Right Hon. W. L. MACKENZIE KING (Prime Minister):: With the consent of the house I should like to move:
That notwithstanding section 2 of standing order 6, this house shall not be adjourned at six o'clock on Wednesday, May 22nd instant, and on every subsequent Wednesday until the end of the present session.
That means that we shall adjourn at six o'clock to-night, but on Wednesday of next week we shall sit in the evening.


[Stage Direction]
Motion agreed to.

Questions

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

Mr. FRASER:: 1.	What was the amount of sockeye fry released in the Skeena river, the Naas river, and Rivers inlet, in each year since the inception of the Department of Fisheries?
2.	What quantity of soelceye spawn has been taken annually from the Skeena river, lakes
Year	Number
1903			 3,450,000
1904			 4.000,000
1905			 4,267,900
1906			 3,784,450
1907			 4,125,750
1908			 8,946,950
1909			 11,782,200
1910			 12,089,000
1911			 12,556,470
1912			 12,367,500
1913			 11.430.430
1914			 11,843.200
1915			 13,822,613
1916			 13,544,257
1917			 9,699,350
1918			 12,166,010
1919			 8,096,000
1920			 8,834,000
1921			 12,325,095
1922			 9,416,279
1923			 16,018,178
1924			 18,237,993
1925			 14,620,510
1926			 14,061,850
1927		
1928			 16,284,870
and tributaries, and placed in the lakes, and tributaries of the Fraser river, giving places taken from in the Skeena watershed and where placed in the Fraser river watershed?
3.	What, if any, other varieties of salmon spawn were so transferred, with quantities of each variety each year?


Mr. CARDIN:: 1.	Distribution of sockeye in the Skeena river watershed-sockeye salmon eggs, fry, advanced fry, fingerlings and older fish:
Distribution of sockeye in the Naas river, nil; distribution in waters in the rivers inlet district-sockeye salmon:
Year	Number
1906		
1907			 7,577,000
1908		
1909		
1910		
1911			 11,436,000
1912		
1913		
1914		
1915		
191G		
1917		
1918			 13.694.000
1919			 2,908.800
1920		
1921		
1922			 16,929,885
1923		
1924			 13,408,253
1925		
1026			 18.169,754
1927		
1928		
2.	Salmon spawn taken from the Skeena river watershed and watershed.
Number
rear	Where Taken	Distributed1907	Lakelse	lake waters	100,0001915	Babine	lake waters	3,360'0001916	Babine	lake waters	2.840,0001920	Babine	lake waters	6,587,0001921	Babine	lake waters	5,893,7201924	Lakelse	lake waters	7,674.0001925	Lakelse	lake waters	5.000.000Lakelse lake	waters	2,300,0001926	Babine	lake waters	2.485,000Lakelse lake	waters	5,000,000Lakelse lake	waters	2,110.000Lakelse lake	waters	5,014,5001927	Babine	lake waters	4,957,0001928	Babine	lake waters	4,004*075
transferred to the Fraser river
Where Distributed Bon Accord hatchery. Stuart lake hatchery.
Stuart lake hatchery.
Stuart lake hatchery. Stuart lake hatchery. Quesnel district waters. Quesnel district waters. Qhesnel district waters. Stuart lake waters.
Stuart lake waters.
Quesnel district waters. Nadina river-Francois lake. Stuart lake waters.
Stuart lake waters.
3.	Varieties of salmon other than sockeye were not transferred from Skeena watershed to Fraser river watershed.


GLACE BAY POST OFFICE
Mr. MacDONALD (South Cape Breton):: , 1. What work was done on the public building at Glace Bay during the past year and by whom was such work done?
2.	What was the revenue of the Glace Bay post office for the years 1922 to 1928, inclusive?
3.	How many persons are employed in the Glace Bay post office?
4.	What are their names and salaries?
5.	How many letter carriers are employed ii: connection with Glace Bay post office?
6.	Of the number, how many are returned soldiers?
Questions


Mr. RINFRET:: 1.	Installation of hot water furnaces, A. Almon; rewiring of building, Arthur & Conn; repairs to plumbing, A. Almon; repairs to pavement, light and curb, P. McCasikill.
2.	Fiscal year ending 31st March:
1922	$17,758	601923	
17,658	541924	
18,185	191925	
16,502	011926	
15,891	321927	
14,964	171928	
18,343	133.	14.
4.
J. R. Burchill	$2,400
J. D. Caimeron	 2,100
F.	J. Keliher	 1,080
Miss N. E. McLeod		1,080
Miss A. F. Cullen	 720
Donald Gillis	 720
J. R. Cameron	  1,080
L. G. MacCorrison	 1,080
P. M. McKinlay	 1,080
G.	J. O'Neill	 1,080
G.-D. Walker	 1,080
Chas. Weeks	 1,080
J. B. McNeil	 1,080
E. J. Rogers	  1,080
5.	8.
6.	5.


PICTOU COUNTY-PATRONAGE
Mr. CANTLEY:: 1.	What is the name and the address of the gentleman recognized by the minister, resident engineer, or other officer of the Department of Public Works, as having the patronage of the county of Pictou during the year 1927 and part of 1928?
2.	Who succeeded to the patronage of the county during the latter part of 1928 and 1929?


Mr. ELLIOTT:: 1.	There is no individual so recognized.
2.	Answered by number 1.


LONG BRANCH RIFLE RANGES
Mr. CHARTERS:: 1.	How many acres are contained in the government property in Toronto township known as the Long Branch Rifle Ranges?
2.	Is it the intention of the government to
offer this property for sale?	_
3.	What was the acreage sold in 1925, if any?
4.	Who was the purchaser?
5.	What was the purchase-price and terms of payment?
6.	What amount, if any, has been paid in actual cash?
7.	What amount of principal and interest remains unpaid?


Mr. RALSTON:: 1.	377.54 acres.
2.	No.
3.	28.28 acres.
4.	Hiibbs & Hubbs Ltd., Toronto, Ont.
5.	Purchase price, $40,073.95. Terms, initial payment, $10,073.95; semi-annual payments- nine, of $1,000 each. Balance payable December 31, 1930. Interest on unpaid balance at six per cent per annum.
6.	$20,149.13.
7.	Balance of principal unpaid, January 1, 1929, $24,975; balance of interest unpaid, January 1, 1929, nil.
mr. t. l. cory-travelling expenses


Mr. MACDONALD (Richmond-West Cape Breton):: What amount of travelling expenses have been drawn during the calendar year 1928 by Mr. T. L. Cory, of the Department of the Interior ?


Mr. MOTHERWELL (for Mr. Stewart, Edimonton):: 


$1,645.20. HOUSE OF COMMONS-TYPEWRITERS
Mr. COOTE:: 1.	How many of the typewriters now in us* in the stenographic branch of the House of Commons were previously used in other offices of the House of Commons or by other government departments?
2.	How many were new when taken into this branch ?
3.	How many now in use were salvaged at the time of the fire?


Mr. RINFRET:: 1.	58.
2.	2.
3.	14.


KENT BOOM PUBLIC WHARF
Mr. PRICE:: 1.	In the construction of a public wharf at Kent Boom, county of Kent, New Brunswick, what quantity of gravel was used?
2.	What quantity of stone was used?
3.	From whom was such gravel purchased, and at what price?
4.	From whom was the stone purchased, and at what price?


Mr. ELLIOTT:: 1. Approximately 175 cubic yards.
2. Approximately 700 cubic yards.
3 and 4. No gravel or stone was purchased, both were secured at cost of cartage.



SHEDIAC-BUCTOUCHE MAIL CONTRACT

Mr. PRICE:: 1. At what date was a contract signed for the carrying of the mails between Shediac and Buctouche, New Brunswick?

Unopposed Motions jor Papers
2.	Who is the contractor and at what price?
3.	What are the names of those who submitted tenders and the amount of each tender?


Mr. VENIOT:: 1.	29th September, 1928.
2.	A. McNaim, $1,690 per annum.
3.	A. McNairn, Buctouche, $1,690; Fabien Pellerin, South St. Norbert, $1,740; Alyre Robichaud, Buctouche, $1,800; Arthur H. Allain, St. Joseph de Kent, $1,950; Thadde Melanson, Buctouche, $2,000; Vital Arsenault, Dundas, $2,000; Charles McDonald, St. Maurice, $2,200; William Babineau, Buctouche, $2,400; Abbey J. Hebert, Shediac, $2,500; Henry A. Cormier, St. Thomas, $2,575.



UNOPPOSED MOTIONS FOR PAPERS


Mr. CANTLEY:: 1.	For a copy of all correspondence, reports and recommendations received at the office of the district engineer of the Department of Public Works, Hal;fax, relating to, or in any way connected with any work done in the county of Pictou by .the Department of Public Works, during the years 1927, 1928, 1929.
2.	A return showing all appointments and /or dismissals made by or under authority of the said district engineer, with the causes assigned therefor, if any, during the years 1927, 1928, 1929.



BUCTOUCHE FISHERY OVERSEER

Mr. PRICE:: For a copy of all correspondence, telegrams, petitions and other communications between the Minister of Marine and Fisheries, the Department of Marine and Fisheries, the Civil Service Commission and any person or persons, with reference to the appointment of a fishery overseer at Buctouche, in the county of Kent, province of New Brunswick, for that district known as south of Chockpish river to the Westmoreland county line, together with a copy of any complaints filed against the appointment of Mr. Wilfred D. Bourgeois, a veteran of the World's war.



COCAGNE POSTMASTERSHIP

Otto Baird Price: For a copy of all correspondence, telegrams, petitions and other communications between the Postmaster General, the Post Office Department. the postal superintendent's office at Saint John, New Brunswick, and any person or persons, with reference to the proposed appointment of a postmaster at Cocagne, in the county of Kent, province of New Brunswick.



COCAGNE-NOTRE DAME MAIL CONTRACT

Otto Baird Price: For a copy of all correspondence, telegrams and other communications between the Postmaster General, the Post Office Department, the postal superintendent's office at Saint John, New Brunswick, and any persons or persons with reference to the awarding of a mail con tract for the service between Cocagne anc Notre Dame in the county of Kent, province of New Brunswick.



GUS CARRIER, PRINCE ALBERT PENITENTIARY

Mr. J. A. CLARK (Vancouver-Burned) moved:: For a copy of all correspondence and other documents relating to Gus Carrier, Prince Albert penitentiary, from January 1, 1925, to date.


Hon. ERNEST LAPOINTE:: May I ask that this order stand? I should like to ascertain what these documents are" and whether they can be made public, because I see that this motion relates to a penitentiary.
Motion stands.



