February 19, 1901


Report of the Secretary of State for Canada for the year ending June 30, 1900.-Right Hon. Sir Wilfrid Laurier.



Lawrence Geoffrey Power (Speaker of the Senate)



I have the honour to inform the House that I have received from the Hon. Mr. Justice Hodgson and the Hon. Mr. Justice Fitzgerald, two of the judges selected for the trial of election petitions, jiursuant to the Dominion Controverted Elections Act, a certificate relating to the electoral district of East Queen's, in the province of Prince Edward Island, by which the said election is declared to be void.

I have further to inform the House that the trial judges having reported

(c) That there is reason to believe that corrupt practices, namely, treating, extensively prevailed at the election to which the petitions relate.


I have, in conformity with section 48, chap. 9 of the Revised Statutes of Canada, withheld the issue of my warrant for a new election pending any action to be taken by the House in the matter.



The MINISTER OF FINANCE (Hon. W. S. Fielding) presented a Message from His Excellency the Governor General. Mr. SPEAKER read the Message, as follows :- Minto. The Governor General transmits to the House of Commons supplementary estimates of sums required for the service of the Dominion for the year ending June 30, 1901, and in accordance with the provisions of the British North America Act, 1867, the Governor General recommends these estimates to the House of Commons. Government House, Ottawa, February 19, 1901.



That the Message of His Excellency, together with the supplementary estimates for the current year, be referred to the Committee of Supply.


Motion agreed to.



The PRIME MINISTER (Rt. Hon. Sir Wilfrid Laurier) moved :

That when the House adjourns this day, it stand adjourned until Thursday next.


Motion agreed to.


The MINISTER OF FINANCE (Hon. AV. S. Fielding) moved that the House resolve itself into Committee of Supply.


William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN (East York).

Mr. Speaker, before we enter into the consideration of that motion, I desire to bring an amendment before the attention of the House, dealing with the question of the government ownership of railways in this country. I have framed an amendment on the narrowest lines possible in order to elicit the fullest discussion, and in order to present the matter before the House and the public in a wide and clear manner. When, the other day, I brought this question to the attention of the House by moving the adjournment of the House, I was criticised because it was said that I was out of order, and that I was springing the question upon the House and the country. I am here to justify what I did then, because what I did then secured for me a very prompt expression of opinion from one end of the country to the other, and if I am moving to-day in a more regular way, it is because, to-day, I have at my disposal an expression of opinion that comes from one end of Canada to the other, and which proves the gravity and indicates the importance of this question, and which justifies me in bringing it up now on a motion to go into Supply. In the short week which has elapsed since I first made the motion, I have had expressions of opinion from all over the country ; from the press and from the public men of Canada endorsing my course ; and, in the discussion to-day these expressions of opinion will throw a great deal of light upon the subject. What is the question to which I direct the attention of the House and of the country ? It is the gravity of the fact that the great railroads of Canada are liable at any moment to pass into the control of that great monopolistic syndicate which has recently acquired control of the great railways of the United States. The future of Canada is involved in that question, and therefore if I take up a little time of the House in trying to make my position good, I trust hon. gentlemen will pardon me. Let me first give a sketch of these men in the United States who control the railways, and I shall do so by way of illustration. At the head of that combination is Mr. J. Pierpont Morgan, of New York, who to-day is the collossus of banking in the world. There is not a proposition that he will not undertake; he frequently puts schemes through which involve

from fifty million dollars to a thousand million dollars. He commands almost the entire banking support of the United States, and he has associated with him men of great experience and capacity ; men like the head of the Vanderbilt family, owning thousands of miles of railroads in the United States; men like Mr. George Gould, who controls thousands of miles of railway, as well as the telegraph system of the United States largely ; men like Mr. Rockefeller, the head of the Standard Oil Company, who also controls thousands of miles of railway ; men like Mr. Harriman, also a great railway owner, and these men, along with others, form to-day, the most powerful combination that ever existed in the United States. Within the past few weeks they have consolidated the Vanderbilt lines, the Gould lines, all the Pacific lines, including the Northern Pacific, the Union Pacific, the Great Northern, and the Southern Pacific. These men not only control the railroads of the United States, but they control also other great corporations. AVithin a week they have secured control of the iron and steel production of the United States, capitalized at $950,000,000. They control the oil production of the United States, through the Standard Oil Company; they control the copper production of the United States ; they control all the coal fields in the Eastern States and the Southern States, and the coal fields of Ohio, and they are preparing to control the ship-building of the United States. There is not a single proposition of the first magnitude that these same men do not seek to control.

