[Stage Direction]
Mr. H. B. MORPHY (Perth North) presented the second and final report of the Select Standing Committee on Public Accounts.

Mr. J. E. ARMSTRONG (Lambton East) moved:: 
Mr. LAPOINTE:: Is this recommended by the Committee on Railways, Canals and Telegraph lines, or is it a motion from my hon. friend without having the support of the committee?



REVISED EDITION. COMMONS

Joseph Elijah Armstrong: I understand that the committee were in favour of reporting in the way that I have stated in the motion.	.


Ernest Lapointe: Of refunding the
fees? Was the question of refunding the. fees considered in the committee?


Joseph Elijah Armstrong: It is the usual
course to refund the fees when a Bill is not reported upon favourably in the Senate.


Mr. CURRIE:: Always.


[Stage Direction]
Motion agreed to.

Mr. J. A. ETHIER (Laval-Two Mountains) :: I beg to present petition from the strawberry growers of Laval-Two Mountains, asking that Inspection and Sale Act, section 326, paragraphs (a) and (b), be suspended and paragraph (g) of said section be enforced for 1921, and the use of boxes for berries, commonly called " short " be permitted.
On the Orders of the Day:


Joseph Arthur Calixte Éthier: As a consequence of the petition which I have just presented, I beg leave to move the adjournment of the House under rule 39 for the purpose of discussing a definite matter of urgent public importance, namely the suspension of section 326, subsections (a) and (b) of the Inspection and Sale Act respecting the sizes of boxes manufactured and approved for sale in Canada and for packing berries for sale in Canada.


Mr. SPEAKER:: It may be open to question whether this is a subject that properly comes within the letter and spirit of rule 39, but without giving a decision upon that point at the moment, I wish to say to the hon. member that I cannot entertain the motion to-day for the reason that probably the House will be moved into Committee of Supply, and, that motion being debatable, the hon. member will have ample opportunity to present the matter to the House. Therefore, it would not be proper at this stage to submit a motion of this character. I shall look into the merits of the motion in the meantime, and if the hon. member is within his rights under rule 39 in submitting a motion of this character, and if a motion to go into Committee of Supply is not made, I shall at a later stage decide on the merits whether the hon. member may proceed.


Joseph Arthur Calixte Éthier: I bow to your ruling, Mr. Speaker. My intention was not to provoke a controversial discussion. This is an important matter, and I had intended to submit the motion to the Prime Minister and the Minister of Agriculture before the House opened this afternoon, but I could not reach them. I am sure that when the matter is submitted to the Minister of Agriculture on the motion for Supply he will agree with me that the matter is urgent.



ARCTIC EXPEDITION

[Stage Direction]
On the Orders of the Day:
Mr. MACKENZIE KING (leader of the Opposition) :: May I ask the Prime Minister why the expedition of the Arctic to the north lands has been cancelled?


Right Hon. ARTHUR MEIGHEN (Prime Minister) :: The Government did contemplate an expedition into Northern Canada, as we describe it, to the islands of the Arctic this year, for purposes connected with the ensuring of Canada's claim to that territory, but since the appropriation was inserted in the Estimates for that purpose-and I believe it has passed- there is reason to believe that no great danger would ensue if the expedition were deferred until at least next year. As a consequence, it has been decided so to defer. In so far as any expenditure has been incurred, I am told that little, if any, will really be lost, because it has gone for supplies, and the like, which can be used.


Hon. RODOLPHE LEMIEUX (Maison-neuve) :: With your leave, Mr. Speaker, may I suggest to the right hon. gentleman that there has been of late a rumour that another power contemplated taking this step in advance of Canada, and therefore is it prudent on the part of the Canadian Government to delay hoisting outr flag on these distant islands, which may be very valuable?


Arthur Meighen: The matter to which the hon. member refers had to do with the original decision of the Government and the vote having passed, I can assure the House that if any reason transpires to indicate a serious intention in that direction on the part of any power, the Government will not hesitate to take action to protect the interests of Canada.



PRIVATE BILLS

[Stage Direction]
ALPHONSE LeMOYNE de MARTIGNY
Mr. ADOLPHE STEIN (Kamouraska) moved:: That the Order for further consideration in /[DOT]Committee of the Whole House of Bill No. 120, intituled "An Act for the relief of Alphonse LeMoyne de Martigny" be discharged, and that the said Bill, together with the evidence taken before the Divorce Committee of the Senate, be referred back to the Select Standing Committee on Miscellaneous Private ;Bills for further consideration, with instruction that the said committee have power to hear further evidence concerning the facts set forth in the preamble of the said Bill.


Edgar Nelson Rhodes: I think there is no question that this motion is quite in order. Perhaps I had better point out at this stage that the motion is not debatable, under rule 17A.


Charles Adolphe Stein: I am sorry to have to
delay the committee again in resuming the remarks I had begun on this Bill a few days ago. When I rose to speak the other day only one hour was allotted for Private Bills, and that time expired a few minutes after I had risen. On that occasion I was about to reply to some of the statements of the hon. member for West Toronto (Mr. Hocken) who referred to certain cases that had been heard before the courts of the district of Montreal, in the province of Quebec, and, I think in goad faith, the hon. gentleman said some things that were not correct. When I first spoke on this subject, I had not available the exact dates in reference to these cases, but I have them now, and will take the liberty of giving this information to the committee.
The first case that Came before the courts in Montreal between these parties was heard on November 12, 1912, when a judgment was rendered, granting to Mrs. de Martigny, under our provincial laws, separation as to bed and board, with alimony of $100 per month. The dispute between the parties remained in abeyance until 19'19, when Mrs. de Martigny brought before the court another petition, this time for an increase in alimony. Her husband con-

tested the petition and, in addition, claimed the custody of the infant child, who was then nine years old-the custody of the child had been left with the mother up to that date. The husband also petitioned the court for relief from the obligation of paying the allowance of $100 a month to his wife. Evidence was adduced by both parties before the Superior Court in Montreal, and at the close of the case Mr. Justice Duclos delivered two judgments on April 23, 1919. By these judgments the monthly allowance was increased, and the counterpetitions of the husband were rejected on the ground of lack of evidence. It was stated in the judgment that it was in the interest of the child that she should remain in the mother's custody, because the father was openly living with another woman. The husband filed an appeal against these judgments, which was heard by the Court of Review, composed of three judges.
An non. MEMBER:	Who were the
judges?


Charles Adolphe Stein: I have not the names of those judges here; I have only the name of the judge of first instance, Mr. Justice Duclos. While the case was pending before the Court of Review, the grandmother of the little girl, Mr. de Martigny's mother, filed a claim of intervention seeking the custody of the child for herself, and she submitted the same reasons as those which had been adduced already by her son against Mrs. de Martigny. She claimed that neither her son nor Mrs. de Martigny should retain the custody of the child. Having heard the evidence in that intervention, Mr. Justice Coderre, as Mr. Justice Duclos had done, came to the conclusion that the intervening party, the grandmother, had not proven her allegations against Mrs. de Martigny, and the intervention was dismissed. The witnesses who were heard before the Superior Court of Montreal on behalf of the husband were the very same witnesses who gave testimony before the Divorce Committee to support his claim. In her testimony, Mrs. de Martigny very positively denied all the charges of adultery brought against her by her husband and by her mother-in-law, and also emphatically denied the alleged admissions which her husband stated before the Divorce Committee she had made to him.
Thi;, Mr. Chairman, is a resume of what happened before the courts in Montreal. Now, if I may be allowed to proceed, I will refer to the evidence that was adduced by

the husband, Mr. de Martigny, before the Divorce Committee of the Senate; and with all due respect to the hon. senators who passed upon the case, as well as tc the members of this House who do not share my views, I shall endeavour to show that there is absolutely no evidence in this case to justify this committee in adopting the conclusions that have been reached by the Divorce Committee of the Senate. When Mr. De Martigny was asked before the Senate what was the cause of the separation between himself and his wife, he replied that it was owing to incompata-tility, and therefore they separated on September 22, 1912. I now quote from the testimony given:
Q. At that time had you any reason to suspect your wife of immoral conduct?
A. No, Sir.
Q. You separated on the 22nd September, 1912, and where did your wile go?
He replied that she took an apartment
on Union avenue, and he said:
For the first year I didn't follow her very much.
Well, it is easy to see immediately that the husband did not care much what his wife was doing. They separated on account of incompatability, and he says for the first year he did not follow her much-he did not care what she was doing, but that he had no reason at that date to suspect her of immoral conduct. He further says that he stayed in Montreal until August, 1913, and that after August 26, he was very much depressed, and he left for California. He states further that when he returned in May, 1914, his wife telephoned to him to secure an interview with him. He replied that he did not care to have any interview whatever with her. He states then that he had heard gossip about his wife, but he does not give the source of this gossip-he does not give any details whatever. It puzzles me why the Senators who sat on the Divorce Committee should have been satisfied with such slim evidence. He merely said that he heard gossip about her, and he did not care to have anything to do with his wife. Furthermore he states that after she had telephoned to him several times he decided to grant her an interview, and then appears the statement he makes as to the admission of his wife to him of her immoral conduct. He says this:
Well she told me that she was living with a man.
Q. What was his name?-A. Mr. V. S.
Stie was his mistress, and
shj Icved him, and she was living with him.

I was passing over several details that are not necessary, I think, to quote.


Mr. HOCKEN:: I would pass over that
myself if I were you.


Joseph Arthur Calixte Éthier: It is not legal proof at
all.


Mr. EDWARDS:: Read it all.


Charles Adolphe Stein: He continues in this way:
A. She was his mistress and she loved him, and she was living with him, and she told me that I could not expect anything different beoause she was not going to spend her life without a man. It was over a year that I had left her. And she told me that she was very much worried, because she was always afraid of being oaught in the family way. The fact is that she had been caught early in 1914.
Q. Or thought she was?-A. She said she was.
Q. I see?-A. And she had gone to our family doctor and he had refused to help her or have anything to do with her, and she had a terrible time to get out of that trouble. And she wanted to know what I was going to do about it.
Well, I claim that this reply is absolutely absurd. If the facts as stated here by the husband are true, it is impossible that the wife should have gone to him and asked what he was going to do about it. It is absolutely ridiculous. This fact cannot have occurred in this way; it is, I submit, impossible.


Joseph Arthur Calixte Éthier: It is absurd.


Charles Adolphe Stein: If the first facts stated
are true, I cannot believe the last one to be true. Why should she have gone to that man if she did not want to live with him, and when she stated she was living with another man? Why should she have gone to her husband to inquire from him what he was going to do? If the facts are as stated by the husband the woman should have hidden herself.


William Cameron Edwards: Was that before or
after she applied for alimony?


Charles Adolphe Stein: That was in 1914. She secured a judgment on November 22, 1912, from the courts of the province of Quebec granting her, under our laws, separation as to bed and hoard, and alimony to the amount of $100 per month; and the husband says that on September 22, two months previous to that judgment, they separated of their own free will on account of incom-patability. Now, the husband does not say a word of this in evidence before the Senate Committee. He tries to hide all these things,
but if he had been frank he would have stated the facts in their entirety. Now hear what he did afterwards:
Q. After 'that interview did you urge her to give up Perry? A. Well, I told her I would not stand for that.
He was very angry; he told his wife he would not stand it. I suppose he slammed the door and left her. I also remind hon. gentlemen that the questions, from first to last, are practically all leading questions, questions putting the answer into the mouth of the suppliant himself, of the party most interested in the case. In fact I find that in one instance a member of the committee told the solicitor for the suppliant that he had better let the witness reply himself. Then de Martigny states that he thought he had lost the right to supervise the behaviour of his wife, but at the same time he was not going to lend himself to a public scandal, especially in view of the fact that the wife had a baby that was only four years old at that time. That was in 1914 and she had been given the custody of the baby by the courts of the province of Quebec. The husband states further that after his wife had left him in 1912, she left the child with him, and he says:
This is what hurt me most. She left me the child. I loved the 'baby, and I could not see how her mother could leave her alone like that.
This statement is absolutely contradicted by the suppliant himself, for on page 10 of the evidence he says:
She was longing-
That is the baby-
She was longing for her mother and her mother was longing for her.
Well, this is a flat contradiction of the statement in which he says he was disgusted to see how his wife could part with that baby. Without having been re-examined, de Martigny contradicted himself on this one fact, to say nothing of many others. He begins by saying that he was dissruitted at his wife not seeming to love the child- having no regret in parting with it. Then he says:	^
The child was longing for her mother, and the mother was longing for the child, and 1 allowed the child to go back to the mother.
He allowed the child to go hack to its mother because he was compelled to do so by the courts of the province of Quebec under the judgments to which I have already referred.

There was no question of immorality at that time. He does not give the date, but after explaining that in 1913, when he felt so much depressed he left for California, he states that he had no suspicion then of immoral conduct on the part of his wife. He came back in 1914, and it is then that he said he heard some gossip. Further on he says:
There was no question of immorality at that time.
This is another contradiction of his statement that he had heard some gossip about the conduct of his wife. After that first answer of there being no question of immorality, he was further asked:
There was no charge of immorality at that time?
But he does not appear to have given any answer to that second question on the same subject.
The following questions were put by the chairman and answered by the petitioner:
Q. She got the custody of the child?
A. So she took the child.
Q. Have you got the child now?
A. No, sir.
Q. Who has the child?
A. She still has the child.
Q. Still has the child?
Mr. Guthrie, who I understand was the solicitor for the suppliant then states:
Mr. de Martigny got a judgment from the courts of Quebec giving him the custody of the child at one time.
Well, that is a mistake. I have stated to the contrary, and I shall be glad to prove my statement before the Private Bills Committee if this Bill is sent back to them. This is a mistake, for Mr. de Martigny was not given the custody of the child; it was the wife, as I stated a few minutes ago.
Then the witness continues to refer again to the interview that he had in his office with his wife after she had telephoned to him on his return from California at the end of May, 1914. He says:
After that interview in my office when I told her I was not going to stand for that kind of life. I told her I was going to take the child away from her. I took action, and I then took the child away from her.
This is another mistake. If he ever took the child away he did not do so after the action, because he lost that action and the court gave the wife the custody of the child.
There is no wonder that although very little evidence was adduced the members
fMr. Stein.]
of- the Senate Divorce Committee were brought to believe that all the grievance was on the husband's side, especially as the wife did not appear before them. But I am not very much surprised at her failure to appear. She had already won three actions against her husband and also against her mother-in-law in the courts of the province of Quebec, and therefore perhaps she did not think that she should be compelled to come into the province of Ontario and adduce further evidence. It must also be remembered that she had only $125 a month to maintain herself and her child.
Then another question was put to the suppliant:
Q. Did you make any condition?
That was after the interview they'had in May, 1914. He stated that the mother was longing so much for the child that he decided to allow the child to go to the mother, but it was on the express condition that she would not live with Perry any longer.
Q. Exactly.
A. And that was absolutely understood, so I let her have the child back, and she kept on living with Perry ever since.
Q. And that is the reason you are here?
There was no answer to that question, but apparently the members of the Divorce Committee were satisfied. Then the chairman of the committee put this one question:
Q. And she still keeps the child?
A. She still keeps the child.
Then Mr. Guthrie, his solicitor, makes the following statement:
The present position, Mr. Chairman, is that Mr. de Martigny has to get a divorce in order to establish toils rights to the custody of the child.
I submit that Mr. Guthrie again" made a great mistake. The judgments to which I referred a few minutes ago were rendered on Article 214 of the Civil Code of the province of Quebec, which provides that the children are entrusted to the party who has obtained the separation from bed and board, unless the court, if it think proper, having consulted a family council, decide it is for the greater advantage of the children that all or some of them be entrusted to the care of the other party or of a third person. I respectfully submit that this altogether sets aside the statement made before the Senate committee by the suppliant through his solicitor. He states that he is before the Senate committee requesting a divorce in order to

establish his rights to the custody of the child. But there is no mention of such a claim in the divorce Bill. If he is seeking a divorce for that purpose he must take action under the laws of the province of Quebec in which he is domiciled. And article 214 of the Civil Code which I have just quoted states that the custody of the children is granted to the party who has obtained the separation, which in this case is the wife. Therefore, whether the husband gets his divorce or not, he will not be entitled to the custody of the child. Then why grant him a divorce?
It is to be noted that all the witnesses who were brought before the Divorce Committee on behalf of the husband were French-speaking, they could not understand English, and their evidence was translated. This enables us to understand why the evidence is so incomplete and why it is so difficult to comprehend the answers that have been given. Most of the answers are given in the third person, as statements made by the interpreter, not in the first person as statements made by the witness himself. The first witness was an old woman of eighty-two years, Azilda Fournier. She was shown a photograph of three ladies and she identified Mrs. de Martigny as one of them. She stated that she had lived in several places with Mrs. de Martigny and that in the last place in which they had lived, on Boulevard St. Joseph, there were four bedrooms, one for Mrs. de Martigny, one for Mr. Perry, one for herself, and one for the child. She was asked:
Q. I suppose you cannot say anything as to what happened between them?

A. She says she did not see anything; she was in her room.
Q. Did you ever see them in bed together?- A. Oh, no, sir.
That is a very emphatic statement,-"Oh, no, sir." Then Mr. Guthrie makes a statement, although he is not a witness and should not have testified in the case:
Mr. Guthrie: All Mrs. Fournier can swear to is that they lived together, apparently en famille, as man and wife.
The witness could not speak English. Mr. Guthrie was not the interpreter and he should not have been allowed to make that statement. That will give hon. members of the committee an idea of the way the hearing was conducted before the Senate committee. I repeat that I say this with all due respect, but I feel that I must express my humble opinion as to how these matters were dealt with before the Senate committee. The next witness was Justina Brosseau, a dressmaker. She had worked
about eight or ten times for Mrs. de Martigny. She was asked:
Did you ever hear them speak to each other?
To which she replied in the affirmative. Then she was asked:
Did they ever use any expressions of affection or endearment?
To which she replied: "No, sir." She had been working there for eight or ten days, but she never heard any expressions of affection or endearment passed between Mrs. de Martigny and Mr. Perry. I have taken the trouble to go through this evidence, because it was frankly admitted by the member for Frontenac (Mr. Edwards) the other day that he for one had never read it, and that may have been the case with several other hon. gentlemen.


Mr. GLASS:: I understood the hon.
member to say that under the laws of Quebec, in view of the action which had been taken in 1912 and again in 1919, Mrs. de Martigny had the custody of the child granted to her by the courts. Now, what would be the effect in that regard if this divorce were granted?


Charles Adolphe Stein: The civil effects of marriage continue to exist. Under article 185 of our civil code, marriage can only be dissolved by the natural death of one of the parties: while both live, it is indissoluble.
As long as there is, no modification of the judgment rendered in favour of the wife by the courts of the province of Quebec, the wife will continue to keep the custody of the child, whatever may be the result [DOT]of this Bill.


Samuel Francis Glass: The granting of this divorce would not in the eyes of the court of Quebec be any evidence as against the chastity of the woman?


Charles Adolphe Stein: No, that would not serve
as evidence against her before the court in the province of Quebec. The third witness examined by the Senate committee was Moise LeBoeuf, janitor of the apartment house in which Mde. de Martigny had an apartment. Again the answers are given in the third person through an interpreter. The witness was examined by Mr. Guthrie as follows:
Q. What did you see of her life with Mr. Perry?-A. He thought it looked to him as man and wife.
Q. What made him think so?-A. By their way; it was always like man and wife in the house. He never inquired.

Q. Did he think the child was Perry's child? -A. The little girl was calling Mr. Perry "Daddy."
Q. How did Perry behave?-A. Very well.
The chairman asked:
Q. Did Perry and this Mrs. de Martigny occupy an apartment there?-A. He says that in the evening he never went up in the apartment.
This witness was the janitor of the apartment. He said it appeared to him that these people were acting as man and wife, but he really knew very little about it. In this case again, the witness does not answer for himself, but his answers are translated from French into English and given in the third person. The answers to those questions might have been very different if they had been given in the proper form, as I claim they should have been, and if Mr. Guthrie, the solicitor, had not taken upon himself to make now and then during the evidence the statements that he made on behalf of the witnesses. As can be gathered from reading this evidence, those three witnesses spoke, not from facts that they knew of personally, but from suppositions that they made. Nevertheless, when the old woman of eighty-two years who has lived most of the time with Mrs. de Martigny is asked if she has seen anything that would warrant this Parliament in granting a divorce she says: "Oh, no, Sir." This is a formal denial to all the charges made by the husband. When Miss Brosseau, the dressmaker, is asked if she has observed the use of any expressions of affection or endearment between Perry and Mrs. de Martigny, she says: "No, Sir." When the third witness, M. LeBoeuf, the janitor, is asked "How did Perry behave?" he says, "Very well." It is on this evidence that we are asked to grant a divorce. I do not see where one can find in this case sufficient evidence to warrant the granting of a divorce. I stated the other day that I took pains to read the evidence in several other divorce cases. I do not want to refer to this to-day because it would be too long, but in all these cases there was strong evidence, altogether different from the evidence in this case, leading to the conclusion that adultery had been committed by the respondent in each case. This case is altogether different, especially if we have regard to the fact which I pointed out a while ago, that the husband flatly contradicts himself in two or three very important statements in his evidence. As regards the custody of the child, he said that he was disgusted at seeing his 
wife not paying any attention to or loving the child, allowing him to take custody of the child. A little further, to avoid admitting that a judgment had been rendered by the courts of Quebec granting the custody of the child to the wife, he explains, contradicting his first statement, that the child was longing for the mother; that the mother was longing for the child, and that he decided to surrender the child to the mother. If hon. gentlemen will, as I did, take pains to study this evidence, they will easily come to the conclusion that there is no ground for granting a divorce in this case. I for one feel bound to vote against this Bill.


Mr. BALDWIN:: While I am not a
lawyer, I am looking at this case from this point of view. A husband and a wife have become incompatible. The wife takes a suit for separation and alimony. She is granted separation with alimony of $100 a month. Later on, under this servitude, the husband brings a counter-suit to have the former position annulled, and in that suit the tribunal enlarges the alimony by $25 a month, making the matter much more galling for the husband. In a later suit, the grandmother contends that neither of the parents is a suitable person to nurture the child. According to the testimony of the three witnesses, as given by my hon. friend (Mr. Stein), there is no conclusive proof that adultery has occurred. Can this Parliament, on circumstantial evidence, question or decide upon the chastity of a woman, or besmirch her character? The very fact that a male and a female, a man and a woman are living together, is no proof of adultery. While the janitor says that he took them for man and wife, that is no proof. I have known a man running a store to have a lady clerk, and commercial travellers who had been coming to that store for many years, always supposed the woman was the merchant's wife. That is, however, no proof. What do we find in criminal courts? We find that the prisoner has always the benefit of the doubt. In a civil court, would a judge in a case of this kind accept the evidence of the only witness, being the plaintiff, who is galling under this servitude, as conclusive? Or would he take it rather that the plaintiff was trying to get rid of paying that amount of alimony? Would the plaintiff not stretch the truth in such a case? There is in this House not a lawyer, nor a judge, nor a past judge, nor a keen, sharp individual who is acquainted with humanity, who does

not know, at this juncture of the world's history, that evidence goes into court of a diametrically opposite character, and that you must believe that one side or the other is committing perjury. In this case, I say, this Parliament has no right to besmirch the character of a woman on any such circumstantial evidence.


Mr. DENIS:: I move that the committee rise, report progress, and ask leave to sit again.
Motion agreed to; yeas 27, nays 11. Progress reported.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. KAY:: What are the names of the census enumerators in the county of Missisuqoi and what are their respective divisions?


Right Hon.   S@: Thfese have not yet been sent in to the department.


DOMINION LANDS ACT AMENDMENT
[Stage Direction]
On the motion of Hon. J. A. Calder (Minister of Immigration and Colonization) Bill No. 212, to amend the Dominion Lands Act, was read the third time, and passed.

[Stage Direction]
On the motion of the Right Hon. Arthur Meighen (Prime Minister) Bill No. 213, to amend the Northwest Territories Act, was read the second time, and the House went into committee thereon, Mr. Boivin in the Chair.
On section 1-council increased to six members.
Rodolphe Lemieux: What is the explanation of this?


Arthur Meighen: This is a very simple Bill. It merely provides for increasing the membership of the council that aids the commissioner in the administration of the Northwest Territories, from four to six. The commissioner is Mr. Cory, Deputy Minister of the Interior, and the councillors are Mr. Gibson, Col. Perry, Mr. Greenway, and Mr. Camsell. A majority constitutes a quorum, but on account of
the necessary absence of some of the members it has sometimes been difficult to get a quorum.


[Stage Direction]
Section agreed to.
Bill reported, read the third time, and passed.

[Stage Direction]
On the motion of Right Hon. Arthur Meighen (Prime Minister) for the House to go into Committee of Supply:
Mr. LUCIEN CANNON (Dorchester) :: Mr. Speaker, the press of the city of Quebec has mentioned a very important matter to which I wish to. direct the attention of the House. A steamship called the Arctic has been kept busy, both under the present Government, as well as under the previous administration, cruising in the northern seas, and generally doing work of exploration for the Government, and I understand that the results of that work have been most beneficial in the past year. This year the same ship was equipped and full supplies were bought in considerable quantities, it being understood that she would leave for the north within a short time. At the last moment, however, for reasons which I do not know, I am given to understand that the Government cancelled the trip, although the object of the voyage this year was of great importance. People were led to believe that discoveries of oil and other valuable minerals had been made in the north, and it was essential for the Canadian Government to send an expedition to these northern lands and formally take possession of them in the name of Canada. Other countries are stated in the press to be getting ready to send expeditions to this area before our own, and the people are anxious to know what influenced the Government in cancelling the trip this year. The newspapers, at any rate, make this announcement, and I shall be glad to have from the minister in charge of the department, a statement as to exactly what the Government intends to do in this matter.


Arthur Meighen: In answer to the hon. member, I may say-


Edgar Nelson Rhodes: The motion having been put in the name of the Prime Minister, he has technically spoken and is therefore debarred from speaking again. I am sure, however, that under the circumstances the House will accord to him the courtesy of

presenting a reply to the hon. member for Dorchester (Mr. Cannon) now.


Arthur Meighen: The subject has already been brought up to-day by the leader of the Opposition (Mr. Mackenzie King), and my reply was that there is an Estimate to provide for further exploration in the Arctic. That Estimate has passed, but because the Government had not sufficient reason to believe that there was any danger in deferring the trip for at least another year, the conclusion was arrived at to do so solely on the ground of expense. It is a very expensive matter to send an expedition to Ellesmere Land, and it is not believed that there is sufficient justification for such an undertaking merely on the score of present or prospective oil or other development there. The idea was in the main, if not wholly, to see that the territorial interests of Canada were not imperilled by any other country, and because that reason does not appear to be so pressing as it was at first considered, it has been decided that the expense would not be justified for the present. If, however, it later appears that the matter is urgent, we will not hesitate to take whatever steps are necessary to protect the interests of this country.



SUPPLY-BERRY AND CURRANT BOXES

['There is no objection.']
Joseph Arthur Calixte Éthier: I desire to bring to the attention of the Government a matter in reference to which I have had an interview with the Minister of Agriculture (Mr. Tolmie), who I am sorry is not at present in his seat. Section 325 of the Inspection and Sale Act of 1920 reads:
(2) On and after the first day of June, 1920, the following provisions shall come into operation ;
(1) All berry or currant boxes manufactured in Canada, and all boxes containing iberries or currants, packed in Canada, for sale in Canada, shall contain when level full as nearly as practicable one or other of the following quantities:
(a)	Pour-fifths of a quart;
(b)	One pint;
(c)	Two-fifths of a quart.
That law was not put in force last year owing to representations by the producers of berries. The Government suspended the operation of the foregoing two sections, and permitted berry-growers to use only boxes of two-fifths of a quart measure, as provided in section 6 of the Act. Last year the berry-growers had a very bad crop; as every one of us knows, the crop was a

failure, and although the farmers purchased a quantity of boxes against the prospective demands of the market, they found no use for them, the crop being so meagre. I may say, that Two Mountains? which is known as the garden of the island of Montreal, and such other places as St. Hypolite, St. Augustin, St. Dorothee, and St. Eustache, met with failure, and therefore the growers did not use the boxes they had on hand for berries. Now, the berry market will be open ten or fifteen days hence, and the producers are anxious to know whether the Government will allow them to use the boxes which they now have. Yesterday, Sunday, notices were posted up outside of the churches to the effect that farmers were not allowed to use what are commonly called short boxes, that is to say, the boxes which they bought last year with the permission of the Government.


