1902-04-24

QUESTIONS.


Mr. WILSON asked :: Is the following statement correct which appeared in the ' Mail and Empire ' of Saturday April 19th, 1902 :	'
Canada wants the Boers.
London, April IS.-The question of what to do with many of the Boer prisoners has been a Mr. TAYLOR.
The MINISTER OF AGRICULTURE
(Hon. Sydney Fisher) :
1.	Yes.
2.	Yes.


Mr. TAYLOR asked :: Was the sum of $115.50, as shown in the Auditor General's report for the year ending [DOT]Tune 30th, 1901, page D-60, paid to George C. Douglas, Mount Stewart, P.E.I., for the articles and services, viz.:-
October and November, 1900, services, $42.50120 chickens, $31.27 ; oats, $56, % bushel at 32' cents ; grinding, $3.20 ; milk. 1,350 pounds, at 50 cents per cwt.; tallow, 14 pounds, at 6 cents-sulphur, 8 cents; horse hire, $1; freight charges', $1.38 ; cartage, 50 cents; rent of scales, 50 cents; labour, SO cents ; dressing chickens, $1.50 [DOT] naid to pickers, $7,-$115.50.
2. Is the amount shown on page D-68, of the said Auditor General's report, viz., Mr. Stewart,

$9.90, all that was received for the sale of said chickeDS ?
3. If not, where is the balance shown as having been received, in said Auditor General's report ?


The MINISTER OF AGRICULTURE (Hon. Sydney Fisher) :: 1.	Yes.
2.	Yes.


Mr. TAYLOR asked :: 1.	Was the sum of $451.23, as shown in 'he Auditor General's report for the year ending June 30th, 1901, page D-60, paid to A. P. Hill-house, Bondville, P.Q., for the following articles and services, viz. :-
Chickens, 240 at 27 cents, 200 at 28 cents ; grain, 5,196 pounds at $1.22 per ewt.; sundry feed, $6.94 [DOT] milk, 2,845 pounds at 15 cents per cwt.; eggs, $35.98 ; tallow. 65 pounds at 5 cents; oil. $10.16; 3 cans, 85 cents, 4 pails, $1.20; nails, $1.50 ; lumber, 78 cents ; 6 feeding troughs, $4 ;
3 egg cases, SO cents ; paint, $4.87 ; wire, $1.25 ; sundries, $6.19 ; freight charges, $19.10 ; cartage, $1.50 ; telegrams, 75 cents ; telephones; $1.55 ; paid to pluckers, $29.25 ; labourers, $68 ; for care of chickens, $54.75 ; buyer of chickens, $14.
2.	Is 1he amount on page D-6S, of the said Auditor General's report, viz., Bondville, $212.21, all that was received for the sale of said eggs and ch'ckens ?
3.	If not, where is the balance shown as having been received, in said Auditor General's report ?


The MINISTER OF AGRICULTURE (Hon. Sydney Fisher).: Again I answer twice, yes.


THE PLAINS OF ABRAHAM.
Mr. CLARKE asked :: 1.	When the Plains of Abraham were handed over to the city of Quebec, was the right reserved to the militia and military authorities to use the plains for drill, review or inspection purposes ?
2.	Is the government aware that the municipal authorities have refused the local militia regiments the use of the plains for drill or inspection purposes ? If so, is it the intention of the government to take any action in the premises ; and if so, what action ?


The PRIME MINISTER (Rt. Hon. Sir Wilfrid Laurier) :: 1.	Yes.
2.	The government has no such information. nor does the government believe that the statement is correct.


WHARF AT L'lLE-AUX-COUDRES.
Mr. ANGERS asked:: (Translation.)
1.	How many tenders have been received for the intended extension to the wharf at l'lle-aux-Coudres ?
2.	What are the names of the tenderers, and
the amount, of each tender 7	.
3.	To whom was the contract granted, and for what reasons ?


The PRIME MINISTER (Rt. Hon. Sir Wilfrid Laurier).: (Translation.) :
1.	Two.
2.	Magloire Francoeur, $6,907.10 ; Harvey Perron and Dufour, $8,875.
3.	To the lowest tenderer, Magloire Francoeur.


THIRD READING.
[Stage Direction]
Bill (No. 40) respecting Pensions to Officers of the North-west Mounted Police.-The Prime Minister.

[Stage Direction]
The MINISTER OF FINANCE moved that the House again go into Committee of Supply.
["If the hon. gentleman (Mr. Ingram) will allow me, unless he particularly desires to go on, I would ask the com-mittee'to allow the chairman to report progress and ask leave to sit again.\nProgress reported.\nOn motion of the Minister of Finance, House adjourned at 12 a.m. (Friday).", 'Friday, April 25, 1902.']
Mr. N. BOYD (Macdonald).: Mr. Speaker


The MINISTER OF FINANCE.: Will my hon. friend permit me to say that I am aware of the matter he intends to bring up. and to ask him if it will suit him as well to bring it up to-morrow, as the Minister^ of Railways wants to make an address which will occupy some time. If the hon. gentleman wishes to proceed, I will not object ; but it would be a matter of convenience if be would let the matter stand until to-morrow.


[Stage Direction]
Motion agreed to, and House went into committee.
['Will my hon. friend permit me to say that I am aware of the matter he intends to bring up. and to ask him if it will suit him as well to bring it up to-morrow, as the Minister^ of Railways wants to make an address which will occupy some time. If the hon. gentleman wishes to proceed, I will not object ; but it would be a matter of convenience if be would let the matter stand until to-morrow.']
Mr. MONK.: Mr. Chairman. I think it is a pity you left the Chair before we had time to come to an understanding.


The MINISTER OF FINANCE.: I supposed that the hon. member manifested his assent. I had no desire to take any advantage.


Frederick Debartzch Monk: The situation is this. We were not prepared to go on with the railway estimates immediately, because we thought the motion of my hon. friend from Macdonald was going to be put before the Speaker left the Chair, and consequently two or three of our friends who desire to be here when the railway estimates are proceeded with are not in the Chamber at this moment.


The MINISTER OF FINANCE.: I may say to my hon. friend that the members will not be called on to vote on the estimates for some considerable time, as the Minister of Railways desires to make a somewhat lengthy address, and before we reach a vote, the hon. member will probably have the opportunity to have the gentlemen he refers to present.


Frederick Debartzch Monk: I think it is important that the gentlemen I refer to should have the opportunity of hearing the statement of the Minister of Railways.


The MINISTER OF FINANCE.: We will wait a few minutes if the hon. gentleman wishes to send for them.
Mr. [DOT] INGRAM. The hon. member for Hamilton came to my desk a few minutes ago and said that he did not expect that the railway estimates would come on until after dinner, and for that reason he left and went to his room in the Victoria Chambers.


The MINISTER OF FINANCE.: Notice was given last evening that the railway estimates would be taken up to-day.


Mr. INGRAM.: But it was understood that the hon. member for Macdonald would bring up his question first.


The MINISTER OF RAILWAYS AND CANALS.: I was asked by the hon. member for South Lanark (Mr. Haggart) whether I was prepared to make my statement this afternoon, and I said I was. I have no desire to inconvenience hon. gentlemen opposite. I would only like to make this appeal to them. I have been most anxious to be allowed to make my statement in the afternoon, as I have not been in as good health or strength as would warrant me to speak at any length in the evening.


Mr.   MONIC@: We were under the impression that this motion, which, I understand, it will not take much time to discuss, would be taken up at once. In fact such was considered the understanding, and some of our friends are leaving later on in the day. It will not take up any length of time, and it will be possible then for the hon. minister to make his statement before the evening sitting.


The MINISTER OF RAILWAYS AND CANALS.: I am quite sure that in order to get through the various subjects, I would like to touch upon, it would be impossible for me to do so in any less time than between now and the dinner recess. I have been consulting the convenience of my hon. friends, from time to time, and yielding to their suggestions for the purpose of securing an afternoon, when I would be in better shape to make my statement to the House.


Frederick Debartzch Monk: I think, under the circumstances, you had better go on.
Intercolonial Railway, $5,500,000.


