June 13, 1923

LIB

Lomer Gouin (Minister of Justice and Attorney General of Canada)

Liberal

Sir LOMER GOUIN (Minister of Justice) :

If the House wishes that I should

state the object of our visit and the result, I will do so. The object of the visit to Washington was to press the settlement of a claim that our government has against the government of the United States in reference to the seizure of certain properties seized by the Custodian of Alien Enemy Property of the United States. In 1918 and 1919 the Custodian of Alien Enemy Property of the United States government proceeded to seize certain certificates of shares and bonds of Canadian companies which were owned by enemies residing in Germany, which certificates' and bonds were then deposited with different institutions in the United States. Our own custodian, proceeding under our war measures act. had also seized some, if not all, of the same securities. Some of the companies which had been ordered by the American courts to pay their dividend to the Alien Property Custodian paid some of the dividends and then ceased to pay, on account of the vesting orders which had been issued by our

own courts. We tried to arrive at a settlement "a l'amiable." The Alien Property Custodian of the United States government came to Canada. The hon. ex-Minister of Finance (Sir Henry Drayton) was then our custodian. I understand that he had some conferences with the representatives of the American government, and Mr. Mulvey was a party to the conferences. The question under discussion was whether we had any right in those securities, or whether they were to be left in possession of the American government. It was important that the dividends should be paid or deposited in the hands of one of the two governments. It was agreed that, pending the discussion, the dividends should be paid to the American government, and that the question of law should be decided by an arbitrator or by a judge of Canada or of the United States. Some of the Canadian companies continued to pay the dividends to the Alien Property Custodian of the United States. After a certain time that very question which was in doubt and discussed between the two governments was decided by the American court, at the request of the American officer, in reference to certain certificates of American companies which had been sequestered by the Alien Property Custodian of the Imperial government, and which certificates were deposited in England. The question was debated and decided in favour of the American government. Taking advantage of that decision, our attorneys tried to induce the American government to turn over to the Canadian government those certificates and bonds. Proceedings have been going on for gome years-since 1920. After consultation with our attorneys we were advised that it would be preferable that we should try and arrive at a settlement with the American government without litigation, and we were advised that if we had the opportunity of meeting the President of the United States, the Secretary of State and the Attorney General of that country, perhaps, after those three decisions-there were three decisions on that very same point'-the American gov -rnment would consent, without arbitration and without litigation, to hand over thos'e securities to our government. Accordingly our custodian, the hon. Secretary of State (Mr. Copp), Mr. Newcombe, Mr. Mulvey, and myself decided to go to Washington. Hon. Mr. Pugsley was not one of our party. We met the Secretary of State of the United States, who declared that he was perfectly willing to turn over to Canada th securities mentioned but thought the

Alien Enemy Property

President would be governed in the matter by the advice of the Attorney General, and that the only trouble in the way was the fact that after the orders had been rendered by the American courts, vesting those securities in the Alien Property Custodian of the United States, they did not see how that officer could take it upon himself to turn those properties over to Canada. We answered that we should invoke the three judgments which were rendered by the American courts at the request of the American authorities, and we did not see that there was any necessity of litigation any more, since the case had been decided in favour of the American government and, consequently, in our favour. The same objection was repeated that there was a distinction also, because registration had been made of those same stocks in favour of the American officer, and they were of opinion that it was necessary that a judgment should be rendered by some tribunal. We had the advantage of meeting the President and repeating the same argument. We were told that the American government were heartily disposed to liquidate the situation as promptly as possible, and that they would be willing to expedite any case that might be instituted by our government before any of the courts of the United States. We suggested that we would prefer to proceed before one of our courts as the American government did in proceeding before one of their judges. Later on, after those two interviews, a conference took place between the Assistant Attorney General and our representative, Mr. Conboy, and it was then agreed that to expedite matters, if we were to institute one or two cases in Canada, assigning one or two companies to appear before such court to be instructed to deliver to the Canadian government certificates for those same stocks, the American government would appear, so that the judgment would be binding upon the American government and upon the companies. This we found most, satisfactory.

As to the bonds, there may be some distinction to be made. Certificates of stocks are only evidence of property, while a bond is something by itself. We contended all the same that no distinction should be made. There is also the question of dividends which were paid to the American government. Our intention is to proceed, as I said, in one or two cases, to have the principle decided of the property in the stocks. If the judgment goes in our favour, necessarily we shall be entitled to dividends paid to the American government. As to the bonds, something

has to be done. We are now considering what is to be done, and when and how it should be done. On the whole we consider that we have accomplished something, and we hope that after a comparatively short delay, we shall get the securities to which we are entitled.

The House in Committee of Supply, Mr. Gordon in the chair.

