Mr. WOODSWORTH:

There is nothing

in what I said from which that conclusion could be drawn. I was answering the argument of the minister that a railway company should not be allowed to go bankrupt. He said also that a private company might go bankrupt if it did not fulfil its contract; I was answering that argument.

Mr. MANION:

I certainly do not wish

to see any private company go bankrupt because the bankruptcy of any company is not particularly good for our country. I would point out to the committee the statements of Mr. Coleman and Mr. Hungerford who stated that if these companies were allowed to go bankrupt they would be forced to rely on foreign manufacturers for equipment. I did not discuss the question particularly myself; I took my statement from them. There is another side to this question. These private companies have not been able to give employment to their workers for four or five years, and these workers have the same rights as the workers in the railroad shops. The shareholders of these companies are also entitled to some consideration. I have not looked into the matter but I assume that these shareholders are largely Canadians. Many of them are taxpayers in a large way and along with the rest of us they have helped to keep the Canadian National Railways from going bankrupt. That company certainly would have gone bankrupt had it not been supported by the Canadian government and by the people who pay the taxes.

Public Works Program

In justice to the Canadian Pacific Railway I must say that we have not given any money to that company. We have advanced some money in order to keep their shops open but this is supposed to be repaid. Some time ago we guaranteed a loan of $60,000,000 but I understand a good deal of this is clear at the present time. Generally speaking we have not been giving direct assistance to the Canadian Pacific Railway.

I do not think there are any more points brought up by my hon. friend with which I should deal. He has a better command of the English language than I, and I am quite sure he understands that the word "subsidy" is not applicable to what we are doing in an effort to give employment to those engaged in the heavy industries. We are only trying to stimulate the upturn of business which we were all so glad to realize a year or so ago.

Mr. EULER:

When this matter of the

$15,000,000 appropriation for equipment for the railway companies was discussed a few weeks ago, some hon. members, including myself, found fault with the government for making an appropriation of this kind, especially with regard to the Canadian National Railways. As has been stated frequently, the president of that railway stated very definitely before the committee that no equipment was required at this time. The minister tells us to-night that the president perhaps will take a different attitude tomorrow before the railway committee.

Mr. MANION:

He said he would elaborate his statement.

Mr. EULER:

He may elaborate his statement, but the fact remains, and it is on record, that when he was questioned with regard to this matter he stated that no such equipment was required.

Mr. MANION:

Except at the peaks.

Mr. EULER:

Except at the peaks, and

then he thought that the cars could be borrowed, the common practice with railways. I find fault with this appropriation because the Canadian National Railways is already heavily loaded with debt obligations. I do not like to strengthen the hands of my hon. friends opposite, and particularly those of the Minister of Railways (Mr. Manion), who so consistently and strongly criticized the former government for expending such large sums of money on the Canadian National Railways. If this $8,000,000 is not required by the Canadian National Railways, as has been stated by the president, we have no right to load S2582-1964

up the company with this additional amount. The amounts which have been allowed the two railroads are not in proportion. The Canadian National Railways is to get $8,000,000 while the Canadian Pacific Railway is to get $7,000,000. If the total $15,000,000 is to be provided according to mileage or capitalization, especially capitalization, the Canadian National Railways would get almost all.

I shall not discuss the division as between the private and railroad shops, although I think there is considerable force in the minister's statement that the employees in the private shops are Canadian citizens and entitled to such relief as the government can afford. I cannot agree entirely with the hon. member for Winnipeg North Centre (Mr. Woodsworth) when he rather advocates that railway equipment, especially locomotives, should be allowed to go down for fear railway labour will be displaced. No one wants to see labour of any kind displaced. I cannot agree that progress in the way of the improvement of machinery and matters of that kind should be stopped for the reason given.

Mr. WOODSWORTH:

I would not like

that to go out as my opinion. I asked the Minister of Railways (Mr. Manion) a while ago whether he had considered that aspect of the case and whether representations had been made along those lines.