PELEE ISLAND-FLOOD CONDITIONS

[Stage Direction]
On the orders of the day:
Mr. E. J. GOTT (South Essex):: Yesterday I drew the attention of the government to the flood conditions existing on Pelee Island The Minister of Public Works (Mr. Elliott) was absent yesterday, but I ask him now if he has any statement to make and if he is ir touch with the conditions existing there.


Hon. J. C. ELLIOTT (Minister of Public Works):: This is one of a number of requests for relief on account of flooding in various districts throughout ' the country. I have issued instructions to have the engineers look into the matter and to see if there is anything properly coming within the scope of this department which can be done to relieve the present situation.


Eccles James Gott: How long will that take?



WESTERN POSTAL EMPLOYEES


[Stage Direction]
Hon. P. J. VENIOT (Postmaster General) moved the second1 reading of Bill No. 252, respecting certain employees of the postal or railway mail service of Canada.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair
Western Postal Employees
[Stage Direction]
On section 1-Salaries of certain post office employees who were dismissed and reemployed.
Mr. VENIOT:: I might draw the attention of the committee to the fact that the bill is in similar terms to the resolution as amended by the house yesterday, and which was fully discussed the other day. If hon. members will compare section 1 of the bill, which is the only section, with the resolution adopted yesterday, they will find that it is in exact conformity with the resolution as adopted.


Mr. STEVENS:: Yesterday when the minister was discussing the resolution upon which this bill is founded, he indicated that there was a certain procedure to be followed. I think he said that an appointee of the Civil Service Commission and an expert of the department would be appointed to check the matter over and to determine the manner in which the terms of the bill should be applied, but I see no such provision in the bill.


Peter John Veniot: There is no such provision
in the bill, because I did not think it necessary to insert it. If, however, the committee regard it as necessary, it will be an easy matter to add a second clause to the ball.


Henry Herbert Stevens: Speaking for myself, I
would say unquestionably that it ought to be in the bill.


William Lyon Mackenzie King: I do not know whether my hon. friend was in the house yesterday when the Postmaster General made his statement. He indicated then the method that would be taken to ascertain what remuneration, if any, was due to certain of the employees of the department. As I recall it, an officer of the Post Office department and one from the Civil Service Commission were to cooperate with the postmaster at Winnipeg in making a report to the minister. I do not know whether my hon. friend1 really feels that that ought to be incorporated as a section of the act. It is purely an administrative matter, and I think that the word of the ministry in a matter of that kind ought to be sufficient; there is no desire on the part of the government to deal with the matter in any unfair way. But to put a purely administrative clause dealing with detail into a bill which merely provides for repaying men what is owing to them seems to me to be loading the bill perhaps unduly.


Henry Herbert Stevens: May I draw the attention of the Prime Minister to the fact that this bill contains the proviso, "notwithstanding

anything to the contrary in the Civil Service Act." In other words, so far as this matter is concerned the Civil Service Act is repealed or entirely superseded. We have set up under the Civil Service Act certain machinery to deal with the civil service of Canada, and therefore inasmuch as you are eliminating the Civil Service Act entirely from this matter -by the way, may I interject here this suggestion, that a lot of these men were placed in their positions in the Winnipeg post office without reference to the Civil Service Commission, after they were reemployed in contravention of the terms of the Civil Service Act-


Mr. THORSON:: All the appointments were made by the Civil Service Commission.


Henry Herbert Stevens: No sir, the men were put in their positions in contravention of the terms of the Civil Service Act, or without reference to the Civil Service Commission.


Joseph Thorarinn Thorson: All the appoinments were made by the Civil Service Commission.


Henry Herbert Stevens: My hon. friend is in error.


Peter John Veniot: The only exception was the age limit.


Henry Herbert Stevens: I think it will be found that I am absolutely correct in what I am saying. Therefore I contend that this bill should contain a clause setting out the manner in which this extraordinary procedure is to be carried out; because we must admit it is not the ordinary procedure. There should be recognition of the Civil Service Commission and its knowledge of the technique in this matter.


William Lyon Mackenzie King: May I say
to my hon. friend that to be logical I think any reference to the Civil Service Commission should be left out, I agree entirely with him that these men were reemployed notwithstanding the Civil Service Act. When the original resolution was before the house I gathered from what the right hon. leader of the opposition said that the men had been reinstated under an order in council passed by virtue of the War Measures Act, and that that was the reason why the civil service law had been ignored. I have since discovered that the order in council was not passed under the War Measures Act at all, but as a matter of fact it was simply an arbitrary act on the part of the government of the day. Now, all this measure proposes is that where

Western Postal Employees
those men have been employed on a certain class of work at a lower rate of wages than is paid to other employees in that class, they shall be paid the difference in remuneration due to them on that score.


Mr. MANION:: Should not the right hon. gentleman use the word " reemployed " rather than " reinstated "?


William Lyon Mackenzie King: Yes, instead of " reinstated " I should have used the word "reemployed." I gathered from the discussion when the resolution was originally introduced that we were practically in agreement on the question of paying the men the difference between what they are or were actually earning in accordance with the rate of wages the positions carry and what they are or were being paid. The only difference between us was whether that extra payment should.be retroactive. The house having passed the resolution and adopted the principle of the bill, the only question which remains is that of the method by which we shall ascertain what is due to the men. The Minister of Justice says it would be difficult to frame a clause setting out this feature which is wholly administrative. Therefore I should hope that hon. gentlemen opposite would accept the Postmaster General's statement to the house as to the method he proposes, with the obligation of course on his part of being responsible to the house for carrying out matters in accordance with that method. I should think this should be sufficient.


Mr. GUTHRIE:: May I ask the Prime
Minister if the bill as now drawn does provide for retroactive pay? I was not here when the discussion took place on the resolution. I understand from reading the discussion that my hon. leader, who is absent to-day, took the ground that he would not agree to a proposal which provided for retroactive pay. Does the modified proposal provide for retroactive pay?


William Lyon Mackenzie King: My hon. friend is quite right. The only difference between us is that the government maintains that these men where they have actually performed the work should be paid for it at the current rates, whether it relates to the future or to the past. I gathered at the time the measure was under discussion that the leader of the opposition did not wish to go to the length of paying for work done in the past, although it had not been paid for at the current rates. I had rather hoped that in the interval my hon. friends opposite had changed their views. On that point there is still a difference between us.


Hugh Guthrie: Will the Postmaster General kindly say how much money this measure will involve?


Peter John Veniot: On a previous occasion I said $123,000. Since then I have been able to go into it minutely and I do not think the cost will exceed $100,000. Since the committee sat last we have ascertained that the Winnipeg authorities have an absolutely correct record of all the men reemployed and the positions they were put in and as they graduated-if I may use that term from one class to another, and the difference in the rates of salaries, and so forth. That is why yesterday I suggested that two persons be appointed, one representing the department itself, the administrative end, and the other the Civil Service Commission, and that these two men go to Winnipeg. Then with the information they already had and the information they would get in Winnipeg, they could take the list of 9fii men, go over it in detail, and work out each individual case. Under the system there may be some who, having come in later, will not be entitled to anything; there are others who came in at the first and certainly will be entitled to be considered under this bill. It is a matter that will take some time to work out. Working off and on, I think the two gentlemen I have in mind could complete their task in about two months. As I say, they would have to go to Winnipeg, get the balance of the information there and work it out from both ends, from the departmental end here and from the Winnipeg end. By that system it can be done.


Mr. McGIBBON:: Has the minister any clear conception as to how this can be worked out? For instance, these men, had they stayed in the service, would have got promotion. Not having stayed in the service, but being reemployed, some of them later got promotion. How are you going to average the graduation between those two promotions? It is absolutely impossible.


Peter John Veniot: That will have to be worked out from the very first moment the men were taken back, dealing with it year by year and taking into consideration what promotion they were entitled to and got during that time, and also what extra amount of money those promotions brought to them. It will take some considerable time to work out the details.


Peter McGibbon: The minister does not get my point. Supposing there had been no strike, and these men had stayed in the service, automatically they would have got promotion, would they not.

Western Postal Employees


Peter John Veniot: Yes.


Peter McGibbon: That is one step. Then you reemploy them and they get promotion along another line; how are you going to readjust those two Lines?


William Lyon Mackenzie King: My hon. friend, I am afraid, is confusing the present bill with the original resolution. As originally introduced there was all the difficulty my hon. friend sees in making the assessment, if I may use that term, because it would have put the men in the same position they would have been in if they had not gone on strike. All the present bill does is to take into account the work a man is doing or has done in the particular position occupied and if he is being or has been paid less than other men in similar positions, then he shall be given the difference.


Peter McGibbon: The Prime Minister does not get my point. How is he going to get at what they would have earned?


William Lyon Mackenzie King: It is not what they would have earned; it is what they have actually earned. For instance, take a man who is a sorter. He is working with a lot of sorters in the office. Let us suppose he is one of the men who went out on strike. When he was reemployed he was reemployed as a postal helper, and he 'has been receiving the wages of a postal helper, notwithstanding that he has been doing the work of a sorter. All this bill provides is that when that sort of thing happens, or has happened, the man who has been doing a sorter's work shall be paid as though he were entitled to sorter's wages from the time that he was engaged on sorter's work. That is all.


Peter McGibbon: That would be all right from the start; but how are you going to decide two or three years afterwards what position he might have been in?


William Lyon Mackenzie King: What counts
is what he has actually done in that time.


Hugh Guthrie: There should be added to the bill a clause elaborating the system under which the money is to be distributed. As the bill is drawn now the Civil Service Act has no bearing on it at all; the Civil Service Commission is practically wiped out. There is no one left to administer the fund but the Post Office Department and the Postmaster General. He may do it in any way he sees fit and there is no check whatever on him. There are ninety-six men to be provided for, and with the commission wiped out, as it is by the first clause of the bill, the matter
[Mrt McGibbon.]
is in the hands of the Postmaster General who may deal with the fund as he sees fit. In my opinion the scheme should be elaborated by a new clause; it is entirely too open at the present time. If the scheme is to be worked out under the supervision of the Post Office Department and the Civil Service Commission, let us so state; but as the matter stands the Civil Service Commission will not be appealed to at all. It will be purely a matter of departmental administration by the Post Office Department.


Mr. ROBB:: How does my hon. friend reconcile his position this afternoon with reference to this matter with the attitude he took a few days ago when he urged us to put in a special vote for certain postal workers?


Hugh Guthrie: I named the postal
worker and the amount in each case, and if that is done here it gets over the difficulty.