The MINISTER OF RAILWAYS AND CANALS (Hon. A. G. Blair).: I propose, at this stage, with the consent of the committee, to make a general statement respecting the administration of the Intercolonial Railway. I think it is convenient that I should do so now as that will be very much more advantageous than to have a general discussion as each item comes up. In this way I think we could better


Frederick Debartzch Monk: 
Hon. Mr. BLAIR.: Then he shows the need of having modem machinery supplied.
It is kept well ahead of the actual needs of the roads, large enough to keep engines and cars in good, healthy condition, and rolling stock is being constantly rebuilt. Its capacity for repairs is flexible, because men can be taken off new work to do repairs when they are accumulating too fast. The general policy being to rebuild both engines and cars instead of wasting time and material in patching up 3tock that is old and worn out, and which, owing to the march of improvements, has become too small and obsolete.
Now, this is the statement of an experienced man as to what a modern railway requires. Let me ask, Mr. Chairman, is there any reason known to any member of this House why, in equipping, building and repairing we should discard modern methods upon a government road 1 Is there any reason why a government road should be an exception to all other roads ? Is there any reason why a government road should remain out of date ? Will anybody tell me why a government road should be an out-of-date institution, that it should be, either as to its passenger equipment or its road-bed, a discredit to the country ? Is not the country entitled to respect from an enlightened and proper administration of the Intercolonial Railway, that it should be as good, as complete, as comfortable, as speedy, as convenient and in as good condition as any other railway in Canada ? Ho the people of this country approve, or do they not, of having the railway which belongs to them in such a shape that it will reflect no discredit upon either them or the government ? I venture to say that the man who interprets the sentiment of the people of Canada in any other way, misinterprets that sentiment. While it may suit the purposes of the opponents of the government to give currency to a view among the people that there lias been wasteful extravagance in the enormous sums of money, as they choose to characterize them, which have been laid out upon the road, I say they are attempting to deceive the people, they are misleading the people in a way which is not worthy of any political party ; and until they can show that in the expenditures we have made upon this railway, on capital or any other account, we have been wasteful, that we have made expenditures without reasonable necessity, they have no case against the administration of the government railway.


Andrew B. Ingram: Whose statement is that ?
The MINISTER OP' RAILWAYS AND CANALS. That of the mechanical superintendent, Mr. Joughins. Then he passes from what he considers ought to be and are the requirements of a first-class road, an up-to-date road, to what our conditions and circumstances are in that regard.

On taking an inventory of our locomotives, we shall find that the freight engines are altogether too small to haul freight with economy. In writing to the general manager on June 18th, in the fiscal year 1897-8, I said as follows : ' Referring to the new engines which we think cf ordering, it seems to me that we ought first to purchase freight engines exclusively, because the grades on our road are so heavy that our present freight engines are totally unable to handle a paying train of freight, and because our passenger service seems to be fairly weTl provided for at the present time, at least it does not demand such a radical reform as the freight service. If we decide to get freight locomotives, we ought to buy as large as it is possible to use on our road-bed.' And this still appears to me to hold good. .	. - . It is
well recognized that very much greater economies can be inaugurated and practiced in hauling freight than passenger trains without detriment to. the service, that such improvements persistently carried out are one of 'the essentials necessary to place a road on a paying basis, and to meet the competition of its neighbours.
Our greatest handicap in endeavouring to reach the goal of economy is the size and condition of the 156 engines employed in hauling freight. They are altogether too small, not one could be considered a modern engine for main line service, and most of them were too small even according to progressive railroad ideas the day they were purchased.
Now, this is a statement of the mechanical superintendent. Whether that statement is correct, whether his judgment is sound or not, I venture to appeal to any man filling any responsible position such as that of mechanical superintendent on any of the railways of Canada, or of any other country on tiie continent, whether the statement lie makes in this regard is not supported and sustained by the judgment of every man of experience in the same direction.
In looking at our list of both passenger and freight engines, we see that we have 143 engines with cylinders 17 inches or less in diameter, and only 57 engines with 18 inches, and six with 19 inches, the latter being purchased only within the last four or five years, and then for passenger service.
That is, prior to 1898.
They were all purchased for passenger service.
Those four or five having nineteen inch cylinders.
For many years engines with cylinders even so large as 18 inches have not been economically useful in freight service, and the smaller sizes should have disappeared long ago from our main line. We are now purchasing engines with 21 inch cylinders, and With almost double the power of the largest we hitherto possessed.
The Canada Atlantic, a level road, have not, I believe, bought less than 18-inch engines during the last fifteen or twenty years, the Canadian Pacific not a single one since 1887, while we have bought or rebuilt 33 engines of less than that size during the last ten years.
Perhaps I could show more clearly what I
mean when 1 say that the engines are too small by comparing the weight and power of a modern freight engine with the engines we now possess. The best of our old locomotives weighed about 50 tons, and could haul 550 tons up a 1 per cent grade, and we have only 12" of that capacity, the rest are smaller, some weighing only 30 tons. A modern freight engine, such as we are purchasing, weighs S3 tons, and has a hauling capacity of 1,100 tons up the same grade. On calculating the hauling power of each freight engine which we own and adding them together, we find :.hat it amounts to 56,000 tons up a grade of 1 per cent, and that if we had the same number of modern engines they would haul 166,000 tons up the same grade.
That is three times as much. And, mark you, in the incidental cost of running the trains, taking into account items such as oil and waste, the rate of wages paid, &c., it would cost practically the same to run a train hauling 300, or 400, or 500 tons as it would be to run a train hauling 1,100 or 1,200 tons.
There is not very much to say about freight cars, except that they have not been designed large enough, and that during the last eight or ten years we have purchased fropi 2,000 t.o 3,000 cars of 20 tons capacity, which should have been 30 tons. To me it seems incomprehensible why 20-ton ears should have been made up to 1898, when every one else years ago had recognized the value of the larger car, and it is, I believe, needless for me to point out its advantages.
Now, there is his statement. He winds up with this :
It is difficult to speak with certainty of what ought to be done to meet the demands of the I-assenger traffic. Both in regard to locomotives and cars it is more a question of competition, appearanoes, speed, comfort and safety than one of reducing expenses per train mile.
I feel that you are quite familiar with the facts and requirements in regard to this, and that I need not say very much about it beyond pointing out that our passenger engines are small and. that the condition of our trains is anything but a good advertisement for our road. A stranger visiting the provinces for the first time, would conclude from their appearance that the road was very much embarrassed financially, so poor that it could not afford to make a decent appearance, unable even :o spend1 enough to keep them clean, and when we know that they belong to the Canadian government and therefore in some degree represent it before the world, we cannot help feeling ashamed for their appearance ; our cars were built long before comfort was considered a necessity in railway travelling and we have not been renewing our cars at such a rate as to be able to say that we have a respectable and modern equipment.


Hon. Mr. HAGGART.: What is the date of that report ?


The MINISTER OF RAILWAYS AND CANALS.: This report was written, with the quotations which I have read, in 1899. I have read to you quotations from a report which was made in the fiscal year 1897-98,

in regard to the conditions of the locomotives, engines and cars.


Andrew B. Ingram: The hon. gentleman (Mr. Blair) says that this report was made in 1897-8 ?


The MINISTER OF RAILWAYS AND CANALS.: Yes, I say that the paper I am reading from is dated May 1st, 1899, and the portion which I have been reading, referring to the condition of the locomotives and train service, is an extract from a report made in the financial year 1897-98.


Andrew B. Ingram: And I understood the hon. gentleman to say that during the year 1898 he purchased a large number of 20-ton cars.


The MINISTER OF RAILWAYS AND CANALS.: No, no.
Mr. INGRAM, I understood the hon. gentleman to say that.


The MINISTER OF RAILWAYS AND CANALS.: No, he wrote in 1897-98 that during the previous years there had been 20-ton cars purchased. He wrote that :
During the 'last eight or tea years we have purchased from 2,000 to 3,000 ears of 20 tons capacity which should have been of 30 tons.


John Graham Haggart: Would the hon. gentleman (Mr. Blair) be good enough to put that report on the Table of the House so that we will have an opportunity of looking at it.


The MINISTER OF RAILWAYS AND CANALS.: I do not think I can put it on the Table exactly, but if the hon. gentleman would like to look at it I will let him have it in his own hands.


John Graham Haggart: I think it would be better when the hon. gentleman reads a report from a public officer that he should put it on the Table.


