Mr. FIELDING:

And the third need not be a judge.

Mr. ROWELL:

My impression is that the provision in the letter which was read to the House is that the third shall be a judge. I am speaking from recollection.

Mr. FIELDING:

The Bill does not say so.

Mr. ROWELL:

The Bill does not say so, but my recollection is that the letter which contains the basis of the proposal so provides. But the other two need not, and probably would not, be judges.

Mr. COCKSHUTT:

I am glad to know that there is something in that, but I do not think it quite covers my point.

Is there any reason to suppose that the Government are not going to appoint a judge? I do not see any reason for supposing that they are not going to appoint a judge, because the Government, as a rule, appoint judges. I do not suppose the leader of the Opposition (Mr. McKenzie) would object to a judge being appointed, but I do not think that in a railway arbitration a judge is the very highest class of arbitrator so far as values are concerned. What I want to see appointed is an arbitration board that is going to take into consideration the value of the line, the location of the line, where its traffic is going to be lasting. For instance, you might build a branch line of lailway into a wood country, and for ten

years, while the timber was coming out, that road would be a paying one; it would, perhaps, be paying a considerable profit. But when the timber was all out, the line would be something of a scrap heap. We want men with an initial knowledge of what will develop traffic, who will go over the line in order to find out what permanent traffic is to be expected from it. That having been ascertained, you will then know that the road is well planted. In addition to that, I would want to know the quality of the road. While a judge is an excellent man in a court room, I do not know whether he is as good a judge as to the values of ties, rails and things of that kind, as a railway man. There is nothing in the Bill that says that the Government shall not appoint a judge, nor that the company shall not appoint a judge, and there is nothing to show that two judges having been appointed will not agree on a third judge; I should think that they would be likely to agree on a third judge. Unless we know the kind of arbitrators to be selected, I do not think the explanation that has been given is conclusive. It is distinctly provided that if the two arbitrators fail to agree on a third, two judges will then appoint a third arbitrator, and he is likely to be a judge also. Therefore, I do not like the proposition. Perhaps I misread it, and I hope that the interpretation placed upon it by the President of the Council is correct, hut I fear it will be an objection similar to what we have had many times in the past.

Further, in the acquisition of the Canadian Northern, a limit was placed beyond which the award could not go, and that limit was $10,000,000. I know I shall be told: You cannot go into an arbitration and, at the same time not go into it; if you are going to submit your case to arbitration, you must submit it, and you must pay the award. But, as the Government in the Canadian Northern ease, fixed a limit of $10,000,000, I would have felt some more assurance in my mind if the Government had, in this arbitration, fixed a limit beyond which we could not go even if it were fairly high. Then the country would know what is involved in this whole purchase which otherwise it does not know and cannot know, perhaps for years to come. That appears to me to be a very crucial question right there in the Bill, and as a business man, I have forebodings that public ownership again is going to be'soaked more or less with values that do not exist. I do not say that to crack the Bill; I am going to support it because I do not see

that there is anything else to it, especially as my hon. friend opposite (Mr. Cahill) gave us no alternative proposition. But Tiaving said that, I do not know why I should shut my eyes to things that may be stumbling-blocks to myself and others, and that is one of the stumbling-blocks I find in the measure. I should like to have the assurance that at least one business man or one railway man will be on that arbitration board. I do not think that is an unreasonable request, and whether this has been tried or not, I do not know, but it appears to me that a limit should be fixed which the Grand Trunk themselves could not oppose and beyond which the country could not go in paying for the road.

We are assuming immense responsibilities in its purchase; there is nothing else to do but to face them and to raise the financial requirements to carry the deal through. But that having been said, that is no reason why we should not get one hundred cents on the dolla'r for every dollar that we put into the undertaking; and as a business man and as a man who is in favour of public ownership I say that a worse blow cannot be given to public ownership than to . overpay for properties that the Government is acquiring and then to expect that the country is going to get value in the result. It cannot be done; we must get value, *and public ownership is not given a fair trial until you buy your properties at a fair market value which is to be determined by their earning capacity. The dividends that can be earned upon the road are the only criteria that we have of value. I may be told that the Grand Trunk cost $134,000 per mile, but I want to see where the assets are, where the dividends are coming from on that $134,000 per mile. As a business man, I think it is our duty to look into this and to see that too high a price is not paid for the road.