Mr. GLEN:: I have just had the bill presented to me and so far as I can see it does not affect the principle of the argument which has already taken place on this question not only this session but on the previous occasion as well. There is no doubt, from the terms of the bill, that this legislation involves retroactive payments to these postal workers. In other words, any striker who was reemployed-not reinstated-after the strike had been settled will now be entitled to claim salary for the work he performed from the date of reemployment until the present moment. That is a correct statement. I am opposed to the retroactive character of this bill for the reasons I have already stated. These men went out on a sympathetic strike and according to some they had grievances; but having seen the gravity of ithe situation in which they placed themselves they were taken back into the service. Now that does not justify any government in paying to them salaries for such services as they were willing and anxious to render at that time; they were reemployed as postal helpers and they went back on that understanding, and on that basis they should still be dealt with.
I do not think there is any great merit in what the leader of the opposition says with respect to the way in which the fund will be dealt with, but I do think that some consideration should be given to the principle involved. I cannot, for one, take the position that civil servants in the class of these workers should have the right to strike and thereby upset the whole business of the country; I should as soon expect the police or the army or the navy to take that attitude and go on strike. And if this bill is passed as it stands a precedent will be established and

C.N.R.-Purchase of Alberta Railways
other public servants will feel entitled to similar treatment under circumstances of a like character. Not long ago I read of the strike that took place in England in 1919 on the part of the policemen, and they certainly were not reinstated in the service; and the same principle applies here. I am opposed to the retroactive principle involved in this bill. If these men wish now to get the seniority to which they are entitled I am willing and anxious that they shall be given it, but the retroactive feature I must oppose.


[Stage Direction]
Section agreed to.
Bill reported.


[Stage Direction]
The house resumed, from Tuesday, May 14, consideration of the motion of Hon. Charles A. Dunning (Minister of Railways and Canals) that Mr. Speaker do now leave the chair for the house to resolve itself into committee on Bill No. 71, to incorporate the Northern Alberta Railways Compaq', and respecting the Canadian National Railway Company and the Canadian Pacific Railway Company.
Mr. D. M. KENNEDY (Peace River):: When the house adjourned last night I was pointing out that the Alberta government had offered the Peace River railway to the Canadian National Railways. I notice that I stated the price offered as $14,000,000; I should have said $16,500,000. This was in 1926. Previous to that time the Canadian Pacific Railway had operated the Edmonton, Dunvegan and British Columbia and Central Canada railways under an operating arrangement with the Alberta government. They claim to be losing money on the operation of these railways but the Alberta government declined to enter into a lease for a further period of time with the Canadian Pacific Railway; instead they appointed Mr. Callaghan manager of the railways and made a joint traffic arrangement with the Canadian National Railways. There was a very strong feeling in Peace River and in certain sections of Alberta that the Canadian National Railways should get the preference in connection with the purchase of these railways on condition that the offers were alike, in case offers were received from both the Canadian National Railways and the Canadian Pacific Railway for their purchase. A large number 78594-160}
of members of the legislature took this view. The Grand Prairie district in Peace River was strongly in favour of the Canadian National, the town of Peace River was favourable to the Canadian Pacific Railway, and the district north of Peace' River, where I reside myself, was somewhat neutral. The people there thought it was up to the Alberta government to get the best price possible.
So far as I am concerned, I have always favoured the acquisition of these railways by the Canadian National Railways because in the first place I am rather favourable to national ownership as against private ownership of railways; and in the second place the Canadian National was in a much better position geographically through the location of its railways and could give the Peace River such service as the Canadian Pacific Railway could not provide without a large expenditure in extensions westward. The Canadian National Railways could give Peace River entry into Vancouver and Prince Rupert with the construction of from 200 to 500 miles of railway, whereas the Canadian Pacific Railway could not do so without building between 600 and 1,200 miles of railway. I have felt all along that if the Canadian National purchased the Alberta railways they were much more likely to work out a solution of the problem so far as the coast outlet was concerned in the near future than was the Canadian Pacific. Between May 3, 1926, and September 17, 1928, a number of offers were made in connection with these railways. The Premier of Alberta offered the Minister of Railways the Central Canada, the Edmonton, Dunvegan and British Columbia and the Pembina railways for about $16,500,000. On November 11, 1927, Mr. Hungerford wrote Mr. Brownlee offering $17,200,000, in round figures, on behalf of the Canadian National Railways, but that offer was turned down by the Alberta government. On November 13, 1927, Mr. Brownlee suggested to the Minister of Railways the possibility of a joint offer, because the Alberta government were not satisfied with the offer of the Canadian National Railways and would not accept it, suggesting that a better offer might result through joint action of the Canadian National Railways and the Canadian Pacific Railway. A joint offer was submitted on January 16, 1928, offering somewhat better terms than had been offered by the Canadian National Railways, but this was still unsatisfactory to the Alberta government. On September 17, 1928, the Canadian Pacific bought the road, including the Alberta Great Waterways, for $25,000,000, and on November 26.
2514	[DOT]	COMMONS
C.N.R.-Purchase of Alberta Railways
1928, Sir Henry Thornton, notified Mr. Beatty that the Canadian National Railways would participate in the arrangement on a fifty-fifty basis.
It has been felt in Peace river and the view has been expressed in other parts of the country that between the Canadian National Railways and the government a good opportunity was lost to get hold of the Peace river railways; others have thought the Alberta government somewhat unreasonable in their demands, but I do not believe that to be the case, because the price of the Alberta railways went up steadily after 1926. The reason for that increase is shown in the speech delivered by Hon. V. W. Smith in the Alberta legislature during the last session of that body. He said:
The first full year of government operation, that of 1927, resulted in a .net operating surplus for all the northern railways of $303,786.63, as against an operating deficit of $188,655.34 in the previous year. This was regarded by the government as a very satisfactory outcome of its policy in assuming control of all the northern roads. The results obtained for the year 1928, however, have been even more satisfactory than those of 1927, and it is gratifying for me to be able to announce that the total operating surplus derived from all the northern railways for the year 1928 is $810,209.41.
That represents an improvement in earning of almost $1,000,000 in two years, and that is why the Alberta government held out for a good price. That is also the reason why the Canadian Pacific Railway came back and finally bought the roads, because after all n-ot much more than a sixth of the land lying close to these railways has been developed, and yet during the last year of government operation the income was almost sufficient to pay not only the operating charges but the fixed charges as well.
Yesterday' the hon. member for North Vancouver (Mr. McRae) said he did not see how any member from the prairie provinces could support this agreement, because it .might put the Peace River country in the position occupied by the three western provinces before the extension west of the Canadian Northern and other railways. At page 2501 of Hansard the hon. member said:
I cannot see how hon. members from the prairie provinces can support a bill which puts the new settlers of the Peace river district in a position similar to that from which the farmers of Manitoba freed themselves more than a generation ago.
That position has to be stated generally in this way: The Canadian Pacific Railway had control and the settlers could not get what they wanted in the way of extensions or railway service, but after the Grand Trunk

Pacific and the Canadian Northern were built that private monopoly was broken up. It seems to me, Mr. Speaker, that if parliament turns down this bill and does not allow the Canadian National Railways to participate in this scheme, we will be putting the Peace River country in exactly the position occupied by the western provinces some twenty or twenty-five years ago. Because of that fact I was very glad to learn that the Canadian National Railways had decided to go in and help develop that country, because I do not believe this parliament would ratify the construction of another line north, duplicating the present road.
What we want this parliament to do is to take care of the development of that country and build a railway west towards the Pacific coast. The Canadian National Railways could give us an outlet to Vancouver and Prince Rupert without any tremendous expenditure, and if someone comes along with a railway from Stewart we will have three separate outlets. Because of these facts I intend to support this bill.


Mr. DUNNING:: Who does my hon.
friend suggest should pay for that last outlet? He indicated who should pay for the others.


Donald MacBeth Kennedy: I have an idea that the country pays for all railways in the long run, but I believe that any railway economically built from the Peace River country will pay. Then there is the further fact: if the Canadian Pacific Railway Company took over the Edmonton, Dunvegan and British Columbia road and had control of the Peace River country, if I were to come back to parliament next year asking for an outlet to the Pacific the government would say, " Go back and talk to the Canadian Pacific Railway." I would not like to be put in that position. No one has promised more definitely to go ahead and deal with this Peace River outlet than has the Prime Minister of Canada. I am not going to quote his statements to-day, but if the Canadian National Railways did not share in this deal to take over the Alberta railways I am afraid we would have almost to let the government out in connection with all its promises. Now, however, we can ask the Minister of Railways to go ahead with the surveys, in cooperation with the other bodies if he wishes, which were promised us here some two years ago after the report of the committee investigating the whole question, and we can ask the Prime Minister and the government to carry out the promises made by the Prime Minister

C.N.R.-Purchase of Alberta Railways
in Edmonton in 1924, when he said this outlet would be built just as soon as it was humanly possible to do so.
As I understand them, the advantages of the joint ownership scheme are about as follows:	We will have in the Peace River
country, through the cooperation of the railways, an absence of destructive competition in the building of railways. That means that we should be able to keep away from wrong locations and duplication such as we have had in many parts of the prairie provinces. I think it was demonstrated two years ago that by properly laying out the railways in the Peace River country we would have 6,000 economic acres of land to every mile of railway as against 5,000 acres in the prairie provinces. Another advantage is that we will have a one-line haul to every point touched by the Canadian National Railways and the Canadian Pacific Railways throughout Canada, and of course we will get away from any private monopoly.
The disadvantage, I suppose, may develop as suggested by the hon. member for North Vancouver last night; it is that the two companies may disagree in other parts of Canada and that such disagreement may be reflected in the development of the Peace River country. In that case, however, having the government interested in the matter, we would expect the government to act as the arbiter and see that justice is done the settlers of that district.


Charles Avery Dunning: The hon. member has
not any faith in the government.


Henry Herbert Stevens: Not very much.


Donald MacBeth Kennedy: Yes I have, but that
does not mean that I think they are perfect.


Henry Herbert Stevens: It gets rather discouraging sometimes.


Donald MacBeth Kennedy: I am willing to support
the government any time they are right, but I will criticize them any time I think they are wrong; that is what I was sent here for. If there is any way in which provision for a coast outlet can be included in this bill, then I will be happy to support that provision.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals):	Mr. Speaker, I
should like to say a word or two with reference to the statements which have been made by the members who have a more or less direct interest in the bill now before the house, providing for the joint acquisition, by the Canadian Pacific and the Canadian National railways, of the Alberta lines formerly owned by the provincial government. In connection with this whole question of railway facilities for the Peace River district and the provision of a western outlet, I sometimes think that the people of the Peace River district and of northern British Columbia might well be delivered from their friends, because, apparently, their friends in this parliament are unable to agree as to the remedy for the condition which they describe.


Donald MacBeth Kennedy: The minister suggested
a way out tw'o years ago. If he will carry out that suggestion I shall be satisfied.


