Sit down.

Mr. MIDDLEBRO:

My hon. friend has asked a question and I am merely attempting to answer him. What is the difference between

Sit down.

Order.

Mr. MIDDLEBRO:

What is the difference between debenture or any other stock and an actual mortgage of property where the holder of the stock has no other interest in it than to receive the dividend on the stock, without any voting powers whatever? We say that the holders of the stock are simply mortgagees without the power of management in the concern, and all we have done is to assume the right to pay them off.

Don't make a speech.

Mr. 'OT>WAKER: I wish to inform the hon. gentleman (Mr. Middlebro) that the statement he has made is not a question.

Mr. KING:

I am addressing my remarks at the moment to the question of ownership. I am taking up the question as to .whether this is in the nature of a transaction of government ownership and I am answering by pointing out-and if I am not correct in so doing, I would like hon. gentlemen opposite to tell me-that all this retained stock remains in the possession of the people who have it at the present time.

Mr. MIDDLEBRO:

Just as a mortgagee.

Mr. KING:

It remains in the possession of the persons who have it at the present time, but the difference is this: Instead

of the payment of dividends on all that stock being made by the Grand Trunk Railway Company, the Government of Canada hereafter will have to guarantee and make every bit of the payment at greatly enhanced values.

Sir SAM HUGHES:

Can the holders of this stock to which the hon. gentleman has made reference sell that stock?

Mr. McKENZIE:

Why not?

Sir SAM HUGHES:

I am asking the

question.

Mr. McKENZIE:

Certainly they can.

Sir SAM HUGHES:

Can they sell it?

Mr. KING:

Mr. COCKSHTJTT:

I would ask the hon. gentleman would he approve of the Government of Canada borrowing money at five or five and a half per cent and paying off these stocks that are only carrying four per cent, because then we would own the stock?

Mr. KING:

This is not a good time to borrow money. The Government will he well advised if it does not enter into any more schemes for borrowing money than are necessary. What is needed above everything else in this country to-day is economy and some regard for public expenditure. It is the wanton extravagance of this Government, more than anything else, that has exasperated the people of this country.

Mr. McCREA:

The Government does not know anything about that.

Mr. KING:

What is this agreement for?

I have said it is not an agreement to purchase the Grand Trunk, it is not an agreement to acquire public ownership. Notice this: The word used all the way through the Act is the word "acquire." That word "acquire" may mean anything. I think in legislation which it proposes the Government should be careful in placing before the country exactly what is meant. I say this is not an agreement in the nature of purchase either of properties or of stock. Stock that is brought in to the country under an arbitration does not represent value acquired by the country for, as I have said already, there is given in exchange for it a four per cent guaranteed stock.

Now, just in passing. The hon. member (Mr. Cocksliutt) referred in his remarks to the way in which that exchangeable stock was to be arbitrated and he took exception to the fact that judges were to be named as the arbitrators. I would like to ask the honourable the Minister of Railways, who I am glad to see opposite, if he would tell this House just why a certain change was made. I notice in the letter that was written to Sir Alfred Smith ers on October 9th and signed by Mr. Meighen, Minister of the Interior, and which is placed on Hansard at page 1023, setting forth conditions to which Sir Alfred Smi there, as president of the Grand Trunk, had agreed, there is -the following in reference to the nature of that arbitration :

The value (if any) to the holders of the first second and third preference stock, and the ordinary or common stock, shall be determined by a board of arbitrators consisting- of three persons, one to be appointed by the Grand Trunk, one by the Government, and the two so appointed to select a third, or failing agreement, the third to be selected from among the judges of the Superior Courts in Canada.

Now, notice this. We have something definite here, we have some little guide a.s to who is to be the arbitrator in this matter because it will be on the third arbitrator's decision more than that of any other that the whole question of what the country is to pay for this stock will turn.

-failing agreement, the third to be selected froni among the judges of the Superior Courts in Canada by Sir Louis Davies, Chief Justice of the Supreme Court of Canada, and Sir Walter Cassels, Judge of the Exchequer Court of Canada, acting together.

There are two gentlemen whose names are known and respected throughout the Dominion, and it was agreed that they should name the third arbitrator. Now, in the Bill as brought down that course has been departed from altogether, as my hon.

friend from Brantford (Mr. Cockshutt) pointed out. Section 6 of the Bill reads:

The value, if any, of the first, second and third preference stocks and the common or ordinary stock of the Grand Trunk now issued and outstanding to the face values above mentioned (hereinafter together called the "preference and common stock'') shall he determined by a board of three arbitrators, one to be appointed by the Government, one by the Grand Trunk, and the third by the two so appointed, or, failing agreement, by judges to be designated in the said agreement.

What I want to ask my hon. friend is: Why was a change made from the original proposal which Mr. Smilhera wua prepared to adhere to, by substituting for the two judges whose names are mentioned therein a clause which leaves us entirely in the dark as to who the third arbitrator is to be selected by, or who the third arbitrator is to be?

Mr. J. D. REID:

It was not necessary to set that out in the agreement. Mr. Srnith-ers, representing the Grand Trunk, and the Government agreed that the two gentlemen named should designate the third arbitrator. When the Bill gets into committee if it is necessary to word the clause differently, there is no objection to its being done.