John Allister Currie: Where do they buy those boxes-from the United States?


Joseph Arthur Calixte Éthier: I am informed that they buy them in the fruit district near Niagara, in Ontario. The berry producers gave no orders for boxes this year because they have large quantities in stock which they did not use last year owing to the failure of the crop. This year the berry prospect is very promising, and they are about to put their crops on the local market; but I see that the Department of Agriculture, whether through an Order in Council or otherwise, I do not know, has issued a notice that the farmers must use boxes as described in paragraphs (a) and (b) of section 325, which I have read. In Quebec, especially in and around Montreal, the producers have in stock various quantities of the boxes they were permitted to use last year, ranging from 50 to 5,000, but these boxes they are now forbidden by law to use. Clause 326 says that the box shall contain "one or the other of the following quantities." Well, one or other means A, B or C. The one used last year was "C." I do not see why that privilege cannot be continued again this year so as to permit of the sale of the fruit we shall shortly have on hand. The berry-growers must be permitted to use the boxes they now have, because they cannot at present get standard boxes from the manufacturers. If that is not done the berry-growers will lose all the crop produced this season. The local berries will mature next week and no standard boxes will be available. This is not a political matter, it is one that deeply affects the entire farming community-in fact it

is in the interest of the whole country. Everybody knows that the berry trade in Canada is a very important one, and in view of United States tariff legislation our growers should receive protection. Per-conally I believe in protection for the berry-grower. I hope therefore that the Minister of Agriculture, in view of my remarks -which I have endeavoured to express in as friendly and sincere a manner as possible-and in the interest of all parties concerned, will, within the next few days, take the necessary steps to permit the berry-growers to use the kind of boxes they used last year. If this is not done the growers must lose their fruit crop or, if they persist in using last year's boxes, they will render themselves liable to the imposition of a penalty. This is a most urgent matter and a decision should be reached immediately because it will only be a few days before the berry crop will have attained maturity. I hope, therefore, that the Government will agree to my suggestion.
Mr. JOHN A. CURRIE (North Simcoe) : Before the minister replies I desire to say a word or two. I have a distinct recollection that last year in the province of Ontario, and especially in my own constituency, vast quantities of berries went to waste because it was impossible to get boxes for the fruit. In many cases the growers had to have recourse to boxes that had been already used. That is, a great many boxes of fruit came in from the United States early in the season and Canadians saved up these containers and used them again. The American berry-growers use what is called the "short" quart, which is one-fifth less than the imperial quart. The plants of the American box-makers are all equipped to make a box that is four-fifths of one quart. On the other hand the Canadian factories are equipped with machinery for making a larger box. Last year something went wrong and the Canadian berry-growers did not bother about procuring the necessary boxes and thousands of dollars of fruit went to waste. I think that rather than see anything of that kind occur again, the Government would be amply justified in extending the privilege granted last year for another twelve months, because I do not think there are going to be sufficient boxes available to carry all the fruit thit will be produced this year. Of course, the time must come when the Government will have to put its foot down and refuse to grant any further concessions. There are, of
course, two parties interested-the seller and the consumer. As long as the seller caused it to be clearly understood that the box he was selling was the short quart and that the price charged was on that basis no harm could accrue. But when one seller is using the short quart box and gets exactly the same price as another who is selling by the imperial quart, the latter, of course and the consumer in the first case, are getting the worst of it. There is a shortage of boxes this year, just as there was a year ago, and I do not see what the * Government can do, in the interest of the fruit growers, except to again extend the privilege granted in 1920-


Joseph Arthur Calixte Éthier: That is what I am asking
for.


John Allister Currie: -or else make the "short" box the standard box. If the "short" box were made the standard box all over the country, then people would know exactly what they were buying. Unfortunately our standard of measurement is one-fifth greater than the American quart and there has been worry and annoyance over the matter.
I think the Government would be justified, from what I learn from many sections of my own constituency, where a great deal of fruit growing is carried on, in accepting the suggestion of the hon. member who has just spoken.


Hon. S. F. TOLMIE (Minister of Agriculture) :: This amendment to the Act was brought down on May 24, 1918, after a conference of fruit growers from all over Canada who agreed that these particular measures should be adopted in the case of fruit. However, one whole year was given, or until June 1, 1919, before bringing the Ast into force. On the representation being made that there was a great quantity of old boxes still on hand, the application of the Act was postponed for another year; but the growers were all alearly informed in 1920 that the use of old boxes would not be permitted in 1921. It is very unfair to the man who is complying with the law to be compelled now to send out a larger package of fruit, or a container with more fruit in it, and at the same time to permit other men to sell fruit in the "short" boxes. I might place on Hansard the dimensions of the various boxes as we have found them. The "short" box is 41 inches by 41 inches at the top; 31 by 31 inches at the bottom; and approximately 21 inches deep. The dimensions of the legal package are as follows: 51 by 5 inches at the top; 4 by 4 inches at the bottom; and 3 inches deep.


Joseph Arthur Calixte Éthier: Is it not a fact that
paragraph B of the schedule provides for a box of one pint which means the following dimensions:	4! by 4g inches at the
bottom and at the top, and li inches deep. So we impose not only on the grower but on the consumer a one-pint box which is smaller than the one which is being used now We do not complain of the decision of the committee of fruit growers which was arrived at in 1918 and was to be given effect to in June 1919, we are only asking that on account of the bad crops of last year, and of the impossibility of getting the required boxes for the time being, last year s rule be again continued this year.


Simon Fraser Tolmie: I submit, Mr. Speaker, that the fruit, growers have had ample opportunity to comply with the law since 1J18, and they were given the whole season of 1920 on the clear understanding that the law would go into force all over Canada _ this year. We have had these applications from year to year, and I have taken them up with the men in my department who are handling this business, particularly the food commissioner and the deputy minister, who are both very familiar with the situation, and they are agreed that sufficient time has elapsed for us to aPpiy the law as laid down, otherwise we may ^ have these requests continued indefinitely. I submit that we have allowed sufficient time for everybody to comply with the law, and there is no reason why it should not now go into effect.


Joseph Arthur Calixte Éthier: If the minister will allow me, don't you think that the interests of the industry are sufficient to justify the continuation of the permission which was given last year? If not, I tell the House that the enforcement of the law this year will ruin the industry.


Edgar Nelson Rhodes: Order.


Joseph Arthur Calixte Éthier: And it will mean the rum of all parties interested in that industry.


Edgar Nelson Rhodes: Order. The hon.
member has spoken at least twice before. ' He must submit to the ruling of the Chair.


Joseph Arthur Calixte Éthier: 
Rodolphe Lemieux: Mr. Speaker, it seems to me that my hon. friend (Mr. Tolmie) might be a little more generous in regard to the application of this law. Although

passed two or three years ago, there are circumstances this year which justify the attitude taken by my hon. friend from Two Mountains (Mr. Ethier). Last year the crop failed, and this year the farmers and market gardeners in view of the scarcity of these new boxes are obliged to use the old ones. I am interested to a degree in this business because many of nr electors in Montreal grow strawberries and I can assure the hon. gentleman that it would be a real hardship to them if he maintain his stern and unbending attitude. In matters of weights and measures, if my hon. friend will read history-and I am sure he does-he will find that it takes centuries to alter them. Take the case of France, where the metric system has been in use since the revolution, there are today many communes where they still use the old weights and measures which were common during the monarchy. Then I would direct his attention to the failure to adopt the metric system in England. Resolutions have been passed from time to time by the British House of Commons in favour of the adoption of the metric system, and yet the merchants and farmers of England still cling to the old system which has been in vogue for centuries. In the province of Quebec we have had three systems; the old French system of weights and measures, then the English currency, and to-day the metric system. But if you read notarial deeds you will find that even to-day in some .4 p.m. of the districts of Quebec the _ people still express values according to the only French monetary system which was in vogue before the British domination. Therefore in these matters of weights and measures you must not be too rigid or you will go right against the grain of the people. On the contrary, you must bring those changes down, as has been said of the development of the British constitution, " from precedent to precedent " and accommodate them quietly to the usages and habits of the people. Surely my hon. friend, who is such a good-natured fellow, would not be so stern as to force those good habitants, who send him those delicious strawberries for his table, to adopt these new boxes this season and so prevent them from selling their fruit on the market next month.


Joseph Arthur Calixte Éthier: They cannot get any
boxes now.


Rodolphe Lemieux: I appeal to him, Mr. Speaker, I am sure he will not deprive

those men of their little profit. We are passing through hard times, and those market gardeners and farmers need all the money they can get to pay their bills. Again I appeal to my hon. friend on their behalf, and I can read in his face his sympathy for them.


[Stage Direction]
Motion agreed to, and the House went into Committee of Supply, Mr. Boivin. in the Chair.
Customs and Inland Revenue, $6,782,195.
['I appeal to him, Mr. Speaker, I am sure he will not deprive\n\nthose men of their little profit. We are passing through hard times, and those market gardeners and farmers need all the money they can get to pay their bills. Again I appeal to my hon. friend on their behalf, and I can read in his face his sympathy for them.']
William Lyon Mackenzie King: I move that this Estimate be discussed item by item.


[Stage Direction]
Motion agreed to.
Salaries and contingent expenses of the several ports in the Dominion, including pay for overtime of officers, notwithstanding anything in the Civil Service Act-and temporary buildings and rentals, $5,489,815.
['I move that this Estimate be discussed item by item.']
William Lyon Mackenzie King: How does the minister explain the increase of half a million dollars?


Mr. WIGMORE:: The item of salaries and contingent expenses of the several ports in the Dominion, including pay for overtime of officers notwithstanding anything in the Civil Service Act, for the year 1920-21, was: Customs, $4,250,000; Excise, $734,433.25. This latter amount was made up of the following items: salaries of officers of excise and to provide for increases pending the result of excise examinations, $465,033.25; extra duty paid at large distilleries and other factories, $15,000; duty paid officers serving longer hours at other than special survey, $2,000; Excise travelling expenses, etc., $112,400; amount to provide for salaries in connection with war taxes, $140,000. The Estimate for the fiscal year, 1921-22 shows an increase of $505,381.75, of which amount $165,533.75 represents the salary arrears from 1920-21, due to reclassification, leaving $339,848, covering increases for the fiscal year 1921-22. This latter amount is made up of the following items: statutory increases, $144,635; amount to provide for 33 auditors and accountants in each of the districts to audit the books in connection with the collection of excise taxes; for temporary employees relieving regular officers on sick leave with pay, and for promotions, transfers, etc., $114,113; amount due to transfer of officers from preventive service, salaries under reclassification, $75,000; amount required due to increased cost of contingencies, $6,100; total,-$339,848.


Mr. VIEN:: Would the minister give us
some further details with respect to these items? What is the amount for auditors?


Rupert Wilson Wigmore: The total amount for
auditors is about $80,000.


Thomas Vien: Are these auditors permanent?


Rupert Wilson Wigmore: No, they were appointed in connection with the collection of sales and luxury taxes last year and are being continued this year on the same basis.


Thomas Vien: They will be permanently
employed as long as there is a sales tax?


Rupert Wilson Wigmore: Yes.


Mr. SINCLAIR (Guysborough) :: I heard the secretary of the Civil Service Commission say that we were going to save a very large sum of money through reduction of staffs, but in this item my hon. friend wants half a million more than was appropriated for the same purpose last year. Is he making any allowance for the work that the Griffenhagen firm did in connection with his department? Will it be necessary to pay all these officers during the whole year if a report comes in shortly recommending the retirement of a very large number?


Rupert Wilson Wigmore: While a certain number of men have been retired and a large number will be retired, these persons are receiving retiring or superannuation allowance. Those who are being retired under the Calder Act and have had less than ten years' service will, of course, receive a lump sum.


John Howard Sinclair: Does my hon. friend mean that the statement made by the Secretary of the Civil Service Commission that we were going to save two millions in connection with the Post Office and Customs Departments is not correct; that he did not take into consideration the superannuation and retiring allowances to be paid?


Rupert Wilson Wigmore: I think that after this year there will be a saving. All that we have done so far is to make retirements involved in the amalgamation of the two departments. The positions of Collector of Customs and Collector of Inland Revenue have been amalgamated and certain of these officers have been retired. As I have said, they will be paid retiring or superannuation allowance so that the immediate saving will not be very great. The salaries

and expenses of auditors, provided for under this item, will not be affected by reduction of staff.


John Howard Sinclair: What percentage of the customs revenue does it require to collect that revenue, including the cost of salaries?


Rupert Wilson Wigmore: The cost of collection,
I am informed, is about 3J per cent, including everything.


Thomas Vien: Were these 18 auditors appointed by the Civil Service Commission.


Rupert Wilson Wigmore: Yes, after examination.


John Howard Sinclair: How did the Customs Department come to be so greatly over-manned that experts had to take charge of it and thin out the number of employees?


Rupert Wilson Wigmore: The reduction became
necessary on the consolidation of the two
departments. For instance, in Montreal the Customs offices and Inland Revenue offices were carrying on the work of these different departments in different places and with separate staffs. Now that the amalgamation has taken place the work of both is done in the same building and necessarily the staff can be materially reduced. I believe the result will he of advantage to the general public as well as economy in administration.


John Howard Sinclair: I would like to get the basis for the figures of 31 per cent given as the cost of collecting the customs revenue. What was the total amount received from customs last year and the total cost of administering the department?


Rupert Wilson Wigmore: I have the figures before me from 1894-95 to the present; perhaps I had better put them all on record. The statement follows:
Statement showing the Percentage Cost of Collection of Customs Revenue since 1894-95
Fiscal Year	Revenue	Expenditure	Percentage Cost of Collection1894-95	... $ 17,890,516 94	$ 917,607 81	5.131895-96	. . . 20,219,037 32	896,332 50	4.431896-97	. . . 19,891,996 77	945,245 33	4.751897-98	. . . 22,157,788 49	968,100 42	4.371898-99 	. . .. 25,734,228 75	1,037,633 61	3.461899-00	. . . 28,889,110 13	1,271,222 17	3.301900-01	. . . 29,106,979 89	1,123,817 06	3.861901-02	. . . 32,425,532 31	1,176,024 24	3.621902-03	. . . 37,110,315 17	1,229,028 71	3.311903-04 	. . . 40,954,349 69	1,357,184 29	3.311904-05	. . . 42,024,339 92	1,467,160 09	3.491905-06	. . . 46,671,101 20	1,548,384 08	3.311906-07*	. . . 40,290,171 70	1,224,981 74	3.041907-08	. . . 58,331,074 04	1,923,854 17	3.301908-09 	. . . 48,059,791 93	1,994,951 46	4.151909-10	. . . 61,024,239 21	2,024,533 51	3.321910-11	. . . 73,312,367 59	2,187,174 76	2.981911-12	. . . 87,596,426 40	2,443,846 23	2.791912-13	. . . 115.063,196 97	3,150,776 75	2.741913-14	. . . 107,179,360 33	3,849,083 86	3.591914-15	. . . 79,205,286 51	3,775,364 31	4.761915-16	. . . 103,941,714 81	3,685,399 40	3.551916-17	, . . 147,631,941 38	3,745,790 90	2.541917-18	. . . 161,587,979 41	4,059,861 12	2.511918-19	4,274,792 89	3.131919-20	4,669,132 78	2.481920-21 (9 months)	. . . 145,757,022 S4	3,699,972 31	2.53
* 9 months.
The following is a statement showing the percentage cost of collection of Inland Revenue for four years from 1917-18:
Inland Revenue Service Statement Showing the Cost of Collection
Fiscal Year	Revenue	Expenditure1917- 18	
$ 29,709,772 56	$1,791,612 171918-	19	
42,287,741	45	1,386,942	351919-	20	
58,527,035	34	1,513,927	861920-	21	
115,469,042	79	1,937,679	94

Percentage cost of Collection 6.03 3.21 2.59 1.68

I think that is the information the hon. gentleman asked for in reference to average costs.


Mr. MORPHY:: 
Rupert Wilson Wigmore: I understand that nine years and six months counts as ten years in calculating the retiring allowance, but the Minister of Immigration is more familiar with this Act, which, in fact, has been called the "Calder Act."


Mr. CALDER:: That Act will be before the House very shortly, and I shall be very glad then to get the views of the committee on that very point. In the Bill that
was passed last year there was an arbitrary line drawn. It was considered that unless a man had been ten years in the service, and was over forty-five years of age, if I remember rightly, he was not entitled to an annuity. You must draw the line somewhere. If a man has had over nine years and six months in the service that counts as ten years, but are you going to provide that every person who is in the service shall be entitled to an annuity upon retirement, regardless of his length of service? While there may apparently be an injustice at the present time as between the man who has been nine years in the service and the man who has had ten years' service, if you drew the line further down, this same apparent injustice would exist as between the man who had had seven years' and the man who had had eight years' service, and between the man with six years' and the man with five years' service. If you are going to carry out the principle of equity all the way dtown, eventually you would have to give an annuity to a man who had been in the service only one year. We must draw the line somewhere.


Hugh Boulton Morphy: Could not a graduated scale be worked out?


James Alexander Calder: What call is there upon the state to provide an annuity for the rest of his life for the man who has been three, or say four, years in the public service? I doubt if there is very much. We considered that a man should be at least ten full years in the service and be of a certain age before he was entitled to an annuity. I do not think we should delay these Estimates, because we will have a Bill before the House that amends the section in the Act relating to the annuity, and there will then be full opportunity to discuss the point raised by my hon. friend.


Mr. REID (Mackenzie) :: The minister has given the committee a great array of figures as to the cost of collecting customs revenue and inland revenue, but he did not say how he arrived at the percentage of cost. Has he taken into consideration, for example, rentals, depreciation of buildings, office furniture, and so on? In other words, has he computed his costs as they would be computed in the annual statement of a commercial company at the end of the year?
I notice also that the cost of collecting the inland revenue was reduced from 6.3 in one year to 3.21 the next, and to 1.68 in the following year. How does the minister

account for this reduction? If the cost keeps on coming down, he will soon be able to collect his inland revenue without any expenditure at all.


Rupert Wilson Wigmore: The department at
one time was responsible for Weights and Measures, Gas and Electricity, and Food Inspection, but these have been turned over to other departments, and that accounts for the reduction in our cost of collection. We have arrived at our percentage cost by taking the gross revenue and the gross expenditure, just as an ordinary company would.


John Flaws Reid: Can the minister give details of his expenditure?


Rupert Wilson Wigmore: It includes salaries,
rentals, travelling and all other expenses in connection with the running of a department.


John Flaws Reid: Have you regular fixed charges to meet, and has depreciation on office furniture, adding machines, and so on, been taken into account?


Rupert Wilson Wigmore: We have simply taken
the total expenditure and the total revenue, and have not gone into details of depreciation. The Customs Department, of course, rents a number of buildings. Particularly in the smaller ports we do not own the buildings.


John Howard Sinclair: A large number of the buildings in which the customs business is conducted not only in Ottawa but throughout Canada, belong to the Government, having been built by the Government for that purpose. Did the minister allow in his calculations anything for interest on the capital expenditure for these buildings?


Rupert Wilson Wigmore: I am informed that no allowance has been made for that. As the hon. member knows, we rent a number of buildings, particularly in the smaller ports. We have not, however, taken into consideration any rentals to the Public Works Department.


William Cameron Edwards: Is not the minister
following in that respect exactly the same course which has been followed since 1867?


Rupert Wilson Wigmore: Yes.


Mr. SINCLAIR (Queen's):: In the amalgamation of the two branches of the department, what system has been followed in recognizing the seniority of the clerks in the two different branches, and who is responsible for that-the commission or the department?


Rupert Wilson Wigmore: The seniority is not affected by the amalgamation. We take into consideration length of service, merit, and efficiency.


John Ewen Sinclair: W'hen you
amalgamate the Inland Revenue with the Customs, are the two heads jointly in control of the amalgamated department?


Rupert Wilson Wigmore: In many cases one or other of them is eligible for retirement, but that is a matter that rests with the Civil Service Commission.


John Flaws Reid: How would it affect the cost of collection if the minister had to pay rent for the buildings he occupies free of charge, or, in other words, if the matter were put on a purely commercial basis?


Rupert Wilson Wigmore: The present policy has been followed since 1895, and probably before that.


John Flaws Reid: Would the
minister follow this practice in his own private business? Is that a proper statement to make to the committee?


Rupert Wilson Wigmore: It is a practice that has been followed since Confederation by all governments. Furthermore, it is the practice elsewhere.


John Flaws Reid: The minister does not say whether or not he would follow this practice in his own private business. If there is to be any allowance made for rentals, it is purely a matter of bookkeeping to ascertain how that would affect the cost of collections.


Rupert Wilson Wigmore: W'e are simply following the practice that has been pursued since the first Government was formed.
I have no doubt that a calculation could be made, taking average rentals into account, and adding the total to the cost of collection: but, as I have said, we are only following the course that has been pursued for years.


John Flaws Reid: I do not wish to monopolize the time of the committee, but I do contend that even though previous Governments may have done as this Government is going, that is no answer to my question. We ought to know more approximately what is the actual cost of collecting the revenue.


Mr. McKENZIE:: Has the bonus been
paid, to date, to the various officers to whom it was granted, and does it extend to the Outside Service?

412j.


Rupert Wilson Wigmore: The bonus has been
paid to all officers of the Outside Service who are considered full-time officers. There are some employed in the outports who are considered only part-time officers, and who, under the Civil Service Act, are not entitled to the bonus.


Daniel Duncan McKenzie: Sydney is a large port with a considerable revenue. Are there any persons in that place who are not entitled to the bonus?


Rupert Wilson Wigmore: All the officers at the
port of Sydney are entitled to the bonus, with the exception of three men on the outside who are sub-collectors. These are: Joseph Orr, of Port Morien, who receives $350 a year; Anthony McDougall, customs patrol officer, $250, and Ephraim McGilliv-ray, of Gabarouse, $300. These are only part-time officers, and they receive no bonus.


Daniel Duncan McKenzie: These places are outports. Gabarouse is a place forty miles from Sydney. It is a port on the Atlantic coast, and I am sure the officer there must be in attendance pretty regularly. I know the place very well, and I cannot see the justice of denying him the bonus. He had bo go through the period of larger expense and harder times which other civil servants experienced, he gets the same salary he got before the war; and he ought to get the bonus. When the minister referred to "part-time" officers, I understood him to mean men temporarily employed; but these men in question are on the job all the time. They do not know the moment they may be wanted, and they must be constantly in attendance. In my judgment, therefore, they are not part-time, but full-time officers. The bonus, I understand, was given to supplement salaries during times of stress and high prices, and it was intended to take the place of permanent increases. I therefore cannot see the justice of depriving these men of the bonus.


Rupert Wilson Wigmore: If these men were
entitled to a bonus, the bonus would be larger than their salaries. The bonus for married men receiving certain salaries is $420 a year. The mere fact that these men receive only $250 and $350 a year is positive proof that they do not give their whole time to the service, and are otherwise employed. The Civil Service Commission, therefore, has decided that such men are only part-time officers, and should not be given the bonus.


Daniel Duncan McKenzie: That may be so, but
a man should not be deprived of fair treatment because it happens that because he has a small salary the bonus would be higher than his regular pay. If the bonus were adjusted on the basis of a percentage on the salaries that civil servants receive, no matter how small a man's pay might be, it would always be more than the bonus. I repeat that I do not see why these men should not be given the bonus. I understand that the bonus is based on a percentage of one's salary and in no instance could it be greater than the salary. I do not understand how that could be effected but perhaps the department has very little to say about it. Still, it is a matter which the department could bring to the notice of the Civil Service Commission. As I said before I always thought that these small-salaried officers were getting the benefit of the bonus. I now find that is not the case. That they could be away froin their offices and do something else may be true; but they cannot be sufficiently far away from their offices at any time to prevent them from attending to their duties. I know a great many of these people; I know their situation and that their salary is small. Many of them only receive $250, but they seem to be fond of getting Government money and they take these positions. There seems to be some lure about Government money that other money does not possess. My hon. friend will find, if he makes inquiry, however, that even in the case of the smallest of these ports ships are passing in and out all the time. I might take the Bras d'Or lakes in my own county-or take the port of New Campbellton. That is a small place with a very small population, but ships are passing back and forth there all the time and these vessels are obliged to enter inwards and outwards. Well, the officer must be on hand to see those entries. I think that when we are dealing with the betterment of salaries the officers with smaller salaries should be recognized just the same as the men who are paid larger stipends. It is, perhaps, too late now to deal with the 'matter, although it ought never be too late to rectify a wrong. If the proper treatment has not been meted out to these men all over the country in connection with bonuses, it should not be too late, even now, to readjust the matter and see that the right thing is done.	.


Rupert Wilson Wigmore: There is no distinction in the matter of bonuses. Some of these men are receiving $250 or $300 and others as low as $50 in salaries unless the bonuses



[Stage Direction]
were on a percentage basis, or on a sliding scale, in many cases the bonuses would be larger than the men's salaries.
John Howard Sinclair: Coming back to the question of the cost of collecting the revenue, will the minister repeat the figures for 1920-21.


Rupert Wilson Wigmore: The figures for nine months are all we have in the case of the Customs Department.


John Howard Sinclair: Well?


Rupert Wilson Wigmore: The revenue was $145,757,022.84 and the expenditures were $3,699,972.31. The cost of collection was 2.53 per cent. We have the complete returns of the inland revenue for the year.


John Howard Sinclair: I want an explanation as to this Estimate which represents the customs returns for last year. The amount voted was $6,653,108.25 and the appropriation not required amounted to $400,000. Deducting the latter amount we have $6,253,108.25. Now my hon. friend says we only spent $3,699,972.31.


Rupert Wilson Wigmore: We have only nine
months returns in the case of customs and the full year for inland revenue. Last year the items were separate. This year, owing to the two departments having been consolidated, they are put in together.


John Howard Sinclair: I do not see how my hon. friend can make correct calculations for nine months and compare them with other full years. Am I to understand that we voted last year $6,653,000 and that we only spent $3,699,000, or about half the amount?


Rupert Wilson Wigmore: Oh, no. I do not know how the hon. gentleman got those figures.


John Howard Sinclair: Where is the rest of the money?


Rupert Wilson Wigmore: The figures I gave
were for nine months of customs, and the hon. gentleman is comparing that with the full year of customs.


James Alexander Calder: I should judge that in the Estimates this year for comparative purposes they have gathered into the one item of six millions, the amounts that were separately voted last year for customs and inland revenue.


John Howard Sinclair: They appear in the same way this year.


Rupert Wilson Wigmore: No.


John Howard Sinclair: The
figures given at page 65 of the Estimates for 1920-21 and 1921-22 do not seem to tally with my hon. friend's statement that he only spent a certain amount. I was going to ask him if all these expenditures are included in the statement of expenses which he gave. For example, the first item given on the page in question is:
Salaries and contingent expenses of the several ports in the Dominion, Including pay for overtime of officers notwithstanding anything in the Civil Service Act-and temporary buildings and rentals.
The second item reads as follows:
Salaries and travelling expenses of Inspectors of Ports and of other officers on inspection and preventive service, including salaries and expenses in connection with the Board of Customs.
Then there are other items: "Miscellaneous," "To provide for expenses of maintenance of revenue cruisers and preventive service," and "Amounts to be paid to Department of Justice." In making up the gross total of expenses were all these items incorporated, including the money paid to the Department of Justice, the expenses of the revenue cruisers, and everything connected with the departmental expenditure?


Rupert Wilson Wigmore: Yes, they were. If the expenditures for nine months of the year amounted to $3,699,972 31 for customs alone, the other three months would bring the total up, figuring on the same basis, to $4,933,296. Then adding the inland revenue figures it would augment the total to the amount that is asked for, namely, over $6,000,000.