Charles Avery Dunning: When the minister suggested that way out he secured the support of my hon. friend only, and I am afraid that that support is not sufficiently strong nor steady nor constant to warrant the government proceeding on the basis of it.


Mr. GARLAND (Bow River):: Has the
government never proceeded without support?


Charles Avery Dunning: The member for North
Vancouver (Mr. McRae) in his address of last evening revealed an intimacy with that part of the country dealt with by the provisions of this bill which suggested an entirely new conception of the Peace River railway situation. He insisted that the Pacific outlet should be Vancouver, as against the view of the hon. member for Skeena (Mr. Brady), who desires that the outlet be Prince Rupert. I am sure that if the hon. member for Vancouver Centre (Mr. Stevens) were to express his views he would prefer an entirely new outlet at Stewart. I am quite sure that the railway authorities of this country-I am speaking now of those responsible for the management of the two great systems-who will be jointly operating this property, will endeavour to decide these questions in the economic interests of the railways as well as in the economic interests of the country to be developed. I am sure that the people of the district concerned will be likely to receive better results from a study made by those men than from the, shall I say, somewhat divergent views of those who sit in this parliament, sincere though they be.
I do not intend to say anything which might be quoted at any time in the future as a commitment or endorsement of the idea that we should build six hundred miles of railway northeasterly from Peace River crossing to Great Slave lake on the Mackenzie river. As most of the members of the house know, I have very great faith in Canada's northland, but I can see sufficient railway construction ahead in what may be described as the present Peace River proposals without embarking at this time in a northeasterly direction towards Great Slave lake. However,
5516	COMMONS
C.N.It.-Purchase oj Alberta Railways
I would say to the hon. member for North Vancouver that I believe I shall live to see the day when there will be a railhead on Great Slave lake tapping the resources of that great northern area, but I think it is decidedly premature to talk about it in connection with the acquisition of these railways, the nearest point of which is six hundred miles distant from Great Slave lake.
The second criticism is that of the acquisition jointly of these lines by the Canadian National and the Canadian Pacific Railways. The hon. member for Peace River (Mr. Kennedy) has recited, not unfairly, the circumstances leading up to the position in which we are now placed. I do not criticize the government of Alberta, because, as owners of the lines, they had a perfect right to negotiate and to do the best they could. I might, conceivably, criticize the way they carried on those negotiations, but it was their own business, and I acknowledge their right to do it their own way. On the other hand, I hardly think it fair that the Peace River country should be circularized, through the newspapers and otherwise, with Statements regarding this government, and its actions with respect to the Peace River railway. Many of these statements have been distinctly contrary to the facts, and I know the hon. member for Peace River would not himself be responsible for the misrepresentations and, in some cases, the absolute falsehoods which have been indulged in, as is illustrated by a copy of the Grande Prairie Herald, which I hold in my hand. The main insinuation is that in some way Sir Henry Thornton was prevented by this government from offering for these railways as much as they were worth to the Canadian National system. In reply to all such insinuations and statements I can only say that Sir Henry Thornton was placed in exactly the same position in connection with the negotiations for the acquisition of these lines as he was in the case of all the other acquisitions, bills for the authorization of which will be before parliament. That is to say, he was given an absolutely free hand to negotiate, in order to reach, if possible, an arrangement which he, as the chief railway executive, could recommend to this government and which would be satisfactory to the vendors in each case. Having reached that point, the next step was to come to the government in order to have the purchase negotiations and tentative arrangements approved. Sir Henry Thornton was at no time prevented, directly or indirectly, by this government from offering for the Alberta railways what in his judgment they were worth to the Canadian National system. I

say this to dispose of that point once and for all.
With regard to the criticism as to the joint acquisition, may I say that the suggestion that an offer be made jointly by both the great railways came to me first by a telegram from Premier Brownlee of Alberta. Being disappointed with the last offer made by the Canadian National Railways independently, Premier Brownlee wired me expressing the view that possibly more satisfactory terms could be secured by both railways acting jointly. At that time I did not have much faith in any result coming about from such a step, but in response to his request I got the two railways together and suggested that an examination should be made of the situation from that point of view. The result was a slightly more favourable offer by the two railways jointly than had been made by the Canadian National individually. As the hon. member for Peace River has said, the joint offer was declined and matters rested there for some time until, finally, the Canadian Pacific Railway made a much larger offer, but a proviso was attached to that offer that the Canadian National Railways should be invited to participate on a fifty-fifty basis in the acquisition of the properties if they so desired.


Mr. HEAPS:: Was it not the Alberta government which suggested that proviso, and not the Canadian Pacific Railway?


Charles Avery Dunning: I am content to allow both interests to claim the credit, or whatever else may be involved in that.


Donald MacBeth Kennedy: As a matter of fact the Canadian Pacific Railway Company suggested that to the government.


Charles Avery Dunning: 
Hugh Guthrie: I rise to a point of order. What particular motion is before the chair, might I ask?


Mr. SPEAKER:: Number 11.


Hugh Guthrie: What is the motion?


Hewitt Bostock: That the Speaker do now leave the chair.


Hugh Guthrie: That is not debatable.


Charles Avery Dunning: We have been debating it since yesterday afternoon, and this is my first intervention in the debate.


Hewitt Bostock: It is debatable because
it is on the orders of the day.


Charles Avery Dunning: I shall be glad to finish
my speech in committee.


Hewitt Bostock: It would not be debatable if it were not on the orders of the day, under rule 38.


Hugh Guthrie: Go on, then.
2518	COMMONS
C.N.R.-Purchase oj Alberta Railways


Charles Avery Dunning: The only complaint 1
have is that three hon. gentlemen who spoke yesterday and to-day were in order, and 1 am not.


Hugh Guthrie: We are anxious to get
on.


Charles Avery Dunning: I shall be just a few
minutes.


Hewitt Bostock: Standing order 38 reads:
The following motions are debatable:

Every motion (a) standing on the order of proceedings for the day.


Charles Avery Dunning: I do not, of course, want to impede my own legislation. But on the other hand, neither do I think it is wise that arguments from three different directions should be advanced in connection with a very important financial and transportation measure without the facts being set forth in reply. I know the house is well disposed to allow this bill to pass along, and I promise not to prevent its progress for many more minutes.
The last point I want to make is the one to which I was referring before the point of order was raised. As regards the argument advanced that branch line construction will be prevented, because of disagreement between the partners, my answer is that there is in the agreement nothing which would prevent either partner from proceeding to build a branch line owned by itself from any point on the joint enterprise. That is the best answer I can make to the argument that the people will not receive branch line sendee because of disagreement between the two partners. Either partner, after securing a charter from the proper source, which is this parliament, may build a branch line from a point on the jointly owned property if the two partners cannot agree to build a branch line as part of the jointly owned enterprise. This is not provided in the agreement, but it is possible since there is nothing to prevent it, and this parliament has the power to grant charter rights.


Mr. MATTHEWS:: Would they be guaranteed running rights over the existing lines?


Charles Avery Dunning: The agreement itself, of course, contemplates that. Either party may operate over existing lines. I think that is all that I have to say at this time. I feel sure no one will expect me to make any commitment regarding future construction of a western outlet, I would, however, say in reply to my hon. friend from Peace River in that regard, that the final settlement of the owner-
ship by these two great railway corporations of the Peace River line will ensure a careful and continuous study on their part, from the point of view of their own welLbeing, of what it is best to do with regard to a western outlet.
Motion agreed to and the house went into committee on the bill, Mr. Marcil in the chair.
Sections 1 to 9 inclusive agreed to.
Bill reported, read the third time and passed.



GRAND MERE-EAST BURRILLS

[Stage Direction]
The house in committee on Bill No. 166, to amend an act respecting the construction of a Canadian National railway line between Grand Mere and East Burrills, in the province of Quebec-Mr. Dunning-Mr. Johnston in the chair.
On section 1-Power to construct and complete line described in schedule.
Mr. GEARY:: I think the minister might
give some explanation to the committee as to the largely increased cost in this particular case.


Charles Avery Dunning: My hon. friend remembers, of course, the discussion in the railway committee, but the house generally is not aware of that. When the bill was before the house previously, some question was raised, I think by the leader of the opposition, as to whether, in view of the high cost, it would be possible for the Grand Mere-East Burrills project to earn interest upon the outlay; whether it was economically sound. Since then I have had that question carefully investigated, and I find that on the basis of presently existing traffic the economies effected will be equivalent to 7i per cent upon the total cost, inclusive of the increase provided for in this bill. The section of the railway referred to is one of the busiest sections of the Canadian National system, and the traffic can be expected to increase as time goes on and, consequently, to produce an even greater return upon the investment.
The two causes for the increased cost in this case were the increased cost of right of way and the increased cost of the grading due to a very much larger quantity of material to be moved. Quoting from the engineer's report:
Over one mile in length of the line was through the town of Sliawinigan Falls, about in the middle of which provision was made for a yard requiring more than normal width of right of way. Isot only did it cost more to buy the right of way through Shawinigan Falls -but the whole right of way proved to-be over double that figured on. In practi-

C.N.R.-Branch Lines
cally every ease a process of law had to be resorted to in order to settle the prices paid. Presumably one reason why excessive prices were asked was because the railway was not wanted by the farmer through whose land it passed as he would get no service additional to what he already had.
The increase in quantities of material required to he. moved was due to the nature of the material itself. Generally speaking the overburden on top of the rock which only outcropped in a few places on the line, was a stratum of sandy material about eight or nine feet in depth under which was brown or blue clay. In most cases this lower material was blue clay of a very wet and soft consistency, which when disturbed at all became unstable. This instability in cuttings caused sliding or sloughing-in of the materal into the cuttings, and where embankments were made from it, it slid or squashed out. This condition varied considerably in individual cases. Some of the material was so bad that the embankments could not be made from it, and other material had to be brought from a greater distance to take its place.
A description of the largest and worst cutting will give an example of how this material acted. The cutting in question was located about a mile from the west end of the line and immediately west of a rock tunnel on the line. It was about nine hundred feet in length and at the deepest part was sixty feet in depth. The material was so soft after having been dug with a steam shovel that when dumped out of the cars used for hauling it, it ran 'like thin porridge and proved utterly worthless for filling material. In fact, substantially all of it was deposited off a few feet of trestle built alongside a gully and it imme-diatey flowed or moved from this gully until it reached the St. Maurice river about a mile away.
We estimate that by reducing the gradient to one-half the existing gradient and by doubling the load behind a standard locomotive, the economies effected will be sufficient on the basis of existing traffic to pay 7i per cent on the whole cost of the undertaking.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 168, to amend an act for the construction of a Canadian National railway line, being a joint section from Rosedale southeasterly in the province of Alberta-Mr. Dunning-Mr. Mar-cil in the chair.
On section 1-Schedule amended.
Charles Avery Dunning: Mr. Chairman, I explained this bill when it was before the house for second reading. It has since been to the
committee on railways, canals and telegraph lines, and now returns to be finally dealt with here. There is no change in the amount of money, but there is a change in the method of expenditure on the line.