The MINISTER OF RAILWAYS AND CANALS.: These are simply extracts from the report of this officer. I have not the whole of the report. I will let the hon. gentleman have it such as it is. Now, Mr. Chairman, just let me state the condition in an abbreviated form. So far as the equipment of the Intercolonial Railway is concerned, we had not a dining car on it. We had not a real first-class car on it. We had not a first-class sleeping car on the road, as everybody knows. Travelling on the Intercolonial over night, leaving our train and taking a car on the Canadian Pacific Railway or Grand Trunk Railway, the comparison which any person would make was open to comment and the subject of general remark. They had all the modern appliances and equipments; we had none of them. The first dining car that was put on the line was put on in 1898, or early in 1899, and so in regard to up to date coaches and sleeping cars. You have heard that we had no locomotives that were Hon. Mr. BLAIR.
capable of hauling more than 600 tons. I can give the committee a list showing when these locomotives were obtained, when they were purchased, how old they were and what the capacity was for hauling. You have the general statement of Mr. Joughins that these engines would not haul 500 tons and everybody who has gone over the Intercolonial Railway in times past noticed the character of the train service, and even down to this date, has seen more trains of perhaps 180, 200 and 300 tons hauled by locomotives than trains of a larger tonnage. One hundred and eighty, or 200 tons was more than the average of the whole tonnage of some of these' trains and yet large locomotives which will cost no more for running, although they cost a little more for fuel, would be able to haul five times that amount of tonnage up our grades without any difficulty whatever, and they are doing it to-day. The only thing that I regret is that we have not been able to get these large locomotives manufactured and put into service fast enough. We have not begun to realize the advantages which will accrue from the equiqment of the road with large locomotives, so that we are yet in no position to claim that we are fully and completely equipped.
We are spending, this year, $400,000 on capital account for rails. We must put down heavy rails to bring our road up to date. I think that is too obvious to need any argument to sustain it. We must have heavier trains, heavier locomotives and heavier cars, and the truest economy, as well as the safety and security of the travelling public, requires that we should have these heavy rails and that we should have tne bridges strengthened so that these trains may safely pass over our line. We have spent $200,000 within the last three years out of capital for the purpose of strengthening these bridges. I would have been better pleased and the road would have been better served if we had spent double or treble that amount during that time. It would have been better if the government had spent more than that for new rails and more rails, but I think hon. gentlemen would be inclined to assume that if it had been possible for the government to have authorized estimates for a larger sum they would have done so. If they had thought that parliament would have approved of larger estimates they would have so asked, but we must move cautiously and moderately in these things. We cannot do as company roads do, circulate their stock, get $20,000,000 at one time and do the things which are necessary. We must go to work in a more moderate way. The expenditures we have made in these years have been less than we would have liked to have made. The expenditure for sidings and accommodations has been very large and will amount up to this time, to about $2,000,000. Does anybody say

that with heavier trains and heavier locomotives we could get along without increased sidings ? I intend to have a memorandum of the exact number, of miles-there were scores of miles-which have been added to the railway in the way of additional sidings during the last two or three years. I will get the information if it can be obtained for me before we get through the discussion on the Intercolonial Railway votes. But, we have spent $2,000,000 for this purpose. Does anybody say that that expenditure was not necessary ? You had better pull up your rails and tear up your road and tell the people that you do not want a railway down there than run it in the twopenny, halfpenny way in which it was going on. If you are going to have a railway that is creditable to Canada you cannot move one peg without doing the whole work. You cannot have locomotives that will economically carry the freight unless you have heavier rails, longer sidings and larger cars. All these things follow in the train, one upon the other, just as naturally as day follows night, and the necessity is just as complete as it would be in any other condition. Now, then, I say that having increased the size of the car and the length of the train, in order that the road may be worked at all, we had to have, as rapidly as we could get them, increased length of sidings from one end to the other of the road.	,	,
As to the expenditure at the Straits of Canso. nobody seems to have taken any objection to that. The little freight sheds that we had along the line with their limited accommodation ; the little stations and the little offices which did not suffice ; these had to be increased and multiplied, and during the last five years we have had to spend $1,000,000 in that work. Shall it be said that when people along the whole length of the Intercolonial Railway were crying out for reasonable facilities to enable them to do their business ; shall it be said that we should turn a deaf ear to their appeals because some one on the other side of the House is going to cry out : ' What an enormous expense,' and because some one on the opposite side claiming to represent his party, may say : This is a sinkhole for the money of the country. Sir, I do not think we would be worthy of the positions we occupy as responsible ministers of the Crown if we had yielded timidly to any such out-crv as that, and refused to give the people of Canada the accommodation which they demanded on the Intercolonial Railway. My business as the Minister of Railways is to present to my colleagues reasonable demands to meet the needs of the railway. As a matter of fact I have never approached this question in any spirit of extravagance, but on the contrary, I have always been behind the requirements of the road. And when I presented these claims, I must say that they have always been received in a
spirit of fairness and consideration by my colleagues. They were not, perhaps, met to the extent which I would have desired, but still they were met to an extent which I could see was as far as the government could reasonably go at the time and under the circumstances. Sir, I am prepared to justify, to justify in the face of the world, what we have done in order to make the Intercolonial Railway a railroad which is creditable to Canada to-day, and which if. we have not brought up to an absolute state of perfection at the present time, we hope to attain in the future. I would like to get a candid avowal from the gentlemen on the other side of the House who have gone over that road, as to what they think of the improvements we have made and the increased facilities which we have afforded. They certainly have told me individually that they much appreciate the improvements which have taken place. They have commended in no carping spirit the splendid and convenient service which -we have given to the people of the country. Let it be remembered that the Intercolonial Railway is not for the people of the maritime provinces alone ; let it not be forgotten that the commercial people of all Canada, and that the travelling public of all Canada are participants in the comforts and facilities which are afforded on that road. I am satisfied, for my part, that the people of the entire Dominion desired that the intercolonial Railway should be put in proper shape. Let me ask : What was the condition of the Canadian Pacific Railway before we entered on our era of improvement on the Intercolonial Railway ? Are there not gentlemen here who travelled over the Canadian Pacific Railway before we brought the Intercolonial Railway up to its present standard, and do they not know it to be a fact that the better quality of the service, and the greater comfort and the greater convenience which we inaugurated on the Intercolonial Railway stimulated the other road to our example. I think hon. members on both sides of the House will recognize that there is a place which a government railway can properly fill in every country ; it can be an example and a stimulus to other railway companies throughout the country to attain to the same high standard of service. And, Sir, if a government railroad does no other good than that, it does a very great deal for the benefit of the country.
I do not believe that under all the circumstances, the people of Canada will say that we have expended one dollar more on the Intercolonial Railway than we should have expended. I say that my hon. friend from Jacques Cartier (Mr. Monk) for instance, does not represent the people of Montreal or the people of his own district when he speaks in the contemptuous way he does of the Intercolonial Railway. He does not represent the ideas of the people when he treats the Intercolonial Railway as if it were

unworthy of serious consideration. I am quite sure that the people will not approve of what he has said in that regard, for X know that the citizens of Montreal are more than pleased with the results of our bringing the Intercolonial Railway to that city.
Now, Sir, I think I have proven that the expenditure on capital has been necessary and justifiable. But some people have said, as if it deserved serious attention at the hands of parliament :	Oh, but you have
spent sums on capital account which ought to have been paid out of the earnings of the road. In other words, they declare that we have not adopted a system of book-keeping w'hich would commend itself to an expert chartered accountant. Now that may be all very well ; it may be a very nice argument to address lo a meeting of shareholders of any incorporated company, if these shareholders were raising the question as to whether the expenditure for the year was an expenditure that ought to be taken from earnings which would reduce the yearly dividends, or whether it ought to be included in bonds, and charged by way of bonded liability upon the undertaking, so that future shareholders would have to bear the charge, and the present shareholders would get a larger rate of interest. The shareholders in these incorporated companies change from year to year ; one set of men may be shareholders to-day and a different body of men would be shareholders in the next month, or in the next year, and the question raised by gentlemen on the other side in reference to the charging of the expenditure on the Intercolonial Railway would be a profitable one for consideration under such circumstances. But is that the situation with regard to the Intercolonial Railway ? I contend that it is not. The Intercolonial Railway belongs to the people of the country, and as such its owners are not in the same position as would be the shareholders in a joint stock corporation. The government lasts for ever ; though its personnel may change, yet it is always the government of Canada that is administering the Intercolonial Railway, and the people wTio own it are Canadians, whether they be the people who are living to-day or the people who will live years hence. It is the country that is concerned ; and it is not particularly a question of book-keeping for them.
I propose to show, Sir, that even if it were, there is nothing in the argument which lion, gentlemen opposite have advanced upon that point.
My first proposition is this, that if the need of making this expenditure is conceded in order to bring the road up to the condition to which we are bringing it, and in order that it may be still further improved, there is only one way in which it can be done, and that is by borrowing, or, in other words, on capital account-why ? Because the earnings of the road do not afford a sufficient margin. Even if they produced each year the largest surplus we ever had,


