March 13, 1933

POST OFFICE-PRE STE-MARIE, SASK.

LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

For a copy of all correspondence, letters, telegrams, petitions, reports and other documents in the possession of the government, respecting the post office of Pre Ste-Marie, Saskatchewan, since the month of August, 1930.

Topic:   MOTIONS FOR PAPERS
Subtopic:   POST OFFICE-PRE STE-MARIE, SASK.
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UNITED STATES CITIZENS EMPLOYED IN CANADA

LIB

Joseph Oscar Lefebre Boulanger

Liberal

Mr. BOULANGER:

For a copy of all documents, requests, petitions, correspondence and reports in the possession of the government or of the Department of Immigration, in connection with applications by citizens of the United States for permits to enter Canada for the purpose of employment on Canadian race tracks during the coming racing season.

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FEDERAL GUARANTEES TO CORPORATIONS


Mr. VENIOT; For a return showing what amounts have been guaranteed by the present government of Canada to (a) provinces; (b) railways; (c) harbour boards; (d) banks; (e) wheat pools; (f) Beauharnois Corporation; (g) other semipublic or private corporations up to February 28, 1933.


BEAUHARNOIS POWER PROJECT

UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

For a copy of all correspondence, telegrams, and _ other documents passing between the Dominion government and any persons, companies or corporations, in regard to the Beauharnois enterprise, from August 31, 1930, to date.

Topic:   BEAUHARNOIS POWER PROJECT
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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

A very large number of

papers have been copied and the copies have been laid upon the table of the house. I assume that the hon. member making the motion does not intend that this work should be duplicated, if so it would take a very long time to complete the return.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

As a matter of fact in the original draft I have the words "balance of." They should be in this.

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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

Motion amended to include the words "balance of."

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SOLDIER SETTLEMENT ACT


Hon. W. A. GORDON (Minister of Labour) moved that the house go into committee tomorrow to consider the following proposed resolution: That it is expedient to amend the Soldier Settlement Act to provide for the remission of interest in certain cases and the application of payments made to reduction of principal indebtedness; and for additional credit on payment of arrears or instalments; the removal of the lien on the equipment of soldier settlers; and for the application of certain of these [Mr. E. J. Garlnad.l provisions to British family settlers by consent of the British government. He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house. Motion agreed to.


CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL


The house resumed from Friday, March 10, 'onsideration of the motion of Hon. R. J. Manion for the second reading of Bill No. 37, respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific railway system, and for other purposes.


LIB

Frederick George Sanderson

Liberal

Mr. F. G. SANDERSON (South Perth):

Mr. Speaker, in rising to make a few remarks on this question I am fully conscious of the fact, after listening to the very excellent speeches which have been made by hon. members in all corners of the house, that one taking part in the debate at this time cannot very well cover any new ground and must repeat, though perhaps not in the same words, many things , that have been said already. However, I believe this debate to be one of the most important that we have had in this house for some years, because it opens up the whole question of transportation facilities in this country, a question which vitally concerns every taxpayer in Canada. Therefore, with the indulgence of the house, I should like to add a few remarks to what has been said previously.

In passing I should like to commend the Minister of Railways (Mr. Manion), as other members have done, for the tone of his address in introducing the bill now before the house. He placed the debate on a very high plane, if I may say so, and I shall endeavour to follow him in that regard.

I should like to say first, Mr. Speaker, that the history of railroad construction in this young vigorous country in some respects does not make very good reading. Undoubtedly mistakes have been made. There have been not only errors in judgment on the part of some railway promoters; there have been errors in judgment, if you like, by previous governments both Liberal and Conservative. I am not going to dwell upon that aspect of the case because I have not sufficient time at my disposal, but for a moment or two I should like to direct my remarks to the present position of our railway companies. To-day in this country we have two great railway companies. One is privately owned, well managed and well financed; it has served

C.N.R.-C.P.R. Bill-Mr. Sanderson

the people of this country in a very efficient way for a great many years. The other day the Prime Minister stated that the securities of the Canadian Pacific Railway were held not only in Canada but also in the United States, in Great Britain and in almost every country in the world, and those securities always have held a high place in the financial markets of the world. We must admit that when this great railway was being constructed it received very substantial aid from the country, not only by way of money but also by way of large grants of land. I do not take exception to that, because this was a pioneer company which did wonderful work in building this railway line from one end of this country to the other. As a matter of fact I am free to admit-though I hold no brief for the Canadian Pacific Railway-that at present, despite the fact that during the last two or three years its earnings have been depleted because of world economic conditions, it stands to-day as perhaps one of the best managed privately owned railway companies in the world, and it has done a great deal to develop Canada and to advertise this country all over the world.