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

[Stage Direction]
The house in committee on Bill No. 173, respecting Canadian National Railways and to authorize the acquisition of the Quebec Oriental Railway and the Atlantic, Quebec and Western Railway-Mr. Dunning-Mr. Laflamme in the chair.
On section 1-Authority to purchase Quebec Oriental and Atlantic, Quebec and Western Railways.
Henry Herbert Stevens: Mr. Chairman, I wish to draw to the attention of the committee the fact that in November, 1927, an investigation of the Quebec Oriental Railway and the Atlantic, Quebec and Western Railway, as regards their proposed acquisition by the Dominion government, was held by two reputable officers of the department, who submitted a report. This report is signed by R. C. Henry and another gentleman whose signature I cannot make out, but he describes himself as assistant engineer.


Charles Avery Dunning: W. H. McGann.


Henry Herbert Stevens: I thank the minister
for his assistance. I suggest that Mr. McGann improve his signature. In the report certain facts are set forth. It is obvious that these two officers discharged their duty with great care and skill. They review in detail and with great ability all the facts of the case, and they conclude their report with these words-I am quoting paragraph 15-
It does not appear that the acquisition of these lines could ever become profitable to the Dominion government.
That ought, I think, to have influenced the committee and the government and the Canadian National Railways' management in regard to this matter before taking these lines over.


Charles Avery Dunning: It did.


Henry Herbert Stevens: I was not a member of
the committee and was unable to attend its sittings and there deal with the matter. S<? I shall have to take this opportunity of draw-
C.N.R.-Branch Lines

ing attention to the report. Before referring to a few facts set forth in the report, may I ask the minister if he will be kind enough to tell me whether in the acquisition of this line by the Canadian National Railways they assume the mortgage indebtedness?


Charles Avery Dunning: No.


Henry Herbert Stevens: They do not. Will the minister tell me what will become of the mortgage indebtedness?


Charles Avery Dunning: The line is in the hands now of trustees for the bondholders, that is. in the hands of its own bondholders, who are of course the holders of the bonds secured by mortgage. They must give a complete discharge. All the negotiations which have been undertaken have been between the management, Sir Henry Thornton personally, and the trustee for the bondholders, Sir William Blender, of a firm of chartered accountants in London, England.


Henry Herbert Stevens: Then I understand we are purchasing this line from the trustee of the bondholders?


Charles Avery Dunning: Yes.


Henry Herbert Stevens: The first and second bondholders?


Charles Avery Dunning: The whole business.


Henry Herbert Stevens: Is that fact set forth in
the bill; if so, just where? I am asking for information.


Charles Avery Dunning: In sections 2 and 3.


Henry Herbert Stevens: The report to which I
refer shows that this railway has received in cash subsidies and in lands, which were sold for a certain figure, $3,750,000, of which the Dominion government contributed about $1,800,000. In other words, we

the Dominion and the provincial government of Quebec- have already put into these lines $3,750,000. We are proposing now to pay $3,500,000 for them, which will discharge the bonded obligations of $3,750,000. These are just rough figures. I notice that in this report the two experts to Whom I have referred state:
The estimated cost of reproduction, less depreciation, arrived at by using present day prices, is $7,000,000.
I do not think the committee should be misled into the opinion that it is worth $7,000,000. That is, physically to reproduce the line in first class shape would cost $7,000,000.


Charles Avery Dunning: No, not in first class
shape; in the condition in which it now is.


Henry Herbert Stevens: Yes, to reproduce it.


Charles Avery Dunning: In its present condition.
My hon. friend said "in first class Shape". That is hardly correct.


Henry Herbert Stevens: The reproduction value.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: That would-be the physical value of the property, not having in mind the earning value.


Charles Avery Dunning: That is it.


Henry Herbert Stevens: They say the scrap value of the railways is estimated at $530,000. There is a vast difference between the two.


Charles Avery Dunning: Always is.


Henry Herbert Stevens: Yes, always is. But it might be well to keep in mind tins-that these railways, in spite of the receipt of cash subsidies amounting to $3,750,000, have been unable to pay their operating and overhead expenses, and this to such a degree that the bondholders are willing to sell. I have already referred to the advice of the experts who say that it does not appear that the acquisition of these lines could ever become profitable to the Dominion, and notwithstanding this the National Railways are acquiring the property. In the face of the financial obligations to which reference was made yesterday, I submit to the minister .that this is a very questionable action on the part of the National Railways and, in the light of this report, disposes us to scrutinize with greater care than we have done in the past the suggestions of the railway. I say that with regret, because I have said to the minister on two or three occasions, and said it gladly, that we have been reposing tremendous confidence in the management of the National Railways in any recommendations they make. But I cannot reconcile-


Charles Avery Dunning: I do hope my hon. friend will turn the searchlight with equal force on each one of the succeeding bills which have to do with purchases. I think it is proper and right that he should.


Henry Herbert Stevens: I am picking this bill out because I know that there is an adverse report, and if there are adverse reports in regard to the others the fact ought to be disclosed.


Charles Avery Dunning: I will discuss the word "adverse" later.


Henry Herbert Stevens: I am quite willing to leave it at that. But let me repeat what I was saying. We have received the recommendations of the management of the Canadian

C.N.R.-Branch Lines
National Railways with a great deal of favour in this house in recent years, and I should like to voice this opinion, that the National Railways management must be very careful in recommending a purchase of this character in the teeth of a report of the nature to which I have referred. I submit to the minister that there are features of this purchase, disclosed in this report, which make me very doubtful indeed of the wisdom of proceeding with the purchase.


Mr. MARGIL:: I am glad the hon. member for Vancouver Centre (Mr. Stevens) has discussed this bill. This is an undertaking which dates back many years. I will not go over the history of it because I do not wish to delay the house. But I may observe that in 1882'Sir Charles Tupper was Minister of Railways while Sir Hector Langevin was chief of the province of Quebec, and the latter advocated and obtained the authority of parliament for the construction of a branch line of the Intercolonial railway from Matapedia towards Gaspe along the north shore of the baie de Chaleur. Parliament acquiesced in the proposal and the undertaking was commenced by the Dominion government as the construction of a branch line of the Intercolonial. The first twenty miles were accordingly built under contracts given by the Department of Railways. Unfortunately, about the same time the legislature of Quebec had incorporated a local company called the Baie de Chaleur Railway Company, with which was connected Mr. Robitaille, a former representative of Bonaventure in this house, Mr. Riopelle, another member of this house and a former representative of that county, and Mr. C. N. Armstrong, a noted promoter in the province of Quebec. These gentlemen induced1 the Dominion government to give up the undertaking and to hand it over to the local company known as the Baie de Chaleur Railway Company and composed of those whom I have named. The misfortunes of the people of Gaspe and Bonaventure commenced from that time in 1884. The people there had witnessed, and had contributed to, the construction of the Intercolonial railway which runs through the Matapedia valley in my constituency and crosses the river Matapedia into New Brunswick and the maritime provinces. They who had contributed their share to the construction of this railway, linking up Quebec with the maritime provinces, were left to one side and this undertaking of the local company was carried on purely through subsidies granted by the Dominion government and by the legislature of Quebec. So long as the subsidies lasted the
undertaking was carried on as best it could be, with the help of the municipalities and of the farmers, who gave right of way without compensation. As a matter of fact many of those farmers are unpaid to this day. When I had the honour of being elected for that constituency in 1900 I found the railway stranded at Caplin, eighty miles from Matapedia, the railway subsidies exhausted, and the road not operated for six months of the year during the winter. I therefore undertook to secure the consent and approbation of the parliament of Canada to extend railway facilities to the people of that peninsula who were among the oldest settlers of Canada, descendants of people who settled when Jacques Cartier discovered Canada. I sought to give them some of the benefits which we had been providing for the rest of the country in a matter of railway accommodation. The hon. the Speaker (Mr. Lemieux) and myself have witnessed during thirty-two sessions the construction of continental and branch line railways all over Canada and now we merely ask for approval for one simple proposal, namely, that this branch line, running 200 miles from Matapedia to Gaspe,, connecting with the Intercolonial railway, and receiving all its business from the Canadian National Railways-it can do business with no other railway-be utilized as a branch line, as it was intended to be regarded the day it was constructed. With the aid of subsidies voted in 1901 the line was extended to Paspebiac, one hundred miles from Matapedia. His Honour the Speaker had the distinction at that time of being the representative of probably the only constituency in Canada without a mile of railway, and naturally he undertook to bring about the extension of that line as originally planned by those great leaders of public opinion, Sir Charles Tupper and1 Sir Hector Langevin, and later by Sir Wilfrid Laurier. He endeavoured to have it extended to Gaspe. The charter was passed, the usual subsidies were voted, and in addition a subsidy of $250,000 was granted by the house towards the construction of numerous iron and steel bridges across the river emptying into baie de Chaleur. An English company undertook to build the railway and completed the work in 1911, when it had reached Gaspe. Shortly after that, in 1914, this house passed what was known as the Branch Lines Act, a measure which authorized the government of Canada to acquire every branch line of 200 miles connecting with the Canadian Government Railways, at that time largely the Intercolonial railway. They took over a dozen lines in the maritime provinces and
C.N.R.-Branch 1/ines

in Quebec, but this railway was left to one side. In 1914 the war came on, and that was put forward as an excuse for doing nothing. Nor was anything done until 1921, when the Liberal party returned to office and the argument was again taken up by the people of these two counties asking that this railway should form part and parcel of the Canadian National Railways and be given the same treatment as had been meted out to others throughout the country.
Now I am speaking not for one party but for the whole population of that district; I am representing the views of all political parties, religions and creeds. And I am glad to know that I am speaking also on behalf of the Conservative party, because two years ago, on the 2nd of August, 1926, the Right Hon. Mr. Meighen, who then undertook the campaign which led him to his defeat in the month of September, opened that campaign in my constituency at Carleton.


Henry Herbert Stevens: That was the cause of
the defeat?