I have spoken longer than I intended, but I have not touched the fringe of the subject. It is so intricate and more or less involved that I do not wish to multiply figures. My intention was-and I hope I have made that clear-to show to the House about what our financial obligations would be, and I have shown that they will amount to about $18,500,000 per annum, or supposing that my hon. friend - opposite is correct, about $20,000,000 per annum. We are not very far apart. Those are the annual charges, and if you capitalize them at 5 per cent, you have pretty well arrived at what the oapital will be, at the obligations that will rest upon the country and that will have to be met. Although

they are mortgages at present, they are on the property, they are fixed charges that you have to meet, and they will not be removed until you pay out the capital for them so that you must not say that we are risking simply the interest; we are also becoming responsible for the principal. There is no doubt about that. If you buy a house with a mortgage on it, you take the house with the mortgage, and the mortgage remains on the house until you liquidate the capital involved in the original amount. It will not do to say that the mortgage is only so and so and that I have to pay five or six per cent on that, amounting to $200 or $300 a year; you have to take the capital on which this is the interest, and that is the obligation that rests upon the country. I figure that we shall be involved in a capital liability which musit some day be met, that will run up into the hundreds of millions of dollars. I do not shut my eyes to that. I am not sure that the hon. member for Pontiac (Mr. Cahill) was very far wrong in the capitalization that he gave. As I read the Drayton-Acworth report, the capitalization will run into the neighbourhood of $400,000,000 or more, so that there is a very heavy financial, obligation in the acquisition of the Grand Trunk. But we are face to face now with the proposition that the Grand Trunk is unable to continue to run the road and to meet its financial obligations with regard to the Grand Trunk Pacific. In other words, it is unable to meet' its liabilities, and it is to-day practically insolvent. Some hon. gentlemen may say: Why not put it under the hammer? We have never seen any railways of that kind go under the hammer in Canada, and I hope we never shall. If it should be allowed to go under the hammer, there is only one possible bidder in Canada so far as I know outside of the Dominion Government, and you all know who that is without my mentioning the name. The people of Canada would not view with equanimity the control of two great railways by a single corporation, no matter how high-minded the board might be. We want competition; we have spent hundreds of millions of dollars in this country to get it, and now that we are on the threshhold of obtaining one of the greatest assets in the way of railways that Canada can get, for the development of trade that binds the east to the west and the north to the south, are we going to let this offer slip through our fist into the hands of a private corporation? I cannot see that that would be sound business.

Though I have some misgivings with regard to some features of the measure I have been forced to the conclusion that there is nothing else for the Government and the country to do but take over the Grand Trunk at the best possible bargain that can be made, and then have all the national railways consolidated under one management. I would put the finest men that can be got in Canada in charge of the management of the road, and have them told by this Government and the country that they are expected to operate the national system of railways to the best advantage of the people and to give financial results of which we need not be ashamed. ' So far as I can see, there is nothing else for us to do, and therefore I endorse the Government's proposal and trust that this legislation will pass.

Hon. WILLIAM LYON MACKENZIE KING (Prince, P.E.I.):

Mr. Speaker, the

hon. member who has' just taken his seat (Mr. Cockshutt) has been so kind as to allude in generous terms to the confidence which the electors of Prince have placed in me in choosing me to be their representative in this House. I must thank him for giving me thL opportunity to acknowledge publicly that great trust. He has also referred to the exceedingly difficult task which has fallen upon me in the obligation which will come in the course of time to assume the leadership of the Opposition in succession to my hon. friend from Cape Breton North and Victoria (Mr. McKenzie), who has led the Opposition during the past two sessions. No one is more conscious than I am of my many limitations adequately to discharge the obligations of that position. I am thankful to my hon. friend for the example which he has set me, and I have asked him, in order that it may be possible for me the better to acquire familiarity with the procedure of the House to acquaint myself with the matters that are coming before Parliament, if he will continue to lead the Opposition for the remainder of the 'present session, and he has very kindly consented to do so.