Topic:   QUESTIONS
Subtopic:   ALIEN ENEMY PROPERTY
Sub-subtopic:   CLAIM OF GOVERNMENT OF CANADA AGAINST UNITED STATES GOVERNMENT
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CANADIAN GOVERNMENT MERCHANT MARINE


Loan to the Canadian Government Merchant Marine Limited, repayable on demand with interest at a rate to be fixed by the Governor in Council, upon such terms and conditions as the Governor in Council may determine, and to be applied in the payment of deficits in operation of the company and the vessels under the company's control during the year ending March 31, 1924, $1,500,000. Hon. GEORGE P. GRAHAM (Minister of Railways and Canals) : Last night I promised to bring a statement down for the ex-Minister of Finance (Sir Henry Drayton). I had to send to Montreal for the material and I expect it some time during the afternoon. If the discussion on this item goes on, I should be glad to give the information to my hon. friend a little later on.


PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River):

I should like to ask an explanation from the minister regarding a statement made yesterday evening. I do not in any way question the accuracy of the statement. The hon. member for Lunenburg (Mr. Duff) said that it was a fact that the Canadian Government Railways paid the ships of the Merchant Marine, I think it was $2.80 a ton to carry coal from Sydney to Montreal, while other ships were carrying coal for $1.10 a ton. Is there any explanation?

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I intimated last night that I thought the hon. member for Lunenburg must have been misinformed. The rate was SI .50.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

William Duff

Liberal

Mr. DUFF:

Might I say that the hon. member for Lunenburg was not misinformed. If the hon. member will turn up the Auditor General's report-I forget the page, but I will get it

I can prove conclusively that my statement was absolutely correct.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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PRO

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

The hon. member for Lunenburg referred last night to an item of $96,122, reserve for doubtful debts and claims. That is an item on which we should have a little explanation. Has the Canadian Government. Merchant Marine been in the habit of running accounts or giving credit for goods transported? Is it unable to collect some os those accounts at the present time?

Supply-Merchant Marine

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I cannot give my hon. friend the item offhand; but, of course, in a business of this magnitude, there are some claims outstanding. I know in my own business, when I am making a statement, I set aside a certain amount for doubtful claims that may be paid hereafter or that may turn out to be worthless.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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PRO

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

I have never known any transportation company, railway or steamship, to take any chances on cLaims for freight. 1 understood these were always collected before the goods were delivered and in many cases before the goods were received for transportation. I can hardly understand the Canadian Government Merchant Marine running monthly or weekly accounts for freight charges, if that is what this means.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

In many accounts for transportation, three or four different companies are interested because of interchange of freight, settlement of rates; and this is a reserve amount put aside to meet any of those settlements that might be unsatisfactory. This might not mean that the private individual had not paid his freight to some transportation company. .

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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PRO

Thomas George McBride

Progressive

Mr. McBRIDE:

I do not think there has been any other question asked as often in this House as the question: Why cannot the Canadian Government Merchant Marine be made to pay? This question has been repeated again; and again I might say that I was a little disappointed yesterday evening when the hon. member for Lunenburg (Mr. Duff) took his seat and, in my opinion, did not make even an attempt to explain the matter.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

William Duff

Liberal

Mr. DUFF:

It is pretty hard to satisfy everybody.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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PRO

Thomas George McBride

Progressive

Mr. McBRIDE:

I claim to have had ju*t a little experience in connection with steamboat work, and I have made the statement at least twice on the floor of this House that the smaller boats up to, say, 5,000 tons will never pay. I think it is incumbent upon me to explain that statement and show why, in my opinion, they will not pay. I am not criticizing the building of the boats; I am not criticizing the workmanship; nor am I criticizing the captains and the crews that operate these boats. But I do criticize the man who was responsible for the designing of them; I criticize the architect. I do not know who he is; I have never heard his name; but in my opinion it is evident that he never had any practical experience so far as freight boats are concerned. He may be a first-class architect from the standpoint of

passenger steamers, but freight boats are au entirely different proposition.

Let us consider the construction of some of these freight boats of 5,000 tons or less-I am referring to those that I have seen. They have a fair, clean run behind, but from the centre they taper off more in the fashion of passenger boats towards the bow. A freight boat should carry its beam well forward to the bow; the boats to which I am referring are less than five thousand tons and ought to have had anywhere from ten to fifteen feet more of a beam to give them carrying capacity. If that wrere the case they could carry at least a third more freight than they are able to take as they are, and it would not interfere with their speed to any extent. In a steamer that makes from eight to ten knots, it does not affect the speed to any appreciable extent to have a blunt bow, and this affords added carrying capacity. These boats are not built in that way; they are more like passenger boats. Then their engines and boilers are placed in the centre, which should not be. The engines should be placed in a freight boat as near the stem as it. is possible to get them. The boilers should be placed in the stem of the boat, taking up as little room as possible, just giving the firemen space enough in which to work. The firemen do not require more than room enough to enable them to attend to the boilers. In the bow of the boat there should be a bulkhead or watertight compartment, or tanks to hold water, so that when the boat is running light the tanks can be filled to prevent the ship from pounding in the sea. A boat in which the machinery is situated in the stern must have some ballast in the bow, because if she pounds in the sea she is bound to do herself material damage. These boats are not constructed in that manner. The centre of a freight boat of this size should be left entirely free for freight, but, as I have already pointed out, the machinery in these particular steamers is all in the centre. There should be two hatches instead of, as is the case with many of these boats, the whole decks covered with hatches. I think the architect sacrificed utility to beauty. Undoubtedly the boats do look well at sea; but that is not the main consideration in freight steamers. These boats should have carrying capacity, which is not provided in these particular steamers. As regards the boilers, any person who has had any practical experience in connection with machinery will admit that a boiler in a freight boat should have a lead anywhere from 25 to 35 per cent over the engines, for the simple reason that when inferior coal is being used the firemen

