[Stage Direction]
Mr. S. W. JACOBS (Cartier) presented the second report of the standing committee on standing orders, and moved that the report be concurred in.
Motion agreed to.
2.	Ontario	S 691,630
Quebec	 788,726
Nova Scotia	 26,860
Prince Edward	Island	 4,000
British Columbia	 2,700

Mr. ISNOR:: 1.	Have the Canadian National railways disposed of any properties at Prince's Lodge, Halifax county, Nova Scotia, since January 1, 1933?
2.	If so, how many deeds have been given in connection with sale of properties at Prince's Lodge, Halifax county, Nova Scotia, since January 1, 1933?
3.	What are the names of parties purchasing properties and the dates deeds were given?


Mr. HOWE:: 1.	No.
2.	Answered by No. 1.
3.	Answered by No. 1.


Mr. ISNOR:: 1.	Have the Canadian National railways disposed of any properties in the city of Halifax, Nova Scotia, since January 1, 1933?
2.	If so, how many deeds have been given in connection with sales of such properties in the city of Halifax, Nova Scotia?
3.	What were the names of parties purchasing properties, and the dates deeds were given?


Mr. HOWE:: 1.	Yes.
2.	One letters patent.
3.	A. S. MacMillan-letters patent, dated November 22, 1935.



EXPORTS TO THE UNITED STATES


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

Mr. MALLETTE:: 1.	How many loans have been made up to May 31, 1936, under the Dominion Housing Act. 1935. through authorized institutions, in each of the provinces?
2.	What was the total amount of such loans
made in each province?	.


Mr. DUNNING:: 1. Ontario	 Ill
Quebec	 93
Nova Scotia	 6
Prince Edward Island	 1
British Columbia	 1


Mr. MULLINS:: 1.	What amount of lumber (hardwood) was exported to the United States from Canada from January 1, 1935, to May 1, 1935?
2.	What amount of lumber (hardwood) was exported to the United States from Canada from January 1, 1936, to May 1, 1936?
3. What amount of square shingles were exported to the United States from Canada from January 1, 1935, to May 1, 1935?
4. What amount of square shingles were exported to the United States from Canada from January 1, 1936, to May 1, 1936?
5.	What amount of newsprint was exported
to	the	United	States	from	Canada	from
January 1, 1935, to May 1, 1945?
6.	What amount of newsprint was exported
to	the	United	States	from	Canada	from
January 1, 1936, to May 1, 1936?
7.	What amount of woodpulp was exported
to	the	United	States	from	Canada	from
January 1, 1935, to May 1, 1935?
8.	What amount of woodpulp was exported
to	the	United	States	from	Canada	from
January 1, 1936, to May 1, 1936?

Questions as Orders for Returns
9.	What amount of patent leather was exported to the United States from Canada from January 1, 1935, to May 1, 1935?
10.	What amount of patent leather was exported to the United States from Canada from January 1, 1936, to May 1, 1936?


Mr. EULER:: 1.	M feet.. ..	.. 4,145	$ 155,4982.	M feet.. ..	.. 9.039	313,7133.	Square.. ..	.. 493,805	1,189,2984.	Square.. ..	.. 577.360	1,510,8235.	Cwt	.. 11,722,505	20,315,8396.	Cwt	.. 13,727,873	23,589,7667.	Cwt	.. 3.075021	6,724,3358.	Cwt	.. 3,835,629	7,965,7539.	$6,382.10.	$43,973.



ST. RAPHAEL, QXJE., POSTMASTER

Mr. WERMENLINGER:: 1.	Has Mr. F. Antoine Labrecque, postmaster of St. Raphael, Bellechasse county, Quebec, been dismissed?
2.	If so, for what reasons?
3.	What is the name of the commissioner who made the report recommending the dismissal of Mr. Labrecque?


Mr. ELLIOTT (Middlesex):: 1.	Yes.
2.	Active political partisanship.
3.	Jules Savard.



BANKING AND COMMERCE COMMITTEE, 1934- STATEMENT OF MR. BENNETT

Mr. POULIOT:: Was the Right Honourable R. B. Bennett, then Prime Minister, sworn as a witness before giving his evidence before the select standing committee on banking and commerce on or about May 20, 1934?


Mr. MACKENZIE KING:: No. The minutes of the sitting of March 20th, 1934, of the select standing committee on banking and commerce show that Mr. Bennett "was called, made a statement and was questioned there-



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. MacNEIL:: 1.	Has a wharfinger been appointed at Roberts Creek, British Columbia?
2.	If so, on what date was such appointment authorized, and what is the name of the person appointed?
3.	On what basis, and at what rate is remuneration awarded for this appointment?
4.	Does such appointment involve the imposition of tolls on goods shipped to and from Roberts Creek, British Columbia?
5.	If so, for -what reasons are these tolls imposed at this time?

6.	Are tolls levied on all supplies shipped from Vancouver to Roberts Creek at both points?


CANADIAN FARM LOAN BOARD- BRITISH COLUMBIA
Mr. REID:: 1.	How many applications for loans under the Canadian Farm Loan Board have been made in the province of British Columbia during the years 1930 to 1935, and in each province of the dominion?
2.	How many loans have been granted in the respective years in British Columbia, and in each province?
3.	What was the average amount loaned in each year in British Columbia, and in each province?
4.	What was the total amount loaned in each of the respective years, in British Columbia, and in each province?


Mr. DUNNING:: Return tabled herewith.


DEPARTMENT OF AGRICULTURE-STUDENTS' TEMPORARY EMPLOYMENT
Mr. BOULANGER:: 1.	How many young men from the British isles, studying in agricultural schools or colleges in Canada, obtained temporary positions in the federal Department of Agriculture during the years 1933, 1934, and 1935?
2. How many young Canadians, studying agriculture, obtained temporary positions in the federal Department of Agriculture during the years 1933, 1934, and 1935: (a) at the Ottawa central experimental farm; (b) at the other experimental farms or stations in Canada?
3. How many French Canadian students obtained temporary positions in the federal Department of Agriculture during the years 1933, 1934, and 1935:	(a) at the Ottawa central experimental farm; (b) at the other experimental farms or stations in Canada?
4.	What salary is paid by the various experimental farms or stations to the agricultural students employed by the federal Department of Agriculture?
5.	On what date should the French Canadian students be available in order to obtain temporary positions in the federal Department of Agriculture, or at the Ottawa central experimental farm or the other experimental farms or stations in Canada?
6.	On what date did the students commence their work as temporary employees of the federal Department of Agriculture at the experimental farms of Canada during the years 1933, 1934, and 1935?



TRANS-CANADA HIGHWAY

Mr. MALLETTE:: What amounts were contributed by the federal government to each of the several provinces, for the trans-Canada highway ?



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. C. D. HOWE (Minister of Railways and Canals) moved that the house go into

Government Holidays
committee at the next sitting to consider the following proposed resolution:
That it is expedient to bring in a measure to provide for the construction, prior to the 31st day of December, 1939, of the following Canadian National Railways branch line:-
From Senneterre to Rouyn in the province of Quebec-estimated	mileage, 99 miles;
average expenditure per mile, $60,000; estimated cost, $5,940,000.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, on June 1 the hon. member for Winnipeg North Centre (Mr. Woodsworth) asked if the government would consider the advisability, in making proclamation of a holiday for any purpose, of providing that such holiday shall be with pay. I replied at the time that the government had not had an opportunity to give special attention to the question beyond that which it had received at different times, but that we would give further consideration to it.
My reply to-day is that the government is advised that under the constitution the jurisdiction of parliament to legislate generally in respect of holidays does not enable parliament to impose upon employers liability to pay wages to persons employed on a day labour basis at an hourly rate of payment, in respect of holidays observed as such by the employees. The legislative power possessed by parliament to permit or require a day to be observed as a holiday does not include the power to legislate (pspecting the terms of contracts of employment on that day. Legislation so requiring wages to be paid would relate essentially to property and civil rights in the province, falling exclusively within the jurisdiction of the provincial legislatures, and any such legislation passed by parliament would constitute a colourable attempt to invade the provincial field of legislative power.


Mr. HEAPS:: Arising out of the Prime Minister's answer may I ask whether the government would not be prepared to set an example by paying its employees who suffer the loss of a day's pay when a proclamation is made.


William Lyon Mackenzie King: So far as the payment of civil servants is concerned, there is already provision for the payment of civil servants and the holidays to which they are entitled. I believe it is all part of the one measure. _



CUSTOMS DUTIES EXEMPTIONS


[Stage Direction]
On the orders of the day:
Mr. H. E. WILTON (Hamilton West):: Mr. Speaker, I should like to ask a question of the Minister of Finance (Mr. Dunning). Would he supply me, by mail if it is more convenient, with a list of the Hamilton business concerns which sent him letters of recommendation or commendation in connection with the $100 exemption on United States goods? At the same time I should like to have a list of firms from the same city who communicated with him protesting against the introduction of the item. Would he be prepared to lay on the table of the house the letters or copies thereof?
Hon. CHARLES A. DUNNING (Minister of Finance): I shall gladly give consideration to the hon. member's request.



OTTAWA RESTAURANT EMPLOYEES

[Stage Direction]
On the orders of the day:
Hon. NORMAN McL. ROGERS (Minister of Labour): Mr. Speaker, on Tuesday last the hon. member for Peace River (Mr. Pelletier) stated that certain restaurants located in the city of Ottawa, whose employees up to the present have enjoyed one day off per week, have advised their employees that, with no increase in wages, they will be required to work seven days a week, with one day off every two weeks. He asked if the matter could be investigated by the federal Department of Labour, and should it be found that such a condition actually exists, if the department could take action to remedy the situation.
Pending a decision as to the validity of dominion legislation now before the supreme court, the subject matter of this question is one coming wholly within provincial jurisdiction. There are several provincial statutes which might have a bearing on the matter, such as The One Day's Rest in Seven Act, passed in 1922; the Ontario Factory, Shop and Office Building Act, 1932, and the Mini
C.N.R.-Board oj Directors
[Stage Direction]
mum Wages Act, 1920. There is, however, no action which can be taken by the federal Department of Labour regarding the complaint other than to bring it to the attention of the provincial authorities. This has been done.


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I should like to ask the Minister of Justice (Mr. Lapointe) how soon we may expect legislation with respect to the repeal of section 98 of the criminal code.


Hon. ERNEST LAPOINTE (Minister of Justice):: A bill to amend the criminal code will be introduced next week.



PUBLIC SERVICE-DISMISSALS

[Stage Direction]
On the orders of the day:
Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, some time
ago an order was passed for a return showing the number of dismissals in the public service since last November. Many days have passed, and so far as I have been able to learn the order has not been complied with.


Mr. GRAY:: They are waiting for the one
I asked for.


Richard Bedford Bennett: Why should it wait for
yours?


Hon. FERNAND RINFRET (Secretary of State):: I made inquiries about these returns,
and I understand they will be available within a few days.


Richard Bedford Bennett: There is no reason why
a return covering a few months should wait for one covering several years.


Louis Édouard Fernand Rinfret: I cannot make a reply
now, further than the one I have given.


Richard Bedford Bennett: The hon. member for
Lambton West has made the reply.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
The house resumed from Wednesday, June 3, consideration in committee of Bill No. 21, to amend the Canadian National-Canadian Pacific Act, 1933-Mr. Howe-Mr. Sanderson in the chair.

On section 2-Definition of trustees.
Mr. THOMAS REID (New Westminster):: Mr. Chairman, before the section is agreed to may I say that I was not in the house when it was previously discussed, due to the fact that I was serving on a committee. My reason for rising to-day is to answer some of the criticisms and statements made by hon. members to the effect that it is the intention of the Liberal party through the present measure to come back to a system of political patronage. Many hon. members who spoke yesterday, including the hon. member for St. Lawrence-St. George (Mr. Cahan) viewed with alarm the bill now before the committee, and I felt I could not allow some of the statements to pass which left the impression that the Liberal party was allied with the Canadian National Railways so far as patronage is concerned. Nothing has been said about the other railway in Canada. Nothing has been said about the political patronage exercised by the Canadian Pacific Railway among hon. members of this chamber. As a matter of fact, for many years pressure has been brought to bear by the Canadian Pacific Railway upon hon. members. Even as late as this year it might interest the committee to know that that railway company were much interested in the personnel of the special railway committee which was to be set up.
I am going to mention one instance of political patronage exercised by that railway company among members of parliament. When I introduced my freight rates bill in 1932 I was approached by a high official of the Canadian Pacific Railway Company who, if I interpreted his remarks rightly, threatened me with political death if I dared to proceed with my bill. He pointed out to me what a large concern he represented, and indicated that if I proceeded with my bill I was going to make an enemy for life of this great company. It is just about time the country was .made aware of the outside pressure brought to bear upon members of parliament by the Canadian Pacific Railway, and it might be of interest to find out how many friends of that railway have been approached in the House of Commons. After listening to speeches which were intended to leave the impression that the Liberal party and the Canadian National Railways are close together in matters of patronage, I felt it was about time someone spoke about the other angle of the matter. I am of the opinion that of the two methods, shall I say, which seem to be in existence, the one under which the Canadian Pacific Railway approaches the


Board, oj Directors
members of this house is far more serious and dangerous than that under which any member of parliament approaches any official of the Canadian National Railways.
But the chief reason I rise, Mr. Chairman, is not altogther on that account. I have a suggestion to make which I think would be helpful in the solution of this great railway problem, and it is one which has not been touched on either in this debate or in any other debate in this house to which I have listened.
Every member of parliament is aware of the heavy load which the country is carrying and the heavy interest charges which have to be met each year on the Canadian National Railways, and in all our deliberations with a view to finding a solution of the problem, no one seems to have put his finger on the one spot which, if properly taken care of, might lead to a betterment of conditions and the bringing of our railways up to date. I speak of the labour element. Every attempt that has been made by either of the railways to amalgamate services has brought numerous telegrams and representations from every labour organization in the country, and rightly so, because they fear the dismissal of the rail-waymen. If more serious note were taken of this labour aspect ,of the question, and an investigation made into it as was done in the United States, where there is provision in all their railway mergers for compensating by way of pension the employees dismissed, if we similarly made provision or set up a commission to take care of the men dismissed in any amalgamation or merger of the railways, I believe we might find a solution of this great railway problem. But that aspect of the situation has never been touched. It is true the financial aspect looms largest in the minds of most hon. members. Nevertheless, every time we approach this problem we are met with the question: What shall we do with the men who are dismissed? I am strongly of the opinion that if we set up a commission to look into the possibility of taking care of the men so displaced, we might bring about a solution of Our railway situation. I know that this question has been gone into in the United States and some such plan is afoot there.
Many changes could, of course, be made. In my opinion our whole railway system would have to be brought up to date and modernized. Also there is a lot of material, shall I say, sitting in the various offices of the railways which should be overhauled. Let me give only one instance to illustrate what takes place when a change is made to bring about a betterment in some part of our railway system. In 1934 we noticed as we travelled on
the trains that there was introduced on the menu of the railway dining cars a fifty cent meal at noon and a seventy-five cent or one dollar meal in the evening, but coming to Ottawa this year I noticed that the dining car had reverted to the old charges. On making inquiries I received this explanation as to why they went back to the old prices, and I mention it as an illustration of what takes place when any move is made to bring about betterment in some part of the system. They said that the office staff in Winnipeg objected very strongly to the great number who were dining in the dining car, they were more interested in making two or three hundred per cent profit, irrespective of how small was the number of meals served, than in having a large number of people frequent the dining cars. One could mention dozens of instances of this kind. So long as there are men in the railway offices who are simply dealing with cold figures, so long shall we be disappointed in our efforts to grapple successfully with this railway problem.
To summarize, Mr. Chairman, the two chief points I want to emphasize are: first, the point I made regarding political interference, not in respect of the Canadian National Railways alone, but in regard also to the Canadian Pacific, which occupies a dominant position and takes an active interest in political affairs in this country; and, second, I offer as a contribution toward the solution of the problem the suggestion that we endeavour to devise some scheme of taking care of railway labour that is displaced in any merger. If that question were gone into and some satisfactory arrangement made, as I believe could be done, I think it would lead to placing our railways in a far better position.


Mr. STEVENS:: What is the number of the clause we are considering, Mr. Chairman?


The CHAIRMAN:: Clause 2-definition of trustees.


Henry Herbert Stevens: This is the clause which repeals the section of the old act which provides for the appointment of trustees, and it is the clause upon which I think one may appropriately make general observations with regard1 to the bill.
I believe that this measure and the bill dealing with the Bank of Canada Act are the two most important pieces of legislation which have come before the house this session. They are both significant and undoubtedly will be most important and, I think, vital in their ultimate effects. It is generally recognized that the railway problem is a vital one, and that we ought to give to the railway situation the fullest and most exhaustive
C.N.R.-Board oj Directors

study. Inasmuch as this bill is the only measure before parliament, so far as I can recall, under which one can do so, I wish to take advantage of this opportunity to discuss the question briefly.
Does this bill, providing for the abolition of the system of operation under trustees and reverting to the system of operation by a board of directors, offer an adequate or reasonable solution of the railway problem of Canada? I fear, sir, we have to answer that it does not; in fact I cannot help feeling that it may prove to be a boomerang. In saying this I do not wish to give the impression that I am trying to belittle the bill, but I do think it has in it all the elements of, shall I say, an effect adverse to that which it is expected the bill will bring about.
Studying the situation as far as I have been able to do so, I believe that the trustees have given to this country reasonably good service. We cannot expect them, being human beings, to accomplish superhuman results. This railway system is * huge undertaking. I wonder sometimes whether we appreciate the tremendous magnitude of this railway system, not only its importance in the congested centres of the two great industrial provinces of eastern Canada but its extension to the Atlantic and the Pacific coasts, constituting a railway system that I venture to say is perhaps the greatest in the world to-day. In mileage it almost equals the total of Russia's railway system, although Russia has extended her railways in the last few years; but certainly it equals Russia's railway mileage of a few years ago. It is a tremendous system, and to expect that a new method of management, that which was proposed in 1933 for the appointment of trustees, could show the maximum of results by this time is, I think, asking more than could possibly be expected. But I think it advisable to impress upon the committee this fact: According to the reports, as I study them, reasonable results have been achieved under the most difficult circumstances.
Another point I wish to emphasize is that I do not believe the principle of the original act, namely that of providing every means of cooperation between the two great systems, has had a fair trial. In the first place, I do not think there has been time for a fair trial, and in the second place a systematic attack has been made upon the Canadian National Railways throughout the country during the last four or five years, which unquestionably has been a serious handicap to the management of the road. I do not believe parliament can ignoore that fact. That there has
[Mr. Stevens. 1
been, first, a very serious depressed condition, and, second, a continuous attack from the outside to which the railway as a publicly owned body have had little opportunity or no liberty to reply, has constituted a handicap which is unreasonable and unfair. As a result of that, or perhaps I should say in spite of it, the measure of progress achieved by the trustees deserves commendation rather than condemnation.
If I understand the views of the minister who introduced the bill, he contends that the system of trustee management is such that there cannot be achieved the maximum of efficiency. The matter is referred to in the speech from the throne in these terms:
You will be asked to consider amendments to existing legislation respecting the Canadian National Railways, which will serve to afford a greater measure of governmental authority and responsibility to parliament.
Those are broad and general terms which mean little to those not acquainted with parliamentary language. But to me they are an insinuation or suggestion that there has been a lack of a sense of responsibility to parliament during the time the trustees have been in charge, and it is suggested that a reversion to a board of directors form of control will result in a larger measure of sense of responsibility to parliament and a larger measure of control by parliament over the road. That is a distinct challenge to parliament. It is a definite charge against the system of trustee management. I do not think the facts as disclosed in the annual report of the railway as laid before the committee of parliament on Canadian National Railways and Canadian National shipping will justify any such charge.
I feel it would have been better had this bill been left with the committee, dealt with there and returned to the house with the report of the committee, not only upon the bill itself but upon the report of the railway, which is studied in that committee from year to year. Since that has not been done, all we can do is apply to the study of this bill the information which was disclosed in the hearings of the committee dealing with the management of the road. I have not been a member of that committee for some years, although I was a member some time ago, but I have attended some of its meetings and have read some of the evidence given before it. I am convinced that in the examination by the committee of the officers of the Canadian National Railways or in the report of the Canadian National Railways there is no justification for the charge, the statement, or the allegation, what-