Mr. COPP:: What was the amount for inland revenue?


Rupert Wilson Wigmore: It was $1,937,679.


John Howard Sinclair: The
staff does not require to be very much larger to collect a greater amount than it does to collect a smaller amount. As far back as 1916 the cost of collection was down to 2.54 per cent and now although we are collecting a good deal more revenue we do not seem to be reducing the percentage very much.


Rupert Wilson Wigmore: In view of the fact that all the services to-day-due to reclassification and the bonus paid-are costing a great deal more I think the showing is a very good one-in fact, in my opinion, it is a remarkable showing and one that the department should feel very proud of.


John Howard Sinclair: Is the minister making allowance for the amount that is paid out to retired officers? Are pensions and retiring allowances a charge upon the department?


Rupert Wilson Wigmore: I could not tell the hon. gentleman just how much they would amount to.


John Howard Sinclair: No
allowance has been made for that?


Rupert Wilson Wigmore: No.


Daniel Duncan McKenzie: I cannot get it into my head how it is that the bonus of any official would be more than his salary. On what basis is this bonus distributed?


The CHAIRMAN (Mr. Steele) :: May I draw the attention of the committee to the fact that there is another item which deals with bonuses, therefore a discussion of that question might be deferred until that item is reached.


Daniel Duncan McKenzie: I wish to say a word or two with regard to the payments made for overtime. I have repeatedly brought to the notice of this department and of other departments the desirability of doing away with this system. It must involve a lot of extra time-keeping and book-keeping. I have suggested to ministers that they should see that whatever is fair compensation for this overtime work be added to the men's salaries, and so dispense with this tinkering. I have no specific charge to bring against anyone, but it is not well that people should be made their own timekeepers with no check over them at all, and certainly the system leaves the door open to dishonesty.
While the Minister of Immigration and Colonization (Mr. Calder) is in his seat so close to the Minister of Customs and Inland Revenue, I wish to point out some injustices which are operating under this overtime system. In North Sydney at the same landing place are stationed officers of the two departments, but only the customs officers get paid for any extra time. Why should they be paid overtime while the officers of Immigration and Colonization get nothing at all? There should be no discrimination. I hope the Minister of Immigration and Colonization will take notice of this condition of affairs so that I will not have to bother him when his own Estimates are before the committee. But I certainly say the same thing to my hon. friend in respect to his officials as I said to his colleague, that the salaries of these men should be increased so that they
may be called on for duty at any time. I think all round it would be much more satisfactory than the present system.


John Ewen Sinclair: Why is the overtime mentioned here as being paid " notwithstanding anything in the Civil Service Act?"	,


Rupert Wilson Wigmore: I am informed it would be illegal to pay it without this proviso.


John Ewen Sinclair: The overtime is not allowed by the Civil Service Act?


Rupert Wilson Wigmore: That is correct.


John Ewen Sinclair: This is a provision to get around the provisions of the Civil Service Act?


Rupert Wilson Wigmore: Yes.


Daniel Duncan McKenzie: What is the nature of the contract for the steamer used in the preventive service around the coast of Cape Breton? And what is the speed and size of that steamer?


Rupert Wilson Wigmore: I suppose the hon.
member refers to the Restless?


Daniel Duncan McKenzie: I presume so.


Rupert Wilson Wigmore: She is not paid from
this vote.


Daniel Duncan McKenzie: Is there any vote
covering her?


Rupert Wilson Wigmore: I am informed she is
paid from the seizures fund. I will get information as to her speed and size.


Daniel Duncan McKenzie: If the hon. minister
would give me all particulars about the vessel I shall be obliged.


Rupert Wilson Wigmore: I shall be very glad to do so.


John Howard Sinclair: Does
the Inland Revenue Department collect any tax from printers for job printing?


Rupert Wilson Wigmore: The inland revenue
officers collect all sales taxes.


John Howard Sinclair: I received a complaint from a job printer who thought the amount charged by the Inland Revenue Department was excessive, in that most of his output was labour. For example, a job printer purchases $100 worth of blank paper and puts his printers to work on it. He pays out, we will say, $500 for labour, that being by far the largest part of the expense. When the percentage sales tax is levied upon the work he has to pay a tax on this labour, which he thinks was

not intended by the department, and that possibly some blunder must have been made by the officials. It did look to me reasonable that the printer should not be compelled to pay this tax.


John Allister Currie: I submit that is out of
order. It comes under the Finance vote.


Willis Keith Baldwin: How many years' service is required, in the Customs Department, we will say, to entitle a man to a pension? And must the service be continuous?


Rupert Wilson Wigmore: Under what is known
as the Calder Act he must have given ten years' continuous service before he becomes eligible for superannuation.


Willis Keith Baldwin: Even if a man enters, say, at the age of twenty-one, he is entitled to superannuation at thirty-one?


Rupert Wilson Wigmore: He is not eligible for superannuation unless he has given ten years' continuous service.


Willis Keith Baldwin: But he is entitled to
superannuation if he serves ten years?


Rupert Wilson Wigmore: Yes, if 45, and
recommended.


Willis Keith Baldwin: You are superannuating rather young men.


John Howard Sinclair: In
order that the minister may have the case properly before him that I mentioned a few minutes ago, I now have the particulars under my hand. They are as follows:
The Howard Smith Paper Company, manufacturers, of Montreal, sell the Maritime Paper Company, Moncton, one hundred dollars worth of paper and add an excise tax of one per cent, which they remit to the Government. The item reads: "Excise tax, one per cent, $1." The Maritime Paper add a profit to the paper and sell it to the Eastern Publishing- Company for $120, plus excise tax of one per cent. This item reads: "Excise tax on $120 at one per cent, $1.20." The Eastern Chronicle Publishing Company apply to the paper only labour, amounting to $500, and in turn sell the printed sheets to their customers for $620, and the Excise Department says the tax in this instance must be two per cent. This we collect, and in turn it goes to the Government along with the previous taxes, the item in this instance reading: "Excise tax on $620 at two per cent, $12.40." Total taxes collected and paid, $14.60.
How is it that in respect to an amount of paper on which there is an original tax of one dollar, when the job is finished and handed over to the customer there has to be paid to the Inland Revenue Department the sum of $14.60?


Mr. McGIBBON (Muskoka) :: I submit
that this question is out of order. If we are to get away this summer at all we must keep the work in hand. There is legislation on the Order Paper under which this matter can be brought up.


John Howard Sinclair: We are voting the salaries of the Inland Revenue officers, and under that head it is quite within the rules to discuss anything relating to the Inland Revenue Department, unless the rules have been very much changed.


Michael Steele: In discussing under this item taxes collected by the Inland Revenue Department, the hon. member would seem to be quite in order.


John Howard Sinclair: I think I am entitled to an explanation.


Rupert Wilson Wigmore: Under an amendment
introduced on May TO, if the job printer sells exclusively by retail on the order of the individual customer, he is not subject to the tax. He is in the same position as the tailor in that regard.


John Howard Sinclair: Then
this tax should not have been collected from the job printer?


Rupert Wilson Wigmore: It may have been
before May 10, but if it was since May 10, then he was not bound to pay the tax.


John Howard Sinclair: Does the minister say that before May 10 the tax was collected?


Rupert Wilson Wigmore: Yes, in every case.


Daniel Duncan McKenzie: This is the only opportunity that we on this side have of making inquiry about departmental matters, and we should be permitted to ask a few questions. It is open to hon. gentlemen on the other side to visit the department and get information privately whenever they like, but members of the Opposition do not regard themselves as being in that position, consequently there must be some questions asked when the Estimates are being put through on these various subjects. It used to be the practice in the case of promotion for officers in charge to make the recommendation which, upon being approved by the deputy minister, might be granted. For instance, take my own home town of North Sydney. We have quite a number of officers there in the customs office who used to get increases of $50 a year, more or less. I do not know whether they get any such increases now, but if they

do, by what machinery are they provided for? Now, that we are under the Civil Service Commission, what machinery takes the place of the old system of obtaining advancement for officers in the various departments?


Rupert Wilson Wigmore: Under the classification these men receive certain statutory increases. That classification, of course, is prepared by the Civil Service Commission.
I am surprised to hear the hon. member say that members on this side have received or do receive more consideration at the hands of the department than members on the other side. I want to say right here that it has been my great pleasure to take up hundreds of cases having to do with matters pertaining to my department and in which hon. gentlemen opposite were interested. The latch-string is always out so far as the obtaining of information is concerned, whether it is desired by hon. gentlemen on this side or hon. gentlemen on the other side. It is a real pleasure for me to give any information I can, irrespective of where the hon. gentleman sits who desires the information.


John Ewen Sinclair: This item provides for "pay for overtime of officers notwithstanding anything in the Civil Service Act." Are we to understand that thfe minister is asking permission to pay overtime which is forbidden by the Civil Service Act? If so, I think we should ask the minister how this overtime is made up. It relates, I assume, to the several ports and outports of the Dominion.


Rupert Wilson Wigmore: No overtime is allowed under the Civil Service Act. This overtime allowance is given to men who are serving as baggage examiners on trains and steamers and who put in extra time in the performance of their duties.


John Ewen Sinclair: Was this done last year?.


Rupert Wilson Wigmore: It has been done for
years. It would be hardly fair to ask these men to go on at eight o'clock in the morning and work until twelve at night without receiving extra pay. If the department did not carry on in this way it would mean the employment of an extra staff and consequent additional cost.


John Ewen Sinclair: I quite agree with what the minister says regarding those who put in overtime, but it seems strange that the statutes forbid any such payments as are here provided for.


Rupert Wilson Wigmore: It is the only way we can provide for it.


John Ewen Sinclair: How much
of this vote is taken up in overtime pay?


Rupert Wilson Wigmore: The overtime pay for
the last year was 8189,678.01.


Mr. TURGEON:: I notice that there is
an increase of $129,000 in the whole of this item. Is that increase due to the amalgamation of the two departments?


Rupert Wilson Wigmore: The increase is in respect of the two departments.


Daniel Duncan McKenzie: I did not notice until now this provision for the paying of overtime, contrary to the statute. Is it not strange that the Government should pass a law regulating the salaries of officials and what duties they shall perform, and then go on spending money irregularly, without authority, in a sense illegally, and afterwards come here with an Estimate of this kind in which Parliament is asked to override and overrule the general law of the Dominion? It strikes me as most extraordinary. I can understand this happening one year, or when the law came into force and this was not noticed and the amount was to pay for services that had been performed. But as to bringing down Estimates to pay for services of this kind that have been rendered since the law was changed, when every officer knows the law under which he is working and what that law allows-well, I certainly hope that this sort of thing wiil stop. The intention of this Parliament in passing the Civil Service Act was that we should at least save this money, because we did away with the power of departments to provide payment for overtime. Now we are dropping that idea, and we are still continuing to make these expenditures providing for them in this way. If this expenditure is to be made, let us amend the Act and make the expenditure properly and under statutory authority. This practice is improper, irregular, and it is one that should be avoided and stopped as quickly as possible.


Rupert Wilson Wigmore: I am very much surprised at the statement of the hon. member, because he has been in this House for a number of years and I have been here only a few months; but I may point out to him that this very item was placed in the Estimates for the first time during the Laurier administration, and I cannot understand why at this late date the hon. member would speak against it. Prior to

that time the transportation companies paid the overtime of these officials, and I think the item at that time was well considered. By the way these men are not allowed any overtime until after they have served ten hours. The fact that the transportation companies paid this overtime practically placed these officials in the hands of the transportation companies, and I do not think that was a proper situation. The move made at that time was well considered and proper, and this is an item that should be placed in the Estimates. This practice has been continued from that time until the present, and 1 do not see any reason for changing it now.


Daniel Duncan McKenzie: My hon. friend seems to find no wrong in overriding a statute; I do. I see the greatest possible objection. This House has solemnly placed upon the statute book an Act of Parliament regulating the department and the conduct of servants, regulating their hours and their pay, and saying that that will be their salary, no more, no less. I see the necessity of standing by such statutes once they are passed. Possibly the minister does not; possibly the minister thinks that they are just to be thrown aside and no attention paid to them at all except as they might meet the exigencies, whims, and convenience of the minister and his officials. If that is his view of an Act of Parliament, it is not mine. I have always had the greatest possible regard for an Act once it is passed, whether I supported it or not. I may say further to the minister, that in the days of the Laurier Government, the Civil Service Act did not apply to the Outside Service. The Civil Service Act as passed in 1908 had1 no application to expenditures in connection with officials at ports or any other place beyond the Inside Service. Even if it were so, even if in the days of the Laurier Administration the minister finds an irregularity, an impropriety, a misappropriation of money, and something done that should not have been done, does he take that as his gospel, and power, and right, to go on in perpetuity with that wrong? I would think that a minister or a member of Parliament, discovering that something had been done by a former minister that was not right or proper, would take the earliest opportunity of getting rid of it. I understand it is the position of hon. gentlemen opposite to hunt deliberately for something that was not right, if there was such a thing, and to make that a basis for the continuance of it for all time;-say: "That

thing was done by the Laurier Administration and, therefore, it can go on forever."


Hugh Boulton Morphy: Do I understand from the hon gentleman's statement just made that he alleges that there was misappropriation of money under the Laurier Administration in connection with the same item?


Daniel Duncan McKenzie: I say nothing of the kind. I say that if there had been-and I do not think there was because there was no such law in force then as there is now- that is no reason or ground for the continuation of such an irregularity. The hon. member for North Perth (Mr. Morphy) is, I am sure, a stickler for regularity, and when there is a statute passed by this Parliament, I am sure the hon. member would like to have it complied with. If the Civil Service Act does not make any provision for overtime, let us put such a provision in it if necessary; but let us not go on in this way, obligiiig us from time to time to be tinkering with the Act by passing Estimates of this nature for which the general law does not provide.


Hugh Boulton Morphy: Do I understand the hon. gentleman to apply the principle that a regular officer should not work overtime, if necessary to perform the service, and that a new staff should be appointed for the overtime service?


Daniel Duncan McKenzie: The hon. member heard all that I said this afternoon. I said that the salary of the officer should be sufficiently large to command his time whenever he was wanted. He should be paid a sufficient amount for his regular hours and for these extra hours. It does not make it any easier for an officer to give his extra time because it is paid for as extra time; he must be on hand just the same. Instead of this being made a separate charge with separate book-keeping and time-keeping, an officer should be allowed a salary sufficiently large to enable us to command his service whenever we want him. That is the position I have always taken in this House. I never liked those extra charges and hours because, as I said this afternoon, there is an opportunity of irregularity and impropriety in connection with them.
I do not think it is well that any man should be his own time-keeper and paymaster and have absolute control of what his time and salary shall be.


[Stage Direction]
Item agreed to.
Salaries and travelling expenses of inspectors of ports and of other officers on inspection and

preventive service, including salaries and expenses in connection with the Board of Customs, $621,380.	,
John Howard Sinclair: What is the explanation of the increase of $77,805?


Rupert Wilson Wigmore: This item is "Salaries
and travelling expenses of Inspectors of Ports and of other officers on Inspection and Preventive Service, including salaries and expenses in connection with the Board of Customs", the vote for which in 192021 was $543,575, made up as follows:-
Customs	$500,000
Excise	 43,575
The $43,575 for Excise was made up of the following items, viz:-
Salaries of inspectors and to provide
for increases	$32,575
Travelling expenses, etc., for inspectors. 11,000
The Estimate for the fiscal year 1921-22 shows an increase of $77,805, of which amount $54,497 represents salary arrears for 1920-21 due to reclassification, leaving $23,308 covering an increase for the fiscal year 1921-22.
This latter amount is made up of the following items, viz:-
Statutory increases	$13,780
Amount to provide for increased cost of travelling expenses and for employees relieving regular officers on sick leave with pay, and for promotions, etc..	9,528

Item agreed to.
To provide for expenses of maintenance of revenue cruisers and for preventive service, $238,000.


John Howard Sinclair: Is the
whole of this vote required in connection with cruisers?


Rupert Wilson Wigmore: Yes.


John Howard Sinclair: That
includes repairs?


Rupert Wilson Wigmore: Everything.


John Howard Sinclair: There
are several votes in the Estimates for repairing ships, and I wanted to know if this covered everything. What are the names of the cruisers?


Rupert Wilson Wigmore: The Margaret operating in the Gulf of St. Lawrence; and the Grib, on the Nova Scotia coast.


John Howard Sinclair: Are
there no cruisers on the Pacific coast or the Great Lakes?


Rupert Wilson Wigmore: No.


[Stage Direction]
Item agreed to.
Further Supplementary Estimates, 1920-21- Customs-To provide for expenses of maintenance of Revenue Cruisers and for Preventive Service - further amount required, $45,000.
John Howard Sinclair: Has
this money been already expended?


Rupert Wilson Wigmore: Yes.


John Howard Sinclair: Under what authority?


Rupert Wilson Wigmore: The money has not actually been expended, but these repairs have been made, and we are now asking authority to make the expenditure. The Margaret during the war was used by the Naval Service Department, and when she was turned over to us considerable repairs were necessary before she could be placed in commission. It was absolutely necessary to have her in commission before May 1, so these repairs were gone on with.


[Stage Direction]
Item agreed to.
Main Estimates-Immigration and Colonization-contingencies in Canadian, British and foreign agencies and general immigration expenses, $870,000.
John Ewen Sinclair: Will the
minister explain the increase in this.item?


James Alexander Calder: This vote covers our general expenses in connection with immigration work in Canada, the United States, and Great Britain. It covers such items as publicity, which includes advertising, printing, pamphlets, atlases, maps, magazine articles, and other items of that character. Our general printing, such as the printing of books, forms, cards, letterheads, and so forth, is done through the King's Printer. Then we have contingencies and miscellaneous expenses. That covers special investigations, and the salaries and expenses of temporary employees engaged outside of Ottawa. I might give an illustration of the expenditure under that head. Last year when the rush of immigration was upon us, particularly from Europe, we were compelled to employ a fairly large number of temporary employees. Many of the immigrants were detained, and many were destined for the United States. It cost us just for that work alone in the neighbourhood of $40,000 or $50,000 for these temporary employees. This vote also includes the small bonus that is paid on certain classes of immigrants that heretofore came into Canada. I am very pleased to state that that bonus is to disappear on July 1 of this year. All the British dominions have agreed that hereafter no

bonus of that kind shall be paid, and I think myself that the time has come when it should be dropped. This vote also covers expenses in connection with the inspection of British immigrant children. Then we have certain grants payable to societies interested in British immigration and immigrant children. We have also our expenses at our seaport and inland agencies. At Montreal, for instance, Winnipeg and Vancouver, we have a building, offices and staff to maintain. This item covers the general expenses in connection with the maintenance of those offices. This vote also includes our expenditure in connection with deportation, which has been on the increase. Last year the amount expended was in the neighbourhood of about $34,000. As I explained to the House earlier in the session, we have a fairly large staff at the ports of entry along the border and there are certain general and contingent expenses in connection with their work that comes out of this vote. There are also a large number of expenses in Great Britain and the United States, such as rental, fuel, light, postage, telegraphs, travelling expenses, stationery, and so forth, which are covered by this vote.
That will give the committee a general idea of the class of expenditure under this vote. So far as the increase is concerned, we found it almost impossible to carry on our services last year on the vote we had asked for of $770,000. That is accounted for very largely, in the first place by the increased railway fares in England, and in the United States as well as in Canada; -our men do a considerable amount of travelling. There has been a large increase in travelling expenses, apart from railway fares. The cost of living has increased, and if our men are to do any travelling, their expenses in that direction must necessarily be greater than before. There is also a general increase in supplies of materials of every kind. For example, the printing of our forms and literature, and everything of that kind, costs a great deal more than formerly, and advertising has increased considerably. So that, if we are to maintain the service at all, it Is necessary to provide the increase here set out. I have carefully gone over all the items in detail with the officers, and unless this amount is voted, we shall have to curtail our services to a great extent.


John Howard Sinclair: The
minister has already been voted $82,000 for Contingencies. It seems to me that the

items he now describes are included in contingencies.


James Alexander Calder: That is for the Department of Health, which is an altogether distinct department from Immigration.


Rodolphe Lemieux: Although there is no
immigration to be expected immediately from Belgium, in the years to come there will be an excellent class of immigrants, especially farmers and gardeners, whom we may secure from that country. Gardeners are very much needed around the large cities like Winnipeg, Toronto, Montreal, and Ottawa. Wherever you find a Belgian, you find an excellent gardener, and although the Belgian Government is averse just now to letting any nationals leave that country, yet we have in that country many openings in the matter of immigration. From the trade point of view, also, I think we ought to have some sort of representation there. When I went to Brussels the last time, I found that the office maintained by the province of Quebec in that place was practically the office of Canada. The agent there is very alert and bright. Mr. Langlois, formerly a journalist of note in this country, of the province of Quebec, has really made a name for Canada in Belgium. He has popularized this country over there. I understand that if he were allowed to add to his sign the name of Canada, in addition to that of the Government of Quebec, this country would be greatly advantaged. I have personal knowledge that ministers of the Crown in Brussels have called on Mr. Langlois and have also sent for him, and in divers ways he has helped the Canadian Government in the work of preventing people from bringing the good name of our country into danger through more or less hazardous propositions. Indeed, he is an excellent go-between as regards the Canadian and Belgian Governments. Would not my hon. friend, under those circumstances, give him some status? I understand that he does not expect any stipend from the Government; he is quite willing to give his services freely, provided he is given a status as Canadian representative in Brussels.


James Alexander Calder: At the moment, I can see no objection at all to that. I have met Mr. Langlois, and I know that he is a very efficient and capable official who has an excellent standing in Belgium. I am quite sure he would be able to give very valuable. service to this country, as suggested by my hon. friend,


Rodolphe Lemieux: He publishes the only Canadian journal on that continent, a very interesting journal called " Canada Belgique," printed in French, which is the most familiar language on the continent. Since the war, I know that big firms in this country, in Toronto, Winnipeg and Montreal, have utilized his services in placing very large orders. Any hon. member who refers to the big firm in the West of Pat Burns, will find out what service Mr. Langlois has been to this country. He has advertised Canada while discharging his duties as representative for the province of Quebec. His paper is typically Canadian and speaks for Canada, and altogether he is a deserving official.


James Alexander Calder: I shall be glad to take the matter up. At present I cannot see any objection to, but rather many reasons for, an arrangement of this kind. I feel certain he could be of real service.


Daniel Duncan McKenzie: What is the $8,000 for?


James Alexander Calder: This is for salaries of officials in the United States. There are other items for salaries in Canada and in Europe.


[Stage Direction]
Item agreed to.
Exhibitions, $90,000.
Rodolphe Lemieux: Are these the usual exhibitions?


James Alexander Calder: Yes.


Rodolphe Lemieux: Who is in charge of these exhibitions?


James Alexander Calder: The Minister of Agriculture (Mr. Tolmie).


Daniel Duncan McKenzie: Is not that a matter for the Agricultural Department?


James Alexander Calder: All exhibition work was transferred from the Agricultural Department to the Department of Immigration two or three years ago.


John Howard Sinclair: What
is the reason for the increase of $10,000?


James Alexander Calder: It is due to cost of
material, travelling expenses, freight, express, etc., which have all gone up. As a matter of fact, if we are to carry on the work with any degree of efficiency, we shall require all that we ask for. We might as well drop the work if we do not do it properly. This vote has been cut to the bone. Personally I would prefer to give it up altogether unless we are going to make something like a reasonable showing in carrying on this work.


Rodolphe Lemieux: I would be very sorry
to see the exhibits-and I have special reference to the one in the Immigration Office at Charing Cross, London-given up. You can always see a large crowd of people admiring the fruits and the various displays that are exhibited there. I think that exhibit is attractive and helpful.


Arthur Bliss Copp: What kind of exhibits are
shown?


Rodolphe Lemieux: Canadian exhibits.


James Alexander Calder: Many agricultural products and occasionally a few minerals, including coal. The exhibits are very seldom manufactured articles, and are mostly products illustrating our natural resources. Usually ,they are small exhibits, window displays, that we have at our offices in the United States and in Great Britain. We have an exhibit, to which the hon. member for Maisonneuve has referred, at Charing Cross, London, and the articles are changed from time to time.


Arthur Bliss Copp: But the exhibits are continuous?


James Alexander Calder: Yes. We have arranged now so that in future there will be probably three or four changes during the year. It is really amazing the number of persons who take a very great interest in these exhibits and how they draw people to our offices. Personally I think this is a very good work. For the present we cannot expect to receive many immigrants, or say in the course of this year, but the time is coming when we will. We are doing educational work now which will have its effect in the years to come.


Mr. MACLEAN (York):: Will the
minister say what plan he has in view for co-operation between our national railways, and the Department of Immigration in order to bring immigrants to this country who will be desirable settlers? I believe the national railways will be a larger means for assisting in the location of immigrants in our new country in the West than heretofore has been the case. The minister ought therefore to frame, in conjunction with the railway management, a new and broader policy for the location of new settlers upon the land in the West. The Canadian Pacific railway has been doing that successfully in the past, and there is no reason why a still more progressive programme in that direction should not be inaugurated between the Immigration Department and the management of our national railways. What we want

in this country is to divide the per capita cost of carrying the expenses and the more people we bring in the sooner we will be able to overcome the high taxation that now prevails-the carrying of the cost will be shared by a greater number of people. In view of the fact that we now have a national system of railways, and that there is a lot of unsettled land in the West which is served by those railways, I am quite confident that a much broader system of co-operation between the two bodies that I have referred to would result in many desirable immigrants coming to this country and settling on those lands.


James Alexander Calder: I may say just a word
or two in reply to the hon. gentleman. We have had a number of conferences during the course of the past year or two with the railway companies, all the railway companies, in fact, in reference to that problem, and we have been endeavouring to arrange all our work so that there shall be as little overlapping as possible and better co-operation. In addition to that, during the course of the last few weeks, largely on account of the discussions that have taken place in the House, I have arranged for a conference to be held sorm time during the month of June. I am hoping that at that conference representatives of both the Ontario Government and the Quebec Government will be present with a view to seeing whether or not practical steps can be taken in connection with tve colonization of the hinterland of both Ontario and Quebec, and it is quite likely that we will have present representatives of the railway companies.


William Findlay Maclean: How I would like to ask the minister another question that came up in the special committee during the consideration of the position of the national railways. It was disclosed there that in addition to the railways we now have a system of telegraphs, and the evidence came out that private companies get the preference in the matter of Government business. I would like to ask the Minister of Immigration, who is a great friend of the national railways whether, in his department, he gives as much Government business as he possibly can to the national railway and telegraph line? I am going to ask the same question of other ministers in this House, and I hope the question will reach the ears of the Prime Minister (Mr. Meighen) himself. I see the Minister of Public Work (Mr. McCurdy) here, and I hoDe he will take note of the matter. There
nvtr. W. F. Maclean.!
is urgent necessity that all the ministers should give as much of the departmental business to the national railways and telegraphs, as possible. The same applies to the national express business. I hope that next year when ministers are putting their Estimates through, they will be able to tell us they have done their best for the national railways, and telegraphs, and express service in this respect. I am making no reflections on the Canadian Pacific or any other railway company; but it is time, after what we heard in the committee, that the attention of the ministers was publicly drawn to the apparent discrimination displayed in some of the departments in favour of private companies and against the national railways and telegraphs, and to that extent not showing the co-ordination in the departments that there ought to be in this particular matter of expenditure.


John Ewen Sinclair: Do I understand that this item provides only for permanent exhibits in immigration offices outside of Canada or does it include exhibits of a more temporary character at fairs and the like?


