DEATH OF MR. T. H. THOMPSON, M.P.

Mr. SPEAKER:: I have the honour to inform the House that I have received the following letter:
Members of the House of Commons,
Your kind expressions of sympathy are deeply appreciated and gratefully acknowledged.
Mrs. T. H. Thompson and daughter.
. REPORTS
Mr. SPEAKER presented the report of the Editor of Debates on the paid circulation of Hansard as affected by the publicity ordered by the House of Commons on recommendation of the committee on Debates as follows:
Ottawa, June 17, 1925.
To His Honour
The Speaker of the House of Commons.
Sir:-We have the honour to report the procedure and results of the effort to increase the paid circulation of Hansard which was ordered by the House.

Reports
The command of the House was given by adopting on July 3rd last the report of the Debates Committee submitted by Mr. Boivin, Chairman, on 30th June. The report read in part as follows:-
"Your Committee have had under consideration certain recommendations providing for a wider and more general distribution of the unrevised edition of Debates at the actual cost of the extra printing, paper and mailing, which has been ascertained to be approximately three dollars per session.
"Your committee recommend that the required steps be taken by the proper officers to inform the general public that the said unrevised edition of debates is available to subscribers, and will be mailed to them daily, upon application to the King's Printer, at the said rate of three dollars per session."
Consulting with Your Honour we were instructed that the members of the editorial staff of Debates were the "proper officers" to carry out this duty. We prepared a plan which, when approved by the Chairman of the Debates Committee, was put in execution. The plan was to ask members of the House for lists of names of those in their several constituencies likely to be interested and then to circularize the partie so named.
We append to this report copies of the printed forms used in this work.
Letters to members of Parliament were mailed January 25 to February 1, those most distant from Ottawa being first. In response 52 lists of names were received, the total number of names being 2,121, an average of about 40 per list. Circulars were promptly sent to the parties named.
When this matter was under discussion in the Debates Committee several members expressed the opinion that the press would probably take an interest in the movement and would promote the circulation of Hansard. Acting on this suggestion we communicated with the Canadian Press, the resident members of the Press Gallery, and others. The result was that Hansard as a subscription proposition was mentioned in many papers from coast to coast. Editorial articles recommending the purchase and reading of Hansard were published by some of the foremost newspapers, including those of Montreal, Toronto, Winnipeg and Vancouver.
A special notice was published by the U.F.A. advising readers to send for free booklet explanatory of Hansard. About 100 letters were received as a direct result of this article. Copies of the booklet herewith and samples of Hansard, together with return envelopes were sent to the parties who wrote.
In all, letters were sent to about 2,400 prospective subscribers.
In every case the party was asked to send his subscription direct to the King's Printer.
It was not possible to "key" these items of publicity in such a way as to trace results in detail. But it would seem that the movement as a whole was markedly successful. The King's Printer advises us that.whereas the paid list of Hansard up to the end of last session was about 700; the present list is 1,245. In judging of this result it is necessary to allow for the fact that of recent years there has been a steady, though slow, growth in the number of Hansard subscribers. The experience with regard to the plan as above would indicate that further publicity would greatly increase the number of Hansard subscribers.
We have the honour to be, Sir,
Your obediant servants,
A. C. Campbell,
Editor of Debates. George Simpson,
Associate Editor of Debates.
Marcel Gabard,
Associate Editor of Debates.
Fifth report of the select standing committee on Railways, Canals and Telegraph Lines.- Mr. Hughes (for Mr. Cahill).



CANADA GRAIN ACT- AMENDMENT

[Stage Direction]
Mr. W. F. KAY (Missisquoi) presented the fifth and sixth reports of the select standing committee on Agriculture and Colonization, as follows:
House of Commons, June 17, 1925.
The select standing committee on Agriculture and Colonization beg leave to present the fifth report of the said committee, which is as follows:-
Your committee have had under consideration Bill No. 113, An Act Respecting Grain, and have agreed to report the same with amendments.
All of which is respectfully submitted.
W. F. Kay,
Chairman.
House of Commons, June 17, 1925.
The Select Standing Committee on Agriculture and Colonization beg leave to present the sixth Report of the said committee, which is as follows;
Your committee have had under consideration Bill No. 113, An Act respecting Grain, and have unanimously adopted the following resolution relating thereto, namely:
"That the Committee on Agriculture and Colonization
strongly recommends to the government, that, in order that the provisions of Bill 113, An Act respecting Grain, may be made applicable to the whole Dominion of Canada without any possible doubt whatever, steps be taken by this government to approach the governments of the several provinces, and more particularly those provinces concerned with the growing of western grain, with the object of having necessary concurrent or enabling legislation passed by such provinces, to place beyond doubt, as far as is possible, the constitutionality of the said act or any of the provisions thereof."
W. F. Kay,
Chairman.

[Stage Direction]
Mr. THOMAS VIEN (Lotbiniera) moved that the fourth report of the select standing committee on Banking and Commerce be concurred in.
Sir HENRY DRAYTON:: Explain.


Mr. YIEN:: The report reads as follows:
In obedience to the order of your honourable house, of the twenty-third day of March last, your committee have had under consideration the question of the basis, function and control of financial credit, and the relation of credit to commerce and industry, and beg leave t") present the following as their fourth report:
Whereas commerce and industry suffer greatly by reason of periodic changes in the purchasing power of money and
Whereas it is generally recognized that the best results are likely to follow from co-operative action towards this end on the part of a number of nations;
Therefore be it resolved:
That this committee recommend to the House that the Canadian delegates to the League of Nations be instructed to bring this matter before the league, at the earliest opportunity, in order that the subject may be discussed and, if possible, such concerted action taken by the various nations within the league as shall be best calculated to bring about the desired end.
Financial Credit


Mr. W. C. GOOD (Brant):: I desire to
draw the attention, of the House to one phrase in the substantive part of this resolution which I think as rather unfortunate; and in that connection I am' going to suggest a slight amendment which I believe will meet with the approval of the House. Hon. members will notice in the latter part of the resolution these words "by the various nations within the league." Now at the present time the United States is without the league. It is very desirable, indeed, I think hon. gentlemen will admit, that the United States should not be excluded from such a conference. There are also some other large and important nations which might be excluded if this phrase were allowed to stand as it is. I submitted the resolution to Professor Irving Fisher, who has taken a very great interest in this matter and is very well informed, and asked him to make any comments that he thought fit to make upon it. He wrote me, under date June 1. suggesting the replacing of these words "within the league" by the words "throughout the world." That would allow the inclusion of the United States or any other nation that might now be for one reason or other outside of the league. It seems to me this minor amendment would make the conference much more effective and ought to be concurred in by the House unanimously. I take it that the hon. member who moved concurrence would be quite agreeable to -this change. At all events I recommend its acceptance.


Thomas Vien: If I am quite in order, in
making an explanation, I may state that this matter has been the subject of careful study by the Banking and Commerce committee for five or six days, and as a result of their deliberations the committee reported that our delegates to the League of Nations should first take this matter up with the various nations within the league, for the league, or the council of the league, to take whatever action they saw fit with reference to the other nations that are not within the league, if such action is deemed advisable. Therefore, that is the reason the committee reported that the best we could do at the present moment was to recommend that our delegates be instructed to bring this to the attention of the League of Nations.


William Charles Good: My hon. friend misunderstands the point which I brought to the attention of the House. I am not objecting at all to the action which he suggests. If my hon. friend will look at the latter part of the sentence he will see that it says:
JMr. Vien.]
Such concerted action taken by the various nations within the league.
Now the proposition is to introduce the matter through the league, but this resolution as worded limits subsequent action to those nations now within the league. I think that is unfortunate. I think this particular point was not definitely considered at the meeting to which my hon. friend has referred. It is quite true that the matter was debated in a general way, but this particular amendment was not then considered.


Hewitt Bostock: Order. Has the hon.
member an amendment to move?


William Charles Good: I should like to move that
the words "within the league" in the second last line be struck out and that the words "throughout the world" be substituted therefor.


Hewitt Bostock: ' The amendment is out of order. The amendment, if there is any, should aSk that instructions be given to -the committee that the report be referred back The amendment cannot be made in the House.


Mr. ROBB:: May I suggest that if the
.resolution as presented to the House with the findings of the Banking and Commerce committee is not satisfactory to all members, we might refer the matter back for further consideration.


Henry Lumley Drayton: No, we could
not.


William Charles Good: If my suggestion does not
meet with the general approval of the House, I do not wish to press it. It seems to me that it should meet with unanimous approval.


Hewitt Bostock: There is nothing before the House except the report and concurrence ,in the report.


Mr. MEIGHEN:: I presume it is of importance to know that the report of the committee is satisfactory to the committee itself before we are asked to concur in it, but it is at least of equal importance to know that it is satisfactory to the government. Apparently if this motion is to carry-and I do not see any sign of demurring on the part of the administration-this government is to undertake to bring up a subject before the League of Nations and apparently the hon. member for Brant (Mr, Good) feels that in order to give it even additional force we ought to take steps to constitute a newer and larger League of Nations.


William Charles Good: No, no.


Arthur Meighen: For the express purpose.

Financial Credit


Mr. JACOBS:: Does the right hon. member not think it would be sufficiently shelved if referred to the League of Nations as at present constituted, without dragging in the other nations?


Arthur Meighen: I have no objection to the government either shelving this report or shelving themselves, but I do not like to be a party to the process of referring it back. * Jf this motion had been seconded by the hon. member for Dorchester (Mr. Cannon), as appears to have been the original intention, I might have been content to let it go, assuming the government had considered the matter, but I notice he hastily and promptly withdrew all responsibility.


Thomas Vien: My right hon. friend is not correct in that statement. Before the House opened I simply asked my hon. colleague, (Mr. Hammell) who is the seconder of the motion to second it, and I never asked the hon. member for Dorchester to second it, and therefore he did not do so.


Arthur Meighen: His name was mentioned.


Thomas Vien: No.


Arthur Meighen: Without any enthusiasm on his part.


Mr. GRAHAM:: An " honourable mention."


Arthur Meighen: However, he will speak for himself on this as on other subjects. What really is the suggestion? It is that this parliament, on the mere motion on a report of a committee, is asked to be in the position of directing the government to bring the question of the control of credits, involving the curing of theoretic change in the purchasing power of money, before the League of Nations, and apparently the government is ready to accept the direction without ever having considered whether it is any cure, or whether it has the smallest suggestion to make to the League of Nations. I can think of little in the way of absurdity that could be more grotesque. What is parliament for? Are we here simply to be trifled with, in order that hon. members to my left may be appeased? If we have some plan, even though we are a small nation, I suppose it would not be altogether unworthy of us to lay it before the League of Nations; but here is something that has challenged the brains of humanity for all time. We are presumed to pitch it into the cauldron of the League of Nations without any idea whatever of what we want done or how to do it. And surely we, one of the smallest members of the assembly of that league, have gone far enough 279
in the way of accepting motions of more or less trifling consequences without the consideration that parliament ought to give to these things. To my mind it reaches the acme of ridiculousness for parliament to accept a motion of this kind with no statement as to policy or no statement even that there has been consideration on the part of the government itself. *


William Charles Good: May I ask my right hon.
friend, is he not aware that this matter received some consideration at the Genoa conference held under the auspices of the League of Nations?


Arthur Meighen: That may be. That is not the point I am arguing at all. Where is the government in the matter? What dc they intend to ask the league to do? I ask the Acting Minister of Finance (Mr. Robb), who I know has revelled in this subject for months and years, to give the House now the result of his deliberations.


James Alexander Robb: My thought at the moment is that my right hon. friend is casting serious reflection on the members of the Banking and Commerce committee who have been studying this question all winter.


Arthur Meighen: I was directing my attention to the government, and I would like .to get the result of their studies. My efforts still continue. Can I get any information?


[Stage Direction]
Motion agreed to.

[Stage Direction]
A message from His Excellency the Governor General, transmitting supplementary estimates for the year ending March 31, 1926, was presented by Hon. J. A. Robb, (Acting Minister of Finance), read by Mr. Speaker to the House, and referred to the committee of Supply:

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Bill No. 211 (from the Senate) for the relief of Maude Crawford Ross.-Mr. White.
Bill No. 212 (from the Senate) for the relief of Bertha Matilda Quinn.-Mr. Church.
Bill No. 213 (from the Senate) for the relief of William Garfield Reed.-Mr. Rankin.

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

Henry Lumley Drayton: L Has a Mr. Gaston of New York been engaged by the Canadian National Railways to make an accounting or valuation of the securities and properties of the company, and of its present position?
2.	If not, has any other person or firm been engaged for such a purpose?
3.	If so, who is the person %or firm?
4.	When was such appointment made and was it made with the authority of the government?
5.	Upon what terms as to payment has such appointment been made?


George Perry Graham: Mr. Geo. A. Gaston, of New York, has been engaged by the board, with the approval of the Minister of Railways, to make an investigation of certain features of the Canadian National Railways along the lines referred to by the minister in his recent annual statement to parliament. The position is of a temporary nature, and Mr. Gaston will be paid on a per diem basis.


CANADIAN FISHING INDUSTRY
Mr. SPENCER:: 1.	What was the total revenue to the government from the fishing industry of Canada during each of the years 1923 and 1924?
2.	What was the total expenditure to the government for same during each of these years?


Hon. Mr. CARDIN:: 1.	Total revenue to the Department of Marine and Fisheries during 1923-24, $180,989.59; 1924-25, $146,389.88.
2.	Total expenditure by the Department of Marine and Fisheries during 1923-24, $1,430,085.98; 1924-25, $1,390,043.32.


NATIONAL FLAG FOR CANADA
Mr. CHURCH:: 1.	Will the government lay on the table of the House the text of a copy of order in council appointing a committee to select a distinctive Canadian flag for use ashore?
2.	Who is asking for such a Canadian flag and for such a change, and why?
S. Is the Union Jack not Canada's only official flag, and was it not the one used by the Canadian expeditionary forces overseas in France, and since Canada has been a British possession?
4.	Will an opportunity be given to the House to discuss such an unnecessary innovation in view of Canada having no land army and no fleet whatever except the proposed Petersen fleet?
5.	Is such a change of policy not for parliament to decide instead of the Governor General in Council?
6.	Will any legislation be introduced as to such a pioposed change this session?
7.	Will the government also introduce legislation or rules to regulate the use of American and other foreign flags in Canada?


Right Hon. Mr. MACKENZIE KING:: No committee has been appointed for the purpose of selecting a Canadian flag. A committee of public servants has been appointed to con-

sider and report upon a suitable design for a Canadian national flag, but the government has taken no action of any kind towards committing either the government or parliament to the adoption of a national flag. I will read to the House the text of the order which it has been requested to have laid on the table:
Certified copy of a minute of a meeting of the committee of the Privy Council approved by His Excellency the Governor General on the 23rd April, 1925.
The committee of the Privy Council have had before them a report, dated 21st April, 1925, from the Minister of National Defence, stating that a distinctive Canadian flag has been authorized to be used by Canadian government-owned vessels and by other vessels of Canadian registry, and that there is throughout the country a desire that there should also be adopted for use ashore a distinctive flag which shall be recognized as the flag of the Dominion of Canada.
The minister, therefore, recommends that a committee be appointed to consider and report on the most suitable design that should be adopted for a Canadian national flag for use ashore, and that this committee be composed of the following:
G. J. Desbarats, Esq., C.M.G. Deputy Minister of National Defence, Chairman.
Thomas Mulvey, Esq., B.A., K.C., Under Secretary of State.
A. G. Doughty, Esq., C.M.G., LL.D. Dominion Archivist.
Commodore Walter Hose, C.B.E., A.D.C., Director of the Naval Service.
Major General H. A. Panet, C.B., C.M.G., D.S.O., Adjutant General.
Group Captain J. S. Scott, M.C., A.F.C., A.D.C, Acting Director of the Royal Canadian Air Force. '
The committee concur in the foregoing recommendation and submit the same for approval.
Hon. members will see that all that has been done has been to refer to this committee of civil servants the question of considering a suitable design for a national flag. Representations have been made to the government from different quarters that there are throughout the country a considerable number of people as well as various organizations who feel that Canada, like Australia, South Africa and other of the self-governing dominions, should have ashore a distinctive Canadian flag as she already has on the high seas. The government has simply referred, and intends to refer to this committee, for purposes of study and report, the different suggestions that have been or may be made in that regard. I might mention, for example, that the Native Sons of Canada, an organization, I understand, having headquarters in British Columbia, has offered a prize for the best suggestion as to a suitable Canadian National flag. A short time ago, during the present session, I had a letter from the Right Hon. Mr. Fielding, Minister of Finance, expressing very strongly the view that Canada should have a flag of her own and accompanying the letter was a flag which Mr. Fielding

Home Bank
himself had designed and which he said he would like to have considered when any discussion with respect to the possibility of a Canadian national flag might come up. I think I need only mention Eight Hon. Mr. Fielding's name in this connection to indicate clearly that those who have views with respect to a Canadian national flag along lines similar to those adopted by other of the selfgoverning dominions are not to be assumed as in any way wanting in sympathy with, or loyalty to the Mother Country in the matter of the flag.
Let me make it quite clear that this committee is simply a committee to study and report. The government has no intention of taking any action in this matter without taking parliament fully into its confidence. Any report that is made will be submitted to parliament at a time when this matter may come up for discussion. There is, I think, cn the order paper at the present time a resolution in the name of an hon. member suggesting that the House should consider this matter. It may be of advantage to the House to have before it, when a motion of this kind is being debated, the different suggestions that may have been made, and something in the nature of a report on the part of a represen'ative committee such as the one here referred to. That is the sole and only object of the order I have read to the House. I do not hesitate to say that the government would not for a moment consider adopting a national flag other than by resolution of this House and the full sanction of the parliament of Canada. But surely that question can be referred to in a calm manner as one worthy of consideration, without it being assumed, as some of the questions which the hon. member has put to the government in his list of questions would suggest, that there are ulterior motives with respect to any consideration of the question. Speaking for myself, may I say that while I am able to sympathize with the point of view which would have for Canada a distinctive national flag, just as Australia, South Africa and other of the self-governing British dominions have their national flags, I would be proud and happy to have Canada continue in the future as in the past to have the Union Jack recognized as the national flag, moreover, I would not lend my support to any proposal which did not include the Union Jack as the most distinctive feature of any national flag that at any time it might be proposed to adopt.
279i
THE LIEUTENANT GOVERNOR OF ONTARIO Mr. CHURCH:
1.	Is the government aware that His Honour the Lieutenant-Governor of the province of Ontario has been elected as a director of the Canadian Pacific Railway?
2.	Is it the policy of the government to allow the direct representative of the crown to accept such a directorship ?
3.	What action will the government take in the matter?


William Lyon Mackenzie King: I may answer this question by saying that the government has no official information, so far as No. 1 is concerned. As regards Nos. 2 and 3, the government has not yet had an opportunity to give the matter consideration.
HOME BANK DEPOSITORS Mr. CHURCH moved:
For a return showing the names of depositors of the Home Bank of Canada for sums of $10,000 or over who will benefit by legislation now being considered for the relief of depositors of said bank.


James Alexander Robb: I want to make it clear to my
hon. friend and to the House that it will take some time to get this information and I cannot promise it this session.


Mr. CHURCH:: I hope the government
will let this pass, as I believe they will. The country is entitled to know how this five and a half millions is being distributed. The liquidator, Mr. E. R. C. Clarkson, has now such a report prepared and the copy can be had at once. All I ask is for those over $10,000. Home Bank officials tell me there has been little or no speculation by or on behalf of these small depositors as to securing payment of their claims.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to introduce a measure to provide:
(.a) that the Governor in Council may authorize advances to any one or more of the provincial governments for the purpose of assisting agriculture by enabling the provinces to make long term loans to farmers;
(b)	that such advances shall be secured by the issue 8nd delivery to the Dominion of bonds of the provinces;
(c)	that the aggregate of advances to be made by the Dominion shall not exceed ten million dollars ($10,000,000).
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recom-
[Stage Direction]
Government Offices in Toronto
mends it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Henry Lumley Drayton: Can the Minister of Railways (Mr. Graham) now give the information I have asked for before in regard to the building at the comer of King and Yonge streets in Toronto? The moving seems to be going on and a considerable cost has already been incurred in this matter by the railway system.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): There is no change in the situation. Any bargain in this transaction must 'be only tentative until the Canadian National Railway board presents to the Minister of Railways a resolution which is approved by the Governor in Council. I have asked for that resolution during the past week but I have not got it yet.


Henry Lumley Drayton: It will be rather late when it is submitted.


George Perry Graham: I should like to give it
to the House, because if the Governor in Council approves of it the bargain will be a good one.


Henry Lumley Drayton: Possibly, but not likely.


Arthur Meighen: I asked the minister last week to expedite this matter and he expressed the hope that he would be able to do so. This is now Wednesday and we are near the end of the session, and it certainly will not look well, to say the least, to have the thing concealed until it is too late.


George Perry Graham: There is no concealment.


Arthur Meighen: It is strange that the
company is taking action already on a matter in respect of which they have no right to proceed without the approval of the government. Has the company not obtained the approval of the government?


George Perry Graham: No.


Arthur Meighen: Well, it is to me a strange proceeding in a matter of such great consequence, involving large sums and considerable property.


George Perry Graham: It is a sale of property,
not a purchase.


Arthur Meighen: It is a sale of property and the government is supplying the money to buy that property.


George Perry Graham: Not at all. The bargain
which has been tentatively made by the board of the Canadian National Railways must be approved by the Governor in Council, and so far as I have heard, the transaction I believe will foe a satisfactory one. I am not in a position to give any information to the House until the transaction is completed, and in that I am only following the rule observed by my right hon. friend when he was in power. I am doing my utmost to get the resolution but I have not yet received it.


MINERS AND STEEL WORKERS
[Stage Direction]
On the Orders of the Day:
Mr. JOHN EVANS (Saskatoon):: I desire
to bring to the attention of the government the following telegram I have received:
At a mass meeting of over 1,300 Saskatoon citizens the following resolution was unanimously passed: Resolved that this mass meeting of citizens denounce the actions of the federal government in sending troops into the Nova Scotia mine area and-


Hewitt Bostock: Order.


William Lyon Mackenzie King: In reference to so much of the telegram as the hon. member has read, it should be made clear that the federal government has not sent any troops into Cape Breton. The troops are there not in virtue of any action on the part of this government but in pursuance of the provisions of a statute of parliament which authorizes the Attorney General of the province concerned to take such steps as he may deem necessary to preserve law and order.
M,r. EVANS: In the face of the deplorable conditions down there and the seeming impotence of the Nova Scotia government in the circumstances, will this government take matters in hand?


William Lyon Mackenzie King: I think the
House knows that the Minister of 'Labour (Mr. Murdock) is at present in Sydney and is Working in conjunction with the Minister of Mines of the province of Nova Scotia. He is hopeful that the mediation in which they are both participators will be beneficial. The Minister of Labour has already had conferences with committees of those who are on strike as well as with representatives of the company, and such information as I have had from him thus far would indicate that while there are many difficult problems to be solved he is not without hope that the mediation will bring an end to the trouble.

Ocean Shipping Rates


ST. JOHN, N.B.-TRIPARTITE AGREEMENT
[Stage Direction]
On the Orders of the Day:
Mr. MURRAY MacLAREN (St. John City and Counties of St. John and Albert):: I wish to call the attention of the government to question No. 8 standing in my name on to-day's order paper with reference to the Tripartite agreement, so called, between the Dominion of Canada, the Canadian Pacific Railway and the city of St. John, New Brunswick. This question has been on the order paper since June 8 and as the session, no doubt, will soon come to an end I should like to know whether the answer will be given at an early date. .


Hon. J. H. KING (Kootenay, Minister of Public Works):: Probably I could answer the
question now.


Hewitt Bostock: By leave of the House.


Murray MacLaren: My I have the answer
in the ordinary form?


William Lyon Mackenzie King: Very well. I will answer the question to-morrow.


MARINE INSURANCE RATES
Murray MacLaren: I
should like to have an answer to a question I put a few days ago regarding marine insurance rates. I think the Minister of Railways (Mr. Graham) 'stated that he would ascertain whether a second report had been received from the Imperial Shipping committee and would inform the House accordingly.


William Lyon Mackenzie King: I was under the impression that I had among my papers to-day a cable from the High Commissioner in London in answer to the query sent him immediately after my hon. friend had asked his question. Mr. Larkin has replied that he expects that the report will be signed this week. There had been some difference with respect to the wording of one clause on which I understand ail parties are now substantially agreed. The report will be signed any day this week, and I will promise my hon. friend to lay a copy on the table as soon as it comes. We have at Ottawa the draft report referred to in the cables which have passed.


OCEAN SHIPPING RATES
[Stage Direction]
On the Orders of the Day:
Arthur Meighen: Mr. Speaker, I want to ask the government if this session is to close without any action being taken or recommended to parliament in
respect of what is called, in the Speech from the Throne, "transportation by sea"? We have had a report from what should be known as the Petersen committee, but it has lain dormant for some time. Does the government propose to introduce any legislation or ask for any authority from parliament arising from that report, or is the session to end with nothing done?


William Lyon Mackenzie King: Mr. Speaker, the circumstances under which the government has thought it inadvisable to proceed with the discussion of the report of the committee must, I think, be in the minds of all present. In view of the sudden death of Sir William Petersen, we have not thought that it would be fitting to bring into this House at this time the discussion of his name in matters relating to his projects. The government, however, intends to consider very carefully the recommendations contained in the report for such action as under .the circumstances may be deemed best. I do not think that it would be advisable to contemplate immediate legislation, but I might say speaking generally that the government looks favourably upon the recommendations contained in the report.


Arthur Meighen: My only comment is
that the death of Sir William Petersen is of course deplorable, and his family and all his friends have our sympathy; but this fact has nothing to do with government policy, and indeed does not affect the validity of the contract in the least; nor was his own evidence to the effect that his death would render the contract inoperative. This appears to be only an excuse to defer action.


William Lyon Mackenzie King: I think I may point out- to my right hon. friend that there is no completed contract. The committee's report in reference to the agreement that was referred to it for consideration was that it would be inadvisable to pronounce finally upon it for the period of at least another year, or rather until further information could be obtained for submission to parliament. The committee was apparently unable to get the information that it thought necessary to deal definitely with ocean rates.


Arthur Meighen: In other words, it is
dead.


VANCOUVER OLD POST OFFICE
[Stage Direction]
On the Orders of the Day:
Mr. GEORGE BLACK (Yukon):: Mr. Speaker, I wish to call the attention of the government, and particularly of the Minister
Export oj Power

of Public Works (Mr. King), to what is apparently an official announcement in the Vancouver Province of June 4, reading as follows:
Hon. Dr. J. H. King, Minister of Public Works, announces that in purchasing the Winch building in Vancouver it is the intention of the government to form a federal area within the boundaries of the city block on which the post office stands. All government offices now housed elsewhere in Vancouver will be moved to the Winch building.
This is the part of the despatch to which I wish to direct particular attention:
Funds obtained from the sale of the old post office building at Granville and Pender streets will be applied on the purchase of the Winch building.
Since April 30, four questions have been standing in my name on the order paper with reference to the sale of this old post office building. I cannot conceive why the government is refusing to answer these questions. The information requested is in the public interest. Has the government in the meantime made a secret sale of this property?


James Horace King: Mr. Speaker, as I stated to
the House some days ago, negotiations were in progress at the time for the purchase of this property for government purposes, and it did not seem proper to answer the questions. Since then the negotiations have been concluded, and I will bring down to-morrow the answers to the hon. member's questions.


MANITOBA FLOODS
[Stage Direction]
On the Orders of the Day:
Mr. ARTHUR L. BEAUBIEN (Pro-vencher): Mr. Speaker, have the government any information as to the serious floods that have taken place in Manitoba through the White Mouth river and the Birch river overflowing their banks? If so, are they taking any action to help those affected? I understand there is a whole township flooded.
James Horace King: Reports have been received of flood conditions in Manitoba, and provision is being made in the supplementary estimates to take care of some of the damage.


Arthur Meighen: I have been urged by
telegram to bring to the attention of the government the serious state of affairs at Delta, due to the same cause. I hope the government has the matter before it for attention.