Andrew George Blair: that would only be a mere drop in the bucket for the purpose of reconstituting and reconstructing a great railway. How long would it be before we would put down new rails (.u the whole road if we had to take the cost of them out of earnings ? How long before we could put: down new sidings or provide new equipment if we had to wait until we could do so out of earnings ? It happens that this read has never been, and perhaps it never may be, a great surpluspaying road. Conditions exist which may for some years to come control the financial results of the undertaking. It would be unfair to hold the Intercolonial to the same strict rule to which you would hold railways which are built for commercial reasons, and in view of commercial considerations exclusively. I woader to what extent commercial considerations entered into the question of the location of the Intercolonial Railway. If we had been building a road to yield a handsome net return to the government every year from its earnings, who would undertake to build a road by the roundabout route which the Intercolonial Railway has taken V I do not suggest that it should not have taken that route. In the conditions of the country at the time, I think it was important that it should have done so, because the people in that portion of the country would otherwise not have had railway accommodation at all. But do not let it be asserted that because those conditions controlled the location of the route, for that reason the Intercolonial Railway ought to be despised and neglected, and left in the condition of a second or third-class road because, located where it is, it did not promise any large financial results and does not give any such results. I claim, therefore, that the position, so far as the question of improving the road out of capital or out of earnings is concerned, is exactly the same as respects its control by the country, and there is not one dollar of difference either to any individual in Canada or to the Finance Minister of Canada, in the result at the end of the year, whether you improve it out of earnings clout of capital. Would it not be fallacious and absurd for me to come down to parliament and ask for an appropriation of two or three or four millions out of earnings for the purpose of improving the road ? If I did so, who would be the first person in the House to condemn such a proposition ? My hon. friends opposite; and what would they say ? They would charge me with beinig guilty of a shallow pretense ; they would charge me with perpetrating a fraud on the parliament of Canada in asking for two or three or four millions out of the earnings of the road when it never had more than $122,000 of net surplus iu any year in its whole history. They would say, why do you not honestly and frankly tell the House and the country that you have not the earnings and do not expect

them, and that you intend to add to the debt of the country by taking this money out of the treasury, out of which it must necessarily come ? That is the attitude these gentlemen would take if the government laid estimates on the Table for an expenditure in that way. So that you can see at once that if the road is to be improved, and improved promptly, and improved by the expenditure of a large amount of money, then of necessity we must borrow the money in order to do it; and when I say that we must borrow the money, I make the statement upon the assumption that there would not necessarily be in the treasury of the country a sufficient amount, after all the other charges for the government service have been disposed of, to meet this charge. If there should be such a surplus then there would be no addition to the debt, and you would be in exactly the same position as if you had voted the money on account of earnings, and had spent it out of such appropriation. I do not think it is humanly possible for any individual to construct any theory or to advance any argument to show, granting my basic proposition, that the expenditure must be made, that one farthing of difference has been made in the financial condition of the country, or that the people have lost one dollar by reason of the particular way in which it has been made, that is to say, by asking an appropriation on capital account.
I hope that my argument upon that point has been made clear. If it has, then there is no substantial ground for criticism as to the expenditure-I do not say as to some of the minute details. I am not going to affirm for a moment that in a large expenditure of millions there may not have been some items in which the expenditure has been larger than it would have been if a closer scrutiny had been kept. I make that statement so as not to appear to make too broad a claim. But in the main, considering these exceptions, I say that assuming that the expenditure was a proper expenditure, it could only be made in this way; and, so far as I can discover, there is no earthly difference between making it in this way and making it in any other way that can be suggested-except this :	The
ex-Minister of finance admitted what I am now stating. In the course of the discussions which have taken place on this question, he admitted that, as a matter of finance affecting the people of the country, or the treasury it did not make any difference ; but he said the difference comes in when we as a parliament are seeking to compare the character of your administration with the character of your predecessors'. The difference comes in, he said, when you want to put the two administrations side by side; you have expended sums of money out of capital which you might have spent instead out of any little surpluses you may have had, and have 108
therefore been able to show some little better results than you would have been able to do if you had followed the course pursued by your predecessors. Therefore, he said, for the purposes of comparison, the system of making the expenditure on capital account is not as defensible as the other system.
There is enough in that argument to justify one in taking a few moments of the time of the committee in order to examine it. You will observe that the proposition is based on two or three assumptions. You have to assume two or three things before you get the length of admitting that the argument is one of force or one that has any. application in the present case. You have to assume two or three very clear and explicit propositions, and I will tell you what they are. To be of any value for purposes of comparison, the first thing is that the conditions under which the comparison is to be made should be, if not absolutely identical, at all events approximately so. Is not that a fair argument to address to the committee ? Is it not fair to say that if you are going to make a comparison at all between this government and the last, then, for the purpose of supporting the statement that your expenditure has not been made under the proper heading, we have to show that the conditions of the expenditure during the period of the exMinister of Railways and the conditions during my period have been similar. Now, if you admit that, it will lead us into a moment's digression in order to see whether or not you can get the conditions alike by auy possible mode of straining or torturing of facts. I say you cannot. My hon. friend was pegging away on the Intercolonial Railway just sufficiently to keep it up so that it could run. No doubt the roadbed was good. There is no better roadbed in the country-solid and all that-very good as far it went. It was good for a locomotive of the size of 30 or 40 tons and to haul ISO or 200 tons, and to haul eight or nine cars at the outside. And if that was all right, my hon. friend was going along well enough. He was considerably out when we come to consider the question of economy, but economy was not sought for by my hon. friend. He took no practical method to secure economy. He was just peddling along in the same old way, and my hon. friend would have been content no doubt to have gone peddling along in the old way for fifty years if his government had only remained in office that long. But the country woke up, the country was aroused, and when I say the country, I mean the whole country. My hon. friend does not think probably that the maritime provinces, or even that portion of the province of Quebec which is traversed by the Intercolonial Railway is the country. But, supposing he is right in that view, I say that Ontario, which sends the largest part



of its traffic on the Intercolonial Railway clown to the maritime provinces-and everybody knows that Ontario furnishes us down there with almost all that we buy in the way of goods not manufactured in that country -is as deeply interested in the efficiency of the Intercolonial Railway as are the maritime provinces. There can be no doubt about that. And if my hon. friend were in my office and in receipt of the letters from the different manufacturers of Ontario which I daily receive, if he could read and hear their denunciations because we have not cars enough, or because we could not move freight and trains fast enough, and if my hon. friend from Jacques Cartier (Mr. Monk) could see these complaints, they would begin to think that there are other parts of Canada interested in the Intercolonial Railway outside of the maritime provinces and that portion of the province of Quebec which it traverses. Therefore, when I say the country, I mean the country as a whole, because the country as a whole is deeply interested. The conditions which existed when the country woke up and called for improvement on the Intercolonial Railway, were totally different from those which obtained during the years preceding. My hon. friend and his associates and colleagues, who have been attending the Public Accounts Committee, and spending no doubt sleepless nights in trying to figure out how many dollars were spent and how many tons of rails were laid down by the late government out of earnings, may take all the benefit they like out of the comparison. They will find that in no one year, during which my hon. friend (Mr. Haggart) administered the Intercolonial Railway, was there more than 3,000 to
5.000	tons of rails, laid down, whereas we have laid down 25,000 to 30,000 tons per year, and ought to lay down 50,000 tons per year, while the present generation or perhaps the children of the present generations are living, if we are ever to get the road properly equipped. I do not think there was any year in which my hon. friend put down as much as 5,000 tons of rails. In some years he put down 1,800 and in some 3,000 and in some 3,500. And there is no sense in making a comparison between an expenditure involving the laying down of 3,000 or 5,000 tons per year out of earnings and that involving the laying down of
25.000	to 30,000 tons per year. Are the conditions alike ? Can you put the one expenditure beside the other and draw any just or fair inference or make any just or fair comparison as between the two, in favour of my hou. friend's proposition ? I do not think you can.
But steel rails are not the only items. Take all the items right through. Take the item of new locomotives. We had to bestir ourselves, we had to be alive and try and accomplish something in our day. We had to buy 25 to 30 locomotives a year. We I Hon. Mr. BLAIR.
have not got them all yet, but are hoping to get them so that we will have them available for service during the year to come.


Frederick Debartzch Monk: By tender.


The MINISTER OF RAILWAYS AND CANALS.: Yes, by tender. I am just going to break away for a moment to make an observation for the benefit of my hon. friend.


The PRIME MINISTER.: It will be lost on him.


The MINISTER OF RAILWAYS AND CANALS.: I hope not. I know how deeply he felt, how full of regret he was, when he came to be informed that this government had, three or four years ago, gone over to the United States and got locomotives built there for the Intercolonial Railway. The picture which he presented when the enormity of such conduct came to his mind, was one which elicited from me a feeling of profound sympathy. I do not think that if he were the bitterest opponent of mine, I should wish to have him suffer the grief which then appeared to weigh him down, but it did strike me with some surprise that he should have been so grief-stricken for the first time. It did appear father singular that he had not given some evidence of his extreme regret that such a policy should have been tolerated by the country, when the government which he himself supported did exactly the same thing, and did it under conditions which did not make it necessary, as they did in our ease, for his friends to take that course. We have a report from the committee upon railway matters to which I can refer. I recollect my hon. friend complaining about the treatment that men who went before that committee received at its hands. He himself did not favour the committee with his presence, so far as I am aware, and how he came to be so impressed with the impropriety of the conduct of the majority of that committee, I do not know. He is very much concerned about all these matters, he is very anxious that information should be secured, yet my hon. friend was never present at any meeting of that committee which I have attended, and I have been present at all its meetings.