It is as the member for Prince that I should like to speak on the amendment which is before the House. I designedly say as the member for that constituency, because it is one of eight or ten constituencies which ought to be represented on the floor of this House in such an important discussion as the present, but which for obvious reasons have had no representation in this Parliament through the whole of this session. I contend that that of itself

is a reason why hon, gentlemen opposite should not press with such undue haste the enactment of this legislation at this time. Surely, if Parliamentary Government stands for anything, it does stand for the right of the people of the country to have their voice healrd through their representatives in the halls of Parliament. There are eight vacancies, I think, existing ait the present time throughout the Dominion. In the constituency of Assini-boia there has been no representation for nearly two years. Are not the farmers of Assiniboia entitled to have their voice heard here in regard to the important measure which is before Parliament at the present time? Are not the electors of the constituency of Victoria and Carleton, in New Brunswick, similarly entitled to be represented here? Are not the electors of the constituency of North Ontario entitled to representation here and to their voice on this important measure? Are not the electors of the constituency of Glengarry entitled also to representation here, and the electors of Quebec and Kamouraska, in Quebec, and the electors of Victoria, in British Columbia? From one end of this country to the other we have constituencies with no representation in this Parliament, and yet the Government without giving any real reason to the country, persists in driving ahead with this measure, which has been described by one of the ministers of the Crown as the most important transaction which the Parliament of Canada has ever had to deal with.

Mr. SHEARD:

May I ask whether the constituencies of Gaspe and Maisonneuve are represented here during this debate?

Mr. KING:

I will answer my hon. friend. Only some ten days ago the leader of the Government, I think it was, assured this House that by the end of last week or the week previous the proceedings of Parliament would be at an end for this session. That assurance by the leader of the Government was accepted in good faith, and the representative of the constituencies mentioned, with another hon. member, arranged to take their passage across the ocean on a mission which they had had in imind for some time previous. If, therefore, these constituencies are not represented here at this, moment, it is not the fault of the members of those ridings, but it is due exclusively to the fact that they accepted in good faith, as they had a right to accept, the assurance given them by the leader of the Government. That is also a very strong reason why, when the Government through

That represents the Grand Trunk Railway property as it is held by the different shareholders and the debenture holders. All of that stock may be divided into two groups in accordance with what is proposed in this Bill: The first, stock which is to be retained by the present owners, and the second, the stock which is to be exchanged-not to be acquired absolutely by the Government of this country with the obligation ending there but to be exchanged. Something is to be given in return for it, another form of stock of actual or greater value, with a dividend guaranteed at four per cent by the Government. Let us see how that measures up with the idea of government ownership. This is what is proposed in clause 4:

As part of the consideration for such acquisition, the Government may agree to guarantee the payment of :-

(a) Dividends payable half yearly, at four per cent per annum, upon the present guaranteed stock;

(to) The interest upon the present debenture stocks as and when payable, in accordance with the terms thereof. -

In other words, the four per cent guaranteed stock and all that is described here as outstanding debenture stocks remain, exactly as they are to-day, in the possession of the people who own them, and what the Government proposes to do is to agree to pay these holders of capital and debenture stocks the dividends which up to the present time they have had to look to the Grand Trunk Railway Company for.

Mr. COCKSHUTT:

May I ask the hoft. gentleman a question, not with any intention of interrupting him? Suppose I buy a house from him. I have not the whole of the money but pay two thousand dollars down and give mortgage for the balance of two thousand. The mortgage is made out to my hon. friend and the deed stands in my name. Whom does he consider the owner of the house?

Mr. KING:

I would answer my hon. friend by asking him this question: Where is the deed that the Government gets for this property? The Government gets no deed for the property which they are assumed to be acquiring or purchasing. The property remains in the possession of the people who already own it.

No, no.

Not by any

means.

Certainly.

Mr. KING:

Mr. COCKSHUTT:

Not immediate!/

Mr. STEVENS:

Perhaps the hon. mendu't will permit me a question?

Mr. KING:

By all means.

Mr. STEVENS:

The possession or control of the property will rest in the voting stock, and the debenture stock and guaranteed stock, which is non-voting, cannot be claimed to have possession. Am I correct?

Mr. KING:

Mr. MIDDLEBRO:

Will the hon. member permit me a question?