Side by side with this great privately owned company we have what is known as the people's railway, the Canadian National system. I am not going back to the time when the companies which now make up the Canadian National system were taken over by the government of the day; the other day the Prime Minister went into this question very fully. But I do not want to forget, and I do not believe the people of Canada will forget, that this conglomeration of bankrupt railways, if I may so term them, which were wished on this country and which now comprise the Canadian National system, were taken over by the government at a time when a decision had to be made as to whether the country would clean the slate and take its huge losses in money which had been advanced to these roads, or would take them over and run them as a publicly owned1 and publicly controlled road. I am not going into that phase of the question but, Mr. Speaker, as I believe the Canadian Pacific system is one of the outstanding privately owned railways in the world so I believe that the system owned and controlled by this country stands out as one of the best managed and best organized publicly owned railways in the world, despite the fact that it is going through heavy weather at the present time.

We have, then, Mr. Speaker, these two great competing railway systems, and sometimes I think we do not realize their immensity. In round figures the Canadian Pacific Railway has in Canada some sixteen thousand miles of track,

in addition to which it controls a certain mileage in the United States. The Canadian National system owns about twenty-two thousand miles of track in Canada, in round figures, and also controls some mileage in the United States. These two railway corporations control about 40,000 miles of track and have employed in normal times, the two together, about 190,000 men. In normal times they have paid out in salaries and wages to employees as large a sum as $290,000,000 a year. That will give some idea of the immensity of the business carried on by the two great railway systems of Canada. They have both been successful until the present period of depression struck this country in common with the rest of the world.

I have nothing but praise both for the Canadian Pacific Railway and for the Canadian National, except in one regard. I have always been of the opinion that the management of both railways were very slow in attempting to cope with a new form of competition that has entered the field, competition of enormous magnitude, namely, the commercial motor truck. In my opinion this motor truck competition when it first appeared could have been combated by the railways if they had put their own trucks into operation. Had they done this at the outset of this competition the earnings of both railways would have been augmented by many millions of dollars during the last twelve or fifteen years. Apart from this, however, I think that the management has been excellent in both cases.

I hold no brief for Sir Henry Thornton, and perhaps he made mistakes. But for that matter who has not made mistakes in every business, in every walk of life, during the good times we had in this country for a number of years? I will say this, however, in praise of Sir Henry Thornton. In the number of years during which he was president and general manager of the Canadian National Railways his achievements far outnumbered any mistakes he ever made. There was a time when the earnings of the Canadian National system were piling up, when that system went after business and got it, and when the morale of its thousands of employees was at its highest owing to the example set them by their chief, Sir Henry Thornton. At that time no one in this country would dare to get up and say that Sir Henry Thornton was not making a success of th'e Canadian National Railways; but when conditions began to get bad, when tonnage declined, when business was poor, then the criticism started. The Prime Minister himself gave Sir Henrjr Thornton a good deal

C.N.R.-C.P.R. Sill-Mr. Sanderson

of credit a few years ago. It will be remembered that in 1926 there was a general election in Canada. The present Prime Minister was then Minister of Finance in Mr. Meighen's government-someone says the shadow government. Be that as it may, he was Minister of Finance in that government and during that election campaign to which I have just referred he made several speeches in western Ontario. He went to the city of Stratford in the county of Perth, which is a large divisional point on the Canadian National roads. Many hundreds of railwaymen live there, there are big car shops there, and it is perhaps as important a divisional point as any other in the whole system. The then Minister of Finance in Mr. Meighen's government addressed a meeting in the city of Stratford on the evening of August 14, 1926, for the benefit of the Conservative candidate. He was addressing an audience in which there were hundreds of Canadian National railway employees on whom naturally he wanted to make a good impression, with a view if possible to winning them over for the Conservative candidate. This is what he said then in regard to the Canadian National Railways:

Mr. Bennett denounced in scathing terms the whispering campaign about the Canadian National Railways, saying that Mr. Meighen had always fought for the road, and had no intention of interfering with its management. In that connection he said that he personally had recommended to Mr. King that Sir Henry Thornton be hired to operate the road. This he had done_ as a result of information from Mr. Thomas in England, he said, and indicated that he thought Sir Henry Thornton had been successful and that his work would certainly not be interfered with by Mr. Meighen.

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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

Merely for information, may I ask the hon. member what he is quoting from.