James Alexander Calder: It applies very largely to the latter. We have practically no permanent exhibits. An exhibition of the class covered by this item is from its very nature not permanent. The material that is used will only last probably six or eight months, or a year or a year and a half at the outside, and then the exhibit must be replenished. So we have nothing in the nature of permanent exhibits of that class. We have these window exhibits in our offices in Great Britain and in the United States, and they are changed from time to time, because an exhibit that stands in a window for three, four or five months, particularly at a point like Charing Cross in London where people by the thousands are passing every day, needs to be changed in order to maintain its attractiveness. In addition to that, I may say that the major portion of this expenditure is in connection with state or county fair exhibits in the United States, I may say that the major portion of this expenditure is in connection with state or county fair exhibits in the United States, and with what they call "the one-day farmer shows" in Great Britain, where one of our agents will go out to a country point and will have a small exhibit and put up his signs for the purpose of attracting a crowd. Now the exhibit that is used there is very small but our men contend

there are hundreds of these one-day shows during the course of the year in Great Britain. It can therefore be understood that in order to carry on this work some thousands of dollars are needed to provide the necessary material.


John Ewen Sinclair: Is there any amount incorporated in this vote for the exhibition of the poultry products of Canada at the Congress that is to be held at the Hague in September of this year?


James Alexander Calder: That would be an agricultural exhibit, and the vote for it would not find a place here.


John Ewen Sinclair: What is the difference between the two class of exhibits then?


James Alexander Calder: If any exhibition of that kind has been arranged for I ha,ve not heard of it at all. Certainly this item does not cover any exhibition of that class.


John Ewen Sinclair: I am informed that the exhibition alluded to is an international affair and that all countries will be represented at it. I understand also, that there is to be an exhibition of poultry products as well as a conference of international instructors on poultry.


James Alexander Calder: Well, I know nothing
about it.


John Ewen Sinclair: Has the
Government received no intimation that this exhibition will be held?


James Alexander Calder: It never came to me. I have not heard anything about it myself.


[Stage Direction]
Item agreed to.
Chinese Immigration-salaries and contingencies, $32,000.
Daniel Duncan McKenzie: What is the present
situation in regard to Chinese immigration?


James Alexander Calder: At present we have an
exclusion order in operation in British Columbia against the entrance of both skilled and unskilled labour at seaports and at one or two railway ports very close to the sea. That order has been in operation for a year, due to the fact that labour conditions in that province have been more accentuated than probably in any other part of the Dominion, and is effective in excluding persons of the Chinese race belonging to those classes, but it would not apply to merchants, students and travellers. As I explained the other day in dealing with the Bill to amend the Chinese Immigration Act, during the year many Chinese entered
Canada under the guise of students and merchants. That now has all been stopped as a result of the steps that have been taken.


Daniel Duncan McKenzie: We have a few very
good Chinamen in my part of the country, and some of them come to me and ask when relatives of theirs, young people like themselves, can come to Canada. Under this order they cannot come at all?


James Alexander Calder: If they came in at the
Atlantic ports they could enter.


Daniel Duncan McKenzie: This exclusion applies only to British Columbia?


James Alexander Calder: That is all.


Mr. CHISHOLM:: Is it correct to say
that Chinese can enter Canada on the east but not on the west?


James Alexander Calder: Yes.


Alexander William Chisholm: What will prevent
them coming in by the eastern ports and going to the West?


James Alexander Calder: Inconvenience and cost
more than anything else.


Alexander William Chisholm: That is an extraordinary regulation.


James Alexander Calder: If they came in that way in large numbers we might find it necessary to put an exclusion order in force there.


Daniel Duncan McKenzie: At our eastern ports
there is no exclusion order in effect at all?


James Alexander Calder: None.


[Stage Direction]
Item agreed to.
Supplementary Estimates-Department of Immigration and Colonization-contingencies- further amount required, $10,000.
Daniel Duncan McKenzie: I do not know why
the department of my hon. friend has spent $10,000 without the authority of Parliament. I think it had better stand over until to-night.
At Six o'clock the committee took recess.
After Recess
The committee resumed at Eight o'clock.
Railways and Canals-loan not exceeding $S9,687,633.39 repayable on demand with interest at the rate of six per cent per annum, payable half-yearly, to be used (where amounts available from net operating earnings may be insufficient) to meet expenditures made or indebtedness incurred at any time by or on behalf of the Grand Trunk Railway Company of Canada or any company comprised in the Grand Trunk Railway System (excluding herefrom, however, expenditures or indebtedness incurred

by or on behalf of the Grand Trunk Pacific Railway Company except as specifically provided in item (f) hereof) on any of the following accounts:-(a) operating deficits, (b) acquisition of property, materials and supplies,
(c)	interest on notes, securities or obligations,
(d)	the principal and interest of maturing or matured loans, secured or unsecured, (e) construction and betterments, (f) guarantees by the said Grand Trunk Railway Company of securities of the Grand Trunk Pacific Railway Company, such loan to be secured by mortgage or mortgages upon the undertaking of the Grand Trunk Railway Company of Canada on such terms and conditions as the Governor in Council may approve. The loan or assistance herein authorized may bp made in cash or by way of guarantee, or partly in cash and partly by guarantee, in the discretion of the Governor in Council. Any guarantee from time to time given under the authority herein may be of the principal and interest of the notes, obligations or securities of the Grand Trunk Railway Company of Canada, and may be signed bv the Minister of Finance, on behalf of His Majesty, in such form and on such terms and conditions as the Governor in Council may approve, $89,687,633.39.


Lucien Cannon: These amounts are referred to as loans. The Government have taken over these railways; how can we lend money to ourselves?


John Flaws Reid: The Canadian Northern Railway system is under charter as a private corporation. Of course, this would be a loan to the Canadian National Railways when the Act dealing with the Canadian National Railways comes into force.


Lucien Cannon: Does the minister contend that we are lending this money to the old companies? Those old companies have passed out of existence and the railways are now under one management.


John Flaws Reid: No; the companies are always kept alive. There will be subsidiary companies of the Canadian National. For instance, there are a number of subsidiary companies in the Canadian Northern system; they are all kept alive, but the stock is held by the parent company.


Lucien Cannon: Have all these companies dilferent directorates, or do they come under the directorate of the Canadian National Railway system?


John Flaws Reid: Each has its own directorate, but it is usually the same as that of the parent company. For instance, the directors of the Canadian National railways would be the directors of the Canadian Northern.


Lucien Cannon: All the directors are the same for all the companies, and they are the directors who were appointed by the Government the year before last?
TMr. McKenzie. 1


John Flaws Reid: The directors who were appointed by the Government a couple of years ago for the Canadian Northern are still directors of the Canadian Northern, but when we bring the Act respecting the Canadian National Railways into force we shall appoint directors of the Canadian National. As a rule the directors of the Canadian National will be also directors of the subsidiary companies, though it does not necessarily follow that they would be the same. In fact it might not be possible to have them the same in the case of some of the subsidiary companies. You might require American citizens on the directorates of some of the companies in the United States in order to keep them alive.


Lucien Cannon: What we are asked now is to lend $89,000,000 to the Canadian Northern and a few other companies. How can we lend money to ourselves? It is the same as if I were to say that I could lend money to myself. These companies are national property.


John Flaws Reid: We own the stock of the Grand Trunk Railway Company, and for the money we advance to that system for further improvements or on capital account we take security on the system itself.


Lucien Cannon: But if we own the stock we own the company.


John Flaws Reid: Yes.


Lucien Cannon: As I understand it, in these companies there is debenture stock guaranteed by immovable property that the company happens to own, and there is common stock. In most of these railway companies the common stock is not worth anything, so we take over not the common stock but the debentures. Now, can we lend an additional $89,000,000 to these companies? What guarantee have we for its reimbursement?


John Flaws Reid: Well, if $50,000,000 is put into the company, of course it increases its value to that extent. For the money advanced the Government must take security on the railroad.


Lucien Cannon: But the minister is not answering my question. What is our security for the $89,000,000, and how is it made up?


John Flaws Reid: The security will be by way of mortgage on the road. Of course, it will rank after the other securities that are ahead of it.


Lucien Cannon: How can a man be at the same time the owner of a property and the mortgagee creditor? That is a legal question that I would like the minister to answer.


John Flaws Reid: I would not attempt to answer legal questions; the hon. member himself, being a prominent lawyer, should understand that without asking me. But if he owned all the shares of any private company, is there any reason why he could not lend that company money and take security by way of mortgage on the property of the company?


Lucien Cannon: Any one who did that would he securing himself out of his own property.


John Flaws Reid: Well, if the property is increased in value to the extent of the advance-


Lucien Cannon: That is his profit.


John Flaws Reid: No, it is money
advanced for the purpose of extension of lines or to pay liabilities against the company.


Lucien Cannon: What is the period of that loan? When are we to be reimbursed?


John Flaws Reid: It will be on demand.


Lucien Cannon: That is very vague. Does the minister mean that a month from now or a year from now the Government may ask the company to reimburse the amount loaned?


John Flaws Reid: It will be a demand mortgage or loan. If it is in the interest of the Government or of the country to demand it in a month or in a year, or whatever time it may be, they will call in the loan.


Lucien Cannon: What rank will this
mortgage hold? Will it be a first or second or third mortgage?


John Flaws Reid: All the securities that are against the road up to date-and they have been given to the House-of course rank first. This will be the last.


Lucien Cannon: Therefore, as regards
priority, we are going to be the very last, and seeing that these companies were taken over by the Government because they could not meet their liabilities, our mortgages are worth nothing. What is the use of saying that this is a loan?


John Flaws Reid: The arbitrators will decide whether they are worth nothing or not. If the arbitrators in regard to the
Grand Trunk decide that these are worth nothing, they will not ask the Government to pay anything; but if they decide that the Government shall pay a certain amount annually, or a certain amount for the equity the Government have, the liabilities that are against the road up to that time will be good.


Lucien Cannon: Why should the Government not take this attitude which, I should think, is far more reasonable? Why cannot the Government deduct from whatever award is given by the arbitrators the amount of this loan? Then we would have a chance of getting our money back; otherwise we have not. We are lending now $89,000,000 to this railway and we have absolutely no security. The minister stated a minute ago that our mortgage is the very last one. These companies were taken over because they could not pay their creditors, and if they could not pay theif creditors before this loan was made, how can we get paid ourselves? Why should the Government not make with the company an arrangement that there shall be deducted from whatever the arbitrators award the company the amount of the loan? If the arbitrators decide that we owe the company for the whole of the prope-t.*, $100,000,000, we will pay them only $11,000,000, because we are lending them $89,000,000. Has the minister any intention of putting up that proposition to the company?


John Flaws Reid: The arbitrators will decide the award taking into consideration the $89,000,000 that must be advanced to the Grand Trunk Railway system.


Lucien Cannon: Does the minister declare under his authority that when the award takes place, these amounts which are being voted now will be taken into consideration and deducted from the amount? Does the minister declare that in his official capacity and under his authority as a minister of the Crown?


John Flaws Reid: The award is given as of the date that we took the road over.


Lucien Cannon: That is not want I am asking the minister. The minister, a moment ago, stated that when the arbitrator give their award, the amount which we are voting now will be taken into consideration. I am asking him to repeat that statement as a minister of the Crown, and co tell the committee and to the country that when the final award is given, these amounts which we are voting now will be

considered and, therefore, deducted from whatever sum the Government will be called upon to pay to the shareholders of the Grand Trunk.


John Flaws Reid: The arbitrators will decide the award with reference to the condition of the company on the day that we took it over. If any of the amounts are in this statement of $89,000,000, they will be considered. If not, then, of course, they are liabilities that have been incurred since and' they will not be taken into consideration.


Lucien Cannon: When was the company taken over by the Government?


John Flaws Reid: In February of this year.


Lucien Cannon: Therefore, this money
being voted in May will not be considered.


John Flaws Reid: I do not know that I can make the matter any plainer. I say that the arbitrators will decide the amount that we have to pay as of February, the date that we took the railway over. Any of the amounts that we must now assume of the $89,000,000 that were due on or prior to that time will be considered; any liabilities since will, of course, not be taken into account in the award.


Lucien Cannon: The minister understands exactly what I mean, and it is very easy for him to give an answer. I may state right now that I shall have the answer no matter how long it takes to get it. The minister has his officials beside him; he has the Minister of Marine and Fisheries (Mr. Ballantyne) sitting at his helm, a very able minister. I am going to have an answer, and the minister owes that answer to the country. The minister a moment ago stated from his seat that this amount of $89,000,000 was to be considered by the arbitrators. He stated that most expressly, leaving no doubt in the minds of whoever heard the statement. Now, the minister is saying that the arbitrators will consider only the liabilities or assets of the company as they existed between the Government and the company itself on February 1 of this year. We are voting on May 30, $89,000,000. Will this $89,000,000 be considered by the arbitrators? Have we a ghost of a chance of getting our money back? That is what I want to know and that is what the people of Canada are entitled to know. The minister is in a position to give the information, and if he does 
not want to tell the committee, that is probably for the reason that he would as well the committee did not know.


John Flaws Reid: Anything I know, I am prepared to tell the committee, and the insinuation was a mean one for the hon. member to make. I am prepared to give any and every answer I can, no matter what the hon. member states. I want to repeat again: Any items in the Estimates that were due or owing when this Government took over the Grand Trunk, will be considered by the arbitrators in making their award. Any item of expenditure since that time, will, of course, not be considered by the arbitrators.


Lucien Cannon: Will the minister state to the committee now, out of this sum of $89,000,000 what are the items which will be considered and what are those which will not be considered? What ones were owing on February 1, 1921? What do they amount to?


John Flaws Reid: I will give the hon.
member the items that go to make up the $89,000,000.


Lucien Cannon: That is not what I am
asking for. I do not want the minister to be under any wrong impression. I want the minister to state openly and frankly to the committee what amounts out of the $89,000,000 were expended prior to February 1, 1921, and, therefore, will be considered by the arbitrators when they make their award. I do not want the items comprising the $89,000,000.


John Flaws Reid: The Government took
over the railway about February, 1920, a year ago last February. These are the items that the arbitrators would consider because they were prior to that time:
Current and overdue working
.liabilities, net	$14,589,433	09Pay rolls	
4,773,726	25Sinking fund	
500,000	00Retirement of capital obligations	
24,765,713	31Bank overdrafts	
5,404,520	03Those are the items that my deputy has marked as being due prior to the time we took over the railway.	.


Thomas Vien: Were the items my hon.
friend has just read the only ones due at the time of the taking over of the railway?


John Flaws Reid: Those are the only ones my deputy has marked as being due at that time by the Grand Trunk Railway. The other items would be since then.


Thomas Vien: Then those items are the
only ones which the arbitrators will take into account when giving their award?


John Flaws Reid: Yes.


Thomas Vien: Would the minister give us a detailed statement of the various items which are covered by the $89,000,000, as shown in the Estimates under the heads (a) (b) (c) (d), and so on? I would like the amounts under each of those heads.


John Flaws Reid: What I would have to do would be this: Give the other items that go to make up the total.


Thomas Vien: It is not necessary, because I can easily deduct from the $89,000,000 the amount the minister has given. The minister can go on with his statement.


John Flaws Reid: I have read five items. The items since then are:
Rentals	$ 1,292,093 45
Interest	 20,304,328	74
Operating deficits on subsidiary
lines	
3,029,658	75Capital expenditure	
12,150,073	00Cash requirements	of	GrandTrunk in the United	States.	4,235,370	55


Thomas Vien: What are those requirements? Are they for capital expenditure or to cover operating deficits?


John Flaws Reid: Part of it is capital. I will go on with the statement:
Discount on "F" equipment trust #
notes to be paid	 $1,002,000 00
Items paid out of special fund,
Department of Railways and Canals, since the 1st of the year, or to be paid, not provided in above	
1,092,437	09Additions to fuel	stocks.. ..	2,500,000	00Locomotives	
3,917,000	00
Those items I have mentioned, and the five I have already given, make a total of $99,656,354.26. Towards meeting that amount the Grand Trunk have the following:
Cash available December 31,
1920	$ 8,313,793 12
Overdue traffic balances and accounts collectable	 3,331,628	47
Due on account from the United
States Government	 5,000,000	00
Net return from operations, less
taxes	
12,892,679	00Other income	
2,501,700	28Total	$32,039,800 87
If you deduct that from the $99,656,354.26*, it leaves a total of $67,616,553.39, that must be advanced to the Grand Trunk Railway. Then we add to that, Grand Trunk Pacific guarantees amounting to
$22,071,080, making a total of $89,687,633.39.
That is the statement that was furnished the department signed by Mr. Frank Scott, first vice-president and financial comptroller of the Grand Trunk Railway.


Mr. MURPHY:: Will the minister explain what the $5,000,000 is for that he mentioned as being due by the United States Government to the Grand Trunk Railway?


John Flaws Reid: The United States
Government agreed to pay the different railways it took over a certain amount to meet interest and guarantees. That $5,000,000 is owing by the United States Government to the Grand Trunk Railway, and Mr. Kelley told me there was no question but that when the vote went through at Washington all the railways would be paid the amounts that had been decided on by the United States Government for each railway.


Charles Murphy: Is that one of the results of the United States Government taking over the railroads?
Hon. Mr. REID The United States Government lost a good many hundred thousand dollars, or rather, the railways did, and the Government agreed to make these amounts up and also to pay interest and other liablilities. The United States Government is liable for this $5,000,000 as regards the Grand Trunk.


Charles Murphy: Is that the debt that
accrued during the time that the United States Government had charge of the road?


John Flaws Reid: That was the time. I have given the figures showing that $89,687,633.39 must be advanced to the Grand Trunk and the Grand Trunk Pacific in order to meet the liabilities I have mentioned.


Lucien Cannon: How much did we
advance last year?


John Flaws Reid: 


Lucien Cannon: Does that include all
our railways?


John Flaws Reid: If I remember rightly, $50,000,000 was advanced to the Canadian Northern System, and I think that included the Transcontinental and the Intercolonial. Then $25,000,000 was advanced to the Grand Trunk, making a total of $75,000,00 advanced last year.


Lucien Cannon: What is the total owed by the railways to the Government to date?


John Flaws Reid: My deputy will look up that information. I suppose my hon. friend means the amount guaranteed by the Government, which would be the same thing.


Lucien Cannon: How much has been advanced by the Government to the railways, and how much has been guaranteed by the Government?


John Flaws Reid: It is all in the Public Accounts; I will get the accounts.


Arthur Bliss Copp: Is the $5,000,000, which the minister speaks of as being due to us by the United States, already settled, or is it only a claim?


John Flaws Reid: The Grand Trunk
claimed very much more, but Mr. Kelley says that we are safe in including that amount in the statement. When he handed us the statement signed by Mr. Scott he assured us that we could rely on that amount.


Charles Murphy: In the meantime, it is just an Estimate?*


John Flaws Reid: Yes.


Lucien Cannon: Some time ago the minister gave us a statement showing that $47,000,000 was considered by the arbitrators as covering expenses incurred previous to February 1, 1920. What was done with the $25,000,000 voted last year?


John Flaws Reid: It was used for the general purposes of the company.


Lucien Cannon: That will not satisfy me at all.


John Flaws Reid: Well, I will make a memorandum of the question, and get the information at the next meeting.


Lucien Cannon: I want it now; the minister ought to know.


John Flaws Reid: If I had the details I should be glad to give my hon. friend the information now. However, I will get it for him; there is no doubt about that.


Lucien Cannon: I want the minister to understand that there is to be no mistake about that. I want to have the information, and I want it now. We understand that Parliament will prorogue pretty soon, and the minister has a happy knack of deferring things until "next week," and "the next meeting," and so forth. I want the 
information at this present sitting of the committee.


John Flaws Reid: I have not got it here, but my deputy will get it later in the evening.


Lucien Cannon: I do not understand how the minister can come before this committee, ask the people's representatives to vote $89,000,000 and not be in a position to give such elementary information as I ask for now. What was done with that $25,000,000 last year?


John Flaws Reid: I have given the
details of the $89,000,000.


Lucien Cannon: It ought to be harder
for the minister to give information as to what might be spent next year, or during the current year, than to tell me what was actually spent last year. I trust that the minister is not allowing these millions of dollars to be spent without any knowledge as to what disposition is made of all this money.


John Flaws Reid: I said I would give
the information later on; I cannot do more than that.


Lucien Cannon: How much of the $25,-
000,000, voted last year, was taken towards the payment of this $47,000,000 which the minister has mentioned?


John Flaws Reid: None of it. This is
all required this year, in addition to the $25,000,000 voted last year.


Lucien Cannon: So that last year we
voted $25,000,000 to cover a deficit, and in addition to that there was a deficit of $47,000,000?


John Flaws Reid: There was no defied,
of that kind.


Lucien Cannon: It is obvious there was
a deficit of $72,000,000 last year, and the minister told us at that time that it was only $25,000,000. This is a most extraordinary state of things. I do not know whether the Government supporters will be satisfied with the situation, but we, on this side, certainly are not; and so far as the country is concerned, my hon. friend, the Minister of Marine (Mr. Ballantyne), who is present, knows the feeling of Quebec since last Saturday. We have an actual deficit of $72,000,000, and last year the minister told us it was $25,000,000. That gives us an idea of what the true situation may be this year.


John Flaws Reid: We did not have a
deficit of $72,000,000. The amount ad-

vanced to the Grand Trunk Railway was not to meet a deficit last year.


Lucien Cannon: What was it for?


John Flaws Reid: It was to take care of liabilities that were falling due; it was not for a deficit at all.


Lucien Cannon: When a man cannot
meet his liabilities, he has a deficit.


John Flaws Reid: The Grand Trunk system alone earned during the past year within $4,000,000 or $5,000,000 of the amount necessary to pay the interest on the debenture stock.


Lucien Cannon: What I want to know
is very easily got at. Last year we voted $25,000,000. What did we do with that? That is all I want to know, and it is not a hard question to answer.


John Flaws Reid: I must repeat what I
said a few moments ago. My deputy has gone to get the information; he says he thinks he can get it in a few minutes. I cannot do more than that, and I shall have to ask the committee to let the question stand for a short while until the deputy minister returns.


Lucien Cannon: I do not want to be discourteous to the minister, but I think it :s a most extraordinary spectacle for a minister of the Crown to ask the committee to vote $89,000,000, and not to be in a position to tell us what was done with $25,000,000 which was voted last year. If the minister cannot give us that information, he should not be entrusted with the expenditure of $89,000,000 this year; there should be another minister.


Thomas Vien: The minister will allow me
to inform him that the Estimates contradict him to a great extent. Item 126 says that the $89,000,000 is required for the following purposes:
(a)	operating deficits; (b) acquisition of property, materials and supplies; (c) interest oh notes, securities or obligations; (d) the principal and interest of maturing or matured loans, secured or unsecured; (e) construction and betterments; (f) guarantees by the sai.d Grand Trunk Railway Company, etc.
last year for the very same purposes for which the item of $89,000,000 is asked this year. My hon. friend from Dorchester (Mr. Cannon) was right when he said to the minister: "You told us that we have to vote $63,000,000 to cover deficits prior to our taking possession of the railway"- that is prior to the first of February, 1920. Therefore last year when we voted $25,000,000 it was to cover the very same purposes for the very same period, since the minister has just told us that the $63,000,000, which are to be considered by the arbitrators, are for expenditures prior to the first of February, 1920. I would like the minister to explain the contradiction between the two statements.


John Flaws Reid: I think the wording of the Estimate last year was practically the same as the wording of this year's Estimate. The hon. member has read out the items that this money would be used for. The $25,000,000 were expended under some of the items he has just read.


Lucien Cannon: Has the minister the details?


John Flaws Reid: Well, as I stated, the details were given last year, but my deputy tells me he will have them here in a very few minutes.


Thomas Vien: Will the minister give us the details as to the $89,000,000, pending the receipt of the information for which he is waiting?


John Flaws Reid: The statement I gave a few minutes ago sets forth the details of how this $89,000,000 is to be expended during the present year.


Thomas Vien: 

[Stage Direction]
*which is adopted in the Estimates themselves.
John Flaws Reid: I see what the hon. member is asking for.


Thomas Vien: The minister understands at last, does he?


John Flaws Reid: We have not the information worked out in that way. I have the details as to how the money is to be expended but to classify them under each heading would need the presence here of the Grand Trunk officials themselves. I think the details that I have read are perfectly plain and explain the whole matter, but I cannot at present take the different' items, separate them and put them under the headings as the hon. gentleman asks.


Thomas Vien: That is a great retreat from the boast the minister made a few minutes ago that he was ready to give the information as to the $89,000,000. It is only fair and reasonable that we should ask the minister to tell us how much of the $89,000,000, for example, is going to cover the operating deficits. I would like the minister to tell me what was the operating deficit of the railway for last year. He has just boasted that he could give the committee any information as to the $89,000,000. Very well, let him begin with that item.


John Flaws Reid: In the statement which I presented on the railway situation earlier in the session I showed the deficits of each railway. They are all in that statement. Now as to how the $89,000,000 is to be expended, let me just give some of the details again.


Thomas Vien: No, I want the minister to understand we do not want any sidetracking.


John Flaws Reid: This is not sidetracking.


Thomas Vien: We do not want any sidetracking; we want to stick to the main line, and it is this: of the $89,000,000 how much goes to cover operating deficits? Will the minister please give us that information?


John Flaws Reid: Well, $7,500,000 of the $89,000,000 covers the operating deficits of the Grand Trunk Railway. Then there is the Grand Trunk Pacific.


Thomas Vien: How much?


Mr. ARCHAMBAULT:: Does that cover the lines in the United States?


John Flaws Reid: Then in the $89,000,-
000 there are guarantees for the Grand Trunk Pacific which we must pay to the amount of $22,071,080. That amount comes off the $89,000,000.


Lucien Cannon: That is for the Grand
Trunk Pacific?


John Flaws Reid: Yes.


Thomas Vien: The minister tells us that
$7,500,000 out of the $89,000,000 will go to cover the operating deficits of the Grand Trunk railway proper?


John Flaws Reid: That is right.


Thomas Vien: Now we want to know what portion of the $22,000,000 in connection with the Grand Trunk Pacific goes to cover the operating deficits on that line?


John Flaws Reid: Of these guarantees?
Nothing. These are guarantees of the Grand Trunk Pacific that we must meet this year.


Thomas Vien: I am not talking of guarantees at all, I am talking of operating deficits.


John Flaws Reid: Oh!


Thomas Vien: The minister says "Oh".
Is he finding out what I want to know. I have been talking about it for half an hour. I desire to know, I will repeat my question in order to make it plain and I will repeat it in French if I cannot make it clear to the minister in English. I would like to know how much of the $89,000,000 will go to cover "operating deficits"? The minister told me that $7,500,000 would cover the operating deficits of the Grand Trunk railway, but to that had to be added a certain portion of the $22,000,000 to cover the operating deficit * of the Grand Trunk Pacific?


John Flaws Reid: No. I understand the
hon. gentleman wants to know what amount of the $89,000,000 is for operating deficits? Well, $7,500,000.


Thomas Vien: That is all?


Lucien Cannon: I notice that the deputy minister is back. Has he with him the statement as to how the $25,000,000 voted last year was spent?


John Flaws Reid: No. One of his
officials is looking it up and will send the information in a few minutes.


Lucien Cannon: Another question I put
to the minister, and to which I received no answer, is this:	What is the total amount

of the moneys lent by this Government to the railways, and what is the total value of the guarantees given by the Government to them?


John Flaws Reid: Here is the investment in and assistance to the Grand Trunk:
1.	Dominion investments not allocated as a charge against the railway company or contingency imposing such charge not matured Grand Trunk Railway of Canada. $25,729,133 18 Grand Trunk Pacific railway. 42,069,148 30
. Total	$67,798,281 48


Lucien Cannon: When was that advanced or guaranteed?


John Flaws Reid: Over different periods. Then:
2.	Doan and accounts chargeable against the railway company due on demand:
Grand Trunk Railway of Canada	$64,730,988 89
Grand Trunk Railway of amt h bam
Grand Trunk Pacific Railway..	59,651,431 42
Grand Trunk Pacific branch
lines	 1,520,000 00
Total	$125,902,420 31
3.	Doans not matured,
Grand Trunk Railway Company of Canada	$15,000,000 00
Or a total in those three items of $208,700,701.79.
In addition to the above there are unmatured liabilities of the Dominion of Canada existing under guarantee obligations as follows:
1.	For the par value, maturing
in 1962, of the portion of the Grand Trunk Pacific first mortgage bonds, not held by the Dominion.. .. $35,040,000 00
2.	For the par value, maturing
in 1962, of the 4 per cent
sterling bonds	 8,440,848 00
3.	Interest on above bonds maturing annually as follows :
On the 3 per cent bonds.. ..	1,050,000 00
On the 4 per cent	 337,634 00


Lucien Cannon: Will the minister allow me? He is quoting interest. Has the capital been included in that statement? We do not want the interest; we have enough in the way of capital liability.