William Lyon Mackenzie King: Provision is being made in the supplementary estimates to look after this.
[Mr. George Black.l


EXPORT OF POWER
[Stage Direction]
On the Orders of the Day:
Henry Lumley Drayton: Mr. Speaker, I desire to ask my hon. friend the Minister of Trade and Commerce (Mr. Low) what is the reason for the continued delay in bringing down the appropriate order in council in ease of the municipalities from the export fax on electricity?


Hon. T. A. LOW (Minister of Trade and Commerce):: I am sorry to have to inform my hon. friend that the matter is still under consideration. It will be dealt with in due course.


Henry Lumley Drayton: "Due course"
is a pretty slow course.


ROOT VEGETABLES ACT AMENDMENT
[Stage Direction]
On the Orders of the Day:
Mr. GROTE STIRLING (Yale):: Mr. Speaker, may I ask the Minister of Agriculture (Mr. Motherwell) whether it is his intention to proceed with the bill to amend the Root Vegetables Act?


Hon. W. R. MOTHERWELL (Minister of Agriculture):: I do not think that the bill
will be proceeded with this session.


Grote Stirling: Is the minister ready to give his reasons for withdrawing it?


RAILWAY FREIGHT RATES
[Stage Direction]
The House resumed from June 16 consideration in committee of Bill No. 181, tp amend the Railway Act 1919.-Hon. Mr. Graham.- Mr. Gordon in the chair.
On section 1-Powers of board continued.
Hon. E. J. McMURRAY (North Winnipeg) :: Mr. Chairman, this bill is of farreaching importance to Canada as a whole, and to western Canada in particular. It proposes, if not completely to wipe out, at least to so completely change as to be hardly recognizable the statute that has stood for the protection of western Canada in the field of transportation for some twenty-seven years. To fully appreciate what this change means to the people of western Canada, a brief review of the circumstances leading to the passing of the statute incorporating the Crows-nest pass agreement is necessary.
In 1897 the Liberal government, in granting a subsidy of some three million dollars to the Canadian Pacific Railway, provided that certain maximum rates should apply to grain moving eastward and to certain stated commodities moving westward. No doubt the

Railway Freight Rates
policy of the government was dictated by the conditions prevailing at that time in western Canada, particularly in connection with the railroads. We must remember that at that time there was no Board of Railway Commissioners, and that this agreement was made for the purpose of protecting the people of western Canada against the discrimination that might exist by reason of water competition in eastern Canada. That competition still prevails to-day; we are in identically the same position we were in at that time. Undoubtedly the policy of the government of that day was dictated by the necessity that then existed of giving to the people of western Canada a fair and even opportunity with the other portions of Canada that lay nearer to water transportation. We will remember that the western portion of Canada was at that time being newly opened up. A vigorous and active immigration policy has been inaugurated in the Department of Immigration by Sir Clifford Sifton, and there is no doubt that in working out that policy for the development of that country it was the policy of the government of that day to grant this protection to the people who were coming into that territory.
That contract has stood deliberately unchallenged until just last year. It is true, it was set aside for a brief period as a war measure. But the Liberal government that existed up to 1911 continued that policy of giving the protection of the Crowsnest agreement; that policy was continued by the succeeding Conservative government, and the present government in office here to-day has continued that policy. In 1922, after a committee composed of the different parties in this House had sat upon it, a bill was brought down bringing in the rate exactly as we have it to-day on grain and flour. That undoubtedly was the intention of the government at that time, because it was not then in the mind of any person, it was not in the mind of any party in this House, or even in the mind of the railways themselves that the decision that was handed down by the Supreme court a short time ago would prevail. It never was questioned, so far as I know, that these rates should not apply over the entire system of the Canadian Pacific Railway. We had that in mind when this House passed the bill in 1922. The government, and the House, and the country as a whole, understood that those reductions would apply over the entire railway system of Canada. Furthermore, last year the government allowed the agreement automatically to come into force, as provided by the statutes of 1918. That
then was the policy of this government. The policy of this government no later than last year was to put into force the entire contract exactly as it stood in 1897. There is no question about that at all. This government understood, this House and the country understood, on July 6th of last year, when this act automatically came back into force, that the Crowsnest agreement came into force over every bit of Canadian Pacific mileage in this country.


George Perry Graham: West of Fort William.


Edward James McMurray: Over every bit of railway mileage as provided in the contract of 1897. This government accepted that on the 6th of July of last year. It accepted as its policy that the Crowsnest agreement would prevail, as they understood it to prevail, without discrimination over the whole of Canada. It was not in the mind of a single member of the government or a single member of the House that anything else but the Crowsnest agreement was coming into force, and that without the discrimination that was afterwards made out by the Board of Railway Commissioners, and confirmed later on by the Supreme court. That was the intention of the government last year. Members of the government last year toured western Canada; the Prime Minister himself came out to western Canada, and he did not deny on a single occasion but that we were following out the railroad policy laid down by the Laurier government and he never left a single intimation in western Canada but that the Crowsnest agreement of 1897 was in full force and effect I am sure that it must have come as a shock to him, as it did to me and the rest of us there, that the Board of Railway Commissioners would set aside, or that they even intended to set aside, at one fell 4 p.m. swoop the act of this parliament.
The Board of Railway Commissioners appear to have acted with wonderful celerity upon that occasion. Speaking moderately, and without any trace of feeling whatever, it does seem to me that the Board of Railway Commissioners proceeded with undue activity in setting aside a contract which had stood as the Magna Charta of western Canada in its transportation difficulties for some twenty-seven years. In setting that contract aside on a fifteen-days' notice, without waiting to go to the Supreme court to see if they were sound upon the matter at all it seems to me they acted with undue and indecent haste. It would have been meet and proper under the circumstances to have waited until they had the law from the Supreme court.
Railway Freight Rates

It was, if I might say so, 'hurrying the culprit to execution almost without the benefit of the judicial clergy.
But we can go further. On the 24th day of December of last year an order in council was passed by this government, with the full knowledge before them of the Supreme court's decision, again reinstating the Crowsnest policy and conpact of 1897, in these words:
Your committee is of the opinion, however, that liour Excellency in Council has power to grant a stay of proceedings or postpone the operation of the order ' the board complained of, pending the outcome of the appeal to the Supreme Court of Canada above referred to, and to direct that the said order of the board be varied by providing that the tariffs therein referred to shall again become operative and remain in effect until further order of the board following the decision of the Supreme Court upon the said appeal.
So that for a period of twenty-seven years until practically the present moment, the Crowsnest compact has been the policy of the Liberal party, and incidentally I might add of the Conservative party in the past, too, and it never was set aside at any time except as a war measure.
Now what has occurred in the interval, Mr. Chairman, to change the mind of the government upon this matter? Apparently they were running true to form on the policy of giving equal justice to the people of the central provinces who were far removed from water.	What has caused their change of
mind? I can conceive of only one thing which the government can advance as a [DOT]reason, and that is the fact that the Supreme court has found that there is discrimination throughout Canada, that the Board of Railway Commissioners would have the right to set up the discrimination that now exists in western Canada, and to approve of the discrimination that now exists in eastern Canada, and in order to meet an awkward situation the government has decided upon a sort of compromise. Are the government justified in doing that? We must remember what the government's opinions were prior to the decision of the Supreme court. Now, the government have the power, this House has the power, to override that decision and to put into legislation that which the government approved of up until the 24th of December last year.
Is western Canada really and properly entitled to some form of guaranteed rate? There can be no argument as to that. Any Board of Railway Commissioners would find themselves placed in such a situation, as a result of the course proposed to be taken, that they would have to put an additional and heavy burden upon the shippers of west-err Canada. They are bound by the con-

*ditions of water transportation in eastern Canada. In eastern Canada the rates cannot be raised by reason of that fact. The railroads must have a certain amount of freight rates to keep their lines in operation. That is an undoubted fact. Talk about the equalization of freight rates! There cannot be such a thing in this country as equalization of freight rates as long as water competition exists in eastern Canada, and western Canada must for many years to come pay a higher freight rate than eastern Canada. We must pay it because the money must be raised. The mountain scale applicable to British Columbia is so high already that it cannot be raised any higher. The conditions of competition in eastern Canada are such that the rates cannot be increased there either. Western Canada, that great reservoir producing the largest proportion of freight in this country, must for many years to come bear a higher burden of freight rates than eastern Canada. W e are agreed as to that. In what position then must the Board of Railway Commissioners find' themselves? They find themselves in this position, that without a maximum protection in western Canada they are compelled to raise the rates there to meet the necessities of the freight rates question. Without that maximum western Canada would be in the position of a man playing poker with all the cards stacked against him and the other side asking for the sky as the limit.


Mr. STEWART (Leeds):: Is it a fact that at the present time the western lines are not paying, and that the central regions are paying?


Edward James McMurray: No, I do not think that could be so.
_ Mr. STEWART (Leeds): It is so reported in the papers.


Edward James McMurray: There are a great many reports available but they must be read together and studied very carefully in order to grasp the exact meaning of the freight rates question. And I may say that the study of railway rates is more complex and difficult than a Greek grammar.


Henry Lumley Drayton: My hon. friend has already established that he djoes not understand the question.


Edward James McMurray: I do not pretend to
understand it thoroughly, but I do claim to have a grasp of some of the salient features so far as the removal of this charter from western Canada is concerned. It is impossible for us in the west to recognize that re-

moval in any shape or form. The government have not gone that far, but under what they propose the Crowsnest pass agreement of 1897 cannot continue. So far as commodities moving from the west to the east are concerned, that agreement is practically nullified. The hon. member for West Calgary (Mr. Shaw) suggested a suspension. There is little to be gained by that.	[DOT]


George Perry Graham: My hon. friend said "from the west to the east." He meant "from the east to the west."


Edward James McMurray: Yes, I meant that as
regards the movement of commodities from the east to the west it is practically nullified under this legislation. The situation reminds me of the Irishman who during a fire in his house put on his trousers the wrong way to, and falling downstairs, when they picked him up and asked him if he was hurt he said, looking at himself, "I am terribly twisted." The Crowsnest pass agreement as a result of the government's action, seems to be terribly twisted, and I do not think we shall ever be able to get the westbound rates into proper form again. It is not for me to suggest to the government exactly what should be done. They have defined their policy in the order in council of June 5, 1925. In that document I read the following:
The committee are further of the opinion that as the production and export of grain and flour forms one of the chief assets of the Dominion, and in order to encourage the further development of the great graingrowing provinces of the west, on which development the future of Canada in large measure depends, it is desirable that the maximum cost of the transportation of these products should be determined and known, and therefore are of opinion that the maximum established for rates on grain and flour, as at present enforced under the Crowsnest pass agreement, should not be exceeded.
That defines the philosophy of the government, but they have not made any declaration whether they believe they are bound by any contract of the past solemnly made between Canada and the Canadian Pacific Railway on behalf of the people of the prairies. The whole of the people of western Canada, without one dissenting voice, are of opinion that the government should adhere to the policy embodied in the Crowsnest pass agreement instead of embarking on a policy such as that set out in the order in council from which I have just quoted. If the latter is the policy of the government it is not satisfactory to me. As a quid pro quo it does not go far enough. This legislation has had the effect of demonstrating one thing-that the prairies are tied to eastern Canada so far as freight rates and the transportation of
Railway Freight Rates
grain are concerned. You cannot get away from that at all. If the policy of the government is to assist in the production and export of grain and flour as one of the chief assets of Canada and the development of the great grain-growing districts of the west, why not give these districts the opportunity of getting down to the nearest tidewater, why not give them the opportunity of reaching a port which is open all the year round? Possibly in my province, possibly in my own city, a narrow parochial attitude may be adopted by some; but any true Canadian will express himself in national terms and not in a narrow way representative merely of the sentiment in cities or provinces. If the philosophy of the government is such as they have intimated, I do not understand why they do not afford the producers of the west an opportunity to reach an all-the-year-round port.
My hon. friend from Burrard (Mr. Clark) spoke last night on this question, and while I did not agree with his law altogether, much less with the application of it to the present situation, I did agree with him when he stated that the very meaning of this proposition was discrimination against Vancouver and British Columbia in favour of New York, Buffalo and eastern ports. There is no doubt of that at all. Then how are we helped by the bill which is before the House? It is contended by some-and I think by some fairly good lawyers at that-that under the bill as drafted the grain rates on grain moving out to Vancouver must be lowered, because there cannot be discrimination in the rates provided herein. I cannot view it that way. The Supreme court has distinctly stated in its latest decision-and stated in very accurate and I might say succinct language, leaving no doubt as to what their opinion is-that the Board of Railway Commissioners are not obliged to prevent discrimination between rates provided under the special act and ordinary rates. Here is what they say:
When such maxima-
Referring to the Crowsnest Pass Act of 1897, the Manitoba Act of 1903 and the act of 1908
When such maxima are fixed by special act they must be regarded as exceptional, intentionally exempted by parliament from its general policy against discrimination.
That was terse and brief and absolutely understandable, that where the special rates are made they are made by parliament for special circumstances, and the Board of Railway Commissioners are not bound to take them into consideration when fixing other rates. That being the case, what would be the position so far as rates are concerned in
Railway Freight Rates

connection with grain passing from Edmonton down to Vancouver and from Calgary westward? I think if my hon. friend (Mr. Clark) had studied this aspect of the bill before speaking last night, he would have obtained a sufficient amount of data and information for his argument, without going into the question of the decision of the Board of Railway Commissioners or the decision of the Supreme court. With reference to that part of the Crowsnest pass contract that is left to the people of western Canada, we find this:
Provided that notwithstanding anything in this subsection contained the rates on grain and flour shall, on and from the date of the passing of this act, be governed by the provisions of the agreement made pursuant to chapter five of the statutes of Canada, 1897.
That brings in a portion of the Canadian Pacific Railway.
But it shall apply to all territory west of Fort 'William covered by the tariffs filed under the said agreement.
That was on the lines of railway then built.
Or all lines of railway hereinafter constructed by any company subject to the jurisdiction of parliament within such territory.
That confines us to the lines of railway in the western provinces. Then we go to the next clause dealing with questions of discrimination, and this is what it says:
The board shall not excuse any charge of unjust discrimination whether practised against shippers, consignees or localities, or of undue or unreasonable preference respecting rates on grain and flour governed by the provisions of chapter five of the statutes of Canada, 1897, and by the agreement made or entered into pursuant thereto within the territory set forth in the last preceding section.
There shall be no discrimination so far as the western lines on the prairies are concerned. The real translation of that is that discrimination is possible between rates down to the coast and the rates provided in this agreement. Under that the proper provision will be a comparison of what the grain rates in western Canada normally are, and then in addition to that the mountain scale be added.	.
Then, comes another question which will receive consideration. We have running down from Edmonton to Vancouver the Canadian National line, a line of low and easy grades, and competing with that we have the Canadian Pacific railway running through Calgary. The cost of operation on the one is very high, and the cost of operation on the other is very low. The rates from Edmonton to the coast on the low grade line will be no higher than the rates on the prairie, but the rates that will require to be set are the rates on the Canadian Pacific Railway where the cost of operation is high.


An hon. MEMBER:: The Canadian
Pacific would then become the beneficiary.


Edward James McMurray: They would undoubtedly become the beneficiary according to my argument, in regard to the rates on these roads running down to the coast. The cost on the Canadian Pacific would be taken as the real standard as to what the cost of operation should be.
I think the standard should be fixed by open competition, and that we should not take the cost of the more expensively constructed and more expensively operated road, and the people of Alberta and western Saskatchewan are either to be forced to pay an added price to carry their product to the coast, or compelled to pay the extra rate to eastern Canada, much of the grain of the west will be forced unnaturally into eastern points. As I said before, it is not for me to work out what the quid pro quo shall be, but in the name of western Canada I protest against this bill, and against the removal of the protection, and I say that if that protection which has been given to them be removed they should be given a proper quid pro quo, and I maintain that what we have here so far as grain and flour is concerned is only what this parliament thought was existing so far as freight rates were concerned, every year up until the decision was given by the Supreme court. Under this bill we are simply giving away a portion of what it wias the will of this government to grant to us all along. I make this suggestion to the government and to parliament: that to-day there exists, by reason of the conduct of the Board of Railway Commissioners -though the knowledge of law of the majority of the commissioners was apparently exceedingly elementary-a discrimination, because they assume to set aside, to the astonishment of everybody, the Crowsnest pass agreement, but their finding was disposed of without a moment's hesitation by the decision of the Supreme court. If anything was required to strengthen the unsatisfactory opinion held by the people of this country largely, and by the people of western Canada more particularly, concerning the Board of Railway Commissioners, it was this action of the board in this matter. It is desirable that the west and all portions of Canada should maintain the greatest respect for that body. It was too bad that at a time when the government was dealing with a matter that is exceedingly critical and difficult, hasty action such as that should have lost the confidence of the people of Canada in that board. I do not use my words lightly. I have considered the statements I am making concerning them. That

Railway Freight Rates
being the case, some change and alteration should be made in the personnel of that board. Western Canada, by reason of its great contribution to freight rates and its vast railroad mileage, should be more strongly represented upon that board, and I suggested some time ago to my good friend the Minister of Kail-ways and Canals (Mr. Graham) that the Board of Kailway Commissioners should have another member from western Canada. We are entitled to that and it is in the interest of the whole country. If that were done, it would inspire more confidence in that board on the part of a large section of the people of Canada. While I am on that matter, I think there should be upon the Board of the Canadian National Railways another representative from western Canada or better still, one from each of the western provinces. I think also, although this is not altogether apropos of the matter, the Supreme Court of Canada, which now has an even number, six judges, an unsatisfactory number in any court where there may be an even division of opinion, should be increased to seven judges, and that western Canada, by reason of its population, area and importance, should have another representative in that court. These things are essential for the continuing of the confidence of the people of western Canada in our various institutions. By the proper division of responsibility, great gain in that regard can be made.
The government in the same order in council utters some pious hopes in connection with what the Board of Railway Commissioners should do with respect to freight rates in Canada:
The committee 'therefore advise that the board be directed to make a thorough investigation of the rate structures of railways and railway companies subject to the jurisdiction of parliament with a view to the establishment *of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities, so as to permit of the freest possible interchange of commodities between the various provinces and territories of the Dominion and the expansion of its trade, both foreign and domestic.
And the government draws the attention of the board particularly to the claim asserted on behalf of the Maritime provinces, and mentions:
The encouragement of the movement of traffic through
Canadian ports;
The increased traffic westward and eastward.
That suggestion to the Board of Railway Commissioners would have just about the same effect as the piously expressed wishes of a revivalist to a bunch of back-seat sinners at an old-fashioned revival meeting. The effect might last on them until they got down on
the road, but before they got home, they might be swiping some of their neighbour's apples. This may be good politics; it may appeal to different sections of Canada, but as an actual settlement of the problem it is of no use at all. Maximum rates must be maintained as a protection, not only to the people of western Canada, but to the Board of Railway Commissioners themselves. Without that maximum, the railways must raise the amount of revenue in the west. They cannot raise it in the east because of water competition. They cannot raise it in the far west because of the high mountain scale. Therefore, the only protection that we have and that the board has is the proper maintenance of some form of maximum rates in western Canada.


Mr. SUTHERLAND:: Surely the hon.
member is not serious in making that statement.


Edward James McMurray: I was never more
serious in my life.


Donald Sutherland: The return tabled in the House by the minister at the present session shows absolutely the contrary of what the hon. member is arguing. There was a deficit between earnings and operating expenses in the Atlantic region and also in the western region. The only place where there was a surplus of earnings over operating expenses was in the central region, Ontario and Quebec, and on the Canadian National lines in the United States.


Edward James McMurray: The hon. member has
made a statement. What is his question?


Donald Sutherland: The hon. member
stated that these rates would have to be collected in the west. I am pointing out that there is a surplus of $17,000,000 of earnings over operating expenses in the central region and a deficit of $5,000,000 in the western region and in the eastern Atlantic region.


Edward James McMurray: The hon. member's
figures are very interesting, but apparently they are inapplicable to the point that I was arguing. I am not arguing where the rates are collected from. Undoubtedly water competition must come in, and if that water competition exists you cannot raise rates any further in eastern Canada.


Donald Sutherland: Why is it then
that there is a very large surplus of earnings over operating expenses in the central region?


Edward James McMurray: Likely because the
rate has not got up to water competition, but the minute it goes up to water competition it cannot go any higher. The conten-
Railway Freight Rates

tion of the railroads is that they have not sufficient revenue. You may be raising more money in Ontario from the railroads than you are in the west, but that has nothing to do with my argument. My hon. friend has missed the point I am making. I say that in eastern Canada you can go only so far in raising railway rates and you will stick there. In British Columbia you cannot go any higher without stifling production in that province. Railway rates can go to a certain height and then they cannot go any higher. The revenues must be raised. Western Canada is the only place where the whip can be laid and, therefore, we must protect that section of the country. If that is the government's policy of building up a great grain producing section of western Canada, following the language used ,by commissioner Oliver, I would point out to the government that it is possibly defeating itself in holding railway rates too high. I put a resolution on the order paper stating that the only solution of our railroad problem in Canada, so far as the Canadian National Railways are concerned, is to people the vacant lands along those roads, to people the western prairies and northern Ontario with good, industrious, hard-working people. I am thoroughly convinced of that and I have argued it several times in this House during the last few years. We should have a genuine colonization scheme that will take care of the people from the British Isles, from our cities, from the United States and, above all, from those European countries where they are naturally agriculturists. The hon. member for Fort William and Rainy River (Mr. Manion) has sounded that note three or four times during this session. A vast hinterland in northern Ontario lies adjacent to those roads. That portion of it that is cultivated grows grain crops, and particularly hay, vegetables and so on, and it is capable of supporting the hardy people of central Europe and the people of Quebec who are naturally pioneers. In that way alone, I believe, these roads can be made to pay. Nothing will be gained by switching money from the Canadian Pacific Railway into the coffers of the Canadian National or vice versa. That sort of thing is only chasing rainbows, and you will never get anywhere in that way.


Mr. MACLEAN (York):: Would railway
consolidation improve the situation?


Edward James McMurray: I do not know. I
know that the Union government did not do much good and I entertain grave doubts as to whether a union of the railways would be satisfactory. I could not answer that question [Mr. McMurray.l
offhand; it is altogether too large to discus at the moment. But I do object to this legislation. It seems to me to be a patchwork attempt at compromise and it will meet with nothing but protest from the people of the west. It is not fair to British Columbia, and being unfair to that province it must in consequence be unfair to a large section of the western prairies. Why could not the western section of Canada have been taken into consultation and a quid pro quo worked out along lines satisfactory to everyone? This present legislation is not satisfactory, and I make the statement fully appreciating the difficult position in which the minister finds himself. Indeed, no one appreciates more than I do the difficulties of the Minister of Railways; I doubt if any man has ever held that portfolio in Canada under similar conditions and with problems so serious to solve. I do believe however that the only solution for our railway problems is to have more industrious people living in the country, people of simple habits, people of real thrift, who will settle along the lines of railway, producing those commodities which the world requires.


Mr. CAMPBELL:: I have a good deal of
sympathy with the government in its attempt to solve the intricate and complicated problem of freight rates. The Speech from the Throne at the beginning of the session intimated that we were to have an adjustment of freight rates which would equalize rates between provinces. I maintain that this is exactly what the present bill does not propose to do, although I notice that in the order in council the same intimation was made. Thi3 bill does not propose to equalize freight rates as between provinces, and personally that is my sole reason for opposing it. We in the west have been compelled all through the history of the prairie provinces to pay very much higher rates than are collected in eastern Canada, and an equalization between all the provinces would certainly be in our interests, and it would appear to be just and right in the interests of Canada as a whole. It apparently is assumed in eastern Canada, judging by the expressions of opinion that appear in the press and which one hears privately, that the west has some particular boon conferred upon it by the Crowsnest rates. The commodity rates referred to from eastern to western Canada are however still higher than the rates for similar commodities and equal distances in effect in eastern Canada. Why therefore should it be considered that the Crowsnest rates are a boon to that part of the country? In the first place, the Crowsnest

Railway Freight Rates
rates were not regular rates; they were not rates that were put into effect, but were simply maximum rates. And in the agreement made between the Canadian Pacific Railway and the Dominion government at that time, statutory maximum rates were fixed above which the regular rates could not at any time go. These rate9, for a long period of years, from 1898 to 1918, weire still higher than the regular rates charged by the railways, so that in all that period we got no benefit whatever from the Crowsnest agreement; and so soon a3 we might have received some benefit from it, so soon as the scale of railway rates began to rise in the country, as it did during the war, the Crowsnest pass rates were set aside for a period of three years. The rates on grain and flour were permitted to come into effect again on July 6, 1922, and from that . period on we have received some definite benefit. But that is the first time in all the history of the west that we' have derived any advantage whatever from the Crowsnest pass rates. The commodity rates from eastern Canada to the prairies became effective on July 7, 1924, and we received some benefit from these rates up to October 29 of the same year, a period of only three months; for after that date these rates were set aside by order of the railway commission. The government over-ruled that order however, to make the rates effective on December 25 last and since that time these rates have been in force and we have been receiving some benefit. But the point I want to make is that in all the twenty-eight years that the Crowsnest rates have been in effect we have benefited only during a few months. The hon. member (Mr. McCrea) speaking last night made the statement that on July 6, 1922 we received reductions amounting to about thirty-five per cent in some of our freight schedules while in eastern Canada they received reductions amounting to only six per cent. But the hon. member did not tell the House that this was only a partial removal of the discrimination which for many years had existed against western Canada. The hon. gentleman went on to quote a few figures and attempted to prove that almost all the taxes were paid by the two central provinces. In that connection he submitted some very interesting figures. For instance, he pointed out that Prince Edward Island contributed only 26i cents per head of the revenues of the Dominion while Quebec contributed $52.24 and Ontario $52.21. On the other hand, he stated, Manitoba contributed $27, Saskatchewan only $3.76 and Alberta only $8.67.


Mr. DICKIE:: What about British Columbia?


Milton Neil Campbell: I have not the figures of that province.


Charles Herbert Dickie: Its contribution is $45.


Milton Neil Campbell: The hon. member failed to draw a distinction between those who paid the taxes and the point at which the taxes were paid. To be fair to the Maritime provinces, let me take the case of Prince Edward Island. Prince Edward Island is a purely rural province, there being nothing worthy of the name of a manufacturing establishment in the whole island; in fact, the majority of the retailers buy their goods from wholesalers resident outside of the province. The wholesaler in St. John or Halifax buying a shipment of goods on which he pays the duty, wholesales these goods to retailers in Prince Edward Island. Now, surely there is no hon. gentleman who would attempt to prove that the duty was all paid either by St. John or Halifax; the duty is passed on to the consumer in Prince Edward Island. And that is the condition in the prairies. We buy tens of millions' worth of goods manufactured in Montreal, Toronto and other eastern industrial centres and we have the duty passed on to us; whatever charges are met, whether it be duty or sales tax or anything else, is passed on to the consumer in that province. So that there is no hon. gentleman so unsophisticated as to accept the figures which my hon. friend gave us last night in the sense in which he intended them to be taken. Let me take the position of Saskatchewan alone. It will be noted that the figures show this province contributing to the national revenue very much less per head than Manitoba. But Manitoba has the city of Winnipeg, which manufactures a considerable amount of goods and is a wholesale distributing point; almost all of our goods are received through Winnipeg. Naturally Winnipeg pays the taxes directly and passes them on to us. So I think we can very well dispose of that.


Charles Herbert Dickie: May I interrupt the hon.
gentleman? The disconcerting feature is that the people of the western provinces do not seem to take kindly to buying Canadian goods. They want the duty taken off so that they can buy imported goods. That is what is worrying us. The west want the Hudson Bay railway completed so they may import goods direct from the Old Country. Unless they buy goods produced in Canada they are not contributing their per capita toward the
Railway Freight Rates

upkeep of the country. If they buy Canadian goods, then the case is different.


Milton Neil Campbell: Mr. Chairman, the hon. gentleman's interruption is not relevant to the point in discussion. The protective tariff today compels us to buy home-manufactured goods whether we like it or not.


Charles Herbert Dickie: You are opposing the
protective tariff.