What is still more significant to the people of this country to-day is the fact that they also control the service of Mr. C. M. Hays, who was the manager of the Grand Trunk Railway, and who is to-day to be the manager of the consolidated system-a man whom all the world admits is the greatest administrator of railway in America and who, having been in the service of the Grand Trunk, and knowing the transportation problems of Canada, as no other man in America knows them, is in a position by reason of his connection with this great syndicate and his knowledge of our railway, to lay out a scheme whereby in the twinkling of an eye the two great Canadian railways could pass into the hands of this syndicate. And even if they do not pass into the hands of this syndicate, they could be greatly injured by him.

They also control steamship and river lines of steamers, on the Pacific, on the Atlantic and on many of the inland waters of the United States.

Now, Sir, if they can control the railways of the United States, I am here to-day to argue that they can control the railways of Canada in a very easy manner, and since I raised this question last week, we have had the opinion of Mr. Shaughnessy, the head of the Canadian Pacific Railway, to show how

easy it would be for this powerful United States syndicate to control our Canadian railroads. In an authentic interview given out by Mr. Shaughnessy, he makes this statement :


Mr. T. G.@

Shaughnessy, president of the Canadian Pacific Railway, was asked by a Herald representative to-day as to what he thought of the possibility of the Canadian Pacific Railway being acquired by a powerful syndicate of United States capitalists, as was stated in the course of the debate on government ownership of railways in the House of Commons yesterday afternoon.

' Oh, it is quite possible,' continued Mr. Shaughnessy; ' there is nothing whatever to prevent American capitalists, if they have got the money, from buying the stock of the Canadian Pacific Railway, which is for sale in London and Montreal, and on Berlin and other continental bourses. Having acquired the stock, there is nothing to prevent these gentlemen from controlling the policy of the company, and exercising their control for the advancement of United States interests.'

Now, not only can these men control these railways at a comparatively small cost-as Mr. Shaughnessy has said, of $30,000,000- but they can control these railways by the simple act of leasing them, for which they will only have to pay a very small consideration. We therefore see that these men can any day acquire control of both of our great Canadian roads for a mere nominal sum. And not only that they could ruin the Canadian manufacturer and the Canadian citizen toy the local rates which they could impose on our local traffic and by the preferences which they could give to American products and manufactures coming into this country. They could if they liked, in this strong position hold us in the hollow of their hand. We would all be their serfs and their servitors.

And if they once started to gobble up our railways, they could gobble up our great lines of production, just as they have got control of the iron and steel and copper and petroleum production in the United States.

We have been discussing the status of these roads from another point of view, and recently it has been pointed out that their management at the present day is a menace to our country. It has been charged against them, the Grand Trunk Railway particularly, that they were discriminating against Canadian ports, and rendering almost useless the great sums of money we have spent on our canal system, on our harbour improvements, and on the deepening of the St. Lawrence route. If these railroads can do that to-day, how much more injurious would it be to this country were they to pass into the hands of a United States syndicate. Today the fight is between the American shipping ports as against the St. Lawrence route, and do you think that if these men who have all their interests bound up in the ports of New York, Boston, Baltimore and Philadelphia, could get control of the Canadian rail-Mr. MACLEAN.

ways, that they would not use that power to the detriment of Canada. This question is therefore, to us, one of supreme national importance, and that is why I have thus early availed of the opportunity to bring it before the parliament of Canada. Why, this syndicate could render nugatory the effects of all the money we have spent in building up our canals and in trying to create great shipping ports in Montreal, in Quebec, in St. John, and in Halifax. These men could do all that by spending fifty million dollars in buying the control of our railways, or easier still for them, by leasing the roads. And, Sir, they would have no hesitation in doing it.

My argument in favour of government control of railways is, in the first place, because I wish to stop the unpatriotic management of these roads towards Canada, and in the second place, I wish to try and prevent our railways falling into the hands of United States monopolists. I have two arguments in my favour. First, that these roads on which Canada has spent so much money in the way of subsidies are to-day inimical to the interests of Canada ; and second, that they are liable to fall into the hands of these men in the United States. These, I submit, Sir, are two good reasons in favour of my contention. In order that X may bring the mind of the House clearly to this matter, I propose to read some expressions of public opinion which have been given within the past week on this question. I shall first quote the Hamilton Herald, which says : .