Mr. EULER:

I should like to see labour saving machinery invented and used to the greatest degree possible, but I should also like to see labour get the full benefit of the invention and use of such machinery. Desperate diseases they say require desperate remedies, and if this money must be expended to give employment and relief one cannot say a great deal, because every member agrees that we cannot allow any person in this country to suffer want and distress. But I do feel disposed at this moment-perhaps I shall be stepping on the toes of some of .my friends not only opposite but on this side-to challenge the propriety of continually, if not subsidizing at any rate financing private industry in business. We have had a good deal of that and I am afraid that this sort of thing is leading the national government almost to the brink of bankruptcy, if I may throw out so alarming a suggestion. We have guaranteed large sums of money of all kinds for private interests. For example, we have guaranteed all the wheat pools of western Canada, and perhaps my hon. friends from the west will disapprove of what I say. This concerns Alberta, Saskatchewan and Manitoba. We have

Public Works Program

speculated in wheat to the extent almost of hundreds of millions of dollars and we do not know how much we shall lose-possibly twenty, thirty, forty or fifty millions. We have guaranteed the debt of the Canadian Pacific Railway to the extent of 860,000,000. We guaranteed 815,000,000 on account of Beau-harnois, for power which is now apparently not required. We have guaranteed or set aside $90,000,000 for the relief of debt mostly in western Canada. It is possible that this government will set aside the sum of $40,000,000 or $50,000,000 to promote housing, which may be a good scheme. And we are now again setting aside the comparatively insignificant sum of $15,000,000 for the purposes of this bill. Where is this sort of thing going to end? As an hon. member here said a few moments ago, there are many other lines of private business that are in distress, needing assistance. There are many industries in the country whose wheels have not turned once in the last three or four years and whose employees are out of work. The principle is thoroughly wrong, that we should go out and finance these private industries and play our favourites, if you like to put it that way. I say to the members of this committee that if the government continues in that way, if it continues to finance private industry, we shall very rapidly reach that point which would be approved of by my hon. friend and we shall have socialism sooner than you think. This country is now in debt to the extent of $4,500,000,000, over $3,000,000,000 on ordinary government account, consolidated debt of Canada, and $1,250,000,000 on account of the Canadian National Railways.

I assume I shall be criticized for what I have said to-night, though it does not matter a great deal. But it is my conviction, and I think the conviction of a good many citizens of this country, that neither this government nor any other can continue indefinitely and increasingly to finance and guarantee the debts and commitments of private interests. In this particular instance it seems doubtful that the $15,000,000 should be given in view of the fact that there appears to be no real demand for it, certainly not so far as the Canadian National Railways are concerned; and in all that I have said I do not want to try to convey the impression that I am not absolutely in favour of doing everything that can be done to relieve unemployment and distress.

Mr. MITCHELL:

I have listened to the inquest of the hon. member for North Waterloo (Mr. Euler), but I would ask this question. What condition would this country

have been in if we had mot gone to the rescue of the farmers in the west when we could hear in the lobby talk about twenty-five cent wheat? What would have happened if we had let all these things go to the wall?

Mr. EULER:

I did not suggest that.

Mr. MITCHELL:

Everything works on

paper, even the capitalist system. However, I want to put this point of view to the committee as one who believes in public ownership; you have to work out a technique to make it function. As to the issuing of bonds instead of allowing shareholders to take their risks as others do in industrial enterprises, I question whether the policy we have been advocating in connection with public ownership is sound. Even in Russia they had to alter their direction and insist upon various industries standing on their own feet. The necessity for this has been proved fully there. It has taken them seventeen years and cost possibly the lives of ten million people to prove it. Evan a communist will not lend money to the government unless interest is paid on it. They are not different from anyone else. Here you have the hydro undertaking guaranteed by the province of Ontario and the vast Canadian National railway system guaranteed by the people of Canada. I do not think that these undertakings should stand, in relation to the financial structure of the country, so far as their indebtedness is concerned, on any different footing from an ordinary company. They should stand on their own feet. When profits are earned by these undertakings those who have invested in them should reap those profits; but if profits are not earned, then the taxpayers of this country or of Ontario or the other provinces should not be expected to foot the bill, any more than they should be expected to foot the bill in connection with other private undertakings. We are fast coming to the point of state ownership whether we like it or not. An absolutely new policy must be worked out whereby these undertakings shall stand on their own feet and be worked on a sound economical basis as other private enterprises are.

