Mr. KING:

Will the minister give the House an assurance that when the Bill goes into -committee it will be worded m accordance with the terms of that letter?

Mr. J. D. REID:

In accordance with the two names I have mentioned?

Mr. KING:

In accordance with the

terms of the letter that passed between Mr. Meighen and Mr. Smithers.

Mr. J. D. REID:

Will the hon. gentleman read the letter that he referred to of July, 1918?

Mr. KIN'G: I am referring to the letter of October 9, 1919, just two weeks ago, which is set out in Hansard at page 1023.

Mr. J. D. REID:

The letter is in this

form:

The value, etc., 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 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.

I have no hesitation in saying that the Government will embody in the agreement exactly what is in that letter. If it is not

in the Bill it will be in the agreement, and I give my assurance to that effect. Is that the answer?

Mr. KIN-G: That is satisfactory. That

improves the -situation to this extent, that in the. Bill as it was presented to the House the amount of money which the country becomes obligated to pay for this stock was to be determined largely upon the words of one gentleman-unknown, who was to be chosen by judges-unknown, the country to pay for the -stock it is obtaining an amount-unknown.

Mr. ROWELL:

Will my hon. friend permit me a correction there? The Bill is framed upon that letter, which is the basis of the agreement. It did not require that all the terms should be embodied in the Bill. There never was any intention to depart from it, and the Bill is not a departure from it.

Mr. KING:

I would say to the honourable the President of the Council, with all deference, that I think it should he stated in the Bill, and I hope the Government will see that the Bill is amended in a manner which will make it perfectly clear that that course is to be followed. I understand from what the Honourable the Minister of Railways said that that will be done.

But the situation, important to observe, is this. Here is stock, the value of which up to a couple of weeks ago could have been [DOT] ascertained fro-m a stock list. In view of the fact that the Government has brought forward this measure to guarantee interest payments on the Stock that is to be given in exchange, all this other stock is going up, up and up. It is all important, therefore, it seems to me, to fix a definite date with reference to which the arbitrators are to base their estimate of the value of the stock. Is that the intention of the Government?

Mr. J. D. R'EID: The hon. gentleman has reference, of course, to the stocks that will be the subject of the arbitration?

Mr. KING:

That is it.

Mr. J. D. REID:

Certainly, a date will be fixed in the agreement. The hon. gentleman should of course know that.

Mr. KING:

Will the Minister of Railways undertake to say that the date to be fixed will be a date prior to the time at which the Government's Intention in this matter was made known to the public?

Mr. J. D. REID:

It is not fair to ask a question of that kind. But I will say this to the hon. gentleman: When the date is

being fixed the Government will protect the interests of the people by setting a date of which no advantage can be taken.

Mr. KING:

I appreciate what the hon. minister has said about fairness.; it is the element of fairness that I am trying to consider. The public of this country as a party to this transaction, are entitled, it seems to me, to the greatest element of fair play. Now, a good deal turns, it seems to me, upon the date to be fixed, and in fairness to the public, I submit that the Government ought to assure Parliament immediately that the date with reference to which the valuation of these stocks will be considered will be a date prior to the time at which the intention of the Government in the matter of this transaction was made known to the public. Without that assurance the whole transaction becomes one which seems to have reference very largely to the stock market, rather than to the interests of the people. It is important in these transactions that the interests of the people in matters concerning payments out of the revenues of the country should be freed from the possible influences of stock transactions inimical to the national interest.

Now, Mr. Speaker, I have pointed out that this measure is not for the purchase of the Grand Trunk properties; it is not even a measure for government ownership. What [DOT]is it then? It is nothing more than an agreement for the transfer of the management of the Grand Trunk Railway system to the gentlemen who, as my hon. friend from Pontiac (Mr. Cahill) described them, are managing the Canadian. National Railroads at the present time, and who were controlling the Canadian Northern system before it was taken over by the Government. That is all that this measure is-plus this one other important feature. It is also a measure to enhance the value of the stock of the Grand Trunk Railway Company. That is all. Those are the only two things that are accomplished in this Bill. There was no need of an agreement between the Government and the Grand Trunk as to the acquirement of the stock; that is something the Government could have arranged with the stockholders if it had wished to do so. But when it comes to the question of relieving the Grand Trunk of its liabilities it was necessary to enter into an agreement, and that is the purpose of this whole measure. It is a Bill to foist on the people of Canada all the liabilities of the Grand Trunk Railway system and of the Grand Trunk Pacific, and to give in return for an exchange of management to the shareholders of the Grand Trunk Railway Company an enhanced value for their stock. I say to my hon. friends they have no right to proceed with a transaction of that kind at this stage of the session. I say we have a right to expect the Prime Minister here in his seat in discussing this question, and. I ask my hon. friends opposite to defer the enactment of legislation such as this, which is going to bind the country for another generation, until the Prime Minister can be present in his seat in Parliament.

If the Government wish to make a working arrangement between the Canadian National Railways and the Grand Trunk Railway system, they have it in their power to effect it.

The ostensible purpose as put forward in the Bill is that a committee of management shall be formed as soon as the agreement is ratified to operate the Grand Trunk system in harmony with the Canadian National railways. A great deal is being said about the merits of bringing these two systems together. Well, every one will admit that it is desirable that these two systems should operate together; the one supplements the other. If they are not supplementing each other in such a manner as will best serve the interests of the country, this Parliament can find a method of bringing such a condition about. Parliament is all-powerful in effecting any arrangement which it thinks best in the interests of the people; and I say that in order to effect a working arrangement between these two great systems which will make the whole system, as it were, serve one big national interest, it is not necessary to go so far as this measure goes; it is not necessary to saddle this country with the liabilities of the Grand Trunk and the Grand Trunk Pacific and at the same time give additional value to the stock of the shareholders over , across the seas.