Milton Neil Campbell: That is not under discussion at the present time. The fact is we do pay those taxes when we buy home-manufactured goods which to-day we are compelled to buy. Throughout almost the entire history of western Canada the people of those provinces have been compelled to pay from 25 to 40, 50 and even 100 per cent more on their freight rates than the people of eastern Canada. That is admitted. If we could have an actual equalization of the freight rate structure, we would have no objection whatsoever to the abrogation of the Crowsnest pass rates. I want to make that plain to hon. gentlemen. Just let the government lay down a policy of equalization of rates, and I think that not an hon. member in this section of the House will object to the complete abrogation of the Crowsnest pass agreement. The only reason why we are protesting against its partial abrogation is because we know there will be a distinct discrimination against us in any rates that are set by the Board of Railway Commissioners. Let us take the western rates case, which was heard before the railway commission in 1913, and judgment given the same year. In their judgment the Board of Railway Commissioners admitted frankly that there was serious discrimination against western Canada in the freight rate structure, but they justified that discrimination on the ground that the railways must carry goods cheaper in eastern Canada in order to meet water competition. That I may say is the reason, and the only reason, why we in the west are demanding the retention of some statutory protection against the discrimination that we know the Board of Railway Commissioners would inflict on us if they have a free hand. It is possible that Ontario and Quebec and the Maritime provinces may get a square deal, it is possible that the freight rate structure may be equalized in so far as those five provinces are concerned; but we in the prairie provinces know, as do hon. gentlemen from British Columbia-although they may not be quite ready to admit it-that the Board of Railway Commissioners will not give that province or the three prairie provinces a square deal and

make any attempt whatsoever to equalize freight rates as between eastern and western Canada.


William Lyon Mackenzie King: Why should my
hon. friend state "We know the railway commission will not give the prairie provinces a square deal"? That is not a fair statement to make.


Milton Neil Campbell: Surely, Mr. Chairman,
we can judge what the Board of Railway Commissioners are likely to do by their actions in the past. We have their decision laid down in the western rates case, in which they admitted discrimination and justified it.


William Lyon Mackenzie King: At that time the
whole field was covered with restrictions that prevented action on the part of the railway commission. The object of this legislation is to remove those restrictions and give the board an opportunity to equalize the rates.


Milton Neil Campbell: I would point out to
the Minister of Public Works (Mr. King, Kootenay) what I have already pointed out, that in the Speech from the Throne the government intimated the policy would be the equalization of freight rates. That would be perfectly satisfactory, but this bill does not provide for such equalization.


George Perry Graham: That is the purpose of
the bill.


Milton Neil Campbell: If my hon. friend will
read the bill he will find it does not provide for equalization. Let me refer him to this one clause:
Notwithstanding the provisions of section three, the powers given to the board under this act to fix, determine and enforce just and reasonable rates, and to change and alter rates as changing conditions or cost of transportation may from time to time require,
and so on. That means we will have the rates worked out on the same old basis -as before.


George Perry Graham: I know my hon. friend wants to be fair. Let me point out to him that the only restriction on the action of the board is that portion of the Crowsnest pass agreement which is retained. Does he wish that removed?


Milton Neil Campbell: I would be quite satisfied to see every vestige of the Crowsnest pass agreement removed if I knew that in the freight rate structure to be built up the railway commission would equalize freight rates as between provinces-the very thing that Was intimated in the Speech from the Throne. If that were done, I think every member in this section of the House would be prepared to see the complete abrogation of the Crowsnest pass agreement.

Railiuay Freight Rates


Mr. STEWART (Argenteuil):: If my hon. friend will look at the order in council, he will find everything contained in it that he is complaining about.


Milton Neil Campbell: But the provisions of the order in council are not carried out in the bill. I am not a lawyer-


George Perry Graham: You ought to offer thanks for that.


Milton Neil Campbell: -but I fail to observe any particular instructions in this bill to the Board of Railway Commissioners to equalize freight rates as between provinces. That is the whole thing so far as we are concerned.


George Perry Graham: The abject of this bill is to remove restrictions so that the Board of Railway Commissioners can carry out the terms of the order in council.


Milton Neil Campbell: There were very few restrictions on the board in 1913; why did they not do it then? The Crowsnest pass rates were not effective at that time because our grain and these other commodities were carried at rates less than those specified by the Crowsnest pass agreement. The railway commission was not hampered in their work in the least degree in 1913, and yet they admitted the discrimination, and they justified it and perpetuated it.
Now, the hon. member for South Oxford (Mr. Sutherland) interjected a remark while the hon. member for North Winnipeg (Mr. McMurray) was speaking, designed to show that there was a large deficit on the operation of the Canadian National Railways in western Canada. I would remind him that the railway commission have laid down the principle that in figuring rates the Canadian Pacific and not the Canadian National must be taken as the basis. I think every fair-minded member of this House and every fair-minded business man will admit that that is only right and proper. All the political crimes and blunders since confederation are welded together in the Canadian National Railways. Why, we have two thousand miles of duplication on the prairies, two thousand miles of railway that never should have been built. That was not the fault of the people of western Canada. That duplication is always going to involve a loss. We have three transcontinental railways that never were necessary, and a great deal of that unnecessary duplication has been shouldered on to western Canada. But in regard to the figures quoted by the hon. member for South Oxford, I would point out that in what is known as the western section, which covers everything from the head of the lakes-including I believe part of
the Transcontinental-to British Columbia, if we study the figures for the Canadian Northern railway previous to its being taken over by the government, and the corresponding figures for the Canadian Pacific Railway, we shall find that their operating ratio has always been a little higher in British Columbia than in the prairie provinces. That is, they had to spend more to earn a dollar in British Columbia. The prairie lines of the Canadian Pacific Railway have always been the most cheaply operated of the whole system; their operating ratio has always been lower than that for the other parts of the system. Now, after 1917 the Canadian Pacific Railway did not keep separate figures for the prairie lines, but included those and the British Columbia lines in the same statement. Therefore any figures that may be quoted either in regard to the Canadian National or the Canadian Pacific Railway in that regard are not fair to the prairies because they have to shoulder the very considerable loss or lower profit that should be chargeable to British Columbia.


Mr. MILLAR:: There must be a great deal of freight that originates at Fort William. Fort William is on the boundary line between the eastern and western sections. Is freight originating at Fort William credited to the eastern or the western section?


Milton Neil Campbell: I take it that any freight transported by rail from Fort William would be credited to the western section.


Henry Lumley Drayton: I might tell the hon. member that Fort William is in the western section, and gets the credit.


Milton Neil Campbell: The officers representing the managements of both roads have pointed out that it is almost impossible ito properly separate the earnings of the different sections, so these Should not perhaps be taken as arbitrary.
I would like to quote a few figures in regard to the Canadian Pacific-I Shall not burden the House with very many. We find that from 1907 to 1911 inclusive, a period of five years, the Canadian Pacific railway produced net earnings, in the eastern section, of 843,500,000, and in the same period had net earnings over all expenses in western Canada of $91,500,000, a very much larger amount; from 1912 to 1916 inclusive, another five-year period, the eastern section produced net earnings of $60,000,000, and the western section, $152,000,000; from 1916 to 1920 inclusive, the eastern section produced $70,000,000, and the western section $144,000,000 of net earnings.
Now let us take the figures that really dhow what the earnings of the railways are, and
Railway Freight Rates

that is the operating ratio, or the amount that it is necessary to spend to earn a dollar. I am not going to quote extensively, butt in going over these figures I find that right from the beginning of the Canadian Pacific Railway's history the operating ratio on the prairies has been very much lower than it has been in eastern Canada, and I think there is no ground whatever for the contention that the operating costs in western Canada justify higher freight rates. When the contention is made that if the reductions that would be brought about if the Crowsnest rates were allowed to stand-and in this connection the Minister of Railways has pointed out that if those rates were permitted .to stand, the discrimination oomplaiined of to-day would have to be removed by the railways themselves, and I was very glad to hear him make that statement; he gave it as a reason Why the government should set aside .the agreement, but that is all -the more reason why we in the west want to see the agreement retained, because we never had any doubts in regard to that-if the Crowsnest rates were permitted to go into effect, I maintain that our railways are operated to-day, so far as their passenger service is concerned, in a way that no business' man, no manufacturer, no commercial institution in this country would tolerate. The railways are losing millions, and tens of millions, of dollars on their passenger service, and that loss on the passenger service has all to be shouldered by the freight service.
Now, what is the proper thing for us to do? To permit them to Charge rates high enough to allow them t'o continue, and go on losing millions of dollars on the passenger service, or force them to put the passenger service on a paying basis, or as near to that as
5 p.m. possible? I say they should be forced to -put the passenger service on a paying basis or as near as possible, and in 'that way pass the saving on t'o the freight Service.
Now let us take the Canadian National railway. In the year 1922 the freight earnings alone of the Canadian National Showed a surplus of $20,000,000.
Mr. Mc'M ASTER: Over operating expenses?


Milton Neil Campbell: Yes. But the Canadian National in that same year had an operating deficit of $8,500,000 in its passenger service, and therefore, instead of turning in to the government that $20,000,000, or presenting a statement showing a surplus in the freight service of $20,000,000, the railway had to take out of that amount $8,500,000 to pay the deficit in its passenger service. In addition .to that, the value of the equipment used in the passen-

ger service is enormous. I have not the figures; I was not able to get them from the department.


George Perry Graham: That is not taken into account in the operating expenses.


Milton Neil Campbell: I have given simply the operating figures, not 'taking into consideration the overhead.


George Perry Graham: The cost of the equipment would not be reflected in the figures as to operating costs. They are not considered in that.


Milton Neil Campbell: I quite understand that. But I am pointing out that in addition to the $8,500,000 loss in the passenger service in 1922, there is an enormous overhead, and great depreciation through wear and tear on the equipment. I say that we are entitled to have that loss in the passenger service done away with, and the benefit passed on to the freight service. It can be done, and should be done.


William Charles Good: Is the hon. member of the
opinion that if that improvement were made in the passenger service, the railways could afford to give this full reduction in freight rates?


Milton Neil Campbell: That is precisely my
point. I maintain that the railways could afford to give this complete reduction if they tried to operate their passenger service on a paying basis. Is there any business man in Canada who would say that there is any justification, for instance, for eighteen passenger trains a day passing between Ottawa and Montreal? That is one of the most absurd things I have ever known.


Mr. EULER:: What would the hon. member suggest as a means to eliminate that competition?


Milton Neil Campbell: If I were dictator in
charge of the situation, I would cut off about sixteen of those trains.


William Daum Euler: What would you do supposing the management of one of the roads refused to cut off their share of the trains? Would you try to compete with them? What would be your method of dealing with that situation?


Milton Neil Campbell: I would not worry
about the management refusing to cut off the trains. I would put into effect reductions in freight rates that would compel them to reduce their passenger service.


William Daum Euler: A reduction in passenger
rates?

Railway Freight Rates


Milton Neil Campbell: In freight rates. Then
they would be compelled to reduce their passenger service to meet the cut in freight rates.


William Charles Good: Put more pressure on the
railways?


Milton Neil Campbell: Yes, and the only way
in which you can bring pressure upon them and force them to do it, is to reduce the freight rates. The Canadian Pacific railway, this wonderful institution whose marvellous efficiency we so often hear boasted about, is also losing an enormous sum of money on its passenger service. That is not generally known, but it is so. It has operating losses every year on its passenger service, I believe, not taking into consideration its overhead, and the wear and tear on its equipment; but it is not greatly concerned how much it loses just so long as we in this parliament permit it to charge sufficiently high tolls on the freight traffic. So long as they can meet out of their freight earnings the deficit in their passenger service, they do not need to be concerned at all. There is only one way in which we can force them to reduce the passenger service to a businesslike basis, and that is to reduce the freight rates to a proper basis, and 1 maintain that that can be done without the railways suffering any loss of revenue.
A few weeks ago I made a trip to Montreal. I went down there purposely to study this situation. About midway between Ottawa and Montreal-I thought it would be fair to take a point about midway between the two cities -I checked up the train and found there were 38 passengers on it, and there was accommodation on that train for 450 people! I could have gone out between the cars and almost thrown a stone over to another train of the Canadian Pacific railway going the same way, competitinjg for the same business, travelling to the same city. It is one of the most absurd situations imaginable, and yet it exists all over the country. Take the service between Montreal and Toronto, or take the transcontinental service. I can leave Winnipeg by two different trains leaving within fifty minutes or about an hour of each other. There is no necessity for it. There is no reason why there should not be only one transcontinental train a day. The Canadian Pacific and the Canadian National could run a train on alternate days, the Canadian Pacific leaving one day and the Canadian National the next.


George Perry Graham: What answer would my
hon. friend give, for taking away the service, 280
to those people who do not live at the extreme ends of the line? In other words, if you take off the Canadian Pacific train on Thursday no person can be accommodated on that day except the man that lives in Winnipeg. All the intermediate and local points would be overlooked and they are of more importance, to my mind, than city points or just as much. That is the difficulty.


Milton Neil Campbell: I would give them
precisely the same answer that the Minister of Railways is giving us to-day when we are asking for lower freight rates-it cannot be done. That is a service that is not going to pay as far as local lines are concerned. I would point out though that a gasoline car operated between here and Montreal would have carried all the passengers on the particular train on which I travelled from Montreal a few days ago; there is no necessity for operating a very expensive passenger train for that service at all.
There is one thing that has struck me very forcibly all through this debate, and that is the attitude of our friends in the east. One hon. member asked the other night why the Crows-nest pass rates should not be given to Quebec. Perhaps the hon. member in question was not aware that Quebec to-day has lower rates than the Crowsnest pass rates. But I want to point this out: it seems to be the fight of the prairie provinces, whether the freight moves east or moves west, regardless who has to pay for it. If we get any benefit in the matter of reduced rates on our products going out surely Ontario gets some benefit from its products moving to the prairie provinces. That angle of the question seems to be forgotten by hon. members from the eastern provinces. I want to point this out also: that just as soon as you raise the freight rates on flour, feed, and any of these other products coming east, you are going to raise your own cost of living; you are going to increase the price of bran, shorts, and flour to everyone desirous of using these commodities in eastern Canada. It is a problem for you gentlemen in the east just as much as it is a problem for us; and the solution of that problem would mean as much to you as it does to us. And let me say further in regard to the thirteen commodities on which the rates were reduced when moved west:	That reduction made a
market for your Ontario products in the western prairies which this legislation will do away with. Surely there can be no question as to that. And yet my hon. friends in Ontario do not seem to realize that it is to their interest as well as ours to maintain reduced rates on all these commodities moving

Railway Freight Rates

between the east and the west. These consist of apples, fresh fruits, furniture, building material, agricultural implements, fence wire, dairy cattle, and some other items.
Now what about the problem of British Columbia? The hon. member for Vancouver Centre (Mr. Stevens) last night enunciated what I presume is the policy of the official opposition. He pointed out that the proper and logical thing to do was to leave the Board Of Railway Commissioners free and unhampered-absolutely free and unhindered by any statutory agreements or limitations-so as to give them a complete and free hand in the building up of a new freight scale. Looking at the question in an abstract way I would be inclined to agree with the hon. member, I would think that from an academic standpoint that would be a right and proper course to take; but there is a human side to this question which we cannot overlook, and while I do not feel like criticizing the personnel of the Board of Railway Commissioners, we know that in the past we have not had a square deal from the board. No one knows this better than my hon. friends from British Columbia. If there is any one province or any one part of the Dominion which is dependent upon another, it is British Columbia with regard to the prairie provinces. Those provinces are the principal market for the fruit, the lumber, the building material, and all the other products of British Columbia. But what has the freight schedule done for that market in the past? Why it has simply been used as a protective tariff; and I draw the attention of my hon. friend for Nanaimo (Mr. Dickie), who asked me a question a few moments ago, to the fact that the freight rates to-day operate as a protective tariff at the Rocky Mountains to prevent British Columbia products from entering the prairie provinces, and I believe that it has been deliberately designed with that end in view. Let me quote a few of these discriminatory freight rates. Taking the regular classification I find that from Vancouver to Kamloops, a distance of 250 miles, the first class rate is $1.34.


An hon. MEMBER:: On what?


Milton Neil Campbell: On any first class commodity. From Montreal to Wylie, a distance .of 253 miles, about the same mileage, the first class rate is 75J cents; and I can go all down the scale and show you instance after instance where it looks as if the whole freight rate schedule were intended to keep the manufactured products of British Columbia out of the prairie provinces and leave those [Provinces as a preserve for the eastern manufacturers. In other words it does the very 
thing on a limited scale that the protective tariff does in a national way. From Vancouver to Marquette, a distance of 1,437 miles, the first class freight rate is $3.99. From Montreal to Marquette, a distance of 1,446 miles, the first class rate is $2.76. What a discrimination against British Columbia! And yet my hon. friends from that province think that if they give the Board of Railway Commissioners a free and unfettered hand in this matter they would get a square deal. I have more respect for their intelligence than to think that they actually believe that.
Now let us take the rates on sugar. From Vancouver to Morse, Saskatchewan, a distance of 994 miles the rate is $1.41, but from Montreal to Fort William, 996 miles, or about the same mileage, the rate is only seventy-nine cents, just a little over one-half. Now sugar is one of the principal products of British Columbia, and the prairies are its logical market. (British Columbia is the source from which we should get most of our sugar, but with a freight rate of such a character we are compelled to get our sugar from the Montreal refiners whether we like it or not. So I say again that this freight schedule operates as a protective tariff, deliberately designed I believe, to keep the products of British Columbia out of the prairie provinces. I find also that from Vancouver to Brandon, a distance of 1,333 miles, the sugar rate is $1.60 a hundred. From Montreal to Rennie, Manitoba, a distance of 1,343 miles, about the same mileage, the rate is $1.11, and so on down the scale. I have a great many figures here but I do not wish to worry the House by quoting them. The same thing is true of lumber. Of course British Columbia supplies most of the lumber to-day, but some of these freight rates were established at an earlier period when [DOT] lumber was being shipped from the east to the west.


George Perry Graham: Is British Columbia lumber shipped at a commodity rate?


Milton Neil Campbell: On a commodity rate, but a much higher rate is imposed on lumber shipped into the prairie provinces than on eastern lumber moved for the same distance.


George Perry Graham: In Ontario the shipments are made on a commodity rate.


Milton Neil Campbell: I think that lumber is shipped on a commodity rate no matter where it is going, at least from mills of any particular size. Now let me take the case of rice. Vancouver imports rice from the Orient, and I believe that city is the logical

Railway Freight Rates
distributing point for the whole Dominion. Now, the rate on rice from Vancouver to Calgary is seventy-five cents a hundred; that from Vancouver to Montreal is also seventy-five cents a hundred. In other words that rice is carried by the railway companies from Calgary to Montreal, a distance of about 2,400 miles, absolutely free. For the benefit of whom? For the benefit of the Montreal distributor.


George Perry Graham: The Vancouver distributor.


Milton Neil Campbell: Not Vancouver, but
Montreal.


George Perry Graham: Not at all.


Milton Neil Campbell: I want to point out to the minister that the Montreal distributor gets his rice from Vancouver at seventy-five cents a hundred. The distributor at Vancouver should be able to supply the local demands of the prairies. That is the logical place from which to supply those demands. I think there should be no difference of opinion on that point.


George Perry Graham: I was not arguing on that at all. The commodity rates are for this purpose alone; to aid the industry at the point where the commodity is shipped. The commodity rate given to Vancouver, as my hon. friend says, is a very low one, in order that Vancouver might put rice into Montreal. That is the object.


Milton Neil Campbell: I contend that in this
case the rate is given, not to Vancouver at all, but to Montreal, because it does not go through the Vancouver distributor. The Montreal importer can import it direct from the Orient and possibly, deliver it back on the prairies and take the market from the Vancouver distributor.


Mr. McMASTER:: It is absurd.


Milton Neil Campbell: Certainly it is absurd.
It means that the railway companies are receiving an exorbitant rate that is almost confiscation for carrying the rice from Vancouver to Calgary, or else they are carrying it at a distinct loss from Calgary to Montreal; either one of those two conditions obtain. There can be no question about it, and just as long as you permit the railways to carry anything at a loss, you must burden something else with the loss, and that is one reason we have high rates and why those rates are being maintained. If there is one part of Canada dependent upon another, it is British Columbia which is dependent on the prairie provinces. As we prosper in the prairies,
British Columbia will prosper. As our farmers get into a position to buy your fruit, your lumber, your sugar and all the other products that you are producing, in British Columbia to-day, you will prosper, and you will prosper only in so far as we prosper. There is no mistake about that, and yet I say that in the four years that I have been in this House, on almost every issue that means anything to the prairie provinces, I see the British Columbia members lined up almost to a man against us. Yet I say that the interests of British Columbia are tied up directly with the interests of the prairie provinces.
I have a great deal of sympathy with the Minister of Railways, and I think Canada is fortunate indeed to have a man like the present Minister of Railways in charge of that department. When I hear expressions of opinion of hon. members behind the minister and realize what some hon. gentlemen in his party would do with this great enterprise, then I thank heaven we have such a man at the head of that department. I wish again to make one last appeal to the government to igo into the question of passenger service very .thoroughly. I find after discussing this matter with business men and newspaper men in Montreal that they see the absurdity of the position; they do not want eighteen trains a day passing between Montreal and Ottawa. It is only a matter of getting together and holding a club over the heads of the railways, and that club would be the reduction of freight rates. If the minister would say to the railways, "You must reduce your freight rates, or show very good reasons why you should be dipping into the receipts from freight in order to bolster up the passenger service that is not paying," it might have a good result. The onus is on the railways to do that. I think the transcontinental passenger service can be cut down, and the use of a few gasoline cars here and there will give just as good service as the people are getting to-day.


Mr. WOODS:: The hon. member stated
that the province of Ontario should be deeply interested in the Crowsnest pass agreement. What would his proposition be in regard to the discrimination against various points in Ontario? The cities of Brantford and Sarnia, and various towns and places where the Crowsnest pass agreement is not in operation pay a much higher rate than is paid by other cities which come under the Crowsnest pass agreement. There is a gross discrimination against different cities and towns in Ontario. Brantford has a large binder twine mauufac-
Railway Freight Rates

turing establishment, and they do not get the benefit of the Crowsnest pass agreement. Undoubtedly they ship a lot of their binder twine to the west, and I see by the reports in the papers that Hamilton-


Mr. DEPUTY SPEAKER:: Is the hon.
gentleman putting a question?


Robert John Woods: I wanted to clear up the
situation so that we might fully understand it. I understand that the city of Hamilton is going to establish a binder twiine industry, and that industry when in operation will get a lower rate going west than is given to Brantford. What would the hon. gentleman do in regard to that situation?


Milton Neil Campbell: I cannot do better than refer my hon. friend to the minister's words last night, when he pointed out distinctly- and I think everybody agreed with him- that if the present rates were maintained the railway companies would be compelled themselves to remove the discrimination. He gave that as one of the reasons for the abrogation of these rates.


Henry Lumley Drayton: Despite Jthe
fact that my hon. friends to my left will say that we never change, I will take the same position in regard to railway rates that we took before; and if the absolutely obvious requires the slightest amount of corroboration, with much deference I desire to submit that the illuminating discussion we have had on freight rates proves beyond all question that parliament is not the proper body to consider the question of freight rates, on which the commercial life of this country depends. What do we know about it? What point have we in common after yesterday's discussion and to-day's discussion? What real practical thought have we got about the underlying principles on which freight rates have to be made? We have to do two things, first, to see that our railways can function and continue to function, and, secondly, that in functioning our rates shall be so arranged as to give each and every part of the country opportunity itself to function having again particular regard to the main activities of each part of the country. The solution of the freight rate burden of this country is not to be found in paper freight rates at all. We get no help in considering the freight problem by being referred to freight tariff items, some of which have been spoken of during this discussion. They are in part, rates on which little traffic moves. We are not at all helped by references to the rate on rice from Vancouver, or by my hon. friend's 
new and illuminating suggestion that Vancouver is given low rates to help Montreal.


Milton Neil Campbell: I said that Montreal
was given low rates, not Vancouver.


Henry Lumley Drayton: My hon. friend was saying one thing and thinking another. He was speaking of a seventy^five cent rate on rice out of Vancouver.


Milton Neil Campbell: Out of Vancouver for
the benefit of Montreal. The benefit to Vancouver would come from the rates Vancouver got from the prairie provinces.


Henry Lumley Drayton: I do not see the reason or the pertinence of the interruption. It is exactly what I said. We have that wonderful discovery made here today that a low rate out of Vancouver is a rate for the benefit of Montreal. That is what the hon. gentleman says when it is put nakedly in sc* many words and one sees how absurd it is, because professedly he is talking about the necessity of lower rates from Vancouver and his idea now is that lower rates from Vancouver are in ease of Montreal and not in ease of Vancouver.
I desire, in the first instance, to discuss the genesis of freight rates. I am not going into details, because it would take me at least two days to give hon. gentlemen anything like a fair, underlying idea of all the different things that have honestly to be brought into consideration when you are going over the wide field of a freight rate structure. But I am going to refer to what any freight regulating commission should strive to do, and further, what any intelligent railway traffic executive must strive to do. Is there any doubt about this first proposition, namely, that railways live on their revenue?


Andrew Ross McMaster: Hear, hear.


Henry Lumley Drayton: I get "hear,
hear" from one quarter. I am glad at least to have that assent. There is no question about it. Again, is there any doubt that, unless a charitable government is ready at hand to use the money of the ratepayers as a whole for the benefit of some selected ratepayers, if those revenues are not enough to keep the railways going, they will stop just like any other commercial enterprise? Therefore, it becomes necessary that there be railway revenues. Judging from some of the conversations and arguments we have had, I am inclined to think some hon. gentlemen believe that to express a pious wish that railways should have revenues is sufficient. They need them in fact, and they need them out of traffic. While that is a

Railway Freight Rates
consideration of first moment, it is only the secondary consideration. The real consideration of railway construction is and ought to be the providing of such a vehicle of transportation as will enable the business of the country to function properly, and all railway rates ought to be arranged, bearing that in mind. The hon. member (Mr. Campbell) says that if there is a loss on any railway rate, that is wrong, because somebody else makes it up. Theoretically, he is right. Practically he is wrong. There are certain things that have to be done in connection with public necessities and the like* having regard to articles of very low value that in the public interest ought and have to be carried. I see the hon. member for Brome making a face at me.


Andrew Ross McMaster: No.


Henry Lumley Drayton: In connection
with that face, I want to point out-


Mr. MARLER:: That is unparliamentary.


Henry Lumley Drayton: No, his natural
face is very pleasant, but he is looking singularly distressed. I consider, for example, the grain business of great importance to this country, and there is not one ton, but there are many tons of grain carried to-day at an absolute loss to the railways.


An hon. MEMBER:: No.


Henry Lumley Drayton: Some hon.
gentleman says "no." I am going to give him facts. Does my hon. friend think that business should stop? I do not. I recognize the public necessity of that business.


Andrew Ross McMaster: Then it must be carried at somebody else's expense.


Henry Lumley Drayton: In part, yes, and I am in favour of that. The only thing that I am not in favour of is a situation where we have hon. gentlemen from the district particularly benefited telling us down in the east that our district is the place of railway deficits and theirs that of railway profits; that the figures we have produced here are nonsense. I do not know where they get their information from. I notice that these same gentlemen upstairs in the committee on Railways and Canals seem to think Sir Henry Thornton is honest and is not there to deceive them, and the figures are his as to the losses in western Canada, But I am getting a little ahead of the story.


Milton Neil Campbell: Will the hon. member not admit that the figures I quoted from the Canadian Pacific are correct? I pointed out
to him that it was not fair to take a conglomeration of failures like the Canadian National Railways and to build up a rate structure on that.


Henry Lumley Drayton: I will give my hon. friend some Canadian Pacific figures in a few minutes, but in the meantime he is talking about failures. Where do he and his party stand in connection with the National railways? Is that how he describes them? There is no greater load to be carried by the west in connection with the National railways than that which is carried in eastern Canada. We have the National Transcontinental, the whole of that barren bridge in northern Ontario, charged up to us. It is perfect nonsense that these excuses should be put up in a sectional way. We get more sectional talk about this thing, a thing in which everybody is interested, in which Ontario is prepared to pay her shot for the benefit of the west and is prepared to go on doing so, than nearly anything else. We have even a suggestion from the former Solicitor iGeneral that we should have an absolutely sectional Board of Railway Commissioners. He does not stop at that. In his opinion we should also have a sectional Supreme Court of Canada.


Edward James McMurray: I cannot let the hon.
member away with that. Did I not say that there should be further representation from the west upon the Board of Railway Commissioners?