C.N.R.-Board of Directors
ever you choose to call it, that the system of management under a board of trustees has been lacking in efficiency or in a sense of responsibility to parliament. That being my conviction, I find it extremely difficult to agree to the cancellation of that system, which is the purpose of the section immediately before us. I regret to place myself in the position of differing from the Minister of Railways, but I cannot help that.
_ The argument that government ownership is always inefficient has been made so often during the last few years that the public has subconsciously absorbed that conviction. We hear this argument everywhere. I saw it in an editorial in one of the leading dailies only a day or two ago-government ownership is in its essence inefficient. A casual comparison of the results of government ownership with the results of private ownership, as -disclosed by the difficulties of the last six years, will, I think, persuade anyone that while government ownership may be attended by certain inefficiencies, private ownership is not free from similar inefficiencies. How often do we see a reference to that great hole in the centre of the city of Montreal as indicating the inefficiency of this road. I was in Montreal the other day and I walked across the viaduct. I must confess it shocks one to see that ghastly excavation which was to be the site of the foundation of a great terminal structure. However, as I stood there I looked to my left and I saw a magnificent building which at a cost of some 820,000,000 to $25,000,000 was erected by one of the most efficient financial organizations in this country. This great organization undoubtedly has men of the highest ability managing its affairs, yet will any one say that that great structure, which is only partly occupied, was a wise expenditure of that concern's money? The two stand there side by side. One is the evidence of perhaps too great optimism on the part of those who headed the national railways a few years ago, while the other is evidence of the superoptimism of private enterprise.
If we are going to compare the efficiency of government ownership with that of private ow-nership, we must go right down the line. For instance, it is said that we are overbuilt in railways in Canada. So we are. There is no use in attempting to disguise that fact; we might as well meet it frankly. The railways have been built; they are here; yet I notice that the great competitor of this national road is attempting to get into the mining areas north of the National Transcontinental line. No one can deny that we have been greatly worried during the last twenty years because of the building of the Transcontinental. That line has been the occasion of rebuke to those who originated it, but it has since been found that it opened up one of the richest mining areas in the world. During the last few years, perhaps more this year than any other, we have begun to realize the value of this area as a source of wealth for Canada. A railroad which is now government owned opened up that area, but there is keen competition on the part of the other railway, which is under private ownership, to go in there to tap some of these rich areas. I am not for a moment discussing the claims of the two-that comes under another bill-but I am pointing out that while for many years the Transcontinental was looked upon as an example of colossal folly in government projection of railway construction, we are now coming to realize that it did open up vast riches in this country.
And so one might go on with many other illustrations. For instance, it is said that the Canadian National has paralleled the Canadian Pacific. Well, if that is true it is also true that the Canadian Pacific paralleled the Canadian National, or the old Grand Trunk in Ontario and the Grand Trunk Pacific on the prairies. So that both systems have perhaps equal responsibility in the matter of overconstruction, but the tendency is always to put the blame on the Canadian National or the government owned system. I think it is wise for parliament to pause and weigh carefully the measure of responsibility. Though that may be now an unprofitable use of time, nevertheless it is advisable to do it if we are to have a proper idea of the responsibility of the government owned system as against the privately owned railway. I will not pursue the comparison further, but I do suggest that it is worthy of very close scrutiny and examination.
The hon. member for New Westminster (Mr. Reid) a moment ago referred to the question of the rights of employees, and I wish to supplement his observations by emphasizing the fact that the employees of this great system certainly have rights. And those rights were recognized by the chairman of the system in his address to the committee the other day. I should like to read two brief extracts from that address. I do so because I think the whole statement should be carefully considered, but these particular extracts are applicable to the rights of employees and will serve to bring them home more definitely than any language of mine could. In this statement Judge Fullerton says:
When we took office, admittedly the morale of the men was low. They had seen their numbers reduced from 111,383 to 70,625 and
C.N.R.-Board oj Directors

their total compensation reduced from $176,000,000 to $95,000,000. Those whose seniority had so far protected them were uncertain as to the future, their opportunities for promotion slight and their chances of demotion real. They were fearful of proposals for amalgamation and unification, both of which in their view meant disturbance, less work and less pay. I consider it essential in the interests of the railway itself that the conditions of service should be such as to offer at least as much security of employment as do other professions and occupations.
I pause here to emphasize that principle which Mr. Justice Fullerton in his statement has laid down-that the men are entitled to a sense of security in employment. And by the way, this parliament is charged with responsibility not only for the reducing of deficits but for preserving in equity the welfare of its citizens; and in this instance the welfare of these men, their livelihood, their very existence is in our custody in a very direct way. Mr. Fullerton goes on to say:
It seems to have been overlooked that the joint advantage can be secured only by transferring the burden to labour.
I would emphasize that point. That, sir, is one of the principal grievances of workingmen in this and other countries, that as efficiency advances in mechanical development and in other ways, the full burden or almost the full burden of loss is borne by labour. That is inequitable; it is an unfair situation. It is one of the things that civilized countries must face, and we ought to face it in connection with this bill and in connection with the proposals now before us. He says further:
A more equitable arrangement with labour appears to be required and should be provided. If this were done, one great preliminary step towards the accomplishment of any radical changes which might displace labour would be made.
And later on he makes a definite suggestion which I commend to the government and to this committee:
An agreement has been reached between the railway executives and organized labour in the United States providing for the payment of a measure of compensation to employees thrown out of work by consolidation of railway facilities, and I understand that the British railways also made some provision for employees displaced as a result of the amalgamation of British railways into four systems. I have reached the conclusion that the government, the railways and the representatives of railway labour should discuss this matter together with a view to the adoption of some arrangement for the two Canadian railroads as will afford reasonable protection against hardship on the part of those employees who may be displaced by the adoption of cooperative measures.
I listened to Judge Fullerton as he read his statement to the committee, and no one

could help being impressed with the serious nature of this problem as he viewed it. I think that this house ought to pause in the passing of this measure and in the consideration of this whole question so as to ensure that, whatever steps are taken, this phase of the subject will be adequately safeguarded.
Another question impresses itself on my mind. Behind this bill, behind all the discussion, there looms constantly the question of unification or amalgamation. I do not think parliament can disregard it. It might be argued that I am trespassing at the moment upon the rules of the house in introducing that question; but we must not lose sight of the fact that, in the clause immediately before us, we are repealing the section that provides for the present system of management by trustees. That system was inaugurated in this country for the purpose of bringing about ultimately cooperation between the two railways.
One cannot have read the public utterances of persons in high authority on the competing line in recent years without being impressed with this thought-and I am not criticizing Sir Edward Beatty in this matter at all; I think he has a right to his views and it is his duty to those whom he serves to express those views. But we must look at this matter from the standpoint of the welfare, first, of the country as a whole and secondly of the Canadian National system. I have been impressed with this thought, that altogether too much emphasis has been placed by Sir Edward Beatty upon the problem of unification or amalgamation and not sufficient attention has been paid to genuine cooperation with the national system. It may be argued that I am unjust to Sir Edward Beatty in that regard. If I am I regret it, because I hold him in the highest esteem. I repeat that I am not criticizing him for taking any stand he thinks fit to take, but I hold that we as members of parliament should review all sides of the question, and if we differ from him we are bound to give expression to our views. Officials of the Canadian National Railways are prevented from making reply in kind to that sort of argument. For instance, Judge Fullerton or the president of the railway cannot go on the public platform and argue with perfect freedom what he believes to be the best policy; he can speak only guardedly, with reserve and after due consideration of what may be the views of the government-perhaps it would be more correct to say that these officials as such are bound to leave to the government itself declarations of large policy. So they are handicapped, and in the mean-

C.N.R.-Board oj Directors
33S1
time there is growing up or being built up in the country a definite body of public opinion which, according to my view, is unfair to the national railways in that it does less than justice to that great system.
So I raise the question of unification and amalgamation, and I ask, is it the only solution? It is cited by many as the only solution of the problem. I do not think it is. Parliament and the people dare not forget that in the Canadian National railway system we have a magnificent asset, and one of stupendous value. True, there are losses. True, we have had every year a cash deficit. But look out over the world, and particularly over the United States; what railway over there but has a deficit? What systems over there, some of them operating in the most densely populated districts of the country, but have received aid from the federal government in the last few years? So, Mr. Chairman, I think above all things we should fix in our minds the fact that we have in this railway a magnificent asset.
The second thing I want to suggest is-and this is a definitely business suggestion-that one should never surrender an asset at the bottom of the market. There has never been a time in the last fifteen years when it was less advisable than it is now to consider any suggestion for the disposal of this system, unless it was in 1933, when things were a little worse than they are to-day. This is no time to tolerate propaganda of any kind for the disposal of what is known as the Canadian National Railways, the property of the people of this country. I am assuming for the sake of my argument and as a reflection of my own views that we ought not to consider unification,-a term, of course, so broad that you can attach to it almost any meaning you like, though I choose to give it the meaning that I think most people do, that it is merely the modern rendition of "amalgamation."
If there is not to be amalgamation or unification, and in my opinion there should not be at this time, what other things can we do, and does this bill offer any new way of dealing with the problem? In the first place I believe, as I indicated at the opening of my remarks, that this bill will be a retrograde step, because under the trustee system of management it would have been easier than it will be under a board of directors to put into effect some suggestions I am about to make.
Here are some things we can do. I admit none of them are new, and I do not pretend to bring under review all the proposals that one might make. There is the matter of the modernization of the service. I have in my
hand an extract from the Wall Street Journal of May 23, 1936. It is headed: Pennsylvania Railroad Speeds Freight Deliveries, and I would ask the committee to give heed to it, because, in my opinion, if more time were spent in studying practical solutions instead of reaching out for the moon we should make much better progress towards the settlement of our railway problem. The article states:
Simultaneously with the inauguration on Monday of system-wide store door pick-up and delivery of less than carload freight at regular station to station rates, the Pennsylvania railroad will extend the range of its overnight merchandise freight deliveries to include hauls of 400 miles and, in many cases, still greater distances. In numerous instances, second morning delivery will be advanced to first morning, reducing the time in transit by a full day. Later and more convenient closing hours for the acceptance of shipments will also be instituted at many points.
That is a statement of what the Pennsylvania Railway is doing in this one rather limited sphere. That road is recognized as one of the most efficient railways and perhaps one of the wealthiest organizations of its kind on the continent. It is progressive and up to date; perhaps more than any other system in the United States it is giving leadership in the modernizing of methods of handling not only freight but passengers and other traffic. But what does this mean? We have had constant complaints during the last ten years about the competition of trucks; it is a real competition and one that is very difficult to meet-. The Pennsylvania railroad, I believe, has met that competition. In part, but only in part, the Canadian railways are doing the same thing. A system-wide store door pick-up: that is one thing. Going right to the place of origin of the freight, picking it up, taking it to the railway, transmitting it by fast freight to the point of delivery and delivering it to the door of the person or the firm to whom it is consigned: that is one element of the Pennsylvania system. The second point is that they give a fast and assured delivery. If Canadian railways, particularly in the congested industrial and commercial areas of eastern Canada, would do the same, they would render a great service to their systems and in large measure would meet the competition of the trucks. The last point is that although this railroad h-as already given a very generous time allowance for the delivery of freight, it has extended that allowance by careful study and good executive management. I cite this merely as an illustration of what is practicable. It is being done; it is nothing new; and certainly it is something that could be followed
C.N.R.-Board of Directors

in this country with substantial advantage to the railway.
The next point has to do with passenger rates. Within the last two years or more, and particularly within the last twelve months, it has become the practice of the two Canadian railways to give cheap passenger excursion rates. I think that could well be extended. I am not prepared to go into details of schedules and passenger rates, but only yesterday my attention was brought to the fact that the cost of travelling to Ottawa, Montreal or Toronto from some intermediate points is such that it would really be a large outlay to the average citizen, particularly in the small towns and rural districts. And the trains are running nearly empty. Stand on the driveway any morning-as I often do, because I make it a habit to walk along about the time these trains go out

and what do you see? A great engine capable of hauling fourteen or fifteen cars, pulling out with only four or five-a baggage and express car, a mail car, a coach or two and a chair car. You can watch the trains go by day after day, month after month and year after year, and you see in them just a handful of people; yet it costs as much to haul that train empty as full. A real and definite lowering of passenger rates would fill up those trains. I wonder whether it ever occurred to the railways that if this were done the movement of package freight might be definitely stimulated, because if people move about by hundreds and thousands it leads to a certain amount of purchasing, which means a larger movement of freight. These are little things, perhaps, but they would contribute to the solution of the problem. I suggest they could be considered with profit.
Then there is the question of carload lots in freight. The present limits are in my estimation altogether too high. Again I am not going to produce data and statistics, but I assert definitely that the minimum car lot is generally speaking too high. Go to any freight yard and watch the loading of the cars; you see a great freight ear with a tare of 36,000 or 37,000 pounds and you see loaded into that car five or ten tons of freight. Dozens of cars go out only partly loaded; or, if they are held to complete the load, the freight that is put in in small lots is delayed and delivery is slow compared with the fast delivery I mentioned a moment ago. Why is it not possible and desirable for the railways to agree to a ten ton minimum carload, thus assuring rapid movement of that freight?
Another thing that should be studied is the whole question, of railway equipment. I have watched these cars for forty years; the only difference between the freight car of to-day and that of forty years ago is that

the car of to-day has a capacity of fifty tons, or sometimes more, whereas thirty or forty years ago I fancy the capacity was twenty or twenty-five tons. It means heavier, costlier, more imposing equipment, but certainly it has not brought about a larger net freight result.
Turning to passenger equipment, we know what has happened in Europe and in the United States in the last two or three years. Railway engineering experts the world over declare that the error of the last two decades has 'been that railway equipment ran to weight, whereas science called for a lessening of weight. Now they are addressing themselves to the task. Here again is a subject which might well receive the attention of the two great railway systems. A complete renovation of railway equipment would probably take ten years and might well be started now; it would give a large amount of employment. Cost-yes; it would cost a good deal, but in net results in the long run it would pay.
All these things could be done, and many others that I have not time to mention, without any conflict of opinion between the roads. It is not a question of amalgamation and unification. Cooperation in the elimination of competing services is sound provided that those who are displaced are reasonably well cared for. But these other matters would increase the efficiency of the roads, would not reduce employment at all, in fact would lead to an increase of employment. In the long run they would tend to increase the returns to and the efficiency of the roads, and they are not subjects which could possibly be looked upon as controversial as between the two railways.
This bill touches only the form or type of management; it does not offer any solution of the railway problem. I think the whole matter could be summed up with this observation; what the railways need is traffic, and what will create traffic? You cannot have traffic if people cannot buy, and people cannot buy goods if they have not purchasing power. That is why I couple this bill with the Bank of Canada Act amendment, because both measures lead us to a consideration of the same subject, namely, the fundamental economic problem of an equitable adjustment of our economic structure so that there may be a larger measure of purchasing power in the hands of the great body of people. Some have expressed it in this way: that out of the consumer's dollar a larger portion may go to the primary producers, who after all outnumber by long odds the rest of the popula-


Board oj Directors
tioa. If their purchasing power could be raised-and I believe it can be-increased traffic would result and the railway problem would be solved.
I conclude by saying, regretfully, that I see no forward step in this proposal. Indeed, as I said at the outset, the repeal of section 3 of the Canadian National-Canadian Pacific Act of 1933, which is the section that inaugurated the system of trustee management, is a retrograde step.


Mr. W. A. WALSH (Mount Royal):: With *the latter part of the remarks of the hon. member for Kootenay Bast (Mr. Stevens) I am in complete agreement. The railway problem, I need not say, is one of our major problems if not the outstanding problem with which parliament has to deal, and as such it should receive major consideration from the government. The present bill is not such as to lead me to believe that the problem has received major consideration. I need not delve into the history of our railways; that history has been placed on Hansard many times and is there for all to read. I should like to emphasize, however, this fact, that it is a problem which is far too serious to be treated as a political issue. In an address before the Toronto board of trade the leader of the opposition (Mr. Bennett) suggested that the railway problem, more than any other, threatens our national life, and in a recent editorial the Montreal Daily Star suggested that the Canadian railway problem is as an octopus slowly and surely sapping the lifeblood of our country.
There is no question that the railway problem is a very involved one. The point uppermost in my mind is whether or not it is too seriously involved to be capable of solution by any one political party. I am convinced, and I believe many other hon. members feel the same way, that this is a major problem requiring the united action of all Canadians regardless of political affiliation. When I entered parliament at the beginning of this session I had hoped that a problem such as this would receive consideration regardless of political affiliations, but in that respect I have been disappointed.
I should like to amplify certain observations which have been made with regard to railway employees. I have a deep interest in the human aspect of the problem. We must remember that when we are considering a system of this magnitude, when we are dealing with an industry giving employment in Canada to 119,357 persons, the human element is of great importance. The Canadian National Railways employ 65,712 persons, and when we look at these large figures we have
a clear understanding of the magnitude of the system and how it must affect our population. We must remember that many of the railway employees support families, in certain districts large families. When we suggest innovations and changes we must remember that the human element, the employee, is becoming uneasy and uncertain as to the future. We are causing a certain amount of unrest among the employees not only of the Canadian National but of the Canadian Pacific and of other railway systems in Canada. My view is that whatever change we may make in the national system indirectly affects every system in Canada.
At the present time unemployment exists to a considerable degree. A move in the railway field is likely to increase the number of unemployed unless we give careful consideration to the human element involved in the proposed change. I regret very much that so soon after taking office the government elected last October has seen fit to cause unrest among railway employees, who, I suggest, do not deserve that kind of treatment. In such a short space of time the government could not have given adequate consideration to proposals involving the radical changes indicated in the measure before the committee. I agree with the statement made by Judge Fullerton in the report he presented before the committee on railways and shipping on Tuesday morning. He used these words:
Further I cannot conceive of anything more likely to have an unsettling effect upon those engaged in operating the railways than public argument centered on the system, and that whatever satisfaction one might obtain from such controversies they cannot in the end be of benefit to the railways over which I have been placed.
I charge the government with causing a certain degree of unrest and dissatisfaction among railway employees in Canada. They have not acted fairly towards those men and women, and in centres where the people are dependent upon railway employment there is great disappointment with the attitude the government has taken on this major question.
The statement has been made that we are overdeveloped in the matter of railways. With that statement we must all agree, and I need not quote figures to prove its accuracy. In passing, however, I should like to pay tribute to those great men of the past who have made possible our railway systems. We must not forget that the large mileage we criticize to-day was developed in the past by men of vision, men who conceived what Canada would be in the future. Those men deserve our tribute, not our criticism. They builded better than they knew.
C.N.R.-Board of Directors

I look at the railway system as it is centred around Montreal and I think of the tunnel constructed many years ago through Mount Royal. This afternoon there has been reference to a hole in the ground, which is a recent development of the tunnel. Was it as a result of an accident that the tunnel happened to come into Montreal through Mount Royal at the same level as the tracks going into Bonaventure station and over the Victoria bridge? No, it was not. The man who conceived the idea of building a tunnel and approaching the centre of Montreal from the north also appreciated the level of the Victoria bridge and Bonaventure station. He had a vision of the possible development of railway facilities on the island of Montreal, with the result that in the centre of Montreal we have an approach that can be used by any or all railways coming into that city. No, it was not any happy accident that took place in connection with the building of the tunnel. Like all railway developments in Canada, it . was the result of broad vision on the part of the men who conceived it.
The hon. member for New Westminster (Mr. Reid) has made slighting references to the Canadian Pacific Railway Company. I hold no brief for that company, but I do not believe they deserve the harsh criticism to which they have been so unfairly subjected this afternoon. That railway has made the Dominion of Canada possible as a nation. Why should we criticize it as it was criticized this afternoon? It has made a great contribution to our national development and should not be subjected to unfair treatment. The hon. member for New Westminster was not fair in his observations. I do not believe Sir Edward Beatty or any of his officials would connive at an act such as was suggested this afternoon. I do not agree with the hon. member for Kootenay East (Mr. Stevens) in the suggestion that unification is but another application of the term amalgamation. It is not so. Unification is an altogether different term from amalgamation. My friend from one of the western constituencies invited a definition of unification and amalgamation. I gave him a definition of the term, and I thought I had made my definition quite clear and distinct.
I always try 'to do that, but evidently I failed, or else his failure to comprehend a clear-cut definition fell short of my anticipations. The next morning I was greeted with the suggestion that he appreciated my definition for he would find it of tremendous value to him when he sought reelection in his district the next time an election was held.

I deprecate, Mr. Chairman, lowering the discussion of such an important problem as this to the level of the election possibilities of one or two members of the house.
I have suggested that we have been overdeveloped in our railways, and I could quote figures in support of that. We have in this country a population of 225 per mile of railway, and in the United States the figure is 500 per mile. It is my opinion that our railways will never reach a state of efficiency until our population reaches approximately 25,000,000.
In the railway and shipping committee we discussed railway costs and the losses sustained by the Canadian National Railways. It was my intention to place certain figures on Hansard this afternoon, but I shall refrain from doing so. Anything I say in connection with the Canadian National Railways I do not say in order to knock or in any way to lower the prestige of that railway, because I am just as much convinced as is the hon. member for Kootenay East that the Canadian National Railways has an important part to play in our national development, and as such, as the railway in which we are vitally interested, it should have fair and reasonable consideration. Any figures I give which might be to the detriment of that railway I give only to show that the low figures that obtained under the board of directors prior to 1933 have been improved since the board of trustees came into office.
Previous to 1933 we had a board of directors, very similar to the board of directors now proposed by the government. When the board of directors was in office previously, we recognized the fact that they were struggling against tremendous difficulties, that deficits were increasing to such an extent that they became alarming. The situation was such that on July 16, 1931 the standing committee on railways and shipping passed the following resolution:
Your committee desire to call the attention of the house to the proposal made by Sir Henry Thornton at one of the sessions of the committee. He referred to the serious position of the transportation business generally and recommended that a commission be appointed for the purpose of considering the whole question of Canadian transportation.
That suggestion was adopted, with the result that the Duff commission was appointed. We have heard a great deal about the Duff commission. I just wish that every member of the house was as familiar with that commission's report as I have tried to make myself during the past few weeks. It is a concise statement of conditions as the commission

C.N.R.-Board of Directors
found them during the course of their investigation. Prior to 1933 there had been a board of directors, and the commission was critical of that system of operating the railway. This is what they had to say in connection with the operation of the Canadian National Railways under a board of directors similar to the board of directors advocated at this time by the present government. In paragraph 33, page 13, we find these words:
Running through its administrative practices, however, has been the red thread of extravagance. The disciplinary check upon undue expenditure, inherent in private corporations because of their limited financial resources, has not been in evidence. Requisitions of the management have been endorsed by governments, and successive parliaments have voted money freely, if not lavishly.
Again, in paragraph 34, on the same page, we find these words:
Within the railway organization there has been freedom in expenditure and encouragement in plans for expansion and extension of services which were inconsistent with prudent administrative practices. The administration failed to realize that this country, with the greatest railway mileage in the world in relation to population, could not afford further capital and maintenance expenditures for unwarranted branch lines, for de luxe services, for uurequired hotels, for the building of ships in competitive service to be shortly abandoned; and, generally, for costly adventures in competitive railways out of proportion to the needs of the country.
Again, in paragraph 142, the Duff report goes on to say:
The conduct of the affairs of the national railway has been subjected in the past to political and public pressure.
Again, in paragraph 145:
Under the circumstances, the directors' functions have been in practice nothing more than advisory. It would seem that they generally gave formal approval to programs of expenditures which they appeared to regard as the main concern of the president and the government. This left the railway open to political influence and to public pressure exerted by communities and by associations of business and labour interests.
Again, in paragraph 146:
Of direct political interference by ministers and members of parliament in the detail operations of the railway, we were assured by the officials there was little or none. It was in the larger sphere of policy that political considerations led to unwise and unnecessary capital expenditures, the result of which was to create an atmosphere in which the ordinary principles of commercial operation of the railway were lost sight of.
There was the condition brought out in the Duff report. That report, which was produced at great cost to the country, and tabled in the house, represented the consensus of 12739-210
able men appointed to study a particular problem, and to-day despite that report, despite its recommendations, the government proposes to go back to the very things that were strongly condemned in that report. I ask you, Mr. Chairman, and through you the other members of this committee: is it fair to the people of Canada to institute a commission of that kind, with all the expenses involved, and then disregard its report? Is it any wonder that Judge Fullerton, emphasizing these particular things, uses these words:
These rvere the fundamental defects which the Duff commission believed could be remedied by a trustee system of direction. I wish to say most emphatically that we have exerted every effort to vindicate the hopes of the commission, and to add with some pride that, having regard to the brief time so far elapsed, we have achieved a substantial measure of success. So far as I have ever heard, there has not even been an allegation that the board of trustees has been influenced in the slightest degree by any political consideration at any time. The board has acted at all times, or endeavoured to act, as business men of broad and far-reaching responsibilities would act.
That is his opinion after two and one-half years experience as chairman of the board of trustees. Despite that experience, despite his considered opinion and despite the Duff report, we have before us a measure which will revert back to the conditions prevailing prior to 1933. I do not think it is fair to parliament or to the people to ask for consideration of a measure such as this. In his remarks yesterday the Prime Minister (Mr. Mackenzie King) suggested that the government had a mandate from the people, but the people gave no mandate to disregard a report for which they paid a considerable amount of money, a report based on considered information and supported by subsequent events. I do not think the government has any right to suggest that the people have had the opportunity to pass on legislation of this kind.
In my opinion this bill will restore political influence in connection with the management of the Canadian National system. There is every evidence of the possibility of government interference and political control. I have only to refer to the remarks of the Minister of Railways (Mr. Howe) during the course of a speech delivered in Toronto, not months after his taking office, not a year after, but just a few weeks. The Toronto Daily Star of December 9, 1935, gives his considered opinion on this question of major importance. He said:
The 1933 legislation which abolished the board of directors and substituted the trustee form of direction removed control of this directing agency from the hands of the gov-



Rf.VISED EDITION 33S6

[Stage Direction]
C.N.R.-Board of Directors
[Stage Direction]
eminent and placed it in the hands of parliament, the Commons and the Senate, though the latter might not he in any sense representative of public opinion as expressed in the election of the representative chamber. It went further. The act provided that the person with the titular rank of president shall report and be responsible to the trustees and them alone. Thus the government representing the owners, has, under the present legislation, no control whatever.
That is the statement of the minister, made less than two months after taking office. He was going to abolish the present system and take control to himself or to his department. He seeks to get the direction of the Canadian National Railways. He assumes that that direction has been lost. One of the presumptions of the Duff report was that it had been lost to political influence, and the minister now seeks to bring it back under that political influence. It was established by witnesses who appeared before the Duff commission that it was detrimental to the railway to be under political influence, and yet the Minister of Railways has introduced legislation to bring that very condition back into the system. I have talked to railway employees and they deprecate such a move. They are entirely opposed to anything that savours of political influence in connection with the operation of the Canadian National Railways. I hope the minister will take cognizance of their objections and of the other objections which have no doubt been voiced throughout the country. The minister continued:
The purpose of the trustee form of management was to take the railway act out of politics. I wish this were possible. As Minister of Railways, I have no desire to interfere with the expert management of the road. My concern is the reverse, which is interference by the railroad management with the expressed policies of the government. We cannot escape the fact that the railway is owned by the people of Canada, that taxes collected from the people pay its deficits and that the prosperity of every citizen in thousands of communities from coast to coast can be affected by its managerial policies. Mine is a railroad riding-[DOT]
Mr. HOWE:: I may say that I never made that statement. It was taken inadvertently from a manuscript from which it was not struck out. I may say the manuscript was prepared by others and that statement was struck out of the copies that went to most of the papers. I never made the statement and it was quoted inadvertently in the Toronto Star.