Charles Marcil: Yes. He was accompanied by Mr. Patenaude, his first lieutenant in Quebec and they were ferried across from Bathurst in New Brunswick by Mr. Angus McLean in a tug, landing at Carleton. Fortunately a correspondent of the Canadian Press accompanied Mr. Meighen on that occasion and reported his remarks which are to be found in the Montreal Gazette of August 2, 1926, and I desire merely to quote that part of his address referring to this railway situation. He congratulated the people on the progress they had made in that hard country, where they have long winter seasons and large families to keep up, and after referring to the fact that from these two constituencies 1,200 boys were sent to the front during the war, he went on to state:
One could not help realizing that there might be indeed a gratifying development if there could be found a method of extending to this district, as yet relatively thinly populated, something of the help which the Dominion has been able to give to other parts of the Dominion. I know that your resources are many and precious. You have splendid timber resources. You have mineral resources. Your agricultural resources are as yet only tapped. It will be impossible that these will progress as you expect-, unless something is done to help with the transportation of your commodities.
. . . . Iam quite aware that there are difficulties in the way. I never could be convinced that it is not going to mean considerable outlay over a considerable time. But I intend to give sympathetic consideration to this question. I am going, as it were, to put my head into it. I hope to say to the people of this province-I promise I will say to them whenever I occupy the post of Prime Minister by 
the verdict of the people-that whatever is done for any part of the Dominion, the same measure of generosity, the same measure of justice will be given to the province of Quebec and to every part of the province of Quebec.
Some days later he appointed my opponent, Doctor Paquet, as Minister of Health and Soldier's Civil Re-establishment, notwithstanding his campaign at that time which had become notorious. On August 23 Doctor Paquet was sworn in to this portfolio as a member of the Meighen administration, and stated publicly that if within two years this railway situation was not settled and the railway linked up with the Canadian National Railways, he would retire from the House of Commons and resign his portfolio.
Matters went along until 1923, when the Speaker of this house, acting for his constituency and for my own, called upon the government to have this situation investigated by the railway commission. On that occasion I had the honour of accompanying the commission as far as Gaspe; .they were accompanied by their entire staff and spent about three days investigating the situation. In their report is included a statement by Judge McKeown, who spoke on behalf of the commission, confirming the statement made some years previously by Hon. F. B. Carvell when he was chairman of the commission. On July 21, 1920, Mr. Carvell said:
It is, therefore, quite evident that this road is in very much the same position as the branch lines in New Brunswick, excepting that, in my opinion, it goes through a better country as a rule than do the New Brunswick roads. There are more people to patronize it, more business to be done, the road-bed is in better condition, and it offers a better guarantee of business than any of the other branch lines with which we have been dealing during the past three years.


Henry Herbert Stevens: What year was that?


Charles Marcil: 
Mr. GARDINER:: What is the hon. member quoting from?


Charles Marcil: I am going to quote from Sir Henry's remarks in the railway committee.


Robert Gardiner: Recently?


Charles Marcil: Yes, when this bill was under consideration. Sir Henry Thornton said:
There are two aspects to this situation. First, the purchase price of the railway as compared with the immediate returns; secondly, the prospects of the railway as an earner in hands which will indicate that an effort will be made to secure the assistance of the people of the Gaspe peninsula in creating traffic and development. That is a situation which always confronts the Canadian National Railway, as a state-owned property, in this sense, that it stands in a somewhat different relationship to the various communities which it serves than does a purely privately-owned company, in that it must give greater regard to the assistance of communities in their development.
C.N.R.-Branch Lines

Now, the principle which underlies the purchase of this property is not much different from the principle we have followed in building branch lines throughout the west for development purposes.


George Reginald Geary: Is the hon. member quoting Sir Henry Thornton?


Charles Marcil: Yes. Sir Henry continues:
It happened that in this case the railway is already built. In the west the railways were not built, but we were pledged to embark upon new construction, but the underlying principle in each case is to give to each one of the communities a service which offers prospective traffic and an opportunity for the community to develop. As I said, in this case we are purchasing a railway already built, in the west we are building new railways; the principle is naturally pretty much the same.
The hon. member who has just piit a question to me was present in the committee and cross-questioned Sir Henry pretty thoroughly with regard to this matter. That deals with the economic aspect of the question, with which, not being an engineer, I am not familiar. But there is another portion of Sir Henry's remarks which I would like to quote, as follows:
The purchase price is $3,500,000, which was arrived at after negotiations with the trustees, and represents the cost of reproduction now less depreciation less subsidies paid. The Gaspe railways were exploited by Alfred M. Carpenter, at one time proprietor of the Charing Cross bank

That is an error, as Mr. Carpenter never operated the railway. Sir Henry continues:
-which became bankrupt a great many years ago, and the property has since been operated by trustees for the bond holders.
That briefly represents the historical and physical conditions, and I can say that the negotiations were carried on by myself with Sir William Plender, a well known chartered accountant in London, England, who represents the trustees.
After some negotiations with him, it was agreed to purchase the property for $3,500,000, subject to the approval of parliament. That represents 50 cents on the dollar invested.
This territory has, for a long time, suffered from inadequate transportation facilities and, for that reason, has been unable to participate in the development which has taken place elsewhere in Canada The population is an exceedingly thrifty, hardworking population, of the best of our French stock.
It was felt that if the railway fell into hands which would foster development in the peninsula, lend its efforts with the people of the peninsula for development purposes, coupled with the possibilities of a large tourist traffic, that a considerable impetus would be given to development in the Gaspe peninsula, and it was for those reasons that it was thought desirable by the Canadian National Railways to take over the line.
As my time is limited I will not be able to go into this matter much further. The hon.
IMr. Marcil.I
member for Vancouver mentioned a report which was made by the Canadian National railway officials, the last paragraph of which reads as follows:
It does not appear that the acquisition of the Quebec Oriental Railway by the Canadian government could ever become profitable.
There is only one railway official of that opinion, and no matter how important the opinion may be it is merely an opinion and it deals with the future. I have been in the house for thirty-two years and I have heard many false prophecies made by very outstanding men. I was up in the press gallery when it was predicted that the Canadian Pacific Railway would never pay for the grease used in its operation. That prediction was made by some very eminent men, and many other false prophecies have been made in the house.
The Gaspe peninsula has an area of 10,000 square miles. It contains abundant lumber, minerals and other natural products

mines are being developed now for the production of zinc and lead-as well as abundant fisheries. It has a magnificent harbour which is the closest in North America to Liverpool, being only four days' sail from Gaspe. This harbour was large enough to shelter in 1914 the thirty-three warships and transports carrying the first contingent to England, and to have had in 1S66 the honour of sheltering the convoy of His Royal Highness Prince Edward, afterwards King Edward VII. The people of this Gaspe peninsula, have contributed their mite to the upbuilding of Canada. They are prepared to continue to do their share in the future, and are asking only for fair treatment at the hands of parliament. I know the hon. member for Vancouver and his colleagues on the other side would be acting in accordance with the wishes of their political friends in those two constituencies if they would give consideration to this bill. We are simply asking that justice be done. The demand is not unreasonable and I hope there will be no further trouble and that the bill will be adopted. The manner in which these people have been treated has not been a credit to Canada, and I hope the house will allow the bill to pass.


Mr. MacLAREN:: Mr. Chairman, I should like to say a few words in reference to this bill. .1 happen to know the Gaspe peninsula and the railway in question. I wish to repeat in the House of Commons what I said in the railway committee, namely, that I support the taking over of this railway. Why? This is a section of the country which is most at-

C.N.R.-Branch Bines
tractive, contains a fine population and, I believe, has a future. But in any case it is a large section which is not adequately served at the present time and I think, on the policy that we have been carrying out elsewhere throughout the Dominion, it is time that we gave a fairly good service to Gaspe. I have taken an interest in this area and the people there have waited patiently a long time. Therefore I have pleasure in supporting the bill.


Robert Gardiner: When this bill was before the railway committee we secured a good deal of information in regard to the history of the railway. The hon. member for Bona-venture just a few minutes ago gave the committee some information which is evidently a transcript of the address that Sir Henry Thornton delivered before the committee. I want to call attention to a very peculiar incident that occurred in the committee at that time. There is a record made by the reporters of the proceedings in connection with this bill in the railway committee. We have never before had any of the business of the railway committee recorded by the reporters this session or for many sessions past; but in view of the fact that Mr. Speaker and the hon. member for Bonaventure were very much interested in the acquisition of this line by the Canadian National Railways, no doubt Mr. Speaker took the opportunity of seeing to it that the reporters were present for the purpose of taking down the speeches delivered by Mr. Speaker and the hon. member for Bonaventure. That, of course, is not allowed to the ordinary member of the house; but, Mr. Speaker, being in a privileged position, took advantage of his privileges on this occasion. I want to protest against anything of that description being carried on. There is no question in my mind that Mr. Speaker and the hon. member for Bonaventure will have these speeches printed and broadcast. I do not know whether this will be done at the expense of the public or not, but the country will have to pay for the reporting staff in any case. These two hon. gentlemen will broadcast these speeches in their constituencies, naturally, for their own benefit. I merely make this statement that I object to anything of that description being carried on where certain members have privileges which other members do not secure. It is not fair.
Coming to the question of this railway, from the evidence given before the committee I am satisfied that it will be probably twenty years before this railway pays back a dollar of the capitalization. I aim not opposing the acquisition of this railway because I recognize
the fact that we have in Canada many sore spots for the healing of which we must make provision such as we are doing by this bill.
In the interests of the people of Canada as a whole and of confederation, the house must stretch its conscience sometimes in that regard.
There is another point that I want to bring before the committee, and it is this. If I understand the matter correctly, neither the Intercolonial nor the Transcontinental railway is included in the present capitalization of the Canadian National Railways; the Canadian National is not responsible for the capitalization of either of those two lines. Some two years ago we passed the Maritime Freight Rates Act for the purpose of taking care of the Canadian National in the maritime section, and also for the purpose of reducing freight rates to the extent of 20 per cent of the rates in force at that particular time. I opposed that proposal then because I thought it was poor economics, but in view of the fact that the house finally passed the legislation,
I accept that as the best judgment of the * house and I am quite willing to support the principle now. But as regards this railway and the next three which are on the order paper, not one of them will be a paying proposition. We cannot hope that for some time to come these four lines will pay even the actual running expenses.


Mr. POWER:: How soon does my hon. friend expect the Hudson Bay railway to pay?


Robert Gardiner: The Hudson Bay railway will, I hope, pay its way within five years, but let me point out to my hon. friend that it is in a very similar position to these and I will explain my position in regard to it a little later on. A moment ago I stated that I do not believe these four lines, taking them as a whole, will pay their wray for many years to come. That means that the country will have to pay the losses incurred by the Canadian National Railways under the Maritime Freight Rates Act in connection with these four railways. But, as I stated before,
I maintain that these districts are sore spots, and if this house can heal those sore spots, it is our duty to do so.
Another point of importance is that under this legislation the capitalization of these lines will be charged up against the Canadian National and I protest against that procedure.
If you are going to buy these railways, then buy them out of moneys provided by the treasury of the country. It is not fair to load up our national system with a number of deadhead railway? and then expect the

C.N.R.-Branch Lines
national system to make enough money to pay the interest charges on the capital invested. In view of the Maritime Freight Rates Act, and in view of the fact that the Intercolonial railway and the Transcontinental railway are not charged up against the capitalization of the Canadian National, it is only fair that we should place these four railways on the same 'basis and relieve the Canadian National of the amount of their capitalization.


