The Ontario View of the St. Lawrence Waterway Scheme
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The Empire Club of Canada Addresses (Toronto, Canada), 29 Nov 1928, p. 270-281


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Lynch-Staunton, The Hon. Senator George, Speaker
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Text
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Speeches
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Holding up to the light the arguments, pro and con, for the extension of our waterways, in order that the audience may see whether they are sterile or fit to put under the hen. An intention to draw the audience's attention to certain evidence, and ask that they make deductions from it. A brief review of statements regarding this waterway. Comments on evidence heard by the Senate Committee, and their report. An examination of the evidence that was brought before that Committee as to the desirability or non-desirability for Canada to build these waterways. The present situation, with facts. The cost to Canada if we build this extension, with dollar figures. Advantages obtained from this canal. How the calculations were made. How much we are going to use the canal when we get it done. Reasons presented by the speaker against building the extended waterway. Comments on how some calculations are made. The issue of trade. No reason to think that if we make the St. Lawrence 40 feet deep the shipowners will bring down rates. Lack of evidence that the Canadian people will use the extended waterway. The rising cost of power. A summing up of what building this waterway will mean. Remarks on the international development of power. The speaker's opinion that it is altogether objectionable, and unprecedented in the history of man, for any country to enter into a commercial partnership with any other country, and why that is so. Some conclusions.
Date of Original:
29 Nov 1928
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English
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Full Text
THE ONTARIO VIEW OF THE
ST. LAWRENCE WATERWAY SCHEME
AN ADDRESS BY THE HON. SENATOR GEORGE LYNCH-STAUNTON, K.C.
29th November, 1928.

COL. BROCK, Vice-President, introduced the speaker, who was received with applause, and said :-Mr. Chairman and Gentlemen, Coming as I do from the hamlet of Hamilton I am much flattered indeed by the reception which is given to me by so many people in Toronto. To tell the truth, I did not think there would be a baker's dozen to hear me. However, I appreciate exceedingly the honour of addressing you.

I have presumed to address you on the great Waterways. I shall not pretend to give you my opinion, because I consider that my opinion is worth about as much as that of the editor of the Globe, for example. (Laughter.) I am only taking him as representing his class. There is no use talking-I think this subject should be treated quite aside from rhetoric. Promoters launch every questionable enterprise by florid prospectuses, and we are in danger, as a people, of entering on public enterprises, driven into a conviction that they are correct by rhetorical addresses of people who do not know what they are talking about. (Hear, hear.)

Now, I am a life-long builder of castles in Spain, and I assure you that I could qualify for admission to the Bricklayers' Union if it was not that I never build castles except on Saturday afternoon and Sunday. I never allow them to come in any business hours.

People who count their chickens before they are hatched would never put so many rotten eggs under a hen if they would hold them up to the light to see whether they are muddy or clear. I propose to hold up to the light the arguments, pro and con, for the extension of our waterways, in order that you may see whether they are sterile or fit to put under the hen. Yet I do not intend to weary you with my opinion. I intend only to draw your attention to certain evidence, and ask you to make your own deductions from it. We have reports on this question, made by various committees which gave us evidence to show that it was possible to build these waterways and develop power on the St. Lawrence. Well, we can say that without any evidence at all, because men can do anything now except bore a hole through the world.

Then we had evidence-not evidence, for there is no evidence-but statements that if we builded this waterway ships from the ocean would go as far as Fort William; and in Fancy's mirror, ever clear, we saw the Mauritania and the Majestic straining at their anchors in Toronto harbor. I can assure you that if you wait to hear the echo of their whistle against the walls of the York building, you will never go down to the front to see them. It is an accepted fact now that ocean vessels will never, in a business way, come up the St. Lawrence as far as Toronto.

Now, I am not going to trouble you with the evidence that was given of that subject, as there is nothing before the country on which to form a business opinion. Rt. Hon. Mr. Graham, who had been on those Commissions, last Session suggested that we should have a committee in the Senate that would call before it people who knew -men skilled and interested in navigation and transportation, men whose opinion was worth having on the question whether it was now in the interest of Canadanot navigation, but Canada-to build this waterway. The Senate Committee heard the evidence of all those who were worth hearing, and of no more. That report is in existence, but of course, like all other parliamentary reports, is never read. This is my excuse for coming before you today and giving you the evidence that was brought before that Committee as to the desirability or non-desirability for Canada to build these waterways.

