Mr. MAYHEW:

The hon. member has put the situation exactly as I understand1 it. This is an enabling bill. The government may lend the railway company money, or the railway company may borrow from the public money which the government will guarantee. As I said two or three times, that is all we are doing. We are not rushing out now to buy. It is enabling legislation so that we can convert these as they come due, and to the best advantage. The suggestion made by the hon. member will certainly be considered when these transactions take place.

Mr. ADAMSON:

Does this refinancing, or whatever it is called, include rolling stock trust certificates? In other words, does it include refinancing through repayments of loans to organizations such as the Guaranty Trust Company, which has the ownership of much of the rolling stock of the Canadian National Railways?

Mr. MAYHEW:

The hon. member will see the items when he gets his copy of Hansard tomorrow. It is in the table I have placed on record.

Mr. ADAMSON:

But it does include those?

Mr. MAYHEW:

Yes.

Mr. ADAMSON:

That is the type of security.

Mr. MAYHEW:

Yes, some of them.

Mr. HACKETT:

Did the parliamentary assistant say that a similar bill is passed every year?

Mr. MAYHEW:

No, not every year. The last one was passed in 1944, but it was for a similar amount, and the sections in this bill are exactly the same as they were in the former one.

Mr. HACKETT:

But is there any limitation as to the period during which the legislation is valid? If not, why do we have to renew the legislation now.

Mr. MAYHEW:

The limitation is the amount; and there is also another limitation in that the last one comes due in 1954. So that it will all have to be paid by that time.

Mr. ADAMSON:

One more question; do any of these bonds being refinanced include long-term securities which might have a gold clause in them? If so, does the government propose to repay some of these securities, if they exist, under the terms of that clause? Some of the old bonds did have a gold clause in them.

Mr. MAYHEW:

I am informed that some of them have a gold clause in them. But a gold clause act has abrogated that. It has not been paid in gold since 1932 or 1933, I believe it was.

Mr. ADAMSON:

Is that our act or the United States act? I ask that question because I am not familiar with the act abrogating the payment. I know the Americans did it, but I did not know we had done it; that we had an act abrogating paying of gold securities held by nationals of other countries. I know we did it to our own nationals, but 1 did not know we did it to the nationals of other countries.

Mr. SMITH (Calgary West):

We could not, of course.

Mr. MAYHEW:

I am informed it was passed by congress and also by ourselves in 1932 or 1933.

Mr. SMITH (Calgary West):

If the parliamentary assistant will look at subsection 2 he will see that it states:

Should any such temporary loans he made within the limits aforesaid, substituted securities may subsequently be issued and guaranteed under the provisions of this act to repay such loans or any part thereof.

Obviously the securities there contemplated are not the securities contemplated in the first part of the bill. If we look at section 3 we find that it says:

. . . the national company may .issue notes, obligations, bonds, debentures, or other securities...

That is, in substitution of loans, irrespective of whether they are bonds, or whatever securities they may be, which are paid off. Then we have ample power to do that.

Then subsection 2 of section 7 says that should any such temporary loans be made within the limits aforesaid, the substituted securities may subsequently be issued. Is that two sets of securities, or do we require that last bit at all?

What I had in mind was this, that the earlier section made provision for the railway issuing securities known as substituted securities. They are issued to take the place of securities which have been reclaimed. That being so, I do not see the object of section 7 (2). Obviously it is not to those earlier securities that this applies. I assume that it may be a security of the railway to the government. Perhaps that is it.

Mr. MAYHEW:

Subsection 2 is the same as section 7 (2) of the act passed in 1944. It makes it quite clear that if the dominion government makes a temporary loan the company securities of the railway company guaranteed by the dominion may be issued to pay off the temporary loan.