Charles Avery Dunning: My hon. friend is surely not clear there. The Maritime Freight Rates Act does just what he suggests should be done.


Robert Gardiner: But not so far as capitalization is concerned. The capitalization will be charged up against the Canadian National system.


Charles Avery Dunning: No.


Robert Gardiner: Will the minister please explain the matter then?


Charles Avery Dunning: The interest upon the capital invested is a fixed charge which is taken into consideration in determining the payments to be made under the Maritime Freight Rates Act for the deficits incurred under the act.


Robert Gardiner: It takes care of the deficits.


Charles Avery Dunning: Of the interest on the capital.


Robert Gardiner: If that is so, I am glad indeed to hear it, and so far as I am concerned, as long as these lines are not charged up against the capitalization of the Canadian National, I have no objection to the house taking this attitude towards these four lines, that, as I stated before, they are to all intents and purposes national problems which we have to solve, and so heal these sore spots.


Henry Herbert Stevens: Before we leave that point, may I ask the minister whether what he says is Correct? How is it that this line is included in those recited by Sir Henry Thornton as being part of the provision for capital expenditure next year? On page 117 of the report of the special committee, Sir Henry Thornton is reported as saying, enumerating certain things all of which I shall not read:
The Quebec, Oriental and Atlantic, Quebec Western Railway, $3,500,000.


Charles Avery Dunning: My hon. friend evidently did not understand my ansiwer to the hon. member for Acadia. Certainly the money requires to be raised to pay for these rail-

ways which we are now discussing, but the interest charge on that money from year to year becomes a fixed charge on a railway included within the area covered by the Maritime Freight Rates Act and, therefore, the interest charge upon the capital is not an ordinary charge upon the system as a whole but becomes a part of the deficit under the Maritime Freight Rates Act if a deficit exists from year to year.


Robert Gardiner: I understand from the
minister that the interest charges will become part and parcel of any deficit which will occur under the operation of the Maritime Freight Rates Act.


Charles Avery Dunning: Yes.


Robert Gardiner: Will the original capital necessary to take over these lines be charged against the Canadian National railway system? Will it become part of their capital account? That is the point.


Charles Avery Dunning: I am not quite sure what my hon. friend has in mind. What I was anxious to provide was that the system as a whole should not be prejudiced nor placed in a more difficult position because parliament in its wisdom, or lack of it, out of its desire to heal these sore spots to which my hon, friend referred, decided to do a certain thing. So far as that phase of it is concerned, the Maritime Freight Rates Act undoubtedly covers the point because the interest charge is part of the fixed charge and becomes part of the deficit which is made up annually by a vote of this parliament. So far as the whole capital structure of the Canadian National railways is concerned, most certainly all sums represented by actual physical assets are included therein, and I do not think that there can be any exception taken to that.
With reference to the criticisms, my hon. friend from Vancouver Centre made a perfectly understandable criticism on the basis of an economic report made in connection with this line by the Director of Economics who is now Deputy Minister of Railways and Canals and one of the engineers of the Canadian National railway system. I would point out to my hon. friend in that connection that economic surveys, of which this was merely one, were made in connection with all of the lines writh which we are dealing in the various bills before the house, and my hon. friend will find the particular comment to which he made reference in the reports on others of these lines as well as the one presently under discussion.
As I said yesterday in connection with these matters, we are linked with the past, and we

C.N.R.-Branch Lines
are dealing with these matters because we are linked with the past, and .because the past carries with it certain obligations. My hon. friend from Bonaventure has indicated to us some of the obligations which are involved in connection with the lines now under discussion and I am very glad, I may say, to be able to propose to parliament the carrying out of at least one of the pledges made by the Conservative party at the last election. If I can help in that particular, I am very glad to do so.


Robert James Manion: The minister apparently
forgets that the county turned down the proposition.


Charles Avery Dunning: I think my hon. friend
should say that the county declined the bribe.


Henry Herbert Stevens: The minister is scarcely
fair. From the reading of the document by the hon. member for Bonaventure it would appear that Mr. Meighen, who was then the leader of the party, stated that the matter would be given sympathetic consideration. He made no pledge, and my hon. friend knows '.hat.


Charles Avery Dunning: But his candidate in that constituency', one of his ministers, a member of the Privy Council of Canada, speaking with all the authority attached to his cabinet position, said:	If this road is not taken over
in two years, I will have to resign.


Henry Herbert Stevens: He did not resign.


Charles Avery Dunning: He never got the opportunity.


Robert James Manion: Since the minister used the word " bribe," does he consider this a bribe at the present time?


Charles Avery Dunning: No, and I regret having
used that word, although I used it only in a good-humoured sense. It is quite proper for a political party to give indications to the electorate with regard to any policy which it proposes to put into effect. I regret having used the word. It is not usual for me to use language like that. It is rather more characteristic of some hon. gentlemen I see on the other side.


Robert James Manion: Of whom, for example?


Charles Avery Dunning: "A political bribe" is
not infrequently used by hon. gentlemen opposite in argument.


George Reginald Geary: Suppose we get on with the discussion.


Charles Avery Dunning: I have only this to say,
particularly to my hon. friend from Acadia. I think it would be fair in dealing with a 78594-161
matter of this kind to imagine the condition of the Gaspe peninsula without a railway at all. It is easy to conceive of it as a similar area in western Canada, and I venture to say that my hon. friend from Acadia, with those around him, would be one of the first to support a proposal to build a line into such an area containing the resources and population which this area contains. Looked at from that point of view, we are getting a line of railway which conservatively is worth as much as a new branch line.


Some hon. MEMBERS:: No, no.


Charles Avery Dunning: Physically, yes. My hon. friends cannot at one time use the report of the experts when they desire to criticize, and then refuse to accept that same report in regard to intrinsic values. At any rate, we are getting this property at $17,500 per mile. Will any of my hon. friends stand up and say that we could build a branch line of the lowest standard for anything like $17,500 per mile?


Robert Gardiner: That is not the point at issue. The point is whether these lines will pay or not. We expect that a branch line in western Canada will pay and the railway companies say that they will not build unless they can see profits ahead. That is the attitude that Sir Henry Thornton takes in regard to a number of branch lines in western Canada right now.


Charles Avery Dunning: If we would only put
ourselves in the position of thinking of this great peninsula without any railway at all, I know that my hon. friend would be one of those who would argue that a railway into an area possessing such resources and such population would pay, and I would honour him for it. I am adopting the position that if there were no railway there, then this parliament would undoubtedly be willing to authorize the construction of one, and to build one would cost twice as much as we are spending to buy the one already there. I am not in a position to say that this railway will pay, but I have sifficient faith in the Canadian National organization to know that they can bring about quite an improvement in the traffic returns of that railway by applying to the development of the peninsula which it serves the power of a great organization both in the development of trade, in the development of tourist traffic, and in the development of manufactures.
It is difficult, Mr. Chairman, to deal with these old matters. When the provinces of Canada met with the Dominion government in Ottawa, province after province raised

C.N.R.-Branch Lines

these railway problems, not from the point of view of their economic soundness as proper acquisitions for the Canadian National railway or the Dominion government, but from the point of view of their historical connection and the obligations in a Dominion sense attaching to them. The Dominion government undertook as a matter of policy that the Canadian National management should be asked to look into these various situations and, if possible, to negotiate ways of dealing with them. May I point out to the committee that if the Gaspe railway had happened to be owned by Mackenzie and Mann in 1918 instead of by the poor shareholders of the defunct Charing Cross bank, it would to-day have been a part of the national system, and there would not have been a word of complaint about it, but because the owners happened to be the poor shareholders of the defunct Charing Cross bank instead of Mackenzie and Mann, this railway was left outside.


Mr. EVANS:: Does the minister think that Mackenzie and Mann would ever have constructed that road?


Charles Avery Dunning: Mackenzie and Mann
constructed many a railroad1 through less promising territory than the Gaspe peninsula, and my hon. friend can think of some instances himself if he will reflect for a moment or two. The point is, after all, we have these railway sore spots. They have been there for years. The file in the Department of Railways and Canals relating to the Gaspe peninsula is a foot thick and goes back pretty well to confederation. The ministers of railways back as far as Sir Charles Tupper helped to promote it, and I think we are doing a good thing for Canada, and we are not harming the Canadian National system in the slightest degree by including these lines within the terms of the Maritime Rates Act.


Robert Gardiner: I do not know whether the minister intended it or not, but I am afraid he did put me in a wrong light. The minister knows very well that I did not object to the buying of this railway.


Charles Avery Dunning: Quite so.


Robert Gardiner: I thought possibly some of his remarks might carry the implication that I objected to its purchase.


Charles Avery Dunning: Not at all.


Robert Gardiner: I said I supported the
purchase on general principles for the benefit of Canada. I have nothing further to say so long as the Canadian National system is protected.


George Reginald Geary: Mr. Chairman, as a member of the railway committee which had this bill under consideration, I feel that having considered it very carefully, with practically all the information now submitted to the house before that committee, I must follow the course I then pursued, that is, approve this bill. But I think the Minister of Railways cannot contend for a moment that this is a good business buy. The railway will not pay within any reasonable time that we can anticipate. It is a more or less decrepit railway, old fashioned in its weight of rails, in its bridges, trestles, structures, and equipment.


An hon. MEMBER:: What is the weight
of rail?


George Reginald Geary: Sixty pounds to the yard,
whereas they are now putting in one hundred pound rails.


Charles Avery Dunning: Not on branch lines.


George Reginald Geary: From eighty to one hundred pounds. However that may be, the cost of reproduction to-day is the cost of the physical reproduction, less depreciation accrued over the years since the lines were first put in place. But that does not take into account the conditions I have referred to, the inadequate, obsolescent-or whatever you may call it-condition of the railway to say nothing of its not having been kept in proper repair. Sir Henry Thornton says it will cost $147,000 to patch the railway up so that it may take care of the present traffic.


Charles Avery Dunning: My hon. friend is very
close as to the amount, but my understanding of Sir Henry Thornton's statement is that it would require that sum to bring the railway u,p to normal branch line standard.