Henry Lumley Drayton: What other is
[DOT]that than sectionalism? What we want is the best man, the strongest man, the fairest man and the biggest man available on any job in this country, no matter where he comes from.


Edward James McMurray: And the west can produce them.


Henry Lumley Drayton: Yes. The board never had a stronger commissioner than the late Mr. Justice Killam, and I thought the very last thing the west would say was that the west could not produce them.


Edward James McMurray: " Can produce them."


Henry Lumley Drayton: I had it a moment ago "could". I wonder if my hon. friend is qualifying for the job.


Edward James McMurray: I can relieve my hon. friend of all his wonderings. He may have wandered far in many places, but he is wrong in his wandering in this instance. I am not.


Henry Lumley Drayton: I do not know whether that is a good thing or not. It might
Railway Freight Rates

be worse. But let us get back to the genesis of railway rates. They should be rates which, in the first instance, would render it possible for the country's business to move surely and profitably and, in the second instance, rates which would enable the companies to continue to live. Let me take some of the illustrations which were given by an hon. gentleman who gave us one or two illustrations as to freight rates. You may have a high rate in one section of the country in connection with, traffic that it is not very greatly interested in and a low rate in connection with traffic that it is interested in, and you imay have a condition where, instead of having one low rate, you have many; or, on the other hand you may have a condition where, instead of having one high rate, you have many, and you may find that traffic is carried in the district in which there are many high rates cheaper than it is in some district with many low rates.


Mr. CRERAR:: Is that justifiable? I am asking purely for information.


Henry Lumley Drayton: It entirely
depends. What must be kept in view is the desire to enable business to be carried on properly. There ought to be put into force such rates as will enable districts to function and give a first consideration to the primary activities of each district, making that the chief object. If you do that, carrying it right down, you get to the point where of necessity you must charge higher rates on some things to the very great advantage of the district.


Thomas Alexander Crerar: I am inclined to agree wiih my hon. friend; I think there is a great deal in his argument. But I would point out that it does not square with the theory of equalizing freight rates. I think the idea of absolutely equalizing freight rates is a hazy dream.


Henry Lumley Drayton: My hon. friend is largely right. When .you talk about an equalization of freight rates you are faced with an ever-changing proposition, for one thing. The demands of business are not the same everywhere; they are not constant. What is necessary to move certain traffic here to-day may be necessary over there tomorrow. We may go wrong in one of two ways. In the first place, it is wrong to have equality in relation to unequal things, and it is just as wrong to have unequal treatment in dealing with equal things. The one is just as wrong and vicious as the other, and the fact is so obvious that it needs only to be

stated in order to be appreciated. After all what is it that the people are interested in? They are not interested in the theoretical amount chargeable in a great long list of freight rates; what they are interested in is the actual cost of moving actual traffic. And all freight rates are reducible to one common factor everywhere, namely, the return to the company per ton mile. How much is the company getting out of it? That is the question. The amount collected from the public is the real thing in which the people are interested.
Mr. McMASTER Suppose there is a district producing a valuable mineral ore as well as a considerable quantity of wheat; would it be fair to carry the wheat out of that district at a- charge below cost of carriage because, from the same district, a high enough rate could be imposed on the mineral ore to make the carriage on the whole profitable?


Henry Lumley Drayton: I can answer that frankly. In connection with all freight rates we must consider these three points: first, the question of public necessity; second, the cost of service; and, third, the amount of added value of the property to the owner by reason of transportation. My hon. friend deals now with a valuable ore. Well, that is worth nothing without transportation, whereas, transportation being provided, it is of great value to the owner. In connection with any commodity in relation to which the percentage of cost of transportation to the total value secured in the ultimate market is insignificant, I would say that the railway should charge enough to make it possible to carry that freight covering all possible charges with a profit. On a valuable ore, I should think that the freight ought to be relatively high.


Andrew Ross McMaster: Does not that mean in effect that the railway board should regulate freight rates in such a way as practically to tax one man's business in order to make another man's profitable? Is that just?


Henry Lumley Drayton: Practically all modern business proceeds along this line, no profits here, good profits there. Let us take the case of a departmental store; here the charges will be high, there they will be low; the profits will be up here while they will be down somewhere else.


Andrew Ross McMaster: But the whole shop belongs to one man or one company.


Henry Lumley Drayton: Perfectly true;
the illustration I readily admit is not a very good one. One really needs a blackboard to

Railway Freight Rates
illustrate these questions properly; but suppose we assume that this sheet of paper which I hold in my hand is a 'blackboard. Suppose we have at the top of the board "100 per cent", representing the sum of money which will enable the railway company to function properly, to pay its costs of maintenance and betterments, its taxes, its interest on bonds, and its overhead charges and fair profit. All that is represented by 100 per cent. We will assume that a line midway down this hypothetical blackboard, marked "50 per cent", represents the actual cost of operation entirely apart from all overhead charges, the cost of operation involved in the actual movement of traffic. Let us assume further that there are fifty people living in the district who by their efforts are producing enough to meet that 100 per cent; and there are five more who come in, newcomers,who want to go into the business of growing wheat. Now, they cannot pay any high freight rate on that commodity and it is perfectly obvious that if their rate be below the 50 per cent line they are penalizing the people that are already there. But if instead of taking a rate below the 50 per cent line, we take from the wheat grower enough to give us 60, assuming that the proportion of tonnage of wheat is equal, it is clear that 10 per cent being added to the upper register, as it were, the general burden on the fifty people who were there first falls from 100 to 90. And that is exactly the situation which my hon. friend puts in regard to the ore and the wheat.


William Daum Euler: I am afraid I have not been able to follow entirely the illustration given by my hon. friend. However, I want to ask him a practical question, returning to what my hon. friend from Brome (Mr. McMaster) brought up. In the case of the transportation of rich ore would not the cost of moving that commodity be a factor in the fixing of rates?


Henry Lumley Drayton: All questions of cost are factors.


William Daum Euler: Would it not be the greatest factor?


Henry Lumley Drayton: Not at all.


William Daum Euler: And it should not?


Henry Lumley Drayton: No. The genesis of all freight rates was the old common law yard stick of what the services were worth; and that old yard stick was something that always related to the value of the commodity carried. There were two reasons for it: the value of the service was greater to the owner of the commodity as the value of his commodity increased the more, and the carrier's risk was infinitely greater.


Andrew Ross McMaster: It seems to me that
that is perfectly logical where freight rates are the result of individual bargaining, but where they are imposed by a quasi-judicial body I cannot see the justice of calling upon the carrier to perform the service at less than the cost of carriage, simply because he can recoup himself from other shippers by charging them more than the cost of carriage.


Henry Lumley Drayton: My hon. friend is missing the point. There are two costs of carriage which I am trying to give. There is the cost of carriage proper, which means what proportion that service would represent having regard to the total load-
Mr. McMASTEiR:	The total load should
be distributed over all.


Henry Lumley Drayton: My hon. friend will follow me and surely see that he is wrong. That is, if we are going to look after the products that are not so costly as others, we must look after them at lower rates, they cannot afford to pay the general rate, and it does not take five cents from the shippers of the more expensive products, because of these cheaper products would not move at all unless they got a low rate, and because if they earn uip to that fifty per cent line of actual cost and get even into the sixty per cent line, as I have pointed out, it is really in ease of the general proposition. I think my hon. friend must see that.


Andrew Ross McMaster: I can follow perfectly
the argument that my learned and hon. friend is making, but it does not square with my sense of justice or fairness. It seems to me of doubtful public utility for society in general to move things which cannot bear the cost of being moved.
iSir HENRY DRAYTON: Well, Mr. Chairman, every country in the world recognizes the principle that I have been talking about, whether they have rate-regulating commissions or not. That is the reason we have ten classes of freight and commodity rates without end. If these concessions were not made by the railways in ease of business, we would not have business moving in essential lines; that is simply all there is to it. Of course, that goes right down to the foundation of everything. My hon. friend is correct, this House can make freight rates, it can say that any commodity is going to cost just so much per ton per mile. But he would find himself supporting an absolute impossibility, for his proposal never could be worked out; in a
Railway Freight Rates

word, he would1 be attempting to treat similarly things that are not equal. It would involve his treating the movement of a ton of gold-to give an extreme case-in the same way as a ton of grain. It does seem to me that the mere statement of the logical outcome of his proposal will at once induce my hon. friend not to persist in it. Of course, if he is right in thinking that anyone can make freight rates, the business of the country would be absolutely destroyed. Now, when we come to look after freight rates, our first honest endeavour ought to be, as I have said, to make sure that the business of each province shall move. The freight increases have worked against the full realization of that endeavour. But our great effort still ought to be the encouragement of interprovincial trade. Unfortunately to-day we have some rates so high that we are not doing the volume of interprovincial trade that we ought to be doing. I am not going to restate the position we laid down in 1922 beyond remarking that the underlying principles are the same now as they were then. The west, we will say, is interested mainly in grain and flour; British Columbia is chiefly interested in fish and lumber; and in Ontario and Quebec we have a greater diversity of commodities without as much volume in any particular one. Now, some hon. gentlemen have said that they do not like the figures of the government lines. Well, I am going to give them some figures of the Canadian Pacific lines. An hon. gentleman said that there was something wrong in 1913 in connection with the western rates judgment, and I am about to give the Canadian Pacific figures with respect to the only real, honest yardstick by which this question can be measured, namely, the earnings per ton per mile. In 1917 the return on Canadian Pacific eastern lines was .69 cents and on western lines ,70 cents per ton per mile. I just take that one year for the purpose of showing how, notwithstanding all the examples that can be cited of paper traffic, traffic that never moves in any volume at all, traffic that no. one is interested in- notwithstanding all those absurd illustrations, how close the board came in the adjustments made in the western rates case judgment. If anybody can show a closer approximation of rates in realities, I should like to see it. Those are the exact figures which resulted from the tariffs that were then fixed.
Mr. 'GOOD:	Is there any discrepancy
between that statement and the fact referred to by the hon. member for Mackenzie (Mr. Campbell), that the Canadian Pacific net

earnings in western territory were nearly double their earnings in eastern territory?


Henry Lumley Drayton: I do not think there is any, because if I remember right, at that time the mileage in the west was just about twice that in the east. If you have twice the investment there, if you have two horses at work in one place as against a single horse in the other, you may expect better results.


Mr. FORKE:: You may have twice the mileage and not twice the investment.


Milton Neil Campbell: Will not the hon.
member admit that the operating ratio was very much less in the west?


Henry Lumley Drayton: I am trying to get at what is the exact truth, but hon. gentlemen may not like it.


Robert Forke: We love the truth.


Andrew Ross McMaster: We are all sitting, as it were, at the feet of Gamaliel.


Henry Lumley Drayton: I am afraid it is an indifferent audience in some places. I said the return on eastern lines was .69 cents and on western lines .70 cents, or a difference of only one one-hundredth of a cent in the actual per ton mile returns.


Milton Neil Campbell: Will the hon. member tell us if the western lines include those in British Columbia?


Henry Lumley Drayton: Certainly.


Milton Neil Campbell: There is a difference
there because the British Columbia operating costs are higher.


Henry Lumley Drayton: My hon. friend from Mackenzie is again betraying his absolute ignorance of the subject. Why, to putin British Columbia, granting what he calls its tremendous high rates, should make that return far higher, but even with British Columbia in it is only .70 cents. He is simply killing his case when he gets that admission.


Milton Neil Campbell: Not at all. I was pointing out that the operating ratio has always been higher in British Columbia, and that when British Columbia was included with the prairie provinces it naturally raised the operating ratio for the whole four provinces.


Henry Lumley Drayton: My hon. friend apparently is incapable of understanding the English language. I am not talking about operating ratio, I am talking about per ton per mile returns. Operating ratio has obso-lutely nothing whatever to do with it.

Railway Freight Rates


Andrew Ross McMaster: That is, gross returns.


Henry Lumley Drayton: Certainly. Those are the returns per ton per mile, and the inclusion of the territory which the hon. member for Mackenzie refers to as "this awfully high territory"-British Columbia-in that should make just that much higher figure if those things were out of line.


John Millar: In the comparison the hon. member is making now are passenger receipts included?


Henry Lumley Drayton: So far, Mr. Chairman, we are not moving passengers on a per ton per mile basis! This is freight. We may get down to that basis, but I hope not.


John Millar: You are making a comparison of earnings.


Henry Lumley Drayton: Oh no. I want hon. gentlemen to try and get this clear, because, after all, we arte trying to understand freight rates. I am not talking about earnings, but about gross receipts. I am 'talking about all the money that is taken from different sections of the country, and I am dhowipg that in, connection with your per ton per mile receipts, which is the only practical yardstick on this question, the Canadian Pacific Railway in the year 1917 took for the carriage of freight an eastern territory, .69 cents, and1 for the carriage of freight in western territory .70 cents,-the difference is the alarming one of one-hundredth of one cent per ton per mile.


Robert Forke: Does the hon. member say that the earnings per ton per mile is the only gauge by which to judge?


Henry Lumley Drayton: Oh no, but let us take one thing at a time. I am answering some of the arguments that have been made -but no arguments have been made yet having anything to do with freight rates whatever. What I am doing now is showing the difficulty we have in attempting to consider freight rates here. That is all I am trying to do, and I am having a great deal of difficulty at the very start.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Henry Lumley Drayton: Mr. Chairman, when we arose at six o'clock I had been dealing with the railway rates per ton per mile, and I had also referred to the argument made by the hon. member for Mackenzie (Mr. Campbell) in connection with the tariffs. Now, I want to say, in fairness to that hon. gentleman, that his argument is just as true, just as cogent and just as reasonable as any argument advanced by the late Solicitor General (Mr. McMurray). I am not going to take up the time of the House in going over those arguments, which were based not upon exact figures or facts, but I am going to take the concrete case given by the hon. member for Mackenzie in connection with the rate of seventy-five cents on rice, which rate he said was hurting Vancouver and enabling Montreal to get this commodity in cheaply and distribute it in quantities in territories where Vancouver ought to have the right of distribution. I say in fairness to him that he is absolutely honest in what he says but absolutely mistaken and absolutely wrong. But he is no more mistaken and no more wrong than-


Andrew Ross McMaster: Did he not say Calgary?


Henry Lumley Drayton: Oh no, Vancouver. The rate of seventy-five cents from Vancouver to Montreal-


Andrew Ross McMaster: And the same rate to Calgary.	'


Henry Lumley Drayton: -and the same rate to Calgary. I have taken the trouble to look up the records. This is a case I happen to know something about. In the first instance rice only came into Canada from two sources. Originally it came from the Orient altogether, and the distributing points for the Canadian rice markets were Vancouver in the west, on the one hand, and New Orleans in the south on the other hand. Vancouver desired to be able to go into the rice business in competition with New Orleans. But New Orleans is much nearer the eastern territory than Vancouver. The Canadian Pacific put that rate in. It put in a specially low commodity rate to enable Vancouver to distribute rice to Canadian territory in competition with New Orleans. No one could quarrel with that motive. It was a good thing for Vancouver, it was also a good thing for the country. It gave the country the possibility of having competition in rice, instead of leaving the whole of the eastern part of Canada entirely at the mercy of the distributors in New Orleans. I do not think that any hon. gentleman would seriously complain of that. Now then, how does it work out? The hon. member for Mackenzie says that is something which hurts Vancouver and is there to help Montreal. Well now, it is extraordinary that the Montreal people-
Railway_ Freight Rates


William Charles Good: Is not my hon. friend wrong in stating that the hon. member for Mackenzie says it hurts Vancouver? I do not recall that statement at all.


Henry Lumley Drayton: Oh yes.


Andrew Ross McMaster: My recollection is that he also said it hurt Calgary.


Henry Lumley Drayton: No, he said it hurt Vancouver by enabling rice to be put cheaply into Montreal, and enabling Montreal to send that rice back into territory it otherwise could not reach. There is no question as to what was said. But the Montreal people did not take that view. Montreal got started in the rice business, and desired to get a rate so as to be able to distribute rice upon a proportionate basis, and the Mount Royal Milling and Manufacturing Company, which is the Montreal company, after complaining about this rate for years, made formal application to the Board of Railway Commissioners They complained as to this special commodity blanket rate of seventy-five cents per hundred pounds, applicable as it is on cleaned rice in car load lots, from Vancouver to practically all points of importance in the prairie provinces and Ontario and Quebec, that it was effective right through the whole of their own local territory, and they asked that the discrimination be removed. And what was the discrimination? Their rate from Montreal to Vancouver was $2.42 as against a rate from Vancouver to Montreal of seventy-five cents. Their rate from Montreal to Calgary was $2, as against a rate from Vancouver to Calgary of seventy-five cents. Their rate to Edmonton was also $2, as against the blanket rate of seventy-five cents. Their rate to Regina was $1.55 as against the seventy-five cent rate, the rate to Saskatoon $1.68; the rate to Brandon $1.23, and the rate to Winnipeg $1.14 from Montreal, as against seventy-five cents from Vancouver. Well, as I say, the hon. gentleman's argument that this rate was a hardship to Vancouver is no worse than other arguments we have heard in connection with this rate situation.
I am not going to waste any more time chasing phantoms in connection with the different points raised in argument by hon. members in regard to this freight business, but I am going back to the question which is the real governing question, which shows just exactly how much money is taken out of a district by a railway, namely the rate per ton per mile. I submit, Mr. Chairman, what I know to be the fact, and it is a result that I am frank to say I take a great deal of pride in; that the work of equalization, not that

equalization which aims at making unequal things equal, which is an impossibility, not insuring equal treatment to unequal, thingg, and thereby bringing about direct discrimination in fact, although not on paper; but an equalization which fixes the whole run of the traffic in such a way as to bring about practically the same result in this field of immense diversity and diversion. It is a tremendous task to perform. It is a task that takes years, and I do not for one minute say that it ever can be actually accomplished. Make your loadings and make your rates on the business of this year or that year, and you will be wrong, because with the very best intentions, following the matter up just as closely as it is humanly possible to do, hon. members will find that the percentages of this loading and that loading change from time to time, and inevitably you get differences in your results. You must get them indeed, unless we are going to treat grain just exactly the same way as you treat gold or anything else. But there the happy chance lies. Let us put it that way, that the happy chance made it in that year 1917 so that there was such absolute equality, not in rate tables, which mean nothing, but in the actual amount of money taken out of the people in the different parts of the country per ton per mile, that there is a difference only of one hundredth part of a cent, and I say it is the closest result, so far as I know, that has ever been obtained.
Rates are delicate things and they can do a great deal towards making or breaking the country. I am going to illustrate what I mean by that. Hon. members will pardon me if I have to refer to myself, because I am speaking of my own knowledge, my own action and judgment, but when I went on the railway board in 1912 there was no Drumheller coal in Winnipeg. The American coal had1 the market. It was actually carried as far west as Saskatoon. As a result of no hit-or-miss jumping at conclusions but as a result of a long, tedious investigation into the question of coal rates, including cost and the 'like, in the judgment of 1914 the whole basis was changed, and in consequence of that change it was but a short time before not only was there no American coal in Saskatoon, Regina, Moose Jaw and other like places, but the Canadian coal was absolutely controlling the markets there and selling largely in Winnipeg. You cannot get these results by acts of parliament. You can only get them by honest, long, painstaking efforts and endeavour. After 1917 we had different increases. You cannot preserve a proper equality of return when you are in the business of percentage increase. The need

Railway Freight Rates
was great. Time was important. Grain returns were high and there was no hardship at all. With these increases the parity which I referred hon. gentlemen to, and which was so marked in 1917, disappeared. I am going to show how it reappears, where it is and how it has become greater than ever it was before and where that disparity now is. The earnings per ton mile became:
Eastern lines Western lines
1918	79	. 9011919	95	1.04
Hon. gentlemen will see at that time that the western lines were paying more than the eastern lines, the difference between .95 and 1.04.
Eastern lines Western lines
1920	 1.05	1.03
That is the first year after the war, when western rates were lower than eastern rates. I want hon. gentlemen to remember that these are of course gross figures and have nothing to do with the operating ratio. It is just to 3how how much the operations, in the composite results, were taking out of the people. That is the point.
Eastern lines Western lines
1921	 1.23	1.00
There is a difference against the eastern lines there of almost 25 per cent.
Eastern lines Western lines I
1922	.. .. 1.13	.911923	.. .. 1.11	.821924	.. .. 1.173	.87
I just pause there for one moment to point out to hon. gentlemen how without any changes in the rate structure upward, but as a result of changes in the actual traffic moving -because in the two 'last years I mentioned the changes if any were down and not up-as a result of a larger percentage of freight that was carrying the higher rate, the rate goes up-


Mr. McTAGGART:: Does this figure include all classes of freight, packet freight and all?


Henry Lumley Drayton: That is the whole freight business.


Mr. KELLNER:: Did the territory known
as the eastern division change in regard to the boundaries at all?


Henry Lumley Drayton: No. There is no change in this at all. I am giving the Canadian Pacific figures because the others were challenged. I was stopping to point out how the charge against the public under the same tariffs, that is, the mile run per ton, had advanced, having no reference whatever to raised
tariffs, but simply to the change in the traffic. Another point that I want to make clear to my hon. friends is this, and it is a point which we all should know about. If you have a low operating ratio, traffic which moves in great volume even at a low fixed rate may be very remunerative. Hon. members must realize that at one time, in my opinion, the grain traffic was the most remunerative traffic in this country. That, I know, is a conclusion that many railway men do not agree with, but I do not agree with them.


Mr. HOEY:: In what years would that be?


Henry Lumley Drayton: Before costs went up when we had a low operating ratio. Before the rate increases came up, we had in western Canada, a splendid operating ratio, one of the best operating ratios in the world. If you have a low operating ratio, so long as you are always below your low rate, and you have great density of traffic, you have great profits. We had tremendous density of traffic in the grain business. I have been making a little calculation based on a theoretical rate in order to give hon. members some idea of what I mean. For example, supposing you take a low rate structure; supposing you take an average ton-mile rate- and this is not out of the way as compared with what we used to have-of 55, and supposing you have a grain rate such as we have now of .52, that does not appear to be a tremendous difference; but if you were going to move seven billion ton miles if sixty per cent, of that business was grain and you made a fair distribution of costs and if you had an operating ratio as high as 70-and the Canadian Pacific used to have in western territory an operating ratio as low as 62-you would have an operating profit of $5,400,000 on this grain traffic even at that low rate. You have your tremendous density and a movement which of itself is comparatively cheap. There is practically no yardage in connection with grain. The railway company is as a rule, at no expense either to load or unload the cars, and although the rate looks small, there was good money in it. Hon. gentlemen, however, must realize that when you are dealing with a business tremendous in its volume, where profits are made in the decimals of cents that I gave to the committee, if that decimal is wrong only a little way, the losses are correspondingly great. One thing that makes ansmne who really wants to see business properly carried on in this country feel sad and depressed is the way in which hon. gentlemen here will not look facts in the face and will make statements which,
Railway Freight Rates

although they may believe in them, are absolutely misleading and which they have only to turn to their own records to know are absolutely misleading. A difference of a few decimal points has worked a tremendous change in our railway situation. While before the grain business was profitable, today it is not.


Mr. KENNEDY (Edmonton):: Why is it that in the grain moving season the monthly net profits jump so tremendously?


Henry Lumley Drayton: My hon. friend will find, as regards the months when the net profits rise, there is really no such thing as a monthly net profit. There are approximations which are put in from time to time, but you do not know what your profits are until the end of the accounting year. He will also find in connection with those self same months there is a movement of high class freight. I am not going into speculation; I want to give the facts, but I want the committee to understand first the reasons for those facts. I want hon. gentlemen to understand this: I have taken the position always consistently that I believe these grain rates and flour rates should be very low. I believe in looking after them; I believe in seeing that the west can properly function; but I believe in everybody knowing what we are doing. I believe in the truth, in looking the truth in the face, and in justifying a rate which will enable the west properly to function. I do not believe we shall ever get a unified country if hon. gentlemen from the west persist in making the claim that they are supporting the railways of Canada. I was pointing out that the difference of a very few decimal points makes a tremendous difference in connection with the results. I have supporting statements for that view.


Thomas Alexander Crerar: Do I understand my hon. friend is arguing that the present grain rates are not profitable to the railways?


Henry Lumley Drayton: I certainly do.


An hon. MEMBER:: Oh, oh.


Henry Lumley Drayton: An hon. gentleman says, "oh, oh". We all like to say "oh, oh", but that does not produce results nor does it produce dividends or anything that enables the country to function. Let me tell hon. gentlemen something else. Although grain rates in western states are much higher than they are in Canada, the states which are supported by the grain movement, the states in which the railways function as a result of the grain movement, have to-day
rSir Henry Drayton.]
an application before the Interstate Commerce Commission. They are asking for rates, not only higher than our present rates, but far higher than the rates they now have, and they say that unless they get those increases, they will go out of business.


Mr. SHAW:: To what states does the hon. member refer?


Henry Lumley Drayton: The states
immediately to the south, the Dakotas, and Montana.


George Perry Graham: Sixty-six companies.


Henry Lumley Drayton: The applications are all filed with evidence in support of them. There is the position of the earnings of these companies.


Robert Alexander Hoey: Those railways do not move the volume of freight that our railways do. The minister says there are sixty-six companies.


George Perry Graham: Sixty-six companies asking for an increase.


Mr. WARNER:: Does the hon. member know why in Montana the railways are likely to go out of business or become bankrupt?


Henry Lumley Drayton: Yes, and I am going to tell my hon. friend. The trouble is that as a result of the opening of the Panama canal, they are in danger of losing their high class freight which previously they carried east and west. They are put into the position of having to support themselves very largely, not by high class freight, but by grain and flour, and they find it is impossible to do so. Hon. gentlemen need not think the United States do not produce a great deal of wheat. They do.


Joseph Tweed Shaw: Would it be fair to compare
the rates from Montana to the Great Lakes with the rates from Alberta to the head of the lakes?


Henry Lumley Drayton: I have not
reached that point yet. If my hon. friend is serious and will look into this question he will see that wthat I say is correct.


Joseph Tweed Shaw: I am very serious.


Henry Lumley Drayton: I do not think the hon. member is, having listened to something he said last night. The truth is that if the grain crop of 1923 had moved, over the mileage it did, at American rates, the western grain growers and millers would have had to pay in round figures $34,000,000 more than they actually paid. My hon. friend may

Railway Freight Rates
say that the longer haul is in the Canadian territory, and that is absolutely correct. There is no doubt that the longer haul being on the Canadian side there would be a gradual tapering in the rate on the mileage scale; but the difference would not have ibeen so vast, and that $34,000,000 would not have been reduced to any enormous extent.


Daniel Webster Warner: Does the hon. member
know that a large percentage-in my judgment about half-of the farmers who were in Montana supporting that railway had paid these high freight rates for so long a time that it put them out of business and compelled them to leave their farms? I travelled through that country and saw many vacant farms which I considered should be producing; but they were not producing anything. And that is what will happen in our own country if the rates are too high.


Henry Lumley Drayton: I do not think anyone will suggest that the Great Northern was very short-sighted in its pblicy, and I am sure their judgment would suggest still higher rates. Be that as it may, that is the situation.


Donald MacBeth Kennedy: Did the
Great Northern get any such assistance as was given the Canadian Pacific Railway?


Henry Lumley Drayton: I do not think it did. There were railways on the American side that did receive great assistance but I do not think the Great Northern did. The earlier American roads got land grants but this policy was soon stopped, and rightly so. But let us remember that every single cent of the Great Northern is shown there, while in connection with the Canadian Pacific, which is supposed to earn seven per cent on its investment in railways, so much of the favours which they got has been converted into property against which there is no charge that the earnings amount only to about 4.4 or 4.3.
I want to give to the committee the exact results of calculations made not by myself but by the statistical bureau of the Canadian National Railways. In these analyses no reference whatever is made to the operations of the Duluth, Winnipeg and Pacific railway, so that the results are as far as possible free from any American rate influence. The grain operating ratio for 1923 was 126.14 per cent, resulting in an operating loss of $6,088,499. In 1924 the grain operating ratio was 126.96, the operating loss being $5,812,016. Freight traffic other than grain produced on the other hand in 1923 net earnings amounting to $8,276,195 and in 1924, $10,432,831. Anyone
who will take the trouble to go over the figures will be convinced that the statements that are made to the effect that the west is carrying the east are untrue. In 1923, in the western territory, excluding the Duluth, Winnipeg and Pacific railway, the railway operating revenues amounted to $66,000,000 odd and the expenses to $70 000,000 odd, leaving a net deficit in that year of $2,105,741. Can there be any honest dispute about this, unless on the part of some excited person on the hustings? Analyse .these figures and you will get the revenue from passenger and allied services. Now, the hon. member (Mr. Campbell) was perfectly right when he said that passenger service does not pay. I have been saying the same thing day in and day out throughout this parliament when the question was up, and that is one of the reasons why we are absolutely insane in connection with our purchases of rolling stock. It is for instance absolutely ludicrous to buy $44,000,000 worth of rolling stock comprising in large part passenger locomotives and expensive coaches, and that in two years alone.