Frederick Debartzch Monk: You would not let us find out anything there.


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend was not there to try and find out anything. But he fires off his shots at long range. When he has any to fire he fires them through somebody else. I want to tell my hon. friend what took place in that Railway Committee, and if he had been present I have no doubt that he would have had to be carried out on a stretcher. It appears that there was a circular issued by one of the officials of the Intercolonial Railway stating that the

mechanical superintendent of the road had condemned the locomotives which were in use upon the government railway. My hon. friend who was conducting the examination (Mr. Haggart) called a witness all the way from Moncton for the purpose of giving an account of himself and verifying the report in that circular. Of course the inference was that in condemning the locomotives, the mechanical superintendent had condemned those which had been recently purchased by my department in the United States. That is the idea these gentlemen no doubt had in their minds, and which they thought, by bringing the mechanical superintendent of the railway to testify they would be able to establish to the satisfaction of the committee. He came, and my hon. friend questioned him. And what facts did he elicit ? He elicited the fact that this circular was erroneous in that it quoted him as making a statement that he had not made. He had never condemned the locomotives, but had said that they required to be adjusted in some minor particulars in order that they might steam to the best advantage, and he attributed the delay in trains to the fact that they had not been sent to the shops as they ought to have been. He was asked by my hon. friend what locomotives he referred to, and gave the numbers. I think they were 24, 28, 66 and 68. My hon. friend asked where did 24 and 28 come from, and the answer was that they came from the Kingston works. And when were they got. In 1894. So, you see, so far as two of these locomotives were concerned, these hon. gentlemen were not able to show, as they had expected, that they were locomotives which had been improperly bought and which were inefficient in working and unfit for the service. Where did the others come from ? They came from the Cooke Locomotive Works in the United States. And when were they bought ? They were bought in 1893.


Frederick Debartzch Monk: Will my hon. friend allow me to ask him a question ?


The MINISTER OF RAILWAYS AND CANALS.: Yes.


Frederick Debartzch Monk: Was that not when we had no shops to build them ?


The MINISTER OF RAILWAYS AND CANALS.: We will come to that in a moment, but, for the present-


John Graham Haggart: Oh, oh.


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend had better not shout until he is out of the woods-


John Graham Haggart: The hon. minister has misstated the facts about there being so many locomotives. It he will refresh his memory he will know that there was only one. and that was at a time yhen there were no locomotives built in Canada.
10S4


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend stated that afterwards. The fact was that my hon. friend got the locomotive or locomotives-the numbers of which were given as appears in the evidence of the committee-in the United States. Now,+iny hon. friend can say that it was sufficient justification for him getting locomotives in the United States that he could not get them in Canada. But is he willing to acknowledge that that is a sufficient excuse for me. Has he ever been willing to acknowledge it ? I have not heard a whisper from hon. gentlemen on the other side suggesting any acknowledgment of the fact that if we could not get the locomotives from Kingston we had an excuse for going outside to get them. As ex-Minister of Railways, I supose the hon. gentleman hopes that when a change of government may come, if it ever does come during his lifetime, he may by my successor. So I suppose he is foreshadowing his future action when he says that there Is justification for a minister to get locomotives in another country if he cannot buy them in his own.


John Graham Haggart: Hear, hear.


The MINISTER OF RAILWAYS AND CANALS.: Then I stand on that. But what becomes of the statement of the hon. gentleman alongside of him ? Of what value are his strictures ? What justification for the contemptuous reference he made to my administration within a recent period when the hon. gentleman (Mr. Haggart) has informed us that two years before he went out of office he went to the United States and bought locomotives there. Will not this same fact justify the purchasing of locomotives outside by this government, and has there not been abundant evidence of that ? Were not the works actually shut up ? And had they not orders on hand from me when we begged and entreated them to fill and to try to keep their staff together for that purpose ? When they closed the establishment, they left those orders unexecuted, and we were obliged to go to the United States or suspend altogether the increase of the equipment of the road. So, I have brought myself within the exception announced by my predecessor in his place in this House. That being the case, let us ask these hon. gentlemen for ever after this to hold their peace.


Frederick Debartzch Monk: Will the hon. gentleman allow me to ask him a question ?


The MINISTER OF RAILWAYS AND CANALS.: A dozen.


Frederick Debartzch Monk: Is it not a fact that, since the government gave orders to the Kingston Locomotive Works without tenders those works have been reopened ?


The MINISTER OF RAILWAYS AND CANALS.: Why, the last locomotives got by the late government were got without

tender from the Kingston Locomotive Works. But what I am saying is that these lion, gentlemen should hereafter hold their peace as to the whereabouts of purchase of these locomotives. And let their press understand that all this ado that they have been making from one end of Canada to the other about the enormity of the conduct of this government is wholly without reason, because that conduct has been justified and approved by the leading members of their own party. My hon. friend (Mr. Monk) asked me a question a moment ago. I did not choose to stop at the moment to answer it but said that I would refer to it later. I will do so now. He said that the locomotive works of Kingston were closed down and the late gvernment could not get locomotives in Canada later than 1893. His excuse is a futile one. The hon. gentleman's memory is at fault. I have in my possession at the present moment, and I will bring here before this debate is concluded, correspondence between the hon. gentleman (Mr. Hag-gart) himself and the Kingston Locomotive Works in 1893 in which they begged and entreated him to take locomotives from them and the government declined to do so.


John Graham Haggart: The evidence the hon. gentleman has is that taken before the committee, which is that of a witness who stated that a certain locomotive, bought in 1891 or 1893, I have forgotten which, was from the United States. I asked him whether the locomotive works of Kingston were open at the time and he said he thought not. My hon. friend (Mr. Blair) can refer to the sworn evidence.


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend (Mr. Hag-gart) is entirely in error. This shows how utterly unreliable his recollection is even in a matter which transpired a few days ago. He was told by Mr. Muhlfield that he did not know anything about it, and, if the evidence has been recorded, a reference to the minutes of the committee will show that that is the case. Now, I will go further and say that when the hon. gentleman tells us that the locomotive works were not in operation at the time and gives that as an excuse for what he did, he is stating what he could not know. Because, it is contrary to the fact. In 1893, the Kingston works were in full operation and turning out locomotives. And in 1892 and also in 1894 they were in full operation and only too anxious to sell locomotives to the government.


Andrew B. Ingram: Does the hon. gentleman approve of sending out the circular to the superintendents


Some hon. MEMBERS: Oh, oh.


Andrew B. Ingram: Do hon. gentlemen opposite object to the House gaining information ? Does the hon. minister approve of that circular stating that the Kingston en-


Hom. Mr.   BLUE@: giues were not good engines, that they were faulty and that their construction was wrong ?


The MINISTER OF RAILWAYS AND CANALS.: Does my hon, friend (Mr. Ingram) want to know my private opinion as to a subject that is not at all material to this discussion ? How can that possibly affect the question whether the locomotives were properly bought in the United States or not ?


Andrew B. Ingram: I want to point out to the hon. gentleman that Mr. Russell, whom he imported from the United States did not know what he was writing about. And I can prove it, too.


The MINISTER OF RAILWAYS AND CANALS.: When the hon. gentleman asserts that I imported Mr. Russell from the United States he asserts that for which he has no warrant. Mr. Russell as a Canadian, born down in the county of Charlotte, in the province of New Brunswick, and has many relatives and friends there. Mr. Russell commenced to learn railroading on the Intercolonial Railway, and remained in the service until he was grown up, went off to the United States, and rose degree by degree until he got into a high position on railroads in that country. We were only too glad, from all the representations that were made to us with regard to him, from the statements that we received from the men in whose employ he has been, to ask him to return to his own country and give us the benefit of the experience and ability he had acquired. Why does my hon. friend interpolate the remark about importing him from the United States ?


Andrew B. Ingram: Because he did not know the difference between construction and adjustment.


The MINISTER OF RAILWAYS AND CANALS.: Is it necessary for the hon. gentleman, when asking a question, to pat a sting into it, as he did when he referred to Mr. Russell as an importation from the United States ?


Andrew B. Ingram: I am a Canadian in the first place, and when any man imported iuto this country runs down the manufactures of Canada, I am opposed to him.


The MINISTER OF RAILWAYS AND CANALS.: If the hon. gentleman wants to be set right, I can tell him that there was nothing in the statement he made which could be construed as, running down the products of Canada as such.


Andrew B. Ingram: I simply said, and I say it again, that Mr. Russell wrote to the different superintendents calling their attention to the unsatisfactory way these engines were performing their duty, and the reason he gave was the construction of the. engines. Now, the hon. gentleman's own officer imported here from Moncton the other

day, proved it was not the construction tu.it -was a fault, but that they required readjustment.


