August 23, 1917

LIB

Rodolphe Lemieux

Liberal

Mr. LEMIEUX:

When were the shares held in trust, to the amount of $1,000,000, by Mr. Aird transferred in trust to him? Could we have the transfer book of the company to see that?

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I do not think they were so transferred. On the face of it they stand in the names of Mr. Aird and Mr. Jones-$1,000,000 of the stock of the company. I asked for the list as of June 30th, and I make the statement, as I was assured by the secretary that no transfers had taken place since." I thought it advisable to get a list of shareholders prior to the date of the discussions in this House.

There is no doubt that the list of shareholders is the correct list, and I am informed further that there had been no changes in the names of shareholders for practically a year previously except for the purpose of qualifying directors.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

Is the Finance Minister prepared to give the House information as to the shareholders of Mackenzie and Mann Limited?

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I understand

Mackenzie and Mann are proprietors of Mackenzie and Mann, Limited, but I suo-mit that has no bearing on the question before the House. We are not purchasing the shares of Mackenzie and Mann, Limited. We are about to purchase the shares of the Canadian Northern Railway Company. My own view is that it is not relevant to this discussion to know the names of the shareholders, but on account of the discussion which developed in the House I thought it advisable to place upon the Table the list of shareholders as of record. This transaction, although it is a large one, is a comparatively simple transaction. The Dominion Government is already-and this fact, I am afraid, is lost sight of in this House-the owner of $40,000,000 stock of the Canadian Northern Railway Company: that is to say, we are a minority stockholder in that company. There are $60,000,000 par value of shares still outstanding. Instead of continuing assistance to the company, as we have in the past, we say that we will acquire the $60,000,000 of shares outstanding, thus making the Dominion Government the sole shareholder, instead of a minority shareholder of the Canadian Northern. I submit that the question as to who are the shareholders of Mackenzie, Mann and Company, Limited is not relevant to the section now under discussion by the committee, but I express the view, with some confidence that Messrs. Mackenzie and Mann-that is Sir William Mackenzie and Sir Donald Mann-are the proprietors of Mackenzie and Mann, Limited. But we are not buying their stock.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

I would have thought

it was of importance to the country to know who were the shareholders of the Canadian Northern. It would be equally important to know who were the shareholders of Mackenzie, Mann and'Company, Limited, who own, from the statement of the minister, $51,000,000 of this stock of the Canadian Northern. The organization of Mac-

306J

kenzie and Mann, Limited, if 'ft is a limited liability, would enable them to hold this stock and transfer it over to different people, and I would assume the pledgees (who are referred to in this Bill) of the stock of the Canadian Northern, are gentlemen of corporations who have received stock from Mackenzie and Mann, Limited in pledge. Therefore, I would think that when, by this Bill, the pledgees are given authority to name one of the arbitrators jointly with Mackenzie and Mann Company, Limited, it would not be unreasonable that the House should be informed as to who those pledgees are, and as to whether or not they received the stock from Mackenzie and Mann Company, Limited.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

We have given that information. My hon. friend now states that what he desires to know is who are the pledgees of the stock of the Canadian Northern Limited, but he did not ask that. He asked me who were the shareholders in Mackenzie and Mann Company, Limited.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

Edward Mortimer Macdonald

Liberal

Mr. MACDONALD:

I asked who werethe pledgees.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The Solicitor General informed the House the other night that, as tlo $51,000,000 of the stock held by Mackenzie, Mann and Company, Limited, that stock is, with other assets of Mackenzie and Mann, Limited, pledged to the Canadian Bank of Commerce by the company. If my hon. friend were carrying on a large business, having contracts, bonds and stocks of companies, amongst others the stock of a railway company, whether the Canadian Northern or Canadian Pacific, and doing business with his bank, he would know that he would give a pledge in respect of all the assets of his firm. It is not the case, as I pointed out to the hon. member for Edmonton, of a specific lo-an against a specific security. The general balance of account between Mackenzie, Mann and Company and their bankers is, I understand, secured as a general balance of account of any firm is secured, by a pledge to their bankers, including among others, these securities. It has never appeared to me that this question is relevant to the consideration of the section now before the House, because it is for the arbitrators to determine what is a fair value for the shares. If we were buying shares of the Canadian Pacific Railway Company, and my hon. friend from

St. John was so fortunate as to own $100,000 worth of stock which he pledged with other assets to the bank, it would not occur to me that this House would be desirous of knowing what amount he owed the bank, in [DOT]respect of that pledge. The real question is, shall the Government buy the stock, and secondly, what is the price that should be paid for it? We propose to have the matter determined by arbitration, and our arbitrator is to be the Chief Justice of Ontario.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

We want to understand whether the whole $51,000,000 of stock held by Mackenzie, Mann and Company is pledged to the Canadian Bank of Commerce, together with their other assets.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

Yes.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

The whole amount is

pledged?