Topic:   CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL
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LIB

Frederick George Sanderson

Liberal

Mr. SANDERSON:

I expected that the

Minister of Railways would ask that question and I am happy to be able to inform him. This is an absolutely correct report which appeared in three newspapers at the time. The meeting was held on Saturday, the 14th, and this report appeared in the Toronto Globe on August 16, 1926; in the Stratford Beacon-Herald on August 16, 1926; and-I know that this will please the Minister of Railways and he will take it for granted^ in the London Free Press on August 16, 1926. So that it is official.

I find no fault with the remarks of the then Minister of Finance in Mr. Meighen's government, but I am inclined to think that he has since had a change of heart.

Topic:   CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL
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?

An hon. MEMBER:

He certainly has.

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LIB

Frederick George Sanderson

Liberal

Mr. SANDERSON:

An hon. gentleman

says he has, and I accept that. In 1926 the right hon. gentleman who is now Prime Minister apparently not only praised Sir Henry Thornton but wished to get on the band wagon and get all the credit for himself, for he said that he really was the man who had chosen Sir Henry Thornton and had been instrumental in bringing him here. This newspaper report which I have just quoted [DOT]declares that the right hon. gentleman denounced in scathing terms the whispering campaign in regard to the Canadian National Railways. Well, if there was a whispering campaign then in this country there are more than whisperings at the present time. The Prime Minister last Thursday, in the course of his speech in this debate, virtually said that the Canadian National railway system was bankrupt, and instead of joining in a whispering campaign he almost made an

S.O.S. call for the undertaker to bury the whole _ road. I mention this to show the inconsistency between the remarks of the Prime Minister to-day and the statements which he made when he was Minister of Finance in Mr. Meighen's government, when he spoke in the election campaign of 1926.

I will refer now for a moment or two to the royal commission, the so-called Duff commission, who have laboured and brought in this report upon which is founded the bill now under discussion. The commission was composed of seven gentlemen, all very eminent in their own spheres. I have gone through the report of this commission as carefully as possible and the only conclusion I can arrive at is that after holding eighteen meetings, lasting fifty days and travelling over nearly all the main lines of both these railway systems, they have not told us anything about these railroads which we did not already know. They have told us nothing that the Minister of Railways did not know; they have told us nothing that the right hon. the Prime Minister did not know, they have told us nothing that every hon. member of this house and almost every man in the whole dominion did not know. I shall not take up the time of the house in reading the conclusions of the commission because I suppose every hon. member has read them. All through their report these gentlemen seem to be leaning towards the amalgamation of these two roads. They do not say so in so many words but that is the inference I draw from their report. I want to be fair to the members of this royal commission but as a member of this house I think I have the right to criticize their report if I so desire and my criticism is that most of the gentle-

C.N.R.-C.P.R. Bill-Mr. Sanderson

men who composed this commission were in favour of privately owned rather than publicly owned railroads. The report bears out my contention. I repeat, this commission after having gone up and down this country, have not told us anything new. They did make certain recommendations which are embodied in the bill now before us, in the discussion of which I shall take a few minutes.

The -bill is divided into three parts. I am only a layman and could not go into the legal aspects of the bill, but I have endeavoured to study it with an entirely open mind. Part I of the bill deals with the substitution of three trustees or receivers, as the Prime Minister chooses to call them, for the seventeen directors and general manager who have been administering the affairs of this road for some years. These trustees are given absolute powers in the administration of the affairs of the Canadian National system. They are to be given powers which in my judgment should not be given to any three men. They will be a law unto themselves, they will not be responsible to parliament or to the taxpayers of this country who have been paying the deficits of the Cariadian National road. They will be able to do just as they like for a period of seven years. It is true that they can be removed from office by an address to the House of Commons and the Senate but that course would never be taken. They will be vested with authority and responsibilities which should not be vested in any three men no matter how capable they may be, no matter what business sagacity they may possess. It is too much power to be given to any trustees or to any body of men. The Prime Minister said that they would be more receivers than trustees. I was a little puzzled at that definition and I looked up the legal meaning of a receiver. I found that a receiver is a person appointed ordinarily by a court of equitable jurisdiction to receive and hold in trust money or other property pending suit, in the case of a person incompetent to manage his own property or upon the winding up or dissolution of a partnership or corporation. A receiver is an officer of the court and the property held by him is not subject to process other than in the case itself. A receiver often obtains authority to continue to manage the business as a going concern.

These three receivers are to administer the affairs of the Canadian National system for the people of this country for at least the next seven years. As I said before, they are to be vested with authority which should not be vested in any one man or in any three men. They are to be a law unto themselves.

I cannot understand why three receivers- that is what the Prime Minister calls them- should be called in at this stage to administer the affairs of this railway. It is the most peculiar receivership of which I have ever heard.