There was one remark' made the other evening by the ex-Minister of Agriculture, the hon. member for Marquette (Mr. Crerar), which I should like to read, because I think it is all-important that he and those who agree with hinh should understand just what this transaction amounts to. I quote from page 1211 of Hansard, which contains a report of the debate on October 20:

An argument has been put forth by the directorate and management of the Grand Trunk that it should he relieved of any liability in connection with the Grand Trunk Pacific, In the face of all the circumstances I think it is impossible for this Parliament to concede that position for a moment-

Mr. Rowell: Hear, hear.

Well, the whole purpose of this Bill is that the Grand Trunk shall be relieved of any liability in connection with the Grand Trunk Pacific; it simply turns over to this country all the liabilities of the Grand Trunk in regard to the Grand Trunk and the Grand Trunk Pacific. The member for Marquette could not have appreciated that fact when he made his speech. Like many others throughout the country and, apparently many in this House, he was under the impression that this measure was based upon a carrying out of the principle of government ownership; that it was being introduced with a view of freeing the country from certain liabilities pertaining to one of the biggest corporations. As a matter of fact, this measure does the very thing that I have described; it simply loads the country with these liabilities and gives in return to the Grand Trunk shareholders an increased value and guarantee dividends for their stock.

Now, Sir, I have nothing further to add except this-and I say it with realization of its full import. The Government are the trustees of the people of this country. They are the trustees of the public funds and the use that is made of them not only in the present; they are trustees also for the generations that are to come. This measure, it seems to me, loses regard of the full sense of obligation of trusteeship which the Government should have in respect of its duty to the people at this time. It loses regard of the obligations iof the Government towards those who come after. By this Act the Government would make it impossible until the year 1950 for the people of Canada to get complete possession of the railway systems of this country if that should be their desire or to acquire ownership of the Grand Trunk properties then, except at a greatly increased cost. The Government have no right so to bind the people for the future.

The Government brought this session of Parliament about for a particular purpose; that purpose related to the Treaty of Peace. That purpose has been fulfilled, and it is not right that the Government should at this time introduce the measure which is now before the House. Moreover, the Government was elected, by means that were very questionable, for a purpose; and what was the purpose? The winning of the war. Does any hon. gentleman say that the war has not been won? Does any hon. gentleman say that the purpose for which the Government was elected has not bgen fulfilled? The purpose being fulfilled, then, by what right does the Government continue to hold

office? They were not chosen by the people to put through a Bill of this kind on behalf of the shareholders of one of the biggest corporations in the world; they were chosen for an entirely different purpose. I say to hon. gentlemen that in accordance with right and proper constitutional procedure, the only course open to them is to drop this measure altogether, for the present at least; give the representatives in Parliament here assembled a chance to go back to their constituencies and confer with the people and get their views. Then this measure can be discussed when Parliament reassembles in February; the representatives of the people will be able to deal with the matter with due regard to the wishes of their constituents. In the meantime, opportunity will have been given to the people to understand the nature of this transaction. I say that Parliament has no right to usurp the rights of the people in regard to a great transaction of this kind and to decline to give the people an opportunity to inform their representatives in Parliament of their wishes in the saatter.

What we nee 1 in Canada to-day is more control of Parliament by the people and of the executive by Parliament. This measure shows, as no other measure possibly could show, how far we have been getting away from constitutional government in Canada. The time has come to call a halt; the time has come when members of Parliament ' should have regard for the people's wishes and when the representatives of the people in Parliament should control the executive.

Mr. G. B. NICHOLSON (Algoma, East):

May I at the outset be permitted to join with the member for Brantford (Mr. Cock-shutt) in expressing my congratulations to the hon. member for Prince (Mr. King), who has just taken his seat- in the House as leader of the Opposition? Perhaps I may be also permitted to say that I feel disposed to express my disappointment at the performance to which he has treated the House on this his first appearance since he was elected as member for Prince and leader of the Opposition. Some of us were looking forward with some degree of hope at least that upon entering the House the hon. gentleman would be able to clear up some of the mists which have apparently been hanging over the eyes and intellects of hon. members who sit around him in connection with the matter of the Grand Trunk purchase, or the taking over of the Grand Trunk system. But having listened to him intently; having taken notes of what he said and given attention to what he has

read; having examined the deductions that he made from the things which he read, I have reached the conclusion that the light which he has on the railway situation in Canada, particularly the light which he has had in regard to the proposal now before the House, is not very much brighter than the light which has been exhibited by the hon. gentleman who has been keeping his seat in this House warm for him during this session and the last.

The hon. gentleman has undertaken to show to this House-and without question with the intention of convincing the country, if he can-that t-he taking over of the Grand Trunk Railway system under the terms of the agreement outlined in the Bill now before the House will not constitute and will not consummate an act of public ownership. He bases his argument in support of that-and I must confess I was utterly amazed to hear him do ito-on the fact that the Government undertakes to continue to pay or to be responsible for the interest on the bonded indebtedness of the Grand Trunk railway. Will the hon. gentleman who, I presume, knows something about financing large institutions in this country, undertake to say that because the Canadian Pacific Railway Company agrees to pay the interest on its bonded indebtedness to the people who have purchased and own those bonds, the Canadian Pacific Railway Company or the shareholders of that company, are not the owners of the system? Would those who cheered so lustily for the statement of the hon. gentleman when hesaid that this would defer for a period ofat least thirty years the possibility of public ownership in this country say that, because a corporation pays interest on its bonds, it does not own the institution, upon which those bonds have been issued? The proposition of the hon. gentleman is 'so obviously absurd that it seems to me unnecessary to take up even a moment ofthe time of the House in arguing

against it. What this Bill purports to do and what the agreement authorized by this Bill brings into effect is nothing more or less than this: The Canadian people take possession, of the Grand Trunk Railway of Canada, subject to its bonded indebtedness and in accordance with terms that will be determined by a board of arbitration that is set up by this Bill. Just as soon as that board of arbitration has given its award, ownership of the Grand Trunk railway, as ownership is understood by any man who understands anything about the

