Mr. GRAHAM.

That necessarily would have to be based upon certain facts for if it could be shown that no injustice is done anybody by the present rates, there would not be any need for any inquiry. The record of this House will show that, in so far as itself is concerned, it is unanimously in favour of cheap rates on the railways ; and that being the case, it would be a laudable ambition on the part of hon. members to wish to extend, in a measure, the benefits they enjoy themselves to those who support them throughout the country.

Mr. FOSTER.

In a measure?

Mr. GRAHAM.

My hon. friend from South York (Mr. Maclean) has raised the question of freight rates and passenger rates. His contention is that instead of in-

vestigating to find out the facts we should take it as granted that passenger rates should be two cents a mile, no matter what effect that might have on the freight rates; but If parliament should enact a two-cent passenger fare-and I am not now discussing the advisability of our doing that-and if afterwards it became clear from investigation and experience that the railway companies could not afford to give a two-cent passenger rate without raising the freight rates, the question suggests itself as to whether we should discriminate against the one In favour of the other. Then the question arises, if we are to establish a cheap rate for some class possibly at the expense of some other class, going on the principle of the greatest good to the greatest number, which is the greater number? I am inclined to think we would come back to the proposition that there are more people interested in cheap freight rates than there are in cheap passenger rates. The average man throughout the country does not spend a great deal in travelling on railways, while every man, woman and child is interested in freight rates.

I'. MACLEAN. I am sorry to hear the minister suggest that there is no Canadian who does not travel, and I would hope that they would not be put in that position.

Mr. GRAHAM.

I did not say that they did not travel; I said that they did not spend large sums of money on travelling, and are not interested in that as they are in freight. The farmer travels say 100 miles each year. If he paid 3 cents a mile instead of 2 cents, he wTould pay a dollar more, but if he were shipping the produce of his farm an increase in freight rates would amount to a great many dollars.

Mr. W. F. MACLEAN.

He would only have to make up the*doilar he was shy on the passenger rate.

Mr. GRAHAM.

Leaving that aside for the moment, it is a large question and worthy of the consideration of the people of Canada, and I am not averse to having it discussed. I want to point out to the leader of the opposition that if I were selecting a time to make an investigation to prove the contention of the railways that the rates are not sufficiently high, I would select this year and this time to do it. There has not been a time in years when the income in the railways has fallen off as it has during the past few months. Suppose we ask the commission to investigate now the question whether the railways ought to carry our passengers cheaper than at present, they would at once be confronted with the immense falling off in traffic. The railways would put up a stronger ease in 1908 than they would have been able in any past year, or I hope will be for many years to come. In May the

Mr. GRAHAM.

income of the large railways, including the Canadian railways, fell off all the way from a quarter of a million dollars to a million dollars. Our own two leading railways, the Grand Trunk and the Canadian Pacific Railway, had a decrease in revenue during May, roughly speaking, of over $SOO.OOO each. That being the case, it would be a poor time for investigation if the object was to help the people get cheaper rates.

Mr. LANCASTER.

Then the government should have accepted that proposition made two years ago.

Mr. GRAHAM.

I am not criticising what happened two years ago, we live too rapidly to do that. We must remember, too, that we cannot compare our conditions with the conditions iD older countries as far as rates are concerned. I have here a few figures. We have in Canada 89 railways. The passengers carried last year numbered 32,137,319. The gross earnings from these amounted to $39,184,437. The average earning per passenger was $1.22. The gross earnings from all sources of our railways were $146,738,215. So the revenue from the passenger traffic was about 22-75 per cent of the whole.

The net earnings from all sources were $42,987,537. The passenger train mileage, to which the hon. the leader of the opposition (Mr. R. L. Borden) referred, was 30,220,401 miles. The cost of running a train one mile in 1907 was approximately $1.25. That would show the cost of the passenger service to be $37,745,355. Figuring that out, it would give us a profit on the capital invested in the passenger service, not dealing with watered stock or anything of that kind, of something less than 4 per cent. But some railways charge now more than 4 cents a mile. The leading railways cannot charge more than 3 cents a mile. I do not agree with my hon. friend, particularly as far as Canada is concerned, in saying that if we reduced the rate to 2 cents we would have a greater passenger traffic in Canada. That principle applies more thoroughly where the population is dense, where you have something more to work on. In Canada we have not a dense population.

Mr. LANCASTER.

Are the figures the minister gave prepared by the railways or by government investigators?

Mr. GRAHAM.

They are figures prepared by the Department of Statistics.

Mr. LANCASTER.

Is the information from railways or from government officers?

Mr. GRAHAM.

It is information sworn to under the Act, which has to be given every year.

Mr. LANCASTER.

By the railway officials ?

Mr. GRAHAM.

Yes ; surely my hon. friend will not take any exception to it.

Mr. LANCASTER.

I do not admit that.

Mr. GRAHAM.

These are from statistics which are accepted as authoritative in all parts of the world by all governments. If we had a dense population such as they have in some other countries I can readily see that we could increase the passenger traffic very much by offering lower rates. But with 6,000,000 spread over as large a territory as the United States with 80,000,000. it will be seen that there must be a vast difference in the amount of money that can be got out of the people for passenger or freight traffic. We have a limited number of people, and only these can travel as far as the population of the country is concerned.

I think it is fair to say that if we reduce the rates-from 3 cents to 2 cents, or 331 per cent, we would reduce the income by 20 per cent. If we take that as a basis, we find that instead of receiving $39,184,437 in 1907 the railways would have received $31,347,450, or a reduction of $7,836,887 in their income. In other words, instead of a balance on the right -side of $1,439,000 they would have a loss of $6,397,805. Perhaps when I say the income would have been reduced 20 per cent I am placing the reduction a little too high, but given any appreciable reduction and you will find that the railways could not afford a very large reduction in their income from passenger traffic unless they added something to the freight rates. It must be remembered that 20 railways in Canada operated at a loss, 12 had net earnings less than $10,000 and 15 had net earnings less than $50,000. But my hon. friend will say in reply that in addition to the passenger traffic the railways have the express and mail carrying, which we ought to add and which does not come in in the way I have figured out the cost.

Mr. LANCASTER.

Yes, and they charge a lot of their profits up in big salaries.

Mr. GRAHAM.

I have never met any one who will not take a big salary if he can get it.