition that all the railways were acquired at the same time and operated under government control. I think that that would have been infinitely better than acquiring the railways piecemeal. In regard to the Canadian Northern stock, I expressed the opinion that the Government should buy the majority of the stock. Instead of doing that, they referred to arbitrators the question of the value of this stock. The result was that the -country had to pay $10,800,000 for stock which was valueless. And they are proposing the same thing in this case. The Minister of Finance (Sir Henry Drayton) is well acquainted with transactions of this kind, and he knows very well that this Bill is so drawn as to afford opportunities of speculation to- those who are behind this transaction. It is framed in such a

way as to give the greatest benefit to the shareholders of the Grand Trunk. It is for this reason that the Government have encountered opposition from the Board of Trade of Montreal, who decided that there was nothing further to be done in the matter since the Government was determined to put this legislation through. The delegation that waited upon the Government is now before the Senate, and I trust its representations will be more successful. I hope that the Senate at the proper time will deal with the Bill in such an effective way as to show to the members in this House who are bound to suipiport it here that it is a-n ill-considered measure.
Amendment negatived. Section agreed to.


Daniel Duncan McKenzie: Does the minister not think that we ought to rise now, after having sat so late last night?


Some hon. MEMBERS:: No; go on.


Daniel Duncan McKenzie: Well, see how much progress you will make.


John Dowsley Reid: As it is getting late, I think perhaps we had better rise.
Progress reported.
On the motion of Hon. Mr. Meighen, the House adjourned at 11.35 p.m.
Wednesday, October 29, 1919.