Andrew Ross McMaster: Is not the real reason
to be found in the fact that trains are run half empty?


Henry Lumley Drayton: The hon. gentleman may try to palliate it as much as he likes, but the fact is that passenger business even in thickly populated centres does not pay, and the United States management regard the thickly populated peopled suburban areas near large centres as the only places where they can make money out of the passenger traffic. There is no mystery about it; every railway man knows that this is the case. And my hon. friend from Brome (Mr. McMaster) is also partly right. We can reduce the loss in part by running fewer trains and by putting a stop to the expenditure of some $1,200,000 for the purpose of advertising passenger trains. We could get rid of some of that loss if we stopped radio and a few more frills. But still there would be a loss. Each year there has been a substantial deficit on passenger business. Bringing in all these things, we have that deficit as I have stated. In 1924 we had a deficit of $1,240,353 on these lines. Now, hon. gentlemen to my left-so far the ex-Solicitor General (Mr. McMurray) is the only supporter of the government who has joined them-were well represented on the committee that investigated the Canadian National Railway accounts, and every member of the Progressive party on that committee has gone through those accounts, but I have never heard any sug-
Railway Freight Rates

gestion from them that the accounts were falsified; if they were, it was their business to show it. The hon. member for Humboldt (Mr. Stewart) has put in a lot of work on these accounts, and he understands them. He has found nothing wrong with them. If we want to be honest with ourselves, we will stop this idle talk that the west is carrying the east, when everyone knows that the fact is absolutely the opposite. We have had large earnings in eastern Canada, as against losses in western Canada and in the Mari times.
Now, some hon. gentlemen say, "You cannot raise rates in eastern Canada on account of water competition." I just wonder how many of those who indulge in that talk really think there is anything in it except so much nonsense. Has not the cost of water operation gone up? Does not everybody know it? Cannot raise the rates in eastern Canada! Why, the rates on pretty nearly every bit of farm produce grown in eastern Canada were raised from 80 to 83 per cent, and they are still up. Hon. gentlemen from farm constituencies in Ontario and Quebec know the state of their rate situation. The ex-Solicitor General actually says, "You cannot raise rates at all in central Canada because of water competition." Well, I should like him for once to look at a tariff, to take a real interest in this situation, and to go and tell the farmers of Ontario and Quebec that their rates cannot be raised because of water competition. The truth is that the rates of the farmers of central Canada on butter, cheese, eggs-the very things that they are interested in-were raised as high as S3 per cent, and only a thin shaving has been taken off. They are still at that high level, and we might as well tell the truth about it.


Thomas Alexander Crerar: How do those rates at
present compare with the rates for similar distances in western Canada?


Henry Lumley Drayton: I should just
like to give my hon. friend this very good answer to his question: their rate per ton mile table from Ontario and Quebec is 1.73 cents.


Thomas Alexander Crerar: That is on all traffic.


Henry Lumley Drayton: Yes, I am
dealing with all traffic. It is the only way I can deal with this question.


Thomas Alexander Crerar: No, I asked my hon.
friend a question which he is very skilfully evading, but which I do not propose he shall evade. He made the statement that the rates on dairy products in eastern Canada had been raised 83 per cent. I asked him how

those rates compare to-day with rates for the same mileage in western Canada, and he quotes me a figure embracing the whole general freight situation. That is not an answer to my question. I should like my hon. friend to answer it.
Sir HENRY .DRAYTON:	I am quite
frank in saying I have not that table in front of me. If my hon. friend will take the trouble to look at the facts, he will find that all the increases in eastern and western Canada, as given by the Board of Railway Commissioners in answer to a question put to them by the hon. member for Brome (Mr. McMaster),

I am speaking from recollection, but I think I am practically right-were 40 per cent odd in western Canada as against 70 per cent odd in eastern Canada.


Thomas Alexander Crerar: Is it not true that they
simply removed to that extent the differences or discriminations that existed prior to those changes?


Henry Lumley Drayton: Mr. Chairman,
there were no differences and there were no discriminations in the large volume of business done, in the toll taken on the real activities that the west wanted. On the other hand, for every single mile that a car is hauled-* and that is the service they get, there is no sidestepping in saying that, it is the fact- for every mile that a car is hauled western Canada pays 87 cents while eastern Canada pays 1.17 per ton of freight. There is where the burden is. If it is not so, how does my hon. friend account for the large surpluses in the one territory and the deficits in the other? Do surpluses mean nothing to him on the one hand and deficits on the other?


Thomas Alexander Crerar: Other factors enter into
the calculation that entirely upset my hon. friend's argument.


Henry Lumley Drayton: My hon. friend
is not doing himself justice.


Thomas Alexander Crerar: Oh, yes he is.


Henry Lumley Drayton: Unless he is
desirous of going back to a rate situation which has changed absolutely as the result of the change in operating ratios, he is doing himself very scant justice. What is there in it except on the one hand receipts and on the other operating ratios? The operating ratio in the west is lower than it is here; it always has been, and I hope always will be; but the operating ratio, lower as it is in western Canada, still produces a surplus in eastern Canada and a deficit in western Canada. There is nothing else for my hon.

Railway Freight Rates
friend to consider except receipts and operating ratios, unless he wants to pretend that there is any discrimination in the rate charged to a farmer reaching a market, for example, in Toronto, as against the rate charged to a farmer reaching a market in Vancouver-a condition of affairs where they cannot in the slightest degree come in competition one with the other.


Robert Alexander Hoey: Will the hon. member contend that water rates have no bearing on freight
rates in eastern Canada?


Henry Lumley Drayton: Certainly not,
Mr. Chairman. I do not contend so for one minute. My hon. friend is perfectly right. The ludicrousness of this whole situation is the statement made by more than one hon. gentleman to the effect that water rates do not go up. Why, they have gone up tremendously, as everybody knows.


Robert Alexander Hoey: Then rail rates could not
remain high if water rates came down; is that the position?


Henry Lumley Drayton: No; but as it is to-day there is the situation. The whole fallacy is in the idea that you cannot raise rail rates because water rates are always the same; they are not. Look at what we have here in t'he ocean rates committee, look at what happens on the Great Lakes.


William Charles Good: Did anyond contend that
water rates had not gone up?


Henry Lumley Drayton: We had this
argument made at the time, against the fact of our increases everywhere in eastern Canada, that the freight rates could not be raised in eastern Canada because of water competition. We had that argument made by the exSolicitor General.


Edward James McMurray: Does the hon. member think he is quoting the ex-Solicitor General fairly? Was not this the argument I made: that water rates are always lower than railway rates, and there must come a time when the water rates in eastern Canada will be lower than the rates in western Canada; that is, naturally there will be an advantage in rates in favour of eastern Canada? That was my argument.
(Sir HENRY DRAYTON: My hon. friend may have understood it, but he did not say it.
Mr. MioMURRAY: I said1 it, but perhaps you did not understand it.


Henry Lumley Drayton: Have it any way you like. But the absurdity of the whole thing is just as I said before, that rates could not be raised in eastern Canada, and they had to ibe raised in western Canada to make up for deficits in eastern Canada my hon. friend was talking of to-day.
Mr. MdMURRAY: No, ultimately.


Henry Lumley Drayton: iMy hon. friend can have it any way he likes. We are confronted with a real situation here, not with any theory. We are paying these rates in Ontario and Quebec, and we are paying those deficits to the extent that we have a surplus.


Mr. GOULD:: Nobody has paid them yet.


Henry Lumley Drayton: Well, $17,000,000 is not so bad to take out of the centre for the purpose of distribution to the extremes.
As I said before, I perfectly recognize the national necessity of low rates on grain and flour. We ought to have them; I have always taken that position. But 1 also appreciate the national necessity of something like a fair understanding of the situation and of what is being done. I do not know that I should take up any more time in connection with rates as rates.


Daniel Webster Warner: Where merchandise is
shipped from the east to the west, and the freight is charged up in the price of the merchandise, who pays that freight?


Henry Lumley Drayton: I have always
found that when I got anything I was compelled to pay the freight, no matter where the goods came from. If ,my hon. friend can get his goods in any other way, he is lucky. I have always had to pay for them, whether it is freight or anything else.
Mr, WARNER: How can the east claim to pay the freight when it is charged up in the price of commodities sold in the west?


Henry Lumley Drayton: I fail to follow my hon. friend's question. I fail to get the sense of it. I want to be fair to him, and to be as polite as possible to him. I wish he would give me the point; I would like to deal with it.


Daniel Webster Warner: Iif you were out there and paid the price for the goods, you would get the point.


Henry Lumley Drayton: I am beginning to get the drift of my horn, friend's question. Now let us see what there is in it. How many gentlemen in this House think that all the freight from Ontario goes west? I wonder if any of them know how small a proportion

Railway Freight Rates
of it does go west, and how large a proportion of it goes right into the towns and .cities and villages of Ontario? That is Where the bulk of it goes. I wonder if hon. gentlemen, are really serious in thinking, for example, that the west is paying the burden of the rate on Ontario butter. The only way they can do it is by eating the butter and paying the bill. There is nothing in that suggestion. It is perfectly true that if the west was the only customer Ontario and Quebec had, the west would then be paying its proportion of those rates; there is no question about that at all. But we all know that that is not the fact, and it is idle to talk of it. If it were the case, why is the west kicking about lower rates in the east? The lower they are, the better for the west in that .case, because the west would not have to pay so much for the goods they get from the east. If -there is anything in that suggestion, .my hon. friends from .the west should foe .cheering for lower rates in the east.


Donald MacBeth Kennedy: Does my hon. friend agree that the farmer in the west pays the freight on machinery and binder twine, for example?


Henry Lumley Drayton: Absolutely. My hon. friend is .perfectly right. The farmer pays for What 'he gets just the same as the city man does. It does not matter what province he is in, on anything he buys he always has to .pay the freight; and if he is selling, in some circumstances, his price is also affected by the freight in the same way.


Daniel Webster Warner: He also pays the freight on the products that are sent east, and with which he buys his .commodities in the east.


Henry Lumley Drayton: I do mot know that I would put it in .quite that way, because that is not quite the .right way of putting it, but we will not get into refinements; we did not have much luck the last .time. I think we had better get on.
I am afraid, Mr. Chairman, I cannot compliment my hon. friend the Minister of Railways upon his production. I still think, as I started out, that the right solution is to be found in. the amendment read by my hon.
friend the leader of the Pro-9 p.m. gressive party, the hon. member for Brandon (Mr. Forke), the resolution which we proposed from this comer of the House. What is more, I think most gentlemen in this House if they were to give voice to their honest convictions, think exactly the same thing. But be that as it may, there is one thing that is absolutely clear, and that is that the present situation is

an intolerable situation. Why, we have had turmoil, more or less, in freight matters ever since 1922. We have had confusion worse confounded because this government have put off and put off taking any stand whatever in connection with this matter until the absurdity of it all has got to be such that the absolute burden of it and the dislocation of business is such that something has to be done, and1 we have this bill brought down in the dying days of the1 session. I do not think we are doing the right thing. Personally I think the whole matter should be sent to the railway board for consideration. I quite despair of ever having proper consideration given in any debating association such as parliament to such a business matter as freight rates, and I am quite sure hon. gentlemen in their hearts agree with me. It would have been very much better to send the whole question to the railway board; I would like to see the whole question sent to the railway board, I am going to be absolutely sincere with my hon. friend when I say that, my point is, my point always was on the railway board, that it is a matter of national necessity to have a particularly low rate on grain and flour in the west. It is an absolute national necessity:	Owing to the
distance from market, owing to the long rail haul, it is absolutely necessary that we should have that, but it is also necessary that the whole question should be looked fairly in the face, and that we should know what we are doing. There is no good in fooling ourselves. But failing to have this matter sent properly to the board, why, let us end the present jumble as much as possible; let us end the present unfairness here, there, and everywhere, practically throughout the country.
I would like to point out just one thing to my hon. friends from the west. We in the east have also advantages under this Crowsnest agreement. The town I come from has special advantages under that agreement. We are in a position to under-sell other towns. It is a matter of importance to us, a matter of just as great importance to people doing business there as a favourable freight rate is to anybody else. They have a long haul to look after, and they are in immediate touch with American competition besides their own local competition. But Toronto does not believe in an unfair, discriminatory rate, although she gains by it. Hon. gentlemen may think what they like, but Toronto does not want discrimination in rates. But we have got it. As a result of the judgment of the Supreme court we have got it right up to the hilt, and1 we are directly helped by it. But we are not looking for any quid pro quo,

Railway Freight Rates
we think more of national equity and justice in connection with this question. Therefore, we think this bill is better than nothing. Failing the absolute repeal of the act, and as apparently this is all we can get, at least we can say for it that it is better than the existing situation.


James Horace King: The bill before the House has been under discussion since yesterday, and in introducing it the Minister of Railways (Mr. Graham) outlined the extent to which it will go. It is proposed by this legislation that the restrictions imposed under the Crowsnest pass agreement of 1897 shall be entirely eliminated, except in the case of grain and flour moving east to Fort William in the territory that was previously considered Crowsnest pass territory. My hon. friend, the member for West York (Sir Henry Drayton), who has had great experience and possesses a great knowledge of this matter by reason of his having been formerly chairman of the Board of Railway Commissioners of Canada, has just indicated to the House that the government have probably not gone as far as they should, but still has suggested that it is good business that special consideration should be given to the rates on grain and flour, commodities produced in the western provinces. In fact he has gone further and said that this would be the practice of the railway board and the railways themselves, and I think in that respect he is correct. I think it has been the policy of the railway commission and the railway companies to give special consideration to these commodities which have so much to do with the prosperity of our friends in western Canada and the prosperity of the province of British Columbia. Now, this matter is one of national importance and it is before this House which represents, or should represent national ideas. It is here that, we should settle what is best in the interests of Canada, and not what is best in the interests merely of one particular section or the other. We should review the whole situation-and the railway situation is a very large and important one-and endeavour to come to a right decision from a national standpoint. We should decide what is best to do for the Canadian people as a whole, not what is best to do for the people of Alberta, or Saskatchewan, or British Columbia, or the Maritimes. Have the government presented a fair proposition in connection with this matter? I think they have. I think it is generally conceded that the Crowsnest agreement entered into in 1897 could not in fair-281
ness to the railways or to other parts of the country, be continued in full effect. That must be conceded by all hon. members. As my hon. friend from Vancouver Centre (Mr. Stevens) said yesterday, the economic conditions resulting from the war preclude such a course. Therefore at this time it is necessary for us to consider what is best to be done in the interests of Canada.
There are some who say that we should wipe out all restrictions and leave the whole matter to be dealt with by the Board of Railway Commissioners. That would have been a fairly comfortable and easy way out of the situation for the government, and I have little doubt if they had brought down such a policy it would have received the endorsement of the House. However, the government has considered that in the great interior of Canada we have problems that are of interest to the eastern and western portions of the Dominion as well as to the territory directly affected. Consequently special rates have been retained on grain and flour which will be the maximum within the Crowsnest pass territory. The Minister of Railways, when explaining the bill yesterday, said that of necessity these rates should be made applicable not only to lines that were constructed in 1897 but to all lines that are in existence in that area. If the problem is there and has to be met there should be such an extension. We people in British Columbia have some knowledge of the Crowsnest pass agreement. We were told yesterday that the parliament of Canada had voted a subsidy of some $3,000,000 odd for the construction of this road, but that in lieu of that subsidy the Canadian Pacific Railway Company had secured this agreement. But it should not be forgotten that the province of British Columbia was the largest contributor to the construction of this railway. The road was built under what was known as the British Columbia Southern charter, a provincial charter, which gave a very large land grant within the province of British Columbia to the Canadian Pacific Railway Company to construct the road. The $3,000,000 that was voted by parliament, a subsidy at the rate of $11,000 a mile was not the primary consideration. However, we in British Columbia have derived benefits from the construction of the line. It opened up a very rich portion of that province, an area rich in timber, minerals, coal and other resources, and the development of that territory brought prosperity to our province. In fact the construction of the line induced a period of great growth and activity in the
revised edition
439G
Railway Freight Rates

Kootenay country, and did much to recoup the treasury of the province for the obligations which it had undertaken. We have undoubtedly received benefits from that railway construction but it should not be lost sight of that British Columbia was a large contributor in the first place. When the Crowsnest pass agreement was entered into British Columbia was not an exporting province; it was pretty much self contained. It was only after the construction of this railway, that the northwestern provinces and British Columbia felt the life blood stirring in their veins and began to grow and become important provinces in this Dominion. Whether or not the policy of the government of that day was the stimulant that brought about the large immigration into and settlement of the northwest, I am not prepared to say, but I think we can fairly claim that it was a very important contributing factor. Certainly in British Columbia we have enjoyed, to some extent, that settlement and development. Such being the case we are deeply interested in the further development of the central portion of Canada. Personally, from my own experience and knowledge, I believe that we are more deeply interested even than we were in those early days. The opportunities are there, and it should be the policy of this government or of governments that may follow to try and bring about a proper settlement of that great interior portion of Canada. My hon. friend from Mackenzie (Mr. Campbell) made a rather startling statement when he said that there was a group over there who were prepared to cut out entirely any concession given by the Crowsnest pass agreement. If that is so, I wonder if my hon. friend really represents the true thought of that great interior west. If that is true, and if that is the real thought of the interior west, then this problem could be solved very easily as far as this government is concerned.


William Charles Good: Did not the hon. member
for Mackenzie attach a proviso to that statement?


William Lyon Mackenzie King: What was it?


William Charles Good: If he could get a square
deal from the railway commission.


William Lyon Mackenzie King: I think I corrected my hon. friend on that, and I told him that I thought he was very unfair in making a statement of that kind. If people in Canada and the House of Commons are to take the position that they cannot get a fair deal from our courts or from public bodies, then we are in a very serious condition.


Arthur Meighen: Has the hon. minister
made that representation to his colleague, the Minister of Agriculture?


William Lyon Mackenzie King: I am talking to
my hon. friend across the way.


Arthur Meighen: I would advise the hon. minister to take care of his own household first.


William Lyon Mackenzie King: I think there is no need to worry in that regard.


Arthur Meighen: Then he has cured his
colleague.


William Lyon Mackenzie King: I accepted a suggestion from an hon. member of this House that he and the body behind him were prepared to cut out all privileges to be derived from the Crowsnest pass agreement, and leave the whole matter as it stands, but I understand he qualifies that with the statement that he has no confidence in the railway commission. That is a matter of opinion. The railway commission in Canada has served a very useful purpose, and we are fortunate at this time as a people that we passed the act in 1903, and that from 1903 onward we have had a specially organized body, and that that body, during the course of some twenty odd years, have been developing a knowledge and information that will make them capable of dealing with the situation with which we are faced to-day.


Donald MacBeth Kennedy: Is the hon. minister aware that the only western representative on the railway commission has been engaged largely in writing dissenting judgments?


William Lyon Mackenzie King: That is always
a privilege of a member of the board.


Mr. GARLAND (Bow River):: It tells
another story.


George Perry Graham: The minority is not always right.


William Lyon Mackenzie King: The minority
cannot write judgments and get away with them.


George Perry Graham: They are always sure that their judgments will not come into force.


Arthur Meighen: Then why was he put on the board?


Daniel Webster Warner: The people of the west
certainly have more confidence in the western member than they have in the rest of the board.


William Lyon Mackenzie King: Well, that would be natural.

Railway Freight Rates


George Perry Graham: The east has full confidence in the western member of the board. We will be more generous.


Mr. HUDSON:: As long as he gives dissenting judgments.


George Perry Graham: We have confidence that
he is honest.


William Lyon Mackenzie King: As I have stated
already, this legislation will wipe out the Crowsnest Pass Act except the provision applying to grain and flour moving eastward. It was suggested) yesterday by some of our British Columbia friends that this would increase or continue the discrimination against British Columbia. I do not agree with that viewpoint. It is true that the people of British Columbia are desirous of seeing grain moved through their territory and through the ports on the Pacific coast. It means increased business through the ports, increased business in the province, and is most desirable. It is of more importance to our friends in Alberta and western Saskatchewan, who are growers of wheat and producers of flour.


Daniel Webster Warner: Is the hon. member in favour of the same rate being applied to grain and flour carried to the western coast or to Vancouver as is applied to grain coming this way?


William Lyon Mackenzie King: My hon. friend can be assured that I am in favour of that; but I am not sure-and I speak seriously and after great thought and deliberation-that in placing further restrictions upon the board, for the purpose of securing a temporary advantage, I would be serving the best interests iof the province of British Columbia. Taking the declaration as made in this bill, the order in council giving directions to the Board of Railway Commissioners, and in addition to that the fact that this great area tributary to the Pacific coast must of necessity adopt the Pacific route, I believe that we in British Columbia and the people of the other provinces will eventually secure that advantage.


Arthur Meighen: Is the minister not aware that his colleague, the Minister of National Defence (Mr. Macdonald) says that the bill does not affect British Columbia at all?


William Lyon Mackenzie King: No, he did not pay that.


Arthur Meighen: Yes, four or five times.


William Lyon Mackenzie King: Some of my hon. friends stated yesterday that the bill adversely affected British Columbia, and my 281*
colleague stated that it did not affect adversely-


Arthur Meighen: Will the minister permit me to read it?


William Lyon Mackenzie King: I have read it.


Thomas Alexander Crerar: I am very sorry indeed to interrupt my hon. friend, but the matter to which he is referring now is one of very great importance. Would he indicate to the committee what section of the bill we are considering, affects grain rates to Vancouver?


William Lyon Mackenzie King: I will come to
that. If the government in their bill had extended the area of the Crowsnest agreement. to include Pacific ports it would have been a temporary advantage to the people of British Columbia, but I am not sure that in doing that we would not have created a condition within, the minds of the board that would have been a barrier to what British Columbia has been asking for. Under the Crowsnest pass agreement, or the old agreement, there were other commodities than grain and flour products. We find all green and fresh fruits had 33* per cent advantage travelling from eastern Canada. We find that cordage and binder twine have an advantage of 10 per cent if manufactured in eastern Panada and shipped west. I may tell this committee that we have a cordage factory and a binder twine factory in British Columbia to-day, and also it is the hope of the British Columbia people, and not a vain hope, that we will be able to manufacture agricultural implements in that province.


Thomas Alexander Crerar: All that has nothing to do with grain rates in Alberta.


Arthur Meighen: Will the minister now
permit me to read out of Hansard the statement of the minister I referred to a minute ago?
Mr, KING (Kootenay):	I will give my
right hon. friend an opportunity in a moment-


Arthur Meighen: I knew my hon. friend; would not permit me.


William Lyon Mackenzie King: I will give my
hon. friend an opportunity.


Arthur Meighen: My hon. friend never
will; I knew it.


William Lyon Mackenzie King: I offered it a
minute ago. We have, receiving a preference under the old Crowsnest pass agreement, paper for building and roofing, paints of all kinds, live stock, woodeniware, household furniture, going west from the east. Under
Railway Freight Rates

the present arrangement that inequality is wiped out altogether as regards western Canada. It will now be the business of the railway commission to adjust the rates on those commodities.


Thomas Alexander Crerar: They will go up.


William Lyon Mackenzie King: They may go up. That will depend on the revenues necessary to operate the railways.


George Perry Graham: From the east they may go up.


Thomas Alexander Crerar: That is what I mean.


George Perry Graham: But they will not from
the west.


William Lyon Mackenzie King: But there will
and should be an equalization, and that is what British Columbia has been striving for. It is true if, in this legislation, without the limiting effects which I fear would result if we extended the Crowsnest pass agreement to the Pacific, we could have had that and this, that would be delightful. But I do not think it would have been wise in the interest of British Columbia to make that statutory. The government has limited the area, and in its limitation has set a maximum rate. That in itself should be an indication to the Board of Railway Commissioners. The government, however, has gone further, and in its order it suggests:
The encouragement of the movement of traffic through Canadian ports.
The increased traffic westward and eastward through Pacific coaat ports owing to the expansion of trade with the Orient and to the transportation of products through the Panama canal.
There is a direct reference there to conditions that exist and that are well known to the people of western Canada to-day.


Mr. McQUARRIE:: Does the minister
anticipate that the Board of Railway Commissioners will give the same rate for grain and flour moving westward as is at present provided under this legislation for grain and flour moving eastward?


William Lyon Mackenzie King: It is not within
my province to answer that question any more than it is within the province of my hon. friend. We have to depend upon the judgment and good sense of the Board of Railway Commissioners. If my right hon. friend wishes to ask a question I shall ibe glad if he will do so.


Arthur Meighen: I did not say that I
wanted to ask a question. I said that I wanted to correct the minister. The minister

said that his colleague the Minister of National Defence (Mr. Macdonald) had not stated that British Columbia was not affected by this legislation at all. I stated that he had said so more than once. I read from page 4345 of Hansard of last night:
Mr. Macdonald (Pictou): In the first place, my hon. friend would not venture to argue seriously before any court that there is a single word in subsection 6 as originally in the bill that affected British Columbia one way or the other-not within a hundred miles.
Mr. Meighen: Then what part of the bill does affect British Columbia?
Mr. Macdonald (Piotou): No part.
Does that satisfy the minister?


William Lyon Mackenzie King: I think the right
hon. member is hardly fair. He is reading one paragraph and drawing conclusions from it.


Arthur Meighen: I will read the same
from another paragraph if that will help.


George Perry Graham: It does not touch the point at all.


Arthur Meighen: The Minister of Railways and Canals made an equal mess of it while he was discussing the matter.


George Perry Graham: I am glad my right hon.
friend thinks he made a mess of it.


William Lyon Mackenzie King: It was contended by my right hon. friend and his supporters yesterday that this legislation would further discriminate against British Columbia.


Arthur Meighen: That is another point
altogether. The minister said that British Columbia was not affected at all.


Thomas Alexander Crerar: If I understand the argument of the minister, it is that British Columbia will derive some benefit from the abolition of these westbound rates that have existed heretofore under the Crowsnest pass agreement, in this way that similar industries such as cordage, glass, and so forth in British Columbia will be put upon a more even basis as to the prairies. What effect will all that have on the prairie consumer?


William Lyon Mackenzie King: I think it would be an advantage to the prairie consumer.


Thomas Alexander Crerar: I am glad the minister is so optimistic.


William Lyon Mackenzie King: At least it cannot hurt him. It gives him another market to buy in.


Thomas Alexander Crerar: At a higher price.

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William Lyon Mackenzie King: I think it is well understood in this House that the old Crows-nest pass agreement could not continue. It is obsolete, out of date and not applicable to present day conditions.


Thomas Alexander Crerar: But the prices that the
consumer will pay will be higher.


William Lyon Mackenzie King: The prices are
all higher and will probably continue to be higher. I do not know that they will be higher on account of British Columbia manufacturers getting into the market. You have a new field and another competitor in the market, so that this should be to the advantage of the purchaser. What I want to make clear and what, I think, in fairness we should make clear is that it is important for the whole of Canada to abolish as far as possible any restriction that will limit the Board of Railway Commissioners in bringing about a readjustment or revision of the railway rates of this country. The government have gone a good way in that regard. My hon. friends opposite think they have gone too far. I do not think so. We have maintained and broadened and fixed in the old Crowsnest area, the broadened area, the maximum on grain and flour. Those are products in which the west is chiefly interested. As I said before, the government deciding upon that policy took into account the importance of that great interior area to the whole of Canada and believed it was in the interest of the whole of Canada to make this concession. Whether we should have gone further or not, I do not know. I think it is a fair concession, and as explained by the Minister of Railways, it should be acceptable to hon. gentlemen opposite.


William Garland McQuarrie: Has the minister
justified the discrimination against the west on grain and flour?


William Lyon Mackenzie King: We are trying to do away with discrimination just now.


William Garland McQuarrie: How is the government doing that?