82J

matter, .passes absolutely to the Canadian people. The illustration given by the hon. member for Brantford (Mr. Cockshutt), in asking the hon. gentleman a question, illustrates the point exactly. The fact that a man has a mortgage on his house, that he may have a certain liability resting on the property that he owns, does not interfere in the least degree with his ownership. It is the title that passes. It is the Canadian people who will own, control and operate the Grand Trunk Railway of Canada.. They will do just exactly the same as any other owner; they will do just the same as if the Grand Trunk passed from the hands of one company to another; they will continue to carry the obligations that the Grand Trunk must always carry, and they will own the system. I almost came to the conclusion, as I heaTd the hon. gentleman leading up to his argument, that he was going to put forward as a basis for his conclusion, the theory that the only way by which the Canadian people could become owners of the Grand Trunk railway would be by utterly repudiating the bonded indebtedness. If that be the position he takes, why then, all right, we are on ground that we can discuss. If it be the feeling of the hon. gentleman that the Canadian people in taking over the Grand Trunk should repudiate the bonded indebtedness of that railway, that they should undertake to say to the bondholders of the Grand Trunk railway: We are not going to give you even the right to foreclosure under a mortgage, but we are going to- cancel the indebtedness-if that be his position, there is at least some degree of reason in it. He can be placed in the .same class as all those who believe in the confiscation of everything in the shape of real and physical property. If that be his position, the House and the country will clearly and definitely understand it. But if he proceeds to argue that when we purchase a property, when we agree to pay to the man who holds a mortgage on that property, the interest on his mortgage until such time as the mortgage is liquidated, as a result of that we do not get ownership, then he takes a position that cannot be justified and that he cannot defend before any man who understands anything about business transactions or the control of any institution of this description.

Let us see what will be assumed when we take over this railway. The Drayton-Acworth report, that we have heard a great deal about in this House and that every

member must agree went into the whole question of the physical condition and values of railways in Canada more thoroughly,

I presume, than any other commission or body that has ever investigated railways in this country or possibly on this continent, says that, the Grand Trunk railway ' cost-that is its value at the time the report was made-$127,000 per mile. The bonded indebtedness that the Government of Canada for the people of Canada -assume under the agreement constitutes an obligation against the * Grand Trunk railway of $49,000 per mile, and not one cent more. The Government says: We will pay the interest on the guaranteed stock and the bonded indebtedness, and we will leave to arbitration what, if anything, shall be paid in lieu of the first, second and third preference stock and the common stock of the Grand Trunk railway. In reality they practically wipe out one-half of the value of the Grand Trunk railway as set forth in the Drayton-Acworth1 report, leaving to arbitration what, if anything, shall bp paid for a sum of about $60,000,000 worth of first, second and third preference stocks, and in doing that they base their position on 'the Drayton-Acworth report that in itself stated that in their judgment there should be paid for the first, second and third preference stock a sum substantially approximate to $3,600,000 per annum for seven years, with a substantial increase at the end of seven' years.

I do not wish to detain the House at any length, and I am not standing here as one of those who are at all enthusiastic with regard bo public ownership of railways. On many occasions in this House I have made my position with regard to that clear, but we are dealing, not with a theory, but with an actual condition. The leader of the Opposition-I will accept the suggestion thrown out by the horn, member for Prince (Mr. Mackenzie King), and I will refer to the hon, member for Cape Breton North and Victoria (Mr. McKenzie) as the leader of the Opposition-has moved an amendment to this Bill and has spoken on it at some length. The hon member for Shelburne and Queen's (Mr, Fielding), who sits alongside of him, spoke also on this Bill at length. Now we have had the hon. member for Prince (Mr. King) speaking this afternoon at length. Has any one of the three intimated to the House or the country any alternative to the proposal made by the Government? What is the alternative that these hon. gentlemen suggest? It is simply: Wait, drift, dilly-dally with this question that has been pressing this country

for two and a half years. How has it been pressing? What is it that has brought the country into the condition in which it is? If my memory serves me correctly, the hon. gentleman was a member of the Government which brought about the condition that makes it absolutely necessary for the Government of Canada to take over this Grand Trunk railway. The hon. gentleman speaks of the people of Canada relieving the Grand Trunk of all its obligations in connection with the Grand Trunk Pacific. It has been a matter of amazement that any hon. member sitting on that side of the House who supported the Government which backed up the Transcontinental and the Grand Trunk Pacific should ever come to stand Up and utter even the words " Grand Trunk Pacific " in this House.

It is the iniquity of the Grand Trunk Pacific and the Transcontinental that has placed Canada where she is to-day in regard to this railway situation, and'which makes it absolutely necessary that we take over the Grand Trunk railway in order that by some means or other the people of Canada may be relieved of carrying a burden that can never be borne unless the National Railway system is rounded out. Will the hon. gentleman or any one else on the other side of the House tell us what he would do with the Grand Trunk Pacific and the Transcontinental without the Grand Trunk railway? Will they tell us?