Mr. YOUNG:

Would you apply that to the Post Office?

Mr. MITCHELL:

Absolutely. The only argument for public ownership, and I am an advocate of public ownership, is that it shall be as efficient as private ownership and shall meet its obligations normally just as any other concern pays its way.

Public Works Program

Mr. WHITE (London):

As to the wisdom or otherwise of spending $15,000,000 at the present time in connection with railway equipment, I cannot say; I am prepared to accept the judgment of the Minister of Railways (Mr. Manion) in that regard. There is however one point which I wish to make and that is that we have a railway shop in London in connection with the national railways. A short time ago I was waited on by representatives of various trades working in the construction of these cars and also on repairs. I went to a good deal of trouble to get all the information I could. These men represented steel plate work, carpenters, millwrights and machinists, and they told me that up to August, 1929, they had worked five days a week and since then only sixteen days per month. They voluntarily reduced the working days per month in order that more men could be assisted to get a livelihood. These men advised me that the highest paid skilled workers .on the present basis of sixteen days a month received $87 a month. These, remember, are only the highest paid; others receive lower salaries. They also state that albout two hundred men in London are idle on account of reduction in activities. Their main fear was that in the event of all this new work being done, within a few months so much new equipment would be available that the railway companies would probably shorten up on the repairs which are now going through the shops in the ordinary way and that the work in the railway shops would be cut down further so far as these per month workers are concerned. I think, sir, you will agree with me that sixteen days a month is a very small amount for men to work. Those men have been very unselfish in the action they have taken and they should be commended for the way in which they have reduced their hours of labour or working days per month. They seem to be quite willing to carry on as they are, but they are fearful of any further reduction.

There is the other side of the picture which I have tried to present to them as a possible reason for a certain division of the $16,000,000. I know something about idle plants. It costs more by long odds, to keep a plant idle than to keep it running. There is the interest on the money invested; somebody has put the money in, perhaps borrowed it in order to do so, and there is no return. There is insurance to be maintained on the premises; there is the municipal tax bill which comes whether the industry is running or not, and there is also the care of the premises which

have to be kept up. Those expenditures cannot be maintained indefinitely by any company and if maintained too long, the result, as has been intimated to-night, is possible bankruptcy. In the event of bankruptcy of a company of that kind which has been idle for several years and has no prospect of getting work for some little time in the future, one can understand how no one would be willing to invest money in such a proposition, and the result would be that if bankruptcy takes place, the plant would be idle for many more years. The precaution taken by the government to avoid such a contingency is in my opinion a very wise one.

The matter of subsidy has been mentioned. I do not like the word; I do not think it is correctly used, but nearly every line of activity in this country has received during the life of this government benefit by some action the government has taken. We might for instance refer to the rail order that was given to the Sault mills and the mills at Sydney a few months or a year ago in order to help out employment in those centres. If all this construction were confined to the railway shops only, what with taking care of repairs and doing the work slowly as they would have to do, the work would be extended to an unreasonable length of time and I do not think that would be good business. The fact is that the Canadian National deficits are now being paid out of the public treasury and they have been for years. We do not call this a subsidy, but it is an expense on the taxpayers of Canada. Roughly speaking, it takes all the money collected in income tax throughout the length and breadth of this country to pay the deficits on the Canadian National Railways each year, and it seems to me that when this plan can be evolved and worked out in the interests of the companies which are undoubtedly in need, the government is taking a very wise precaution in saving a great many of these companies from disaster. The only thing that I could suggest to the minister is this-and I make the suggestion in all seriousness-that possibly the proportion given to the regular railway shops might be increased. Someone spoke of $3,000,000 out of the $15,000,000; a few minutes ago the minister said nearly $4,000,000. If that were divided perhaps a little more favourably for the railway shops, a great deal would be done along the line in which we all wish this money to be expended, that is to the effect of doing the greatest good to the greatest number of workmen.

Public Works Program

Mr. CAMPBELL:

May I ask the minister if there is any schedule proposed regarding the number of locomotives that are going to be bought by each railway?

Mr. MANION:

These are the estimates made by the railways and I assume they are subject to change, but I think they are in a general way correct. Altogether they are going to buy about twenty of various kinds.