John Flaws Reid: 
Lucien Cannon: Making a grand total of how much?


John Flaws Reid: Some are guaranteed, some are loans and some are interest; they are not totalled.


Lucien Cannon: What is the total liability incurred by this country for the railway? That is what I want to know.


John Flaws Reid: I will have to add the figures up.


Thomas Vien: While the minister is preparing that statement I should like to continue. Out of the $89,000,000 how much will go for acquisition of property, materials and supplies mentioned in subparagraph (b) ?


John Flaws Reid: 


Thomas Vien: And (c) interest on loans, securities and obligations?


John Flaws Reid: There is $20,304,328.74 for interest and for rentals $1,292,093.45.


Thomas Vien: I do not follow the minister there. I was asking as to item (c), interest on loans, securities and obligations


John Flaws Reid: 


Thomas Vien: Then (d) as to principal and interest of maturing or matured loans secured and unsecured?


John Flaws Reid: $14,589,433.09 and
$24,765,713.31. Then there is another item: Grand Trunk Pacific guarantees, $22,071,080.


Thomas Vien: Is that all included in (d)?


John Flaws Reid: I think so.
4140


Thomas Vien: Then (e), construction and betterments?


John Flaws Reid: That is not separated. It is included in that capital expenditure of $12,050,072.


Thomas Vien: Included in (b), acquisition of property, materials and supplies?


John Flaws Reid: It is under the head of capital expenditure. Part might be in one and part might be in the other.


Thomas Vien: But the minister is asking something for construction and betterments. I should like to know how much he is going to spend under that heading.


John Flaws Reid: Does the hon. member want to find out how much is being expended on betterments and construction in connection with operation, and so on?


Thomas Vien: No. The minister is asking Parliament to vote him $89,000,000 on account of (a), (b), (c), (d), (e) and (f). Cuff of that $89,000,000 I want to know how much will go for construction and betterments.


John Flaws Reid: I quite understand
what the hon. member wants but I cannot give him the details from the statement I have here. I will have to get that further information from the Grand Trunk.


Lucien Cannon: Mr. Chairman, before
the minister came to the House to ask for $89,000,000 he must have had some statement prepared by somebody who knew. Evidently the minister does not know much. I should like the minister to put that statement before the committee so that we will know exactly where we are. The officials who look after these railways must have told the minister that they wanted $89,000,000, to be expended in such and such a way, and they must have submitted a detailed statement. If the minister has such a statement, why not lay it on the Table so that hon. members will have it?


John Flaws Reid: I have no objection to laying on the Table the statement which I have just read. But so far as the Grand Trunk is concerned, it is operated by the Board of Directors of the Grand Trunk Railway Company. I cannot go into the details, because I have not had anything to do with them. Mr. Kelley, the president, and Mr. Scott, the comptroller, came to Ottawa with the statement showing the requirements of the Grand Trunk, and that statement was given in detail.


Thomas Vien: Did they take it back with them or leave it with the minister?


John Flaws Reid: The statement was
submitted first to the Minister of Railways and the Minister of Finance. We asked for a further statement signed by the officials of the company showing exactly what the requirements were. We then sent our auditors and other officials of the department to Montreal to examine the details carefully and confirm the statement of the requirements.


Lucien Cannon: Did the auditors make a report?


John Flaws Reid: They made an investigation and confirmed this report.


Lucien Cannon: They must have done it in writing, when it is a question of $89,000,000. Therefore I would like the minister to put before the committee the memorandum prepared by the officials showing that their requirements were $89,000,000 for the coming year, and also the written report of his own auditor showing that statement to be correct.


John Flaws Reid: The statement is
signed by Mr. Scott himself, vice-president of the Grand Trunk Railway Company, I will put it on Hansard just as it is, if hon. members so desire.


Lucien Cannon: Put it on Hansard.


John Flaws Reid: The statement is as follows:
The Grand Trunk Railway System Estimated Cash Requirements, including Capital Expenditure, maturing obligation etc.
January 1, 1921 to March 31, 1922
Requirements
"A" Current and overdue working liabilities net	$14,589,433	09'B" Pay rolls	
4,773,726	25"C" Rentals	
1,292,093	45"D" Interest	
20,304,328	74"E" Operating deficits of Subsidiary Lines	
3,029,658	75"F" Sinking Fund	
500,000	00"G" Retirement of Capital obligations	
24,765,713	31"H" Bank overdrafts	
5,404,520	03"I" Capital expenditure	
12,150,073	00
"J" Cash requirements of Grand
Trunk in U.S	 4,235,370	55
"K" Discount on "F" Equipment Trust notes to be paid. 1,002,000	00
"L" Items paid out of Special Fund Dept, of Railways and Canals since first of year or to be paid not provided in
above	 1,192,437	09
"MM Additions to Fuel Stocks. 2,500,000	00
"MM" Locomotives	 3,917,000	00

Resources
"N" Cash available at December 31,
1920	$8,313,793	12"O" Overdue traffic balances and accounts collectible 3,331,628 47 "P" Due on account from U.S. Government	
5,000,000	00
"Q" Net return from operations
less taxes	12,892,679	00
"R" Other income.. 2,501,700	28
______________$32,039,800 87
Grand Trunk Cash requirements $67,616,553 39 "S" G. T. Pacific guarantees.. 22,071,080 00

Frank Scott,
Vice President.
Montreal, February 22, 1921.


Thomas Vien: Has the minister in hand
the written report of his own auditors showing that that statement is correct?


John Flaws Reid: No; there is no written report. The deputy minister and his officials took the matter up, examined into it, and reported that the statement was correct. Of course, it will be checked over as the money is paid out.


Lucien Cannon: I would like the minister to give us the total amount of liabilities incurred by Canada for the railways under the three items which he detailed a few minutes ago.


John Flaws Reid: There was the item of
$208,700,701.79. Then there is the total of principal on the other items of $68,480,818, and of interest $14,690,135.25. These are the three totals.


Lucien Cannon: Does the minister say
that these three items include everything?


John Flaws Reid: That is the information I have with reference to the Grand Trunk.


Lucien Cannon: I was asking the minister to tell us exactly the amount of liabilities incurred by the country as regards railways, not only the Grand Trunk.


John Flaws Reid: Grand Trunk, Grand Trunk Pacific and Grand Trunk branch lines.


Lucien Cannon: What about the Canadian Northern?


John Flaws Reid: That is another item. We were talking about the Grand Trunk, and that is why I gave my hon. friend the amounts for the Grand Trunk, Grand Trunk Pacific and Grand Trunk branch lines.


Lucien Cannon: Will the minister give the committee the total amount as regards the Canadian Northern?


John Flaws Reid: That is in the Public Accounts, but it is not in one total amount.


Lucien Cannon: I do not want the Public Accounts. We have here the Minister of Railways who ought to know, and right next to him is a representative on the board. What is the amount of our liabilities as regards the Canadian Northern railway?


John Flaws Reid: The deputy does not have it here.


Lucien Cannon: Let the deputy go and get it. I hope when he comes back he will have the necessary information. When I ask for anything, the reply is that the deputy minister has to go and get it.


Thomas Vien: How much of the $89,000,000 goes to construction and betterments?


John Flaws Reid: What the hon. gentleman wants is the details of how the $89,000,000 is to be expended. I cannot give that this evening. I shall have to get that from the Grand Trunk officials themselves.


Thomas Vien: I take the answer of the minister to mean this: "You of the House of Commons, elected to check public expenditures, will vote me $89,000,000; as to the details of how I am going to spend this $89,000,000, do not ask me; I do not know anything about the matter. The only thing you have to do is to vote and vote and vote; as to how I spend that money, is none of your business; you are too inquisitive altogether." The minister at page 35 of the Estimates says: "I want $89,000,000. Of this $89,000,000 I will make the following expenditures: To cover operating deficits, to acquire property, materials and supplies, to pay interest on notes, to cover construction and betterments, and for guarantees." It is only a fair and reasonable question to ask the minister how much of that money is going into construction and betterments. If the minister wishes me to put the question in other words, let him give a detailed account of how he is going to expend the money, and how much of it will go into construction and betterments. If the minister is not ready, the item should stand until such time as he is prepared to give the committee the necessary information. Some time ago, in answer to the hon. member for Dorchester, he said:	"As to this expenditure of
$25,000,000, I cannot give the information, but I am willing to give all possible infor-

mation as to the expenditure of the $89,000,000. "This is in respect of the $89,000,000. Let the minister give us the information. Surely, somewhere in his papers the minister must have some details or explanations from those people who came to him asking for $89,000,000. The hon. gentleman is a responsible minister of the Crown, he would not come to Parliament and ask $89,000,000 unless he was prepared to substantiate his request by the necessary details. It is the most elementary duty of the representatives of the people to check public expenditures, particularly in a period of monetary stringency such as we are now passing through. The minister should understand the situation in which the country is. I think the minister will be reasonable and will give us fair answers to fair questions. We do not wish to embarrass him, but we wish to get the proper information so as to be in a position to know if there is any possible way of checking the public expenditures and commitments which the country has taken in respect of railways. I for one would not be prepared to vote $89,000,000 undess the minister is prepared to tell us how he is going to spend it.


Lucien Cannon: The contention of the
hon. member for Lotbiniere (Mr. Vien) that full details and particulars should be given to the committee is absolutely sound, and not even the Minister of Railways will consider that it is unsound. When we first started discussing this item, I asked the minister to explain why we were lending money to a company of,which we were also owners. The legal proposition that I was putting up was: How could a Government be at one time a proprietor and also mortgagee creditor? But there is more than that. If we analyze the details as given in the Estimates, not only are we lending money to a company which we own, but we are lending money to buy part of the property. Are we going to give money to buy property which will be security for the loan? Is that the meaning of the item in the Estimates? The amount is so large that the minister ought to come before this committee with every bit of information required by the members, and the minister should give that information, not only when asked for, but even before he is requested to give it. There is an additional reason why we ought to be very careful over this matter. Last week, the Government of Canada appointed a new Grand Trunk board. The railway situation

being as serious as everybody knows it to be, the people of Canada expected that that board would be composed of men whose reputations would be above any suspicion or even criticism. The people of Canada were entitled to have on this new board men who would give every possible guarantee of trying to make a success of the management of the railways, but although the situation was very grave, and although the public were anxious that the appointments should be the best that could possibly be made, to the surprise of many members of this House and of the country at large, the Government chose for the chairman of that board a man whose name is the most hated of all throughout our country-Sir Joseph Flavelle. During the war Mr. Flavelle gained for himself a very unsavoury reputation. He has been designated from the Atlantic to the Pacific as the Bacon King. He has made millions of dollars out of the war. He is to-day the greatest war profiteer we have in our country, and it shows that this Government has not in view the best interests of the people of this country when it chooses as the head of that board, instead of a man who will try to work in the public interest, a man who is the worst war profiteer we have in Canada. When we see that a man like Sir Joseph Flavelle, who is interested in many companies which have been supplying the Canadian National railways with many things, is to be chairman of the board, I say that it is time for the members of this House to ask for every possible guarantee from the department as to how this money is to be expended. The people of Canada are tired of the waste of money there has been, and, they expect that their representatives in this House, no matter on which side they sit, will see that $89,000,000 are not passed into the hands of Sir Joseph Flavelle without proper guarantees having previously been given as to its expenditure. We have asked for particulars to which we are entitled, and we will have them. The Minister of Railways ought to have in hand every bit of information that is necessary. Before I resume my seat I would ask the minister to tell us if there is any possibility that the new directors will run the railway in a less expensive way, and that there will therefore be a reduction in this amount of $89,000,000.


John Flaws Reid: Let me say first that I think the attack which the hon. member has made on Sir Joseph Flavelle is

unfair and unjust. I do not think there is a man in Canada with a higher reputation and standing than Sir Joseph Flavelle. This board has been appointed temporarily to carry on the operation of the Grand Trunk Railway system until we can bring all the railways together under the Canadian National Railways charter.


Thomas Vien: Why do you not do that now?


John Flaws Reid: We will do it in a very short time. We have only had possession of the Grand Trunk a few days, since the appointment of the new board. I feel that I voice the opinion of the majority of the people of this country when I say that if the Government can succeed in getting Sir Joseph Flavelle to accept the chairmanship of the board, and assist in carrying on the operations of that road, it will be one of the best selections that could possibly be made in this Dominion.


Lucien Cannon: He will take the chairmanship and everything else.


John Flaws Reid: The hon. member for Dorchester (Mr. Cannon) asked for details as to how the $25,000,000 was -expended. I have the details here:
Appropriation under Vote 478 applied in discharge of
Vouchers	 &, 555,173.97
Special coal vouchers	 1,153,571.74
Short term notes	 2,356,2120.88
Special short term notes	 liOOi.OOO. 00


Lucien Cannon: What is the difference between short term notes, and special short term notes?


John Flaws Reid: The short term notes for coal extended for a little longer time.


Lucien Cannon: There is a short term note, and a special short term note. Is there an extra special short term note?


Thomas Vien: The minister has not completed his statement of how the $25,000,000 is made up.


John Flaws Reid: I will tell the hon. member why. The hon. member for Dorchester had asked me for this statement, and when I was proceeding to give it I thought it was not fair that he should interrupt and not allow me to read it. As apparently he does not want the information, I shall not give it to him.


Lucien Cannon: I beg the minister's pardon. I have been asking for the information for an hour and a half. The minister ought to be delighted to be for once in a position to give information.


John Flaws Reid: I am prepared to give it if the hon. member is prepared to listen, but if he wishes to interrupt I shall not give it to him. In addition to the items I have read there are the following:
Fixed charges:
London	
New York. . .. Montreal .. ..
Total	
Capital expenditures	 [DOT]
Equipment-Canadian	Rolling
Stock Ltd	
Back Pay-Grand Trunk Western
Railway	
Back Pay-Grand Trunk Railway	 [DOT] -	[DOT] [DOT]
Workmen's Compensation Board Traffic Balances due Erie R.R. Pay rolls:
Grand Trunk Western Railway	
Canadian Car Foundry, car
repairs..		 [DOT]
Deficiency in advances repaid with proceeds, $25,000,000 7 per cent bonds	
Cash on hand, February 15, 1921	
Remitted to London	
Montreal ..	..
New York .. ..
$6,044,3*36.	74
9*18,627.	09
2,438,209.	76
$9,401,173 .	50
$ 612,3*22.	46
3,409,678.	72
831,140.	00
2,925,461.	.45
251,480.	,00
199,199.	.83
$ 250,000	09
690,957	09
255,694	59
$24,992,074	23
7,925	77
$25,000,000	00
6,300,031	33
17,781,341	67
918,627	00
$25,000,000	00
Certificates 1 to 12 inclusive were given out by the Department.


Lucien Cannon: In the statement the minister has given, certain amounts are mentioned once of twice as being under pay rolls. Were those moneys expended in ordinary wages of employees on the line?


John Flaws Reid: That was for pay
between May 1 and September 1, when they got the increase under the McAdoo Award. It was back pay; we had to pay the employees those amounts in addition to the pay they received between May 1 and September 1.


Lucien Cannon: I may be mistaken, but the minister, I think, stated concerning this $89,000,000, that the money was given to the railway as being capital expenditure. I suppose the $25,000,000 was also loaned to the company last year as capital expenditure. If so, how could you pay wages out of that $25,000,000?


John Flaws Reid: The $25,000,000 last year was expended under an item in the Estimates similar to this item. It was used to pay liabilities, and I have stated how it was expended.


Lucien Cannon: It was understood that these moneys were to be expended by the railways on capital expenditure. The company is in such a bad way-the Grand Trunk, the Grand Trunk Pacific, and the Canadian Northern-that the Government have to pay the wages of the employees out of loans.


John Flaws Reid: I have already dealt with the $25,000,000. I have the details of the $89,000,000. The first item is $14,589,433.09 for current and overdue working liabilities. The amount of overdue vouchers dated prior to December 1, 1920, and unpaid as at December 31, 1920, is $10,179,170.90.


Lucien Cannon: That was prior to when? Hon. Mr. REID: Prior to December 1, 1920. The statement is as follows:
Unpaid, as at December 31, 1920. $10,179,170 90 Amount of voucher audited for account of month December,
1920, which were unpaid as
at December 31,	1920	
4,644,664	08Total vouchers	$14,823,834	98Amount of overdue traffic	-
balances dated prior to December 1, 1920, and unpaid as
at December 31,	1920	 2,690.248	73
Amount of traffic balances, audited for account of month December, 1920, which were unpaid as at December 31,
1920	
575,349	38Total traffic balances	
..	3,265,598 11
Total vouchers of traffic balances
amount to	$18,089,433	09From which we deduct working balance of amount of vouchers and traffic balances remaining unpaid	
3,500,000	00Leaving net requirements of.. $14,589,433	09
That explains the first item.


Lucien Cannon: Would the minister prefer to read the whole statement first, before the committee asks him questions in regard to these figures?


John Flaws Reid: I have already given a statement of the $89,000,000 which is on Hansard. Now I am taking each item and giving the explanation as I have them from the Grand Trunk. The next item is Payrolls, amounting to $4,773,726.25, made up as follows:
December, 1920 : Pay-rolls payable in January, 1921	
Back Pay estimated	
Unclaimed wages	
Discharged tickets	
Telegraphers' decisions, No. 2, estimated	
Total pay-rolls between January
1, 1921, and March 31, 1921..	$4,773,726 25

The next item is rentals, $1,292,093.45, as follows:
Payable for lease on roads:
Atlantic-St. Lawrence Railroad	$
Buffalo and Lake Huron.. ..
Central Counties Railway . .
Chicago-Detroit and Canada Grand Trunk Jet. Rly..	..
Cincinnati, Saginaw and Mackinaw Railroad	$
Lewiston and Auburn Railroad	
Pembroke Southern Railway.
Total payable for lease of
roads	$	1,13)9,896 83Joint facility rentals	$	37,5001 00Ottawa Terminal Railway.. .	15,067 38Sundries	
14,172 80
495,897 00 510,999 97 28,500 00
34,269 84
43,224 00
18,060 06 9,0001 0*0
Total joint facility rentals.$ 66,740 18 Total miscellaneous rentals. .$	86,462	44Total rentals	$	1,292,063	45
Estimated Cash Requirements.
D-Interest.
D-l-Mortgage Bonds

Canada Atlantic Railway. ..$	960,005	52Grand Trunk second equipment	
43,186'	80Northern Railway,	phird...	4,234	00Wellington Grey &	Bruce...	25,560	01Total mortgage bonds...$	1,032,976 33
D-2f-Debenture Stocks-
Grand Trunk, 4 per cent cons.$ 5,991,950 70 Grand Trunk, 5 per cent.. ..	1,558,686! 87
Great Western 5 per cent.. ..	993,924 21
Northern Railway, 4 per cent 89,998' 77
Total debenture stocks...$	8,634,560 55

7 per cent Gold Bonds-
Interest at 7' per cent on
$25,0i06,0:00 G.T. Railway.. .$	1,741,250)00
D-4-4' per cent Guaranteed Stock- Interest at 4 per cent on
$60,833,333.33 of Guaranteed
Stock	$ 3,923,333 34
D-5-Funds appropriated under vote 478'-*
Interest at 6 per cent	$	1,802,640 22
D-6-Secured notes-
Interest at 6 per cent on $4,866,66*6.67! due Jlanuary
14, 1921	$	146,000) 00
Interest at 6 per	cent o*n
-?! 4,600,00101.00 due October 1921	 876,000) 00
Total secured notes..	l,022,060i	00D-7*-Equipment Trust Notes- Grand Trunk Railway, Series "A"	$	22,162	50Grand Trunk Railway, "B"	Series	26,4-601	00Grand Trunk Railway, "C"	Series	27,720	00Grand Trunk Railway, "D"	Series	121,875'	00Grand Trunk Railway, "F"	Series	767,000	00Grand Trunk Railway, England line. . . .	, New	77,271	00Grand Trunk Western way, Western) lines.	Rail-	260.322	COTotal Equipment Notes	Trust	1,30)2,81 O'	50
D-8-Other Interest-
Grand Trunk Western Railway Bonds	$	657,484 80Grand Trunk Junction RailWay -Bonds	
70,322	00Portland Elevator Bonds.. ..	4,900	00New England Elevator Bonds.	12,187	50Government Loan $593,733.34	35,624	00Government Loan $554,800.00.	33,288	00Bank of Montreal, $400,000.00	14,000	00
Grand Trunk Milwaukee Car
Ferry Notes	 337	50
Grand Trunk Milwaukee Car
Ferry Bonds	
2,070	00Whipple Car Shop	Bonds.. ..	4,544	00Whipple Car Notes	
10,000	00Total Other Interest.. ..	844,757 80
Grand Total Interest.. .. $20,304,328 74


Lucien Cannon: We cannot follow the minister very well.


John Flaws Reid: I do not know that I can make the matter any plainer.


The CHAIRMAN:: I think that hon. members other than those that are specially interested in this matter are perhaps to blame. There is altogether too much conversation not only on the floor of the chamber but in other parts of the House. It is a very difficult matter for the minister to read such a long list of figures. There are certain hon. gentlemen who desire to take those figures down and I hope that hon. gentlemen who are not interested will have recourse to the lobbies for conversational purposes.


John Flaws Reid: Does the hon. member want to hear the rest of the figures?


Lucien Cannon: Yes.


John Flaws Reid: All right. Now we will take operating deficits:
E-of Subsidiary lines-
Western lines-
Deficit from operations, Jan.
1, to Dec. 31, 1921..	.. $ 2,314,574 00
Deficit from operations Jan.
1, to Mar. 31, 1922..	..	578,643 50
Less:	Amount charged for
rental, provision for which is made in Grand Trunk figures	
693,598 75

Central Vermont Railway-
Deficit from operations, Jan.
1, 1921, to Mar. 31, 1922. $ 1,097,800 00
Total

F-Sinking Funds:
Sinking fund to retire 7 per
cent gold bonds	3
April 1921-	.
7 per cent Gold Bonds, April 1, 1921 to Mar. 31, 1922 October 1921-
7 per cent Gold Bonds.. ..
500.000	00
250.000	00
250.000	00
Total Sinking Funds.. .. $	500,000 00
G-Retirement of Capital Obligations-
G-l-Bonds-
Grand Trunk, 2 Equipment
Bonds	3	719,780 00
G-2-Equipment Trust Notes Grand Trunk Western Railway, western lines	?
Grand Trunk Railway New
England lines	
Grand Trunk Railway, Series
"A". Grand	Trunk	Railway,	Series"B". Grand	Trunk	Railway,	Series"C".	Grand	Trunk	Railway,	Series"D".	Grand	Trunk	Railway,	Series"F".	
403,600 00 119,800 00
394.000	00
336.000	00
224.000	00
375.000	00 800,000,00
Total Equipment Trust Notes. $ 2,652,400 00
G-3-Secured Notes-
Grand Trunk Railway 3 year
6 per cent	
Grand Trunk Railway 5 year
5J per cent	
Grand Trunk Railway 5 year
5 per cent	
Grand Trunk Railway 3 year
5	i per cent	
Grand Trunk Railway 3 year
6	per cent

Total	 2,893,217	50
Less, amount charged for interest, provision for which is made in Grand
Trunk figures	
2,494,010	00Total	$	399,207 50


Mr. CAHILL:: What is meant by western lines?


John Flaws Reid: Lines west of the Detroit river in the United States. I now continue with the statement:
New England Lines

Deficit from operations, Jan.
1, to Dec. 31, 1921	$ 1,781,000 00
Deficit from operations, Jan.
1,	to Mar. 31, 1922	 445,250	00
Total secured notes	$19,563,999 97
G-4-Loans-
Government Loans Government Loans Bank of Montreal
Total Loans	5 1,548,533 34
G-5-Other items

Whipple car notes	? 200,000 00
Portland Elevator Bonds..	..	10,000	00
Grand Trunk Milwaukee Ferry
Notes	 15,000	00
Grand Trunk Milwaukee Ferry
Bonds	
16,000	00New England Elevator	Bonds.	10,000	00Whipple Car Bonds	
30,000	00Total other items	5	281,000 00$	593,733 34
554,800 00 400,000 00

Grand Total	$24,765,713 31


Lucien Cannon: Before the minister goes any further, I notice in his statement several items relating to loans by the Government. I understand those items would appear in the statement prepared by the Grand Trunk because they received the money from the Government, but surely we are not going to vote the same money again.


John Flaws Reid: My deputy tells me it is a book entry wiping it off. It was loaned and a new party included in the mortgage.


Lucien Cannon: If I understand the
situation rightly, suppose the Government to have loaned to the Grand Trunk during the course of last year $500,000, that sum would appear in the Grand Trunk books as a liability; but we are certainly not going to be called upon to vote that $500,000 again to the Grand Trunk, otherwise the railway company will receive the amount twice.


John Flaws Reid: No. It was a loan to the Grand Trunk, but now we are going to take a mortgage for the total amount. It is really a book entry; it is kept back and credited to the amount loaned last year.


Lucien Cannon: Even if we do take a
mortgage we need not loan the money again.


John Flaws Reid: No. We have to take a vote in the Estimates to repay it and make the book entry.


Lucien Cannon: Suppose I give the hon. minister $5, later on when we settle he is not going to ask me to give him $5 again so he may pay me back. It would mean the minister would be receiving $10 to repay me $5. That is exactly the transaction we are asked to approve here.


Thomas Vien: I think we have sufficient
figures to mix the question up very well. Would the minister try to clear up the point as to how much we are going to spend on construction and improvements?


John Flaws Reid: That item is $12,150,000 odd. The information I have of that is as follows:
On the Grand Trunk proper.. .. $7,496,754 On the Grand Trunk Western line.. 3,7150,222 On the Grand Trunk New England
fines	 290,609
On the Central Vermont Railway.. 612,485


Thomas Vien: Are we going to spend
money to construct new lines in the United States?
[Hon. Mr. Reid.l


John Flaws Reid: I will give the hon.
member the details furnished to me in respect to the New England lines.
Rails, heavier weight, also rail anchors and ties, $60,568.
For instance, when you lay a heavier rail, as 85-pound in the place of 60-pound, the extra weight is charged to capital account.
Bridges and culverts	$33,450
Passing tracks, yard tracks and other '
company facilities	 1,920
Engine house facilities	 2^000
Passenger and freight handling facilities	 36,700
Water service facilities	 1,380
Hocks and wharves	 8o|531
Automatic block signals, interlocked
crossings, etc	 44,550
New buildings, company's employees
and materials	 840
Expenditures authorized year 1920 unexpended, principally equipment.. ..	28,720
Making the total of $290,000 odd. The hon. member will see that it is simply for improvements.


Thomas Vien: Is the Central Vermont expenditure for construction of new lines or only betterments?
. Hon. Mr. REID: There are no new lines. It is simply items similar to those I have already read.


Thomas Vien: Are we building new lines
in the United States?


John Flaws Reid: No, none whatever.


Lucien Cannon: The minister told us
that our total liability as regards the Grand Trunk, the Grand Trunk Pacific and the Grand Trunk subsid-
10 p.m. iary lines was $290,000,000, and the deputy minister was to supply information as regards the Canadian Northern. Has the minister received that information?


John Flaws Reid: I will get that.


Mr. DAVIS:: I understand that the figure of $12,000,000 just given by the minister is for improvements upon existing lines?


John Flaws Reid: Yes.


Fred Langdon Davis: Is it in the contemplation of the Government to acquire any other roads; and, if so, will that acquisition he submitted to the House before it is completed?


John Flaws Reid: It is not the intention, nor would the Government have power, to

acquire any other roads without getting the authority of Parliament.