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

Yes.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

I do not propose t>o

discuss the question as to the importance of it. It seems to me it could be well argued that Parliament should be informed on that subject. My hon. friend (Sir Thomas White) says that we seem to forget that the Government already owns 40 per cent of the common stock of the Canadian Northern. Let me say that neither this House nor the country is likely to forget that, because, simultaneously with the getting of that stock, the country became committed to the enormous liability of $45,000,000. That is a fact that the country is not apt to forget. Neither is the country apt to forget that because the very next year or the second year after that obligation was entered into, the country is called upon to pay $15,000,000 more into the enterprise-and one of the arguments advanced in favour of it is that the country had previously, in 1914, become committed so enormously by guaranteeing the bonds to the extent of $45,000,000, it could not, without affecting the credit of the country, refuse the additional $15,000,000. Therefore, the country is riot likely to forget the circumstances under which that common stock was acquired, which common stock, I do not hesitate to say, is intrinsically just worth the value of waste paper.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

And my hon. friend recollects that he was in favour of arbitration to determine the value of these shares, fixing for them a maximum of a very large amount?

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

Yes, I remember, too, that at that time my hon. friend, the Minis-

ter of Finance, assured Parliament that if $45,000,000 were guaranteed the company would be able-he believed he could inform the House with full confidence-to go on and complete its entire system. He said they had $45,000,000 available for all the purposes of the road, and .there was no likelihood of their coming back for further assistance, and the resolution which I had the honour ol moving was to the effect- and my hon. friend forgets that, apparently -that the stock issue should be reduced from $77,000,000 .to $30,000,000, so that, instead of standing at $100,000,000, as the Government proposed it should stand, it should be reduced to $30,000,000, that all of that stock should be placed in the hands of a trustee, for the benefit and security of the people of Canada, and that it should remain there for five years, so that, in case of default, the Government would have power to act upon it, and speedily take possession of the road, without paying out any money; that, in case it was carried on successfully for five years, paid its interest, and its expenses of operation, and became a successful enterprise, this Parliament would have the right-if it was thought desirable to take over the road and have it operated as a Government work- to take the stock by arbitration.

Does not my hon. friend think that the circumstances under which that suggestion was made are very different from the circumstances with which we are confronted to-day? Does my hon. friend forget that in 1914 he assured Parliament that through the remarkable ability and the wonderful and unprecedented ingenuity of the Solicitor General a plan had been prepared which was embodied in section 24 of the Bill, under which Parliament would have the right to foreclose by Order in Council the equity of redemption in the Canadian Northern Railway Company and in all the subsidiary companies, and if Parliament thought fit to do so it would in that way, acquire an absolute title to that property without foreclosure proceedings and without the payment of any more money, but solely in consideration of the enormous sums which had been poured into this railway system in the past, and in consideration of the vital assistance which is being asked for in 1914? Has my hon. friend forgotten all that? Has he forgotten that he said he wanted to take off his hat to the Solicitor General in recognition of the wonderful ability and the great ingenuity which he had displayed in fram-

ing this resolution under -which Parliament could so speedily act in the interests of the people of this country? He must have forgotten all this, because to-day he is telling Parliament and telling the country that it would be nothing short of an outrage to act under the authority which was then given to the Government at the suggestion of those who are now occupying the treasury benches. He says now it would be an outrage to act upon that wonderful provision which was framed by the Solicitor General, and which was proposed by my hon. friend when he asked Parliament to assent to the Bill. I have been drawn away from the question I proposed asking the minister by reason of his referring to circumstances which I think he would be glad to forget in view of the action which he is now asking Parliament to take. My hon. friend says in the statement that there are in the treasury of the province of Saskatchewan something over $1,000,000, and that that is held in trust and will be available for the purpose of completing certain branch lines in that province. I would ask if that is the ease. With reference to all the other current assets mentioned in the statement which has been laid upon the table of the House, each held on account of Dominion Government, $4,471,611.12; province of Manitoba, $239,350.64; province of Alberta, $3,104,966.24; province of Ontario, $407,487.43; province of British Columbia, $6,403,989.06; would all those amounts be amounts that are not payable to the company to-day but would be payable in the event of their completing certain railways in those various provinces? From what the minister says I would assume that to be the case.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

These figures are a year old.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

I presume in respect of those amounts there has been little change. We have not been favoured with a printed statement for the last year, therefore we must be pardoned if we refer to the statement the minister laid on the table of the House for our information.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

This statement

is correct as of June 30, 1916. Those were the moneys held in trust account in respect of securities which had been sold, the proceeds of which would be available for the construction of railway lines.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

They appear on the

credit side of the balance sheet. Would the minister inform me what items there are on the debit side representing this twenty odd million dollars?

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

It would be included in the temporary loans and the funded debt. If my hon. friend will allow me to explain: Supposing there is an issue of bonds of, say, the Canadian Northern Railway Company or the Canadian Northern Saskatchewan, guaranteed by the Government of Saskatchewan; those 'bonds are sold, and when they are sold the amount would be shown among the liabilities of the company. If the money was not actually paid out in construction it would appear on the other side of the cash trust account. If my hon. friend is under the impression that they are on one side and not on the other he is entirely in error.

Topic:   CANADIAN RAILWAY SITUATION.
Subtopic:   CONSIDERATION OF CANADIAN NORTHERN RAILWAY BILL RESUMED IN COMMITTEE.
Permalink

August 23, 1917