Richard Bedford Bennett: The minister is frank, anyway.


Clarence Decatur Howe: I believe other people have been misquoted.
{Mr. Walsh.]


William Allen Walsh: I accept the minister's statement, I thought I was perfectly safe in quoting from the Toronto Star rather than from the Mail and Empire. Is the remainder of the quotation incorrect?


Clarence Decatur Howe: The whole thing was struck out.


William Allen Walsh: From the minister's statement we can assume it was written for him to give as an example of what might be done by a railroad governed by trustees. It might interfere with the election of certain candidates in certain ridings.


Clarence Decatur Howe: Just what is my hon. friend referring to? Is he referring to the sentence which I said I did not speak?


William Allen Walsh: I take it for granted that the minister did not say it.


Clarence Decatur Howe: Why refer to it?


William Allen Walsh: I am not referring to it.


Clarence Decatur Howe: I said I did not say it; let us drop it. On a point of order, Mr. Chairman; the hon. member is reading something that I did not say.


Frederick George Sanderson: The Minister of Railways and Canals (Mr. Howe) has denied that he said what the hon. member for Mount Royal (Mr. Walsh) quoted him as saying. The hon. member would be out of order in continuing to refer to that.


William Allen Walsh: I ceased to read. I accepted the statement of the minister that it had been prepared and written for him, but that he had not actually said it.


Frederick George Sanderson: I think the matter is closed.


William Allen Walsh: Anything I have said that casts any reflection upon the minister, I happily withdraw, because I would not like to do anything of that sort.


Richard Bedford Bennett: The hon. member is referring to what somebody other than the minister said, and he has a right to do that.


William Allen Walsh: I was referring to the situation that existed prior to 1933. This situation which was recognized by everyone had been brought about through the operation of the Canadian National Railways by a board of directors. It could be clearly inferred from the Duff report that that method of management had given rise to a considerable amount

C.N.R.-Board of Directors
of political interference in connection with the operation of the railway. The point I am trying to make is that all this was done away with by the board of trustees. We now have a measure to reestablish that influence in connection with our Canadian National system.
I commenced by suggesting that this was a major problem, one that was beyond the ability of any one party to solve. I feel that that is so. This problem should be over and above all political parties. As one newspaper suggests, if we do not solve it, chaos will result. I urge the solution from that point of view. What the government has brought down is no solution; it will never alleviate the distress caused by the deficits that are piling up at the present time. This year we have $115,000,000 to pay out of our treasury in connection with the Canadian National Railways. How much longer can this country continue to pay amounts equal to that without going under? I leave it to the imagination of hon. members. How much longer can the people of Canada supply through taxes the deficits that are being piled up by the Canadian National Railways? I say again, as I said before, that anything that affects the Canadian National Railways indirectly affects our other great railway system, the Canadian Pacific. I wish therefore to urge the considered opinion of this house with respect to this question, an unbiased opinion. I want to see the question raised above the political issue. I should prefer to see the minister strike out this clause and continue with the board of trustees, who have been in office only since December, 1933. They have been in office just long enough to get the idea of what a railway is, and they are producing results; the reports this year show that the system is improving. If that is so-and we assume it is, according to the reports before us-why change something that is improving a bad condition? Why not continue the board in office for a certain period in order to give the trustees an opportunity to work out their policy? Raise it above political party.
The other evening I read an article from which I should like to quote:
But what have we done at the instance of this government to solve the problem involved in the net loss of $115,000,000 in the railways last year?


Frederick George Sanderson: The hon. member will be good enough to state what the article is from which he is quoting.


William Allen Walsh: I am quoting from a newspaper report of a speech delivered in this house by the Right Hon. R. B. Bennett, leader of the opposition. It appeared in the Montreal Star on May 6, 1936.


Clarence Decatur Howe: Is it in order to read from a newspaper report of a speech delivered in the House of Commons? I am merely asking a question; I do not know.


Richard Bedford Bennett: It is frequently done but should not be done.


Frederick George Sanderson: It is really out of order; I think the leader of the opposition will agree with me.


Richard Bedford Bennett: Unfortunately you cannot say it is out of order in this particular case when it has been regarded as being in order in the last two or three months. The difficulty is that we have been quoting from newspapers, a practice which is frowned upon in the imperial parliament, being regarded as unsound, but which here we have followed constantly. The hon. member can easily quote from Hansard instead of reading from the newspaper report, for the speech to which he refers was in the debate on this particular bill. That is what he is proposing to read from, so that he is in order inasmuch as he is not quoting from a previous debate-it is all part of the discussion on this bill. Our difficulty however lies in applying the rule to one speaker and one newspaper at one time, whereas we have generally followed another course.


Frederick George Sanderson: I may say to the
leader of the opposition that the rule was quoted the other day in his absence. It is rule 306 in Beauchesne's Parliamentary Rules and Forms:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting upon proceedings within the house.


Sir GEORGE PERLEY:: With all due
respect, Mr. Chairman, I submit that that rule does not apply in this instance. The hon. member was not quoting from anything said by any person outside this house, nor was he commenting upon or [DOT] criticizing anything done in the house. He was merely reading from the report of a speech delivered in this house. I suggest that it would be necessary to invoke some other rule; but I may add to what my leader has said in that regard, with respect to the rule about not quoting from articles, that it has been more honoured in the breach than in the observance.


Richard Bedford Bennett: On the question of order, Mr. Chairman, I would point out that what you have just read is paragraph 306 of Beauchesne's volume, and it is not a rule. Some years ago we made the mistake, in quoting from Beauchesne, of citing paragraphs
C.N.R.-Board of Directors

as rules. The rules of this house are the standing rules of the house, and parliamentary practice is the practice that has developed under the rules; and Mr. Beauchesne, in this admirable book, quotes Bourinot at page 336 as authority for his summary or precis of the law. Unfortunately however it is not a rule; it is simply a summary of Bourinot's book at page 336. You will recall the time at which that error was made; it was in connection with the question whether or not a member was bound to vote if he remained in the house. Reference was made to what was called a rule but it turned out to be a paragraph not founded upon a rule. As a matter of fact it was then determined that a member might remain in the house and not vote, when the suggestion was made that he was obliged to vote if he remained in the house. I daresay you recall the circumstances, Mr. Chairman. It is easy to see why it was referred to as a rule-I think I did myself refer to it at that particular time as a rule, but my attention was directed to the fact that it was not. I do wish we had a universal rule with respect to the reading of newspaper articles, because there are 245 members in the house, and when someone else, a 246th member, is quoted because he happens to be a particular person, we are likely to get into great difficulties. I once heard a distinguished jurist, a Lord Chancellor, say, when reference was made to Berriedale-Keith's eminent work, "Who is he?" As a matter of fact, quotations from living authors are usually not used in courts of law. There are one or two great exceptions, Benjamin on Sales, and likewise Buckley on Companies. Generally speaking, however, the practice is not sound. If the rule were laid down from the Chair it would expedite the conduct of business. In the meantime the hon. member has Hansard, so that the difficulty is avoided.


William Allen Walsh: May I continue, then, quoting from Hansard-


Frederick George Sanderson: I have before me
Bourinot's Parliamentary Procedure, at page 336-	.


Richard Bedford Bennett: That is what the reference is to.


Frederick George Sanderson: I quote:
Neither is it regular for a member to read a paper which he is asking the house to order to be produced. Nor is it in order to read articles in newspapers, letters or other communications, whether printed or written, emanating from persons outside the house, and referring to. or commenting on, or denying anything said by a member, or expressing any opinion reflecting on proceedings within the house.

I am quite aware that 306 is not a rule, as the leader of the opposition has said, though he did quote it as a rule at one time.


Richard Bedford Bennett: Not that one.


Frederick George Sanderson: It is not very often
quoted, but I think there are instances in which it is. I would ask the hon. member for Mount Royal not to continue reading the article.


William Allen Walsh: I am about to read from
Hansard.


Frederick George Sanderson: The hon. member is
not going to quote from Hansard from a previous debate at this session?


Richard Bedford Bennett: It is the same debate.


William Allen Walsh: It was on the first reading
of this bill.


Frederick George Sanderson: This year?


William Allen Walsh: Yes, May 5, 1936.


Charles Avery Dunning: It is a nice point as
to whether the discussion on the first reading was a previous debate. Personally I take the view that the debate on the measure is virtually continuous, but I cannot cite any authority. I think the hon. member is quite in order in quoting from Hansard as he proposes to do.


Richard Bedford Bennett: Discussion from the time a resolution emerges until the third reading of the bill founded upon it is said, somewhere, to be one debate. I do not know whether it is on this occasion or not.


Frederick George Sanderson: The hon. member for
Mount Royal (Mr. Walsh) may continue.


William Allen Walsh: I quote from Hansard of
May 5, 1836, at page 2525 where the leader of the opposition is reported as saying:
But what have we done, sir, at the instance of this government, to solve the problem involved in the net loss of $115,000,000 in the railways last year? That is the problem. In view of the protestations and promises made from this side of the house by hon. gentlemen opposite when we were in office, I had expected that some legislation, worthy at least of the name, would be introduced to deal with the problem. But instead of that the major part of the existing legislation is left alone, while there will be substituted seven directors for the three trustees, ultimately, the minister says, largely for the purpose of getting rid of the chairman of the board. Is that the government's conception of its responsibility to the Canadian people in that regard? If it is, let it be known; let it be understood, for this is not something that is the accumulation of years but something that took place last year, 1935. I put that question to the government and to those who support them.

C.N.R.-Board of Directors


Frederick George Sanderson: I do not wish to interrupt the hon. member for Mount Royal, but he has already exceeded his time, and has had credit for the time spent on the point of order.


William Allen Walsh: I am about to finish the
quotation:
They have the majority, they have the power, and I trust they have the inclination. Let them proceed to give effect to their inclination and they will receive the support of those members of the house who are interested in the solution of this problem.
I desire to leave the problem on that high level, the utterance of a statesman who is recognized as such throughout this country, and to ask that the government give the matter consideration in the spirit of that pronouncement.


Mr. J. A. BRADETTE (Cochrane):: In speaking on this very important bill, I wish to be hrief, recognizing that we expect to complete in short order the remaining work of the session. At the outset I thank the hon. minister for the manner in which he has brought this matter to the attention of the House of Commons and the country as a whole. Certainly no one on either side of the house can accuse him of partisanship in his method of presentation of the bill; he dealt with it in that businesslike way which befits a matter so important to the people of this dominion, and one in which every citizen is greatly interested. It is not my intention to go over ground that has been covered by previous speakers in the presentation of figures regarding the railways of this country. We all know that our railway systems are very important and very expensive. Nevertheless, in dealing with this subject we must keep an open mind, realizing that when the fathers of confederation and those who pioneered in new inventions fostered the development of our railway transportation services, no one dreamed of the changes that have taken place in these latter years and which have to some extent replaced those services. Even members of parliament may sometimes feel a little astonished at this phase of our progress when dealing with certain of the items of the federal administration, for instance, the Post Office Department. Some now are dreaming of the day when our postal service will in the main be conducted by air. No one will criticize this progress and development, for after all we must be on the march if we are to keep abreast of civilization.
But there is one factor we cannot avoid in discussing railway questions in this country,
namely, that unlike some sections of the United States or some countries on other continents we shall always need railway facilities, at least during certain times of the year. No one will challenge this statement, that no matter what we may do with our trans-Canada highway, which is going to parallel our present railway system from coast to coast, in the winter months we shall require our railway facilities, not only in the northern sections of Canada but in the southern ones as well. In dealing with this matter, therefore, we must apply our minds to this consideration, that no matter how much we deplore the deficits on the Canadian National Railways and the burden that is thereby laid on the shoulders of every taxpayer of this country, we must deal with the question in a way that will not jeopardize the services to which our people are entitled during every month of the year, and more particularly in the winter. If there is one suggestion I would particularly like to commend to the present government, it is that they should appoint a transportation department, with which it may be found possible for the various provinces to be associated, and with only one head of the transportation system we have in this country, so as to have uniform transportation regulations. There is no evading the fact that we are going to have deficits. Everyone will have been struck with the inroads that have been made into railway business by the bus and truck services of this dominion, and those inroads are going to be deeper and deeper unless we find it possible to put the two systems on an even keel, where we shall have uniform legislation and regulations, and where one will compete with the other with an equal chance of success, and with definite fields of action. I fully understand that this is very dangerous ground. No doubt these questions have been mooted at provincial conferences held in Ottawa. I also readily recognize that for sentimental reasons, if for no othei'3, the various provinces wish to have the full say so far as truck and bus services are concerned. But I believe the situation is so serious, and that fact is so fully appreciated by the provinces, that the time will soon be ripe for the creation of a centralized service, a central department that will look at transportation from all angles and will function along the line of definite activities emanating from the central government.
Speakers on behalf of the opposition would have us believe that politics have been injected into the consideration of this problem and this bill, but I believe implicitly in any new measure which will improve, in my opinion, the position of our railways, and I

C.N.R.-Board of Directors
surely hold that the Montreal Star is not being fair to the Canadian National railway system or to Canada as a whole when it deals in a biassed way and with far-fetched criticism with the operations of that system. As has been said by a previous speaker, no one will deny that the Canadian National Railway is a wonderful asset to this country. I admit that in certain features of administration it has sinned, and sinned grievously, but surely we shall take note of the mistakes of the past and thereby benefit in future as far as that great system is concerned.
In this discussion frequent reference has been made to the human factor. That is one which no person can wish to ignore, and it seems to me that in the so-called cooperation upon principles of economy which has been applied for the last five years in the Canadian National system, the little fellow, the working man, the one that sweats and toils, has been neglected in a good many cases in contrast with the treatment which has been enjoyed by higher officials. I do not pretend to be a railway man, but when I see a man working on a section of track getting $2.40 a day, while at the same time some high officials of the system are receiving tens of thousands of dollars a year, I can understand tl i>
agitation which is going on in some sections of the dominion. More than that, when 01 id! sees that only two men are engaged on twelve miles of railway, and have to keep that track in good condition-which I maintain is absolutely impossible-while at the name time high officials of the system are travelling over the country in palatial coaches, enjoying the finest possible sendee, one may have to admit that it is less important that officials should have these luxuries than that better provision of necessities should be extended to the working man. The human factor has received consideration so far as the higher officials are concerned, but the men working on the sections or in the shops have not for the last five years received from the administration of the Canadian National Railways the consideration to which they were entitled. I believe that talent and experience should receive a fair recompense. On the other hand labour men have to work under all climatic conditions; I have known them to work ten consecutive hours in a great downpour of rain and at the end of the day get $2.40, and I say that is not fair and not conducive to the esprit de corps that should mark such an organization. I have taken up the cudgeis for these men in the past and I am going to continue doing so. The minimum wage law should be applied on the Canadian National system. Two section men [Mr. Bradette.l
to twelve miles of main line railway is not sufficient. Some day there may be an accident resulting in heavy loss or grievous bodily harm, and the blame should be put where it properly belongs. I do not want to go into that situation at length, but the Canadian National system should realize the competition they have to meet. I have not yet heard of the president or directors of some bus or truck company having a special bus to travel in over the country. Such companies do not have the administration overhead that prevails in the Canadian National Railways.
There is another factor I wish to mention. Take my own section. A young man doing office work or any railway worrk there has no chance whatever of advancement. It seems to be a kind of family compact; the bigger positions go to men in the bigger centres. Surely, in the smaller places young men of experience, with years of service, should have opportunities of promotion. But this is never the case. I do not want to criticize the appointments that took place in my own section, but local men who know all the conditions should receive consideration. Nevertheless men from Montreal, or Quebec, or Toronto, or Winnipeg were placed over men in our section who had years of service and seniority.
There is one section of the Canadian National Railways which has never received proper attention from any government. I am absolutely at ease in speaking about that matter because I have done so every session for the last ten years. That section is the transcontinental link of the Canadian National Railways. Sir Wilfrid Laurier had the great dream that some day a major portion of passenger and freight traffic would go over that section. Perhaps now, through lack of maintenance, the road-bed is not too good and the service would not compare with some other services, but the fact remains that that section has never received the attention it deserves. According to the Duff report, on more than eight hundred miles of main line of the Canadian National system the commissioners did not find it possible to spend a single hour during their inquiry. Every one knows that progress in Canada at the present time is northward and westward. Anyone who knows the mining history of this country knows that progress is being made mostly in the northern sections, especially of Ontario and Quebec. What happened in 1931? Without our section of the population ever being consulted the daily train service we had from Montreal and Quebec via Cochrane to Winnipeg was cut off. To-day there are

C.N.R.-Board oj Directors
400,000 people in that area who have been deprived of direct communication with western Canada. Is this fair? It is not. There is only fifteen miles' difference between the route through my section and the routing at present followed by the Canadian National.
I am practical enough to realize that it would not be fair to ask the same kind of palatial trains that we had prior to 1931. Often I criticized the luxurious equipment they had. But this is a fact in which every hon. member is directly interested, that there are at present 400,000 Canadian people deprived of direct communication with the west. If I want to travel from my own home town to Winnipeg I have to go 255 miles out of my way to North Bay. It is true there are local trains twice a week, but will anyone travel on a mixed train the schedule of which is so uncertain that he may reach Winnipeg in a week or it may be two? One of the main reasons I am speaking here now is to make an appeal to the Minister of Railways and to the House of Commons to give a proper train service to a pioneer section of the country, a section the population of which is increasing at the rate of 5,000 a month, and is going to continue to increase. In my own riding I have at present 100,000 people; it is part of a riding which was one riding fifteen years ago, and which is now divided into four. This shows the unfair treatment we receive from an institution that is supposed to give us service; it forgets the human factor. I have been told by some high officials of the Canadian National Railways that they cannot make time on our section. I know they cannot, but there is a very good reason, namely that they have neglected the roadbed. I said that there are only two section men to twelve miles of railway. I am begging this committee, not only the minister but every hon. member present, to study the situation. I do not believe in deficits, but at the same time this country owes something to its population. The hon. member for Kootenay East (Mr. Stevens) said that the Canadian National Railways is a wonderful asset. He also mentioned the fact that we are spending tens of millions of dollars for war pensions, and I never heard a word of criticism of that from any section of the house. These are liabilities, contracts, for which the dominion carries a certain responsibility.
It is not my intention to deal with this matter at any greater length now; I hope other opportunities will be given me, either before the department or the management of the Canadian National system, to state my case. I hold that under the new board of
directors for which the minister is making provision it should be possible to decrease interest rates on the Canadian National bonds. No one will challenge the statement that when the people invested in those bonds years ago the situation was different from what it is at the present time. If interest rates were reduced fifty per cent that would practically wipe out the deficit. I hope the minister will look into that question. I know it has been given attention by previous administrations.
As far as I am concerned I never had any quarrel with the Canadian Pacific railway ; everyone realizes the good it has done this country and the great part it has played in its development, but the same principle should apply, as forcibly or more so, to the Canadian National Railways. A previous speaker mentioned the Duff report. We see from that report how many roads were unloaded on the Canadian National system. In a good many cases they were unloaded by provincial governments, and those amalgamations were compulsorily loaded on the Canadian National Railways. We cannot expect the Canadian National system to carry all these roads. I make this fervent plea to the minister. I have confidence in his ability; I say this sincerely and I am seldom inclined to praise, but since he has been minister all the presentations he has made in the house have been made in a businesslike way, and I have implicit faith that he will be successful in eliminating some of the troubles that at present face our railway system.
I have been elected to the federal parliament to help every section of Canada, and we must face problems in a national way. Parochialism has never been and never will be my weakness. When I say that at the present time we have not the passenger accommodation between east and west to which we are entitled, I am speaking not politically, but in a national way. I am not fighting only for my constituents; I am speaking for 400,000 people in northern Ontario and northern Quebec, and voicing the sentiment, I believe, of every hon. member and citizen in Canada. An improvement and the reestablishment of the above passenger service would be beneficial not only to the section in which I am most interested, but to the whole of Canada.