Fred Langdon Davis: It is quite conceivable that the railways acquired may be under contract to take over some other roads, and the Government, assuming their obligations, might acquire those other roads without coming back to the House for authority. I should like to have the pledge of the Government that before any such acquisitions are made they will be submitted to the judgment of this House.


John Flaws Reid: I stated a few minutes ago that the Grand Trunk Railway cannot go ahead with any construction work or borrow any money without the consent of the Government; and the Government have not power to advance moneys or guarantee bonds or anything of that kind without getting authority from the House. So I can give that assurance to the hon. member. There is no doubt at all that the Grand Trunk will not acquire any new roads. Of course, the arbitrators will have before them all the liabilities of the Grand Trunk and of any subsidiary companies, and they must take those liabilities into account when they make their award.


Lucien Cannon: In answer to my hon. friend, the minister stated that it was impossible for the Grand Trunk Railway to borrow any money without having the previous consent of the Government, and that it was impossible for the Government to guarantee any liability without having obtained the authority of Parliament. Would the minister be kind enough to state to this committee when consent was obtained from Parliament for the $20,000,000 which we are guaranteeing out of this $89,000,000?


John Flaws Reid: The first loan was made, as I understand, a number of years ago by authority of Parliament.


Lucien Cannon: I do not wish the minister to misunderstand my question. We are asked now to vote $89,000,000, $67,000,000 of which is for cash requirements, and $22,000,000 for guarantees.


John Flaws Reid: Yes.


Lucien Cannon: When did Parliament
give its consent to those guarantees?


John Flaws Reid: In 1909 the Government of that day loaned $10,000,000, which fell due in 1919, and in 1911 there was another ten year loan for $9,720,000, a total of $19,720,000. There are five items of interest amounting to $2,351,080. The
items of principal and interest together amounted to $22,071,080. These are in respect of the Grand Trunk Pacific.


Lucien Cannon: If, then, this is money due to us, the company should be paying the country $19,000,000, instead of our voting them that amount. The thing is absolutely absurd.


John Flaws Reid: It is really merely a book-keeping entry.


Lucien Cannon: The minister is not
serious when he claims that this is only a book-keeping entry. He explains that this $19,000,000 fell due in 1919 and 1921, and he says that we are giving $19,000,000 to the company in order that they may pay it back to the Government. I say again that the thing is ridiculous.


John Flaws Reid: Ten years ago we loaned the Grand Trunk Pacific this amount. Now, the Minister of Finance insists that we shoud vote it and take a mortgage on the Grand Trunk, because we hold them liable for it. We are, therefore, cancelling it against the Grand Trunk Pacific and putting it against the Grand Trunk, and this is the only way in which it can be done.


Lucien Cannon: What security did we have for the moneys loaned in 1909 and 1911?


John Flaws Reid: A mortgage on the Grand Trunk Pacific, a subsidiary company of the Grand Trunk.


Lucien Cannon: Do we still hold that security?


John Flaws Reid: Yes, but we are now
going to take a mortgage on the Grand Trunk for the amount. It should be better on the parent company.


Lucien Cannon: Two or three years ago the minister explained that the Grand Trunk Pacific was being placed in the hands of a receiver, the minister himself being the receiver, because of the refusal of the Grand Trunk to take over the liabilities of the Grand Trunk Pacific. Am I to understand now that the Grand Trunk has consented to assume the liabilities of the Grand Trunk Pacific?


John Flaws Reid: When we take over the Grand Trunk we take over all the subsidiary companies, and we are merely cancelling this debt of a subsidiary company, the Grand Trunk Pacific, and taking instead a mortgage on the Grand Trunk, the parent company.


Lucien Cannon: Does the minister mean that this Government is going to reduce by $19,000,000 the assets of the Grand Trunk by adding on liabilities which really belong to the Grand Trunk Pacific, and at the very moment when this country is taking over the Grand Trunk? That is worse than ridiculous.


Mr. BOYS:: We have to pay a certain
sum to the Grand Trunk, to be fixed by arbitration. If this is regarded as a liability of the Grand Trunk, as it should be, we shall have that much less to pay for the system and the country will get the benefit.


Lucien Cannon: I am pleased to hear
my hon. friend come to the rescue of the Minister of Railways.


William Alves Boys: It is not a case of rescue.
It is the facts we want.


Lucien Cannon: When we started to
discuss this matter this evening one of the first questions I put to the minister was this: Will the $89,000,000 that we are voting to-night be deducted from the award made by the arbitrators with respect to the Grand Trunk? The minister said: No, only the amounts which were expended prior to the first of February, 1920 will be considered.


William Alves Boys: My hon. friend must know
that the obligations of the Grand Trunk are to be taken into consideration in fixing the amount to be paid by the country for the system. Surely if this is a liability- and there is no doubt that it is-it will de deducted from the amount which would otherwise be given to the shareholders.


Lucien Cannon: I am quite of that view myself, but I repeat that the- Minister of Railways told me that that was not so; that whatever moneys were voted last year and will be voted this year to help the Grand Trunk or the Grand Trunk Pacific would not be considered as liabilities of the company to the Government of Canada unless they were amounts which had been expended prior to the first of February, 1920. The minister said that out of this amount of $89,000,000 no more than $42,000,000 could be deducted. He will correct me if I am wrong.


John Flaws Reid: The items in the $89,000,000 that were expended prior to 1920 would be taken into account, but not anything expended since that. The award will be as of the date when we took the road over.
[Hon. Mr. Reid.l


Lucien Cannon: Of this $22,000,000 the minister said that one amount of $10,000,000 had been loaned in 1909 and became payable in 1919. Will that be considered?


John Flaws Reid: Certainly.


Lucien Cannon: Then the loan of 1911,
$9,720,000, due in 1921 will not be considered because it was not expended prior to February, 1920?


John Flaws Reid: 1911 is previous to
1920.


Lucien Cannon: But it became due in
1921.	.


John Flaws Reid: These are liabilities
against the Grand Trunk Pacific, and the arbitrators will take them into consideration in making their award.


Lucien Cannon: Then the minister's
contention is that this $19,000,000 loaned by the Government to the Grand Trunk Pacific will be charged up to the Grand Trunk and deducted as a liability of the company when the final award is made?


John Flaws Reid: Yes, that is it exactly.


Thomas Vien: If I understand aright, the transaction is this, if the statement of the minister is correct, that the Grand Trunk at present owes to the 'Government of Canada $19,000,000.


John Flaws Reid: The Grand Trunk
Pacific.	,


Thomas Vien: But the Grand Trunk Pacific Railway Company is a subsidiary of the Grand Trunk Railway Company, and the Grand Trunk Railway proper is responsible to the Government for the obligations of the Grand Trunk Pacific Railway.


John Flaws Reid: That is it exactly.


Thomas Vien: Therefore, the Grand Trunk to-day is responsible to the Government for the $19,000,000 which becomes due, $10,000,000 for a loan in 1909 or 1910, and $9,000,000 in 1911 or since. If I understand the vote and the book-keeping entry correctly, this means that we are going to lend to the Grand Trunk Railway $19,000,000 for the Grand Trunk Railway Company to pay to the Government. Will the Government receive in one pocket what they disburse from the other?


John Flaws Reid: That is it exactly. It is a book entry. The $19,000,000 was against the Grand Trunk Pacific which is in the hands of the receiver, and the Government have to pay that amount. We have to pay

it to meet obligations against the Grand Trunk Pacific which is in the hands of the receiver and the Government say: "Having to pay this amount, we are going to take a mortgage on the Grand Trunk road to cover the payment."


Thomas Vien: Are these bonds for $19,000,000 in the hands of the Government or outstanding?


John Flaws Reid: In the hands of the Government.


Thomas Vien: Therefore, the Government
will advance $19,000,000 to the Grand Trunk Railway Company to get it back from them in payment of obligations guaranteed by the Grand Trunk Railway on behalf of the Grand Trunk Pacific Railway?


John Flaws Reid: That is it exactly.


Thomas Vien: But in this ,way, that we are lending to the Grand Trunk Railway Company $19,000,000 to cover up loans which mature this year.


John Flaws Reid: That is it.


Thomas Vien: Another question as to what the minister said a minute ago as to deductions which are going to be made from the amount awarded by the arbitrators. I understand that in estimating the value of the common stock of the Grand Trunk Railway, the arbitrators will take into account the liabilities of the company in respect of the Grand Trunk Pacific Railway, and that item of $19,000,000 will be taken into account as well.


John Flaws Reid: As a liability, yes.


Thomas Vien: As a liability of the Grand
Trunk Railway?


John Flaws Reid: Yes, because they guaranteed it.


Thomas Vien: And the fact of the Government taking over the Grand Trunk Pacific Railway and putting it into the hands of a receiver under the Minister of Railways will not affect the liabilities of the Grand Trunk Railway Company in respect of the Grand Trunk Pacific?


John Flaws Reid: Not at all.


Thomas Vien: The minister said a minute
ago that the amount was to be secured by a mortgage on the property. We lend to the Grand Trunk Railway $89,000,000, and the Grand Trunk issues bonds which come as a mortgage, of course, after the present issues. It will be a new issue of bonds taking rank as a subsequent mortgage. The minister said to the committee that this
amount was fully secured because the amount of money going into the treasury for betterments or extensions or capital expenditures was really an investment. I beg to draw the attention of the minister to the inaccuracy of the statement. Quite a large amount of the money voted, comprising the $89,000,000, will not go into capital account. Some of it will go into paying operating deficits; another portion of it will go into repaying loans; another portion will go in buying rolling stock which should have been provided for, but which has not been provided for. Therefore, a considerable amount of the item of $89,000,000 will really not be secured by the investment. Quite a considerable amount of that item will be eaten up by operating deficits, repairs, interest on notes or redemption of bonds maturing this year.


John Flaws Reid: I cannot agree with
the hon. member that the amounts are all eaten up by deficits.


Thomas Vien: Not the whole of it, but a
considerable portion.


John Flaws Reid: The deficit last year
amounted to only $7,500,000. It is true that we are not handing over $89,000,000 to the Grand Trunk Railway. We are making a loan to, and taking a mortgage against, the road to settle up liabilities such as I have mentioned; for instance, the $22,000,000. Parliament gave authority to lend the Grand Trunk Pacific a certain amount. That is due. We want to renew that loan on the Grand Trunk because they guaranteed it. We have to get an appropriation. True, that amounts to $22,000,000 out of the $89,000,000. Some of the items as well-


Thomas Vien: 


John Flaws Reid: Yes. Then there are
other liabilities, accounts due and so on. This is to get the liabilities together and settle those liabilities that must be settled so that the operation of the road may be carried on, but it does not increase the liabilities against the company other than the $7,500,000 of deficits. The Government assume them and takes a mortgage. But the arbitrators, when they are considering the whole situation, will take into account the liabilities prior to the time when the Government took over the road. The $22,000,000 guarantee by the Grand Trunk Railway must be taken into consideration, and the award reduced by that amount, or whatever is the value of that in the opinion of the arbitrators.


Thomas Vien: It would not be a deduction of $19,000,000, but a deduction on the value of the stock as determined, taking into account the indebtedness of the Grand Trunk for an amount of $19,000,000.


John Flaws Reid: That is right.


Thomas Vien: That means that the value
of the stock of a company that owes $19,000,000 is so much less than it would he if the company did not owe $19,000,000. Therefore, that amount will he taken into account in respect of the value. In answer to the hon. member for Dorchester a minute ago, the minister said that the bonds were fully secured and that the position of the company is not rendered any worse by the issuing of those bonds. Those bonds which the Government are issuing on the property are not of a par value, because, while you issue $89,000,000 worth of bonds, a considerable portion of that goes to pay deficits, so that you do not increase the value of the railway by $89,000,000.


John Flaws Reid: No.


Thomas Vien: If it were an issue of $89,000,000 worth of bonds to the public, what would it mean? It would mean that $89,000,000 would fall into the treasury of the Grand Trunk. You have bonds issued and you have $89,000,000 of cash on hand, but in this case it is different. Instead of having $89,000,000 cash, you have a lot of that eaten up already by the deficit of $22,000,000 on the Grand Trunk Pacific. You have also an operating deficit of $7,500,000 on the Grand Trunk last year, and at least $500,000 over due for back pay. So at least $40,000,000 of that $89,000,000 will go to pay the deficits and arrears of the Grand Trunk railway, and therefore the bonds have no real value behind them. The $89,000,000 that the Government is going to pour into the treasury of the company is not really shown as a capital expenditure. At least half of it will be eaten up by the deficits, and that is why I stated a moment ago that the bonds which the Government is going to receive in exchange would not represent real value.
As we are the sole owners of the railway I do not know that it is absolutely a lound principle to issue bonds against the railway. The advances that we make to the treasury of the company are just as good as the bonds issued on our own property. It may be that the Finance Minister can finance on easier terms by this system of accounting, but the fact remains that the treasury bonds of the Canadian 
Government should be just as good as the treasury bonds of the railway company guaranteed by the Government. This method wh'ch the Government is following seems to mix things up and make them more difficult to understand. We are the sole owners of the railway, and it is immaterial whether the money that we advance to the company is covered by bonds or not, for the whole thing is our property. I would like the minister to explain the real reason why we cause a company which we own in its entirely to issue bonds for money that we advance to it.


John Flaws Reid: The Grand Trunk
Railway Company is a private corporation. We own the stock.


Thomas Vien: But the stock is the whole thing.


John Flaws Reid: There are other liabilities against the company, and it is certainly in the interests of the Government and of the country that any advances, expenditures or liabilities in connection with the operation or construction of any of our railways should be charged up against that particular railway so that we shall know just how each one stands. To borrow money on Government bonds and loan it, as my hon. friend suggests, is not the best way in my judgment.


Thomas Vien: The present method may
be better tor accounting purposes. Were bonds not issued in New York last year for the Canadian National railways?


Hon.   M@: Yes.


Thomas Vien: For what amount?


John Flaws Reid: $25,000,000 for the Canadian National, and $25,000,000 for the Grand Trunk.


Thomas Vien: I thought the total was
something like $75,000,000 for all the national railways?


John Flaws Reid: We issued $25,000,000 for the maturing obligations of the Canadian Northern, $25,000,000 for the Grand Trunk, and $20,000,000 or $21,000,000 for equipment bonds. That would be about $75,000,000.


Thomas Vien: Were the equipment bonds in connection with the Grand Trunk?


John Flaws Reid: Some of the equipment was passed over to the Grand Trunk and used by them. The $25,000,000 for the Canadian Northern was to retire securities falling due.


Thomas Vien: Was the $25,000,000 for the Grand Tr ank also to redeem maturing securities?


John Flaws Reid: Yes.


Lucien Cannon: I am not quite satisfied with the explanation given by the minister.
I would be very happy if I could understand it. The Government of Canada advanced in 1910 and 1911 $19,000,000 to the Grand Trunk Pacific. The Grand Trunk is responsible for the liabilities of the Grand Trunk Pacific. The Grand Trunk Pacific is now in the hands of a receiver; therefore, the Grand Trunk is responsible to the Government. In 1919 and in 1921 the Grand Trunk owed the Government of Canada $19,000,000, plus interest, amounting in all to $22,000,000. We have a claim against the Grand Trunk for that amount, and the Grand Trunk has a liability towards the Canadian Government for a like amount. Now to-day the Minister of Railways comes to this committee and asks it to vote $22,000,000 to give to the Grand Trunk to meet the liability incurred by the Grand Trunk towards the Canadian Government. It means-I see the Minister of Finance is here and perhaps he could give a more lucid explanation, and if he can it will be welcome-that ten years ago this country advanced $19,000,000, and this year we are going to advance $22,000,000, making $41,000,000 in all. Now if we are going to pay to the Grand Trunk the money necessary to enable them to pay their debts to the Canadian Government, this Government is going to expend twice the amount of money that should be expended.


John Flaws Reid: I do not know that I can make it any clearer, but I will try again. In 1910 there was a loan made by the Government of that day of $10,000,000 to the Grand Trunk Pacific, which fell due ii< 1919.


Frank S. Cahill: Was that guaranteed by the Grand Trunk?


John Flaws Reid: Yes. Then in 1911
there was a loan of $9,720,000, making $19,720,000 in all.


Lucien Cannon: The second loan was
also guaranteed by the Grand Trunk?


John Flaws Reid: Yes. The Grand Trunk is liable for the Grand Trunk Pacific, and that $22,000,000 is over-due and against the Grand Trunk Pacific, the subsidiary company. The books of the Government show that amount as due, and it should be paid, and the Government are holding the
parent company, the Grand Trunk, liable for that amount. The Government want to take a new mortgage on the Grand Trunk for the $22,000,000, payable on demand, but we have not power or authority to discharge the $22,000,000 shown in the books of the Finance Department as overdue until we get authority from Parliament to loan that amount to the parent company, the Grand Trunk. When this goes through, %c shall be able to take a mortgage on the Grand Trunk for $22,000,000, credit that to the Grand Trunk Pacific, and wipe off the amount. It is a book entry altogether.


Lucien Cannon: We took over the Grand Trunk; the whole company is .ours, in the hands of the minister as receiver. We turn around now and say to the Grand Trunk:	"We will give you $22,000,000,
and you will give us a mortgage for that." Well, we are only mortgaging our own property, and to secure that mortgage it will cost the country $22,000,000 additional.


Frank S. Cahill: The minister said that the loan was guaranteed by the Grand Trunk Company, so that he has absolutely the same security to-day that he will have after advancing the $22,000,000. He will have a mortgage on his own property to help him out. I move, Mr. Chairman, that item No. 126 be reduced by $22,000,000. This vote simply means that the money will be turned over to the parent company and the Government will have to get it from them again. It is safer in the treasury than in the hands of the parent company with Sir Joseph Flavelle in charge.


John Flaws Reid: The hon. member does not understand the situation correctly. We have the security of the Grand Trunk Pacific, and in addition we have the guarantee of the Grand Trunk. I do not think I can explain the matter any more fully than I have done already.


Thomas Vien: In 1910-11, when the loans
were made to the Grand Trunk Pacific, and guaranteed by the Grand Trunk to the Government, were any securities issued by the Grand Trunk to the Government?


John Flaws Reid: Only the guarantee
on the bonds.


Thomas Vien: Was that secured on the
Grand Trunk railway proper? Does that guarantee give to the Government, for their claim, any rank which would put them in a privileged position in respect of the bonds issued by the Grand Trunk, posterior to that date?


John Flaws Reid: No; it simply gives the endorsation, and whatever that would be worth at the time.


Thomas Vien: That means that we loaned
money to the Grand Trunk Pacific, on bonds issued by the Grand Trunk Pacific, and endorsed by the Grand Trunk, and now we take the bonds of the Grand Trunk railway proper.


John Flaws Reid: A mortgage on the
Grand Trunk.


Thomas Vien: It is a bond secured by a
trust deed covering a mortgage. The situation is this:	The Grand Trunk Company
receives $22,000,000; the Grand Trunk owes the Government $22,000,000. Will that be simply a book-keeping entry?


John Flaws Reid: That is all; no money
changes at all. We say to the Grand Trunk Railway: "Give us a mortgage on your railway to settle your guarantee, and when you sign that mortgage and it is duly recorded, we will credit the Grand Trunk Pacific and wipe it out."


Lucien Cannon: Why vote the money at all?


John Flaws Reid: We have to vote this in order to pay the mortgage on the Grand Trunk.


Lucien Cannon: The Grand Trunk belongs to the Government. This year we have passed additional legislation to have absolute control of the Grand Trunk, and besides that the Government have appointed a new board. As I said before, the choice of the chairman, Sir Joseph Flavelle, was a very bad one.


Mr. CASGRAIN:: The worst one.


Lucien Cannon: The vice-president is the former president of the Grand Trunk, Mr. Kelley. Now, if he is a good man, he should have made a success of the Grand Trunk, and if he is bad he should not be on the hoard. Another member of the board, Mr. Mitchell, is financial expert of the Canadian Northern. His performance on the Canadian Northern is not a great recommendation for placing him on the Grand Trunk. All that aside, however, the Grand Trunk is ours, and I do not see why the Government should come and ask us to vote $22,000,000, and take a mortgage on our own property. Why should they obtain from a company which is ours a mortgage which, according to the minister himself, has absolutely no value, because it ranks after all other mortgages, seeing 
that the Grand Trunk cannot meet their liabilities. If it is simply a book-keeping matter, why should not the Government arrange it with the company instead of coming and asking Parliament to vote millions which are not needed. Do not let the country be called upon to vote $22,000,000 if this is only a book-keeping matter.


Michael Steele: Mr. Cahill moves that item 126 be reduced by $22,000,000. Is the committee ready for the question?


Daniel Duncan McKenzie: There is no hurry
about putting that question, Mr. Chairman. We are assuming, for the sake of argument, that, by reason of the award of the arbitrators, there will be some money coming to the Grand Trunk Railway. It would be interesting to know what the submission says about the deductions that are to be made in the award. The member for South Simcoe (Mr. Boys) came bravely to the assistance of the minister, and I do not think he came a minute too soon. He tells us that there is no need to worry about this matter because everything will come out of the award. If the Minister of Finance (Sir Henry Drayton) is within my hearing, he will remember that a former Minister of Finance promised us, as can be found in Hansard, that all the liabilities of the Grand Trunk, either by reason of direct loans or guarantees, would be deducted from the award if there should be enough to meet those deductions. For myself, I should like to see that submission. The paper by which this matter was submitted to the Board of Arbitrators would be interesting to the committee because the whole award wil be governed by the language of that submission. The Grand Trunk people may sell that award before it is made; it is quite possible for them to sell it to any one who might want to buy it as a matter of speculation. If it is sold, it will be bought on the terms of the arbitration deed, so I think it would shorten the discussion and settle the doubts in the minds of a good many members on this side if we saw the submission, to know what control the Government has over the award as to deductions. If that submission provides that the Government, in meeting the terms of the award, have the right to cut out of it the amount the Grand Trunk Railway owes them, we need not worry about this book-keeping, and there will be no sense in voting this money. If the money goes to the Government

through this award they can credit the company with it on their books and square it up; it is not such a very difficult thing to have done. It seems to me that it is a very peculiar transaction to advance $22,000,000 to ourselves-because it is to ourselves-and take a mortgage from ourselves so as to square it in some fanciful manner of book-keeping upon the books of the country. I do not understand it. I would say to the minister that we should see this submission deed of arbitration. No doubt a copy of it is in his department because it is through his department this whole business is being handled. Possibly the Department of Justice has something to do with it but the Minister of Railways is no doubt, kept apprised of what is being done. I think therefore it is a reasonable proposition to ask for a copy of the submission deed so that we will know what provision the Government made to protect themselves in connection with this award.


John Flaws Reid: All the papers in connection with the avrard were submitted to Parliament and laid on the Table. The very document the hon. gentleman refers to has been laid on the table of the House. I am sure hon. gentlemen will agree with me that one object is to have this claim established against the Grand Trunk itself.


Frank S. Cahill: Did you not get the
guarantee of the Grand Trunk?


John Flaws Reid: We have the guarantee of the Grand Trunk, but this is a liability against the Grand Trunk Pacific.


Frank S. Cahill: Who will sign this deed?


John Flaws Reid: Which deed?


Frank S. Cahill: This mortgage.


John Flaws Reid: It will be signed by the proper officers of the Grand Trunk Railway system.


Frank S. Cahill: Who will sign the deed of mortgage, Sir Joseph Flavelle and the new beard?


John Flaws Reid: The hon. gentleman asked who will sign the deed! The president and secretary generally sign it after being authorized by the board of directors. To-day the president is, I understand, Mr. Kelley. He will sign the mortgage and will do so after being duly authorized by the board of directors. That is done in the case of every company.


Daniel Duncan McKenzie: The minister will
pardon me. He gave us to understand that 264
we have to deal with the Grand Trunk as we found it on the first of February 1920 when we took it over.


John Flaws Reid: Yes.


Daniel Duncan McKenzie: We have to deal with the company up to that time and on that [DOT]date.


John Flaws Reid: Yes.


Daniel Duncan McKenzie: Very well. Does any sane person think that we can make the old company or the company that existed before the first of February 1920, pay for a mortgage we are going to put on since then and for which we are going to hold the value of the road before that date good?


John Flaws Reid: The Grand Trunk
guaranteed this $22,000,000 in 1910 and 1911, and the position counsel will take is that it is a liability which they assumed, in regard to which there has been a default, and which they are called upon to pay. Even if the mortgage was put on afterwards they only acknowledge by the mortgage that they were liable for it at that time.


Daniel Duncan McKenzie: That is not their mortgage, it is our mortgage that we put on our own property. If the officials of the Grand Trunk, as the company existed before the first of February, 1920, came forward by authority of their board and signed that mortgage there would be some argument in what my hon. friend says. But they did not sign it, they will not sign it, they will have nothing to do with it. Now we are going to fix things so that we are forgiving them for the old obligation of nineteen millions, and its interest, and we are taking a new mortgage as security for it. That is what we are doing. We are foregoing the old claim entirely, and we are saying "Give us a new mortgage which will be a substitute for the old obligation". That substitute comes in as a claim against the Grand Trunk Railway pioperty after we took it over. Does anybody think they are going to allow us to charge that against the award? Not at all, and no court would hold them liable to that extent. That is why I want to see the submission deed and see what things we can charge and deduct from the award.


William Alves Boys: Does the hon. gentleman expect for a moment to make any deductions after the award is made? The only way to proceed would be to present evidence before the court of arbitration, and then have the deductions made. When the award is



[Stage Direction]
once made no right will exist to reduce it; my hon. friend will find nothing in the submission deed which warrants any reduction from the amount of the award.
Daniel Duncan McKenzie: We are not talking
about reducing the award at all. The hon. member who comes so bravely to the rescue of the Department of Railways-


William Alves Boys: Do not be sarcastic.


Daniel Duncan McKenzie: I am not sarcastic at all. The hon. member is mixing two things. The first thing is to determine the amount of the award, whether ten millions, twenty millions, or one hundred millions.


William Alves Boys: That is the last thing.


Daniel Duncan McKenzie: That is what the
Board of Arbitration has to say. We have to pay it. It is quite open to the arbitrators to say that the Government [shall have the power, authority, and right, when they come to pay this award, to keep out of it what this company owes them. That would be a plain and simple transaction.


William Alves Boys: What I have endeavoured to contend is that the right to present claims exists before the amount of the award is fixed, and when the award is made it is final.


Daniel Duncan McKenzie: The arbitrators are not fixing what the Grand Trunk have to pay; they are fixing the value.


William Alves Boys: Quite so.


Daniel Duncan McKenzie: Is that not what they are doing?


William Alves Boys: Fixing the value of the
stock after taking into consideration all the assets, and liabilities.


Daniel Duncan McKenzie: If that is the language of the document-


William Alves Boys: It certainly is.


Daniel Duncan McKenzie: Very well, let us see it. If it authorizes them to take into consideration the moneys that this company has to pay and if these moneys-among them the liabilities of the Grand Trunk Pacific and moneys advanced them-can be kept out of the value of the stock, then, although to that extent it is being done in an indirect way, still it is being done. If that provision is in the submission I am satisfied, but the hon. gentleman shakes his head which leads me to believe it is not. Very well, how are we going to get this money after the award is made? fMr. Boys.]


William Alves Boys: How are the arbitrators going to ascertain the value of the system? By first taking into consideration all the assets and all the liabilities, of which this is one. When that liability is subtracted, if there is any value left they fix the award and that is the final step in the whole proceedings.


Daniel Duncan McKenzie: Very well, what have we before us to-night to show the arbitrators what the liabilities of the Grand Trunk are? Are they mentioned anywhere?


William Alves Boys: As it is the legislation of this House we are supposed to know it.


Daniel Duncan McKenzie: I did not quite catch the hon. gentleman.


William Alves Boys: I said, as it is the legislation of this House we are supposed to know it.


Daniel Duncan McKenzie: But it is not the legislation of this House. The hon. gentleman knows very well that this House only authorized the making of an agreement of submission, that is all. The details of the submission are not in the Act, they are in the agreement itself. That my hon. friend knew as a lawyer, and as a member of this House, when the legislation went through. I know it but I never saw the submission, we never had an opportunity of seeing it. As far as I know it was never on the table of the House. If it was I never saw it.