What is the present situation ? We have a waterway twenty feet deep, supporting a vessel that will draw 18 feet, from the head of the lakes, and, taking the Welland Canal to be completed, to Kingston; 27 feet in Welland; 20 feet in the Detroit, St. Marys, and so on; and it is proposed to deepen the canals and waterway from Kingston to Montreal so that vessels drawing 25 feet, or those big lakers, may deliver their cargo in Montreal. We are told that 'this is in the interest of Canada. Now, I do not care about navigation, and I am not interested in the foreigner-(hear, hear)but I am interested in Canada.

Let me, as a parenthesis, say this to you, because I have found that where anybody advocates anything against public ownership, or development of things by the Government, he is always set down as a hireling of the big interests, or as interested as opposing the interests of the people. Now, I have no financial stock in any institution, or man or woman or child who is interested either in its development or non-development; I am not the lawyer for any of those huge corporations and power barons-they never had sense enough to employ me. (Laughter.) But I will tell you what I am, gentlemen; I am one of those cranks who, since I went into the Senate, realized that the country is paying me $4,000 a year-far too much (laughter)-and that it is my duty to take an interest in the public questions and things that affect my country. (Hear, hear, and applause.) Now, you know that those people who take themselves seriously are usually laughed at; but a man who takes himself seriously cannot help it, so he has to take that chance. I take this case quite seriously.

Now, what is the cost to Canada if we build this extension ? because even in public questions costs sometimes count. I will give you only the totals, because time is short. We are paying half of the development on the international portion, 54 miles; the cost to Canada will be $224,600,000, plus $13,800,000-about $236,000,000. We have $150,000,000 in the Welland Canal-it was to have cost $50,000,000. Leaving out the years of the war it has taken ten or twelve years to build it. Did you ever know an estimate that was not under the mark ? I never did. So if it is $130,000,000, I do not think it is exaggeration to expect it will cost $150,000,000; but let it go at their own figures.

What advantages are we to get from this canal ? That is what you want to know. We had before us the representative of the Transcontinental, the representative of the Montreal Harbor Commission, and several other men who are reliable, and they all agreed in one thing-that this waterway would be a good thing for Montreal, but they could not show why. They say that if we build it we will save a cent and a half per bushel on wheat-not five. They say that it costs a laker--one of those large ships-to go from the head of the lakes to Kingston or Prescott, and tranship at Montreal, 6.57 cents a bushel; but if we build it right through it will cost him 4.22 cents per bushel. Here are the figures-cost under the present system, Fort William to Port Colborne by typical large freighters, 2.39; by typical canal freighter 4.81; total, 7.20. They say that when the Welland Canal is through to carry it to Prescott it will cost 6.20 per bushel to carry it into Montreal. I hope I have made that clear. If you get it to Montreal by the other way it will cost 4.22. On that calculation you save two cents a bushel by extending the waterway.

Those calculations have been made in this way: they say that is what it will cost to ship if the ship operates for 230 days, and has no delays, and gets a full cargo every time she goes to Fort William. Well, I was for many years a director of a shipping company, and I never knew a ship that had not delays, and I never knew a ship that got full cargoes every time she went to Fort William. I don't believe she gets it three times out of four. So that is what you call an ideal trip; in fact it is on paper. Mr. James Playfair said in his evidence that the average freight to Montreal throughout the year is seven cents, and he says they are carrying it for nothing--absolutely no money in it at all.

Now, that is the cost to the ship, and you will save one cent, two cents, call it three if you like; that is the way we do when we are figuring out; we say we are going to make $50,000, and we say, " Cut it in two, and we will make $25,000 any way." But you must add to that the profit that the boat has got, so how are you going to save anything ? That is not rhetoric; those are the cold figures made up by those gentlemen, they said, from actual enquiry from the steamship men as to the steady cost of operation, cost of the boat, and so on. That is the fact, and rhetoric cannot blow that away. That is what the evidence says, and I assure you, gentlemen, that I am not distorting the evidence in the least.