Mr. STEWART (Edmonton):

I have been greatly interested in listening to the discussion to-night in connection with this work. May I say first that if this is not to give employment, then I am against it. I have been given to understand that next to house building, this will provide more employment for unemployed men than will any other venture the government is proposing. If that is true and the unemployment situation is so serious as it is to-day, particularly on the railways and in the equipment shops, whether they are publicly or privately owned, then I am prepared to support this proposition especially on the statement of the minister that the railway companies are to be the arbiters who will make the decision. I have complained before about the interference of government in the management of the railways and I shall be prepared to complain about it again. It seems to me that the business of the government, so far as the national railway is concerned, is to see to it that proper management is provided and then let the management run the road. Interference from members of the House of Commons or from the parties would be disastrous to the operation of any enterprise of the size of the Canadian National Railways. If -we are going to give employment, as is the avowed object of this vote, and if it will give a larger amount of employment than almost any other vote that the government has proposed for relief purposes, surely it is a step in the right direction.

I have had communications from the railway shops in West Edmonton asking that a larger proportion of this vote be allocated to repair work and stating that a very large number of cars require repairs and that this would give a considerable amount of employment to men who have now been three or four years out of work, some of whom, having spent their substance, have had to go on relief and are anxious to get back to work. Naturally I would feel like supporting that position, but the minister has assured the committee-and I must take him at his word -that this is a matter that is left entirely in the hands of the management.

In regard to the Canadian National Railways, let me again say this: Whether national ownership is going to prove a good thing or not, the Canadian people who use these lines have the satisfaction, even if they are paying deficits annually, of knowing they are getting their freight and passenger rates lower than those charged on privately owned institutions in the United States. That is something we lose sight of every time we begin discussing this problem. If the rates on the Canadian lines were the same as those on the United States lines, with the traffic carried we would come much nearer to making our railways pay their way than they are doing at the present time. Therefore to my mind it is just a question whether it is better to take care of the deficits and pay the lower rates where we have a much sparser population than they have in the United States.

As the minister has pointed out, so far as this vote is concerned, it is a loan to the Canadian Pacific. I do not know what position the Canadian Pacific are in. I happen to know some of the stockholders of that company, who have received no dividends for the past few years, and I think that is a clear indication that the Canadian Pacific are not in an extremely prosperous condition. But I do not propose to go into that argument at all. If this will give as much employment as a housing scheme and will take up the slack of employment even for this year-and heaven knows the situation is bad enough- and until such time as we have a change in fiscal policy that will make it possible for our people to get employment without resorting to relief measures, then I am in favour of this vote and propose to support it.

Mr. COTNAM:

Before the Easter adjournment I had occasion to present to the house and the Minister of Railways a petition from the residents of the village of Beachburg and township of Westmeath requesting the board of management of the Canadian National Railways to build a small new station there. I pointed out that for the past four years there has been no station in that locality although about $80,000 worth of freight traffic originates at that point, and I do not know how much express and passenger traffic. The Minister of Railways was kind enough to refer the petition to the trustees of the Canadian National, and he received from them a letter in reply which reads in part as follows:

Beachburg is seventy-four miles from Ottawa on the main line to North Bay and fifteen miles east of Pembroke. The station at this

Public Works Program

point was destroyed by fire on February 27, 1931, and since then a combination baggage ear and coach has been used for the accommodation of the agent, passengers and freight.

Although the board of management have had four years to deal with this question they have left the people of that locality with practically no station accommodation at all, and according to the tone of this letter they propose to continue that condition. I understand that where the management of the Canadian National Railways have been requested to provide elsewhere in the country a coach or baggage car as a station at some wayside point they have refused to do so, on the ground that it would be unsightly and not in accord with the ideas of the management; yet they have continued that condi-at this point for the past four years. This accommodation is unsanitary; I believe that if the local board of health wished to take action they could compel its being closed. Two transcontinental trains, one each way, arrive there during the night. The management of the railways say that they provide for heating at night. That statement is not in accordance with the facts; the people tell me that this baggage car is not heated at night, and frequently women and small children arrive during the night and there is no fire and ' no accommodation whatever. Sometimes the trains are two or three or four hours late, and people have to wait. The railway people say it would be easy for people to telephone to Pembroke, a distance of fifteen miles, and find out whether the trains are late. But during the winter months people have to drive with horses perhaps ten or twelve miles to meet the trains, and they do not know just when the trains may arrive.