The MINISTER OF RAILWAYS AND CANALS.: Well, if the hon. gentleman is anxious that his certificate should be given as respects the character, quality and workmanship of the engines we are getting iu Canada, I will be only too glad, and l am sure the officers of the road will be only too glad, to give the highest certificate of their qualities. I have never hesitated to say in this parliament that the locomotives we got from Kingston always gave us great satisfaction, and in saying that, I am expressing the opinion of the officials of the road who are competent to pass an opinion upon that subject. And I have said chat we were only too sorry we could not get them all here.
Now I say that for the purpose of comparison it would be utterly absurd to complain of our charging expenditures of this character against capital, when they charged the expenditure of trivial amounts against capital, and where we are absolutely reconstructing the line in many important particulars; so that the force of the argument they resort to does not weigh in the present instance. It is in fact only a mere technical controversy ; the hon. gentlemen are chasing a shadow. The substantial fact is that the country has not suffered in the slightest, to the extent of u farthing, by reason of the way in which these expenditures have been charged. Has the country suffered under this administration as compared with their administration? I say no. To charge us up, as compared with their administration, with the millions we have spent in improving, renovating and recreating the road, would be an outrage upon all fairness, all reason, and all justice; therefore I entirely repudiate the force of the argument, and claim that there is nothing in it, and the country I think will be of that opinion also. Now there is a way in which a comparison can be made between this administration of the railway and their own, in which every element of justice and fair-play will be found, and by which they may obtain every advantage that possibly belongs to them. There are certain classes of expenditure which may properly come out of earnings year by year in order to keep up the standard of the road. Those are classified under a few heads and are very accessible. You can easily get at them, and you can easily see what is the gross amount of those expenditures. Now, take up the expenditures which are made for maintenance of way and works under the late government, and we find they expended in the gross, we will say, a million dollars. Now if I take the expenditures under this administration and show that under the same heads, for the same general purposes, we have expended less than they; or if they can show that they
have expended more than we, making allowance and charging up against us what would be a fair proportion for additional mileage, then they have got an argument. But if they cannot do that, they have not got an argument. They cannot show where we have expended less for those purposes, comparatively, than they expended, making allowance for the increased mileage ; then they cannot say that the comparison tells in their favour and does not tell in ours, or they cannot argue that we have taken out of capital money which we ought to have expended upon maintenance, in order to keep up the comparison and to make our position good as compared with theirs. I think I have made my proposition clear, and if so, then I will endeavour to elucidate it by the actual facts.
After all there are these different heads : Ways and works, which include all that is laid' upon the track, all that is laid out for improvements upon the stations, and all that is laid out for sidings, repairs to locomotives, and renewals of locomotives, repairs to cars and renewals of cars. These are the three heads under which the various amounts are found which have been laid out upon the road, and the fair comparison can be made from them. We can take these three items, these three general classes of expenditure by the late government, we go into them, we ascertain that they spent so much each year in respect to ways and works, so much in respect to repairs and renewals of locomotives, so much in respect to repairs and renewals of cars, we add these up and get year by year what they have laid out on the road. I do the same with the years of our administration. For the purposes of this comparison I have taken the last year of the late government. It is a fair year. They expended as much that year and rather more than in any previous year. It is a fair year for comparison, as I think my hon. friend will allow. I will take, of our administration, the years 1900 and 1901. I will compare their-last year with two years of our administration. The expenditure upon ways and works in 1896 was $774,556-the last year of the administration of the late government. The expenditure for the same purpose during the year 1900 was $962,978. For repairs to locomotives and renewals of locomotives in 1896 the expenditure was $230,000 in round numbers, and in 1900 it was $317,000. In 1896, for repairs to cars and renewals, the expenditure was $290,000, and in 1900 it was $472,500. Now, the total expenditure, therefore, of the late government for these three classes of work was $1,294,372. But we had more mileage than they. We had 15 per c.ent more mileage, we therefore had the earnings of 15 per cent more railway, and we are entitled to add 15 per cent to their outlay to put them on the same footing with us in 1900. If you will add 15 per cent to $1,294,372, you will find that it