Now, how much are we going to use that canal when we get it done ? Well, they tell us that there is an ever-rising tide of wheat flowing from the boundless West; we will use it for that. But do we ? Curious thing, that we have the cheapest combined rail-and-water haul to the seaboard on this continent when that seaboard is in Montreal. It costs more money to send a cargo of Canadian wheat to Buffalo and to New York, and then to England, whether you make it rail-and-water or water alone to the seaboard, and water thereafter, of course, till it freezes over; and yet the major portion of our wheat goes by New York, though you can carry it cheaper by Montreal.

Do you know that last year we carried about 135,000,000 bushels, and Senator MacDougald, who is a member of the Montreal Harbor Commission, told us that 91,000,000 of that was American; and I have the tables here which show what we did in former years, and so far as I can analyze those tables we never in our existence carried more than fifty-fifty bushels of Canadian wheat down the St. Lawrence. Therefore we are providing for carrying half of the receipts of America, and we are putting up all this money to put five cents a bushel into the pocket of the American farmer.

The way some people make up their calculations is amazing. One gentleman came before us and said that we will save five cents a bushel on 140,000,000 bushels which has never gone down-which will pay the cost of the Welland Canal. Then he said we were going to draw in 800,000 tons of Welsh coal to Toronto-that is, only when the steamers come up from the ocean, and we are going to save $3 a ton on that. Well, that is the first time that I ever heard of a rule not working both ways. If the exporter, being the Manitoba farmer, saves five cents, why will not the English exporter of coal save the $3 ? We won't. I say that on their own showing it cannot benefit Canada one copper to reduce the cost of all the inbound freight. If it does, then it does not benefit Canada one copper to reduce the cost of outbound freight. That is what the evidence shows.

Then we have to consider another item. The mysteries of trade are past finding out. It is the most mysterious thing, and I have never seen any of those political economists that ever solved anything. (Laughter.) Years ago I was always told that money was a medium; that was the doctrine of political economy. Now it is recognized to be a commodity. They have blown that theory into the skies. You are told that this will reduce the cost to the Canadian farmer because the ship owner can carry it cheaper. But will he put down the price ? He says, " I am only carrying it now at cost.' Mr. Playfair says, "The only time we can jack up the rates a little is when there is a big choke up the lakes." Don't you suppose they will keep the rates jacked up as high as they can ?

What reason have we to think that if we make the St. Lawrence 40 feet deep the ship owners will bring down rates ? They won't do it. It is not human nature. You can't control them. Therefore I say they have not yet proved to me, or shown to me, that patent way of reducing rates at all; and if they have, they have not proved the saving to the Canadian people-I am not meaning to the world-of one-quarter of the interest it will cost us to extend this fine thing. They have not shown us that the Canadian people will use it. Our experience is that the Canadian people do not. We have got the maximum tonnage carried on that river St. Lawrence between Montreal and Welland, 5,000,000 tons; that is what it has gone up to, while the railways have gone up to 122,000,000.

With regard to shippers lowering the freight rate, I make this proposition, that no man can point in the history of transportation to any place where the cost did not go up when facilities were increased. I am not talking about the Panama Canal, because that cut off about 4,000 miles, nor the Suez Canal, which did the like. But what did we have ? In the old days our cars carried 25 tons; now they carry over 40 to 100. Our grades were three percent; now they are flattened down to the disappearing point. The rails were 50 pounds; now they are 80 to 100. Our trains were light tuppenny-ha'penny things; now our rail facilities have gone up enormously, hundreds fold. And the cost has gone up. I have come out of the estuary of the Thames and seen steamboats parked in there like motor-cars on Front street-no business-showing that there was a surplus of tonnage on the Atlantic. Vessels have been increased enormously from 2,000 tons up to 10,000, and passengers up to fifty times. Facilities have increased, but ,the cost has gone up. So it is inevitable.

When we begin to think of the electric current in this country it was manufactured by a few little isolated plants through the country. Now we have spent $100,000,000, and we have 1,000,000 horsepower which we are getting at cost. Yet the cost has gone up. The more facilities you have, the more cost you have. You cannot blame the increased price of electric current in' this Province on the power barons, because we control it ourselves; but the cost has gone up. Yet somebody tells you that if you deepen the water you will save the cost !