Herbert Earl Wilton: Several yearn ago I was employed as a railway telegrapher. At that time I worked on what was known . as the "7/12/365/40-system, without." That meant seven days a week, twelve hours a day, three hundred and sixty-five days a year and forty
C.N.R.-Board of Directors

dollars a month without vacation. Due to the improved intelligence of railway officials and to an increased realization of the value of railway telegraphers the situation has been improved. To-day they are in a much better position.
Much has been said in connection with the higher points of railway administration. The hon. member for Kootenay East (Mr. Stevens) referred to the habit of reaching for the moon. I believe that sometimes in the discussion of great and important questions there is a tendency to think of the higher-ups and overlook the ones at the bottom. As the hon. member for Cochrane (Mr. Bradette) stated, the human interest element must enter into the successful operation of a railway company. While that element may seem to be of minor importance, in my view it is of great importance because it may reflect either for or against the standing of a railway company.
May I call the attention of the minister and of the board of railway commissioners, if possible, to the situation existing in connection with a service which is only of minor importance so far as railway administration is concerned, but of greater importance as it affects the public. I refer to the railway depot service given by red caps. Some hon. members may smile; when we refer to people at the bottom it is sometimes easy to smile. I must say, however, that the situation with respect to this particular service does not commend itself to the respect of the public.
Let me illustrate. There are about sixty red caps in the union depot at Toronto, only ten of whom receive wages, and small wages, at that. The other fifty are thrown on to the generosity of the public with the result that a government owned railway is encouraging the vicious system of tipping. In other words these boys-we refer to them as boys, but most of them are young married men, some of whom have families-are forced to make their living by receiving tips from the public. In many cases those young married men are receiving such small amounts of money each day that the city of Toronto through its welfare and relief department must subsidize their receipts so that they may live. It is a sad situation when a government owned railway retains employees who render a first-class service to the public, but at the same time pays so little for that service that the workers have to rely upon municipal assistance. The situation I have described applies in other cities where there are union depots.
There is this further point to be considered: The last speaker mentioned that only two men are used to work a twelve mile section. When I worked for the railway a section was five miles long, and five men worked on it.

I do not know what the situation is in Ontario with respect to the numbers employed on sections, but any person using the sleeping cars between Ottawa and Toronto will readily realize that there are certain spots so rough that one almost needs to be fastened into the berth for fear of rolling out. It is evident that an insufficient number of men are being used to patrol the tracks and to keep them in satisfactory condition.
I have referred to these two human interest points, namely the employment of more men on track work and the placing of red caps on a basis whereby they may live without receiving help from municipalities. The giving of assistance simply places another burden on municipalities already overburdened.


Mr. T. L. CHURCH (Broadview):: Mr. Chairman, we are discussing section 2 of the bill which has to do with the definition of the term "trustees." This section stands as the basis for the whole bill. I suggest that the act passed in 1933 known as the Canadian National-Canadian Pacific Act was of a judicial nature, because it was based upon the findings of the Duff commission. Each railway was to appoint an arbitral tribunal, the functions of which were to be judicial. It was never intended that the tribunal should be in politics. The gentlemen who formed the tribunal were to perform certain duties as set forth at page 66 of the Duff report, paragraphs 215, 216, 217, 218 and 219.
Hon. members will notice the provision appearing in paragraph 218 of the Duff report on the functions of this joint tribunal.
There shall be no appeal to any court in Canada from any decision of the arbitral tribunal on any question of law or fact; except as to a question of law' if it is one involving a question of jurisdiction, in which case there should be an appeal to the Supreme Court of Canada, by leave of a judge of that court.
In the present instance the trustees are to be known as directors; in that regard we are becoming more like the Canadian Pacific Railway every day in our "me too" political policy. We should never have moved the head office of the Canadian National Railways from Toronto to Montreal. I have every respect for the Minister of Railways (Mr. Howe). I realize that he is a new minister, but the longer he stays in Ottawa the more he will realize that it is politics, politics, all politics all the time.
. May I say that the three gentlemen who served on the board set up by the act of 1933 rendered a good service, one of them without salary, Mr. F. K. Morrow of Toronto, a brilliant young Canadian. They effected

C.N.R.-Board oj Directors
economies, and we have but to look at the railway report and examine the operating ratio set out in the Duff report to realize the good work they have done. They have struck off huge maintenance charges, and I must say that the work of the Bennett board was wonderful and satisfactory. In the present instance we are to substitute for that board of three trustees a board of sevenfold amen board of directors.
The employment commission was selected along political lines, and I must say that that is a step in the wrong direction. The same practice will be followed in the present instance of a sevenfold amen board of directors for three trustees a difference without a distinction. Without any notice in votes and proceedings the minister had a committee appointed, violating every rule of parliament, immediately preceding one of the holidays and without any notice whatever they got away with it. No one knew anything about it. It was not on the order paper; no notice was given. It was the only opportunity we had to discuss this most important question of the national railways, involving such huge deficits that it will be an old man of the sea on the backs of the next generation.
The very object of passing this Bill No. 21 is set out in section 2, which is the gist of the whole bill. All the rest of the clauses are merely subsidiary and are built round section 2. Section 2 deals with the definition of the new trustees, who will be a lot of useless figureheads, and their duties. The duties of the board of trustees which were set out in the statute of 1933 were derived from the Duff commission's report. What were those duties? The board of trustees was to get together regarding the joint, use of terminals; running rights and joint use of tracks; control and prohibition in respect of the construction of new lines, and provision of facilities and additional services; the joint use of facilities where this would promote economy or permit the elimination of duplicating or unremunerative services or facilities; abandonment of lines, services or facilities; pooling of any part or parts of freight or passenger traffic; things necessarily incidental to the above enumerated matters.
The very next clause of the Duff commission's report, which was signed by Right Hon. Chief Justice Duff, sets out the jurisdiction of the board of trustees. There is no appeal to any court of law. The Duff commission's report at pages 50 and 51 gives the reasons for the board's recommendations which were incorporated in the statute of 1933, chapter 33. That whole act was built
on the Duff report. Now we are asked by Bill No. 21 to turn that act of 1933 upside down founded as it was on fact and destroy all the good work that has been done under the administration of the board of trustees during the last three years. The board of three trustees was an economic, useful and nationally efficient judicial body, and it is to be replaced by a board of seven directors of no experience with different functions and political powers, and the railway is to be run from the political and not the economic *aspect. At page 50 of their report the Duff commission gives the operating ratios of the Canadian National and the Canadian Pacific, from which I will quote a few figures, as follows, to show the necessity of running the road outside the small realm of politics from the commercial aspect. This railway will be an old man of the sea on the backs of our poor taxpayers for twenty-five to fifty years. This table shows it:
Operating Ratios
Canadian Canadian National Pacific r ear:	per cent per cent
1923	
91-8	81-01924	
92-5	80-51925	
86-7	77-31930	
91-4	78-41931	
99-8	80-3
The Duff commisison gave these reasons above why the new board of trustees which it recommended should be freed from political and public pressure. They called in the presidents of the two railways, Sir Edward Beatty and Sir Henry Thornton, and got their views on this subject, and the commission would not have recommended a board of trustees had it not been for the evidence that was given by the president of the Canadian National Railways and of the Canadian Pacific Railway on political influence and its baneful effects which is cited on page 51 of the Duff report. Sir Henry Thornton said:
The leaders of all political parties and the people of Canada as a whole are a unit in their desire to prevent political invasion of the Canadian National Railway.
That was his very first statement. The report goes on to say that the president of the Canadian Pacific Railway appeared to be more concerned over the activities of what he termed "politically-minded" executives of the publicly owned railway than he was over straight political pressure for definite ends. Sir Edward Beatty said:
We talk a great deal about political interference being damaging to railway operations, and we know that that is true, generally speaking. But when we say it we seem to
C.N.R.-Board of Directors

think the only political influence is that exercised by a government, or a member of government, or a member of parliament. To my mind the worst kind comes from the political attitude of men in publicly-owned institutions. Possibly they are not conscious of it, but they become politically-minded; their policies and actions have a political tinge, and that, from my standpoint, is more serious as representing the attitude of the corporation than the isolated act of a member of parliament who tries to get a man employed.
Years ago the ability of privately-owned railway companies to withstand political pressure was somewhat limited. To-day it is nothing like it was, because we can say no to that kind of pressure. But the politics that develop inside an organization because it is publicly-owned, and not privately-owned, is a serious thing.
We are going to upset all the good work that the board of trustees, appointed in pursuance of the Duff report, has done. Liberal newspapers, such as the Toronto Globe, for instance, are taking a great interest in this question of public ownership. I am for public ownership, but I am not out for the kind of public ownership that we see in the Canadian National Railways. There never was and never will be public ownership in the Canadian National Railways because the present system is but the leavings of a lot of privately owned roads, and it is bankrupting the country. The Toronto Globe takes very strong ground on the method, as proposed in this bill, of selecting the railway directors, and it has a great deal to say in praise of the three trustees who are to be removed for this "sevenfold amen" directorate, and particularly in praise of Mr. F. K. Morrow, for what he has done in eliminating what has been termed this reckless and criminal waste of public funds.
We find that the Drayton-Acworth commission in 1917 made parallel recommendations to those made by the Duff commission, namely, that there should be a joint arbitral tribunal working not from any political aspect but solely from the commercial aspect. In the early days of public ownership in your constituency, Mr. Chairman, this very same issue came up, whether there should be political influence in the public ownership of heat, light and power in the hydro development. The Drayton-Acworth report is founded upon the parallel principle of that hydro system that we find in the Duff commission's report, of a publicly owned utility being operated not from a political standpoint but commercially. That is what the Duff and Drayton commission in 1917 recommended should obtain in connection with the board of trustees that was appointed to operate this public utility. The board of three trustees, from 1933 to 1936,

has not had a chance in the two or three years of its existence to show what it could do, and I am sorry to see this change being made. Mistakes have been made in the past, and they are well known to parliament. Parliament has practically no control over the Canadian National Railways. If you ask the Minister of Railways, a new minister, a question about the Canadian National Railways, he replies that he cannot say anything about it because it is a matter for the railway.
It was always intended that any member of parliament could attend the committee on railways and shipping, and ask questions, but members have not yet received the reports of the committee except Nos. 1 to 6. This Bill No. 21, which is now before us, is nothing but a political bill, and the Canadian National Railways will not have a chance under the board of directors which the bill proposes to appoint. The minister should give some evidence as to whom the government is going to appoint. The newspapers seem to know ahead who the seven directors are going to be. All is politics and the games of the ins and .outs, that is all Bill No. 21 is. We all remember the board which had control under the Liberal administration. We remember the conditions under which officials did not even have to put in vouchers for expenditures. We remember how $350,000 was spent for advertising and editorials in newspapers to boost the president and certain directors. We remember how branch lines were built to the sun, to the moon and to the stars. We remember the Cook's tour of a small standing army of officials that travelled all over Europe. Evidence of this disgraceful expenditure is to be found in the 1932-33, 600-page book of the select committee on railways and shipping, and bills from the different hotels throughout Europe. All this was done at the expense of the people of Canada and these officials were exempted from ever putting in any vouchers for these hundreds of thousands of dollars of corrupt and dishonest expenses as set out in the committee's reports.
Are we going back to the conditions which existed in those days? Are we going to build more golf courses, hotels, useless branch lines, and a thousand other things and have deficits all along the line? Are we going back to the building of branch lines, referred to in the Duff report? We have 44,000 miles of single track railway with a population of only nine or ten millions. Our railway mileage equals that of France, Germany and the United Kingdom, with total populations of 47,000,000, 46,000,000 and 45,000,000. Expenditures on branch lines in Saskatchewan amounted to $30,000,000; in Manitoba the

C.N.R.-Board of Directors
total expenditure was S9,862,000; in British Columbia, $5,210,000, and in Alberta, $8,600,000 These branch lines were constructed over the nead of parliament in an absurd way with useless duplication and waste. All this money was spent by the old board1 whom Bill No. 21 now reestablishes, and the old order is back on us. Whenever we asked for information we were told that we could not get it. The province of Ontario and Quebec, where 80 per cent of our cash revenues come from, got little or nothing under the political management to which the Drayton and Duff reports referred. This is to be found in the Duff report commencing at page 50. That report suggests that a non-political board should be appointed.
The central provinces have to pay the deficits. Only a small percentage of the necessary money will come from the workers in the other provinces. Central Canada has to make up these deficits through income and sales taxes and other taxes of that kind. Yesterday the Prime Minister (Mr. Mackenzie King) referred to the rights of the majority, but this is the first time I ever knew of a majority having any rights in Canada. The taxpayers of Ontario and Quebec pay eighty per cent of the taxes. The Prime Minister said that he had a mandate from the people, but he never received a mandate to change the management of this railway. The head office was moved from Toronto to Montreal, and it should be moved back to Toronto, the home of public ownership. The national railways should be given a chance to rid itself of the grafters in its make-up and management and organization. A large residence in the city of Montreal was bought for the former president. These new trustees most likely will come from St. James street too, and I should like to know if new houses will be bought for the new president and his sevenfold amen crew of directors.
These new trustees will have their hands tied under section 2. This section is an antithesis to the recommendations of the Duff report. As I say, I have great respect for the minister. I knew him years ago when he was a very likeable, able and capable civil engineer of good repute. Under this bill, neither he nor any other living man will be able to rid this railway of political influence in its administration, that type of influence which has been a curse since confederation in this country. There will be no freedom under this bill. There is no longer any freedom in this parliament, in the press, the pulpit or the universities in this country. There is no freedom I say in the press in this country as its members refuse to have anything to do with reporting the proceedings of this house except what the government cares to have the union press publish. There is no freedom in the pulpit and there is no freedom in our legislatures. We are going back to where we were before the days of responsible government.
Hundreds of millions of dollars were spent without the authority of parliament. I can remember one time when I wanted certain information from the board of directors and the minister told me that he had nothing to do with the matter. He refused to give me a detailed statement of $400,000 which had been spent on paid editorials in the newspapers of this dominion in an effort to boom the president of the Canadian National Railways. Money was spent over the head of this parliament and when we asked for information, the minister told us that he had nothing to do with the matter. If the hydro, that great public enterprise in the province of Ontario, in which tens of millions of the people's money has been invested, had been conducted in the same way as this railway was conducted, that enterprise would have been bankrupt and the province would have been bankrupt. We are going back to the dark days which existed when I first came into this house.
I give a great deal of credit to the leader of the opposition (Mr. Bennett) and to that other faithful follower of his, the former lovable member for Muskoka, Mr. McGibbon. The latter is a very sick man to-day, the press say, nearly at death's door, but he did a great national work in connection with this railway as a real public ownership man. The people of Canada owe him a great debt of gratitude for the way in which he explored and disclosed the rotten state of affairs that existed in the administration of this railway under the old board of directors. He performed a duty to the people of this country. The Duff report says that this old board acted only in an advisory capacity. They loafed round their offices in Montreal and did nothing. They appeared before the committees here and they sat up in the galleries while the debates were going on, and smoked cigars. They had a good time all over Canada.
I can remember when I tried to start my national coal supply policy in 1923 and to get this railway to adopt a proper national policy in connection with the carriage of coal from the maritime provinces and the western provinces to central Canada. The former board of trustees were absolutely opposed to this, Sir Henry Thornton said I wanted a lunch counter system of freight rates for coal and steel and iron, yet under a system brought about- by the former government along these
C.N.R.-Board oj Directors

lines of my coal bill of 1923 to 1930, over 2,800,000 tons of coal were moved economically last year to central Canada and ;he head of the lakes. This movement has jeen of great benefit to the maritime prov-nces and Alberta. Yet the old political crowo in the Canadian National Railways ridiculed it, although it is law to-day.
The government might as well appoint seven directors of the Canadian Pacific Railway to operate the Canadian National system, :or they know more about the system than members of parliament do and will know all that the new seven under Bill 21 know. When we asked for information from the old board, under the political administration, we could not get it; a. member of parliament could not find out anything about the Canadian National Railways. But the head office of the Canadian Pacific Railway knew everything that was going on. That was proved by evidence given here in 1932 before the railway committee, evidence covering nearly four or five hundred pages in the 1932 report on railways and shipping. Do we want to go back to that state of affairs? Yes, and Bill 21 brings us back to the oldi big I days of 1923 to 1930.
I have ne%*er faltered in my support of public ownership, but we have never had public ownership in the National railways, only a name. The present situation has been advertised all over the United States as an evidence of the failure of public ownership, but as I say we have never had public ownership. If the government want to hand over the whole system to private interests, then they are doing the right thing in appointing seven directors. We are simply imitating the Canadian Pacific in referring to the trustees as directors. These directors, I assume, will have private cars and will travel round the country. King Solomon in all his glory was not arrayed like the former president and those under him from 1923-1930. There was never anything like it except in the United States. The sections that constitute the backbone of this bill are political in their implications. In Cleveland they have the headquarters of a four billion dollar railway like this under Mr. Van Sweringein comprising twenty corporations, the whole system having been built up on credit, and we all know what revelations have been made regarding that system in Washington into Wall Street, all the errors that have crept into it, political interference, and so on. One has only to read the report of proceedings -in the United States senate to see what has been done over there, and we are imitating them.

Where does the taxpayer come in? We sit here as members of parliament and we have no more to say about the railway department than has the man in the moon. Over the head of parliament a committee was appointed. I attended one or two sessions to see what was going on; thinking a member of parliament might reasonably ask for a copy of the report in the committee of railways and shipping, I applied for one, and a gentleman named Thompson of the Canadian National Railways, who was one of the old regime chiefs of staff and splendour, refused to let me have it. Well, I do not want any favours; I know enough about the way in which the railway has been administered.
I contend that the present government has no mandate from the Canadian people to return to the old state of affairs in connection with the national railways. It was not the government's election platform that returned them to power, for they had a different platform in every province. The reason they were returned to power was not the reason given by the Prime Minister yesterday; it was as a fact the deep resentment which the people of the world had felt against all governments then in power the world over, a resentment which they shared with people throughout the world against all governments. And I submit that the people of Canada removed from office a government which had received cold storage of justice and regard from the electorate. If the government insists on our going back to the old condition of things, at any rate let them not call it public ownership; let them call it Canadian Pacific ownership, because that is all it has ever been. Under Sir Henry Thornton the management was one of the most politically-minded the world has ever seen, and one of the most inefficient and useless in Canada.


Hon. CHARLES MARCIL (Bonaventu.re):: I have not the time to discuss the broad issue of the Canadian National Railways; everyone agrees as to its importance. I would, however, crave the indulgence of the committee while I read a resolution adopted at a meeting of the Bonaventure county council held in New Carlisle, Quebec, on March 9, 1932. This resolution will indicate the feeling of the people of that district with respect to the way in which the Gaspe railway has been administered under the present regime, and the hope which they cherish that a change will be made under the new system which is about to be inaugurated. I could take up a good deal of the time of the committee covering the whole history of the railway, but in this resolution I find a

C.N.R.-Board oj Directors
concise statement of the facts. The resolution reads:
Whereas the federal government has purchased and taken over the railway known as the Gaspe branch lines and has made said branch lines a part of the Canadian National Railways; and
Whereas since acquiring said branch lines, the railway management has undertaken to remove from Gaspe, New Carlisle and Matapedia, all repair shops and terminal operations, and to establish said repair shops and terminal operations in the town of Camp-bellton, in the province of New Brunswick, to the great detriment of Gaspe, New Carlisle and Matapedia, and to the people in general in the counties of Gaspd and Bonaventure, and especially to those whose means of livelihood have been taken away by the removal of said repair shops and terminals; and
Whereas the reasons given by the railway management for these changes are economy and efficiency; and
Whereas after several meetings between the management and interested parties, the reasons given by the management were not substantiated but rather were shown to be without foundation; and
Whereas a meeting was held in Montreal, on May 15, 1931, where Sir Henry Thornton, president of the Canadian National Railways, gave definite assurance to a representative delegation along with federal members of parliament for the province of Quebec that these changes would not be made; and
Whereas four months after this assurance was given the terminal at Matapedia was closed without previous notice and terminal operations transferred to Campbellton, N.B., with a gradual removal of all repair shops and other works from New Carlisle and Gaspe to Campbellton, N.B.;
Therefore be it resolved that we, mayors from every municipality in the county of Bonaventure composing the county council, protest against these changes for the following reasons:
1st. That removal of repair shops and terminals do not make for efficiency or economy but rather for less efficiency and certainly greater cost in operations;
2nd. That removal of these repair shops and terminals from the province of Quebec to the province of New Brunswick is a serious infringement of the rights of this province, which has made valuable contributions in both lands and money for the construction of these lines, with the just expectation that all reasonable benefits obtained in the operation of said lines should be for the people of this province;
3rd. That the removal of these works and terminals is a direct violation of the tacit understanding and promise arrived at with Sir Henry Thornton, and shows a serious disregard for the rights of the people in the counties of Gaspe and Bonaventure, and disrespect for the chosen representatives of the people of this province with whom said understanding was arrived at;
Therefore be it further resolved that we, the members of this county council for the county of Bonaventure, in regular session at New Carlisle, and representing the divers interests in every municipality throughout the county, place ourselves on record as being
opposed to the removal from this county and province of the railway repair shops at New Carlisle and terminal operations at Matapedia or anything else the removal of which would be detrimental to our communities, county and province, and do hereby urge upon the railway management the necessity of reestablishing as soon as possible all works and terminal operations that have been removed;
And be it further resolved that a copy of this resolution be sent to: The Honourable the Prime Minister, the Minister of Railways, Sir Henry Thornton, Honourable Doctor E. Paquet, Lucien Moraud, K.C., Henri Larue, M.P., and Mr. Beaudry Leman and Hon. Charles Marcil, M.P. of Bonaventure county, and E. A. D. Morgan, K.C.
Mr. Morgan was the Conservative candidate in 1930. Nothing has been done since the passing of this resolution except that the western terminus of Matapedia has been removed from the place where it has been located for forty years into the province of New Brunswick, so that the railway has to go thirteen miles backwards to reach Campbellton, to the great dissatisfaction of the community. I congratulate the Minister of Railways on bringing about this change, so that that part of the province of Quebec, one of the oldest parts of Canada, may obtain that fair treatment to which it is entitled.


