Mr. W. F. MACLEAN (South York):

I followed somewhat closely the speech delivered the other day by the former Minister of Railways (Mr. Graham) in regard to the proposed aid to the Canadian Northern Railway Company and the Grand Trunk Pacific Railway Company. What he said was that the present railway situation in this country was not permanent, and that if it had not 'been for the war and the consequent general dislocation of business all would still be well. His conclusion was that the sun would shine again; that things would come back to their normal; that the railway situation in this country would come all right once more. In other words, he endeavoured to justify the proposition that no fundamental error had occurred in regard to the railway situation. My contention is that the war which is now waging has disclosed the dislocation of the railway situation in this country. Not only may the war have helped to bring on this dislocation, but it has disclosed a railway situation that is unspeakably bad and against the general interest of the country. The situation must be remedied. I disagree with my hon. friend when he says that everything will come back to normal. I say that the people of Canada will have to come to the conclusion that the railway situation in this country is fundamentally bad and must be cured. I am going to prove my contention by pointing out these things to him. The Globe newspaper says: The railway situation is unutterably bad; the people of this country think the same thing, and I will read

the confession, of Mr. Smithers, Chairman of the Grand Trunk Railway Company. On the first page of his letter addressed to the Prime Minister are these words:

Sir,-I have brought before the board the result of my conversations with you and some of your colleagues during my recent visit to Canada, as to the financial position of the Grand Trunk and Grand Trunk Pacific Companies from the 1st of January next.

I told my colleagues that at the interview 1 had with you on November 25 I disclosed to you very frankly the situation with which the Grand Trunk and Grand Trunk Pacific Companies would be confronted in the immediate future. I also told them that after full consideration, and with the deepest regret I had proposed to you, as the only safe solution of our difficulties that the Government should take over the Grand Trunk Pacific railway as from the first January next, with all its branch lines, together with its development company, and other subsidiary companies, with all the as. sets, the Grand Trunk Railway Company to surrender to the Government the whole of the common stock of the Grand Trunk Pacific Railway Company on condition of the Government relieving the Grand Trunk Railway Company of all liabilities in respect of the Grand Trunk Pacific Railway Company, its branch lines, its development company, and other subsidiary companies, and repaying to the Grand Trunk Railway Company any money advanced by the Grand Trunk Railway Company to the Grand Trunk Pacific Railway Company, or its branch lines,, and Development Company and other subsidiary companies.

Mr. GRAHAM:

Will the hon. member allow me? , I want .to read to the House from the 'same letter a paragraph which, I submit, proves my contention. This paragraph appears on page 6 of the statement respecting the Grand Trunk Pacific Railway Company:

If the Government accept the proposition of the Board, I feel confident that whatever the liability the Government may assume will he amply repaid in a few years by the increased traffic arising from the development of the Northwest, and the bringing of new land under cultivation. What that development may mean is foreshadowed in the amount of the record crop just gathered in the Northwest, the production of wheat alone being 320,000,000 bushels, as against only 140,000,000 bushels in 1914; with other crops showing considerable increase in yields. The board feel that they may be severely criticised in a few years for parting with the property, and nothing but the necessity of saving the money which the present investors have put into the property would have induced them to do so. The deficit of the next few years, at a time of unprecedented strain owing to the terrible war in Europe, is the danger to be avoided, but an amount of deficit which is impossible for a company to finance is quite possible for a nation.

Mr. Smithers assures the Government that it will get all the money back and that the investment will be a paying one.

Mr. MACLEAN:

My contention is that Mr. 'Smithers shows by his letter that he has a lame duck upon his hands-

Mr. GRAHAM:

For the present.

Mr. MACLEAN:

-and he propoeee to hand it back to the Canadian people if they will repay him all the money his company have invested in it, and if they will relieve that company from the agreement by which they are bound. I claim that the argument is a double-edged one. Mr. Smithers drunk or Mr. Smithers sober is anxious to put this burden on the shoulders of the people of the country. My main object to-day is not so much to argue that the bargain was bad, as to. bring this Parliament to a recognition of this fact disclosed by this company, notwithstanding the conditions attendant upon the war, that the system we have been following in the past, of using the public treasury, and the legislatures and the Parliament of this country, to carry out the ambitions of ambitious men in connection with railways-, is bad, is irretrievably bad, and must end here and! now. This contention is proven toy the words which I have just read from the. letter of Mr. Smithers. I ask the ex-Minister of Railways (Mr. Graham) to read the Globe these days on the mistakes which have been made in connection with railways-, and to note the attitude it assumes towards the railway situation. As I have said, I do not intend to hand out criticisms, especially in the way of blame; perhaps nearly all of us are more or less to blame in this matter. But the facts have disclosed a situation that cannot be justified, and the facts have done more; they have brought about-and I wish to say this in the way of advice to the Minister of Finance-they have brought about the psychological moment to administer a cure for this condition. There never will be such an opportunity as this to administer the cure, whatever it may be, to -this railway situation.