William Alves Boys: It was in a schedule to the Act.


Daniel Duncan McKenzie: If it was in a schedule to the Act there should be no trouble in getting it. But I venture to say that the submission as signed by the company and the Government is not in any Act.


William Alves Boys: Suppose a county judge has to fix the value of the property to be expropriated by a railway, would my hon. friend suggest that there should be a clause in the submission to arbitration to entitle the judge to take into consideration any mortgage that may be existing against the property? Surely his duty is first to ascertain the value of the property, next to subtract any mortgage there may be against it, and finally to give the net result. That is what is done here in regard to the Grand Trunk-the arbitrators take all the assets and liabilities and ascertain the value of the stock.


Daniel Duncan McKenzie: And the man who holds that mortgage need not care a snap of

the finger whether the judge takes it into consideration or not if the value is there. He can foreclose the mortgage, and if the judge does anything else the mortgagee is not concerned about it; the man who takes the property subject to the mortgage should do the worrying. We have no such security at all. At no stage of the proceedings as far as I know have the Grand Trunk admitted that they were going to pay those guarantees. I never heard of anybody saying it on their behalf. They are simply saying, " You took the Grand Trunk Pacific yourselves, and for better or worse you have taken it with its obligations. We are not going to pay anything." That has been their attitude throughout, and if any member of the Government will take the responsibility of standing up here and saying that the Grand Trunk have acknowledged their liability upon those guarantees and are willing that the arbitrators shall consider that liability, I should like to hear him, whether it be the Minister of Railways, the Minister of Justice or the Minister of Finance all of whom are perhaps more directly concerned in this matter than any of their colleagues. Now, if my hon. friend from South Simcoe has that information, well and good, but I would not wish him to be put forward as the goat in this matter to take a responsibility which the ministers themselves do not care to assume.


William Alves Boys: I did not say that at all.


Daniel Duncan McKenzie: I thought my hon. friend would back out when it came to the real responsibility.


William Alves Boys: I am giving it up as useless.


Mr McKENZIE:: I think the position I take, Mr. Chairman, is absolutely clear. If we have some undertaking that the company is willing to pay those liabilities, one of which is this $22,000,000, perhaps the minister will tell us, and also advise us how much we are claiming against the Grand Trunk altogether.


John Flaws Reid: We are claiming the $22,000,000 in this item, and also in the arbitration we are claiming the Grand Trunk Pacific bonds guaranteed by the Grand Trunk Railway Company. We say that the parent company are responsible for those bonds as well, and they
11 p.m. have not taken issue in so far as that is concerned, The hon. member knows that if the Grand Trunk could have got out of their guarantees in
connection with the Grand Trunk Pacific, it is very doubtful if we could have ever acquired the Grand Trunk railway.


Daniel Duncan McKenzie: Has the minister any acknowledgment in writing or otherwise from the Grand Trunk officials admitting that the company is liable on those guarantees and regard them as a debt against the company?


John Flaws Reid: I think the hon. member heard me read a statement a short time ago of what went to make up the $89,000,000 and in that total was the $22,000,000 that we are now discussing. That statement was signed by Mr. Scott as vicepresident of and representing the Grand Trunk Railway. There is one document acknowledging officially their liability for the $22,000,000 in connection with the Grand Trunk Pacific, which is now in the hands of a receiver.


Daniel Duncan McKenzie: I presume the minister gave Mr. Scott the very same explanation he is giving to us-there is no money to pass. Does it mean anything at all except a matter of book-keeping? Mr. Scott is no longer an officer of the old company, and that company has not been doing business since the 1st of February, 1920. We took the company over, and if the minister and his officials told Mr. Scot;, "Well, we want you just as a matter of form to put this in a statement, because it is a cross entry in our books," why would he not oblige them? But he could only do that sort of thing under the direction of his board; otherwise he would have no authority to make any acknowledgmenr. for the company. It is rather simple to say that the only thing you have got is a statement made long after the fact by some official who was not authorized to make that statement.


John Flaws Reid: That is hardly correct. The Grand Trunk Pacific is in liquidation. The Government had to pay the $22,000,000, and make a demand on the Grand Trunk Railway Company in 1919. The Grand Trunk Company was asked to compile a statement of all the moneys they would require to pay their liabilities, and Mr. Kelly and Mr. Scott together said it would take $89,000,000 and in the statement they submitted was the $22,000,000 they admitted they owned and that it should be paid. The Finance Department had to advance that to the Grand Trunk Pacific, a company in liquidation, and the Grand Trunk Railway Company having acknowledged its liability, the


only way we could get security from the parent company is to ask Parliament to allow us to loan to the Grand Trunk Railway Company $89,000,000. When we have that authority we can credit to the Grand Trunk Pacific the $22,000,000 and wipe that off against the Grand Trunk Pacific. The liability is then against the Grand Trunk Railway Company. They have admitted that.


Daniel Duncan McKenzie: Supposing we accept
this whole story, I am sorry to be wasting time on something that does not need anything to he done with it-


Some hon. MEMBERS:: Hear, hear.


Daniel Duncan McKenzie: Hon. gentlemen say
"Hear, hear". They care not one whistle what becomes of the country. Twenty million dollars, forty million dollars, three hundred million dollars is nothing at all to them. If a member says anything about it he is laughed at. I venture to think that not one-tenth of one per cent of hon. gentlemen opposite understand the situation at all. Suppose we take a mortgage for this $22,000,000 for ten years. By the time the mortgage expires we shall have acquired entire ownership of the system; the old shareholders will be sitting back clipping their coupons and having a good time with our money. Now, what is going to be the term of the mortgage, and when it comes due where is the minister going to get his money?


John Flaws Reid: It will be payable on demand, and we will demand it when we know they are able to pay.


Daniel Duncan McKenzie: But the Grand Trunk will be going out of existence in a few days. If the minister comes to foreclose the mortgage upon whom will he make the demand? Upon whom will he serve the papers-himself?


John Flaws Reid: The Grand Trunk as
a corporation will not go entirely out of existence. These companies will be subsidiary companies of the Canadian National. The Canadian Pacific for instance, when they purchase a line do not allow the identity of the purchased railway company to go out of existence; they issue bonds and so on against it as a subsidiary company. The Grand Trunk itself has a number of subsidiary companies, and they are all kept alive; they do not disappear. If the mortgage is to be foreclosed, the papers will be served on the officers of the Grand Trunk Company.


Daniel Duncan McKenzie: Does the minister say that after we assume ownership and control

of all these companies we are going to keep them going as separate concerns, notwithstanding the fact that we have scooped out of them everything they had and placed them under the management of another company? Why not put all these stocks or bonds under the control of one company and have simply one concern, thus avoiding these frightful complications which seem to be resulting? I think I may say that members of the House have the average share of intelligence-more than the average, I am sure, all of us, why should we be called upon to follow a frightful muddle of this kind in trying to protect the interests of the people? If your property is to go into the hands of one company let us deal with that company and have no more complications of this kind. I repeat that I am not satisfied that we are getting anything for this $22,000,000. When we forced the Grand Trunk Pacific into the hands of a receiver and took possession of it, we assumed all its liabilities, and we should not now bother any one else about them. If there is anybody sitting on that Grand Trunk board or any lawyer appearing before it on behalf of the interests concerned who acknowledge this liability, I have not heard of it. I would rather think they still adhere to their old position, that they claim to have nothing to do with the Grand Trunk Pacific and that having taken it over we must assume all its obligations. Until I am assured that the arbitrators are taking these matters into consideration and that the value of the property will be reduced to the extent of this liability, I would contend strenuously against voting any more money along that line.
Mr. C \HILL:	The hon. member for
South Simcoe (Mr. Boys) pointed out that the Government in this way get an acknowledgment of account from the Grand Trunk Company. As I understand the matter, in 1910 and 1911 loans were made to the Grand Trunk Pacific by the Government of Canada. The Government of Canada of that day got a guarantee of the Grand Trunk Railway Company. The Grand Trunk Railway Company acknowledged their responsibility in the matter when they guaranteed the return of the loan. T.re minister now tells us that Mr. Kelley and Mr. Scott, I think, two officers of the old Grand Trunk Company, have recently acknowledged their liability as regards that guarantee. There are other guarantors or obligations of the Grand Trunk winch they do not acknowledge. For instance, they undertook to operate

the Transcontinental railway system; but on account of some changes made by the present Government in the construction or completion of the line, the Grand Trunk people took the ground that they were not obliged to carry out their contract with the Government. To that extent there is a dispute between the Grand Trunk proper and the Government. But as regards this guarantee, their is absolutely no dispute. The Grand Trunk parent company acknowledge owing $22,000,000, and they say that they are willing to pay it if they had the money. The security which the Government have to-day is a mortgage on the Grand Trunk Pacific secured by a guarantee of the Grand Trunk Company. But in the interval, the Grand Trunk Company have made an agreement with the Government whereby the Government have appointed their own directors. Now we propose to release the Grand Trunk Pacific and to take the new directors which the Government themselves have appointed, to sign this new mortgage. In my opinion, the new mortgage will not be nearly as valid as the old mortgage, because the holders of the stocks that are now being arbitrated, the minority stockholders, may take the ground that the Grand Trunk Pacific have $22,000,000 less of liabilities. It is true that the Grand Trunk have this, but they may take the ground: "You have appointed your own officers; this is a loan that you made yourselves; we are not responsible." And the position of the Government is worse if anything, but certainly not better, with this important difference, as regards the country, that if you vote this $22,000,000, if it is passed in this Estimate, the Government have the right to spend it; it is not earmarked for any particular purpose. The minister tells us that it is to make a loan to the Grand Trunk proper, with which loan they are to pay off a loan; but if in the interval the Grand Trunk find themselves short of an additiona' $22,000,000, the Government will be in a position to advance them this money during the year without coming to Parliament for an additional sum of money. The country have no better and, perhaps, not as good, security, but the Government have $22,000,000 that they can push around the checker board and use as it suits them for their purposes. That is the only important difference that I see in this appropriation and, therefore, there is absolutely no reason why this $22,000,000 should be voted in this fashion. It is not required by the Government. All that the Government have to do is to extend the time of payment to the Grand Trunk Pacific and
still hold the Grand Trunk responsible on their guarantee. The argument that they are to take a mortgage on the Grand Trunk does not get us anywhere because the mortgage is no better than the guarantee. The property is the property of the people of the Dominion, and the arbitrators will not take into very serious consideration this $25,000,000 or $50,000,000 or whatever the amount may be. The shareholders have a cevtain amount of stock; they have been paid certain dividends at times, and they claim there is a value in their securities. The arbitrators are bound to award an amount not to exceed $3,600,000 or $5,000,000 a year, I am not sure which. The amount was originally $3,600,000, and I think the Senate increased it a little. The interest charges will be so much per annum. The Government will not get one cent from the present shareholders, and it does not make much difference about these guarantees, because if the arbitrators take the ground that the Grand Trunk Company are responsible for their contract with the Government on account of the Transcontinental and their guarantee on the Grand Trunk Pacific, there is no equity in any of the stocks and the award will be nil, because not only are the parent company producing a deficit on their operation, but the subsidiary companies are having huge deficits. If you held the Grand Trunk proper responsible for the deficits of the Grand Trunk Pacific and for their agreemen- to operate the Transcontinental, it goes without saying that they are insolvent and the stock under arbitration would be worth nothing. Therefore, there is no need for this $22,000,000 loan, and it should be struck from the Estimates.


William Alves Boys: I want to put myself right with the hon. member for Cape Breton North and Victoria (Mr. McKenzie). A few moments ago he was very anxious to see the submission in a statute, and he did not think it was in any statute. It is in chapter 13 of the Statutes of 1920. I made the statement that the arbitrators would have the right to consider and deduct any liability on the part of the Grand Trunk. I went further, and in that, I was in error. I am glad I was. I said that after the award was once made, there would not be the right to make further deductions; but I find provision in this submission and I should not have forgotten it because I quite recall it now when I read it again. This provision is very unusual, and it affords the Government of this country great protection. It shows that the Government have been very careful in completing this

agreement. Under section 6, the right to consider obligations and liabilities exists. Section 10, which I am going to read, contains an unusual provision which, I think my hon. friend will agree, affords this coun-tiy exceptional protection as regards this very matter. It is headed: "Undisclosed liabilities" and reads:
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.


Daniel Duncan McKenzie: Does my hon friend think that this obligation of $22,000,000 would be an undisclosed liability?


William Alves Boys: I do not know whether he and I agree as to what that means. As I understand, it means, that if counsel representing the Government on the arbitration gave evidence of that liability, it is a disclosed liability and is considered by the arbitrators and deducted from their award. If, perchance, that is not done, at any time within three months after the making of the award, the Government may still raise the question as to this obligation, which was an undisclosed obligation, and have it deducted. Therefore, not only under this submission has the Government, through its counsel, the right to present obligations and liabilities of the Grand Trunk at the hearing in the ordinary way; but if by any chance they overlook obligations, they have a further period of three months in which to present them. I think if my hon. friend will be good enough to look at the statute which I have before me now, he will come to the conclusion that the Government is pretty well protected.


Daniel Duncan McKenzie: I do not think so at all.
I very well remember the Act going through; I was in the House at that time, and if my hon. friend finds any safeguards in the Act, no matter how weak they may be, they are there because of the strenuous efforts of the Opposition. If the Act had gone through in its original form it would have been a very weak milk-and-water affair. I do say that it was never thought at the time that any of these matters that were public property when the arbitration was entered into were to be regarded as

undiscovered indebtedness. This Government knew every dollar they were claiming against the Grand Trunk before the arbitration was entered upon, and they signed the deed of arbitration with a full knowledge of every dollar they were claiming. They could never come now and say: Something has been discovered that we knew nothing about. They could not say that because they are dealing with their own business. The object of that provision was to protect ourselves if within three months there should turn up a debt which the Grand Trunk people owed down in the United States or somewhere in Canada which they had said nothing about at the time. That is what the provision was for. We could not plead for one minute that we did not know what our claims were. We knew all our claims and all the guarantees; they were not undiscovered at all, and I am surprised that a keen capable lawyer like the hon. member for South Simcoe (Mr. Boys) should take shelter under such a flimsy structure as that, trying to make a gourd out of it for which it was never intended. I am afraid he will find a worm in it which will cause it to fall down upon him.


Mr. JACOBS:: Referring to the arbitration, in view of the fact that Mr. Taft is about to be appointed Chief Justice of the United States Supreme Court, I should like to know whether we will require to have a new arbitration. Will the proceedings have to be recommenced?


Georges Henri Boivin: I suppose the committee will allow the minister to answer by unanimous consent, but I must say that the question is not relevant to the item under consideration. We have not yet reached the item dealing with the arbitration.


Samuel William Jacobs: May I point out that we are discussing the arbitration now, and I thought that this was the proper time to put the question. It is very important that we should know what is going to happen in that respect. We have already incurred a heavy bill of costs, and if the proceedings are to be commenced all over again, we know what that means.


John Flaws Reid: I have no reason to
believe that Mr. Taft will not continue as arbitrator. As I understand, it will not be necessary to have a new arbitration. I think the proceedings will be continued.


Samuel William Jacobs: The minister knows that Mr. Taft's name has already gone before the Senate of the United States for approval.


John Flaws Reid: That is a newspaper
item, but I understand that he is going to continue.


Samuel William Jacobs: The newspapers are right sometimes.


Jean-Joseph Denis: I have listened with a
great deal of interest to the debate tonight, and I think the trouble is in a great part due to the Government not taking Parliament and the country sufficiently into their confidence. This vote, No. 120, of $167,000,000, comprises an item of $89,000,000 another of $50,000,000, and another of $26,000,000, and after hearing all that has been said by the minister and by hon. members, I cannot for the life of me understand exactly what this vote is for. I think it was the duty of the Government to place in the hands of every member a statement other than that which is to be found in the Estimates. That statement, in fact, is no statement at all. I submit, further, that it would take a juggler of more than ordinary dexterity to be able to extract anything out of this muddle. Questions come from this side of the House, and the minister answers, but Parliament and the country are none the wiser. How can the Government expect that Parliament can intelligently vote this item without having in their possession a statement or summary of the book-keeping corresponding to the figures before the committee? The minister comes along and says that this $89,000,000 is required for the reasons which are shown in the Estimates. I submit that no man in the world can have any appreciation whatever from reading these Estimates what this vote of $89,000,000 is for. It is all very well to say that we are voting this money to pay the debts of the Grand Trunk, to pay their deficits, to help them out and so on, but that is not a reasonable explanation to be placed before the members of the committee. We are called upon to vote this item blindly. For my part, if the details necessary to make the item intelligible had been given to the committee, I would not rise to discuss it, because I know it is going to pass anyway, and we are perhaps simply losing time in discussing it. The Government are asking Parliament to vote $167,000,000, and they will not give us the necessary information. I will go further than my hon. friend from North Cape Breton and Victoria (Mr. McKenzie), and say that there will not be five per cent of the members of this House who will know khat they are voting for. It is absolutely impossibly from the information before us. No accountant in the country
could make anything out of this statement, or of what the minister has told us tonight, or of what is to be found in the Estimates. Of course, we understand it in a general way, but not sufficiently to render a reasonable judgment upon it, and that is why I say that the Government are not taking Parliament and the country sufficiently into their confidence. The minister says that of this $89,000,000, $22,000,000 is due by the Grand Trunk. Before I go any further, I would like to ask the minister if the sum of $22,000,000 is the only amount of money that was due by the Grand Trunk to the Government of Canada, directly or indirectly, on the 1st of February, 1920.	*


John Flaws Reid: There were other items due by the Grand Trunk. There was an item of $3,917,000 for locomotives that were purchased, and rented to the Grand Trunk. They are paying rental for them, and we want them to buy them. We would take security on the equipment, and on the railway itself. We purchased these engines when the war was on, and the Grand Trunk are using them.


Jean-Joseph Denis: I do not want all the details. I just wanted to know whether or not there were other amounts than this $22,000,000 owing by the Grand Trunk to the Government on the 1st of February, 1920. How can a member of this House take a statement, submitted by the minister ex abrupto, and make anything intelligible out of a mass of intricate figures? This statement should have been printed and placed in the hands of the members at an earlier stage, because it is absolutely impossible for us to follow the figures now. If this had been done, many of the questions asked now would have been unnecessary. Now, if the Grand Trunk owes the Government more than $22,000,000, what is the total amount of their indebtedness? And if we are lending them money to pay us that $22,000,000, why should we not lend them money to pay us everything they owe?


John Flaws Reid: There is $22,000,000 owing by the subsidiary company; that amount is in the books, owed by a company in liquidation. The Finance Department, and the Department of Justice say that we should take security from the parent company, and we are doing so. The Government owes $3,900,000 for locomotives, purchased when the war was on, and they have been paying rental regularly, as any railway would pay for engines. Those accounts should be closed out; the parent company

will assume them, and we will take a mortgage on the road.


Jean-Joseph Denis: Are there any other obligations besides this $22,000,000?


John Flaws Reid: The Grand Trunk have guaranteed others which the Government will have to assume, but they are not due yet. One of these loans was made in 1909 for ten years, and is due; the other was made in 1911, and is also due, and we have to pay them now. When the others fall due, we shall have to pay them, and it strikes me as good business that we should renew them with the parent company.


Some hon. MEMBERS:: Question.


Jean-Joseph Denis: My hon. friends will get nowhere by shouting "question." This is an important matter, and if they are not interested in it, I am. What is the amount due by the Grand Trunk to the Government, and what will be due later on?


John Flaws Reid: That information has been furnished already.


Jean-Joseph Denis: I must once more protest against the placing of a solid mass of figures before the committee, without any previous opportunity for members to digest them. It is a bad practice, and the Government is to be censured for it. If I understand rightly, this $22,000,000 was due on or before February 1, 1920.


John Flaws Reid: The first $10,000,000 was due in 1919, and the second $10,000,000 in March, 1921.


Jean-Joseph Denis: 
Georges Henri Boivin: Is the committee
ready for the question.


Jean-Joseph Denis: Not yet, Mr. Chairman.


John Flaws Reid: In answer to the hon. member I would say that I should think the first security on a property is better.


Jean-Joseph Denis: That is what we have, the first security.


John Flaws Reid: No, we have not. We have it on the Grand Trunk Pacific but that is a company that is in liquidation.


Jean-Joseph Denis: But guaranteed by the
Grand' Trunk.


John Flaws Reid: Guaranteed by the Grand Trunk. It is not on the Grand Trunk property directly, it is on one of the sub-

sidiary companies. But if you have a loan charged to the Grand Trunk Company, the parent company, it is really again'st all the subsidiary companies as well. The others would be liable as well. In the other case we simply have the guarantee. In order to collect the debt we would have to sue the Grand Trunk. Is it not better that we should have a mortgage on the property of the parent company and thus have a claim against one of the subsidiary companies cleared up.


Jean-Joseph Denis: Before we go any further, may I ask the minister if this sum of $22,000,000 is for the whole amount of the debt of the Grand Trunk Pacific guaranteed by the Grand Trunk? As I understand, it is only for part of the amount.


John Flaws Reid: Will the hon. member repeat his question?


Jean-Joseph Denis: I want to know if this sum of $22,000,000 is the whole amount of the debt of the Grand Trunk Pacific guaranteed by the Grand Trunk?


John Flaws Reid: Oh, no, the others are not due. When they become due-


Jean-Joseph Denis: What is due?


John Flaws Reid: The $22,000,000. That has been paid. That is the reason it is due by the Grand Trunk Railway Company, they having failed to meet the obligation in 1919. So in March, 1921, the Government had to come to the rescue.


Jean-Joseph Denis: The minister has just stated that it is much better to have a debt directly against the parent company. The parent company in this case is the Grand Trunk which guaranteed the obligations of the Grand Trunk Pacific. The minister has stated that this refers to an item of $22,000,000. Is the whole of the $22,000,000 a debt of the Grand Trunk Pacific guaranteed by the Grand Trunk? In other words is it for the entire amount an indirect debt of the Grand Trunk, through their guarantee of the Grand Trunk Pacific?


John Flaws Reid: Now let me see if I understand the hon. member. The Grand Trunk guaranteed these bonds on the Grand Trunk Pacific, and the money was expended on the latter system. These two amounts that have been paid form part of the guarantee of the bonds. Therefore the Grand Trunk were indirectly responsible because they guaranteed the amount. Now that the Grand Trunk Pacific has failed the Grand Trunk are directly liable for the amount,
and we must make them pay it or take security on the company.


Jean-Joseph Denis: I will put the question in another way: Is it not a fact that the Grand Trunk Company owe the Government of Canada moneys which have been directly loaned by the latter to the former?


John Flaws Reid: Yes, of course, they do, and this will come after.


Jean-Joseph Denis: This is not due now then?


John Flaws Reid: Which?


Jean-Joseph Denis: The moneys which were
loaned by the Government of Canada to the Grand Trunk. Are they due?


John Flaws Reid: No, they are not due. If they were we would have to get the authority of Parliament to renew them again. Supposing the Government loaned the Grand Trunk $10,000,000 and took security, we would have to renew it again- at least we would have to get authority from Parliament if we wished to renew it.


Jean-Joseph Denis: What is the entire amount of money loaned by the Government of Canada to the Grand Trunk and owed directly by the company to the Government?


John Flaws Reid: I read that statement a few minutes ago. It is quite a lengthy statement and it has gone on Hansard.


Jean-Joseph Denis: To-night?


John Flaws Reid: Yes.


Jean-Joseph Denis: That is what I am complaining about. Nobody could listen to such a statement, retain the figures in his head, and discuss them intelligently a few minutes afterwards.


John Flaws Reid: The hon. gentleman
knows the only way a minister can do is to bring down his statement and give the details as requested.


Jean-Joseph Denis: The only way to doalthough I am not suggesting that course should be followed-is to prevent these Estimates from being passed, and then in a day or two the minister will come along with the required statement and read it.


John Flaws Reid: I have the statements here and have been giving them to the House from time to time. I am satisfied that if hon. gentlemen will read those statements they will realize that very full information has been given. In the case of a large item like this I must admit that

there are many details that hon. members want and are entitled to. It is altogether likely that a good deal of the discussion we have to-night will be saved another session if the special committee appointed by the House continues its sittings, takes evidence and acquires information regarding the whole National railway system. These Estimates were prepared when the impression prevailed that we would not be taking the Grand Trunk over at the present time. Otherwise all these matters would have come before the committee, and a good deal of this discussion might have been prevented.


John Howard Sinclair: Is this amount of $22,000,000 a liability against the stock of the Grand Trunk?


John Flaws Reid: Of course every mortgage you put against a road depreciates the stock of that road. I should think it is a liability against the road; that is what it is.


John Howard Sinclair: I think I can make myself understood. As I understand it, this guarantee was given ten years ago, long before anything in the way of handing over the road took place. It is a guarantee by the Grand Trunk Company to pay the debt of the Grand Trunk Pacific is it not?


John Flaws Reid: Yes.


John Howard Sinclair: Then it is a liability against the Grand Trunk itself?


John Flaws Reid: Yes, that is right.


John Howard Sinclair: Now an arbitration is going on at the present time to find out what the value of the Grand Trunk stock is, and this guarantee hangs over it. Consequently it ought to reduce the value of the Grand Trunk stock by that amount?


John Flaws Reid: Yes.


John Howard Sinclair: That is the logic of my hon. friend.


John Flaws Reid: That is right.


John Howard Sinclair: Then
why does my hon. friend not prove before the arbitrators that a guarantee was given by the Grand Trunk ten years ago of $22,000,000 which ought to be paid by the company? Why does not my hon. friend prove his case in regard to this $22,000,000 before the arbitrators, in place of asking us to vote the money again and going through 
this manoeuvre of mortgaging our own property to square his books? It seems to me a very simple proposition to go before the arbitrators, if this is a legal obligation, prove the case, and settle the business there. How does my hon. friend explain bis failure to pursue that course?


John Flaws Reid: The directors of the Grand Trunk admit this liability. It is before the arbitrators now, and the arbitrators will consider this liability. The Grand Trunk admit their liability and they will have to settle the matter in so far as we are concerned..


John Howard Sinclair: If it
is charged up against the Grand Trunk stock that settles it.


John Flaws Reid: We want to have a mortgage against the road.


John Howard Sinclair: We
want to know what we ought to pay for the stock of the Grand Trunk Pacific, and the less we pay for that stock the better it will be for us; and if we can charge this $22,000,000 against the Grand Trunk Pacific, we will have that much less to pay. Mortgaging the road is no good to us, because it is our own road, and in the end we will have to pay the mortgage ourselves. That is the point I want my hon. friend to make clear. It is very simply to me that if he the minister has a valid claim he should prove it before the arbitrators, and if he succeeds that is the end of it, because we get the stock of the Grand Trunk for that much less.


John Flaws Reid: The Grand Trunk
have acknowledged this indebtedness. I put on Hansard this evening a statement signed by the Grand Trunk admitting this liability of $22,000,000.


John Howard Sinclair: The
document signed by the Grand Trunk was signed by officers oppointed by ourselves, not by the Grand Trunk prior to the time that this transaction took place.


John Flaws Reid: No, Mr. Kelley was
president of the Grand Trunk, and Mr. Frank Scott was comptroller for many years.


John Howard Sinclair: Then
if that is so the liability is all the easier to prove.


John Flaws Reid: I say Mr. Scott sent
in a statement some months ago showing the liabilities of the Grand Trunk that should be straightened out, and among them is this $22,000,000 paid by the Government

on account of the Grand Trunk Pacific and guaranteed by the Grand Trunk. Now then, that stands in the books of the Government as owing by the Grand Trunk Pacific but guaranteed by the Grand Trunk. The arbitrators in making their award will take all that into account. Therefore, in view of all that, I cannot see where it is not in the interest of the railway, the Government and everybody else that we should have the debt against the company that owes it and should pay it.


Jean-Joseph Denis: But the company belongs
to us.


John Flaws Reid: It does not make any
difference.


