Mr. MEIGHEN:

I shall not attempt to make reply to the purely show features of what I may describe as the speech to the press gallery of the hon. member for St. John. There are, however, serious members of the committee who are anxious that no substantial feature of the subject before us shall be in any way obscure. I have heard the warning of the hon. member for St. John, that we are going to have to pay at least sixty milliondollars for this stock, on the determination of its value by the arbitrators, and he assures the country that the stock is not worth a dollar. He knows that in the height of his wisdom. He has no

confidence that men like Sir William Meredith, and an appointee agreeable to him or to the Chief Justice of the Exchequer Court of Canada, will be anything but mere victims of the chicanery of Mackenzie and Mann. I do not know that the committee has any reason' to assume that the Chief Justice of Ontario and the Chief Justice of the Exchequer Court would not be proof, and could not select men who would be proof, against the chicanery of Messrs. Mackenzie and Mann, -just as much >as the hon. member for St. John is proof against it. I have no reason to assume that such men would be mere putty and clay in the hands of the Canadian Northern any more than the hon. member for St. John would be putty >and clay in the hands of either the Canadian Northern or the Canadian Pacific.

As to these land grant bonds, I do not know what the hon. member for St. John has in the back of his head. I do not know what he is trying to express. I have not been able to get my mind around any complete idea that he is trying to give the committee. What are these land grant bonds? The Canadian Northern Railway Company became the possessors of a large grant of land. It formerly belonged to Mackenzie and Mann, then to Mackenzie-Mann, Limited and, in return for stock, it became the property of the company. The Canadian Northern then were the owners of more than 4,000,000 acres of land in Western Canada. What happened? The Canadian Northern Railway Company issued land grant bonds and secured them on that land grant.

Mr. MURPHY:

In the West?

Mr. MEIGHEN:

Yes, they are all in Western Canada. There was, first, a land grant bond issue of $7,000,000, the proceeds of which were applied to the Canadian Northern Railway, just the same as the proceeds of every other bond issue of the Canadian Northern Railway Company. Then, subsequently, they issued another, but not being able to secure as much money as they desired to get for the purposes of the railway on that land grant, what did they do? They procured Mackenzie and Mann to put in the townsites as additional securities and the townsites were then added'to the security of the land grants and the whole was made the basis for another issue the proceeds of which also went into the road. The committee must remember that these bonds were the bonds of the Canadian Northern Railway Com-

pany, were the promissory notes of the company which they are obliged to pay and which can be got rid of by one method and one method only and that is lepudia-tion. No other method in the world can get rid of them. No mere construction of words will get rid of them. You may repudiate them, of course, but that is the only way. Other issues of bonds have beau made since then. Vi hat are those sub ie-quent issues? They are issued guaranteed by the Government, there are mortgages made on the road, tnd which are made to secure the money that we have advanced. There is the consolidated bond issue. What is the po3.tion of the securities? My hon. friend assumes that the land grant is not worth nearly as much as what is against it. I do not think he is at all correct. Even if we could in honour or law repudiate this debt, where would we be? We would, of course, lose the security. What is the fact? My hon. friend says that these lands are just the tail end, the leavings of the original lands. I am afraid he does not understand the way lands are sold by railway companies in the West. It is not as if a farmer comes along, looks at a piece of land and says: " I will take that " and another farmer comes along and says: " I will take that" with the result that after the good land has been picked out you have only the worst land left. That is not the procedure at all. They put values on that land in accordance with the quality and location of the land, the values which they think the land ought to have. There is just as likely to be good land left as good land sold. Then, it comes down to a question of the fairness of the value put upon the land by the company. Instead of the sales of land indicating that it is valueless, they indicate the very opposite. Valuations arrived at by lands actually being sold now show a tremendous equity in these lands, amounting to several millions of dollars. Lands have been sold at the following rates:

Average Bate

Tear. Per Acre.

1913 $15 361914 15 231915 15 531916 16 37

This shows an increase in the last two years in the average price per acre of these lands. Any one will inform the committee, who knows anything about western farm landis, that the prices are higher to-day than they have been at any period in our history.

Mr. MURPHY:

Is that the case in the three provinces?

Mr. MEIGHEN:

That would apply to the three provinces. I understand that Canadian Pacific Railway lands are selling better now than they have at any other time.

Mr. MURPHY:

Of course a part of their land is irrigated.

Mr. MEIGHEN:

I know that there is

a part of their land irrigated but I do not

think that irrigation has anything to do with the question because it has not been a very pronounced success.

Mr. MACDONALD:

Are there many sales being made?

Mr. MEIGHEN:

I think sales are being made pretty freely.

Mr. LEMIEUX:

Does my hon. friend

include in the term " lands " timber limits?

Mr. MEIGHEN:

No; these are farm

lands.

Mr. LEMIEUX:

I am informed that they have very large timber limits in the British Columbia section.

Mr. MEIGHEN:

I do not think those

are included in the land grant at all. I do not know anything about the timber limits.

Mr. MURPHY:

These are agricultural

lands?

Mr. MEIGHEN:

These are agricultural

lands, as I understand it, entirely. I would point out that the increased rate at which they have been able to sell these lands indicate that the proportion of good land left is about the same as it was at the beginning. I only make that argument as a matter of inference, I do not make it as a matter of personal knowledge but clearly from the record it would appear that the land that is left is likely to be a fair average of the land that has been sold. At all events the land generally is much higher in value now than it was. That is a fair assumption, based on recent sales, and consequently if we adopt a scheme which would dishonour the obligations of the Canadian Northern the proceeds of which obligations went into this railway, we would in all likelihood forfeit assets of tremendous value. As to taking the valuation of the land; no doubt that would be part of the duty of the arbitrators. We are getting the land as a part of the property of the railway company and consequently it would be for the arbitrators to ascertain

what the land is worth. The Drayton-Acworth commission did not pretend to do that. They did not deem it their duty and I think rightly so but the arbitrators now, no doubt, would find out what these lands are worth. My hon. friend harks back again on the question: Why did you not value the land? We have done it in substance and in effect. We have not valued it specifically. Why? Because to value it specifically would mean for the time being at all events the disintegration of the system. The entity of the company would be destroyed. While the company might exist, it would not own the railway. It was an accepted principle that if we should fix any terms or conditions for ascertaining the value, it would subject us to the application of every rule of law which would tell against the Government and against the people of Canada, as against the plan, the parallel line, which we are following, and which puts us in a much stronger position before the arbitrators especially when we are taking the stock instead of the assets themselves.

Mr. MACDONALD:

Why arbitrate at all?

Mr. MEIGHEN:

In order to get at the value.

Mr. MACDONALD:

But you said that if they defaulted they would lose all claim, and that the property would be the property of the Government.

Mr. MEIGHEN:

That is what I say as between Parliament and Mackenzie and Mann; if Parliament deems it fitting and honourable to confiscate these lands, Mackenzie and Mann cannot complain. But that does not say that we must deem it fit or honourable or in the interests of Canada.

Mr. MACDONALD:

I do not think you had anything about honourable in it in 1914.