The truth is that canals are a back number. Nobody hauls anything by canal except coarse, low-cost freight, and freight that would not move at all if you did not haul it by water-wheat, sand, heavy pipes, and things of that kind that cannot stand the high rate. One gentleman told us that Eaton here never sends anything by boat to Toronto; they won't stand for the time; and a friend of mine in the railways tells me that if by transhipping of them they can get it cheaper by boat from Montreal they won't do it. Now, you know; you are business people.

One thing they said they will get is that they will steal away from the railroads all the flour that goes down by Port McNichol. Very little of it now goes by water, but they will take it cheaper that way. I don't think they can take it away; and I don't think it would be in your interest if they did, for we have about two billion dollars invested in the National Railways, and we are handing out to them $75,000,000 to $100,000,000 a year to keep it going. Then we have the C.P.R., which in my humble judgment is the backbone of Canada. (Hear, hear, and applause.) In my opinion it has done more than any and all the agencies that exist for the development of this country, and I don't want to injure them, and I don't want to injure the National.

They tell us that at certain seasons of the year those canals are congested. That's a great word; I don't know what it means, half of the time; but one witness said 80,000 bushels can go through those canals as they exist now, and if you put in Diesel engines which will be done-you can carry 120,000 bushels through the new canals; we can nearly double their capacity.

Then we have got the Hudson Bay. That mighty ocean is to be opened to carry outborne freight to Europe from the West. It won't come down here, will it ?-if that dream comes true; and in my opinion-and my opinion is not worth that (snapping his finger)it never will. But we have got it, and we have to consider the wheat it will take away from this waterway, because grain is the only thing of which we export all of it. When we are talking of putting in another $150,000,000 you ought to think about it in Ontario and Quebec, because you are the people who have to pay for it. It is the manufacturing industries and the people who pay income tax that have to find the money for this, and the only pleasure you will have will be to increase the taxation of this country, which is now so stimulating to our industries.

Now, as far as I can see, that is a faithful and a truthful resume of the evidence that came before that Committee-interlarded with my own remarks. To sum it up, it means that by this waterway we will save on the outbound traffic one to two cents per bushel; that the maximum amount of Canadian wheat that goes out there has never been more than 56,000,000 bushels; that we are providing that for American traffic; that our own traffic goes, and will continue to go the other way. You see, the American traffic comes on in July and August, a month ahead of us, and they use this for their surplus. They export as much as we do of wheat. We think we are the granary of the world, but we are no more the granary of the world than Russia or the United States. Oh, get your heads out of the clouds, gentlemen, when you are talking business. Look at what the facts are, and not what the facts are said to be.

Then I submit to you, according to this evidence, that if the time arrives-it has not arrived yet-we have ample capacity; and canal transportation is the dearest in the world. If you charge up the cost to the shipper, and charge them a toll through our canals, and let them break even on the cost, they would never use it at all.

Of course if you took the Transcontinental lines here and carried things for nothing, letting people use the roadbed for nothing, and running their own cars over it, if we provided this at no cost, you would think people would use it-but they don't. That is that evidence.

Now I want to tell you a few things about that international development of power. Is it necessary for us to go into that now ? Have we got enough power in Ontario ? Well, when I saw the members of the Government and every one of the Hydro Commission on their knees to the little town where I was born, begging them to take their power, I came to the conclusion that they must have a surplus, and that we have got more power than we know what to do with, or they would not run to a little town of 200 or 300 people. At least I drew that inference.

This power is to be developed at the foot of Harnhart Island. It happens that at that point the international boundary comes within a few feet of the Canadian shore, so that the dam across the St. Lawrence, if built, will be 95 per cent. in American territory. Now, the Aluminum Company of America owns the shore and the bottom of the river on the American side; owns Barnhart Island; owns the company that owns the Canadian shore; so that they own the whole thing. We are told that the proposition is to shift the international boundary line so as to put half the dam on our side and half on their side. Well, the United States Government cannot shift that boundary line. The constitution of the United States provides that the United States shall protect each state from invasion; and if they carry out their obligation to the States they cannot allow any foreign power to get one inch of the territory of any State. So they cannot shift the boundary line unless the State of New York agrees to it.