Few speeches delivered in the Dominion are more worthy of serious attention than the one which was made yesterday hy the member for East York (Mr. Maclean). It was a very bold and radical speech, and a very important one. Mr. Maclean advocated the acquirement by the government of the whole interest in the Canadian Pacific Railway and the Grand Trunk Railway as a means of averting the great danger. The proposition is made not so much as a matter of general national policy as because the nationalization of the railways is the only adequate means of defence against the national danger arising out of new and unexpected conditions. Even more significant and important than Mr. Maclean's advocacy of this policy is Mr. Charlton's tacit endorsation of it. The member for East York has for some years been an advocate of national railways; but Mr. Charlton has never given any hint of favouring such a radical innovation. The member for North Norfolk is a prudent, cautious politician, inclining to conservatism; and the fact that he favours the serious consideration of Mr. Maclean's proposal will go far to save that proposal from ridicule as one of Billy Maclean's fads.

La Patrie on the same day says :

The situation is far from being a desperate one; it is neither dark nor compromising as depicted by fantastic rumours. But the present agitation will open the eyes of those who had refused to see, and will cause those with serious thoughts to give careful attention and' efficacious protection to our great natural interests.

Here is an extract from another paper which I think will appeal to the House, namely, the Montreal Witness \

There are few persons who have been observing how the interests that are developing Canada have been falling into few hands, and many of these foreign, who have not wondered what might be the effect of it all on self-government and on Canadian nationality. Whether or not there be anything in the fear expressed by Mr. Maclean of the Canadian Pacific Railway falling into the tentacles of the all-absorbing railway octopus now developing in the United States, the bare mention of such a possibility must awaken serious reflections in the minds of all who remember the nature and extent of the sacrifices made by the country to secure the construction of that great transcontinental railway. If such an extraordinary anti-climax to an undertaking, originally designed to knit the scattered provinces together and make this country independent of the United States in matters of transportation, could have entered the minds of the statesmen who projected the railway, we may be sure they would have provided securely against it in the charter and Act of incorporation. The magnitude of the new power which has come into existence on this continent, however, with its unconcealed intention of controlling transportation between the two oceans, gives colour to the apprehensions expressed in parliament, extravagant though they may appear. The Canadian Pacific Railway is of the nature of an Impreial highway, as it is certainly an alternative route between Britain and the east. Such being the fact, its control by foreign and possibly hostile capitalists is a contingency not to be contemplated. Like the Suez canal, as Mr. Maclean says, it is an Imperial necessity. It has long been boasted as Canada's contribution to the empire's defences. It must remain a national enterprise. Mr. Maclean's proposal that this should be accomplished as Lord Beaconsfield secured the key of the east, is one which, should it be the right one, will not perhaps be facilitated by the public proposal of it. In taking the readiest way to answer the Sphinx's riddle and to unlock the Asian mystery, that Oriental magician did not propose at the same time to solve the great economic problem of the west, nor do we know that the way proposed is the right one. We only know that the question is a live one, full of electricity.

I am not going to read all the press opinions which I have, but I wish to read some extracts from an article in the Toronto Globe of only Friday last. The Globe says :

Mr. Shaughnessy says that there is nothing whatever to prevent American capitalists from buying the stock of the Canadian Pacific Railway, which is for sale in London, Montreal, and on the Berlin and other European exchanges. Having acquired the stock, there is nothing to prevent them from controlling the policy of the company and exercising their control for the advancement of United States interests. He might have added that there was nothing to prevent them exercising their power to the positive detriment of Canadian interests without overstating the case. The danger is even more immediate, for there is nothing to prevent the present owners of the road, whether they be Canadians, Americans or Germans, from operating the road in such a way as to favour foreign at the expense of domestic enterprises. In fact,

the present management have been convicted of such lines of policy on many occasions, not adopted for the purpose of favouring Americans or hurting Canadians, but that they might augment net receipts regardless of consequences. Such restrictions as have been placed on the transfer of stock in the Canadian Pacific Railway agreement seem rather for the protection of the company than to preserve the national character of the road. But even if there was a specific provision against the sale of stock to foreigners, it would be of no avail, for the exactions of a Canadian company would be quite as onerous as any pressure that could be applied by foreigners. The danger lies in the absence of any defence, against discrimination injurious to Canada. This defect has been mentioned by Mr. Shaughnessy, and it should be remedied, as far as possible, by the creation^ of machinery for controlling services and regulating rates.