William Lyon Mackenzie King: I believe we are going to do it. If we remove the conditions that have been restricting and preventing the board from receiving the representations not only of British Columbia, but of the Maritimes and other provinces, we clear the field for a readjustment of rates.


William Garland McQuarrie: How do you remove a discrimination by making it worse?


William Lyon Mackenzie King: You do not make it worse. It is easy for one to take the local viewpoint and to develop that for one's own advantage or for the advantage of one's locality. But the problem is too large to be put into that category.


William Garland McQuarrie: But what is the difference between grain going west and grain going east?


William Lyon Mackenzie King: That matter will be left to the Board of Railway Commissioners, and as I have already stated, the importance to the grain growers in Alberta and western Saskatchewan of the nearby Pacific ports and the necessity of their use by them will, in itself, under the directions that the board have received in the order, of necessity cause the board to consider that question.


William Garland McQuarrie: Will the minister suggest that the Board of Railway Commissioners by any possibility will make the rates westward the same as the rates eastward?


William Lyon Mackenzie King: There is nothing in the legislation, nothing in the order, to prevent them from making them lower if they feel that is justifiable.


William Garland McQuarrie: Will the minister suggest that they will do so?


William Lyon Mackenzie King: It is not within my province to say so nor within the province of my hon. friend.


William Garland McQuarrie: The minister knows
perfectly well they will not do it, they never can do it.
Mr. KING' (Kootenay): I do not agree with my hon friend at all. I take a different
point of view.


William Garland McQuarrie: With this legislation,
that is impossible.


William Lyon Mackenzie King: No, this is not
limiting in its effect.


George Perry Graham: It does not limit their
power one iota.


William Lyon Mackenzie King: In fact, it rather
sets a standard for them to conform to.


William Garland McQuarrie: Would the minister
expect the railway commision to do any such thing?


William Lyon Mackenzie King: I should have the greatest reason to expect that that would be the effect of this legislation.
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Mr. CLARK:: How are we going to overcome by this legislation the effect of the words contained in the decision of the Supreme Court of Canada:
Discrimination so authorized by parliament itself cannot be regarded as unjust or prohibited.
How in the face of that decision and under the legislation as it is now framed can you go before the railway commission and allege a discrimination as a ground for lower rates on grain and flour westward?


George Perry Graham: You can get rates without alleging discrimination.


John Arthur Clark: But that ground is removed.


William Lyon Mackenzie King: My hon. friend
advanced the same point yesterday and it was fully met by the Minister of National Defence (Mr. Macdonald, Pictou). This legislation does not limit the power of the board in dealing with grain and flour rates, but having fixed a maximum rate it will have a controlling effect generally. That is the only effect it will have. I should think that the parliament of Canada if it adopted this legislation would have indicated to the Board of Railway Commissioners that in its opinion it was in the interests of the people that grain and grain products should have the advantage of the cheapest possible transportation in order that these commodities might be moved to the seaports of Canada for export. That is what is indicated in this legislation and I should think it would be a guiding principle to the commission.


William Garland McQuarrie: Can the minister justify this legislation in relation to grain and flour going westward?


William Lyon Mackenzie King: Let me read far the benefit of the hon. gentleman the following paragraph from the order in council:
The committee are further of the opinion that as the production and export of grain and flour forms one of the chief assets of the Dominion, and in order to encourage the further development of the great graingrowing provinces of the west, on which development the future of Canada in large measure depends, it is desirable that the maximum cost of the transportation of these products should be determined and known, and therefore are of opinion that the maximum established for rates on grain and flour, as at present in force under the Crowsnesrt; pass agreement, should not be exceeded.
That is a fair declaration of policy, and it is I think important, in the interests of the country, that the movement of these products to the sea board should be facilitated at the lowest possible cost.

'Mr. McQUARRIE:	From the standpoint
of British Columbia, how could the fixing of a maximum rate westward for grain and flour injure that province?


William Lyon Mackenzie King: It might not injure British Columbia, but parliament having declared that this should extend into British Columbia it would have a limiting effect on the Board of Railway Commissioners in dealing with traffic which we hope will flow from British Columbia into the prairie provinces. The people of British Columbia, as I have said, are anxious to see the western grain movement facilitated; but we are more anxious to see the elimination of what is known as the mountain scale. I am satisfied that with this legislation, and with the scope of reference to the railway commission cleared up, we may look forward to the day when British Columbia will not be discriminated against as she has been in the past. My hon. friend speaks of the railway commission. Well, he must also remember that there is an appeal from that body. The direction of the government in the order in council is explicit on the matter, and the legislation is also plain and direct. It deals with one phase only of the fixing of rates, and in other respects it removes all limitations that have heretofore been operating against British Columbia, preventing that province from obtaining what it considers its just due.


William Garland McQuarrie: Does the minister say that it removes all the discriminations against which that province has been fighting?


William Lyon Mackenzie King: I say that it removes from the field the limitations that heretofore have existed and gives to the railway commission full scope to consider properly the claims of British Columbia.


William Garland McQuarrie: But it leaves a serious discrimination against the western movement of grain.


William Lyon Mackenzie King: There is no discrimination; it is left to the Board of Railway Commissioners to fix what they consider a proper and fair rate on grain moving westward.


William Garland McQuarrie: Why not do the same with the grain moving eastward?


William Lyon Mackenzie King: For that matter,
why not fix a rate on coal moving either eastward or westward? I think our experience yesterday and to-day will show us how utterly absurd such an undertaking would be.


Arthur Meighen: Why start it then?

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William Lyon Mackenzie King: I think we have
explained fairly why the government have taken this step. I have read the clause in the order in council showing clearly why we have considered this policy essential to the development not only of western Canada but of the Dominion as a whole. Now, my hon. friend from North Vancouver yesterday referred to the Vancouver Sun of June 6 and intimated that I had said so and so. Let me say in reply that I am no more responsible for what appears in the press than he is himself. I find in the same issue of the Sun that the hon. member is reported as expressing unqualified approval of the government policy. He is also reported as saying:
The recommendation to the railway commissioners to hold thorough investigation into traffic east and west via the Panama is sound. The whole freight rates structure should be revamped on distribution from both Atlantic and Pacific sea-board inward.
That is what the government has in view.


John Arthur Clark: The minister referred to the member for "North Vancouver." That happens to be in my constituency and I want to say that I gave no such interview as the minister attributes to me.
M.r. KING (Kootenay):	I meant the hon.
member for Centre Vancouver (Mr. Stevens). But I would refer the hon. gentleman (Mr. Clark) to his own statement. He said that Saskatchewan and Alberta would pay nearly double the rate under this legislation that they would pay to Buffalo and New York. My hon. friend was not serious when he made that statement. He knows where the dividing line is in Alberta; and under the adjustments that have taken place since 1922 one-fourth of the discrimination has been wiped out, and to-day there are points in Alberta that have a preference and will continue to have a preference to the ports of the Pacific. As the discriminations are removed that line will move further eastward. But my hon. friend could not successfully contend for one moment that wheat moving from Alberta or Saskatchewan to the Pacific coast would pay double the rate applicable to wheat moving to Buffalo or New York, although he made that statement yesterday.


John Arthur Clark: Is it not a fact that the rate on wheat from Edmonton to Fort William is practically the same as from Edmonton to Vancouver?


William Lyon Mackenzie King: I think there is a difference of three to five cents per hundred pounds.


John Arthur Clark: One cent difference?


William Lyon Mackenzie King: No, more than
that.


Mr. MALCOLM:: The difference is two
and a half cents'-22| against 25.


William Lyon Mackenzie King: There is a preference there anyway and we can come as far east as Medicine Hat at the present time. This question is not only of interest to British Columbia and to the prairie provinces, but to the whole of Canada, and I believe that under the policy laid down by the government an opportunity will be given the railway board to effect an equalization of freight rates by building up a new rate structure that will enure to the advantage of the whole Dominion.


Mr. McCONTCA:: Mr. Chairman, I have
no desire to prolong this debate, but L should like to say one or two things in reference to some of the statements made yesterday. Some hon. members seem to be under the impression that the government by this legislation is fixing freight rates. Nothing of the kind is taking place. The rates on grain and flour are fixed by the Crowsnest pass agreement-a contract that was entered into almost thirty years ago, a contract that was duly signed and delivered, the consideration for which was fully paid by the people of Canada. That contract was made by the parliament of Canada with the railway company, but parliament acted in a representative capacity, the real party in interest being the people of Canada. The people paid the money, the people acquired the rights-rights that were vested not in the parliament but in the people of Canada. That contract should be regarded as sacred. I spent some fifty years or more of my life in a country where no power could abrogate a contract without the consent of the parties interested. There is no such power vested in the president or in congress or in all the courts of the United States, nor can all these combined annul or modify in the slightest degree the contract rights of the humblest citizen of that republic. Contracts should be regarded as sacred. Now, western Canada and eastern Canada are interested in a contract-a contract that was paid for, a contract that has stood for nearly thirty years-and we in western Canada insist that that contract shall be duly recognized. I believe the people are entitled to that consideration. It is not a proper thing to tear up the contract without the consent of the people, and I submit that no man in this House has any mandate from their electors to destroy the Crowsnest pass agreement. We
Railway Freight Rates

from the west were instructed to see that it was reinstated, and we thought we had succeeded, but it has been so seriously modified by the Supreme court that it is hardly recognizable.
In the course of this debate yesterday it was said that the parties were willing to rescind this contract. I deny that assertion. The people of the west are not ready to rescind it, and they are the real parties in interest. They are clamouring against a re-scision, they are insisting that the contract be carried out and that the railroad company should be held to its agreement. It was suggested yesterday by the member for West Calgary (Mr. Shaw) that the Board of Railway Commisisoners were handicapped by the water rates and consequently were not able to raise the railway rates indiscriminately in the east. That is true no doubt. They are not only handicapped by that factor, but they are handicapped by another-a contract with the Canadian Pacific railway that the company shall have a 10 per cent dividend. That is one of the things they must insist on-and they seem very willing to insist on it. Now, where is that 10 per cent dividend to come from if freight rates cannot be raised in the east? It will come from the west. For that reason we need some safeguard, we have that safeguard in the Crowsnest pass agreement, and we insist on retaining it.
It is suggested that this arrangement does not give rates on westbound traffic to the Pacific coast. Of course it does not. But it does give to our British Columbia friends the right to ship their wheat to Fort William if they want to, there is no discrimination against them in that regard, and they can ship east under the agreement just as we do. So I say they are not discriminated against. Of course, statutory rates for westbound traffic could1 be enacted, but such rates are not favoured, and the rates under the Crows-.nest pass agreement are not statutory rates. It may be suggested that the agreement has been extended to take in additional territory since the Supreme court decision was rendered. That is true, but it is for the purpose of preventing discrimination. That decision merely *extends the Crowsnest pass rates to the territory where they were in force before the *agreement was tinkered with by the former government. Its application has been extended only as far as it extended prior to that catastrophe to our Crowsnest pass agreement. But that extension is not a fixing of rates; *the agreement fixes the rates; the Supreme court merely fixed the bounds of the extension.

Now, what position do we in the west find ourselves in? We are getting some things that we did not have; we are losing some things that we did have. We are losing the westbound rates on various commodities, and we deplore that fact. We insist that parliament has no right to do that thing, we insist that we are entitled to the Crowsnest pass agreement. But we are making a sort of trade it seems-not very willingly on our part. For instance, under the Supreme court decision there is not a point in my constituency that would derive a dollar's benefit from the Crowsnest pass agreement; we would not get it on the westbound nor on the eastbound traffic.


Edward Joseph Garland: The hon.
member states that we are trading. Is it true we are trading, or it is not rather that the trade is being tendered to us?


Thomas Henry McConica: It is being forced upon us. I repeat, under the Crowsnest pass agreement, as construed by the Supreme court, there is not a point in the Battleford constituency where we will have the benefit of one penny on the rates westbound or east-bound. The new arrangement on wheat and flour will extend to all points in that constituency, so that I am not sure but what we are getting a better trade. But I do not like the principle of it. I do not believe anybody has the right to take that agreement away from us without our consent. I therefore insist that we return to the Crowsnest pass agreement and1 make it applicable as it was before it was tinkered with by the former government. That is the position I think the government should take, and with that position the west will be entirely satisfied.


Arthur Meighen: One can usually depend
on getting the standard Liberal doctrine and Liberal argument from the hon. member for Battleford (Mr. McConica), but this evening he diverged. I cannot say that lie presented anything worse than what the government has presented from the beginning of this debate, but at last he broke his record and swerved a little from the straight and narrow path of the Liberal government. His tenderness for a contract is really pathetic. He never wants a contract broken unless it is in favour of himself, but then he is quite ready to weigh the merits of the change and assume the whole responsibility for it.
The railway rates question is before us again, and we have need to have it before us.
I do not think there ever was anything demanding solution more urgently than this

Railway Freight Rates
question has for many months gone by. It has seemed a very strange thing that while parliament was being served up with all sorts of little tinkering legislation and every manner of bill, oeeupying the time of the members week after week, the business of the country was allowed to wrestle with a condition of turmoil and chaos, and no remedy at all (provided. We had to wait till the very eve of prorogation, till within a few days of the close, to enable the government to come down with this legislation. All the facts for that legislation, all the data, were before them months ago. There was nothing they could possibly have been waiting for. All they were waiting for was a time fit and proper to try to get it through, and in their wisdom they considered the last hurried hours of the session would be the best.


Robert Alexander Hoey: The Saskatchewan election may have been a factor.


Arthur Meighen: And I presume, as well,
the synchronism of the Saskatchewan election may have affected their politically-minded policies.


George Perry Graham: Where did I hear that
word before?


Arthur Meighen: I think it was from the
Minister of Railways.


George Perry Graham: I think it was the Minister of Finance in my hon. friend's government.


Arthur Meighen: Mr. Chairman, this is
a piece of floundering and irrational legislation. It had to be so. The government had to bring in something of this kind, or completely swallow the position they took two years ago. It is because they got into the mire two years ago that they have to come to parliament for legislation now, and it is because they are not willing to reverse an unsound step they took two years ago that they have to bring in legislation of this kind
I felt rather sorry for the Minister of Public Works (Mr. King) in the course of his speech. I do not think he made much of a presentation, but he did the best he could, and I do not know that anybody could have done any better who had been a minister and whose province had been treated by his colleagues the way the Minister of Public Works and his province have been treated in this legislation. I did not expect to see the radiant smile that we were told beamed over his countenance when interviewed by the newspaper reporter after the order in council which preceded this legislation was announced
to the public. The radiant smile I knew would not be there. Instead, he reminded me of nothing so much as a man trying to race as fast as he could through a bog, and the speed that he managed to acquire was not very much.
After all, there should not be any great difficulty for this parliament in determining its course as regards the railway rates. The policy of Canada was determined upon in this respect years ago. Always, ever since we have had a parliament, the right, of course, to fix rates, or to determine the principles upon which rates should be fixed, or both, has resided in the parliament of Canada in so far as Dominion railways are concerned. We have always had that. We could do it by legislation or by the creation of a body, a committee of the Privy Council or otherwise. We could do it through any agency we wished, or we could do it by bargain, if we liked, with the railway company. The jurisdiction has always been ours. The bargain with the railway company really meant, nothing, for the reason that whether the railway company consented or not, we always had power to enforce it by statute if we wanted. The control has been ours. The problem that faced us has been:	How should we exercise it?
First of all, it was exercised through a committee of the Privy Council for many years, enabled to do so by statute of parliament. This was changed in 1903, and a judicial body was created. That judicial body was entrusted, subject to certain underlying principles defined by parliament, to fix all rates in this country. That body, the railway commission, has functioned as a judicial body ever since. It functioned unhampered although there was existing an agreement that had not been removed, but an agreement that was quiescent, ineffective, because its terms had become obsolete and were not necessary for the day. The railway commission operated unhampered until this government came into power. Then pressure was brought to bear from a section of Canada to interfere, to alter the course which had been pursued. Conditions had arisen which brought into being again the bones of that old agreement, conditions which were due to the war-rising rates, rising costs, rising wages all over this country-and the agreement was suspended by the then government. It was a matter the disposal of which could wait, and well wait, more peaceful and quiet times. The suspension terminated in 1922, and then it was this government came upon the scene.
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Daniel Webster Warner: Would the right hon.
gentleman assume that we have had a mandate from the people of Canada to change this contract?


Arthur Meighen: We have a mandate
from the people of Canada to do whatever is in the interests of the Canadian people. I have not started yet to argue whether it is in the interests of the Canadian people or
whether it is not; what I say is there has never been any vested right on the part of anyone in this contract the moment it appears that it is not in the interest of the whole people of Canada. That is all I have sought to convince this House of. If there were some other parties to the contract besides Canada on the one hand and the Canadian Pacific on the other-if there was a third party or a fourth party, then they would have rights too, but is theTe? If so, who is the third party? Canada is one, the Canadian Pacific is the other, who is the third? If any third party was in the contract at all he would have to show, first consideration; but there is no third party in it, there is nobody else a party to it at all. If the three western provinces had been in the consideration given then this parliament would have no right to set aside the contract except at the price of compensation to those provinces. But that is not the condition.


Thomas Alexander Crerar: Would the statement or
assertion that the right hon. gentleman has made apply for instance to the Manitoba contract regulating rates, that was made with the old Canadian Northern Railway Company by the late Roblin government?


Arthur Meighen: No it would not apply; my argument would have no application whatever. Were I standing in the Manitoba legislature and arguing as to the duty of that legislature, I would argue just the same. I would say if the other party is ready to waive it, all you have to consider is the interests of the people of Canada. You can waive it as soon as you feel it is in their interests. But I cannot. I am in the parliament of Canada. The parties to that contract were the Canadian Northern and the government of Manitoba, and this parliament takes a very serious step when it wipes out a contract between other parties and assumes no responsibility for compensation.


Robert Forke: This was a bargain that
was made between the parliament of Canada and the Canadian Pacific Railway that was supposed to be in the interests of the three prairie provinces. Does not the hon. leader of the opposition believe that this parliament has some duty to see that these benefits are still conferred upon those provinces?


Arthur Meighen: This parliament's duty
is to the whole of Canada. Our duty is to the three prairie provinces just as much and just as directly as to any other provinces of the country. But the three prairie provinces, while they may have been the special beneficiaries of the original contract, were in
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no way parties to the contract and had no special rights under it. They were special beneficiaries, perhaps, although the Minister of Public Works in his .desire to square himself with British Columbia, argued to-night, rather circuitously, I admit, that British Columbia was a beneficiary too; and indeed the Minister of Railways argued, likely for some similar purpose, that the rest of the country was a beneficiary. Perhaps in a sense everybody was a beneficiary. I frankly admit that the three prairie provinces were the principal beneficiaries. But the fact that this government enters into an arrangement especially beneficial to one party does not give that party a better right than all the rest of the country to review the general merits of the contract. Every part of this country has just the same right to review entirely the general merits from the standpoint of the whole people as have the representatives of the provinces of western Canada, and I am not saying this merely because I am standing now at a considerable distance from the taxoayers of those provinces. I have said this right on the plains, and I do not see for the life of me how any other line of reasoning can be followed.
Such is the position, as I understand it, of the contract itself. We have to consider, as we had to consider two years ago, whether it is in the interests of those for whom we are trustees, the whole people of this Dominion to maintain that contract as an integral and solemn pact. Is there one hon. member in this House who will suggest for one minute that it is? I am in the presence of men who I know would suggest it, if nothing restrained them except bashfulness and timidity. There is nobody who would suggest the enforcement of that contract, as the contract is now interpreted at least, and as the contract was understood by this House three years ago, though perhaps a different interpretation. In every aspect of this question, there is no member of this House who would suggest that you could enforce that contract in the interests of the people of Canada. The hon. member for North Battleford (Mr. Davies) says the contract has been so changed by the Supreme court that you cannot recognize it now at all. Whatever else we) may say about the hon. member for North Battleford, we can say for him that he has a mind of his own. He is not a lawyer, but has common-sense. I ask him, did he ever hear in his life of the courts changing a contract? That is not what the courts are for. If the Supreme court changed this contract, I think he had better set to work by some means or other

and get rid of the 'Supreme court. All the Supreme court had any right to do, and all it was asked to do was, to tell us what the contract meant. The Supreme court told us the contract meant such a thing and no more. For the hon. member to argue that we are justified in tinkering with its terms, and shutting this out or taking that in because it has been mutilated by the Supreme court, is to suggest something to this House that does no credit to his recognized intelligence. All we have now as the result of the government's action is a court decision as to what it means. I do not think we needed that decision. I do not think it mattered a whit whether the contract meant what the court said it meant, or whether the contract meant what the majority of the House said it meant two years ago. Taking it either one way or the other, you cannot enforce it in this country. The government, acting in the interests of the people, has to fall away from the contract and is bound to. It fell away two years ago when neither the government nor this House thought the contract had the strict interpretation which the Supreme court thought it had. The fact of the matter is that twenty-five years have so disturbed the current of trade in Canada, and have so altered the whole trend of prices in Canada, that the contract to-day is an absurdity. The contract to-day, instead of contributing to equalization, overthrows every possibility of equalization. It defies every principle on which any rate structure can be based. Is that true or is it an exaggeration? Nobody in the House has claimed otherwise. The Minister of Railways admits it. He expounds it. The Minister of National Defence did the same. I have heard member after member stand up and say the same thing. If that is the case, is it in the interests of the people of Canada that we stand on our rights under the contract? Surely now I am in a position where I can say that parliament is free. Surely I am now in the position where I can say that it is parliament's duty to turn its back upon that contract. The minister says, "Oh, we will keep part of it." Have we any right to keep a part of it and to throw the rest away? If so, where do we get the right? Whoever heard of a contractor assuming to himself the right to do what he liked with part of the contract and put the rest in the wastepaper basket?


Oliver Robert Gould: Did the right hon. member anticipate this day of debate when he or his government allowed the suspension of the Crowsnest pass agreement under the War Measures Act?

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Arthur Meighen: No, we had no prophetic powers. I do not think we would have even prophesied that hon. members opposite would be in the treasury benches, but if we had so prophesied we would never have thought that they would have done this. We suspended the agreement in order that the whole question could be reviewed at a time when such questions would more appropriately come up.


Daniel Webster Warner: Is it not a fact that parliament did, as far as they were concerned, abrogate the agreement, and the Senate said no?


Arthur Meighen: I have not heard of that. If that is history I have never read that portion of our history.


Daniel Webster Warner: I understood that the
Senate was the body that saved the contract and suspended it for three years.


Arthur Meighen: That may possibly be. It does not matter at all to the argument. That would only mean that the Senate decided there should be a time for review later. If so, it means that still less of the responsibility for the suspension instead of abrogation would rest on me, and to that extent I am grateful to the hon. gentleman from Strathcona for mentioning the matter.
I was dealing with that phase of the question as to our right to pick and choose among the clauses of the contract, and then to justify our conduct to-day in relation to that contract. I appeal to the hon. member for Brome (Mr. McMaster), did he ever in his life hear of anything more absurd? It may be the duty of parliament to fix special rates in this House, and I will argue that in a minute. But for goodness' sake, if it is our duty to do so, let us manfully do it and do not let us get behind the shadow of a dead contract, a contract that we proclaim ourselves we cannot possibly adhere to and that the other party to the contract also wants to abandon.


Daniel Webster Warner: If the people of Canada had been satisfied with the right hon. gentleman's work as regards the suspension of the Crowsnest pass agreement and other things, would he not be back here as Prime Minister instead of as leader of the opposition?


Arthur Meighen: My mind is much in the same channel as that of the hon. member for Strathcona. That, I think, is also an irremediable disaster. I have come to the point now whether or not there are such circumstances as would make it the part of wisdom for this parliament to vary the course pursued for years and, in respect of certain commodities, to fix a certain rate. It would take, hon. gentlemen will admit, a very strong argument, to justify such a variation. It would take 'very extraordinary circumstances to justify it. I have tried to listen to those who contend that such is our duty. One says: It is essential for the west; we must have lower rates there in order to function. I know it is very essential for the west to have low rates, but I do not see that it is any more essential for them than it is for the Maritime provinces or for British Columbia to have low rates. It is essential for all of us to have low rates. Others say: Well, in the west we are not sure of low rates, because in the east they have water competition which is a factor in determining rates, and consquently there is likely to be too big a burden put upon us. You can point to similar conditions in all parts of Canada. You can point to many another part of this country where there is no water competition. Is parliament going to assume the duty of legislating rates in this House everywhere except where there is water competition? If we are not, how are we going to justify doing it for one section of the country?


Robert Alexander Hoey: Because of the volume of
freight in the west.


Arthur Meighen: Is it to be assumed that we have a railway commission which will be quite competent to decide the right rate if there is not very much freight to carry, but which is not competent to take into account this question of water competition where there is a large volume of traffic?


Robert Alexander Hoey: But their decision would not be so satisfactory.


Arthur Meighen: Naturally, if the people of one section can get parliament to act towards them in one way and towards the people of the rest of the country in another way, I have no doubt they will be happy. I am surprised to hear this advanced by my hon. friends from the west. Have they not drunk the milk of wisdom from that periodical, the Grain Growers' Guide? Have they not stuck to the bosom of that journal for years and preached from every platform that special privilege must go? How then can they come to this parliament and proclaim in this debate that they are the sworn foes of special privilege in every case except where they are the beneficiaries themselves?


Robert Alexander Hoey: We do not admit that the Crowsnest pass agreement on grain and flour would confer a special privilege on us.
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Arthur Meighen: If it does not, if there is nothing special- desired, how is it that my hon. friends cannot depend upon the railway commission to give them what is fair along with the rest of Canada?


Daniel Webster Warner: On what has happened in the past we are basing our judgment as regards the future.


Arthur Meighen: If the railway commission is not good enough for the west, how can hon. members say in this House that it is good enough for the Maritime provinces and British Columbia?


Daniel Webster Warner: We do not.


Arthur Meighen: Then the hon. gentleman here is ready to abolish the railway commission and to fix rates in parliament.


Thomas Alexander Crerar: Where does the special
privilege exist under the Crowsnest pass agreement?


Arthur Meighen: If there is none-


Thomas Alexander Crerar: May I interject a remark? My rigjht hon. friend made the assertion that there was a special privilege under the Crowsnest pass agreement.


Arthur Meighen: Certainly I did, because nobody in this House would be demanding it if there was not.


Thomas Alexander Crerar: Wherein does the special privilege exist?


Arthur Meighen: Because parliament is
fixing maximum rates. It is always a special privilege to have maximum rates fixed. I do not say that it is not a good thing; but if it is a good thing for one part of the country, it is a good thing for another, and if one part gets it and another does not, it is a special privilege.


Donald MacBeth Kennedy: Where
does the special privilege arise in view of the (repeated statements of the Board of Railway Commissioners that rates in the west have been higher than they were in the east generally? They have made that statement repeatedly and I will read them to the right hon. gentleman to-morrow.


Arthur Meighen: The hon. gentleman is Still on a worse com than he was at first if. that is the case. If there is no special privilege at all, and if all other rates are put on a parity with Crowsnest pass rates, then why ask for legislation?
[Mt. Hoey.]


Donald MacBeth Kennedy: That is not the point. The right hon. gentleman says that the Crowsnest pass agreement is giving a special privilege.	.


Arthur Meighen: The railway commission has never held that there is discrimination against the west. The railway commission do not hold any such view, because it is instructed by the law of Canada to remove any discrimination that can be removed. The head of the Canadian National Railways, not two weeks ago and not a hundred yards from this place, declared that grain rates in western Canada were 50 per cent lower than corresponding grain rates in the United States.


Donald MacBeth Kennedy: That does
not affect the matter.


Arthur Meighen: Not only that but the
head of the other railway said so also. But that is not the point. The point is this, that if the Crowsnest pass rates are only rates of a level that could prevail over the whole country, as the hon. gentleman wants the House to understand, why does he fear that the Crowsnest rates will not be maintained if the railway commission is allowed to deal with them?


Robert Alexander Hoey: For protection, because of
the absence of water competition.


Arthur Meighen: Will the hon. gentleman do this also for every part that has not water competition?


Robert Alexander Hoey: No, because they are not so vitally concerned.


Arthur Meighen: They are not? They
are just as vitally concerned as any other part. How does the hon. member think he is in a special place of danger?


Robert Alexander Hoey: Will the right hon. member name any territory as vast?