George Reginald Geary: We need not quarrel about
that. It is simply bringing up to branch line standard a railway that does not handle a great deal of traffic anyway. I do not think it is any use for the minister to attempt to take any comfort in the reflection that we are building branch lines in the western provinces that may not pay on their actual construction cost. Those branch lines fit into the system as a whole and contribute to the general traffic. I do not think we can get very far by comparing this acquisition with a new branch line constructed in the western provinces. But I think the minister is on sound ground when he says there is some obligation on us to take this road over viewing it from this other angle, that we should not forget the frank statement of the railway officials concerned, that in buying the road we are relieving the English bondholders to some

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extent of an obligation which this country was under to them for financing the railway. This factor had a good deal of influence on my judgment. Now, there has been in times past- a lot of criticism on the part of English investors of Canadian financial methods, and it is not thought by Sir Henry Thornton, and I judge by the minister and. others associated with him, to be advisable to incur any more of such criticism. There is no doubt that if we sat tight on this proposition and let the bondholders come to us, we could squeeze them down to a lower figure. But I am not complaining of the action of the railway officials in giving what under all the circumstances is a fair figure. I do not think it is the part of this government to wait for the road . to drop into our basket for practically no consideration at all. To my mind those two considerations are preeminent. One, that we have an obligation to these people. There is no good reason why we should leave the Gaspe peninsula out of our calculations. That obligation I think we should fulfil. The other consideration I have already adverted to, namely, the impression to be left upon English investors in regard to money which they have bona fide placed in a railway enterprise in Canada.
For these reasons, Mr. Chairman, I think there is no doubt in our minds that we are buying as a matter of business what is a very bad business proposition, and certainly my vote was not influenced in committee at all by the supposition that we are getting a money making property. I think, as an toon, member expressed it, it is about one of the worst things we have ever been obliged to do, but we have to do it. That expresses the opinion of many members in regard to this matter. I find no fault with the government for yielding to pressure, if it can be called pressure, for the reasons I have outlined, but I cannot say they are justified in their action by any consideration of the dollars and cents involved in the transaction.


Charles Marcil: Since the reports of the
experts of the Canadian National Railways was made I have received a letter from Mr. J. S. Gordon, general manager of these two railways, giving the returns for last year. Let me quote from his letter:
Our revenue for 1928 for the two railways was $609,240 with expenses of $548,910, leaving a net operating revenue of $60,330. Of course this balance of $60,330 is debited with such items as hire of equipment, taxes, etc., but in railway accounting, these items are regarded as non-operating expenses.
Mr. Gordon states that within the last twelve months considerable development has 78594-1611
taken place in the Gaspe peninsula. The Madawaska Corporation has gone in there and erected a mill which employs hundreds of men. They have leased a mill at Restigouche, and they have cut during the past winter 50,000,000 feet of lumber. So the traffic will increase with this steady development.


George Reginald Geary: Everybody will be pleased
if that works out.


Charles Marcil: In the centre of the peninsula, near Grand Cascapedia, there is a zinc and lead mine which has been declared by the geological survey here to be the equal of the Jobson deposits in Missouri, one of the richest of the kind in North America. For these reasons, and for the still greater reason that these people are entitled to fair treatment on a equal basis with all parts of Canada, I again urge that the house pass this bill.


Finlay MacDonald: What is the relation between the fixed charges and the maritime freight rates? Why should those fixed charges be added to the maritime freight rates?


Charles Avery Dunning: Under the terms of the Maritime Freight Rates Act the deficit on all of the roads within that region are paid by a vote of this parliament to the Canadian National Railways. Now, the deficits are arrived at by taking the revenues and deducting them from the expenses including the fixed charges. The fixed charges in the area covered by the Maritime Freight Rates Act including interest on the bonds outstanding -as for instance, in connection with the Halifax and Southwestern railway-in fact interest on the outstanding bonds of any of the lines which are now part of the Canadian National system in that area is taken into account. If my memory serves me aright, there is no interest involved in connection with any portion of the Intercolonial railway, buit there are interest charges connected with parts of privately owned systems which come into the area in question. I fnentioned the Halifax and Southwestern as an instance of what I mean in that regard. This line and each one of the others which will come before the committee shortly will have fixed charges attaching to them. I do not claim that these roads, at least immediately, will be profitable to the Canadian National. By the terms of the Maritime Freight Rates Act this country as a whole bears the interest charge on the capital. The Canadian National Railways administer the property under the terms of the maritime rates act.
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Henry Herbert Stevens: Will not the minister admit that the interest on capital expenditure we are now authorizing amounting to some $3,500,000 will be simply carried in t'he Canadian National accounts, with the large interest charged on its total indebtedness to the government? It will not be segregated in any way.


Charles Avery Dunning: It will be segregated in
the accounts in accordance with the terms of the maritime rates act. That is to say, the Canadian National will receive from the Finance department, under the vote which is made each year under the maritime rates act, an amount equivalent to interest charge on the bonds against this particular property and against all other properties in the maritime rates area.


Henry Herbert Stevens: Paid out of a vote of the government.


Charles Avery Dunning: Yes.


Finlay MacDonald: My understanding is that the Duncan report was in favour of a 20 per cent reduction in freight rates in certain areas in the maritime provinces. That reduction was made and became chargeable to the Dominion treasury. If that is right I cannot see the relation between that and interest on capital charge.


Charles Avery Dunning: I am not referring to the Duncan report, which is not legislation.


Finlay MacDonald: I know.


Charles Avery Dunning: The legislation is the
maritime rates act.


Finlay MacDonald: Based on the report.


Charles Avery Dunning: It carries out the Duncan report. In placing that legislation before the house I carefully explained just the feature of it which is now under discussion. It was well understood and in succeeding sessions has been the subject of discussion when the estimates relating to it have arisen. The recommendation of the Duncan report in that connection is familiar to hon. members. It is provided that the cost of this relief shall be definitely borne by the Dominion government, who will make the necessary reimbursement to the Canadian National Railways without impairing the financial results of the operations of the system.


Henry Herbert Stevens: That is the 20 per cent,
reduction.


Charles Avery Dunning: Yes. But there is somewhere-I cannot lay my finger on it at the moment-a reference to the machinery for working out the problem in the area in question.


Henry Herbert Stevens: It does not apply to this interest.


[Stage Direction]
Section agreed to.
Sections 2 to 7 inclusive agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 174, respecting Canadian National Railways and to authorize the acquisition of the Saint John and Quebec Railway-Mr. Dunning-Mr. Johnston in the chair.
On section 1-Authority to purchase St. John and Quebec Railway.
Mr. MaoLAREN:	When the Transcontinental was built it was run diagonally across the province of New Brunswick, terminating at Moncton, which is an inland town. The Transcontinental therefore gave no direct access to the sea-an indirect access, it is true, but not the shortest nor nearly the shortest route that could be selected. Consequently the province of New Brunswick felt that the Transcontinental did not afford a sufficiently direct outlet to the sea for transportation and therefore proceeded to have constructed this railway which is called the St. John and Quebec Railway. It was built down to the valley of the St. John river, a valley very well known to the country as fertile for both fruit and grain. This railway was partly built in 1914, when the war broke out; then difficulties arose. The government did not wish to proceed with any railway construction beyond what was absolutely essential, and work on this line ceased. The original idea was that the railway should run from St. John and join the Transcontinental at Grand Falls, but this involved the construction of two bridges and at the request of the Dominion government the plan was modified and resulted in the construction of a railway from Centreville to Westfield, so that while the railway is called the St. John and Quebec railway it does not touch either St. John or Quebec; it is suspended between the two, as it were.
Peter John Veniot: Like Mahomet's coffin.
C.N.R.-Refunding Obligations


Murray MacLaren: That is the present
situation, but it will be changed in future if the government follow this idea. I would like hon. members of the house, including my hon. friend the leader of the group to my left, to look at this not as a deadend railway but as one with a promising future.


Charles Avery Dunning: How soon?


Murray MacLaren: Just as soon as the
government decides to carry out this program by extending the railway eighteen miles further into St. John and on to Grand Falls. Then we will have transcontinental transshipments of grain to the port of St. John, which is a very large item. The minister need not shake his head.


Charles Avery Dunning: I did not shake my
head; I merely looked surprised.


Murray MacLaren: I will not delay the
house except to say that this was the original idea, and I believe it will persist. The faith of the whole province was behind the construction of this railway; they considered that the plans were based on solid ground, and I am of the same opinion. It was because of the war and at the request of the Dominion government that the railway was not completed, but it is still active; it passes through numerous towms and a great deal of construction will not be required to finish the work. When that is done the government can send grain over its own lines by a shorter route than is available to-day. This bill will afford relief to the province of New Brunswick because it will enable the Canadian National Railways to take over a line which the province has not felt able to complete.


An hon. MEMBER:: Carried.


Murray MacLaren: I second the motion.


[Stage Direction]
Section agreed to.
Sections 2 to 8 inclusive agreed to.
Schedule agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 175, respecting Canadian National Railways and to authorize the acquisition of the Kent Northern railway-Mr. Dunning-Mr. Johnston in the chair.
Sections 1 to 6 inclusive agreed to.
Schedule agreed to.
Charles Avery Dunning: Of course this and the
next bill are both subject to the same criticisms made by the hon. member for Vancouver Centre with respect to the first bill of this kind which we considered.
Bill reported, read the third time and passed.



INVERNESS RAILWAY

[Stage Direction]
The house in committee on Bill No. 176, respecting Canadian National Railways and to authorize the acquisition of the Inverness railway-Mr. Dunning-Mr. Johnston in the: chair.
Sections 1 to 6 inclusive agreed to.
Schedule agreed to.
Bill reported, read the third time and
passed.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved the second reading of Bill No. 253, respecting the Canadian National Railways, and to provide for the refunding of certain maturing financial obligations.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Short title.	*
George Reginald Geary: May I ask t'he minister if
these obligations now being refunded carry the guarantee of the government?


Charles Avery Dunning: Yes.


George Reginald Geary: To the full extent?


Charles Avery Dunning: Yes.


Robert Gardiner: Has the bill been
printed?


The CHAIRMAN:: Yes.


[Stage Direction]
Section agreed to.
Sections 2 to 7 inclusive agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 42, to amend the Insurance Act-Mr. Robb-Mr. Johnston in the chair.
Sections 1 to 5 inclusive agreed to.
Bill reported, read the third time and passed.
[Stage Direction]
Regulation of Liquor Traffic


Hewitt Bostock: In explanation of what has been referred to by the hon.. member for Acadia (Mr. Gardiner) I would state that it was I who authorized one of the reporters to attend and report certain proceedings of the railway committee, but it was done at my own expense.


Robert Gardiner: We will accept Your Honour's explanation.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.
Thursday, May 16, 1929