Here is wliat the Globe says on government ownership :

With regard to the agitation for government purchase and operation, Mr. Shaughnessy expressed the view that it would be a far better policy to buy out roads like the Canadian Pacific and Grand Trunk than to subsidize and construct useless lines. He says emphatically that we have had too much wasting of public money in the past for the building of railways which are not only in themselves useless but are positively injurious, inasmuch as they cripple the lines already built. This, he says, is very pernicious, and it would be far preferable that the government should take over the existing lines than that they should build new ones to compete with them. All who have studied the history of competitive railway building in Canada and the United States will see the wisdom of this position. In every case where two roads have been constructed to do the xvork of one the result has been the maintenance of rates by agreement and the imposition of a double burden on the community. The people have been required to maintain two equipments instead of one, and the greater cost of management has militated against any reduction of rates. If anything has been established and settled by the experience of the past it is that railway competition is not often an effective means of regulating railway charges. Only an unreasoning and destructive obduracy that no business man would be likely to indulge in would justify the government in paralleling existing railways. We may get an exaggerated idea of the waste of parallel roads through the contemplation of railway maps. Unnecessary duplication of roads by the government would be a great waste of capital, and while it would not cost the government any more than the purchase of existing roads, it would mean the destruction of a great amount of capital already invested in the railways.

That is the opinion of the Toronto Globe of Friday last. Here is an extract from a St. John paper, the Gazette-this is directly the opposite of the wind-tip of the Globe article :

Perhaps the best way to meet the combination is by the construction of a government line of railway from Montreal to Parry Sound and another from Montreal to the Detroit river. This would prevent railroad combination from charging excessive rates of freight in the most populous sections of Canada and would furnish

means of transportation independent of company railroads to the great west. The Gazette is strongly in favour of fast transcontinental railroad owned and operated by the government of Canada. It has been shown time and again that less than one-half of the proceeds of the sale of stocks and bonds of railroads constructed in Canada has gone into the road-bed or equipment of these lines. . . _. . The time is

not far distant when Canadians will be compelled to grapple with the question of transportation rates, because if we only paid rates proportionate to the cost of moving the freight and allowing a fair interest on the actual cost of the roadbed and equipment, freight rates in Canada would be cut in two. The question is one which requires great consideration and careful legislation. It is a question which the Minister of Railways has already given great consideration, and he will probably be able at an early date to present legislation which will prevent any further inroad on public rights by railroad corporations or combinations.

Here is a brief extract from the London Advertiser, a prominent Liberal paper :

The question thus raised is a very large one, but not less large and formidable would be the proper handling if any remedy could be proposed. But these are the sort of questions which, before the twentieth century is very old, may compel men to sit up and think.

The London News says :

Mr. Maclean has stated that the government, that is the people of Canada, could secure control of the Canadian Pacific by the expenditure of $50,000,000. That looks like a large sum, and it is a large sum, but the question, to the Neios' mind, is simply whether that money shall be spent now, and the people of Canada be given a chance to transport their goods and do business on a fair basis, or whether we shall wait until the Canadian Paciflc Railway, the Grand Trunk Railway and the other big Canadian roads pass under the control of the United States railroad trust, and then have to be bought out at an enhanced figure.

There are many problems connected with government ownership of railways, and business methods would have to be strictly adhered to in the event of the government securing control of the Canadian Paciflc Railway, but these problems will be no easier of solution in the future than now, and meanwhile the plundering of the country by exorbitant rates will have been going steadily on.

The situation has apparently got to be faced. Why not do as Mr. Maclean suggests and face it now?

The next authority I want to quote is the hon. the Minister of Public Works (Hon. Mr. Tarte), who addressed a letter the other day to the Montreal Board of Trade, in which he made the following remarks :

The American railways are equipping themselves in a most energetic and modern manner in order that they may he able to carry cheaper and cheaper every day the western trade to the ports of the United States. I greatly fear that unless we make an earnest effort on behalf of Canada, we will lose much of the benefits and advantages of the improvements that we have made to the St. Lawrence route.

In my humble opinion, we must not lose one moment. The St. Lawrence route must be overhauled, made deeper and wider, and as safe as possible from one end to the other, In order


William Findlay Maclean

Independent Conservative


to provide cheap and quick transportation from the west to the European markets.

The more I study the map of Canada the more I feel convinced that the ports on the Georgian Bay are destined to become splendid reservoirs and recipients of trade. All that trade can be secured to the St. Lawrence route if we make the necessary effort.

Tlie consequence, I believe, of what the hon. minister here says cannot be anything else than government ownership.