In addition to providing for the appointment of these three receivers, the bill provides for compulsory cooperation or, as the Prime Minister said the other day, directed cooperation between tbje Canadian -Pacific and the Canadian National roads. What kind of amalgamation is this to be? They will not be joined in wedlock but they will be handcuffed and shackled together. The Canadian National is to be administered by three trustees and by a president who is to be the operating manager. This president is not to be responsible to the Minister of Railways, he is not to be responsible to this parliament, lie is to be responsible only to the three trustees. The purport of this bill is to join these two great railroads together and, as I said, handcuff them and shackle them and keep them in that position for seven years.

A study of the history of the railroads of the United States will show that during the war the government administered the railroads, although at the moment I cannot say whether this was done under trustees, receivers or just what form of control was used. But the result of the control vested in private individuals by the government was that they made bankrupt every railroad which they were permitted to manage. That has been the history of trusteeship or receivership, if you like, in the United States. While I do not want to be pessimistic; while I do not want to make any prophecies as to the future, I am of opinion that if this bill goes into effect, one of three things will happen within the next seven years. One will be that we shall have complete amalgamation of these two railways, either the absorption of the Canadian Pacific by the publicly owned road or the absorption of the publicly owned by the privately owned road, or both roads will be so impaired, so restricted in business that this will constitute one of the biggest calamities Canada has ever experienced.

The very conclusions at which the royal commission- arrived in regard to economy and cutting down of expenses have been put into effect during the last two years. This started before the royal commission began to function and it has been continuing. Some hon. members during the debate have pointed out-I think the Minister of Railways did so-that Mr. Hungerford's report was to the effect that in the administration of the Canadian National in th-e last two years there had been

C.N.R.-C.P.R. Bill-Mr. Sanderson

a saving of $44,000,000 a year due to cutting off trains, perhaps letting out some men and the elimination of duplication. That having already been done, this board proposes to tie these two systems together, the Canadian National under a trusteeship and the Canadian Pacific under its own board of directors. I hold no brief for Mr. Beatty, but I want to read what he said in Winnipeg on February 3. Let me read this paragraph, quoting Mr. Beatty's own words:

I have stated on more than one occasion the objections of the Canadian Pacific to the commission's plan. We are prepared to agree to all proper measures of cooperation, but we cannot consent to our property being administered for us, but at our expense, by others. We cannot agree to turning over to an arbitrary body the conduct of our enterprise and the shaping of our policies, when, in the nature of things, the consequences must be borne by the shareholders. The views of those charged with the responsibility of protecting the enormous investment in the Canadian Pacific would not, in those circumstances, prevail. This is not regulation: it is_ the assumption of complete powers _ of administration without financial responsibility.

That is the opinion of Mr. Beatty, president of the Canadian Pacific Railway, but under this bill he is compelled to tie his system up with the Canadian National. In my humble opinion the cure for the situation in which the two railways find themselves is the one that could be applied to every individual in this country. The reason that these two great systems are in their present condition is that they have not tonnage; they have not business. Give them business and tonnage-and I hope before long we shall have them back- these two railways will again be serving the Canadian people in the efficient manner they did a few years ago. Further, the railways will never be back to normal tonnage until our agricultural industry is back on a footing whereby the product of the farm can be sold at a profit. When that occurs, these railways will not want for tonnage. The bon. member for Muskoka-Ontario (Mr. MoGibbon),-and I welcome him to our side of the house, because I see he is here-said the other day that the Canadian National system was in red ink. There is not an individual or an industry in Canada that is not in red ink. I am of the opinion that the manufacturers of red ink are perhaps the only people who are out of it, because they must be doing a large amount of business. Everyone is in red ink. It is true that the Canadian National, this great system of which we were all so proud a few years ago, is in red ink. But I give it, only as my opinion, that the Canadian people, irrespective of politics in regard to the Canadian National, in the condition in which it is to-day, if you

like, in red ink and with huge deficits, still consider that it is one of the greatest assets we have and posterity will show that they are right.

In conclusion, I say: Hands off the Canadian National Railways. Let it work out its own destiny, not tied up with the Canadian Pacific Railway, not administered by three trustees whc- are not responsible to anybody, who are not responsible to this parliament and who are a law unto themselves. Let the present manager of the Canadian National and his directors, if you like, who come from all sections of the country and who know the local problems, continue to function. Let them go on carefully as they are doing, keeping down expenses, and when conditions change we shall not hear very much about the woeful position of the Canadian National Railways.

Topic:   CANADIAN NATIONAL-CANADIAN PACIFIC RAILWAY BILL
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March 13, 1933