Abraham Albert Heaps: I have listened wi th care and attention to what the hon. member for Bonaventure (Mr. Marcil) has just said. If I have gathered correctly what is contained in that memonaeduim, I think it is a very poor reason indeed for any changes to be made. The railways cannot be efficiently administered in a national sense if local considerations are always to have preference; you will have what may be called a patchwork railway across the whole dominion. I realize the hardships, speaking in a local sense, that may accrue to some part of the country when a transfer is made of certain shops from one place to another. But the question where those shops should be located is not a matter for local determination; it must always be one of which the directors or the board of trustees and the administrative officials should be practically the sole judges. I feel sorry in one way for the position in which the hon. member for Bonaventure and certain of his constituents find themselves, but that in itself is not a condemnation of what has been done either by the existing board of trustees or by the previous management of the Canadian National Railways. It is quite conceivable that from time to time, due to adjustments which must be made in the administration of the railways, hardships will be inflicted upon certain communities. From that point

C.N.R.-Board of Directors
of view every member of the house, I think, feels a certain sense of regret and commiseration for those so affected, but they may have to suffer in the interest of the general benefit accruing to the railway system as a whole. What the hon. member for Bonaventure has said is true regarding not only the Canadian National system but the privately owned railways, and that condition will continue to arise from time to time when changes are necessary to bring about a fairly efficient management of the railroads of Canada.
It appears to me that in the course of discussion this afternoon we have been going, somewhat like the song, round and round. On this clause we have discussed virtually the whole railway situation as it affects the country at this time. Remarks of a general nature have been made with regard to how the railway should be run, the kind of equipment it should have, and so on. I believe that every one of the problems raised on the floor of the house this afternoon has also been raised from time to time in the committee which has been studying the railway question. I do not think this parliament or this committee as a whole is more competent in that regard than is the management of the two railroads or, specifically, of the Canadian National Railways. We have listened also to a great deal of talk about politics. That is quite the usual thing in this chamber when we discuss railways. I remember very well just a few years ago, when the former government took action which resulted in the dismissal of the late Sir Henry Thornton, and when the new setup of the railways was made, we had the cry of political interference with the Canadian National Railways. To-day, with the situation reversed, we have it again. I do not believe that in the proposed new setup, about which I am not in the least enthusiastic, we shall have any more political interference than we have had during the last five or six years. Last evening some fairly harsh things were said, particularly by the hon. member for St. Lawrence-St. George (Mr. Caban), predicting political interference with the national railways as a result of the proposed new scheme. I do not share in that regard the fears of my hon. friend, but I take some exception to the government's action, and I do so on the ground I indicated last night when I spoke on this question for a minute or two.
When the right hon. Prime Minister (Mr. Mackenzie King) discussed this clause of the bill he confused two aspects of the question, the first being its political significance, and

the second, the personnel. To my mind the two are entirely separate. I quite agree with the Prime Minister in his statement that the section contained in the act which this bill seeks to amend did convey to the existing board of trustees a power greater perhaps, than they should have had, because in case there was dissatisfaction in this house with the activities of the board it would have 'been a very difficult thing to remove them from office. It may be that far more powers were given to them than could be justified, or were contained in previous acts of parliament. On the other hand, the extent of the powers conferred by the act has really nothing to do with the personnel of the commission, and the objection I take at this time is to the very dangerous principle, which may become a bad precedent for future years, that whenever we have a change in the political complexion of parliament we are to have, or are likely to have, a new board of trustees. I very strongly object to that. As has been pointed out, I believe by the hon. member for Mount Royal (Mr. Walsh), there is a great deal of dissatisfaction among the employees of the railway at the action this parliament is taking. Similar dissatisfaction was expressed when, in 1933, a similar bill was before the house. Now, three years later, we hear the same rumblings from the employees of the Canadian National system because of the changes that are being introduced in this house. I see, Mr. Chairman, that it is six o'clock.


Frederick George Sanderson: I think the hon. member has about half a minute more.


Abraham Albert Heaps: Mr. Chairman, you have become so exacting in looking at the clock that I think, if you will now give another look at it, you will probably say that it is six o'clock.
At six o'clock- the committee took recess.
After Recess
The committee resumed at eight o'clock.


Abraham Albert Heaps: At half a minute to six o'clock when I asked for the recess I was discussing certain aspects of this question. I never knew that half a minute was quite so valuable. I know it is valuable when you have to catch a train; I know also many a half hour has gone without much serious work being done in this chamber. However I want to discuss one or two aspects of the clause at present before the committee. I hope that when the appointments to the directorate

C.N.R.-Board oj Directors
are made by the government, they will obtain the very best men, irrespective of previous political convictions. It has, perhaps, been a weakness in former appointments that the political relationship of the appointees was a factor in making the selection. I hope on this occasion the only thing that will be taken into consideration will be the fitness of the men for the very responsible positions they will assume. I also ask that there be appointed from among the railway workers some man who has a practical knowledge of the railway men's side of the situation. I would prefer that the railway men themselves should have an opportunity of nominating either one man or a slate of three or four from which the government might make the appointment.
That brings me to the other question, which I suggested yesterday evening. If the government follows the practice of previous governments in choosing the men, it is quite likely that if at the next election there is a change of government the men now appointed to the responsible position of directors of the national railway system will be supplanted. I think that should be obviated. When a man has served a term as director or trustee he has gained experience which ought to be of value in the performance of his duty. If such a person has given good service it is a pity that the value of that experience should be lost. As the government insist on obtaining control of the Canadian National Railway system they should have adopted the same policy in this matter that they are following in connection with the Bank of Canada. To gain control of the bank directorate they are acquiring fifty-one per cent of the shares. It might have been a good precedent if in this case the government had nominated four new directors to be added to the three already occupying the position. However, as the government have thought otherwise, and the resignations of the chairman and board of trustees have been requested, I assume it is the intention of the government to appoint seven new men. I should like to hear from the minister his opinion of the suggestion I made last night, that there should be some agreement between the leaders of the different groups in this house as to the men to compose the new board of directors, so that there would be at least some assurance of permanency to them once they are appointed. I make that suggestion in all seriousness. There is nothing new in it; it has been adopted in many other spheres of public activity in this country, and there is no good reason why it should not be followed on this occasion. I do not say
that the nominations should be made from the floor of this chamber, but I would like to have the leaders or representatives of the various groups get together and see if they could not agree on seven suitable men to direct the affairs of the Canadian National Railways. That, I think, would be far preferable to the government having to assume the whole responsibility for the appointments. If the appointments were made in that manner we should be likely to get a better type of men for the position, as they would have some assurance of permanency.
During the afternoon some allusions were made to the matter of pensions or retiring allowances for the men who, through coordination of services, might lose their positions. The same question was raised in this house in 1933 when the act now being amended was before us. The .former government declined at that time to accede to that request. I am glad to see that on this occasion there are members of the Conservative party who favour such a proposal. When we come to discuss section 4 of the present bill I intend to move the same amendment as I did three years ago, asking for some form of compensation to be awarded to employees who lose their positions as a result of cooperation between the railways. I hope that when that time comes the proposals I make will receive the same sympathetic consideration by hon. members who spoke this afternoon. Good reason has already been given why such a proposal should receive sympathetic consideration. I think when the Minister of Railways (Mr. Howe) was before the railway committee on Tuesday morning, he said that when the present chairman .of the board of trustees was asked to resign provision was to be made for a retiring allowance to him. If that can be done for the chairman of the board of trustees there is no reason why similar action should not be taken in regard to men who suffer the loss of their employment as a result of the present legislation. In the United States an agreement has recently been reached between the railways and. the employees whereby those who lose their employment as a result of coordination of services in that country receive compensation. That was a voluntary arrangement entered into between the unions and the managements of the roads. But that voluntary arrangement was brought about by the fact that in the United States congress legislation was pending which would make such compensation compulsory for the men who would lose their positions as a result of a process of amalgamation of services. So I
C.N.R.-Board of Directors

hope that when the time comes in this chamber for us to discuss the matter, both the government and the house will be sympathetic towards such a proposal, and that compensation will be provided for the men who lose their positions as a result of legislation such as that which we are now considering. There is a very good reason why we should do this. The men who may be affected by the legislation will lose their jobs because of an act of parliament. From the very nature of the legislation we must assume a certain responsibility for those men who might lose their jobs as a result of our legislative action. Personally I would oppose any legislation which had not within it certain provisions that would provide for the men under the contingencies I have mentioned.
At this time I should like the minister to state whether the government would be agreeable to a proposal to the effect that the board of directors of the Canadian National Railways would be jointly appointed or agreed to by the various groups in the house. If that were done it would create a favourable impression not only on the board appointed but among people throughout the dominion.


Clarence Decatur Howe: In reply to the hon. member's question may I say that the government will make the appointments and will accept full responsibility for so doing. In British parliamentary institutions it is an established practice that the government must take responsibility for its actions. I cannot think who would take the responsibility if three groups undertook to share it. It does not seem to me that such action would be fair to the people of Canada. I assure the hon. member that when appointments are made they will be made by the government.
As to compensation for dislocation may I say that in the present circumstances we find an extraordinary situation. On the one hand we are taking the railways from the government. We say that the government must not have anything to do with them in any shape or form, and must turn them over to trustees to operate. I understand that attitude perfectly. Since I have held office I have taken that attitude. Yet the same people who take that position come to the government and say: You must make agreements between the management and the men. Why? Eighteen months ago I attended a luncheon in Toronto at which the president of the Canadian Pacific Railway expounded the principle that compensation payments should be made to men displaced. At that time he was talking about unification, and spoke of that factor as an aid to such unification. Two or three days
[Mr. Hcaps.l
ago we went into committee and heard the statement of the chairman of the board of trustees of the Canadian National Railways, when he suddenly discovered the reason he had not made progress in two and a half years of cooperation was that no provision had been made for taking care of the men displaced.


Mr. STEWART:: The minister is not justified in saying that that was the reason given by the chairman for not making progress. He said that they had made substantial progress, but he threw that out as a suggestion.


Clarence Decatur Howe: Why did he not have such
provision made? Who was to do it, if it was not the chairman of the board of trustees? He is the man vested with supreme authority over the railroad. This agreement has been made in the United States, how? It has been made not by legislation, but by agreement between the managements and the men. Every phase of relations between managements and men has been worked out by committees of the two. That is the proper way to do this. In a measure of this kind, which sets up a management of railways to operate independently of the government, why attempt to make the government responsible for the negotiation of labour agreements between the railways and the men? That is not consistent with the purpose behind the legislation.


Abraham Albert Heaps: May I answer the minister briefly as to why the government should interfere in a question of this kind. By the very nature of this legislation we are interfering with the two railways. I say that through the legislation we are going to compel cooperation, and when you have a certain amount of cooperation of services of the two railways, as a result of such legislation we automatically displace men who have given long years of service to the railways. In other words, as a result of the legislative action of this body men will lose their position.
In regard to the position in the United States, it was the government of that country which practically compelled the railway companies to negotiate an agreement with the men, and the threat was held over the heads of those companies that unless an agreement was arrived at a bill would be passed whereby such compensation would be made compulsory. Had there been no legislation introduced into congress it is quite likely that today there would be no voluntary agreement between the railways and the employees. Those are the simple facts. If the government is not prepared to insert in the bill a clause along the lines I have indicated, would it not

C.AMi.-Board of Directors
do the same thing as was done in the United States, namely compel the railways and the employees to come together and by voluntary agreement provide such compensation as might be determined by a board.


Clarence Decatur Howe: I have tried to sort out the ideas of hon. members, and I should like to ask the hon. member who has just spoken if, under the present trustees set-up, or under the new set-up, it would be a proper function of government to interfere between the management and the men. In other words, should we tell the management what to do with their men? I would like to know that.


Abraham Albert Heaps: We are doing it, as a result of this legislation.


Charles Avery Dunning: No, no.


Clarence Decatur Howe: No; the legislation does not change the cooperative clause, in any way. That was passed in 1933, and is still in the statute. This enacts only the clause which has to do with the set-up of the management.


Abraham Albert Heaps: Quite right. This is practically the act of 1933, and in 1933-


Clarence Decatur Howe: No; it is nothing of the kind. It is a bill amending the measure of 1933 in certain particulars.


Abraham Albert Heaps: Yes, quite right. May I say to the Minister of Railways that in 1933 we moved an amendment to the bill along those lines. I notice the Minister of National Defence shakes his head in disapproval of what I am saying.


Mr. MACKENZIE (Vancouver):: Hear,
hear.


Abraham Albert Heaps: He did not speak in that way in 1933 when he sat on this side of the house.


Ian Alistair Mackenzie: I am just reading what I said.


Abraham Albert Heaps: The minister should read Hansard.


Ian Alistair Mackenzie: I am reading it now.


Abraham Albert Heaps: Of 1933?


Ian Alistair Mackenzie: I have it before me.


Abraham Albert Heaps: I suggest that the minister should read Hansard of April 7, 1933, and see what he said at that time.


Ian Alistair Mackenzie: The same thing; quote it.


Abraham Albert Heaps: I say-


Ian Alistair Mackenzie: Would the hon. member please quote it?


Abraham Albert Heaps: At that time the minister was speaking to a point of order, and dealt with an amendment before the house. He spoke in favour of the amendment.


Ian Alistair Mackenzie: Preserving the order of the house.


Abraham Albert Heaps: But when it came to a vote, he voted for the amendment being put.


Ian Alistair Mackenzie: To allow discussion; that is all.


Abraham Albert Heaps: We know what that means; it is more or less of a subterfuge.


Ian Alistair Mackenzie: Order.


Abraham Albert Heaps: I should not have used that term.


Ian Alistair Mackenzie: On a point of order. The hon. member should not impute his own particular qualities to other members.


Abraham Albert Heaps: He was using that as a means of giving his real views to the house.


Charles Avery Dunning: That is out of order.


Frederick George Sanderson: Does the hon. member withdraw?


Abraham Albert Heaps: I withdraw the first statement; I think the second one is quite in order. I was saying that at that time a good deal of sympathy was expressed by hon. members of the Liberal party, as it has been expressed to-day on both sides of the house, in favour of compensation for the men affected. I am not asking for anything new. It is only to give compensation to the men who will be affected. What is wrong with the principle? The only thing which I find the minister states is wrong with it is that we cannot compel an agreement between the railway company and its employees. We may not be able to compel it, but we can put such a clause in the legislation and make it effective. We have compensation for workmen who are injured in industry, and why should not men be compensated when they lose their positions by an act of parliament, for that is really what is happening? The act of 1933 was an act to provide for cooperation between the two railways, and if I remember aright-and I hope the minister will tell me if I am wrong-when he introduced the present bill he said that one of the reasons for the changes proposed was that there had not been sufficient cooperation between the two railways.



C.N.R.-Board of Directors


Clarence Decatur Howe: The hon. member asked me
to correct him if he were wrong, and I shall be glad to do so. I said nothing of the kind.


Abraham Albert Heaps: Then I apologize to the
minister, and I shall probably look up Hansard to see what he did say, I do not want to do him any injustice. I was saying that no new principle is involved in what I propose. These men are to lose their positions as a result of legislation put on the statute books of this country, and I think the least that parliament can do in a case of that kind is to see that the men are reasonably compensated for the positions they are about to lose.


James Shaver Woodsworth: A question has
arisen with regard to the agreement recently secured by the railway people in the United States. I hold in my hand a Labour paper, entitled Labour, under date of May 26, in which the agreement is given in full. I do not want to burden the committee by reading any lengthy extracts, but I notice that the agreement conforms to the statement of my colleague (Mr. Heaps). I quote from the article:
Senator Burton K. Wheeler of Montana, and Congressman "Bob" Crosser of Ohio, who were ready to push railroad workers' protective legislation through congress if no agreement had been reached, emphatically expressed their satisfaction over the signing of the pact.
President Roosevelt beamed with delight when the tired, but happy, railroad labour chieftains filed into the White House along with the carriers' committee, to report that the pact had been signed.
Then is given a brief summary of the agreement.
Carriers are required to give ninety days' written notice to employees who will be affected by consolidations, and within thirty days after the notice conferences must be held between representatives of the men and the management. Machinery is also set up to handle any disputes	regarding the	displacement	of
employees.	_
No employees' wages will be reduced if, as the result of a consolidation, he is placed on a job paying a lower rate.	_
Displaced employees will be paid coordination allowances-


Clarence Decatur Howe: I would raise the point of
order, Mr. Chairman, that this has nothing to do with the section under discussion.


Frederick George Sanderson: The point of order
raised by the minister is whether the article which the hon. member is reading has anything to do with the item under discussion-


James Shaver Woodsworth: Yes, it has, most
decidedly. This is an agreement recently secured in the United States.


Frederick George Sanderson: Order. The committee is still on clause 2, dealing with the definition of trustees, and I do not see that the article the hon. member is reading has any bearing on clause 2.


James Shaver Woodsworth: Mr. Chairman, the discussion on this point has gone on for some time. My colleague was speaking on this question just a few minutes ago, and it has been discussed backwards and forwards. There has been a general discussion on this clause relative to the reorganization of the board, and I respectfully submit that I am in order in referring to this arrangement that has recently been secured in the United States, and I hope that I may be permitted to read a paragraph or so.


Frederick George Sanderson: I think the hon. member would perhaps not be very much out of order if he would make a reference to it rather than read the whole article.


James Shaver Woodsworth: The reference has already been made, Mr. Chairman, and it was in order to substantiate a statement made by my colleague that I wanted to quote a paragraph or so from this paper, which summarizes the arrangement made in the United States.


Richard Bedford Bennett: On the point of order, Mr. Chairman, surely the hon. member is within the rules in view of the discussion which has taken place in this chamber in the last three hours, and it would be most unjust, I think, to limit him in view of the extent to which this discussion has gone. As you will recall, Mr. Chairman, on this clause we are discussing the general principle of the legislation; it has been discussed from every angle by almost every member of the committee who has spoken, and to limit the discussion now would seem to be unfair. I do not think, Mr. Chairman, that you quite caught the words which the hon. member was using because there was a noise at the moment. What he said was that he proposed to read from the article to remove any doubt as to the nature of the arrangement which had been made in another country, and if he is promoting a particular view I think it would be quite within the general rules of discussion in this house for him to do so, in order to make his reference exact. If one refers to the speeches made the other day and the extracts made from books on central

CJW.R.-Board of Directors
banks one can readily understand what I mean. This business of quoting from articles and papers and books has reached a point in the house as a whole where it seems to me to be quite unfair to endeavour to limit it in committee. I say that, Mr. Chairman, with deference, because I realize that we desire to limit the quotations which are made, but in view of the wide extent of the present discussion I think surely the hon. member is in order.


Ian Alistair Mackenzie: I understood that the hon. member for Winnipeg North (Mr. Heaps) intended to move a specific amendment embodying his views.


Abraham Albert Heaps: To clause 4, where I think it would be more applicable.


Ian Alistair Mackenzie: Then
surely, Mr. Chairman, the discussion of the hon. member for Winnipeg North Centre (Mr. Woodsworth) would come more appropriately on clause 4 than on the present section.


James Shaver Woodsworth: My colleague was allowed to introduce the question, and the discussion has covered a very wide range. My colleague emphasized a point that had been made by a Liberal member, and I am just seeking to give a brief resume of what actually took place in the United States. It is only two or three paragraphs, and, as the leader of the opposition has stated, is quite in keeping with the discussion which has taken place. I cannot see that I should be suddenly choked off at this stage of the discussion.


Clarence Decatur Howe: Mr. Chairman, perhaps I
should explain why I raised the point of order. The previous discussion had something to do with management, which is what was under discussion. My hon. friend's remarks have to do with legislation in another country, which has nothing to do with management so far as I can see.


James Shaver Woodsworth: It is not, strictly speaking, legislation; it is an arrangement under which certain agreements were arrived at between the employees and the railway companies.


Frederick George Sanderson: If the hon. member will permit me, paragraph 306 of Beauchesne's Parliamentary Rules and Forms, page 101, which was referred to this afternoon, states:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member

12739-217j|
And so on. It is the first part of the paragraph to which I direct attention. I want to say this to the hon. member who has the floor. I have no desire to curb any discussion with regard to this bill; that is not my intention. I think a very wide latitude has been allowed to members of this committee speaking this afternoon on the bill. Railway matters were gone into quite thoroughly, and I think most hon. members of the committee, on both government and opposition benches, who spoke this afternoon were out of order if the rules were enforced strictly. I have no desire that that should be done and I ask the hon. member for Winnipeg North Centre to be as brief as possible and curtail his remarks as much as he can.


Richard Bedford Bennett: On the point of order, Mr. Chairman. I should like to direct your attention to a slight error into which you fell a moment ago. You will observe that the word "and" is used. Paragraph 306 reads:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.
You, sir, read it as though it were divided into two sections. It is not. This error has been made before; the conjunction "and" is used. There must be a communication emanating from persons outside the house and it must refer to, or comment, on, or deny something said by a member. This point of order does not fall within that rule.


Frederick George Sanderson: The right hon. leader of the opposition is correct. The other part of the rule does not bear on this point of order; it is only the first part. It was to that part of the paragraph I was referring.


Richard Bedford Bennett: It cannot be separated. The conjunction "and" joins two things; it is not an alernative. That is the point to which I was directing your attention.


Frederick George Sanderson: 'I ask the hon, member for Winnipeg North Centre to endeavour to keep within the rules of the house and not to read the whole article in the paper.


James Shaver Woodsworth: I am not reading the whole article.


Ernest Lapointe: On the point of order, Mr. Chairman. I am not pressing it, but I should like to remind hon. members who were in the last parliament that we were always prevented by the Deputy

C.N.R.-Board of Directors
Speaker from reading an}' article in a newspaper. My right hon. friend unfortunately 3ided with the Deputy Speaker of that period vnd I was many times a victim of the ruling.


Some hon. MEMBERS:: Hear, hear.


Richard Bedford Bennett: I hope this manifestation of applause is not indicative of the state of mind that it would seem to indicate is possessed by those who are guilty of it. May I remind the hon. member that he was not in the house this afternoon. If he had been he would have heard the discussion which took place. I have always contended that the reading of newspaper articles in the house is an unsound exercise of privilege by hon. members.


Ernest Lapointe: I heard that before.


Richard Bedford Bennett: But the house has adopted the other rule. During the last five years extracts from every paper in the world were read continuously from this side of the house.


Ernest Lapointe: We were prevented.


Richard Bedford Bennett: I can recall vividly one extract read by the hon. member who now has the floor. That was from a leading Canadian journal and I recall it vividly. That would have fallen within the rule which was enforced by previous speakers, namely, a statement by someone outside the house reflecting upon someone within the house.


Ernest Lapointe: Any newspaper article.