Let me read just two more newspaper extracts. The Winnipeg Free Press says :

It behooves the people of Canada to take some notice of symptoms that have lately developed among railway companies controlling the chief railways in Canada, of an effort to coerce this country by threatening to injure Canadian ports by transferring their trade and terminals to United States ports. . . . This practically amounts to an attempt to establish a system of terrorism and to frighten the Canadian people from taking steps which they consider proper. It is, therefore, a reasonable thing that the public should look to the government to exercise all possible control over these roads, and by legislation, if possible, prevent them from injuring what they were subsidized to build up and improve.

Tbe St. Thomas Times says :

If the government has no other means of stopping this anti-Canadian policy on the part of the Canadian railways, it should have no hesitation in putting Mr. McNaught's suggestion into practice.

That suggestion is that a preferential tariff should only be allowed on goods that come in by Canadian ports.

The St. John Telegraph of February 15, says :

But the interests of the country, and particularly of these maritime provinces, demand some such radical cure for the present trouble.

The writer in the above quotation refers to Mr. McNaught's remedy for the discrimination by Canadian railways against Canadian ports.

The St. John Telegraph of February 14, says :

The latter idea [the extension of the Intercolonial to the Georgian Bay] was outlined by the Minister of Railways in his speeches in St. John prior to the general elections. Such a movement will check for ever any possibility of American railway magnates monopolizing the constantly increasing transportation of Canadian products to the eastern seaboard.

I can hardly agree in the opinion that the extension of the Intercolonial Railway by the government will settle the question. That would only aggravate the situation, although I have supported in the past and may, under certain circumstances to-day, defend that proposition.

I have one more letter to read, out of many similar ones which I have received : Dear Sir,-I am much pleased to read of the stand you have taken with reference to the government ownership of railways. The stand you have taken is well chosen, and it is difficult to imagine any other way to escape from the railways of Canada being absorbed by the gigantic

combine that evidently has for one of its objects to get hold of and control our railways. Could they accomplish their design, then the independence of the Canadian people will exist in name only. For it is a self-evident fact that if any corporation can control the means of transportation in Canada, they can then dictate their terms in other directions. So far as I can learn, the system of government ownership in some European countries seems to give general satisfaction to the travelling and commercial public. One of the advantages is, that it for ever shuts out all gambling in stocks, and special rates to favoured localities or individuals. As I am a stranger to you, I will refer you to our member, A. E. Vrooman, or Hon. George McHugh; also will add that I am a lifelong Reformer. But your step is in the right direction, and of my own knowledge, know that a large percentage of the people were looking in the direction of government ownership before this movement was inaugurated. So you can easily see how much more interest will be taken in this matter now. You are at liberty, if-you see fit, to use this letter for any purpose that will suit your convenience.


William Findlay Maclean

Independent Conservative


Mr. Minthorne, of Oak-wood.

I think, Sir, I have proved to the House that a seriotis problem is before us. 1 think I have proved, by quoting the leading newspapers of the country and by a reference to the language used by two members of the government, that we have to grapple with a very serious problem; and having made that point, I think it is incumbent on me to make some practical suggestion. That practical suggestion is that there can be no radical cure of these evils except government ownership. You will says perhaps that government ownership involves a very large financial proposition. I said the other day that it would take $50,000,000 to acquire the Canadian Pacific Railway. I spoke wide of the mark intentionally, and have since found out that less than $30,000,000 invested on the stock exchanges to-day would secure control of the Canadian Pacific Railway. and also that for less than $20,000,000 you can secure control of the shares of the Grand Trunk Railway. But, there is a much more simple proposition, which perhaps will surprise the House and the public. I say in all seriousness that the government of Canada, which is controlling the Intercolonial Railway, the national system of railways, can obtain a lease of the Grand Trunk Railway for $1 a year, and the Canadian Pacific Railway for $1 a year, and that is in substance all the financial obligation involved. The government can lease these two great roads for $1 per year each and get a lease for 999 years, if it so desires. Such transactions are going on every day, But the government would have this to do, and I am not concealing that from the House and the country : it would have to assume the liabilities of these roads. But. who is assuming the liabilities to-day ? It is the people of Canada, for it is the traffic that sustains these roads. The bondholders,

the shareholders have not assumed them, but the people who use the roads are meeting these liabilities, and there is only one portion of these liabilities concerning which oue of these companies is in default, and that is the first shares of the Grand Trunk Railway. So far as the Canadian Pacific Railway is concerned, however, every dollar of liability in connection with it is being paid, and paid promptly, and yet the shareholders of that road would be willing today to lease that great enterprise, which has about $300,000,000 invested in it, to the people of Canada for $1 per year. That is a very simple proposition.


February 19, 1901