The hon. gentleman speaks about traffic agreements and a gentleman's arrangement between railways, and all that sort of thing. Some of us know a little about the operation of railways, not very much, but we have given the matter some little thought, and I ask any practical railway man who has been close up to the management of a railway, what kind of a job could be made of operating the Grand Trunk Pacific and the Transcontinental under a traffic arrangement with the Grand Trunk. Where would we land? In just one of two positions: We would still further bankrupt the Grand Trunk Pacific and the Transcontinental, anid they are bankrupt now, or we would bankrupt the other road. We would be operating them in the first place at a double overhead cost of management, equipment, terminals and all that kind of thing, and in the end we would be working simply on the basis of a gentleman's agreement. Take, for example, the history of the United States railways and you will find that these " gentleman's " agreements have not been very effectual in making it possible for United States railways to operate successfully. There is only

one way in which public ownership of railways in this or any other country can be made a success, and that is by rounding out the system as it should be rounded out, spending a sufficient amount of money to develop the system as it requires to be developed, and then operate it strictly .under a business management, with a tariff for both freight and passenger traffic that will make it possible for the railways to operate without placing indirect taxation on the people of the country to support them.

Coming back to the question of what we are going to do with the roads that have been foisted on us by the Government of the hon. gentleman (Mr. Fielding) and those who supported him in this House, what are we going to do with the roads we now have if we do not take over the Grand Trunk? Will some hon. gentleman tell us how we are going to operate them? As a matter of fact, whether we take over the Grand Trunk or noit, we are up against this in connection with the Transcontinental, that some one will have to operate it for the next twenty years at a loss, but that is not the case in connection with the Grand Trunk Pacific, so far as operating expenses are concerned because it is within the hounds of possibility that it can be operated so as to make both ends meet. It is true that if we are going to deal fairly with the Canadian people as a whole, we can never look forward, and I use the word "never" advisedly, to having the Grand Trunk Pacific or the National Transcontinental earn interest on the money that has been sunk in those two roads, because there has been no equivalent value produced for the expenditure of that sum. I think the hon. member for Pontiac (Mr. Cahill) said this afternoon that it would be a fair proposal to say to the Grand Trunk: We will give you the National Transcontinental on the basis of $60,000,000, the original estimated cost. As a matter of fact, the National Transcontinental has cost about $215,000,000, and the Grand Trunk Pacific $260,000,000 or $270,000,000. Where did the money go? Not into the construction of the railway-not for one moment. It would be utterly impossible to trace where the money did go to, but any one who has investigated the matter for a single moment knows that the money did not go into the railway. Consequently, it would be unfair to competing railways or the people of Canada to expect the road to earn interest on anything more than its actual value, which is about 35 or 40 per cent of what it is supposed to have cost. .

Something has been said during this debate with regard to arbitration. The hon. member for Prince (Mr. King) was apprehensive ' that the country might get the worst of it in connection with the arbitration. Reference has also been made to the arbitration award in connection with the Canadian Northern. It is true that the arbitrators in that case found a value that the Drayton-Acworth Commission did not find. Whether they were justified in their finding or not, I am not going to argue. The position I have always taken is not to question the integrity of the judges on the bench of this country. I believe the arbitrators acted honestly. They may have been mistaken. Whether they were or not, I say that when the Canadian people got the Canadian Northern at the price they paid for it under that arbitration, even though they assumed all the obligations of the Canadian Northe. a, they got the best railway bargain that h, s ever been handed over the counter in this country. They got the cheapest rai'way that has ever been produced in this country, because the road was built by railway n. n and built honestly. The money all wei into the railway, and not into the pockeh of political friends of those who were behind the railway. Those are the facts.

There is one other point: What would happen if we did not take over the Grand Trunk railway? If the Grand Trunk Pacific, which the country has to take over because we have guaranteed the bonds to an amount greater than the value of the railway, and if the Transcontinental and the Canadian Northern are to be a successful system, one of two things is necessary. We must acquire eastern connections, either by purchase or by construction. Which are you going to do? It has been stated on the floor of this House that it would cost $100,000,000 to round out the Canadian Northern and the National Transcontinental in Eastern Canada. It will cost nearer to $200,000,000 to construct terminals and a gathering system in Eastern Canada that will make the operation of the National Transcontinental a success. When you have spent that $200,000,000, what have you got? You will have a reckless duplication of lines, which is what has bedevilled the whole railway business of this country. Would that be a wise policy to pursue, instead of acquiring lines that are already in existence? The hon. gentleman has referred to the necessity for economy. Would there be very much economy in the Canadian people undertaking to construct another set of terminals in the city of Toronto, for in-

stance, or in Ottawa, or in any of the towns throughout Ontario and Quebec, and duplicating lines already in existence throughout these provinces in order to make more difficult the profitable operation of the lines now there? Instead of doing that we should begin with eliminating some of the lines we now have, and one of the things that will be necessary before government ownership or any other kind of ownership can be a success is the elimination of certain of these non-productive competing lines that never were necessary and should never have been constructed.

In conclusion, if any hon. member in this House, or any business man outside of it, be he a railway man or not, will show me a way by which this railway burden that has been imposed on the people of Canada can be carried, other than by acquiring the Grand Trunk and rounding out the National Railway system and operating it as a public utility, I will be ready to hold up both hands for it.

If the hon. gentleman (Mr. King) can find any group of financiers in this country, either the Grand Trunk financiers or any others, who will take these burdens oft our shoulders, co-ordinate the railways, and give to the people the service they should get from them, then I would be willing to write off all the money that his friends pocketed but of the construction of the Transcontinental and the Grand Trunk Pacific and turn the whole thing over to them for nothing. That is the position I would take, and it is a perfectly logical position. But faced as we are with this tremendous burden from which we cannot escape and which was imposed upon us against the will of the people and notwithstanding the protests of those -who were best fitted to know what the railway situation was, what are we going to do to-day? I say to my hon. friends: Come forward with some alternative proposal that possesses intrinsic merit and show the Canadian people sane leadership in the endeavour to get out of the wilderness into which they were led by the hon. gentleman (Mr. King) and his friends in connection with this whole railway business.

At six o'clock the House took recess.

After Recess.