Arthur Meighen: The central part of
British Columbia.


Robert Alexander Hoey: There are no people there.


Arthur Meighen: There will not be any people if other people are getting all the advantages over them. There are people in the inland parts of Ontario and Quebec that are not affected by water competition in the slightest, larger populations than the whole of the west. Hon. gentlemen have been simply covering themselves with feathers on this matter. They have no case to stand on at all. I do not believe if the people from

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western Canada let the whole Crowsnest pass rates go and allowed the railway commission a free hand that, in the course of a very short time, there would be any higher rates than there are to-day.


Mr. MORRISON:: How is it that the railways are so anxious to get this Crowsnest pass agreement abolished?


Arthur Meighen: Anybody would be
anxious to get it abolished.


John Morrison: So that they would be able to get higher rates. Everybody knows that.


Arthur Meighen: The railways cannot give in other parts of Canada the rates which they could give if the railway commission had a free hand.


Daniel Webster Warner: Does that not mean that the west would pay the difference?


Arthur Meighen: There are undoubtedly
portions of the west to-day that, in my judgment, are paying under the Crowsnest pass agreement lower rates than they would pay otherwise, but the great part of the west, I believe, are not, and that is shown by the offer of the railways two years ago before the committee. The point is this:	If they are
not higher than is fair, than the railway commission would fix, why in the world are hon. gentlemen asking for the continuance of this agreement? Is not the railway commission competent to take these matters into consideration? Let me put the position in this way to hon. gentlemen. If some special consideration should be given to the absence of water competition, is it not the right and the proper function of parliament to declare what that consideration should be, to lay down a principle governing the matter, and to direct the railway commission to follow that principle? Is not that the right course for parliament to pursue?


John Morrison: And what else does the Crowsnest agreement do?


Arthur Meighen: The Crowsnest agreement does not fix any principle; it is merely the application of a schedule fixed by parliament. It is a wholly different thing. This parliament might perhaps be moved to give to all portions of Canada which lack water competition some special advantage. Very well; declare that principle and embody it in your law. That is the function of parliament. But when a certain section come to the government and say, "We want you to fix rates along this schedule for us because we will not depend upon the railway commission, believing that the commission has no regard for our interests at all"-then hon. gentlemen cannot ask the representatives of other parts of the country to abide under the jurisdiction of a tribunal in which they have no confidence themselves.


Thomas Alexander Crerar: Would the right hon. gentleman support that suggestion?


Arthur Meighen: Well, I would need to
see how the law was put into effect. I have never subscribed to the suggestion, but I do say that those who subscribe to it, believing that the inland parts of Canada should have some special advantage, should see to it that this principle is embodied in our law and that the railway commission shall be instructed to apply it. That at any rate is the course they should advocate.


Oliver Robert Gould: Would the right hon. gentleman argue that the people of the west had no need for concern after the action of the railway commission last fall in abrogating the Crowsnest agreement, in regard to which there was dissension among the members of the board itself?


Arthur Meighen: If the west has need
for concern because of any action the railway commission may have taken, then the whole of Canada should be concerned. Hon. gentlemen should be equally solicitous for other parts of the country as they are for themselves, and that is the contention I am advancing. Now, what is to be the attitude of hon. gentlemen towards the representatives of British Columbia? And I take British Columbia only by way of illustration. The Maritime provinces have just as insuperable and invincible an attack against the measure as has British Columbia, and I do not see how any member of this House can go to the Maritime provinces and defend before the people there a vote in support of this legislation. Here is British Columbia declaring, "You give our competitors to the east certain rates, while our rates are such and such a percentage higher. We now call upon you to give equal rates to these commodities going westward." And what does the government say in reply? They say, "Well, we have a pious aspiration in an order in council, and we have conveyed the same pious aspiration to the railway commission, that they will do something in the matter." The minister from that province has expressed a rather lively hope to-night that they will. But how is it that the representatives of British Columbia must rest on a mere pious aspiration while the representatives of three other provinces rest on solid law? Is that fair or just? Is that
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going to contribute to the unity of the country? British Columbia under this legislation is worse off than it was before. When it comes before the railway commission now it is faced among other things -with the railway returns, wthich are affected by this pact. This pact now is extended over the whole northern area, and in the words of the Minister of National Defence (Mr. Macdonald, Pictou) it is now three times what it was by law in the prairie provinces. By law, under this supposedly sacred contract, it covered only thirty-five per cent of what it does to-day, and therefore the whole earnings are affected. When therefore British Columbia comes before the commission it will be told that any reduction is impossible in view of these earnings.


Daniel Webster Warner: Is the right hon. gentleman in favour of extending to British Columbia the privileges which we have under the Crowsnest pass agreement?


Arthur Meighen: I would extend them to the whole of Canada if we could beep the railways going; and so would the railway commission. It is easy for hon. members to get up and say that they are in favour of lower rates here and lower rates there. Hon. gentlemen are safe in doing so so long as they know they will not be in office. But those who are in office must keep the railways functioning.


Daniel Webster Warner: If the leader of the opposition looked at the matter fairly, would he not give British Columbia the same treatment as is given to other places?


Arthur Meighen: That is what I am pleading for.	'*


Daniel Webster Warner: And that is what we are
ready to do.


Arthur Meighen: I say, do for British
Columbia what you do for any other part of the country. But if you cannot do it for British Columbia, for the Maritime provinces, for Quebec and Ontario, you should not do it for any other section of the Dominion.


Donald MacBeth Kennedy: Does the
hon. gentleman suggest that the rates in the Maritime provinces are higher than the Crowsnest rates in the west?


Arthur Meighen: If I were an expert on freight rates I should be on the railway commission and not here.


Donald MacBeth Kennedy: Will the
hon. gentleman take the word of the railway commission?


Arthur Meighen: I will take the word
of the railway commission for the facts as they relate to the west as well as to the east. The trouble is that hon. gentlemen are ready to take the railway commission as an authority for every part of Canada but their own. Again I address myself to the position of hon. gentlemen in relation to British Columbia. British Columbia will have to be denied redress; at least the denial will now be more forceful than ever .because of the extended effect of this agreement. Yet the minister from British Columbia wore a radiant smile, according to the newspapers, when he thought of the great victory he had achieved because of this legislation. Here is the order in council. It preceded the legislation in order that-its publicity would precede the publicity of the legislation; because the order in council has no virtue on earth except from the standpoint of publicity. It has no virtue at all except as propaganda; it is just so much eye-wash, just froth and foam. That is all it is. First of all it is a piece of literature and history; it recites the verdict of the court and all that sort of thing, and the only part that has even the appearance of meaning anything is the last page. I quote from that page the following:
The committee therefore advise that the board be directed to make a thorough investigation of the rate structures of railways and railway companies-
That "rate structures" is the new phrase of this government; it has supplanted all the other favourites that have done duty so long.
-subject to the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities, so as to permit of the freest possible interchange of commodities between the various provinces and territories of the Dominion and the expansion of its trade, both foreign and domestic, having due regard to the needs of its agricultural and other basic industries,-
How novel, how revolutionary that suggestion is.
-and in particular to:
(a)	The claim asserted on behalf of the Maritime provinces that they are entitled to the restoration of the rate basis which they enjoyed prior to 1919;
(b)	The encouragement of the movement of traffic through Canadian ports;
(c)	The increased traffic westward and eastward through Pacific coast ports owing to the expansion of trade with the Orient and to the transportation of products through the Panama canal.
Do hon. gentlemen get the full effect of that? The government says to the railway commission, "We have tied your hands to a certain section of the Crowsnest pass agreement; we have tied them by an act of parliament.

Railuxiy Freight Rates
Now we tell you to go to work and devise a fair and reasonable rate structure; and when you are doing that, you might be good enough to have regard to the claim asserted by those representing the Maritime provinces that they have certain rights." Is there any principle there defined upon which the railway commission can act? None whatever. There is just a dodging of principle, that is all. Having regard to a claim asserted-no expression that there is anything in the claim, not a suggestion of it. Does anybody imagine that they have not had regard to that claim before? What is next?
Having regard to the necessity of encouraging the movement of traffic through Canadian ports.
If there is a member of the commission that has failed to have regard to that in all his work up to date, then the statute should be repealed so that he could be got rid of and another commissioner appointed in his place. The same is true of the last paragraph. Have we had a lot of dullards in the railway commission that they did not know there was a Panama canal, that there was now more traffic westward? It is all right to lay down a principle and tell the railway commission, "Now, go and investigate your rate structure and make it conform to that principle." That as done in 1920. In the judgment of the railway commission of that time they declared they based their decision in part on the necessities of the National railways. We did not tell them to go back and review their decision in the light of the fact that the National Railways were in heavy debt or were built before their time; we told them to go back and review their finding in the light of our declaration that they had to leave the National Railways out altogether. There we declared a principle and took the responsibility ourselves. A reference back on a principle clearly defined means something; but here they define nothing. The railway commission has for twenty years been instructed to investigate the rate structure to make it fair and reasonable and produce equalization as far as possible. And that is all that it is instructed to do here. All this order in council means to the railway commission is simply this:	You, the railway commission of Canada, now set to work and do what you have been told to do for the last twenty years. This is supposed to be consolation to British Columbia and to the Maritime provinces. They are told to rejoice and be glad over the empty words of a futile order in council, while in order to get enough votes in parliament the representatives of 282
those districts are told to go back and rely on rates fixed by this House. Now, is this law, it is equity, is it common sense? I appeal again to the hon. member for Brome (Mr. McMaster). There is no answer?


Andrew Ross McMaster: I am not a member of the railway commission.


Arthur Meighen: No, but he is a member o( parliament, and he has to come to a decision as to this. How can he as a Liberal -who loves that name at least, whatever he may think of the record-how can he vote for legislation that denies every principle of Liberalism, or so-called Liberalism, that has not a particle of equity in any line of it? If any hon. member thinks there is any consolation for his district, unless he comes from the special one, I should like to find how he is going to establish it. All the rest of Canada is told, "Go back and take what solace you can out of these words of the order in .council"-words that have been repeated over and over again for twenty- three years, words that in effect were in the original law, words that to-day are not supplemented by any declaration of principle at all. The w'hole thing is just a waste of printer's ink in order that a good taste could be put in the mouth of British Columbia and the Mari-times before this inequitable legislation was brought down.	*
There is only one course parliament should have pursued years ago, it should have met the problem right face forward and acted upon the sound, safe principle of doing the same for every part of Canada. Then there would have been no trouble to-day. Does anybody imagine that this is going to end the problem? It cannot. I do not care whether the railway rates of the Crowsnest pass agreement are lower or higher than the average level of Canada, so far as this argument is concerned, as long as you have to get a maximum fixed by parliament for one section, while the other sections are denied it, you cannot have good feeling in this country, you cannot have the sentiment among the people that they are fairly treated at the hands of parliament. Whether those rates are higher or lower, the people of the Maritimes, being people of the same composition as the rest of us, are bound to believe that they are under a special disadvantage because parliament would not do for them what it has done for the prairies. They are bound to believe it anyway, and you cannot possibly find any fault with them for so believing. I ask hon. members from the prairie provinces, suppose this legislation were for the Maritimes, and were denied to them,

Railway Freight Rates

would they like to have the members from those provinces stand up and say, "Oh, but we have to have certain rates or we cannot function. These rates are not lower than you are paying out in the west, we assure you they are not." Would hon. members from the west take that for an answer? Not one.


Donald MacBeth Kennedy: It will 'be
time enough to raise the maximum when the other rates are up to the general level.
' Mr. MEIGHEN: Very good. If the position were reversed, and we were fixing maximum rates for the Martime provinces, and some member from the Maritime should stand up and tell him, "Oh, we are fixing these maximum rates, but they are not a bit lower than yours," I should like to hear what he would say. He would get up and say, "Very well, go and fix the other rates. If you want to go to the commission, go yourselves." Would not that be his answer?


Donald MacBeth Kennedy: Not necessarily.


Arthur Meighen: It would be "necessarily," unless he were a transformed being from what he is to-day.


Donald Ferdinand Kellner: We are not fixing the
rates; they were fixed about twenty-seven years ago.


Arthur Meighen: I got past that argument about three-quarters of an hour ago. Perhaps I had not awakened the hon. member at that time. We are fixing rates in this legislation, and this talk about an agreement is simply concealing ourselves behind an imaginary barrier.


Edward James McMurray: Is it not a fact that the Conservative government in 1916 set a special rate on grain from Armstrong to Quebec?


Arthur Meighen: I have no recollection
of the event at all, and I am quite satisfied we did not set any rate. But in war time there are occasions when very quick action is necessary that would not be considered in peace time at all. But I do not think any special rate was fixed by the government at that time.	.


Edward James McMurray: Did I understand the
right hon. gentleman to say that his government suggested to the Board of Railway Commissioners that in considering the rates they should have special regard for the condition of the National Railways?


Arthur Meighen: No, we said the very
contrary. We said, "A great mileage of the Canadian National Railways is premature, a

great deal of it was built, not for commercial profit as was the Canadian Pacific 'railway, but for colonization or other advantages"- that was a euphemism, we did not want to put in the order in council that it was purely for winning elections, so we stated it that way -"and as a consequence it is not fair to the shippers of Canada to-day to load on them the cost of that error; the whole of Canada should bear it. Therefore, come to your decisions wholly without regard to what the necessities of the National Railways may be."


William Daum Euler: Mr. Chairman, my contribution to the discussion will be brief. It is prompted only by the desire to see a solution of this vexed problem that shall be reasonably satisfactory to all concerned. Yesterday the Minister of Railways (Mr. Graham) reviewed the provisions of the Crowsnest pass agreement and the whole course of events leading up to the present situation, and therefore I shall not take the time of the House by going over the same ground again. The outstanding point, in the present debate is that the decision of the Supreme court has left a condition of discrimination so far as freight rates are concerned which is intolerable, and must be remedied. We have, now, to consider ways and means of removing that discrimination. It seems to me that that can be done in any one of three ways: First, to make the Crowsnest rates on the various commodities applicable on all parts of the railways; second, to restore the general rates and abolish discrimination in that way; and third, to give the railway board of Canada a free hand to make such rates as they think are equitable and in the interests of the whole of Canada.
Before going on to discuss these various methods, I should like to say that I believe that special agreements made in the interest of any particular section of the country or of any class of the people, are bad as a matter of policy. I think possibly that might be modified in some cases by the fact that the national interest might be served by a modification of the principle, especially in such a country as Canada, where we have such a diversification of interests that compromise sometimes is necessary. We have, for example, our friends immediately opposite frequently saying that the tariff is a matter of class legislation, and for that reason should not be tolerated. That is combated by a good many members of this House, who say that it is not class legislation, that the tariff is beneficial to the whole of Canada, and for that reason should be continued. Whether it be class legislation or not, it might be held

Railway Freight Rates
to be in the public interest. On the other hand, we have now a proposal from our friends opposite, and I think from the government, that we should enact legislation by way of granting the privilege of rural credits, which might be argued to be in the nature of class legislation,, but which may be desirable in the public interest.


Edward Joseph Garland: I am sure the hon. member does not wish to mislead the House. Perhaps he is not aware of the fact that the rural credits legislation suggested will place no burden on the taxpayers of the Dominion, but will rest only with the provinces that take advantage of it.


William Daum Euler: Perhaps my illustration was not very good, but I think the House will readily see the point I am trying to make. Admitting therefore, as I do, and as I think all will, that class legislation is bad, that special agreements for the advantage of any one section of the country are bad, and also that the matter of freight rate making should not be given to parliament, we have then to consider, so far as I see the question, how far we should depart in the public interest from the principle I laid down, that rate making should not be given to parliament but should remain vested in the Board of Railway Commissioners.
The hon. leader of the Progressives spoke yesterday of the solemn contract of the Crowsnest agreement, and said that because it was a solemn contract, it should be maintained. Now I must take issue with him, and with my hon. friend from Battleford, who stated that that contract cannot be varied without the consent of the western people, and I think the members of the House will believe me when I say that I do that without any animosity whatever towards the people of western Canada. It should be remembered, and I agree in this with the right hon. leader of the official opposition, that that contract was made between the government of Canada, or the parliament of Canada, if you like, and the Canadian Pacific Railway. The consideration for the contract that was given to the Canadian Pacific Railway, something like $3,600,000,-was paid by the people of Canada. I contend that when both parties to an agreement decide and mutually agree to vary or even to abolish a contract entirely, they have a perfectly legal and a moral right so to do. So I do not think this House should be deterred because of the fact that a contract did exist.


Robert Forke: Nobody denies those facts.
282-i


William Daum Euler: I am of the opinion that he said it was a solemn contract and therefore should not be tampered with, or words to that effect.


Oliver Robert Gould: Would not the hon. member also argue that the Board of Railway Commissioners should have approached both parties to the contract before they abrogated *the Crowsnest rates last fall, instead of just *taking the Canadian Pacific side of the case?


William Daum Euler: I do not think it is right to accuse the Board of Railway Commissioners of taking the Canadian Pacific side of it. I am perfectly willing, although perhaps I have not sublime confidence in the board, to give them credit for trying to do what is right, although possibly they may be mistaken in some of their judgments.


Daniel Webster Warner: Does not the hon. member consider that this agreement was made for the benefit of the western provinces, to guarantee them against paying too high a freight rate?


William Daum Euler: I will say that the people of the western provinces were perhaps the chief beneficiaries under the agreement, but not the sole beneficiaries. They were not specifically parties to this agreement. It was an agreement between the government of *Canada and the Canadian Pacific Railway Company.
I would like to refer to the work done by the committee appointed by parliament in 1922, a committee of twenty-five members of this House, who were to make a report to parliament as to whether the Crowsnest agreement should be allowed to come into force or whether its suspension should be continued. I had the honour of being a member of that committee, and that is why I refer to it now. It is no secret to say that I believe the disposition of the majority of the members of that committee was to allow all the rates on the commodities mentioned in the Crowsnest pass agreement, grain included, to be referred to the railway board, and that a new freight rate structure should be framed.


Daniel Webster Warner: Following up my first
question, does not the hon. member think it is only reasonable for the western provinces t.o want to know what they are going to get before they give up the bargain they have already got?


William Daum Euler: The western provinces have only such a bargain as the parliament of Canada in agreement with the Canadian Pacific Railway sees fit to give them. They have
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what they have only by reason of a contract made between the government of Canada and the Canadian Pacific.
If I may get back to the work of that committee, there was a feeling in that committee that in theory at least the whole matter of rate making should be vested in 11 p.m. the railway commission, but there were some of us, and I was one of them, -who felt that in the interests of harmony, in the interests of the country in general, and in the interests of the western people, we might depart to some extent from that principle, and for that reason we advocated and secured that the freight rates on grain and flour should be allowed to come into force according to the terms of the Crowsnest agreement. I say frankly, Mr. Chairman, that I have sometimes within the last few days almost felt that we made a mistake. I am not going to say that definitely, because I have felt that we were reasonable at that time in what we did. But I do say that the proposal made by the government to allow the Crowsnest rates on grain and flour to remain in force, and to widen tremendously the scope and the application of those rates, is such a concession that our friends opposite should support it unanimously and without any objection. I say frankly that I am disappointed at the attitude taken by some of my very good friends opposite in insisting that the whole list of commodities should be restored so far as the Crowsnest pass rates are concerned. Now some of the members of that committee in 1922 compromised pretty heavily. They declared themselves in favour of retaining the Crowsnest pass rates on grain and flour. Some of us to some extent sacrificed the interests of our own constituencies in so doing; I know there is one member of the committee, I do not see him in the chamber just now, and I am another one-who sacrificed the Crowsnest pass rates on commodities manufactured in his constituency. I refer to furniture. Furniture is one of the commodities mentioned in the Crowsnest pass agreement. We were quite willing to forego the lower rates on furniture and to give to the west the benefits of the lower rates on grain and flour because we felt at the time that the west had difficulties to contend with and that we could stand the reduction a little better than they could. At any rate we did that in what we thought was in the national interest.


Thomas Alexander Crerar: Might I suggest to my hon. friend that that suspension on furniture and other articles was only for two years.


Joseph Tweed Shaw: Just for one year.


William Daum Euler: It was only for one year and could be renewed for another year. I may add that at that time we were under the impression that if the Crowsnest pass agreement came into force in its entirety that furniture would get the benefit of the lower rate. However, what we did we did in good faith so far as giving the rates on flour and grain are concerned. Unfortunately in my own case we never got the benefit of the reduced Crowsnest pass rates on furniture.


Donald MacBeth Kennedy: Who does my hon. friend think pays the freight on a carload of furniture going from his town to any point in the west?


William Daum Euler: That is an old question
which I think the ex-Minister of Finance (Sir Henry Drayton) answered this afternoon. I have no doubt the westerner pays the freight but I will also say this-that every reduction of freight on a commodity surely assists the sale of that commodity if the price is lowered. But we did not anticipate at that time any such decision as was given later, that the Crowsnest pass rates on furniture and other commodities would apply only to such points as were in existence on the Canadian Pacific Railway in 1897. Because of that, my own city-and I may say that in the constituency which I represent we have about twenty-five furniture factories-we do not get the benefit of the Crowsnest pass rates on furniture, and to give you an idea of the discrimination that exists I shall merely quote by way of example, the rate we have to pay in competition with furniture manufacturers in the city of Woodstock, situated about thirty miles from Kitchener. Woodstock got the benefit of the Crowsnest pass rates of 1897 on furniture to Winnipeg of 86J cents per hundred pounds, whereas from Kitchener to Winnipeg the rate is $1.38 per hundred pounds, an increase over the Woodstock rate of a little over sixty per cent. Our furniture manufacturers, however, are resourceful enough to circumvent that. They bill their goods to the city of Galt, about twelve miles away, and pay that extra rate. Galt was on the Canadian Pacific in 1897 and by shipping from that city they get the benefit of the Crowsnest pass rates. This does not work out so badly, but I assure you our manufacturers consider it is a very great nuisance and an unfair discrimination.
Now, if such a contract as the Crowsnest pass agreement were to be made to-day in the light of the fact that a railway commission exists, one of whose functions is the fixing of rates that are not discriminatory,

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then I would say that the making of such a compact to-day would be in violation of the principles that I believe in that rates should not be made by parliament but should be made by a properly constituted body.


Donald Ferdinand Kellner: Did not the government propose to fix rates under the Petersen contract if it had gone through?


William Daum Euler: Well my answer to that
would be that, under the report submitted to the House the Petersen contract did not come into force. I would also say further-


George Perry Graham: Would my hon. friend
just let me straighten that out.


William Daum Euler: Certainly.


George Perry Graham: Under the Petersen contract the government took the power to control the rates through any machinery it liked. That machinery would probably have been the Board of Railway Commissioners.


William Daum Euler: If that explanation is not
satisfactory I will add this. I have already admitted, and I say now, that conditions may arise in this country that will make it advisable that we should sometimes vary and depart from any strict principle that may be laid down in matters of this kind. The leader of the Progressive party (Mr. Eorke), gave as the reason why we should go further in the making .of rates in this House, the fact that we are continuing rates that were made under the Crowsnest pass agreement. I do not consider that an entirely fair argument. The rates which are now given under the Crowsnest pass agreement on grain and flour are a concession to our western friends, one that I have already justified and can continue to justify under the proposal that is made now. My hon. friends should not take that as a reason why we should decide to go further in the violation of what I consider is a principle.


Thomas Alexander Crerar: Wherein does the concession arise?


William Daum Euler: In that it is a special agreement in which rates are given that are lower than normal rates and beyond which the railway commission is not able to go. They are specially fixed fey parliament and are below the regular rates. That is my argument.


Daniel Webster Warner: If it is a concession given in the case of the eastbound rates on grain and flour, is it not a burden on the western people that by raising the rates on the commodities going west they have to pay more when they come to buy those commodities?


William Daum Euler: If -the rates are raised on
the other commodities going west-and there is as yet no ground for believing that will be the case, these rates are to go to the railway commission. We do not know that as a consequence they will be; it is not saddling the western people with anything that is not being borne equally by the other citizens of Canada.


Daniel Webster Warner: The hon. gentleman has
not answered my question. If the rates are raised on goods going west and those rates are charged in the price we pay for the goods, is that not a burden On the west?


William Daum Euler: I do not think I am called
upon to answer hypothetical questions. I may say, however, that I do not think there is any discrimination in that way. Westerners would simply be placed on the same footing as are all the other citizens of Canada.
We have had a good deal of argument as to whether tates in western Canada are generally higher than they are in the east. I know that when I come to discuss that question I am liable to meet opposition and perhaps enter on debatable ground.


Mr. BIRD :: What does the hon. gentleman mean by "concession?"


William Daum Euler: I was hoping I had got away from that phase of the subject.


Thomas William Bird: Does he mean it is an act of pure generosity on the government's part, or does the observation apply to some right we have in the west?


William Daum Euler: Well I would answer that
in this way: I believe that the west has no inherent right to receive such a concession, but I also believe that it may be in the public interest, it may be in the general interest of Canada, that western Canada should have some concessions that will enable them to make progress and to prosper and thus benefit the whole of Canada.


John Evans: Does the hon. gentleman
mean by "concession" that we are getting a. service which is rendered at less than cost?


William Daum Euler: I was coming to that point in a few minutes. However, I will answer my hon. friend briefly, yes.
I was beginning to discuss the question of rates. It is said the rates in western Canada are higher than in eastern Canada. The leader of the! Progressive party yesterday quoted a good many figures to prove that statement. I could, if I so desired, quote figures which would show that on similar
Railway Freight Rates

distances on internal points in the central provinces rates are higher than for similar distances on internal points in western Canada. I am not going to do that, and I would simply leave it with this observation, that our freight rate structure is such that you would be able to prove almost anything from the rate figures.


Robert Forke: If they are higher, they must be very high, because the internal rates in the west are high.


William Daum Euler: I can show the hon. member a statement in regard to it in black and white, but I will not trouble the House with it now. I Shall leave that point with the statement that in northern Ontario, for example, rates are a good deal higher in many instances for similar distances within the province from Toronto, say, to some point in northern Ontario, than for similar distances in western Canada. That being the case, would my hon. friend argue that special agreements should be made in the interests of people living in northern Ontario? If we do that, where are we going to end? Because the same sort of thing will crop up in different parts of Canada. If these rates are not equitable, sureiy we should be able to trust the fixing of rates to the body properly constituted for that purpose. Something has been said about the fixing of rates in Ontario on the basis of water competition. To be quite frank, I have not attached so much importance to that as have some ethers. There is no doubt water competition has a good deal to do with the fixing of rates in Ontario, but there are many points in Ontario which are not affected by water competition at all. There may be competition along the water front, but in the interior of Ontario that does not apply. I would add this further: Is it reasonable that those who happen to live in such communities as have advantages because of their geographical location must . necessarily be expected to give up any of those advantages for the sake of those who happen not to be so advantageously situated? I am not sure that it is correct to say that because a certain rate is given, we will say in Ontario, in a thickly populated district, so much per mile or so much per hundred pounds for sc many miles, that absolutely the same rate must prevail in another portion of the country where traffic is less dense.


Edward Joseph Garland: No one
suggested that.


William Daum Euler: That suggestion was made by another hon. member. We have an illustration of that in Ontario. As hon. members
[Mr Euler.]
know, Ontario has gone into the development of Niagara power. The municipalities that are nearest the source of supply get the lowest rates, and the other municipalities more remote from the Niagara district do not think that they should receive as low a rate as is enjoyed by the municipalities close to Niagara falls, because the cost of carrying that power to the municipalities more distant is greater than in the other case. I have heard of one or two complaints during the regime of Hon. Mr. Drury, when the suggestion was made that there should be a flat rate all over Ontario, but that proposition was never entertained.
I would lay down this definite principle, so far as rates are concerned: that we must have rates throughout Canada that will enable the railways to live.


Robert Forke: Of course if you provide that the Railway board is the only authority to fix rates we cannot say any more; that settles that part of it, but do you not think the fact that the products of the central provinces have to be transported 1.000 miles either out or in requires some consideration? These provinces are not self-contained in any way. Everything they use has to be taken in, and everything they sell has to be taken out, and these provinces should have some consideration over other provinces differently situated.


William Daum Euler: I am quite willing to agree
with my bon. friend as to that. It is a question how far we can go. I would be quite willing to agree that the rates on grain and flour should be according to the Crowsnest pass agreement, and I think that is a very considerable concession, if I may use that word without getting into trouble. But to say that we should carry the making of rates on all the commodities that might be mentioned into parliament, I think would be very inadvisable indeed.