Supply-Merchant Marine

can still keep up steam. And, besides, it is much easier on the boiler. These boats have not got that feature; at least I have not seen it in any of those that I have looked over. I consider the boiler of a steamer the most important part of its equipment. When you have to force a boiler to keep up steam by forced draft, you are apt to have trouble with the combustion chamber, and the probability is that you will spring a leak. On getting into port with such boilers the first thing that has to be done is to draw fire and cool off the boiler, and it takes anywhere from 36 to 4S hours to cool one of those large boilers. Furthermore, it requires a considerable time to get up steam to do justice to the boilers. During all that time the boat is lying in port and expenses are running up. I am of the opinion, therefore, that it is a big drawback to these boats that the boilers have not a lead over the engines. The disadvantage would not be so great if they could use oil fuel, I am referring to boats that are using coal. There is another consideration, too. If the boilers had the lead I suggest, the boats could use slack instead of good coal. The firemen would have no difficulty in keeping up steam with slack coal, which is about one-third the price of first-class coal, and in that way a great saving could be made.

It has been suggested that these steamers should be provided with passenger accommodation. In my opinion they are not built for that purpose and never will be a success as passenger carriers. There is no doubt in my mind about that; and if any more money were invested to provide for passenger accommodation on these steamers it would be only so much more money thrown away.

Taking these things into consideration, I believe that the best thing that the government could do would be to get rid of the smaller boats as best they can. We have got into this mess and we must get out of it. But I want the' House to understand that the government is not the only one that has got into difficulties in connection with shipbuilding. There were some people in Vancouver who built boats for the government, and when the government refused to give any more orders they formed a company and built ships for themselves. Some of these ships cost over a million dollars, and one in particular was sold last fall, I think, for 8250,000, or less than one-quarter what it cost originally. Parliament should understand therefore that the government is not the only one that is faced with this proposition. I cannot see how these boats will ever pay running expenses, and when these ships can-

.

not take care of themselves and pay the running charges, surely the sooner the government get rid of them the better it will be for the whole country. I do not propose to offer any opposition to this item, but I do think that the minister should give the House some guarantee that he will endeavour to get rid of the boats in whatever way he can before another session of parliament is called. We should not be asked to vote a sum of money year after year to keep up something that is of no benefit to the country. What right has this House to vote the money of the taxpayers each year in the way of a bonus to keep in operation these boats that are competing with ships owned by private companies? I do not think it is fair to the other companies. Those other companies have to pay their crews, and interest on their investment, and, in a great many cases, income tax. Why then should this government vote sums of the taxpayers' money year after year for the purpose of competing with private companies that are doing a legitimate business? I do not think it is right, and I certainly hope that before another session comes around the minister will see his way clear to have some at least of the boats disposed of. *

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

William Duff

Liberal

Mr. DUFF:

I rise to apologize to the House for the statement I made last night which the minister referred to a moment ago -that freight was paid to the Canadian Government Merchant Marine boats on coal carried by them from Sydney to Montreal at the rate of 82.80 per ton.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

It was a member over there who said it.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
Permalink
LIB

William Duff

Liberal

Mr. DUFF:

Somebody said it anyway, and I said so, too. The minister points out today that I made a mistake and that the freight rate charged was $1.50 per ton. Well, I have to apologize to the House because I made the rate too low. I do not know where the minister got his information, but if he will turn to the Auditor General's report for 1922 he will find the following at page W-116:

Freight on coal, Canadian Government Merchant Marine: Sydney to Levis, 3,110 tons at $4 per ton-

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
Permalink
?

An hon. MEMBER:

What!

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

William Duff

Liberal

Mr. DUFF:

Four dollars per ton, when other boats were carrying coal for $1.10 per ton.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

What year?

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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LIB

William Duff

Liberal

Mr. DUFF:

I am quoting from the Auditor General's report for the year ended March 31, 1922. Continuing my quotation:

Supply-Merchant Marine

Sydney to St. John and Halifax, 19,202 tons at $2.60; Louisburg to St. John and Halifax, 29,337 tons at $2.60.

I am quite sure that other boats would have carried this coal at half the rate to the two latter ports, and at less than half to Levis. And yet the minister says the coal was carried at a rate of $1.50 per ton.

Topic:   QUESTIONS
Subtopic:   CANADIAN GOVERNMENT MERCHANT MARINE
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June 13, 1923