Jean-Joseph Denis: It makes all the difference.


John Flaws Reid: Suppose the hon. gentleman purchased a farm, and he put it in the name of the company of which he owned all the stock, if there was a liability against that farm would he not think it would be well, if he has other interests, that any loans he makes in the operation of that farm would not be placed against it; or would he rather charge it up to himself and pay it out of his own pocket?


John Howard Sinclair: There is sometlvng very bewildering about my hon. friend's statement. He tells us that this liability of $22,000,000 is before the arbitrators, and that he expects to collect it from the Grand Trunk, or to reduce the value of the stock of the Grand Trunk by that amount. Surely my hon. friend does not want to be paid twice?


John Flaws Reid: I will be satisfied with once. I wish I could get the money now.


Some hon. MEMBERS:: Question.


Daniel Duncan McKenzie: We are not ready for the question. The Minister of Railways cannot blow hot and cold. He tells us that he has put evidence before the Board of Arbitrators of the existence of 12 m. this indebtedness of $22,000,000, but I am not so sure that he can tell us who testified as to this claim before the Arbitration Board. But he says that is being considered by the board and he expects them to do justice in regard to it, and to cut down the value of the Grand Trunk stock to that extent. If that is so, what are we taking a mortgage for? But the real fact of the case is thait if after this goes through the Government attempted to argue before the board that this $22,000,000 is still a liability against
the old company, the company's lawyer would claim that the old obligation of $22,000,000 is paid by this new mortgage and the fid company is not responsible at all. That is the situation, whether hon. gentlemen opposite understand it or not.
If a man has a note outstanding, and he gives a new note, that pays off the old one although no money passes. In this case there was an old liability of the Grand Trunk by way of guarantee. Now they have given a mortgage for that old liability. Is that not equivalent to paying that liability? If not, does it mean anything at all? I should like to hear from the minister whom he sent down to Montreal to testify as to our claims against the Grand Trunk Pacific, and in what shape the evidence was put before the arbitrators. It would be interesting to get a copy of his testimony.


John Flaws Reid: The hon. member would not expect me to have that evidence here this evening. But in discussing the matter with counsel for the Government there was no question about the Grand Trunk admitting their liability. The solicitors never took issue on the liability of the company in regard to the guaranteeing of the bonds of the Grand Trunk Pacific. They did take issue, of course, as was stated in the House, as to the Grand Trunk assuming the operation of the Transcontinental, although rhat is one of the claims of the Government that will be put before the arbitrators as well as the liabilities in respect of the Grand Trunk Pacific and other subsidiary companies.


Daniel Duncan McKenzie: Does the minister say, then, that he has no confidence in the arbitrators, that he does not believe they will give us credit for these amounts? If he does, why not leave the matter with them? I shall be satisfied if he says that the board will give us credit for these amounts; that it will take them into consideration in arriving at the award. If the Government is assured that the board will do that, there is no sense in taking this mortgage, we have no business to take it.


John Flaws Reid: I have every confidence in the arbitrators; they will take this into consideration. The only difference between the hon. member and myself is as to whether we should let our security remain as against thte subsidiary company or hold it against the Grand Trunk itself. We say that the parent company, which is liable for this debt through its guarantee, should now furnish the security.


Daniel Duncan McKenzie: If we are satisfied that this sum will be included in the judgment, why should we take a mortgage? I assume that enough money will be found to be due to the company to cover these liabiliities. By proceeding in this way we are simply jeopardizing our position. We should hold on to the original security. We are simply cancelling the old security and taking this new one; one wipes the other out. We are endangering our position, if we ever had anything but a dangerous position in this matter. If our old security was any good we are simply destroying it by taking this new security on our own property. We have the old claim or guarantee clearly and indisputably against the old company, but with this new security the officers of the company have nothing to do. They will say to us: You can pile mortgages on your own property as high as the tower of Babel; we don't care anything about it; we are not affected in the slightest degree. If the minister is satisfied in regard to the manner in which the matter will be dealt with in the arbitration, then I think he should leave it as it is.


John Howard Sinclair: There is only one source from which we can get one dollar out of these liabilities, and that is the stock of the Grand Trunk. The shareholders are not liable; the road is our own; the only course we can draw from is the stock itself. If the debt of $22,000,000 as against that stock is recognized by the arbitrators, we do not need any mortgage, because we shall have that much less to pay for the stock. The minister has not satisfied me that we are going to gain anything by what he proposes to do. It is quite clear that if we make our own property liable for this debt before the artbitrators have made their decision we are only complicating matters and probably destroying any claim that we have.


John Flaws Reid: We are not destroying any claim. Our legal advisers think this is the way we should proceed. The Grand Trunk itself is liable for these amounts and we want to have them responsible, because they are the ones from whom we should collect if necessary. Hon. members may laugh, but I want .to say that if it was not for the liabilities of the Grand Trunk Pacific the Grand Trunk Railway would not be for sale to-day. That is where the trouble is, and we want to have this claim against the parent company.


Daniel Duncan McKenzie: How is it then, that the Grand Trunk, quite apart from the THon. Mr. Reid.]
Grand Trunk Pacific, is hopelessly and helplessly insolvent? We were told a moment ago that $69,000,000 was the deficit on their road, in addition to the $25,000,000 announced by the minister in his statement made earlier in the session. In other words, The Grand Trunk was $60,000,000 or $70,000,000 in default last year, entirely apart from the Grand Trunk Pacific.


John Howard Sinclair: The
minister has told us that the operating deficit on the Grand Trunk for the current year was about $7,000,000. When he forced Parliament to take over the Grand Trunk he told us that it was going to be a paying venture; that it would be the one part of the whole system that would make the other parts solvent; that if we had the Grand Trunk with its terminal facilities and all its other advantages we would be in a position to make the other roads pay. That was the statement on which he secured the vote of the House to take over the Grand Trunk. It did not take us long to find that the statement was incorrect. He comes now before Parliament and tells us that the Grand Trunk itself has a deficit in operation this year of $7,000,000. How in the face of that can the minister say that it is the Grand Trunk Pacific which has been pulling down the Grand Trunk?


John Flaws Reid: I said that the Grand Trunk had lost some $6,000,000 or $7,000,000, but when I made that statement I was not referring to operating expenses. The Grand Trunk outside of its Grand Trunk Pacific made its operating charges and two or three or four millions on the fixed charges last year. It failed by $6,000,000 or $7,000,000 to earn sufficient to pay its fixed charges. The reason for the deficit on operation last year was that between the first of May and the first of September last year they had to meet this back pay and they had no chance to make larger earnings, owing to the fact that the freight rates had not been increased. This year the Grand Trunk itself will earn its operating expenses and part at least, perhaps all, of the amount necessary to pay fixed charges. Of course, it may fall short on account of abnormal conditions-the high cost of fuel and of materials. That is the position of the Grand Trunk.
It is not a deficit, as the hon. member stated a few minutes ago. The other amounts are not deficits; they are amounts that should have been borrowed from time to time as charges against the railway.

But the Grand Trunk for the last two or three years, while all these litigation troubles were going on, could not borrow money, and these amounts had to stand and be borrowed temporarily, as was done. I said then, and I repeat now that I have no doubt that the old Grand Trunk Railway company will meet its fixed charges; I go further; I feel satisfied that the Canadian Northern Railway system will also earn its fixed charges within a few years. I am not at all pessimistic about the situation. I feel that we have a great asset in this railway system if it is allowed to continue in operation for a few years.


Daniel Duncan McKenzie: In a statement made
earlier this session the minister told us that in the year 1921-22 he would likely have a deficit of $100,000,000. He will find that in his statement he said that the deficit last year was $48,000,000; this year it was $70,000,000, and he told us he would rot be surprised if in all it would reach $100,000,000 for the ensuing year. If the amount of $100,000,000 is correct, will he tell us how he divides that between the different railway systems, and how much, it is anticipated, would fall to the Grand Trunk?


John Flaws Reid: I have not the figures
just at hand; but if I remember rightly, when I made that statement, the deficit on what we call the present Canadian National Railway system, that would be the Canadian Northern, Intercolonial, Transcontinental, what we are operating now, was estimated at about $60,000,000; then the deficit on the Grand Trunk Pacific was estimated at some $20,000,000, and as regards the Grand Trunk, I think the estimate was about $6,000,000 or $7,000,000. As far as I can remember, that would be the estimated loss during the fiscal year, January 1, 1921, to December 31, 1921.


Daniel Duncan McKenzie: Since we took over
the road on February 1, 1920, we are liable for the operation in all its details. Why do we not pay that debt as we pay a debt in connection with the Intercolonial, without going through the circumlocution of borrowing money in the name of the Grand Trunk, giving it to somebody in the name of the Grand Trunk and paying our money out in that way? When we go into the money markets in the name of any company to borrow money, we do not get the same rate that we would get if we were borrowing directly. I had no end of fun with the Minister of Finance (Sir Henry Drayton) on the Budget in connection with his borrowings. Some of the bonds of this
company, after we took it over, were selling at 91 point something-that was the lowest, 91 point something for another issue, and 96.20 was the highest.


John Howard Sinclair: What rate of interest?


Daniel Duncan McKenzie: Seven per cent. Six
and a half per cent, I think, was the lowest. This company was getting only 91, 95 and 96 because we were borrowing in the names of these old companies. Anybody who has any knowledge of financing knows that, no matter how good a guarantee may be, a bond that is merely guaranteed will not sell at as high a rate as the direct liability. If we were selling the securities of the Dominion, surely they would sell at their face value. I showed in the discussion on that occasion that bonds of the Nova Scotia Government sold in one case at 101 point something and in another at 102 point something. Surely the bonds of the Dominion should sell as high as those of any of the provinces. But about the same time Nova Scotia was getting 102 for her securities at 6 per cent we were selling 7 per cent bonds, with the guarantee of the Dominion of Canada, for about 91.20 simply because we were taking this frightful way of borrowing in the names of those old concerns, instead of going to the market with our own securities and paying our own bills. If the minister was trying to plan out the most difficult way of doing business and getting money, while destroying our credit, I do not see how he could do it better than he has been doing it for the last year or so in connection with these bonds. I can see no reason on earth why, when we have this road on our hands, we should not pay these bills like men directly and not borrow in the name of the Grand Trunk in order to pay bills of the Dominion Government.


Sir HENRY DRAYTON:: I do not want to take issue with my hon. friend.


Daniel Duncan McKenzie: My hon. friend had
better not.	.


Henry Lumley Drayton: I am afraid
of him; he is a great long-distance worker, but he could not tell me when we were talking about these bonds, what market he was getting his quotations from. He could not say whether they were Canadian or New York funds. I have looked up the matter since. He has mixed up quotations in both markets, and when he claimed that the issue in Nova Scotia was higher than the railway issue, he took Canadian quotations in one instance and American

quotations in the other. I find the truth to be that, on the same market and taking the same quotations, the railway financing has been well done; that those bonds stood higher than did any other bonds of any government on that market, not excepting the British Government, and several points higher than the bonds of Nova Scotia.


Daniel Duncan McKenzie: I certainly join issue
with my hon. friend. I quoted and put on Hansard the letter of the deputy Provincial Secretary of Nova Scotia and I stand behind him. I saw in the press the report of the loan and I wrote to him. He did not know that I was going to use this in the House nor what I wanted it for. He told me that the bonds sold for 101 in one case and 102 in the other. I pledge my word of honour that I am sure that Mr. Barnstead gave me the facts. The letter is in my possession, and I shall be glad to produce it if the minister has any doubt about my word. He knows that Mr. Barnstead is deputy Provincial Secretary of Nova Scotia and assistant treasurer of the province, and he will get word from Mr. Barnstead very quickly that those are the quotations which he gave me, and I am sure he gave me the exact facts.


Henry Lumley Drayton: No doubt my hon. friend is perfectly sincere, but the trouble is that he does not distinguish between New York and Canadian funds. He does not distinguish between a premium and a discount, and unfortunately a premium on one side and a discount on the other make all the difference in the world. A low quotation relatively with a discount in New York, when converted into Canadian currency, which the Nova Scotia treasurer got because he was getting his money from New York, becomes a premium.


Daniel Duncan McKenzie: The company through whom the Nova Scotia Government negotiated their loan had an office in Toronto. I have no doubt in the world that the Nova Scotia Government did their business with the Toronto office, and surely when doing business with the Toronto office, doing Toronto business, they were not going to accept at a discount Canadian money in Toronto. There is not a scintilla of evidence that Toronto or Nova Scotia got anything but the full face value of the 101 or 102 stated in the letter. I rather think, from what I know of Mr. Barnstead, that if there was any quibble of that kind he would have told me. He would have been deceiving me if he had told me they got the full face value if they actually got anything less.


Frank S. Cahill: When the Minister of
Railways first proposed this loan of $22,000,000 to retire the Grand Trunk Pacific loan, I understood him to say that it was the wish of the Minister of Finance that the transaction should be put through in this way. I see the Minister of Finance in his seat now, and perhaps he might explain to us why he wants a mortgage on our own property in lieu of a mortgage on another property which is guaranteed by the Grand Trunk. The Minister of Railways did not seem to be very clear in his own mind as to why it should be done in this way, but seemed to hope that the Minister of Finance would come in and help him out. Perhaps he would explain the reason now.


Henry Lumley Drayton: In view of the lateness of the hour, and after having heard the lucid explanation given by the Minister of Railways, I feel that I cannot usefully add to the discussion.


Frank S. Cahill: Does the Minister of Finance agree with the statement of the Minister of Railways?


Henry Lumley Drayton: I do not know the one to which the hon. gentleman is referring.


Joseph Philippe Baby Casgrain: The Minister of Railways has also referred very often to the Minister of Justice in this debate. He has told us that he has sought advice from both the Minister of Finance and the Minister of Justice, and that this is a question both of accounting and of law. We have all respect for the Minister of Justice. We know that he gives a very good opinion on many occasions. Since the beginning of the session he gave as the opinion one day that the then member for Leeds (Sir Thomas White) had the right to keep his seat, although that hon. member later on chose to resign. Perhaps he was not satisfied with the opinion of the Minister of Justice. I think that as the Minister of Railways has so often mentioned the name of the Minister of Justice in this debate, and has said that he was acting upon his advice, it is only fair that we should have the legal aspect put before the committee.


John Flaws Reid: I did not make any such statement.


Mr. McCREA:: I understood the minister to say that the loss on operation last year on the Grand Trunk was $7,000,000. A little earlier in the evening he stated that $5,000,000 was owing to the Grand Trunk

by the United States Government, under the arrangement whereby the United States took over the operation of all the roads and agreed to pay a certain percentage of the earnings which the railways had had on an average for the preceding three years. Does that $5,000,000 that is due by the United States represent the loss on operation on the United States end of the road for the year which has just passed, and does the $7,000,000 represent the loss on the Canadian end, or does the $7,000,000 represent the loss on both ends?


John Flaws Reid: On the whole Grand Trunk Railway system, including all the American roads and subsidiary companies, except the Grand Trunk Pacific Railway. As I understand it, the Grand Trunk earned its operating expenses, but was short some $6,000,000 or $7,000,000 in meeting its fixed charges.
Amendment (Mr. Cahill) negatived.


Arthur Bliss Copp: Before the main motion
carries, I would like a little information.
I thought I had a reasonably fair grasp of the situation after the time I had spent in the Railway Committee studying this question, but the Minister of Railways this evening has led me through such paths of distress that I am absolutely in the dark again in regard to railway financing and the general railway jumble my hon. friend has got into. We had before the railway committee expert witnesses who gave us information that, in some parts, at least, was fairly clear, but the minister has befogged the whole situation, and I do not wonder that my hon. friend from Joliette (Mr. Denis) said that it was absolutely impossible for any ordinary individual after listening to this discussion for three or four hours, and with figures presented for the first time running into the hundreds of millions of dollars, to cast an intelligent vote. This mortgage of $22,000,000 which my hon. friend is anxious to get from the Grand Trunk Railway as security for a loan to the Grand Trunk Pacific is a new thing to me. In regard to the terms of the mortgage on the property of the Grand Trunk, how long does the minister propose that the mortgage should run?


John Flaws Reid: I stated a few moments ago that it would be a demand mortgage, but, of course, the Minister of Finance may decide to change the terms. At all events, it will be a mortgage against the road, either on demand, or for a definite
period, and I would suggest a demand mortgage.


Arthur Bliss Copp: If that is correct, and if it is also correct, as has been argued by my hon. friend from Antigonish and Guys-borough (Mr. Sincair), and by my hon. friend from Cape Breton North and Victoria (Mr. McKenzie), that this $22,000,000 is a direct charge, or offset, call it what you will against the amount of the arbitration award for the stock of the Grand Trunk, and if that arbitration is to be completed in the * course of a few months, it does seem to me that the mortgage is unnecessary.
Suppose the arbitrators allowed $50,000,000 for the stock of the Grand Trunk Railway: as the Government would hold $22,000,000 of a mortgage, instead of paying that $50,000,000, they would pay $28,000,000. I can see no particular disadvantage in taking a mortgage, along with any other security you have, provided the Government has assumed all the liabilities of the Grand Trunk. If you assume all the liabilities, and there is no one who can come in with a first mortgage, ahead of the $2,000,000, while it will do no good,
I do not see that it will do any harm. Now, Mr. Chairman, the minister has a number of items to put through, and I do not think it is the intention of any one unnecessarily to prolong the discussion; but members of Parliament owe it as a duty to the people to obtain all the information possible in regard to this important matter, and to give it the greatest degree of attention. We realize that we are in an unfortunate position in regard to our railways, and it should be the one resolute desire of every member of Parliament to work out the best possible solution of the problem. I suggest to the minister that as we have had a lengthy discussion to-night on this particular item, and as a gret deal of information has been placed on Hansard, which, as my hon. friend from Joliette (Mr. Denis) has truly remarked, cannot be digested in the course of an hour, this item be allowed to stand so that we may have an opportunity of reading Hansard and studying the whole question. I do not suggest that we should stop altogether now, if my hon. friend wants to go on with other items.


John Flaws Reid: I agree that the item is a large and important one, and I do not wish to rush it unduly. If hon. members desire to discuss it at further length, I have no objection; I want to give them all

the time possible to study it. The railway problem to-day is one of the most important matters that have been before any government. Before I leave this item, however, I want to move an amendment so that hon. members may have it to study before they approach the consideration of the matter at the next sitting. When these Estimates were prepared, we did not know that the arbitration would end, and the language of the item was prepared under those circumstances.
I beg to move, in connection with the wording of the item for $89,687,633.39, the following:
Insert after the word "the," in the sixth line, the words "Canadian National Railway Company, the."
Insert after the word "the," in the eighth line, the words "Canadian National Railway system or the."
Insert after the word "system," in the ninth line, the words "or any of them."
Insert after the word "of," in the twenty-first line, the words "the Canadian National Railway Company or."
Insert between the words "the" and "Grand," in the twenty-ninth line, the words "Canadian National Railway Company or the."
I may state that His Excellency the Governor General has been informed of the proposed change and recommends it to the House. The reason the change is made, is that when the Estimates were printed we were not sure that the Grand Trunk would become part of the Canadian National system. Since that time legislation has been introduced providing for the acquiring immediately of the Grand Trunk system. It, therefore, becomes necessary to make the changes which I have proposed, in order to permit of the appropriation being used after the Grand Trunk Railway system is merged in the Canadian National Railway system.
This means that the vote is to meet the expenditures made, or indebtedness incurred, at any time by or on behalf of the Canadian National Railway Company, the Grand Trunk Railway Company of Canada or any company comprised In the Grand Trunk system. It simply adds the Canadian National Railway Company.


Mr. BUREAU:: Will the item as amended be printed in Hansard?


John Flaws Reid: I was going to suggest that, instead of reading the item as amended, which is rather lengthy, I might hand it to Hansard to be published.


Daniel Duncan McKenzie: Before the minister does that, I notice that at the end of the motion which he has made, provision is 
made for the payment of debts of the various companies. We are only liable for the debt of the Grand Trunk since we took it over. He should put something in to show that we are liable for those debts since the company has become the property of the Government. Some date should be fixed.


John Flaws Reid: We have to assume
responsibility for the debt's of the company as at the date decided upon by the arbitrators. However, when we are next in committee, I shall consider any suggestions hon. members have to make.
Item as proposed reads:
Loan not exceeding $89,687,633.39 repayable on demand with interest at the rate of six per cent per annum, payable half-yearly, to be used (where amounts available from net operating: earnings may ibe insufficient) to meet expenditures made or indebtedness incurred at any time by or on behalf of the Canadian National Railway Company, the Grand Trunk Railway Company of Canada or any company comprised in the Canadian National Railway system or the Grand Trunk Railway system, or any of them (excluding herefrom, however, expenditures or indebtedness incurred by or on behalf of the Grand Trunk Pacific Railway Company except as specifically provided in item (f) hereof) on any of the following accounts: (a) operating deficits, (b) acquisition of property, materials and supplies, (c) interest on notes, securities or obligations, (d) the principle and interest of maturing or matured loans, secured or unsecured, (e) construction and betterments, (f) guarantees by the said Grand Trunk Railway Company of securities, of the Grand Trunk Pacific Railway Company, such loan to be secured by mortgage or mortgages upon the undertaking of the Canadian National Railway Company or the Grand Trunk Railway Company of Canada on such terms and conditions as the Governor in Council may approve. The loan or assistance herein authorized may be made in cash or by way of guarantee, or partly in cash and partly by guarantee, in the discretion of the Governor in Council. Any guarantee from time to time given under the authority herein may be of the principle and interest of the notes, obligations or securities of the Canadian National Railway Company or the Grand Trunk Railway Company of Canada, and may be signed by the Minister of Finance, on behalf of His Majesty, in such form and on such terms and conditions as the Governor in Council may approve, $89,687,633.39.


Frank S. Cahill: I would suggest to the minister that he ask the leave of the committee to hand in to Hansard the statements which he has read appertaining to the Grand Trunk Pacific, and the information he has in regard to the Grand Trunk, so that we may be in a better position to study the matter.


John Flaws Reid: I think all the statements I read are on Hansard.


Lucien Cannon: I would like to ask the minister if he has obtained the consent of the Governor General to his amendment.


John Flaws Reid: Yes, I made that announcement.


Georges Henri Boivin: Before this matter
goes any further I may say that the minister did point out to ithe committee that His Excellency the Governor General had been informed of the* proposed change and recommended it to the House. I have accepted tne amendment for the time being but subject to further decision by the Chair. I am not absolutely sure that an announcement by a minister in committee that the recommendation of His Excellency has been obtained is quite sufficient. The question which arises here is whether there is really a change in destination of the amount. That will be looked into before the amendment is formally put to tne committee for a vote, and the Chairman will announce the decision thereon at the next sitting.


John Flaws Reid: I want to give notice of another amendment. I beg to move, in connection with the wording of the item for $26,0)0,000, the following:
Insert alter the word "the." in the sixth line, the words "Canadian National Railway Company or the."
Insert after the word "the," in the eighth line, the words "Canadian National Railway System or in."
Insert after the word "System," in the ninth line, the words "or any of them."
Strike out the word "vote," in the twelfth line, and insert instead the word "item."
Insert after the word "the," in the nineteenth line, the words 'ICanadian National Railway Company or of the."
Insert after the word "the," in the twenty-seventh line, the words "Canadian National Railway Company or the."
I may state that His Excellency the Governor General has been informed of the proposed change and recommends it to the House. The same reasons that I have given for the change in the previous item apply to the changes in this item.
The item as proposed reads:
Loan not exceeding $26,000,000, repayable on demand with interest at the rate of six per cent per annum, payable half-yearly, to be used (where amounts available from net operating earmngs may be insufficient) to meet expenditures made or indebtedness incurred at any time by or on behalf of the Canadian National Railway Company or the Grand Trunk Pacific Railway Company or any company comprised in the Canadian National system or in the Grand Trunk Pacific Railway system, or any of them, (excluding herefrom, however, guarantees by the Grand Trunk Railway Company which are provided for in item (f) of the next preceding item), on any of
the following accounts: (a) - operating deficits, (b) acquisition of property, materials and supplies, (c) interest on notes, securities or obligations, (d) the principal and) Interest of maturing or matured loans, secured or unsecured, (e) construction and betterments; such loan to be secured by mortgage or mortgages upon the undertaking of the Canadian National Railway Company or of the Grand Trunk Pacific Railway Company on such terms and conditions as the Governor in Council may approve. The loan or assistance herein authorized may be made in cash or by way of guarantee, or partly in cash and partly by guarantee, in thi discretion of the Governor in Council. Any guarantee from time to time given under the authority herein may be of the principal and interest of the notes, obligations or securities of the Canadian National Railway Comnany or the Grand Trunk Pacific Railway Company, and may be signed by the Minister of .Finance, on behalf of His Majesty, in such foim and on such terms and conditions as tne Governor in Council may approve $26,000,000.


Lucien Cannon: You have not given your decision, Mr. Chairman, but I think in a case of this kind, whenever the minister wishes to change an item in the Estimates, he should bring in an entirely new resolution, approved by the Governor General, and not simply an amendment. The Governor General cannot give consent to an amendment, but he can approve of a resolution.


John Flaws Reid: Perhaps we can take the balance of the items in connection with this item No. 126. They are to be found on the next page.


Daniel Duncan McKenzie: I would like the minister to produce the submission deed in connection with the arbitration so that we might have an opportunity of seeing it. I have not seen it myself and I would like to have it on Hansard.


John Flaws Reid: It is in the statute. It is the agreement that was attached to the Bill.


Daniel Duncan McKenzie: Does not the minister think we might adjourn now; it is past one o'clock.


John Flaws Reid: We have not made any progress at all.


Daniel Duncan McKenzie: We have made very extensive progress.- We have got through a lot of matters that will not bother us again. Nothing is gained by these late sittings which exhaust our vitality for the next day. We might as well go home and get a good sleep, then we shall be able to do some work to-morrow.
Miscellaneous works not provided for, $2,060.


John Flaws Reid: There are only four or five items. Perhape we could pass them and then close up.
REVISED EDrflON.


John Howard Sinclair: I think the committee should rise because there are a few questions in regard to railway matters that hon. members on this side will want to have something to say about. I do not think we should put these items through to-night.


John Flaws Reid: We have not made any progress with any of these items. However, I have no objection to letting the railway Estimates stand so that we might go on with the labour Estimates.


Frank S. Cahill: It is too late to start
now. We had better take them up tomorrow.
Labour-Salaries, $171,640 ; contingencies, $35,000.


Georges Henri Boivin: Shall the item carry?


Jacques Bureau: It is pretty late and the committee seems more or less indisposed to work longer to-night. The Prime Minister ought to let us go to bed and we shall be in better humor to-morrow.


Arthur Meighen: I will be content if the committee passes this one item. Then we can adjourn. I want to point out that we really are not getting on very fast.


Jacques Bureau: I know there are a good many members who desire to speak on this item.	i
Right hon. Mr. MEIGHEN: There are no changes in connection with this item.


Lucien Cannon: There is an increase of $4,983. What is the reason for it?


Arthur Meighen: That is accounted for by the statutory increases, and there have been as well 54 clerks recommended for transfer from the temporary to the permanent list. That accounts not only for the $4,900 but for a great deal more, but what it accounts for more is made up in the saving.


Joseph Philippe Baby Casgrain: What is the reason
for the increase?


Arthur Meighen: I have just explained. It is due to the statutory increases and the transfer of certain temporary employees to the permanent list, and having them therefore paid out of civil government for the first time.


Daniel Duncan McKenzie: If this item goes
through, it is understood that any person not here now who might want to say anything about it may do so on the others that are to stand?


Arthur Meighen: There is no objection.


[Stage Direction]
Item agreed to.
Progress reported.

[Stage Direction]
A message from His Excellency the Governor General transmitting further Supplementary Estimates for the year ending March 21, 1922, was presented by Sir Henry Drayton (Minister of Finance), read by Mr. Speaker to the House, and referred to the Committee of Supply.
On motion of Right Hon. Arthur Meighci the House adjourned at 1 a.m. Tuesday.
Tuesday, May 31, 1921.