Mr. L. A. LAPOINTE (St. James):

Mr. Speaker, in rising to speak on the question before the House I am not going to repeat the many (good reasons given by the speakers on this side who have preceded

me against the acquisition of the Grand Trunk at the present time and under the existing circumstances. I desire not so much to express my own views as to put on record the resolutions and protests of the Montreal Board of Trade, the Chambre de Commerce and the Canadian Manufacturers' Association against this transaction. My desire is mainly to place before the House and the country the views of these great commercial organizations, composed of eminent business men, with respect to this transaction. The announcement of the Government's policy with respect to the Grand Trunk came as a surprise not only to the city of Montreal, but to the whole country, because nobody expected the question would come up at the present session. As a result of the strong opposition to the Government taking over the Grand Trunk railway which is expressed by the business men of Montreal, the Board of Trade met on the 16th of October and passed a resolution demanding that the Government halt in its present proposal. That resolution was Worded as follows:

That this special general meeting of the Montreal Board of Trade, having in view the result of Government operation of railways both in Canada and the United States, and the heavy financial responsibility assumed by the Dominion Government in connection with the railways already taken over by it, which, added to a public debt, enormously increased by war expenditure, necessitates a heavy burden of taxation on the country, strongly protests against the proposed acquisition and operation by the Government of the Grand Trunk Railway system.

Also resolved that a special delegation be appointed by the Board Council to present this resolution at Ottawa, and secure all information possible regarding the railway situation.

The above resolution was moved by Mr. George Sumner and seconded by Mr. Lansing Lewis, and fifteen minutes after its introduction was unanimously passed by the attendance of over two hundred business men at that meeting. That indicates that all these business men had a thorough grasp of the situation, appreciated the circumstances of the case, and understood what was involved in the Government's policy of acquiring and operating railways.

In moving the resolution, Mr. Sumner said:

Why should this great question, involving all Canada be hurried through in the closing days of a session of Parliament?

Is it politics and votes that are sought-or why are the Canadian people to be led blindfolded into the fatal policy of more government controlled railways? Has not Canada been bled for a generation by deficiencies of the I.C.R. ?

Have we not before us the huge deficiencies

in recent years through the management of railways by the Government of the United States and Great Britain?

The newspapers say the G.T.R. had an operating surplus qf $1,543,000 for the past six months. Is there one man in this room who believes that the Government could have operated the G. T. R. for the past six months and shown a loss of less than $3,000,000?

Mr. BURNHAM:

Does the hon. gentleman and his clients not believe in government control? It they do, is it not true that in case the railways which are controlled object to that control and wish to give up, the Government must he prepared to own the lines?

Mr. L. A. LAPOINTE:

Really, Mr. Speaker, I will not undertake to answer a question that more nearly resembles a speech than anything else. My hon. friend entertains theories of his own and some of those theories excite surprise among his fellow-unembers. The hon. gentleman is welcome to his theories but at present I am not speaking about government ownership or nationalization. I am explaining why this transaction should not be carr'ed through at the present time, and I am quoting the opinions of business men of Montreal in support of that view. To resume now with my quotation from Mr. Sumner's speech at the Board of Trade meeting:

Montreal is the great centre through which flows the produce of Canada, and if the Government would take their advice from men of experience in railways instead of looking to the West to catch votes, they would keep themselves out of trouble.

That is very plain. Mr. |Sumner said further:

I am told that there are very great errors in the Dray ton-Acworth report? Why are they not pointed out? For instance the statement that cost of equipment was added to capital, 1 am informed, is not true. Why are not the facts about what is written off and in development brought out?

Why the great hurry to acquire the Grand Trunk?

The Canadian Government has loaned money or financed the purchase of wheat and cheese for Great Britain, and also various products of Canada that are being shipped to Roumania.

Why not give a helping hand to the G.T.R. so that her pressing debts may be paid and her equipment improved? Then wait a few years until Canada gets over this horrible war's effects and until the whole country can think and work calmly.

The Government of former days subsidized the Grand Trunk Pacific. Then came a new Government that subsidized the Canadian Northern. Who is at fault for these two railroads being built from Edmonton to the Pacific?

In view of these facts, why should not the Government take over the Grand Trunk Pacific

and pay its debts and relieve the G.T.R., and thus enable it to become a credit to Canada.

It appears to me that such help to the Grand Trunk would put them in a position where the railway could, under reasonable rates of freight and proper traffic arrangements with the Grand Trunk Pacific, relieve Canada of a calamity of further Government-run railway. At the same time, there would be fair prospects of paying dividends to the English owners.

Does the Government expect that taking possession of, or tying up the Grand Trunk, will help the Victory Loan? It is the common talk of the street-Not one dollar for the Victory Doan, if the Grand Trunk is taken over or throttled.

That question comes from a gentleman who is respected in Montreal and who is not a French Canadian, but a good Englishspeaking Canadian.

The reasonable plan is to form a working agreement for freight and passengers between the Grand Trunk in the East and the Canadian Northern and Grand Trunk Pacific in the West, and thus enable all these roads to earn dividends.

Characterising the Canadian National railways as a "wooden railway, run by wooden heads," Mr. Lansing Lewis, in seconding the resolution flayed those who sought to nationalize the Grand Trunk. While the motion, he said, did not contain "enough pep," he was willing to second it and support it.

Lansing Lewis, speaking on the resolution, said it seemed to him rather a ladylike one, and if he had had anything to do with it it would have been a little more definite.

This is a most vital question and one on which the board should express itself very distinctly. It is not fair and just that such a big question should come before the country, and that the Board of Trade should not be heard from. Is it not selfish to leave a poor old government to struggle with this question alone? Are they possessed of the business acumen which we naturally look for in a congregation of such men as I see here to-day?