amounts to $1,488,000. The gross expenditure by this department on the Intercolonial Railway in 1900, for these three purposes was $1,752,000. or $264,000 more when you add the additional mileage and percentage than was expended by the late government. Now, that $264,000 more was paid for the keeping up, repairing and improving of the road in its various departments out of earnings in 1900, and in the name of common sense is it possible for any hon. gentleman to construct the argument, or to support it, that we have taken money out of capital to do what they did in order to make a comparison with them ? Is it not an unmeasured fallacy ? Will it hold ground for a moment ? These are the facts and hon. gentlemen have the records and they can go through them. I do not deny that my hon. friend from Hamilton (Mr. Barker) can, as he no doubt will, pick out a few of the items which go to constitute these three classes of work, and make a long speech, and to those who are interested in minute details connected with railway expenditures, he can make an interesting speech. He can say, that, whereas the late government in some year, in any year that he chooses to select, spent $75,000 on one item, we have only spent $25,000. He' can do that in a hundred instances, or twenty or thirty instances, perhaps, and what is the value of it after it is done ?-Because to make a fair comparison, you must take the totals. The totals show that in the year 1900 the expenditure for all these purposes put together, taking the larger with the smaller and the smaller with the larger, by this government was $264,000 more than the expenditure in 1896, and that just so much more money was taken out of the earnings for the betterment, improvement and maintenance of the railway.
Now, I will ask to be allowed to make another comparison. I will give, for the benefit of my hon. friend, the result of the operation of the road in 1901, in which year we had a deficit of $488,000, and I will show what was spent for maintenance, ways and works, repairs to locomotives, renewals of locomotives, repairs to cars and renewals of cars. The late government spent in 1896, as I have already stated, for these purposes, $1,488,000, while we expended in 1901, under the same heads, $2,051,182, or $562,000 more, after adding 15 per cent for the additional mileage. More than half a million of money in excess was laid out on that road in these various departments, under these different heads, for the purposes which I have named, that is to say for betterment and improvement out of earnings. If we had not spent any more on the Intercolonial Railway for maintenance out of earnings than these hon. gentlemen did, making allowance for the additional mileage, we would have had a surplus of $80,000 instead of a deficit of $488,000. My hon. friend (Mr. Haggart) laughs. I do not know what the Horn Mr. BL UR.
laugh is indicative of. I would like to be able to interpret that laugh but he renders me no assistance. Does he laugh because he thinks the comparison of that kind is of no value ? Well then, if it is of no value, figures and accounts and statements are of no value. If the hon. gentleman thinks that figures are of no value then let him live up to his statement, because, if he does, he will have to hold his peace instead of offering any criticism upon the administration of the Intercolonial Railway. My hon. friend from Hamilton (Mr. Barker) would not like to subscribe to that, because, when he comes to make his speech, he will simply overwhelm us with statements of figures and calculations which will go to show, as he would say, that the comparisons were favourable to the late government and unfavourable to this government, but here are the figures which can be found in the public accounts and in the ' Hansard,' and they can all be criticised. Here are the figures as they are furnished by the department in the ordinary way, and they prove this, that if comparisons are of any value at all, if there is anything in the argument which hon. gentlemen make that we have taken money out of capital and spent it, which we ought to have taken out of earnings as they did, then that fact would appear on the record and would be evidenced by the results for that financial year. But, these things disprove any such inference, and absolutely nullify any such argument.
In connection with the question of capital expenditure, I must crave the indulgence of the committee, if I refer to another matter which I quite overlooked in the course of my digression for the benefit of my hon. friends opposite. I want to make this statement, and it is a somewhat important statement. The hon. gentlemen opposite who have been criticising the method we have pursued in charging expenditures to capital, wish us to understand that they never did such a thing when they were in 'office, and that therefore they are on strong ground when they now condemn this system. They would wish it to be inferred that their condemnation of the system was the result of their ripe experience in carrying out an entirely different system when they managed the affairs of the Intercolonial Railway. Well, Sir, even that ground, weak as it would be in view of the other arguments I have presented, is not available to my friends opposite. They cannot stand even on that narrow platform, because I will be able to show that they were equal sinners in that respect with us, if sinners we be. I will show that these very gentlemen, time after time, came to parliament and asked parliament to give them money on capital account for exactly the same purposes as we have spent money on capital account, and which they now condemn. Of course the expenditure was not exactly upon the same scale; I do not
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say that they were called upon to spend as large sums as we have been obliged to expend, but surely when a question of principle is under consideration, the question of the amount does not seriously affect the argument. If they asked for $100,000 on capital account, and if for similar purposes I ask $1,000,000, their position is not one whit stronger so far as the principle is concerned. They claim that in reference to this expenditure on capital, they are contending for a principle upon which they have lived, upon which they died, and to which they say we should adhere. Let us look at the records which are at our disposal. These records will afford some en-lightment to the House. I go back to the year 1891, and I find the Minister of Railways in the Conservative government asking parliament for capital expenditure for the construction of a ' Y ' at Truro, $1,500. Surely nobody will say that a ' Y ' at Truro was the introduction of something that was entirely so exceptional as to call for its payment out of capital account, if there is any reason at all in the argument now advanced by these gentlemen. Surely if they were justified in charging $1,500 for a ' Y ' to capital account, the cost of laying rails and of material for the equipment of a whole yard could be properly charged to capital account. Here are the expenditures for 1890-1 on capital account:
Intercolonial Railway.-Statement o£ capital expenditure.
1890-91.
Construction of a 'Y' at Truro	$ 1,500 00
Increased accommodation,	Moncton..	10,608	73Increased accommodation,	St.	John..	4,355	17Dartmouth branch	
413	94Indiantown branch	
402	63St. Charles branch	
12,033	49Rolling stock	
50,083	44Construction	
531	94Total	$ 79,929 34
It will be noticed that there were even some
very small sums charged to capital account. I do not say that these gentlemen opposite were not justified upon the ground which I justify myself in asking for every one of these expenditures on capital. I am not condemning their expenditures. I never have, but I think it is rather more than human patience should be asked to stand to hear these gentlemen opposite venting their indignation and condemning in unmeasured terms my action when they themselves were the originators, and the adopters of exactly the same policy. If I were of opinion that they did wrong, I could not justify myself, but as I am strongly of the opinion that what they did in that respect was right, I think I may refer with some little confidence to their own record as in some degree tending to mitigate the wrath which they now pour out on my conduct, for doing the same thing as they did. In 1891-2, the Conservative government charged the following sums to capital account:
1891-92.
Foot bridge over railway at Truro..$ 5,983 70
Stairs at Halifax station	 691 00
Halifax Cotton Factory siding	 3,184 09
Increased accommodation at Moncton. 710 00 Increased accommodation at New-
Glasgow	
11,107	91Increased accommodation at St.	John	1,086	65Extension along front, city St.	John..	176	15
Additional property accommodation,
St. John	
79,960	42Dartmouth branch	
796	46indiantown branch	
642	75St. Charles branch	
45,171	27Rolling stock	
22,026	25Train Ferry, Strait of Canso.... 10,297	GoOxford and New Glasgow Railway	.	4S.745	23Cape Breton Railway	
89,639	31Total	$320,218 84
These are the items of 1891-2 on capital account expended by tbe Conservative government, and you would hardly credit it. To sit here patiently listening to the violent condemnation of these gentlemen upon me, you would hardly credit that they spent such sums on capital account. And mark you, that condemnation does not come from the men who simply sat by and zealously supported them in doing this, but it comes from the very men who>
did it themselves. It would almost try the patience of Job if he had to sit here and listen to such absurdities from these gentlemen opposite. Surely we are endowed with no ordinary quality of patience when we can sit here listening to the denunciations of these gentlemen. Surely we may congratulate ourselves on the patience exhibited by some of us, and by myself particularly. In 1892-3 these gentlemen spent the following sums on capital account:
1892-93.
Increased accommodation at Halifax. $ 56,934 62
Additional sidings at	Halifax	 4,500	00
Increased accommodation at New
Glasgow	
5,999	47Increased accommodation	at	Moncton 8,590	00Increased accommodation	at	St. John 9,512	58
Additional property accommodation
at St. John	 120,526	49
Extension along the front, City St.
John	 2,816	b3
To pay interest and costs, Gallivan
vs. the Queen	
476	30Stations and sidings at Eureka Junction	
9,000	00
Siding at Campbellton to Mowatt's
wharf	
i,914	00Rolling stock	
16,813	06Construction	
125	65St. Charles branch	
1,061	59Total	$238,260 39
That amounted to $238,000. Of course it
does not amount to $2,000,000, but I suppose these gentlemen opposite will not claim that there can be a line drawn between capital expenditure which may be justified, and capital expenditure which may not be justified, and that they are the persons who shall determine where that line shall be drawn.
[Stage Direction]
Surely these gentlemen are not impressed with the idea that what they did must have set the standard of propriety, and that they have figured out that the very expenditure on capital account which they made should be the guide for all future governments as to the limit of the expenditure on capital which future governments should make. In 1893-4 they spent the following sums on capital account:
1893-94.
Increased accommodation at Halifax. $	855 41
Increased accommodation at Moncton
-machinery	  2,700	00
Extension along the front, City St.
John	 30,821	01
Construction		1,678 19
Rolling stock	
11,251	13St. Charles branch	
33,349	19Purchase of two heavy	locomotives.	22,244	47
Train ferry between Mulgrave and
Point Tupper	
63,463	03Oxford and New Glasgow	Railway..	112,332	75Cape Breton Railway	
158,770	61Total	$437,515 79
In 1894-5 they spent the following sums on
capital account:
1894-95.
Increased accommodation at Halifax. $122,708 28 Increased accommodation at Moncton 7,494 17 Increased accommodation at Ferrona
Junction	T	
1,981 57Construction	
1,920	18St. Charles branch	
890	65Indiantown branch	
1,291	07Dartmouth branch	
118,153	94Rolling stock	
9,984	24Oxford and New Glasgow and Cape Breton Railways	
62,610	41Total	$327,034	51
Now we come to 1895-6, the following sums were expended on capital account:
Increased accommodation at Halifax $124,910 00 Increased .accommodation at Moncton 1,000 00 Increased accommodation at Sydney. 11,374 41
Construction	
1,948	35St. Charles branch	
1,271	96Indiantown branch	
1,436	10Dartmouth branch	
107,402	17Rolling stock	
10,000	00
Oxford and New Glasgow Railway.. 80 40
Total	 $259,423 42
I am assuming that my hon. friend will admit that this was his year; but probably I am assuming too much. Perhaps be will not admit it. In case he will not admit it, I want to read to you a document which my hon. friend presented to me-not personally. He did not hand it over to me, but I received it as a bequest from my hon. friend when I was deputed to occupy the place which he so efficiently and worthily filled. I have a document here which hears my hon. friend's sign manual and endorsa-tion. He said, ' Here it is written on the record which I present to you as the incoming Minister of Railways.' Well, I inno-Hon. Mr. BLAIR.
cently took it up and adopted it, and I did not expect, I frankly acknowledge to you, in doing that, that among the first persons whom I would find sitting in unhesitating and unqualified condemnation upon mv conduct would be my hon. friend who left this as a legacy to me after his departure. You can judge how grave and serious was my hon. friend's conduct when I read to you the items which I propose to read now-the items of my hon. friend's last will and testament; the very estimates which the government of which he was a member prepared. to which they laid on the Table of parliament, which they struggled for many weary months to get the assent of parliament. and failed. If these estimates did not become the law of the land, it was through no fault of theirs. If they had become the law of the land, the expenditure would have gone on, and where would be the critics who are now condemning the expenditures ? If all that they have said in reference to our mode of making these expenditures is well founded, what must he the punishment of those who would initiate such outrageous expenditures as these ? My hon. friend first proposed to purchase rolling stock on capital account.
Mr. ROSS (Ontario).: What is the date of that ?


The MINISTER OF RAILWAYS AND CANALS.: The fiscal year ending the 30th of June, 1897.


John Graham Haggart: Did the hon. gentleman say that it was presented to parliament ?


The MINISTER OF RAILWAYS AND CANALS.: I do. Does my hon. friend say it was not 1


John Graham Haggart: I do not know.


The MINISTER OF RAILWAYS AND CANALS.: Then, what my hon. friend does not know, would, I think, form a very large volume, indeed. My hon. friend does not know that the government of which he was the Minister of Railways, presented estimates to parliament early in the session of 1896, struggled to get them through, and ultimately failed; and my hon. friend, who undertakes to criticise the different items of our railway expenditure, does not know that in that year he put before liis colleagues, got their consent to, and brought down to parliament with their entire approval, the items of expenditure on capital account which I am now about to read to you; and the first item is for rolling stock. Gould anybody imagine such a thing as that ? This incident is fresh, mind you. It is not as if some years before he left the government he had got new light and changed the error of his ways; it was not as if my hon. friend had struggled with this question in all its length and breadth, and had come to see how monstrous was

the course he had been pursuing, and at the last moment had got conversion aud had been put in the right way. But in the very act of dissolution, in his last extremity, my hon. friend's last kick was to perpetuate a system which he is now condemning. No wonder my hon. friend would like to take refuge in ignorance, because, while it is not a justification, it is the only excuse my hon. friend can offer. I am not able to yield even to the force of that as an excuse, because I cannot credit the possibility that these items could have been submitted to council, could have passed council, could have been laid on the Table, and yet my hon. friend, as the head of the department, which fathered them, could not have known of their existence. T cannot reconcile these things at all, and I do not think he can when he comes to give them a moment's reflection.