Richard Bedford Bennett: I was unable to carry that view. That is my view still, and I told the chairman so this afternoon. This paragraph 306 is not an alternative. There must be two things. First, there must be a reading from an article and, second, it must refer adversely to someone in the house or deny some statement made. That is the matter under discussion and it also came up this afternoon. It is not conducive to the conduct of the house according to the rules if we depart continuously from the line of action that has been laid down. In the early stages of this session I directed attention to this fact, that the house has continuously violated the rule and permitted extracts to be read from newspapers and the views of persons other than hon. members to be referred to in this chamber. I have accepted that as the established rule. I pointed out this afternoon that as we have accepted that as the rule which is to govern, tve must treat everyone with the same measure if consideration. When the hon. member for Winnipeg North Centre was stopped from
fMr. E. Lapointe.]
reading, I pointed out to the Chairman that however much we might agree with him, and had in times past endeavoured to promote that view, since the beginning of this session we had followed another view.


Ernest Lapointe: We are more lenient than you were.


Richard Bedford Bennett: You are more careless of the rules that govern the conduct of the business of the house. That is the proper way to put it, but it is not my duty to see that the rules are enforced. I endeavour from my place as a member, in the position which I occupy, to see that everyone receives the same consideration. I am bound to say that you, Mr. Chairman, afforded the widest latitude this afternoon to every hon. member to go into every dietailed phase of this railway problem. The hon. member now having the floor (Mr. Woodsworth) was reading an extract from a paper published in the United States to indicate howT they had dealt with the problem and to remove doubts as to the correctness of a summary given by the preceding speaker. He was stopped from reading this extract and it was then I intervened, not for the purpose of questioning the observations made by you, sir, but for the purpose of pointing out that in the hurried reading of the paragraph you had overlooked the conjunction "and" and had treated the paragraph as being an alternative rather than in the sense in which it is used


Ian Alistair Mackenzie: I do not think that was the point of order raised. The hon. member for Winnipeg North (Mr. Heaps) referred to the question of compensation and informed the committee that when we reached clause 4 he intended to raise that question specifically. The hon. member for Winnipeg North Centre (Mr. Woodsworth) now seeks to continue a discussion on a question which his colleague said he was going to submit to the committee when clause 4 was reached. I submit that it is out of order for the hon. member to proceed under clause 2, but he would be quite in order under clause 4.


James Shaver Woodsworth: Are we on the point of order? If we are, I should like to say that there have been two points of order raised. The first is as to the discussion, whether or not I am in order in introducing the question of compensation. I may say that the minister made certain statements with regard to the situation in the United States. I did not think these statements were altogether fair and I was seeking to answer them. This question had already been taken up in the committee. As the leader of the opposition (Mr. Bennett) has said, hitherto there has been a wnde open discussion upon this bill. The Chairman him-

C.N.R.-Board of Directors
self has said that he considers that the greatest part of the discussion this afternoon was out of order. Personally, I object to discussion being allowed to go on which the Chairman himself considers to be out of order and then when I get up to speak find that I am ruled out of order on the same kind of discussion that has been regarded as being in order. That is one point.
The other point has already been referred to by the leader of the opposition. Under our rules, the reading from a newspaper is out of order if the article expresses an opinion on a matter at issue. I am not reading from an article that expresses an opinion; I was simply attempting to read a paragraph which gives a summary of an agreement that has been recently arrived at in the United States. This paragraph expresses no opinion; it simply gives the facts in the case. I was doing this to illustrate my point. This matter has been discussed already on the floor of this committee, but hitherto I have not had the opportunity of speaking. I claim I am quite in order.


Frederick George Sanderson: In order to clarify the whole situation, let me say that I consider the point of order raised by the Minister of National Defence (Mr. Mackenzie) to be well taken. The hon. member for Winnipeg North Centre (Mr. Woodsworth) was confining his remarks mainly to the question of compensation. It is true that the minister referred to compensation, but he did so in answering a question put by the hon. member for Winnipeg North (Mr. Heaps). The hon. member intimated that he was going to move an amendment when we reached clause 4. This amendment would have reference to compensation, and there is nothing about compensation in clause 2. Therefore I rule on the point of order raised by the Minister of National Defence. May I say to the hon. member who has the floor that if he wants to talk about compensation he will have to wait until we reach clause 4.	.


James Shaver Woodsworth: I am talking of com-pei. ation only as it is related to the reorganization scheme.


Frederick George Sanderson: I have given my ruling.


James Shaver Woodsworth: I appeal against your ruling, Mr. Chairman. I think we have reached the stage where some of us, if we 'are to be choked off in this fashion, might simply go home. I appeal against your ruling.


Frederick George Sanderson: I have no desire to "choke off" any hon. member.


James Shaver Woodsworth: The record speaks for itself.


Frederick George Sanderson: I have given my ruling.


James Shaver Woodsworth: And I have appealed against your ruling.
Mr. Speaker having resumed the chair.


Mr. SPEAKER:: In the course of discussion on clause 2 of the bill, the hon. member for Winnipeg North Centre (Mr. Woodsworth) began to speak on the question of compensation, which is dealt with in clause 4. The Chairman ruled that the discussion was out of order and the question now is whether the ruling of the Chair shall be sustained.


James Shaver Woodsworth: Is that statement correct?


Richard Bedford Bennett: No.
_ Mr. LAWSON: The statement of the ruling is not correct.


Walter Edward Foster: It is the statement as submitted to me.


Charles Avery Dunning: It is not correct for tlw reason that I understood you, Mr. Speaker, to read that the question of compensation is dealt-with in clause 4 of the bill. I have just read clause 4 and I can see there nothing in the nature of. compensation mentioned in the reference to you.


Walter Edward Foster: The Chairman ruled that the question could not be discussed under clause 2. The question now is whether the ruling of the Chair shall be sustained. Those in favour of the ruling of the Chair being sustained will say aye.


Some hon. MEMBERS:: Aye.


Walter Edward Foster: Those opposed to the ruling will say nay.


Some hon. MEMBERS:: Nay.


Walter Edward Foster: I declare the ruling of the Chairman confirmed.


James Shaver Woodsworth: On division.
And the house having resumed in committee,


James Shaver Woodsworth: If I am in order in speaking, I wish to suggest that when the minister introduced this legislation he stated very clearly the main reason for which the 1933 legislation was to be amended. He said:
Mr. Speaker, in bringing down this measure I feel I am sponsoring a most important and necessary piece of legislation. It is common knowledge that the three directors to whom the direction of the railways was entrusted as a result of the 1933 act have made no real progress toward the improvement of our railway situation. To date they have failed to

C.N.R.-Board oj Directors
achieve any substantial cooperative economies, to secure which was the principal object of their appointment and the outstanding feature of the 1933 legislation. Not only have they failed to secure any substantial results to date, but on their own published statements, the prospect of future results from cooperative measures, plans and arrangements is not bright. Nor have they been able 'to reduce to any great extent Canadian National operating costs, due to the fact that that avenue had been so thoroughly explored by the previous boards of directors.
Here, then, we have a statement from the minister as to the underlying reason for the legislation which is before us. The old board aad not been able to make any substantial progress in securing economies under a cooperative scheme. This board, if we make the new set-up, will no doubt be expected to travel a little bit faster in the way of cooperation and the securing of economies under these cooperative schemes. As we in this corner pointed out when the 1933 legislation was introduced, the vrage bill occupies a very prominent place in the expenditures of the railways, and if we are to economize through cooperation the chief economies, or at any rate some of the main economies, must result from the cutting down of the wage bill. Another would come through the abandonment of some of the branch lines which are to-day serving the public. We tried at that time to establish the principle that the interests of the public and the welfare of the employees of the road should have prior consideration, should take precedence over the interests of the bondholders. For it will be remembered that the present leader of the opposition, then Prime Minister, said that in reality the road was owned not by the people of Canada but by the bondholders; that the road to-day was almost, as it were, in the hands of the receivers, some such phrase as that.
The point which my colleague was trying to emphasize a few minutes ago is that if employees of the railroads are to be turned off to effect economies under the new set-up they may suffer a great deal of hardship. We are trying to insist that those who in consequence of this change will suffer loss shall be recompensed. I think that is a reasonable proposal, and one that should be advanced at this stage of the bill. The principle of compensation has been recognized in other spheres of business. The state has interfered in a great many ways between employer and employee, seeking to safeguard the interests of the employed; and what I was trying to point out was that even in a country, namely the United States, where perhaps we think lower standards prevail, this principle has been recognized. That is all I want to urge

at this stage. I am not advocating any particular methods by which that principle might be put into effect. In the United States it was done through an agreement. In this country, as my colleague has shown, the necessity for some protection of the employees has resulted directly from legislation introduced into this parliament. The minister, when my colleague made that statement, objected to it. He pointed out that we were not altering a great many things in the act of 1933. That is true. But the act of 1933 was brought in specifically to secure certain economies. Those economies could be obtained only as wages were cut down or as certain employees were laid off. Under those circumstances we tried to introduce the principle of compensation. The situation has now changed to this extent, that the board now being set up is replacing the old board for the very purpose of more effectively securing the economies which, the minister states, the old board failed to achieve. For this reason, since the government seems to be intent on economies, we believe it is all the more necessary that the proper claims of employees should be recognized.
One of the railroads is a government concern. Surely all along we have recognized certain special responsibilities of parliament towards the Canadian National Railways. We have paid the deficits of that railway, and we have done so in order to help the bondholders. Some of us take the position that, if it is necessary for this parliament to come to the aid of the bondholders, it is surely just as necessary that it should come to the help of the railway employees, more especially as the legislation is put on the statute books to help the bondholders. Should provision for compensation be put on the statute books? Well, if we are to provide certain safeguards for bondholders there is no reason why we should not, at the same time and in the same instrument, provide for the interests of the employees. That is the reason I introduced the matter a little while ago. I pointed out that in the United States the principle of compensation was now very clearly recognized. If it had not been arrived at through voluntary agreement between the railways and the employees undoubtedly legislation would have been introduced. But the minister must admit that the situation in the United States is vastly different from that in Canada. In the United States the railroads were privately owned, and there had been no drastic legislation enforcing anything in the form of cooperation or consolidation. In this country one at least of the roads is a government road, for which we have very heavy

CJVJt.-Board oj Directors
responsibilities, and it is the action of this government itself that is leading to a measure of cooperation or consolidation. I think, then, we are quite right in urging upon the minister the necessity of incorporating in the bill provisions of this kind. No such provisions are now contained in it. I can quite conceive that, on any particular clause of the bill where we attempted to introduce anything of this kind, the Chairman would again rule us out of order. That is the one reason why we wanted to introduce it when we were discussing the whole set-up. I would ask the minister again, as my colleague has done, whether he can give any assurance to this committee that he will take into serious consideration the inclusion in this legislation of some sort of compensation clause which will ensure that, if in the process of carrying out these principles of so-called "cooperation" employees are dismissed or are forced to take lower positions, their interests will be safeguarded. I would urge the minister to give us some assurance that he will include in this bill a provision of that kind.


Frederick George Sanderson: Section 2 carried.


James Shaver Woodsworth: Has the minister no answer to that request? He might at least show us the courtesy of saying that he refuses to consider it.


Frederick George Sanderson: Section 2 is carried. Section 3, Part I.


Mr. FINN:: Mr. Chairman-


Frederick George Sanderson: We are now at section 3.


Abraham Albert Heaps: The hon. member was on his feet.


Frederick George Sanderson: Section 3.


Robert Emmett Finn: I took my seat in order that the hon. member for Winnipeg North Centre (Mr. Woodsworth) should not be interrupted by me; and in the meantime I have not had an opportunity. Subject to your ruling, Mr. Chairman, I was going to ask a question of the chair, and it is this: It seems to me-


Frederick George Sanderson: Order. The hon. member for Halifax (Mr. Finn), I think, seems not to have heard what I said. I said that section 2 was carried, and he was quite in order to discuss section 3.


Robert Emmett Finn: Yes, but, Mr. Chairman, I said that I was on my feet before the Chairman made the ruling that carried section 2. I have no disposition to prolong or extend the debate in connection with this bill. It is a most important bill, one that affects every part of Canada. It affects particularly the maritime provinces, and it seems to me, from
the ruling of the Chairman as to all hon. gentlemen who spoke on both sides of the house this afternoon and this evening, one does not just know how far he is permitted to go in the discussion of the general principles involved in this measure, or whether one is absolutely tied down as a finality to the section under consideration, namely section 2. Surely within the confines of this bill there must be-


Frederick George Sanderson: Order. I must draw to the attention of the hon. member for Halifax that he is under a misapprehension if he says that the committee is on section 2. Section 2 is carried, and we are now on section 3.


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Yes.


Richard Bedford Bennett: Section 3; it is broader than section 2.


Ian Alistair Mackenzie: Much
broader.


Charles Avery Dunning: You have plenty of room under section 3.


Richard Bedford Bennett: Section 3 is broader than section 2.


Robert Emmett Finn: My hon. friend the Minister of Finance tells me there is plenty of room under section 3; I hope there is. I have not had a chance to look at it. When I do I shall know better whether he is speaking as a layman or as one of the learned profession. This bill, it seems to me, is a desirable measure. If one goes back over all the legislation that has been brought down in this house by Liberal governments or Conservative governments, including the late government led by the present leader of the opposition (Mr. Bennett), it will be seen that they were all in accord on the fact that this railway belongs to the Canadian people and that it is in the interests of Canada that there should be a board of directors on which the various provinces would have direct representation, and which, independent of hon. members of this house, would look after the interests of the various provinces and of the dominion as a whole. If that policy was good and was believed in and lived up to; if that was the policy of the Right Hon. Sir Robert Borden when he was Prime Minister; if it was right when the Right Hon. Arthur Meighen was Prime Minister, who enunciated that policy when he was in opposition, I cannot see why the legislation of 1933 which is now being repealed was brought down in this house by the late prime minister. I had not an opportunity of hearing the reasons given by the present leader of the opposition for the legis-

C.N.R.-Board of Directors
lation of that day, but by it three gentlemen, called trustees for whom I hare great respect, were given charge of 25,000 miles of railway in this country, including the Canadian government railways and the Intercolonial railway which under section 145 of the British North America Act belongs to the crown. The Intercolonial railway by one stroke of the pen was taken from the people of the maritime provinces and placed under a board of management on which the people of the maritime provinces had no representation and were practically not consulted. I was astounded to learn in the railway committee that in the last annual statement brought down by the present board of trustees they showed a deficit of $5,285,373 on the eastern lines, a deficit of $360,334 on the Prince Edward Island car ferry and terminal, and a deficit of $41,791,000 on the system. During the time I had the honour of sitting in parliament from 1922 to 1925, it was arranged after representation to the late Sir Henry Thornton and the board, that there would be regions established, and regions were established. Members from Nova Scotia, New Brunswick and Prince Edward Island represented to Sir Henry Thornton and the board of directors, on which sat the then Deputy Minister of Railways, the reasons why we in the east should have an Atlantic division. That Atlantic region was set up, but we were given only the brain and the body; its legs were cut off; the region stopped at Riviere du Loup instead of continuing on to Montreal, which was the western terminus of the Intercolonial railway. In the statutes to-day the provision is that the Intercolonial railway consists of the line from Halifax through to Ste. Rosalie or Diamond junction.
From 1867 for forty-three years we had "arbitraries" on that road, to use the terms of the Minister of Inland Revenue of a former government. He called them, in relation to income tax, "arbitraries," why? Because they were not rates based upon any scientific system of railway rates but rates made in order to permit us to get into the market of central Canada and take our place industrially in this dominion. That was the reason the Atlantic division was set up. But that Atlantic division was a disappointment; it is a disappointment to-day, and we insist that that Atlantic region shall extend from Halifax to Montreal. Leave it as the late Hon. Mr. Blair made it and Hon. Mr. Emmerson left it, a road that we were proud of, started in the early days of confederation and pushing on towards the great centres that developed rapidly in central Canada, as compared with us in the maritime provinces with a small territory and a country closed against

us to the south by a high tariff and where so many of our people went to live. We started out with a great disadvantage; we are under that disadvantage to-day, and unless something is done to remove it I say with all sincerity that the consequences may be serious. I may not live to see them; I expect my life is not going to be so long, but other men will see what will happen unless the government afford us some relief. I speak in criticism of the government of my right hon. friend the leader of the opposition, and I think we may well bury the differences that may have existed. At this session of parliament we may well set ourselves to the task of righting the wrong that has been done, and we should attempt to place the maritime provinces in a position in relation to the central provinces of Ontario and Quebec as favourable as that in *which the 'western provinces are to the centre of the dominion. All hon. members know the Drummond county railway was leased by the Intercolonial under the authority of the parliament of Canada and that afterwards it was purchased. In time we saw the trains leaving the city of Halifax and travelling through to Montreal. Later we saw the shadow of a great wrong coming down upon us, and the train was cut in two at Riviere du Loup. The feet were taken off the head and body, and the train crews had to sleep in cars at Riviere du Loup, so as to pick up the train at that point returning to Halifax. They did not go through to Montreal, as they had done formerly.
We in the maritime provinces have some rights. I stated once before in this chamber, and I repeat to-night that we were the hewers of wood and the drawers of water. The men who made Canada what it is to-day came from the east because there was no west in their day. If the brains of the east made Canada what it is, surely we are entitled to some consideration. Our little province by the sounding sea, the province with a magnificent maritime frontage and the harbour with which God and nature endowed us, should be given what it deserves, what is its right. If, when we entered confederation, we gave all these advantages to round out and to make Canada the nation she is, surely at this late date we are not to be told that we cannot participate in her development from the province of Quebec through to the great Pacific ocean. Surely we in the maritime provinces are not gradually to recede as does the tide and die of ennui; surely we are to be given our proper place in the dominion, and surely industries in the maritimes which could compete with those in the central and prairie

CJf.R.-Board, of Directors
provinces, but are prevented from so doing by excessive freight rates and indifference to transportation needs, should be permitted to exist.
I say to the leader of the opposition that I never before in my life read a statute which within its four corners was so completely imperialistic, and I do not use the word in a sense of empire, but in a sense of might. Napoleon said that military genius was the thing which ruled the world. The statutes of 1933 made provision for the appointment of three trustees who would have supreme control over 25,000 miles of railway. They would be responsible to parliament and to the Minister of Railways only in so far as *the making of reports and voting of moneys for capital expenditures were concerned. Beyond that they would sit on their thrones, but to-day those thrones are tottering. They were placed in a position even higher than that of the chief justice and judges of the Supreme Court of Canada, our final court of appeal, who can be removed only through the passing of an address by both houses of parliament. Our judges are placed in that high position because we want to have them removed from the man on the street. They are placed in that high position because they have to deal not only with property but with the lives of individuals governed by the laws of Canada. Therefore they should not feel that they are under the control of the people or of parliament.
Such conditions, however, do not apply to the board of trustees, and when the leader of the opposition placed them in a position equal to that occupied by the supreme court judges, I strongly suggest that he was going too far. The people of Canada who are paying through the nose for these 25,000 miles of railway have no right to speak or to whisper into the ears of the management of the national lines to-day. I do not believe in the patronage system as it existed in the early days, and I think we have developed to a point where such a system in its entirety could not exist. When men are placed in public positions, mind their own business and do their duty they should be protected. I have always taken that attitude, and I take it here to-night.
I must say, however, that I am in favour of the repeal of the 1933 legislation for the reasons I have indicated. In giving my opinion I do not have to appeal to the judgment of the Prime Minister, or to that of the Minister of Railways and Canals or to that of the Bennett government who were responsible for the legislation. I ask the leader of the opposition only to read the reasons given by Sir Robert Borden and those which were
given by the Right Hon. Arthur Meighen when prime minister to the effect that under no organization other than a board of directors representative of the whole of Canada would it be possible to maintain a railway system in the interests of the people as a whole.
Some of the wrongs that have been done by the act of 1933 cannot be righted. When we are talking about amalgamation between the Canadian Pacific Railway Company and the Canadian National Railways, I would ask Sir Edward Beatty and his board of directors what action they took in connection with the Crowsnest Pass Rate Act of 1897, and why the rate applied only as far as Megantic in the province of Quebec and was not extended to the port of Saint John, which was the eastern terminus of the then Canadian Pacific railway which was then being operated from Vancouver to that port. This rate, if fixed to Saint John, would be met by the Canadian National Railways over their line to the port of Halifax and both ports would then come into their own in eastern ports.
If amalgamation is in the air, it will stay in the air. It will never come down to mother earth because there is no honest, sincere intention-I am not speaking now as to personal integrity-of doing anything at all to help the people of the maritime provinces on the part of the Canadian Pacific Railway, but rather they wish to help themselves. They took advantage of the fact that as Megantic was the last point in eastern Canadian territory in the province of Quebec, before running across the state of Maine, they would not have to give the through rate which the Crowsnest pass agreement required. The railway as it existed and was operated in 1897-and they were operating in 1897 from Vancouver to Saint John-cut us off at Megantic, and they will as occasion requires cut us off at any other point. These great corporations have received much at the hands of Canada. A few millions of people have undertaken tremendous financial obligations, and in the words of the Chief Justice of the Supreme Court of Canada in 1925, Sir Lyman Duff: This question was one that should be considered by itself on application to the court because it was not one of the questions for presentation to the supreme court at that time and therefore they were unable to pass upon it. But in the statutes to-day there is a provision sufficiently large.
There are 470 million bushels of wheat grown in our western country, and I would ask how many hundred millions of bushels of that wheat come through to the maritime ports in winter, either to Saint John or to