Are we to leave all legislation to the west, where the Board of Trade is a very wise one? The boards of trades in various cities are often foolishly jealous of one another, but I know the Montreal Board of Trade does not want to boast as having the whole say in this matter and we passed a resolution in July last that was very good. He hoped they would not think him discourteous if he said that the question was such a big one that it required a meeting of the whole board to express its opinion rather than simply the council alone.

Continuing his remarks, Mr. Lewis asked what had been the result of the resolution. He did not think that any of them had seen any results except that the Government were going to do exactly the thing they did not want them to do. It was by their actions that they showed what was in them. They knew what happened to resolutions, stacks of resolutions were being proposed and carried every day, with an extra quantity on the first of January, but they must

show that they meant what they said in order that the resolution had any effect.

" When you want a thing done you must go to the Government and tell them what you want done and get some attention," declared Mr. Lewis, " That is the only way we car. get attention. X>o you realize the position of the Montreal Board of Trade? It is in the metropolis of Canada, the head of commerce, hanking and everything else. We must enlist the interest of all the boards of trade throughout the Dominion on this Dominion question, for we want their assistance. A person by the name of Wilhelm Hohenzollern caused to be injected into the German people a very viscous bias, and we know the result. Another person in the province of Ontario seems to be playing much the same game, and entirely turning the heads of our people in Ontario, but that borders on politics.

''I have pored over the newspapers and have not heard a single man who pretends for a moment that our government or any government in any country can run a railroad.

"I don't want to allude to that ridiculous railway that is said to run between here and the lower provinces, the laughing stock of Canada."

Mr. Downey: "It is the wooden railroad. I christened it that years ago."

Mr. Lewis: "Yes, the wooden railroad run by wooden heads. Any government-run railway means increased taxation, but for some reason members of parliament who have taken the oath to serve the best interests of this country are preparing to vote for It and we are paying those gentlemen $2,500 each to put us in the hole."

I do not think that he alluded to members on this side of the House, because we are making a fight on that.

If you really mean what this resolution says so very daintily, I do ask you to express yourselves in such a way that the council will feel that it is necessary for them to take such steps as will induce the Government to realize that the Board of Trade of the metropolitan city of Canada looks on this project with the greatest horror as being one that is bound to bring disaster and which should be avoided in every possible way.

That represents my view exactly; I could not present it any better than it is given there.

Mr. A. A. Ayer was the next speaker. He said:

-that Montreal ae an individual city through Which poured the commerce of the country should have the biggest voice In determining whether or not it was best to take over the Grand Trunk railway.

And he went on to give good reasons why the resolution that had been presented should be adopted.

Mr. James Cleghorn, Vice-President of the Board of Trade, then made the following statement:

As a member of the council I would just like to say a few words in reply to Lansing Lewis. Mr. Lewis had a feeling that we should

recommend that something be done. We sent a recommendation to the Prime Minister last July. At that time no person had any idea that this was to be sprung upon us and only one week ago the Prime Minister informed the House that the session would end in another week. Not even the members of the Opposition at Ottawa had enough information to discuss this important question. They are asking for a delay until next session in order that they may acquire the proper information so as to find out if the statements of this present Government are facts, and that the taking over of the railway is the only way out of the situation.

In looking at the papers we find that the Minister of Hallways t lade a statement that if this deal goes through we will have 21,780 miles. The largest system of national ownership in the world. That is what astonishes us. We have heard about the Intercolonial. It is a crime the way that road has been operated and it fills us full of fear when we hear about this proposal.

It is useless therefore to expect your council to put a definite proposition before the Government. That would be impossible. We have not the proper figures upon which to work. We are told that we will not have to pay any money but the country nevertheless will be responsible for the deficits and the annual fixed charges if this deal goes through and we cannot tell what this is going to cost us. The council has been alive to this matter. Last week we sent a telegram to the Acting Prime Minister protesting against the scheme.

Among the other speakers were Messieurs William Galbraith, F. W. Covert, W. P. Downey, Huntley Drummond and John Baillie, -President of the Board of Trade. I will not read the complete list of names, because there were over two hundred at that meeting.

On the 20th of this month this resolution was presented to a committee of the Cabinet by a delegation consisting of Messieurs John Baillie, Huntley Drummond, A. A. Ayer, W. B. Miller, Herbert Molson and George Sumner. The delegates were introduced by Senator Smeaton White to the committee of the Cabinet, which consisted of the following members of the Government: The Acting Prime Minister, Sir George Foster; Mr. Meighen, Mr. Rowell, Mr. Doherty, and Senator Robertson. With regard to what took place on that occasion, the Montreal Star says:

The hearing took place behind closed doors and the delegation, judging by their reticence, were evidently completely tied up as to what transpired.

The members of' the delegation who afterwards were questioned as to their views of the situation declined to make any statement.

Sir George Foster said that the delegation presented two resolutions expressing the sentiment not only of the council but of the whole Board of Trade. Of course, we do not know what took place, but this despatch-Whether the gentleman

who sent it to the iStar was inspired I do not know-says this:

There is no question that the Government has things pretty well lined up to secure the . passage of the Bill. For months many powerful .and influential interests have been insisting upon the acquisition of the road and the presence here of heads of the Canadian Northern and of a certain politician, who had much to do with the formation of the Union Government has afforded evidence of what was in the wind.

That is what I endeavoured to say the other day to the President of the Council (Mr. Rowell), namely, that something of that kind was said,-that there was a man behind who was holding the strings and influencing the Government in trying to push this deal through the House.

Mr. ROWELL:

I will give my hon. friend the answer made in this House this afternoon by the Minister of Railways (Mr. J. D. Reid), namely, that the statement is absolutely false, manufactured out of whole cloth by the interests which are opposing the policy of the Government, a policy which is in the public interest.

Mr. L. A. LAPOINTE:

Who has manufactured that anyway?