Sir WILFRID LAURIER:

What is the cure?

Mr. MACLEAN:

I was- just about to deal with that. I hardly need to tell the House what my cure is, my cure is public ownership, and now is the time to apply it. I give the Government credit for saying that public ownership may have to come, and that they intend to look into it by means of a commission appointed to investigate and advise. I do not need any

advice from a commission of this kind on this subject, and the people of Canada have made up their minds what they intend to do. They are ready to assume the responsibility of applying this cure of public ownership to the transportation situation which has arisen at this time, and which has been aggravated by war conditions. Public ownership of railways, when it was first suggested in this House, was described as being almost lunacy; the best that could be said of those who favoured) it was that they were enthusiasts. But the whole history of progress in relation to railways is a history of advancing public ownership. Britain to-day is a public ownership country practically, so far as her railways are concerned, and she never intends to part with the control of those railways that she now has. I shall be asked: If we are to have public ownership, what practical suggestion have you to make as to these railways -granted that the time is opportune? A friend behind me says, " That is the point." I say that the worst thing that can befall us in this matter is a continuance of the present system; and the best thing is that, having faith in public ownership, we should try it out. I am told that this would involve an immense sum of money. Perhafps it would. It involves taking over commitments that already exist. But, as a matter of fact, we are committed to these commitments and must assume them whether we will or not. The very reason why this difficulty has arisen is that the railways are in such a state of misfortune that they must be rescued. There is no other way than by the assumption of these liabilities by the country. We are called upon to perform a work of salvage, nothing else and the question is whether we are to make it a temporary salvage or a permanent salvation.

How are we to proceed? I would assume the duty, whatever it involves; but there are various ways of procedure. For my part, I am willing that we should first deal with these two lame ducks, the Grand Trunk and the Canadian Northern. But the really easy way to proceed, the one that should be followed if I had my way, would be to nationalize the Canadian Pacific. I am willing, however, to proceed in the other way for the present. I would treat the Grand Trunk, perhaps, a little differently from the Canadian Northern, for the Grand Trunk has confessed bankruptcy in connection with this proposition. It says it is not able to continue the business and

wants to hand the railway back. It wants to get its money back and be forever absolved from the engagements and commitments it has made in connection with the situation. The first thing I would say to the Grand Trunk-that is the Grand Trunk proper-is: "Mr. Grand Trunk,

we will not release you from your engagements unless you propose to turn over not only the Grand Trunk Pacific but the old Grand Trunk." This is the Grand Trunk that we know in the provinces of Quebec and Ontario as the greatest railway of its kind in Canada. There is no such fine railway in Canada as this Grand Trunk. It runs through the settled portions of the country and it reaches the factories. It touches the city of Quebec, it runs opposite Three Rivers; it has great facilities in Montreal; it reaches Ottawa, and it runs to Toronto, Hamilton, London and nearly all the cities and towns of southwestern Ontario; it reaches the two international rivers, the Niagara and the Detroit; and it has important terminals on Georgian Bay giving access to the West. This Grand Trunk is so good a railway proposition that, even though it has made some mistakes, it will pay. It was getting out of the woods at the very time it made these commitments in connection with the Grand Trunk Paci-fiic. It is the greatest railway in Canada, the one that can earn the most money, if it were administered from Canada, as Mr. Hays had begun to administer it; and it would have achieved success and been a paying proposition to-day, notwithstanding the enormous mistakes made in its early construction, had it not been for these unforeseen difficulties. I would leave the early shareholders to look after themselves. The road is admitted to be bankrupt. If the Grand Trunk Pacific is absolutely hopeless so is the old Grand Trunk proper, facing default, and ready for liquidation.

Mr. GRAHAM:

You say that is the old Grand Trunk?