I also pointed out that it would be possible for the Canadian National to provide rapid transportation on the main line between Pembroke and Ottawa. There is no question that if the management were willing they could give a service between Pembroke and Ottawa in two hours or two hours and a quarter, yet when they had the diesel engine car on that route it was taking three and a quarter and three and a half hours to cover the distance. Then they say they discontinued the service because the people had taken to buses and automobiles. To show how little they know about the circumstances, there is no bus service in that locality. Of course the people use automobiles as they do elsewhere.

We had a peculiar spectacle in Pembroke a little while ago when an application was made by the Canadian National to close the branch line twenty-two miles long from Pembroke to Golden Lake. Although the board of management of the railway had absolutely refused to give us certain information requested prior to the sitting of the railway board, when the sitting came on and they were compelled to produce the information required, the chief solicitor of the railway came to Pembroke and said: "We are willing to give you all the information you want." Another peculiar thing was that the solicitor of the Canadian National Railways sat down with the railway board and tried to find out where people could get alternative routes by the use of country roads. He said: This road would be suitable for trucks; some other road would be suitable for trucks. I pointed out at the time that I thought the Canadian National existed for the purpose of giving service to the people of this country, not of diverting traffic to the bus or truck services. It seems to me they are pursuing a very short sighted policy in curtailing and restricting service on the branch lines at a time when service should be their motto. If we are going to provide money under this unemployment relief scheme to build new coaches, perhaps the management would at least consent to give us a new railway coach to serve as a station at the village of Beachburg. For my part I intend to protest most vigorously against this measure until accommodation is provided in that locality. I do not think the board of trustees sitting in Montreal and getting reports know the local situation at all. This whole letter is filled with inaccuracies. I intend to protest and to continue to protest until they give the people of that section the service they are entitled to. No one there can understand why they took off that day coach between Pembroke and Ottawa. I do not know whether they have an agreement with the Canadian Pacific to slow down their service, but they have a run of ninety miles from Pembroke to Ottawa and if they speeded up their service they could carry passengers over that run in two hours or two hours and a quarter. Instead of driving passenger and freight traffic to alternative methods of transportation the railway management should be looking for means of bringing that traffic to the Canadian National. I hope the Minister of Railways will, with me, continue to lodge protests with the management until the conditions existing there are rectified.

Public Works Program

Mr. CAMPBELL:

A few minutes ago I asked the minister as to the number of locomotives that were going to be bought under this bill, and he replied, about twenty. I point out that this probably means an expenditure of only one and a: quarter to one and a half millions out of this total of $15,000,000. It is further shown that only about $4,000,000 will be spent in repairs; therefore about $10,000,000 will go to the car manufacturers Which seems too large a proportion. I take it that the railway companies feel that twenty locomotives are all they need, so that I am not going to make any special plea for any locomotive manufacturing company. But I want to add a few words, not in defence of any private corn-pay, but to show that some of the utterances of some of my friends to the left on this side are a little severe as to where this money would go. I feel that any money spent under this bill would benefit the unemployed and the farmers and business men surrounding any city in Which any of these factories are located. I have asked several manufacturing concerns in Kingston for their payroll and their production during the years since 1920, and I have before me a table made up by myself from the data received from the Canadian Locomotive Works. I want to be brief, because the hour is getting late, but the table shows that on the average the company have employed 501 men yearly since 1920 and have paid these men $575,833.34 annually, or about $1,150 per man. They have built 238 locomotives, costing $15,353,000, or an average of 21-6 per year. The statement was made tonight that of the money spent for locomotives two-thirds would go in material and one-third in labour. It will be noted that in this case of $15,000,000 spent on locomotives over $7,000,000 went in wages. I believe in this plant wages are fairly high; I can assure my hon. friends to the left that if the Canadian Locomotive Works in Kingston is given some business probably the wages paid will be a little higher than those in some other shops.

Mr. MaoINNIS: Are the men organized?