Mr. ROWELL:

The supporters of my

hon. friend on this motion.

Mr. L. A. LAPOINTE:

Let the President of the Council (Mr. Rowell) remember that the Star is a friend of the Government, not mine, and I am to-day putting all these things before the House for a certain purpose. I want my hon. friends opposite to be sure that they will be sincere and not hypocritical at the proper time. The same despatch continues:

Montreal's delegation to-day, though representing the greatest body of business men in the Dominion, thoroughly convinced of the peril of nationalization, was as the voice of those crying in the wilderness. They were received courteously but that is all that they got. However, the impelling force behind the deal and the Government, evidently, is an acquiescent party prepared to utilize its prestige and influence to see it through without regard to any disastrous consequences it may entail.

There is no way of getting out of this. That is to say, our hon. friends opposite will not take any reasons or arguments; they are ready and they have decided to pass this measure, and in proof of that I have only to quote these words of the acting Prime Minister (Sir George Foster) to the delegation:

" The measure is before the House and will be pressed to a conclusion," said Sir George Foster, acting Prime Minister, to the delegation from the Montreal Board of Trade.

We are losing time in discussing this matter, but we will do our duty up to the last moment to show that wj* are sincere on this question. I have given the protest of the Board of Trade, but let hon. gentlemen remember that there is another Board of Trade, the Chambre de Commerce, as we call it, of the city of Montreal which represents the French business men of that city and which includes many English-speaking members as well. In the Gazette of this morning it is reported that they met and passed a resolution. The article in the Gazette reads:

Opposition to the proposed purchase by the Government of the G.T.R. was voiced at a special general meeting of the Chambre de Commerce yesterday and a resolution of protest was adopted with one dissenting voice. The resolution, brought in by Mr. C. H. Catelli, cloirman of the committee on transportation, which, at the last meeting, was instructed to study and report on the G.T.R. question, is as follows: '

This is the resolution:

Whereas the national debt of Canada has reached such a figure that the resulting taxation jeopardizes the chances of competing, in Canada as wel as abroad, with foreign producers;

"Whereas the manner of acquisition of the Grand Trunk Railway system proposed by the Government is a most onerous method;

Whereas the Government might, perhaps, *without acquiring the railway, secure the right of way over the Grand Trunk lines which could insure to the Government transcontinental lines the necessary feeders;

Whereas experience, in Canada and elsewhere, has demonstrated that a democratic state cannot operate a railway as economically as a private company;

La Chambre de Commerce of the district of Montreal declares its opposition to the purchase of the Grand Trunk Railway system by the Government of Canada according to the resolution presently before Parliament;

And expresses the opinion that later it will be found expedient to devise a method of transferring to a private company all the Government lines.

The report of this meeting in the Gazette is in part as follows:

In moving the adoption of the resolution which he had submitted, Mr. Catelli stated that the committee in its study of the question had concluded that if the deal were proceeded with there were only two methods of taking over the system, sequestration and acquisition by arbitration. He ventured the opinion that sequestration was out of the question, as the road had been able to pay dividends. His opposition to the arbitration method was based on a quotation from the Hansard which tended to show that the awards of the arbitration board would be final and not subject to appeal.

Not even subject to a report to this House after the arbitration. That is to say, the representatives of the people will have

nothing to say as to the decision given by these gentlemen from Toronto-because 1 expect that three Toronto men will be the experts on this question; there is no doubt about that, because I may say, en passant, that when somebody who wants to have his property expropriated has already one man on the arbitration board, it is very easy to get a second. The article continues:

Mr. Catelli submitted that this procedure would be unbusinesslike, particularly as practically no information as to the reasons for the proposed acquisition had been laid before the people by the Government.

Mr. J. N. Cabana, in seconding the resolution, declared that the question was one of the most serious which had ever come before the country. He briefly outlined the history of the G.T.R., and attributed its failure to achieve more favourable results to the fact that the directors of the road were all in* England and thus had at best only a detached interest in this country. He alluded to the deficit of the Canadian Northern under Government administration and called upon his hearers to imagine what the deficit would amount to if all these roads were taken over. Mr. Cabana suggested that all three transcontinental roads should be placed under common control of a private company. He thought that a more practical plan than that of Government acquisition was needed.

Another big manufacturer in the city of Montreal, Mr. Alfred Lambert

thought it extraordinary in a democratic country such as Canada that such a situation should arise as the Government attempting to put through such a deal without furnishing the people with the most minute details as to reasons for, and people behind, such proposal. He said that the spread of Bolshevistic tendencies in this country was greatly deplored, especially by the Government, but declared that the Government, in pursuing such a policy as that which it had adopted with regard to the G.T.R. deal, was going farther than any other agency in propagating Bolshevism. He even intimated that the people, if this course of procedure were persisted in, might take over the reins of government themselves. While not opposing the principle of nationalization, he thought that a full light should be thrown upon the matter. '

There was only one dissenting voice, and that was as to the manner of taking over the shares. A copy of this resolution has been sent to every hon. member of this House, so no doubt the Government have received copies.

The Canadian Manufacturers' Association are also opposed to the Government's proposals. So unanimous in their opposition to the Grand Trunk railway deal, proposed by the Federal Government, that they decided that discussion was unnecessary, and believing that the reasons for their opposition were so obvious, the Quebec Division of the Canadian Manufacturers' Association passed a resolution against the

scheme at their first annual meeting last night, to the accompaniment of a determined and solid vote and hearty applause. The resolution reads:

"In view of the grave financial responsibilities already assumed by the Government of Canada, through the acquisition and operation of railroads, which responsibilities add to a public debt enormously increased by war expenditures, and which will necessitate a heavy burden of taxation on the country.

"And in view of the actual results of such government operation of railroads both in Canada and in the United States.