C.N.R.-Board oj Directors
Halifax. It goes to Montreal and Quebec and is taken down the mighty St. Lawrence, and then when providence closes that great river by ice, where do these millions of bushels go? They go to United States ports, to be handled by the labourers and stevedores and agents in those ports, while the people who have spent almost their life-blood in order to survive and keep Canada together have to sit back and see their eastern gateways receiving nothing, practically doing nothing, and the port of Saint John would not be receiving what it is to-day if it were not for the fact that it is what you might call the half-time servant of a halftime corporation, the Canadian Pacific Railway, in this country.
Look back over what Canada has given the Canadian Pacific Railway, what wealth of money and wealth of soil; compare that with what the Canadian Pacific Railway is giving us, and then consider whether or not a few hundred thousand dollars thrown at the people of the maritime provinces is sufficient. It is like giving a milk bottle to a baby to keep it from crying when people are around and do not want to hear the noise, but when they go away the milk bottle is taken away and the baby can cry as long as it likes. We are not babies in the maritime provinces. We do not cry. We stand on our own ground, equal in status in Nova Scotia with the people of every other province of Canada, equal in status as completely and as securely as is Canada in the commonwealth of nations, under the act that my right hon. friend recommended in England be placed on the statute books there, the statute of Westminster, which makes all dominions of the empire equal in status. When we in Canada get that idea of the smaller eastern provinces having their rightful place and their proper share in the production, and distribution of the products of this dominion, thee we shall begin to feel that we are coming into our own, and tardy though it may be it is not yet too late.
I wish to congratulate the Prime Minister, the Minister of Railways, and the government on the step they have taken in this legislation. In the province in which I had the honour to be a candidate of the party supporting the right hon. the Prime Minister, one of the issues was the taking away of the power given to the board of trustees under chapter 33 of the statutes of 1933, the Canadian National-Canadian Pacific Act, and putting it back where it rightfully belongs, in a board ol directors to be appointed by the governor in council, which exists through the authority of the people.
(Mr. Finn.)
My right hon. friend the Prime Minister was a bit too modest while speaking yesterday afternoon. In that great city of Toronto from where my hon. friend, the ex-mayor of Toronto, comes who spoke this afternoon (Mr. Church), where, it seems, there is neither liberty of thought nor liberty of action nor liberty in religion, no liberty perhaps in anything at all, the present Prime Minister, leader of the Liberal party, during the election campaign made this statement: "I desire the people of Canada to know that if I come into power-and I ask for a majority sufficient to give me a mandate to meet the senate which is overwhelmingly Conservative, so that they dare not touch legislation passed by the House of Commons of Canada through the people's will-I propose to repeal the 1933 act and go back to the system that we had before." That voice was heard clearly from one end of Canada to the other, and what was the answer? The answer is in this chamber to-night; it is in the representation behind the Prime Minister in this chamber to-night, the greatest representation ever given to a public man in Canada since Canada became a confederation in 1867. If my right hon. friend the leader of the opposition feels that he is being criticized inferentially through the repeal of the 1933 legislation, it is the will of the people as spoken at the polls as clearly as the voice of the right hon. gentleman or of the Prime Minister is heard in this house when they speak on questions of importance and on matters involving the future prosperity of this country.
Let me say further, Mr. Chairman, that before the railway committee I asked a question or two. I said: I notice that in your annual statement you have "eastern lines." There are not any. I asked: Is that the Atlantic division or region? The answer was, no. I said, " What does it include?" They told me that it included the road through to Ste Rosalie, outside Montreal and two pieces of railway in Quebec, one 180 miles long and the other 110 miles. I was told that that together with what is known as the Intercolonial railway makes up what they call the eastern lines on which they say there was $5,265,373.20 of a deficit. I asked if they would give me-this was on the order of the chairman of the committee, the hon. member for Rimouski (Sir Eugene Fiset)-the receipts and expenditures on the Atlantic division as it existed to-day. Mr. Fairweather, who is in charge of the finances and economics of the road, said that it would cost too much to get that statement ready to let the people of the maritimes and of this country know how much it was costing to run the Atlantic division and how much was

being received in return. I want to be fair to Mr. Fairweather, to the president, Mr. Hungerford, and to the board of directors, but the fact remains that when the hon. member for Winnipeg North (Mr. Heaps) asked a question with reference to the deficit of some $383,000 on the Prince Edward Island ferry, in the twinkling of an eye, not waiting for the last trump or the last trumpet, they had the number of cars carried, the number of passengers carried and the cost of operating the nine miles of railway in Prince Edward Island. But they had no information to give the committee or parliament as to the cost of operating the Atlantic division, or how much of that deficit of over five million dollars belonged to the Atlantic region and how much belonged to what is known as the eastern lines of the Canadian National Railways.
In answer to an order of the chairman of the committee, Mr. Fairweather addressed to me a letter which speaks for itself. If an hon. member of this house is not entitled to information upon the order of a chairman of the committee so that he may deal intelligently with the question involved, then responsible government is gone. This is the first reason why the board of trustees should go. These officials have done as they pleased and they give just what information they want to give. You cannot find out what salaries they receive as it is shown in a lump sum. They are like certain other people; they go aside and they divide the loaves and the fishes. This is the letter I received. It is on the letter head of the Canadian National Railways, Bureau of Economics, Montreal, Quebec. It is dated May 8, 1936, and is addressed to me. This letter reads:
I did not have the opportunity of seeing you before leaving Ottawa. I recalled having promised to prepare a statement-


Frederick George Sanderson: I do not like to inter-dupt the hon. member, but he has spoken forty minutes.


Robert Emmett Finn: I am sorry my forty minutes are up, but I am glad there are other sections.


Hon. C. H. CAHAN (St. Lawrence-St. George):: Mr. Chairman, I was hoping
the Prime Minister (Mr. Mackenzie King) would be in the chamber to-night. In connection with an answer which he made to me yesterday afternoon, I have gone into the record more carefully. The right hon. gentleman was referring to 1933 when section 7 of the existing act, which it is proposed to repeal, was under discussion. He stated:
I think it was stated very plainly that if that clause did carry, every effort would be
C.N.R.-Board of Directors
made to see that the House of Commons, which was the representative of the people as a whole, would not have its hands tied with respect to the control of any industrial activity for which it might be held responsible.
I have looked very carefully through the debates. I may have overlooked something but I cannot find anything which fully substantiates that remark of the Prime Minister But I should like to call attention to something that I did find. I refer hon. members to page 4583 of the Hansard of May 4, 1933. At that time the leader of the opposition of that day, the present Prime Minister, proposed that certain words in section 7 of the bill then under discussion should be struck out. This section reads:
No trustee shall be removed from office, nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada.
The record shows that the present Prime Minister was then proposing to strike out from this section the words, "and on address' of the Senate and House of Commons of Canada." The section would then have read:
No trustee shall be removed from office, nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause.
In moving that amendment the right hon. gentleman said:
-if any time a Liberal administration should be returned to power and I had anything to do with it, my last desire would be to remove any trustees appointed by the present government provided they were performing their duties impartially, fairly and well.
In reply to that statement, the then Prime Minister, the present leader of the opposition (Mr. Bennett), is reported on page 4585 of Hansard as follows:
When we say that good cause must be assigned for their removal or dismissal I am glad to hear the right hon. gentleman say that he thinks that is fair.
Mr Mackenzie King: I agree with that entirety.
I was intending to call the attention of the Prime Minister to those remarks. At that time he gave what was practically a pledge to the House of Commons that no trustees would be removed except for cause assigned. That statement "for cause assigned" has a very clear and specific meaning. If that pledge is to be carried out in its entirety, as I think it should be, the present trustees should not be removed except for cause assigned, at least for cause assigned to this House of Commons or to a committee of this House of Commons, so that the trustees who are about to be removed might have

CJSt.R.-Board oj Directors
ample opportunity to vindicate their position. I regretted very much, on reading the report of the standing committee on railways and shipping, which is now on the table of the house and therefore may be referred to by members, to learn that before that committee full opportunity was not given to its members to elicit the actual facts with regard to the proposed removal of the trustees, which was then under consideration.
With regard to the report made by Mr. Fullerton in reply to certain statements which have been made in the house by the Minister of Railways (Mr. Howe)-I believe it was on the second reading of this bill-Mr. Fullerton said:	,
I wish to say most emphatically that we have exerted every effort to vindicate the hopes of the commission, and to add with some pride that, having regard, to the brief time so far elapsed, we have achieved a substantial measure of success. So far as I have ever heard, there has not even been an allegation that the board of trustees has been influenced in the slightest degree by any political consideration at any time. The board has acted at all times, or endeavoured to act, as business men of broad and far-reaching responsibilities would act.	_
When we entered into office there had already been some years of the depression, and already great and needed economies had been put into effect, but under the management of the trustees these economies, in spite of obvious difficulties, were augmented, and to-day, when all the factors affecting the railway are taken into consideration, it is my confident claim that the railway is more economically operated, that its efficiency as a transportation system is greater, and that it is better equipped, from the viewpoint of prospective profit, to deal with business expansion than it ever was before. The proof of these claims will be found in the public records of the company.
I have been reading from page 216 of the minutes of proceedings and evidence before the standing committee on railways and shipping. I wish to do full justice to the Minister of Railways, for before the committee he stated very clearly, as reported at page 228:
I am willing to grant all that Judge Fullerton says about economies. I think the road has been carefully operated....
And so on. It seems to me under the circumstances that the pledge-because I think it was a pledge-made by the present Prime Minister when the original bill was under discussion, that none of these trustees would be removed from office by any government with which he was connected, unless for cause assigned, demands that before this bill finally passes there should be an opportunity for this committee of the House of Commons and for the House of Commons as a whole to ascertain definitely in what respect these

trustees have been delinquent in regard to the duties imposed upon them; otherwise they should not be removed. This house should be fully informed. Mr. Fullerton declared that in no case had any suggestion been made of any partisan action on their part, and I think that is entirely in accordance with the facts. He also stated that in dealing with the administration the commission had always sought what they believed to be the promotion of the best interests of the railway and of the public service as a whole. I think, therefore, that this house is entitled not only to have a cause assigned but to have full access to the evidence on which any complaint against these commissioners is based, so that the house itself, irrespective of any action that may be taken in another place, can fully and fairly consider whether these commissioners have been so delinquent in the administration of their office as to be subject to summary removal, as is proposed in this bill.


Richard Bedford Bennett: I desire to add only one or two words to what has been said by the hon. member for St. Lawrence-St. George. I would point out first that it is now quite clear, from the statements made by the Minister of Railways, that this legislation is introduced into this house for the purpose of dispensing with the services of the present trustees. In his initial statement the minister made that fairly clear. If that statement is supplemented by the statements which he made in the committee, the evidence now being tabled in this house, it is quite clear that this measure is attributable to the fact that the trustees did not resign, as suggested.
The second point to which I desire to direct attention is that the minister aparently discussed with the chairman the conditions under which he might resign. Either the minister misunderstood the chairman or the chairman misunderstood him, for I assure him there was no discussion as to the chairman being appointed to any office under the late government in the event of his terminating his services. He took his superannuation allowance; before he took over the duties of chairman the order in council was passed by which he became a superannuated judge, and the question of appointing him to any position on the bench was never discussed as a possibility, although. it is just possible there may have been some laughing reference to the fact that he was giving up his position in the railway commission to the uncertainties of what might transpire in the event of there being a change of government. But no discussion ever took place looking towards his

C.N.R.-Board of Directors
appointment to the bench, my personal view being that a superannuated judge was not eligible for reappointment to the bench, having regard to the custom and practice under the constitution.


Ernest Lapointe: Was he
appointed a judge under the old law prior to 1920?


Richard Bedford Bennett: Yes.


Ernest Lapointe: He had
a right to superannuation after fifteen years.


Richard Bedford Bennett: Yes, quite so. Now, I do not think the minister discussed this with his law officers or he would realize the implications of any discussion of the kind to which reference was made in the testimony adduced before the select committee. It is a well known fact that the decisions of the courts in that regard are very, very striking. In Britain a public office is a public trust. The holder of that office cannot agree to terms under which he will accept resignation and have any claim in consequence of that contract vindicated or *made good in any court of justice. I looked up roughly, in view of the statement made by the minister, one or two decisions. One of them- was the case of a gentleman who possessed an office of importance in a dockyard. His friend suggested to him that he should accept his superannuation and retire on the usual pension, and in that case the friend would succeed him and allow him a certain annual share of the profits of the office. This agreement was carried out up to the point of there being a superannuation and an appointment, but after the friend received the appointment he was not disposed to pay the money. Thereupon the former officer brought his action, but the court held that he could not succeed; that an action could not be maintained on an agreement such as that, because a public office was a public trust, and that it was against public policy for any such action as that to be taken. Now, Judge Fullerton is an eminent judge and a very able lawyer, and I assume he knows the law far better than I do. But when I read the statement made by the minister in the committee I realized that possibly he had not consulted bis law officers or he would have been advised as to what the position is. That is the second point to which I desire to direct attention.
I am not going to amplify the third point, because it has been so fully dealt with by my hon. friend (Mr. Cahan) who has just spoken. He has gone with care over the records of Hansard. It will be observed that there was common ground between the then opposition and the government that these trustees should
be appointed for long terms and that the office would be vacated only for cause assigned. "Cause assigned," as the hon. member who has just spoken points out, is a cause given and stated by the person exercising the dismissing power. But that is not sufficient. Those of us who as students of our constitution recall the earliest cases to which attention was directed remember that an eminent judge in one of the colonies got into financial difficulties and was unable to pay his obligations. He gave promissory notes, which were very frequently renewed, and as a matter of fact, when he was sued on his notes, there was difficulty in connection with the carrying on of the proceedings in his court. Thereupon he was dismissed. My hon. friend from Cape Breton North-Victoria (Mr. Cameron) remembers the case of Graham v. Laffitte. The privy council held that Graham was properly dismissed in so far as there was ample cause to justify his dismissal, but that the dismissal was illegal, and he recovered. He succeeded in his action, why? Because he had not had an opportunity to be heard. When a man is appointed a judge for life his position is terminable only on address of both houses of parliament. That, at least, is the method adopted. He must have an opportunity to be heard. He must meet the assigned cause, and, meeting the assigned cause, he must be in a position to give his answer. If the answer is adequate, the cause is not sufficient; if the answer is inadequate, then of course the power is properly exercised. In this case, to my surprise, in view of the discussion which took place in this house at the very inception of this legislation, when I stated that I thought the chairman should have a chance to be heard and that that chance would come only when the committee met, I find the chairman taking the view that he should not be heard at all. Finally, however, it was arranged that he should make a statement. He made a statement in writing. Thereupon the minister of the day made the observation to which my friend from St. Lawrence-St. George (Mr. Cahan) has referred. On that statement, clearly, the chairman could not be dismissed. In other words, he has stated how he discharged his duties, and the minister has indicated that he has accepted that statement. The other two were not afforded an opportunity to be heard in the sense-


Clarence Decatur Howe: They refused.


Richard Bedford Bennett: Allow me to finish-in the sense of having charges alleged or causes assigned to which they could direct an answer. It is a fundamental principle that where office is held for a term which is terminable only for cause assigned, there must be the formal

C.N.R.-Board oj Directors
proceedings for which the law provides if there is the termination, of that employment by the employer. And as I have pointed out, the law goes so far as to provide that, a public office being a public trust, it is not competent to negotiate legally with that person for what sums of money he will accept the termination of his employment, but that matter must be dealt with under another branch of law.
That establishes clearly, and without any question, I think, that by this legislation an attempt is being made to railroad the trustees out of their office by an enactment which is certainly at variance with the fixed principles upon which the legislatures have heretofore proceeded. In the Reilly case it was held, following an old decision, that those who hold office, civil or military, under the crown, hold office during pleasure, and the crown may terminate their employment, but there were special circumstances referred to in the case, which came up from Australia and has been frequently cited since, to the effect that if a contractual relation exists between the parties then the power to terminate at pleasure is gone. Here not only had we the contractual relation established, for a term of years, but we had the then leader of the opposition making a statement, which the then leader of the government said he regarded as a fair statement, indicating that the good faith and the high honour of parliament, at least as represented by the House of Commons, had been pledged to that course of action being pursued, namely assigned cause, which involves the opportunity of being heard, which in turn involves the cause being mentioned, for it must be assigned against him. And it is no good to deal in innuendoes, or in insinuations, or in inferences; you must deal with direct statements which constitute assigned cause in order that the action shall be taken.
So we have here, Mr. Chairman, a situation that I regard! as one to which the law officers of the crown should direct very careful consideration! and attention. The basis of this legislation fails. Its foundation has been destroyed by the minister in his first statement and in the statement he subsequently made in the committee, and, based upon our conception of British fair play, we are indebted for its application to this case to the pertinacity of my colleague the member for Leeds (Mr. Stewart), who succeeded in overcoming the attitude of the chairman and others that he should not be heard, and who deprecated the discussions that did take place. Therefore this must be regarded as the position: By common consent the trustees

could be removed only for cause assigned; no cause has been, assigned, and to the extent that there has been any discussion that discussion resulted in the alleged cause being held by the representative of the employers to be wholly inadequate. That is the position. On that state of affairs we are asked to repeal the legislation that appointed the trustees; we are asked to terminate their office without any suggestion of compensation; we are asked, without cause assigned, without an opportunity being given them to be heard, against their will to terminate their employment and dismiss them from the service of the country. Stripped of incidentals that is the case. I cannot add to the strength of what has been said by my colleague the hon. member for St. Lawrence-St. George, but I hesitate to believe that a Canadian parliament is to set up this precedent. I hesitate to believe that when there was a consensus of opinion between the then leader of the opposition, now the Prime Minister (Mr. Mackenzie King), and the then leader of the government who now stands here, as to the fairness of the attitude taken in the legislation, this parliament is to create such a precedent.
I quite understand the argument made yesterday by the Prime Minister as to the senate not being concerned. But the answer to it is one that perhaps does not suggest itself to the layman at first; it is this, that when we say that a man shall be removed from office on an address of parliament, that means both houses of parliament, because parliament does not consist of the House of Commons; it consists of the House of Commons and the Senate and the crown, in parliament assembled. That is the reason our legislation runs in the terms that it does. The senate is introduced into the legislation by name because the senate house of parliament is a constituent house of parliament, this being the commons house of parliament, and the two houses together make up the parliament of Canada. That is why the legislation is drawn in the terms in which it is. The argument that was made by the Prime Minister respecting the right of the senate to deal with matters affecting taxation is, of course, rather an, old argument and is based upon the sound principle, by analogy, that the House of Lords in Great Britain has not the right to deal with matters affecting taxation and revenues, money bills as it is put. But the late Senator Ross was of the opinion, after a careful review of the authorities, that that power was possessed by the Senate of Canada. That is not a matter which need

CJV.E.-Board oj Directors
concern us at the moment; it is sufficient for my purpose to point out that the reason reference is made to the senate in the section which is to be repealed is that the senate is a constituent house of the parliament of Canada, and that reference is generally made to addresses being made by both houses of parliament rather than by one.
So far as this legislation being conceived as a Tory plan, if hon. members read again the words of the Prime Minister to which the hon. member for St. Lawrence-St. George referred, I think they will realize that at that time the Prime Minister did not so consider the legislation. Although many things were said about it, and will continue to be, the fact is that in that instance there was apparently a common understanding. I said that I thought the statement he made was a fair one, and I repeat that I think it was a fair one.
The question of minorities and majorities was raised. Of course changes of government have always brought about difficulties. Where those who formerly sat in opposition are in office and those who were in office are in opposition, there is a tendency on the part of the new government to try to make good the position they took in opposition. But there have been exceptions to that rule. The law and the custom of the constitution are predicated upon an entirely different conception of the situation. If hon. members read the parliamentary history of Great Britain they will find successive governments under Mr. Gladstone continuing to maintain legislation which was passed by their Conservative predecessors. It will be recalled that with respect to reform measures, to the com laws, to much other legislation, notably the unemployment insurance act in recent times, new governments have maintained the legislation of their predecessors. Frequently they have made changes and additions for the purpose of making it more in accordance with their conception of its usefulness, but they have maintained it. Here we have an illustration of a situation that has grown up markedly since my hon. friends assumed office. Men were appointed to positions for a period of five years. Then they were told that they held office during pleasure, and were dismissed. Of course I would say that that question may have to be settled ultimately by a court. The judgment in the Reilly case makes it quite clear that if the court should find that there is a contract, then the rule with respect to service to the crown, whether military or civil, being service during pleasure would not prevail; the ordinary rule of contractual liability on the part of those who without cause terminate an agreement of
service or of hiring would prevail, and damages would be recoverable. In the Reilly case the court took the view that as the man could no longer offer himself for the discharge of his duties because the office no longer existed, he could not recover damages, and they avoided determining the question whether or not a contract existed.
I submit to this committee that, by the course the government propose to follow, we shall be creating a very dangerous precedent. It is a course of legislation which is at variance with all our precedents, and is in my judgment wholly unworthy of this house or of the government of the day. I mention it only in this sense because, when I read the statement made by the chairman of the trustee board, Judge Fullerton, and the statement made by the minister, added to what he said on a previous occasion, I realized that this is what has sometimes been described in the courts as mere brute force. It is a case of abolishing a position for the purpose of getting rid of the present incumbents. I submit that is not a proper course to follow and cannot but be injurious to the well-being of this country.
One word more upon the other questions discussed this afternoon. I am wholly in accord with the minister if he says that in his judgment as the new minister it is desirable to remove the veto power of the chairman. I am not going to quarrel with that, if the minister says that he considers it desirable in his interest to have that veto power done away with. It was inserted in the act because the commission thought it desirable that it should be there. The question of continuity, the question of permanency, the question of creating a policy and outlining a policy-all these are matters with which the commission dealt, and I have referred to them in previous statements to the house. I shall not weary the committee by making further reference -to them, more than to say that they constitute the causes which led up to the recommendations for the legislation.
Without going into the matter in detail may I say that if the minister, especially one who has accepted great responsibility, thought it desirable to improve or make more workable some condition, or to bring about a more direct relationship between the government and the commission, I could quite understand his introducing such legislation. But when the avowed design of the legislation is to get rid of three men who occupy positions as trustees, and to substitute for them men called directors, with all the difficulties to which the commission has pointed out directors are subject, I suggest that this is not a proper course to take. I