Oliver Robert Gould: I was going to remark that the hon. member is evidently unaware that the Prime Minister positively stated on his tour in the west last fall that water competition was a factor in the fixing of railway rates.


William Daum Euler: I have not contended that it had no bearing at all. I said I did not believe it had quite the importance that was sometimes attached to it. It has been claimed that western railway business is very profitable, and the inference is that the west is being discriminated against in favour of the east. Now if I may do so without arousing undue antagonism, I should like to say a few words

Railway Freight Rates
in regard to that. I have not any extensive figures with regard to the Canadian Pacific Railway, but I have it on very good authority -almost as good authority as one can get- that so far as the transportation of grain in western Canada by the Canadian Pacific Railway is concerned, their operating expenses are 98 per cent of their revenues; that they make money on the short haul, but lose money on the long haul. That leaves a margin of only 2 per cent. That margin of 2 per cent does not nearly cover the fixed charges and overhead which must be taken into account when you arrive at the net profit, so that the statement is made that the carrying of grain even ;by the Canadian Pacific Railway is not profitable.
Coming to the National Railways, the figures have been quoted before and have been questioned, but I have not yet seen them disproved. In the central region, in the provinces of Ontario and Quebec, the figures show an operating profit last year of $16,433,446.96. The United States division showed a profit of $5,480,162.25. The western region showed an operating loss of $1,124,353.49, and the Atlantic region showed an operating loss of $3,545,004.24. These are either operating profits or operating losses, without taking into consideration, as I said before in the case of the Canadian Pacific Railway, the overhead or fixed charges. The president of the National Railways, before the committee on National Railways and Shipping not very long ago, made the statement-and hon. members have probably read it in the account of proceedings-that the Canadian National Railways lost money on every bushel of grain shipped eastward. That was an important [DOT] statement, made by an authority and deserves some consideration. I might add also that something has been said at times with regard to rates in the United States-


Thomas Alexander Crerar: I would like to clear up
that point. I understood my hon. friend to say that the chairman of the National Railways said that the railway lost money on every bushel of grain shipped eastward. Was that from Fort William eastward, or from prairie points to Fort William?


William Daum Euler: , Shipped eastward from any point in the prairie provinces, I think.


Robert Forke: I think the hon. member
for North Waterloo saw the statement of President Beatty at New York, that if the Canadian Northern had been content with their prairie lines to Fort William, they would have been the richest men and the richest railway in the world to-day.


William Daum Euler: Did he say that they would
make the money out of carrying grain or by selling land?


Robert Forke: The hon. member cannot
get away from it like that.


William Daum Euler: I do not know. I have not seen the statement.


Robert Forke: The hon. member was speaking about the deficit on the western lines and, of course, that includes all those fool lines that were built by authority of this parliament and for which the west is not to blame, such as the line running up to Prince Rupert the operation of which must entail great loss and the duplication of lines throughout the west-lines that were never needed.


Andrew Ross McMaster: The Hudson Bay railway.


Robert Forke: No. The Hudson Bay railway paid for itself. You cannot charge that up to the western lines. If you take just the prairie division where they are performing a useful function, they are paying institutions.


William Daum Euler: I am quite willing to accept that observation, but I have never at any time heard that the westerners disapproved any of those lines while they were being built.


Robert Forke: This parliament must assume the responsibility for them.


William Daum Euler: Very well. I am coming a
little later to figures, which do not include the line running to Prince Rupert-which deal entirely with grain and which figures, I think, are quite authoritative. I was going to quote here some figures which I have with regard to rates in the United States.


Oliver Robert Gould: If the hon. member's statement is correct-and I am accepting it as correct-that there is a deficit on the National railways at the present time in moving grain eastward, is it not foolish to vote $5,000,000 for the Quebec harbour?


William Daum Euler: I am sure the committee
does not expect me to go into a debate on the merits of the Quebec harbour.


Oliver Robert Gould: The point is there just the
same.


William Daum Euler: It is stated by the National
railway authorities that if the general rates that now apply on the Great Northern railway in the United States were applied to the
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National railways in western Canada, the revenues, and consequently, the operating profits, would be 820,473,000 greater than they were.


Donald MacBeth Kennedy: Is that on the same volume of grain?


William Daum Euler: I have been fairly patient,
I think, and I will give the hon. member an opportunity in a moment. It is also stated that if the rates on the Northern Pacific were applied to the National railways-and this applies to general traffic-the revenues and consequently the operating profits would have been $24,608,000 greater than they were, an amount sufficiently large, if added to the operating profits which the National railways actually had last year, to pay the fixed charges to the general public.


Mr. COOTE:: Was that in 1924?


William Daum Euler: Yes.


Mr. BROWN:: What does the hon. member think would have happened to the men who were paying those rates?


William Daum Euler: A little later I will give
hon. gentlemen the reason for my making these remarks. I might say now that I am not giving these citations in order to advocate that rates in western Canada should be increased. That is not my purpose at all.


George Gibson Coote: Has the hon. member the
figures showing the quantity moved by the railways in the United States?


William Daum Euler: I have not. I merely have
the net results. The revenue in the western region of Canada in 1924 on all commodities other than grain averaged 11.23 mills per ton-mile. If grain were included, then those revenues shrink to the astonishing figure of 7.63 mills per ton-mile as compared with the central region of 11.12 mills per ton-mile for all traffic. Those are official figures, and I think they would tend at least to confirm the view that grain is being carried at a loss. The operating loss on the Nationals, as was given this afternoon, on grain in western Canada was in 1923, $6,000,000. I am giving it just in round numbers. Last year, in 1924, the operating loss on grain was $5,812,000. I would draw attention to this significant fact, because it goes to prove what I have said before, that when less grain was carried-because less was carried in 1924 than in 1923- the loss was slightly less. I am going to leave that rather disagreeable subject, because I admit that I dislike to mention facts that are unpalatable to my western friends.


John Evans: Was that loss occasioned
on the western division or the eastern division, because the hon. gentleman must remember that there are two rates?


William Daum Euler: My information gives that
as being a loss sustained on the western division. I am not giving these figures, showing that railway business in western Canada is not profitable, and certainly not so far as grain is concerned to urge an increase of western rates, but I give them to impress, if possible, on my hon. friends opposite that, after all, the proposal which is made in this bill is a very generous one and one which, it seems to me, ought to be accepted without much protest.


Mr. BRISTOL:: In reference to the matter that the hon. member is speaking about, has he seen a report that was distributed, I think, to nearly every member of parliament, by the Canadian Pacific, that rates allowed to our western people were nine cents per bushel less to the head of the lakes than rates that are allowed by the United States railways to the American farmers? I have a copy of it.


William Daum Euler: I have not seen that particular statement, but I have seen a similar one which shows that rates in the western states are a good deal higher than they are in Canada.


Thomas Alexander Crerar: We have heard that for
years.


William Daum Euler: If my figures are correct,
then under the proposal that is at present before the committee the government maintains losing rates on grain in the interest of the producers of western Canada. That means a great deal. It is giving more under the proposal that is now before the committee than was enjoyed by western Canada formerly, because, as has been stated by the Minister of Railways, it extends the scope of the application of those rates two-fold. The application of Crow rates is extended to all lines now in existence, both Canadian Pacific and Canadian National, and as well, I presume, to all lines that will be constructed in the future unless a change is made later on with regard to grain rates.


George Gibson Coote: I think the hon. member
said that the president of the National Railways stated that they had lost money on every bushel of grain hauled eastward. Did he make a similar statement with regard to grain hauled westward?


William Daum Euler: He did not. He said that
he makes a little money on grain hauled westward.

Railway Freight Rates


George Gibson Coote: Would the hon. member be
willing to give his opinion whether the farmers of Alberta should not have a similar rate westward to that which they have eastward?


William Daum Euler: I would say this, that I do
not like the idea that there should be any discrimination. If it is at all possible-I should like to see the same rates from the prairies to Pacific ports, proportionately speaking, as those that apply on grain going to the east. If these are facts as I have stated them, I want to repeat this, that I think our friends opposite ought to appreciate what is proposed in the legislation now before the House. Discrimination must be removed. I do not believe there is one hon. member in the Progressive party who will say otherwise. We have in Ontario a condition of affairs that is, perhaps, not fully appreciated by our hon. friends from the west, but it cannot be allowed to continue. Who shall remedy it? There is only one unbiased body in this country, a body specially created for that particular work. That body is the Board of Railway Commissioners, and one of its most important functions is the fixing of rates.


Donald MacBeth Kennedy: The hon.
gentleman suggests that discriminations should be abolished. Does he mean discrimination as between different territories in the west, or does he mean that in so far as it is possible for the railway commission to do so, the general level of rates east and west ought to be the same.


William Daum Euler: I do not know that I can go into any extended argument on that point. I say that there should be no unfair discrimination against any interest or any class of people, or any industry or commodity, east or west, north or south, or in any other direction. I stated at the outset that I believed in the principle that all rates should be fixed by the railway board and not by the parliament of Canada. We are departing to some extent from that principle inasmuch as we are allowing by act of parliament the continuance of the Crowsnest rates on grain and flour. But I am willing to compromise to that extent, and I am doing so for the same reason as influenced me in 1922 as a member of the committee; I feel that reduced rates on grain will be in the interests of harmony as well as in the interests of the country as a whole.


Donald Sutherland: If the hon. member is agreeable to having these preferential rates on wheat and flour, why not extend them to live stock, which are grain-fed? Why not
extend the principle further if you extend it at all?


William Daum Euler: I am free to admit that I may be open to a charge of inconsistency in violating the principle I have laid down; but it is merely a matter of the degree to which we think it advisable to go in matters of this kind. I do not desire to go any further ini violation of that principle than we have already gone in the legislation now pending.


Donald Sutherland: Does the hon. member not think it would be better to have the rates apply to live stock?


William Daum Euler: If it is advisable to make a concession in relation to grain and flour it might be advisable to do the same thing in the case of live stock. But possibly somebody would want the rates applied to building material or agricultural implements or other articles. The varying of the principle cannot be carried too far.


Donald Sutherland: Certainly.


William Daum Euler: There are occasions when it may be in the interests of the country and of good business-I am not going to say good politics, because I do not care much about that-to depart from a too strict adherence to any particular principle.


Robert Forke: It shall be counted to you for righteousness.


William Daum Euler: machinery, which ordinarily is in the same rate classification as agricultural implements, carries a rate of about $1.08 per hundred pounds from Toronto to Winnipeg. The manufacturers-or rather the consumers, we will say, because it is argued that the consumers pay the freight-might very well say, " Why should we be discriminated against in favour of the users of agricultural implements? That is only one instance. Coal oil is another. The Crow rate from Toronto to Winnipeg is 65J cents, but coal oil ordinarily is in the same rate classification as all other oils; yet all other oils are required to pay a rate of $1.14. Would that not constitute discrimination?


George Gibson Coote: How could it be discrimination when these articles are covered by special agreement made in 1897?


William Daum Euler: We are not recognising the agreement of 1897 now; henceforward the conditions will be different. But suppose we consider the suggestion that these articles that are now in the Crowsnest agreement should all be restored and the Crowsnest rates made applicable all along the line, on all lines of railway. What would happen? You would immediately have requests from those shipping similar articles and who were being charged a higher rate, for equal treatment and you could not fairly refuse them the same rates. So that the whole situation bristles with difficulties that may not be at present apparent to hon. members.
The railway board is charged with the duty of making rates fair and equitable to all. We have set up the board to do that work. Why then not let the board perform that duty? They are infinitely better qualified to make these rates than are members of parliament. If parliament has no confidence in the railway board-and that sentiment has been expressed by some hon. members-then the remedy is not to throw the business of rate-making into this House; the remedy is so to constitute your board that you will have confidence in it.


Donald Sutherland: Why not give the board full control over the whole matter, if that is the hon. member's opinion?


William Daum Euler: I have answered that question already.


Donald Sutherland: But you are approving of this bill.


William Daum Euler: Yes, and I have already
stated my reason for so doing. In conclusion, I would appeal to my hon. friends opposite, for whose needs we on this side of the House have the greatest sympathy, to accept the
	.
proposal which is now made in this legislation. It may seem to them to be a yielding of some advantage which I think is more fancied than real, because in the present proposal they are receiving a great deal more than they now have under the law as it is construed by the courts. If they can accept this measure it will show that they appreciate the fact that sometimes it is necessary to make some compromise; and if they do this I believe they will find it in the end in the general interests of the country.


Mr. JELLIFE:: Will the hon. member explain how the railway commission fixes rates, in other words, who are the chief architects of these so-called rate structures?


William Daum Euler: It is regrettable that the hon. member was not in the House this afternoon when the member for West York (Sir Henry Drayton) was speaking. As ex-chairman of the Board of Railway Commissioners that hon. gentleman is much better qualified to go into the intricacies of rate-making than I am. I have a suspicion however that railway rates in the past have been fixed on the basis of what the traffic will bear.


Mr. WOODSWORTH:: Mr. Chairman, the ground has been well covered, but as a representative of Winnipeg I feel I must join with other western members in protesting against the proposal contained in the bill now before us. Urgent appeals have been made that we should view this from a national standpoint. I submit that any truly national policy is dependent upon its meeting the needs of every section of the community. The people of the west feel that this measure will not meet their needs. I believe that measures of this kind are the sledge hammer blows that are driving the wedges that are separating the various parts of Canada. I cannot but utter a warning to the government from another angle altogether to that taken by the leader of the opposition

if measures oi this kind are persisted in you cannot expect to maintain a united Canada. We all pleac for unity, but that unity is possible onl>
under certain conditions. The existence oi the west is dependent almost entirely upon proper transportation. Those who have lived all their lives in the east perhaps can hardly realize how different the west is in this regard. Here for a hundred years communities have lived more or less self-contained, their markets to a considerable extent close at hand. But without transportation the west would still be in the control of the Indians; and if we do not give suitable transportation

Railway Freight Rates
rates the west might as well revert to the Indians. Make freight rates prohibitive and you strangle our agriculture. The markets of the west are not local markets. We are told again and again that it is well that we should build up industries in order that we might have local markets. Suppose we should attempt to do that in the west where would the east be under those circumstances? The people of the east are dependent upon the west, to a certain extent at least, for their markets, but those markets are available only so long as we are able to ship large quantities of foodstuffs overseas. I repeat, our western markets are not local, and that should be taken into consideration
This bill deprives the west, as has been repeated again and again, of certain statutory guarantees. And this is the main objection -it offers no satisfactory guarantees in return. It leaves the west to the tender mercies of the railway commission. Now, we may as well frankly recognize that the west has to a considerable extent lost confidence in that commission as now constituted. It is not merely a question of personnel. It is based on the fact that the commission is very largely working on principles which cannot continue to be applied if the west is to prosper. The commission is located more or less in the east, it is subject to the principles and ideals pertaining to this part of the country-principles and ideals which no doubt are held by the majority in Canada-and thus it cannot jbe expected to formulate policies that will meet the needs of the west.


Andrew Ross McMaster: Are the principles and ideals of the west essentially different from those of the east?


James Shaver Woodsworth: Yes, in some very important points.


Robert Alexander Hoey: Free trade.


George Gibson Coote: Ten per cent dividends;
we think five per cent good enough.


James Shaver Woodsworth: One or two of
these points I should like to mention. We all appeal to general principles, and no one is more fond of doing so than my good friend from Brome (Mr. McMaster). The trouble is that people who hold the most diverse views and advocate the most adverse policies may appeal to the same general principles. The whole matter is one of the application of those principles. For instance, at the present time we hear a good deal about equalization. We all say, if we could only have equalization-whatever that means-we
would all be happy. But what do we mean by equalization? As soon as we begin to define it we are all at sixes and sevens again. As I have heard this word repeated so often, I have thought of the little story that is familiar to many of us of the old Scotch lady, who returned from church greatly edified. On being asked the cause of her elation, she answered, "'Oh, it was the sough of that blessed word Mesopotamia." I am inclined to believe that the government is trying to lull the country into a sense of -false security by repeating frequently enough that remarkable word-equalization.
The hon. member for Mackenzie (Mr. Campbell) has pointed out to-day that this bill makes no provision whatever for equalization of rates as between provinces. I submit we might very well go further than the demand of the -hon. member for Mackenzie. The hon. member for North Waterloo (Mr. Euler) hardly likes to admit that geographical location ought to have any very great weight in the determining of freight rates. I submit that it is not an unheard of principle that geographical location should very decidedly determine rate policies. Let me give a very simple illustration. We are all supposed to be here on equal terms. When I come from Winnipeg my fare is paid by the government; the fare of the member for Skeena (Mr. Stork) is also paid by the government; but his fare is very different from mine, and mine is very different from that of a member from Montreal. However, the arrangements are made in such a way as, approximately at least, to equalize the position of all of us. I wonder if that principle were applied to the western farmer where we would be. Supposing we tried to place the western farmer in as good a position in regard to the world markets as is the eastern farmer? The member for Brome asked me a little while ago1 wherein our principles differ. I should like to put that proposition to him. Will he admit its soundness? Its application would mean the elimination of freight rates entirely as far as payment by the west is concerned.


Andrew Ross McMaster: And it would mean that the western farmer would pay a very great deal more for his land.


James Shaver Woodsworth: It might. But I
imagine some eastern people would be very loath to admit a principle of that kind. To a very considerable extent we have admitted that principle in dealing with our postal rates, and I can send a letter three thousand miles for exactly the same charge as I can send another letter a mile. I am
Railway Freight Rates

not going to urge that this principle should be applied in this particular case, because there are a great many other factors entering into it-for instance, some people think we have better land in the west-but I would urge that this question of geographical location cannot be ignored, and that behind the plea that is frequently made, "In the east you have water competition," there lies this further geographical fact, that the industry of the west is almost entirely built up on our transportation system, and that unless we have that transportation system arranged on such a basis that it is possible for the west to produce at a reasonable cost, the west will be unable to carry on.
The right hon. leader of the opposition spoke against special privilege. He suggested1 that the west claimed special privileges. Again let me refer to my illustration of the payment of the transportation expenses of the members of this House. Would anyone seriously claim that because the member for Skeena is paid say $100 for his transportation expenses and the member for, say George Etienne Cartier (Mr. Jacobs) $5, that there is a case of gross discrimination, a case of special privilege? I think not. The fact is that by paying one member much more than the other we are simply bringing about a measure of equality. These are some of the principles that underlie this very complicated question that we have before us. We have heard the appeal made again and again in this House that the freight rates must permit the railways to live. I should like to place side by side with that, this plea, that the freight rates must permit the west to live. This is all we ask. Let me say that I do not think that the majority of the members of this House, even although we have been trying to make out our case here during the last four yearn, yet realize the serious situation that exists in the west.


Donald Sutherland: How does the hon. member justify paying the members of this House outside the 400-mile limit 10 cents a mile, whereas those within 300 miles of Ottawa get nothing?


James Shaver Woodsworth: I do not know that I would attempt to justify that.
Mr. (SUTHERLAND: That is what you have been attempting to justify.


James Shaver Woodsworth: Oh no, something very different indeed.


Donald Sutherland: That is the regulation to which you have been referring.


James Shaver Woodsworth: My reference was simply by way of illustration. I am attempting to put forward the principle which I think should not be lost sight of in considering this question.


Donald Sutherland: My hon. friend will admit that the members of this House outside the 400-mile limit have a free pass, and they collect 10 cents per mile additional coming and going, and those within the 400-mile limit do not receive anything.


James Shaver Woodsworth: I am sure the hon. member does not intend me to go into that matter. I understand that the amount paid the members is by way of allowance for travelling expenses, not for transportation.


Donald Sutherland: It is for transportation.


James Shaver Woodsworth: Let me review very briefly the situation as it appeals to some of us who make no claim whatever to being experts in this field.
The Crowsnest agreement we regard as a contract. I think that is admitted. The underlying principle is that of safeguarding the west iby maximum rates. The courts have decided that the agreement stands, but have robbed it of value. It is the duty of the highest court, the parliament of Canada, to give effect to the underlying principle. I do not know that I need to enlarge upon that statement. We are not insisting upon the agreement, according to strict legal interpretation, being maintained. We recognize that the situation is absolutely anomalous, that there must be changes, but we do say that parliament, as the highest court of this country, ought to give effect to the underlying principle, that of safeguarding the west by maximum rates. I quite agree that parliament is not the body to erect a freight rate structure. Any of us who has even glanced over the schedules realizes the difficulties, and these have been pointed out at length to this House, but I would urge that it is the duty of parliament to decide on basic principles.
The proposed legislation concedes part of the agreement. Why not the whole? It is all very well for the member for North Waterloo (Mr. Euler) to admit generously that he is not quite consistent in conceding a part, but I submit that underneath that admission, there is more or less a recognition of the real difficulties which are inherent in the situation, and the concession is in reality a concession to certain rights that ought to be recognized. The only reason given by the Minister of Railways for the rejection of the recognition of the whole principle is that the revenues of

Railway Freight Rates
the railroad would not stand it. He offers no figures in substantiation, and, more serious still, he offers no alternative.
I would submit, Mr. Chairman, that there are alternatives. Sooner or later we must change the entire basis on which the revenues of the railways are collected. We all know something of the political jobbery, the incompetence and graft that have characterized the history of the construction of railways in Canada. I do not intend to go into this matter, but merely by way of illustration let me call attention to one or two facts as given us in the Drayton-Acworth report back in 1917:
The property investment of the Canadian Northern Railway system is stated in the balance sheet of June 30, 1916, at $494,112,489.34. This figure admittedly has been written up to include $100,000,000 of capital stock. And this stock, as we have already said, was issued without any cash consideration. We have endeavoured to ascertain the actual cost of the system. From the company's official reports and special statement supplied to us, we have ascertained that the maximum cash investment that can have been made in the property is $383,302,451.33.
Thus fictitious capital stock is made a charge upon production. One other statement with regard to the Canadian Pacific railway. Here is a summary of the government aid that has been granted to the Canadian Pacific railway:
Completed road and surveys cost the government	$37,785,320
Cash subsidies	 66,905,481
Lands sold	123,810,124
Total public assistance	 228,500.925
Company's valuation put on unsold lands.. 119,259,000

The public has very largely paid for the road, and then private enterprise demands dividends on government grants. It is possible, I urge, quite possible, that instead of saying that we will allow the railways to live, that is, to pay dividends on these huge sums, we might alter the whole basis on which we compute these dividends.
One other suggestion that I would offer in closing has been put forward on several occasions during this session of the House, and that is the amalgamation of the railways into one system. That, it would seem, is the only ultimate solution that lies before us. It is inevitable sooner or later; why 12 m. not face it? We are informed that during the first four months of this year the gross earnings of the Canadian Pacific railway dropped $6,000,000 as compared with the corresponding period of last year. The gross earnings of the Canadian National Railway dropped a similar amount, $6,000,000, over the gross earnings of
the corresponding period of last year. How long can this state of affairs continue? It is being kept going at the present time very largely at the expense of the producer of this country. The labour people are being taxed, the employees of the railroads are being taxed, but worse still they are being laid off in large numbers in order that the railroads may make any showing at all. I need not speak for the farmers and the business men. I repeat how long can this state of affairs continue. We propose by this bill to penalize still further the producers of the west and not only the primary producers but a large number of people engaged in the distributional system. In our city of Winnipeg we are a long way from the seaboard. We are-


Mr. CANNON:: Did the hon. member know it when he got there?


James Shaver Woodsworth: I do not catch
the bearing of the question.


Lucien Cannon: The hon. member seems to think we ought to bring the ocean nearer to him.


Milton Neil Campbell: You can do it by building the Hudson Bay railway. ,


Lucien Cannon: I am talking to the hon. member for Centre Winnipeg; one at a time.


James Shaver Woodsworth: I would say simply that we recognize that Winnipeg and the west are located a long way from the seaboard and therefore labour under certain disadvantages. We recognize that the completion of the Panama Canal and the shipment of the grain westward, which is quite inevitable, will undoubtedly mean some very great changes in the situation. We ask that in the consideration of these freight rates due regard should be paid to the welfare of all sections of the community. We think that is the only basis on which we can maintain our present relations as provinces in one federation. I do not plead for the maintenance of the Crows-nest pass agreement as it is to-day-I can see as everybody must that it should be revised-but I should like to plead for the recognition of the underlying principle, that is the maintenance of certain maximum rates, and I do so on the ground of the peculiar geographical position of western Canada.


George Perry Graham: Some of the older members on both sides of the House, outside of ourselves, think it is about time to adjourn as we have to meet to-morrow morning at 11 o'clock. I had hoped to have this bill reported in its entirety from the committee to-day, but it looks as if we would have to take an
Railway Freight Rates

hour or so to-morrow forenoon. But I do want to say seriously that I think the majority of the House will agree with me that this bill must be finished to-morrow, and as early as possible. So without the forty-minute rule being in I would suggest to the members that they arrive at that conclusion unanimously in order that there will be no disagreeable feeling when we put the bill through to-morrow. What I want to do is make a little advancement after a whole day's conversation and to get-


Edward Joseph Garland: Is the
House to take that as an intimation that the government proposes to put on closure tomorrow?


George Perry Graham: No, the good sense of
the members of the House themselves will operate as a closure, I think, to-morrow.


Arthur Meighen: What does the minister
mean by "finishing the bill"? We are ready to finish it now.


George Perry Graham: Putting on the finishing
touches woujd, perhaps, be more appropriate. So that we may make a little progress I should like to have the committee consent that we pass sections one and two which merely repeal the act of 1922 and that of 1919, in order that I may move an amendment to . the next clause. It will then go on Hansard, and be in the hands of hon. gentlemen tomorrow. Then I will ask the committee to rise and report progress.


Donald Sutherland: It appears to me that we have adopted a rather unusual procedure during the present session, and that is of adopting the second reading of bills without any discussion in order that full discussion may take place in the committee of the Whole. This bill did not receive any consideration in the second reading. On the contrary we immediately went into committee of the Whole and then the minister outlined the objects of the bill. The discussion which has been going on since, used to take place on the motion for the second reading. Bearing in mind the fact that this bill is one of the most important measures that could possibly come before parliament it seems to me that it is a most unusual course to follow, and I question the wisdom of even passing one or two sections of the bill at this stage.
Sections one and two agreed to.

On section three-Power to fix rates and to enforce fair and reasonable rate structure.
Mr. GRAHAM moved to add at the end of subsection five the following:
But shall apply to all the territory west of Fort William covered by tariffs filed with the board under the terms of said agreement at the date of the passing of this act, and to all lines of railways now or hereafter constructed by any company subject to the jurisdiction of parliament within such territory.


Edward Joseph Garland: I wish to
ask the minister one question, I did not quite catch his explanation. It is not understood that by allowing this amendment to be read we concur in it?


Mr. MACDONALD (Pictou):: How could
that happen?


George Perry Graham: The reason for moving
the amendment is that hon. members may have it in Hansard before them in the morning.
Progress reported.



FRUIT ACT AMENDMENT BILL


Hewitt Bostock: I have the honour to
inform the House that a message has been receive from the Senate informing this House that the Senate doth not insist upon their amendment made to Bill No. 117, an Act to amend the Fruit Act, to which the House of Commons has disagreed.



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: That as in accordance with the resolution adopted on the 16th instant the House will be meeting at 11 o'clock for the remainder of the session, (the standing committees of the House be given leave to sit while the House is in session.


Hewitt Bostock: The motion requires unanimous consent, of course.


Arthur Meighen: I do not feel like giving
consent to this. I had not heard of it before. I do not know how many committees now have authority to sit while the House is in session, but if many of the committees meet in the morning the attendance in the House of Commons will be even more meagre than usual. I suggest that the motion stand over until tomorrow.


George Perry Graham: The trouble is that the
committees sit at 11 o'clock.


Arthur Meighen: It will not hurt tomorrow.
Motion stands.

Old Age Pensions



OCEAN SHIPPING RATES


William Lyon Mackenzie King: That the report and proceedings of and evidence taken by the special committee appointed to consider a resolution to give the government of Canada control ovei certain ocean rates be printed as an appendix to the journals of the House of the present session.


Arthur Meighen: I cannot consent to that resolution. I think it should stand over until to-morrow.
Motion stands.
On motion of Mr. Mackenzie King the House adjourned at 12.15 a.m. Thursday.
Thursday, June 18, 1925