Then, in my opinion, it is altogether objectionable, and unprecedented in the history of man, for any country to enter into a commercial partnership with any other country. Partners often quarrel, and when those partners are two nations and quarrel, it is serious. Let us take George Washington's advice to the Americans in this regard, and keep ourselves, commercially at least, from entangling alliances. (Applause.)

But supposing we make that bargain, supposing we build that dam, we admit that at present we have no use for it. We will want it in those halcyon days when Canada is as big as the United States-which of course is going to be the day after tomorrow; but in the meantime we don't want it. There will be at least loads of time between the period we finish it and the time we want it.

Now, the American Government does not own the territory; does not own anything; has no control over that territory excepting for navigation. But the Canadian Government does not own it, and has no control whatever over those waters except for navigation. But supposing the Aluminum Company builds the dam, they will own the canal unless the Ontario Government expropriates it, and that Mr. Hoover will not go into that noble experiment of public ownership. He denounced it for all he knew how in New York the other day, and he was backed in his presidential election by all the private interests in the United States, because he is absolutely opposed to any public ownership creeping into the Federal Government of the United States; so they won't take it up. So it will be developed by the Aluminum Company, which will be in partnership with the Federal Government if they expropriate the piece on our side-and they can do that. Then, Chicago-like, they will take more water than was given to them. Supposing they take all the territory, or supposing they take three-fourths-we are not using it-our Ambassador at Washington goes down to raise a kick; the Secretary of State sheds a few Alice-in-Wonderland tears and says, "We can't do anything; we are sorry; we never thought that they would break their word." Or supposing they say, "Well, we will stop them." What do they do ? They will go to Court-that is what they had to do in Chicago. You know the American Government can't do anything unless it goes to court; and in Chicago when they went to court they got the judge to hold up the judgment for nine years; he said he was not going to see Chicago poisoned. I am told that it was sixteen years; any way, it was nine; that is that baseball player. (Laughter.) Well, he was the umpire in this game. What is to prevent them from doing that over there ? You can't confiscate any property of the United States, you know.

These are just a few of the complications which will arise; and I say that until we have developed all the power along the St. Lawrence river-and there are millions of horse-power there-let us let that lie the way it is; and if we have any spark of decency in us as to provinces, Quebec and Ontario will get together and agree that these enormous principalities of wealth-sources of power along the St. Lawrence below the international portion-will be developed for the general benefit of Canada. (Applause.) And it won't require that development. If the time comes when we have to develop it, in my judgment the only way to keep us out of danger, of quarreling with our neighbours, is for us to make a bargain with the United States Government that they will develop the whole thing and own it, and agree to give us a certain quantity of it; or to make a bargain with the United States Government that we will develop it and own it, and give them a certain quantity of the power-their half-but no joint management, no joint control, between the two nations. (Hear, hear, and loud applause.)

On the suggestion of the Chairman, the audience rose and stood silently to show their sympathy with His Majesty the King in his illness.

HON. MR. JUSTICE KELLY expressed the thanks of the Club to the speaker for his interesting address.

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The Ontario View of the St. Lawrence Waterway Scheme


Holding up to the light the arguments, pro and con, for the extension of our waterways, in order that the audience may see whether they are sterile or fit to put under the hen. An intention to draw the audience's attention to certain evidence, and ask that they make deductions from it. A brief review of statements regarding this waterway. Comments on evidence heard by the Senate Committee, and their report. An examination of the evidence that was brought before that Committee as to the desirability or non-desirability for Canada to build these waterways. The present situation, with facts. The cost to Canada if we build this extension, with dollar figures. Advantages obtained from this canal. How the calculations were made. How much we are going to use the canal when we get it done. Reasons presented by the speaker against building the extended waterway. Comments on how some calculations are made. The issue of trade. No reason to think that if we make the St. Lawrence 40 feet deep the shipowners will bring down rates. Lack of evidence that the Canadian people will use the extended waterway. The rising cost of power. A summing up of what building this waterway will mean. Remarks on the international development of power. The speaker's opinion that it is altogether objectionable, and unprecedented in the history of man, for any country to enter into a commercial partnership with any other country, and why that is so. Some conclusions.