C.NJI.-Board of Directors
say that, when I remember what directors have brought upon us in almost all parts of the country, whether it be in connection with the Vermont Central, with the Grand Trunk Western, with steamships or with some part of the country. No matter whether it was in Montreal or elsewhere, we had difficulties come to us by reason of the appointment and operations of directors. The reason was obvious, wholly obvious. I have heard nothing from the minister to indicate that those reasons will not continue. On the contrary, our old friend, one of the venerable and venerated members of this house (Mr. Marcil) only this afternoon read a petition in which he pointed out that in the interests of efficiency and economy certain changes were made with respect to railway workshops at a point where repairs were carried on. "In the interests of economy and efficiency" were the words used. A change was made from one point to another, namely from point A to point B, in other words to Campbellton rather than elsewhere. Just imagine the pressure that will be heaped up against these directors! This is a fair warning. Can the directors resist the power of 170 odd members of parliament? If the minister means what his words would seem to indicate, he is not going to have anything to do with the operation of the railways; that is going to be done by the president and directors. I may say that .if an examination were conducted on cause assigned I have no doubt the minister would discover many things he ought to know, because inevitably where you have a combination of both systems there are difficulties. The late Sir Henry Thornton found difficulties but he brought them into a harmonious whole. Now and then we find the assertion of this or that right on the part of the old road or one of the other roads, and the difficulty of creating harmonious operation of the system is very, very great.
In his statement Mr. Fullerton referred to that difficulty. But when there is a great depression and a lessening of traffic and revenue, with a consequent laying off of men, the human factor enters into the problem, and the consideration of that human factor involves many questions to which references have been made to-day. The essential point it seems to me we cannot get away from is that the very feature contained in the address made this afternoon in connection with the acquisition of branch lines, and other properties, in a constituency represented by a member on the government side of the house represents an effort which must and will be made to secure a recognition of local communities for local purposes as against efficiency and economy, which were the

grounds put forward by the late Sir Henry Thornton as the reasons for actions which were taken. That condition is going to be intensified one hundredfold. It will be intensified one hundredfold, under a board of directors.
The whole purpose of the Duff commission was to create a body just the opposite of a directorate. Why? Because this was a publicly owned property in connection with which the House of Commons had undertaken to represent the shareholders, and a property which, as I pointed out, if the ordinary rules of law were to prevail, would have been in the hands of receivers long since, and would have been operated for the benefit of those who held the securities. In order that we might avoid that, trustees were appointed. They were free from political consideration, and Judge Fullerton has accentuated that point in the statement he made. Others have done the same thing.
I know about all the complaints; I know about the complaints made. I know it was complained that these men would not take a political outlook. Do I not know, sir, the extent to which the late government suffered? Do I not know about the appeals that were made? Do I not know about the votes that were lost? Do I not know about the successful effort made to create poisoned ideas and views in the minds of Canadian National employees? Have I forgotten? I have not. I have not forgotten the propaganda and the efforts that were made. Are we to return to that? If we are not, then all I can say is that the minister must either yield or leave; no alternative is left, because of the very action that has been taken ever since the trustees took office.
In the very nature of things we must be sincere, whether we like it or not. In connection with this matter we must be sincere, and I cannot but think that hon. members of the committee must realize that the substitution of directors for trustees will bring about an inevitable recurrence of the difficulties to which reference has been made, and which were accentuated this afternoon by the observations of the hon. member for Bonaventure, when he indicated his position.
The statement of the summary of the Duff commission made by Judge Fullerton is so ample that I think not even the hardest cynic could object to its fairness. This is the last opportunity afforded in committee to raise our voices against the repeal of a statute which entrusted to a body of three trustees the administration of the greatest property the Canadian people own. If the minister is dissatisfied with the trustees I have no doubt methods could be devised by which they could

CJVJt.-Board of Directors
be replaced. To do it in this indirect manner is bad enough, but when for the trustees he substitutes directors, the very persons against whom the Duff commission reported, those persons because of whom the red line of extravagance was running through the whole operation of the system, then I say that he has invited the very criticism which has been made in this committee, namely that the action is taken for the purpose of restoring those days, with all the sad effects they have had upon the Canadian taxpayer.
That is the reason-I know it is too late- why I appeal to the minister to think carefully; I appeal to the Minister of Justice, too, to consider the precedent we are establishing with respect to the disposition of the trustees, realizing that a public office is a public trust. The approach which was made to the matter was unfortunate; I do not blame the Minister of Railways for that, because he is not a lawyer. But it is quite obvious that had he had brought to his attention the decisions of the courts with respect to the position in which Judge Fullerton would have placed himself had he yielded to any suggestions that he be provided with this or that office, with this or that position or with a sum of money, unless it be a sum placed in the estimates, the minister would run counter to this. He would have had regard for that great line of decisions which, strange as it may sound, began as far back as 1551, when a statute was passed in Great Britain. It has brought about other statutes and decisions since that time, and that is the reason why in Great Britain they could not possibly submit to parliament a measure such as this. It would fill British legislators with a sense of horror to have submitted to them a statute that proposed, without conferring an opportunity to answer to an assigned cause, to wipe out trustees in the method which is being followed in this bill.
I can only make this final suggestion-it will do no good, of course-as to the desirability of the government reconsidering the matter from the other angle which apparently they had not thought of at all until the statements made by Judge Fullerton and by the minister appeared. But now that they do appear, it seems to me that we have in the printed word reasons which should influence this committee, and the government first of all, to hesitate to ask the members to follow a course, pursue a policy, and create a. precedent which is without parallel, so far as I know, in the whole British empire, and which does violence to every settled and established rule dealing with the relations between the crown and its servants. For while Judge 12739-218
Fullerton and the trustees were paid by the railway company, they were appointed by the crown in the exercise of the power conferred by parliament, and when a contract such as that is made by the crown with its servants, to suggest that those servants should be treated in this way is, I say, doing violence to every established precedent. But worse than that, it creates a sense of unfairness and of injustice which, while it might meet with temporary cheers and approval, cannot in any sense be divested of its real quality if sufficient examination and analysis are given to the statute under which that power is to be exercised.
This section repeals the existing law. The government, I can readily understand, desire to make modifications and changes in this law as they have in other statutes, but so far as the general principle is concerned I hope that on reconsideration, and especially in view of what has taken place in the committee, the government will realize the desirability of not departing from known pathways of conduct and will not endeavour to establish a precedent that, in my judgment, will react some day or another, I do not know when, upon the heads of those who are responsible for it.


[Stage Direction]
Section agreed to.
On section 3-Part I.
Ian Alistair Mackenzie: I have an amendment, Mr. Chairman, to section 3, as follows:
That all the words after the word "council" in the third line on page six of the bill down to and including the word "approve" in the sixth line, on page six of the bill, be struck out.


Richard Bedford Bennett: These are separate sections, Mr. Chairman?


Clarence Decatur Howe: I might explain that. Section
3 says:
Part I of the said acts is repealed and the following substituted therefor.
It so happens that the first paragraph of part I of the said act that is amended is paragraph 4, and all the succeeding paragraphs up to and including paragraph 15 on page 7 of the bill are part of section 3 of this bill. There are only five sections to this bill. Section 3 is on the first page, and section 4 is on the eighth page of the bill.


Richard Bedford Bennett: I was going to suggest to the minister, although of course it is not for me to say, that these paragraphs 4, 5, 6, 7, 8, and so on down to 15, should have been designated by different figures because they

C.N.R.-Board o/ Directors

are not sections; they are really paragraphs, and might be designated a, b, c, and so on. The section is 3, but these paragraphs 4, 5, 6, and so forth appear in the bill as if they were separate sections.


Clarence Decatur Howe: Yes, and I thought it well to direct attention to that. I think we should jertainly consider section 3 paragraph by paragraph, because in the act they will be separate sections.


Charles Hazlitt Cahan: The minister has stated it exactly. This section 3 repeals a whole part, consisting of several sections of the existing act.


Clarence Decatur Howe: Quite so.


Charles Hazlitt Cahan: The proper way, I submit, to have done it would have been to repeal the old act section by section and substitute the new sections. This may have the same effect, but in consolidating the act later for office purposes these paragraphs 4, 5, 6, and so forth, must appear as sections of the new act.


Clarence Decatur Howe: My hon. friend is quite correct. We could have repealed it paragraph by paragraph, but the draftsmen have in fact repealed all of part I.


Richard Bedford Bennett: That is clear, and the following are substituted therefor. The question is how they shall be numbered.


Charles Hazlitt Cahan: Of course, we have been discussing section 3 of the bill. Section o is practically the whole bill, and therefore we were entitled to roam from Dan to Beersheba.


Clarence Decatur Howe: The discussion took place on section 2.


Charles Hazlitt Cahan: Yes, perhaps so. Now the minister proposes that we shall proceed with what are to be the new sections of part I, and that we proceed section by section. Is that the intention?


Clarence Decatur Howe: Yes.


Charles Hazlitt Cahan: I think there is no objection to that.


Clarence Decatur Howe: The amendment i3 to section 3.


Richard Bedford Bennett: But it is with reference to page 6.


Henry Herbert Stevens: Could we have the amendment read again, Mr. Chairman?


Frederick George Sanderson: The committee is on paragraph 4 of clause 3, appearing on page 2 of the bill.
fMr. Bennett.]
On section 3, paragraph 4-Board of directors.


Hugh Alexander Stewart: I submit at least, Mr. Chairman, that we might have the marginal note read.


Frederick George Sanderson: The marginal note
reads, "Board of directors."
Paragraph 4 agreed to.
On section 3, paragraph 5-Remuneration of directors.


Richard Bedford Bennett: Has the minister any
statement to make as to the salaries it is proposed to pay the directors?


Clarence Decatur Howe: I do not know that that has been considered. We propose to put this pretty much on the basis of national service, and not attempt to pay the class of men we hope to get for the actual time they spend. But I suppose quite a small sum, perhaps three or four thousand dollars.


Abraham Albert Heaps: Does the minister think he can get competent railway directors for three or four thousand dollars?


Clarence Decatur Howe: I think we can get men of the right type, anxious to do national service, who will put service above the actual remuneration.


Richard Bedford Bennett: Does the minister think it would be possible to get that type of man able to divorce himself from his own business to the extent of being able to meet with the board of directors once a week for the purpose of doing railway business?


Clarence Decatur Howe: I feel that we can. When I said three or four thousand dollars, I would not like to be tied to that, for it might be five or six thousand dollars; I would say not more than six thousand dollars, but that is a situation we have to meet when we come to discuss it with the men we hope to get. I do not think any man that we might hope to get will discuss salary until after he has decided whether or not he will accept the position.


Robert Emmett Finn: The board of directors as suggested by the minister is to consist of seven members?


Clarence Decatur Howe: Yes.


Robert Emmett Finn: One of whom will be the
chairman?


Clarence Decatur Howe: Quite.


Robert Emmett Finn: In the appointment of these directors is it the intention to carry out the principle and appoint a board of directors representative of the different parts of

C.N.R.-Board oj Directors
Canada? I do not know whether the government has definitely made up its mind in this connection and if the minister cannot answer me to-night, I shall be quite satisfied to have his answer later before the bill is finally dealt with.


Clarence Decatur Howe: We shall decide what directors we shall get when the bill passes.


Robert Emmett Finn: I must take issue with the minister. There is a principle involved in this change. A few moments ago I referred to the remarks of the Right Hon. Arthur Meighen and the reasons he gave for appointing such a board of directors. He contended that politics would be removed and the board would be representative of the different parts of Canada; that they would know the local conditions and needs, the same as a doctor does when he visits the bedside of a patient. I am speaking only for my own province of Nova Scotia and hon. gentlemen who represent Prince Edward Island and New Brunswick can speak for themselves. I should like to know if this board of directors is to be representative of all the provinces of Canada. The minister now tells me that a statement will be made after the bill is passed and the stable door is locked. I think this committee is entitled to this information. We should know the type of man to be selected and whether territorial limits will be taken into consideration in the appointments.


Frederick George Sanderson: Shall paragraph 5
carry?


Robert Emmett Finn: I think I am entitled to an answer from the minister, and if I am not to get one, I should like him to say so. I want to be fair, but I shall not, without uttering my protest, permit legislation, whether it be introduced by the government or otherwise, to pass that might be subversive to the best interests of the province which I have the honour to represent. I think, before this legislation leaves the committee, every hon. member present is entitled to receive the information he desires.


Clarence Decatur Howe: I want to give my hon. friend the fullest possible information, but I thought I made it quite clear that the government have not gone as far with the selection of directors as my hon. friend seems to think. They hope to get six men and a chairman who will be of the greatest value to the property. I can assure my hon. friend that when the time comes the considerations he mentions will be weighed very carefully, but surely he should not ask me at this time as to the policy of the government with reference to these directors who have not been definitely chosen.
12739-218J


Robert Emmett Finn: Perhaps the minister has misunderstood me. I did not ask him who the directors were to be; I asked him whether in the selection of these directors the question of territorial limits would be considered.


Clarence Decatur Howe: I can assure my hon. friend that territorial considerations will be carefully weighed when the time comes.


Richard Bedford Bennett: Will they weigh enough?
Paragraph 5 agreed to.
On section 3, paragraph 6-Tenure.


Henry Herbert Stevens: How does the minister propose to assure these directors that they will have continuity of office. Three of the original directors are to be appointed for three years; two are to be appointed for two years, and two for one year; then the succeeding directors are to be appointed for periods of three years. The present board of trustees were assured by statute of a term of five years. They have been in office a little more than two years and now they are being simply legislated out; the statute means nothing. What confidence can be placed in this statutory assurance of three year appointments?


Clarence Decatur Howe: I may say that I do not consider that of the highest importance since the men who will be chosen will be selected because they feel they can make a contribution to their country. I believe that should there be a change of government and it is intimated to these men that they have not the confidence of the government, they will retire promptly. I would expect that men of the calibre we hope to get would do that, and I would be disappointed if they did not. In the meantime, they are to be appointed for three years, and one-third of the board retires each year. In other words, the board of directors faces its shareholders every three years just as is the case in many private corporations. I think that is a very proper thing and I would not care to do anything to tie the hands of the next parliament from reorganizing this board as they see fit.


Henry Herbert Stevens: I am referring to this
revision to the old system. It means that these directors are being appointed for the term of office of the existing government; that is the effect of the minister's observations. In other words, we are declaring to the country that in so far as the Canadian National Railways are concerned, its policy of operation, its policy of administration must be attuned to the policy of the government that happens to be in office. I think it is important that this fact should be recognized in passing this
C.N.R.-Board oj Directors

legislation. In my opinion, it is possible to change that. Would the minister consider the suggestion of having these directors appointed by parliament itself, thus ensuring at least before any change is made, a full discussion by parliament acting as shareholders of the railway? For if the theory just expounded by the minister is to be the doctrine which will govern us, it really means that we are creating a partisan board of directors; that is what it amounts to. Altogether apart from what is in the minister's mind at the moment, this legislation as such will amount to a partisan appointment of directors. The minister has emphasized twice already, I believe, in the last few minutes, his hope of getting men who will serve the country and accept this office as a national service. That is fine, and I shall not, in anticipation, cast reflections upon these gentlemen; I have no doubt that very worthy gentlemen will be chosen. But the point is that behind it all we are adopting a system which will grow into and be perpetuated as a partisan administration of the railways. That is exactly what was intended to be overcome by means of the trustee system. I confess that when the legislation was first brought down, after the Duff commission had reported, for the appointment of trustees, I considered that that phase of the matter required a great deal of thought if its value was to be appreciated. But having seen it put into operation I have come to the conclusion that it was sound, not only as a method of getting away from the partisan element which inevitably creeps in, but in addition to that for the reason that the trustee system clothed the administration of the railways with authority in connection with dealing with the competing railway, which I think is impossible in connection with a board of directors. Well, I will not say impossible- that is going too far-but it could not be done with the same efficiency by a board of directors as by a board of trustees. In my opinion the minister should give this paragraph further consideration.
I would suggest that parliament might well consider now, if we are going to depart from the system of trustees, whether or not the directors should be appointed by parliament itself. That is a thought which has been in my mind many times in the past when this subject of the national railways has been before parliament. I have long had the view that it might be advisable-that is, when the railway was under a board of directors-that parliament might at some period of the session sit as shareholders of

the railway. We might constitute the house in committee of the whole as a meeting of shareholders for the purpose of appointing directors, receiving the annual statement and dispatching business of that kind. Parliament as a committee of the whole might sit as shareholders of the railway.


Charles Avery Dunning: There is no provision
anywhere for parliament sitting as a committee of the whole.


Henry Herbert Stevens: No, but there is no
reason why parliament should not pass legislation for the introduction of that system.


Charles Avery Dunning: I do not think it could
constitutionally. Parliament is composed of two bodies functioning separately, each within its own orbit.


Henry Herbert Stevens: There is no reason in
the world, however, why parliament could not pass a statute. I am not saying that my idea is the wisest; I am merely offering it as an opinion. There is no reason why parliament should not pass a statute providing that in so far as the national railways are concerned an annual meeting might be held which would be attended by all the elected members of parliament as representing the people, who are the owners of the property. As the company operates to-day, or as it will operate under this bill, it will be administered by a board of directors, and the only body above the board of directors will be the executive, namely, the cabinet or the government of the country. As a matter of fact, every citizen or taxpayer in Canada is a shareholder of the railway, but it is obvious that you could not have a meeting representing the shareholders as an ordinary shareholders' meeting is held. We could, however, enlarge the number by constituting parliament itself as representing the shareholders for the purpose of appointing directors and performing other limited duties. About three years ago, in 1933, we passed a statute which provided that the trustees should be appointed for a term of five years. They have been in office for something like two or two and a half years, and now by legislation we are removing them without any cause assigned. There has been no complaint; there cannot be any reasonable complaint sufficient to warrant their removal. We ar_ declaring in this bill that the directors shall hold office for three years. But there is no guarantee whatever that these directors will hold their office for three years.

C.NJi.-Board oj Directors


Mr. BAKER:: Why not say for the duration of this parliament?


Henry Herbert Stevens: That would be a much
more frank way of putting it, because that is what it means. For hon. gentlemen at present on the government benches cannot now take an action that nullifies the action of parliament three years ago and say: We are so much superior to those who preceded us that any action we may take will stand and these directors will remain in office for the full term of three years. The government must expect that, once having established this precedent in connection with the national railways, other governments will be inclined to follow in their footsteps, and they would have abundant excuse for doing so. Personally I should like to see in this bill something repudiating the idea of interference with these appointees, once appointed, except for dereliction of duty or incapacity or untrustworthiness or something of that sort. That is the only reason why a man should be removed. I offer these suggestions for what they are worth.


Richard Bedford Bennett: We are providing in this measure that the governor in council shall be a shareholder of the company for all purposes under the railway act. The hon. member for Kootenay East (Mr. Stevens) has referred to members of parliament, the senate and the commons, voting as shareholders. It is quite competent for us to pass a statute to that effect. I at one time had a plan by which all the members of the local legislatures and of parliament, the senate and the commons, should cast a ballot for the election of the directors of this road, and should be authorized by parliament to act as shareholders for that purpose.


Charles Avery Dunning: I should be interested to know the reason my right hon. friend abandoned the idea, to see whether it is the same reason that actuated me in abandoning a similar plan.


Richard Bedford Bennett: I abandoned it because
it did not appeal to those to whom I suggested it. I am going to be perfectly frank about the matter, because the minister was very frank this afternoon about his speech. I might say that the plan did not seem to win commendation from anybody.


Charles Avery Dunning: I had the same experience.


Richard Bedford Bennett: That is a fair statement of the situation. On the other hand the hon. member for Broadview (Mr. Church) has put his finger upon it. What this government
says is this: "We found a man who had a right to a job for five years, who was given that job by an act of the parliament of Canada; we wiped it out, and we are going to make the appointment for three years"-which makes it a joke. Why not say, "shall hold office during the lifetime of the present government," or "unless they change their mind," or "as long as their present state of mind continues?" Having said that there is no value to a written contract; that an act of parliament is a worthless scrap of paper, why not be consistent and put it in the statute? That is the position. The minister should be consistent about it. He has declared that a former act of parliament is a piece of waste paper. That act gave one man a position for five years, and others for a less time; one expires in December next. Why not say in this section, "They shall hold office as long as we think they should, and no longer," "we" meaning the present government? That would be better than coming down to this parliament and repudiating a statute. It would be much better to indulge in an act of acquiescence rather than in an act of repudiation, and simply to say, "We acquiesce in the position which we have taken and are going to embody in this statute a provision that hereafter no man may be appointed for three, four, five, six, eight, or ten years-that doesn't mean anything to us- but, so long as we feel he is satisfactory to us." It sounds so much better than to go through all these formalities about equity and fair dealing and doing justice and loving mercy, and the other clause that I shall leave unsaid. Why not do what I suggest? I am very serious about it. Having repudiated all these provisions of last year in the section, why not now say, "We will save parliament trouble by saying that the term shall be three years or such time as to the governor in council may seem satisfactory?" In other words, as long as the pressure from without is sufficient to enable them to discharge their duties to the satisfaction of the members of the House of Commons who sit to the right of the Speaker, it is all right. I suggest seriously to the government that they should put that on the statute book.


Clarence Decatur Howe: I may say, Mr. Chairman, that in 1933 for the first time legislation was passed which attempted to tie the hands of an incoming government beyond peradventure, by making a change of personnel possible only by means of a joint address of the Senate and the House of Commons. The present government is not perpetuating that method.


Charles Hazlitt Cahan: This bill can pass only with the consent of both houses of parliament.
CJJ Jl-Board of Directors


Richard Bedford Bennett: Hear, hear.


Charles Hazlitt Cahan: You are in no worse position now than you would be under any circumstances in which you wish to repeal an act constituting the national railway board. You must now go to the other house and secure their consent to the bill which is at present before the committee. There can be no legislative measure without the consent, direct or indirect, of both houses of parliament, and when it is suggested that the address should be concurred in by the Senate and the House of Commons, that is the form provided by the rules of this house for every address which is to receive the approval of parliament for any purpose whatsoever.


Richard Bedford Bennett: Petitions have to go to both houses.


Mr. NEILL:: Would the minister allow me to ask a question regarding a paragraph that has already passed? Paragraph 5 of section 3 provides that the directors shall not be entitled to receive any other recompense of emolument from the Canadian National Railways or any company of which they form a part. Would it not be a good idea to provide that they should not receive any recompense or other emolument from any other railway company?


Clarence Decatur Howe: I think the hon. member can leave it to the good judgment of the government not to appoint directors or employees of other railway companies.


Alan Webster Neill: I do not mean directors or employees; I mean people who are under an obligation, possibly pensioners, or who are closely allied with them by way of having large business dealings with them and things like that. If it is desirable that they should be absolutely clear from the Canadian National Railways, it is ten times more so that they should have no connection, direct or indirect, open or concealed, with any other railway.


Richard Bedford Bennett: Will this be paid by the railway or by the crown?


Clarence Decatur Howe: By the railway. The purpose of paragraph 5 is merely to provide that they will not get two or three emoluments from serving on different boards of the railways, of which there are so many boards. They are to be paid one fee by the railways.


Hugh Alexander Stewart: The minister persists in stating or insinuating or suggesting that the object behind the fixing of the period of office of the trusteees was a political one; that it was done for the purpose of tying the hands of a succeeding government.


Clarence Decatur Howe: So it was.


Richard Bedford Bennett: The minister was not in the house at the time.


Hugh Alexander Stewart: I ask the minister to read the report of the Duff commission and to study the reason why that commission recommended the appointment of a board of trustees and recommended also that it be given permanence.


Richard Bedford Bennett: And the length of time.


Hugh Alexander Stewart: And the length of time.


Clarence Decatur Howe: Did my hon. friends opposite adopt the length of time?


Hugh Alexander Stewart: I do not know that we adopted the report in every detail. There were reasons given by the commission why trustees should be appointed and the desirability of their having a secure tenure of office, in order that one of the troubles which was referred to in the report might not occur again.


Frederick George Sanderson: Order. Eleven o'clock.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, June 5, 1936