Mr. MACLEAN:

It faces default according to this letter and is ready for the knacker if the knacker comes for it.

Mr. GRAHAM:

Do you mean the Grand Trunk proper?

Mr. MACLEAN:

That is the confession. They say: " If you force us to carry out our agreement, we are bankrupt. The lawyers will tell you that when you go to court, and when the bonds come due

the bondholders will to the Grand Trunk treasury and demand payment. Here is an opportunity which presents itself for the first time, by reason of the war and as the outcome of our policy in the past. For the results of that policy I am putting no more responsibility on one side than on the other. The Grand Trunk Pacific is at our door in the position of a suppliant-and that word " suppliant " to me is the key to every important question of this kind which has arisen in Canada. It always happens that the persons or the companies that aTe the cause of grievances in this country are here this day and the next day as suppliants, and we miss the whole teaching of our English language and of the progress of liberty if we do not seize the opportunity which is afforded us by the presence of these suppliants seeking a cure of the grievances which they themselves have brought about. The old Grand Trunk is here as a suppliant asking for relief. I do not believe in taking over the Grand Trunk Pacific and relieving the old Grand Trunk of their engagement, letting them go scot free. I say: summon Mr. Smithers to Canada; tell him to bring over his board of directors and to go into session in the city of Montreal, where the head office is. We should say: we will talk with you here and now as to how we are to acquire and take over the Grand Trunk with the Grand Trunk Pacific. They will be glad enough to give it to us in order to be saved from liquidation. I would give them some little compensation in connection even with the old original stock; it would not be much, but it would be a little. But they will lose everything if this Government demands what it has a right to demand of them: that they pay their commitments ; that they run the Grand Trunk Pacific; that they take over the Transcontinental, as they are bound to do. It may be argued that the time has not yet arrived for taking over the road, but I say that this is the opportunity to remedy the situation by faking over the old Grand Trunk and the Grand Trunk Pacific. It is all very fine for these opponents of public ownership when they are in trouble to say to the people of Canada, as they have said in the past: "Take over the dead

horses and the lame ducks, and leave us the profitable ends." They have public ownership of telegraphs in almost every country in the world except our own, but whenever there is a weak line in this country for which there is no business and no profit-let the Government build it.

Mr. GRAHAM:

Or to be bought.

Mr. MACLEAN:

Or if there is a line to be bought, let the Government take it. And the Government takes it. They put the Transcontinental on us; it is not productive just now, although I think it has a great future. I am not going to profess lack of faith in my country so far as the future of the Grand Trunk Pacific is concerned; I hope that even the right hon. gentleman will give me credit for that. But this is the psychological moment to administer a cure to prevent the recurrence of the railway evils that have arisen in the past. In a word, that is my proposal as to dealing with the Grand Trunk. Let us say here and now, when they are suppliants at our door: " All right, gentlemen, we will take this road over and relieve you if you give us the old Grand Trunk upon certain conditions that we will name to you."

Mr. MORPHY:

What does the hon. gentleman say as to this being the proper time to finance a proposition of that kind?

Mr. MACLEAN:

You do not have to

finance it; you have to assume commitments. I made that argument in this House some years ago in connection with the Grand Trunk and the Canadian Pacific. On one or two occasions in this House I have said: "How will you finance it?" The late Minister of Finance thought he was taking a shine out of me when he said: "We should have to raise millions and millions of money." I said: "No, you will have to assume commitments." We will have to assume the commitments of the old Grand Trunk if we take it over. But the last thing that I am in favour of suggesting to the Canadian people-I do not think this Government will suggest it-is that they should relieve the old Grand Trunk and take over the lame duck, the Grand Trunk Pacific. The stars of fortune of these two railways will never again come so close together; rather, there is a conjunction of circumstances affecting the fortunes of these two railways which will never occur again. It is this circumstance which gives us an opportunity to take them over and to use them for the benefit of the people.

Mr. STEVENS:

What would the hon. gentleman do with the 'stockholders of the Grand Trunk?

Mr. MACLEAN:

I said a moment ago: notify Mr. Smithers, get his board of directors to come over heTe by the next boat and hold a meeting in Montreal. Have

3a30

them bring some authority from their shareholders in England to negotiate with this Government; otherwise, let them go into court and defend an action for the liquidation of both roads. We do not have to go tp them; they are here now as suppliants.