''Be it recorded that the general meeting of the members of the province of Quebec division of the Canadian Manufacturers' Association held in Montreal on October 1'6, places itself on record with the Dominion Government, as unalterably opposed to the contemplated acquisition and operation by the Dominion Government of the Grand Trunk railway."

The motion was introduced by F. W. Stewart, the vice-chairman of the division. Mr. Stewart said that at a meeting of this kind the question of the Grand Trunk purchase should be taken up as one of the most important issues facing the country to-day.

Without further comment he read the motion as given above, and it was greeted with applause'on all sides. He then called for a seconder and Lieut.-Ool. W. J. Sadler responded, but without making any comment upon the proposed resolution. The chairman called for expressions of opinion but there were none offered. He then put the motion and called for a show of hands in favour. A veritable forest Of hands sprang up, and when an opposition vote was called there was none. The resolution was declared carried unanimously. The president instructed the secretary to wire the resolution at once to the acting Premier and the Minister of Railways.

No doubt the Government have received that protest also.

I also wish to read a few extracts from editorials in the Montreal Star, which will no doubt appeal to hon. gentlemen opposite. The editor of the Star is addressing them, not us, because he thinks the members of the Opposition are doing their duty to the country in this matter. He talks very straight:

*But the deal itself, above and apart from all its possible graft,-

Did hon. gentlemen opposite hear that? Is there any possibility of graft in this transaction? The editor of the Star, at all events has his suspicions:

iBut the deal itself, above and apart from all its possible graft, is pregnant with disaster. Not only does it add hundreds of millions to the debt, not only does it commit the country to annual millions which will never be earned, to necessary capital expenditures for maintenance running into scores of millions, and to tangled Grand Trunk legal liabilities in the United States amounting to scores of millions more, but as -at present before the House it commits the country definitely to the greatest

and most dangerous experiment in public ownership the world has ever seen.

In another Star editorial I find this:

If the country is let in for this deal, hastily and without a prepared avenue of alternative When the inevitable disaster impends, we shall be led near to national ruin, if not over the brink. This population cannot bear the burden of debt and deficits, the burden of waste and graft,-

Again the word " graft " is mentioned:

-the burden of political domination by the huge machine which the administration of a great transcontinental traffic system by politicians will thrust upon us.

The Minister of Railways has undoubtedly read these words with care, and, astute as he is, he must .read between the lines. The article goes on to say:

But so rigid are party bonds, even under the coalition, that there are apparently none in Ottawa to make a fight for the public welfare in so desperate a difficulty except for party reasons. But whatever the underlying motive, there is sound common sense back of the Opposition demand for slow progress and careful consideration of every step in this portentous project.

Not later than yesterday the Star 'said:

Democratic principles are completely disregarded in the present proposal that Parliament shall accept in a few days a highly complicated proposition prepared in secret conferences extending over many months. It comes out of a survival from the times of war exigency of that dominance of the executive, properly exercised when the Hun thundered at the gate, but to-day both unwise and undemocratic, a shocking reversal of British practice and an abominable denial of primary public rights. To all intents and purposes, there is to be staged at Ottawa a spectacle of taxation without representation, for a blindfolded chamber could not pretend to translate into effective influence the feeling of the people in regard to this scheme. A bold injection of the element of hurry places both the House of Commons and the people in the hands of the schemers.

Schemers, Sir! I do not know that such a word would be countenanced were it not for the fact that I am quoting an article. The rules of the House, however, protect me and if the cap fits any hon. member on the other side he can vvear it.

-a situation entirely to the liking of docile parliamentary pawns,-

Observe, Mr. Speaker, some hon. gentlemen on the other side are described as "docile parliamentary pawns." These are not my words; I am quoting them.

-fraught with the gravest dangers to the country, as all men of independent mind are aware.

I read in the Citizen of this morning the following:

Deficit reported on Canadian Northern railway operation. Total $17,011,875 up till Dec. 31 last under government ownership.

The President of the Privy Council (Mr. Rowell) said that this question had not been anticipated at the time it was stated that prorogation would shortly take place. He said that the agreement had been suddenly submitted to the Government. The agreement was dated October 9, but the correspondence began in March, and the advice to the Grand Trunk concerning the receiver was contained in a communication dated March 7, 1919. Now, the question we cannot refrain from asking ourselves is, what transpired between that time in March and the middle of October? The letter of the 24th March, which it is said was "handed to' Sir Thomas White by Mr. H. G. Kelley," conveyed the intelligence that the negotiations were completed. What happened since then? At page 1021 of Hansard on October 10 the Minister of the Interior says:

I need not read the cables themselves for the reason that if my memory is correct they have already been produced and are embalmed in Hansard ; but further for the reason that they are embodied in the letter dated 11th July, 1918, addressed by myself to Sir Alfred Smith-ers, President of the Grand Trunk Railway Company. This letter was written after thorough consideration and review on the part of the ministers then overseas, and after full conference with members of the Government at home. That the re'rrd may be properly based, I shall read that teller which is as follows:

That letter is dated July 11, 1918, and refers in part to the conferences that had been held, but I want to know what led to that letter of the 9th of March, and by what process Mr. Smithers had come to the conclusion to submit this proposition to the Government with a view to arbitration, when there had been no previous hint of any kind. Until I am convinced to the contrary, I shall believe that the decision to hand the matter over to the Government was arrived at long ago and that the Government was just waiting until the last moment to spring it upon the House.

The Prime Minister has stayed away and has not compromised himself; and Sir Thomas White, who is responsible for a great deal of this trouble, is no longer Finance Minister. His successor has not had very much experience in Parliament as yet, and I do not think he will be able to offer a strong defence of this bargain. If I understand correctly the vote is to be taken to-night and that hon. gentleman has not yet spoken on the question although he should be here to defend this bargain