John Graham Haggart: I have not heard any of them yet.


The MINISTER OF RAILWAYS AND CANALS.: The hon. gentleman will hear them soon enough. The first is $15,000 for rolling stock. Does that not strike everybody as amazing from the hon. gentleman who said when we got the Drummond County' Railway, that rolling stock could only be charged to earnings and must not be paid out of capital account-


John Graham Haggart: Hear, hear.


The MINISTER OF RAILWAYS AND CANALS.: Hear, hear, says my hon. friend. Does my hon. friend say that this $15,000 was for rolling stock that was got by reason of an extension of the Intercolonial Railway during the preceding year ?


John Graham Haggart: Yes, perhaps.


The MINISTER OF RAILWAYS AND CANALS.: Will my hon. friend enlighten me as to when and where the extension took place for which this rolling stock was asked ?


John Graham Haggart: For the Cape Breton extension.


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend makes a positive statement, and I will hold him to it. I ask him to tell me now where and when the extension took place ?


John Graham Haggart: The Cape Breton extension the year before.


The MINISTER OF RAILWAYS AND CANALS.: Does my hon. friend say that there was an extension of the Intercolonial Railway in Cape Breton in 1896 ?


John Graham Haggart: There was shortly before that.


The MINISTER OF RAILWAYS AND CANALS.: How shortly before that, does my hon. friend say ?


John Graham Haggart: Go ahead. Do not be sparring for wind.


The MINISTER OF RAILWAYS AND CANALS.: My hon. friend declines to answer. I am afraid my hon. friend has got himself into a snarl. My hon. friend may have forgotten for what purpose the particular rolling stock was bought, but he cannot forget, what was the fact, that it was not got for any extension of the Intercolonial Railway. It was got because they wanted that much rolling stock, and the only way they could get it was out of capital, because they could not hope to supply it out of earnings-exactly the same reason that has necessitated the same thing in the present case. Then my hon. friend proposed to expend $30,500 for increased accommodation at Moncton. Mind you, this is all right; I do not complain of any of these items, because there was no other way of doing the work. Then, he proposed to build a coal shed and trestle at Mulgrave at a cost of $500, and he gets the amount out of capital. Look at my hon. friend and say whether you think it possible that a gentleman who has taken the high ground that he has, who has stood so stoutly against this pernicious system which I have pursued, would come to parliament and ask for an appropriation of $500 out of capital account to build a coal shed and trestle at Mulgrave ? No; it must be a different gentleman. Some strange metamorphosis has taken place in my hon. friend since 1896. Then, here are some other items :
Extension to deep water at North
Sydney	 $ 20,000
Increased accommodation at	Halifax..	105,000
Increased accommodation, Dartmouth
branch	   20,000
Provide wells at stations	 500
Increased accommodation at	Pictou...	5,000
Extension of freight shed at Truro.. ..	1,000
Increased accommodation at St. Fla-vien	   1,500
To furnish water supply at Grand Narrows	$1,500	00
To provide station1 and siding at No
Man's Brook	
2,000	00Purchasing sluice at	Etchemin	
1,500	00Improvements at	Little	Mens	
1,200	00Improvements at Sussex, Trenton and Orangeville	
850	00
I have read you the items of my hon. friend's own proposal. They do not total a million, but they do amount to $211,000, a substantial sum, sufficient at all events to afford very cogent evidence as to what he thought it would have been proper to ask parliament to do and for the government to do. This country cannot afford to listen to the charges, repeated ad nauseam, which these gentlemen are making about the expenditures on capital account, citing their long experience in support of their position, in the face of such statements as those and the facts shown by the public documents.

I am now going, Mr. Chairman, to pass on to a brief reference to the condition of things during the year for which the accounts are before us. The gross earnings were $4,972,235, as compared with our gross earnings in 1896 of $2,957,000. There was therefore an increase of 66 per cent in the gross earnings, as compared with 1896. Our working expenses last year were $5,320,000, showing a net loss of $348,000, to which we must add the rental upon the portion of the Grand Trunk Railway line that we use of $140,000, which makes a total of $488,000. Our gross earnings appear to have been increasing since the end of last year at the rate of about $400,000 per annum.
It is fair that I should give the committee an explanation of why the deficit for the last year was $488,000, when the year before we were able to show a substantial surplus of $120,000, and In making this statement I wish to call attention to the conditions and circumstances which existed last year, and which did not exist the year before or in years previous. In the first place, let me point out that, as compared with the year before, when we had a surplus of $120,000, we spent $300,000 more on maintenance of way and works. We spent $300,000 more under that bead. Therefore if we had only expended in 1901 the same amount which we did in 1900, when the mileage was exactly the same, if we had kept the road only up to the same standard, instead of $488,000, our deficit would only have been $188,000. I may say hex-e that when we made our arrangements for a very large portion of the expenditures on improvements, we did not anticipate the conditions which proved to exist, and that outlay was larger than it would otherwise have been. I am not saying that the outlay was not of value or that it does not tell. It does and will tell and was usefully made.
I know of no amount that has been expended which was not usefully expended, and which will not save expenditure this year. But on the Intercolonial Railway, as on all railways, you never reach the acme of perfection. If you think that you are going to have the money, you will make this thing a little better or improve that, and you will make this improvement in anticipation of your increased revenue. We did that last year expecting a good year. We did not have a surplus and in that sense did not have a good year, and therefore our expenditure on improvements was not kept so much within our control, or was not curtailed so much, as it would have been had we foreseen the conditions which proved to exist. We expected, in the first place, that we would have had a larger proportion of our large locomotives at work upon our road, and you can haul three times the amount of tonnage by one of these large locomotives than you can with the small ones. In consequence of our disappointment in this respect, the cost of operating the road was increased very materially. We counted


Andrew George Blair: upon getting these locomotives, but the locomotive shops did not supply their locomotives as early as promised, and we did not have, by three or four big locomotives, the number that we thought would have been available to us for the year. I think I am entitled therefore to set down a considerable portion of the loss we suffered to that cause.
There were other causes also. Our coal last year cost us much more than the year before. In that respect we are in tiie same position as many other railways. If auy of you have followed the newspaper reports with reference to the net results obtained from the operating of railways in England, you will find that their dividends fell off very considerably. Some of these companies paid no dividends at all this year, and that they attribute almost entirely to the fact that the cost of coal had so materially increased. Some of our local roads here were more favourably situated because they had large contracts which had not run out. Take the Grand Trunk Railway, that company had a contract, which had been running some years, at very low prices for all the coal it required on that portion of its line which practically reaches half way to Toronto, but even that company, enjoying this advantage, called attention in its last report, to the shrinkage in profits owing to its increased expenditure on coal. Our condition, however, is entirely different. We make our contracts from year to year. We have not deemed it desirable or proper that such large contracts should be* made for a long term of years. Probably if we were to make contracts with the coal companies for a long term of years, and the time came when the price of coal, under that contract, would be very much below the market rates, we would have more trouble in enforcing our contract and getting our supplies than the whole thing would be worth. We therefore make our contracts from year to year, and last year we had to pay $3.30 per ton from the 1st July down to the end of the fiscal year. We asked for tenders in May, and I think about the 1st of July they came into effect. We therefore had to pay $3.30 per ton for a grade of coal which we got the previous year for $2.20. There is 50 per cent increase on the item of coal alone, or $1.10 per ton on the enormous quantity which we consumed on the Intercolonial Railway. We could not help ourselves, there was no remedy, we could not get the coal anywhere else at a lower price, and	we had to pay	this figure.
When you deduct the difference in the cost, you get a very large sum, and a sum which accounts for part of the deficit of the year. There was a difference of $1.10 a ton on the great bulk of the coal, there was a differen-ence of $1 on a portion, and a difference of 90 cents on another portion-keeping in mind always the quality of the article delivered. On the whole, I have counted the difference as $1 a ton. I had Mr. Pottinger

examine the statement carefully and give it to me accurately. And he states that the calculation of $1 a ton of increase is against myself rather than in my favour. There were 280,000 tons of coal which would mean that $280,000 more money was actually paid for the same quantity of coal than we paid the year before. We cannot increase our rates merely because an item of expense like this is increased. We would need a very large margin of profit in order to have as favourable a showing as we would desire to make. We cannot, I say, increase the rates, though, in some cases it would be quite reasonable. I did attempt it in one matter, and what occurred ? There was not a Conservative newspaper in the country that did not announce the fact with large head lines, declaring that I was attempting to impose upon the people.


Mr. FRASER.: * Judas Iscariot.'


The MINISTER OF RAILWAYS AND CANALS.: Yes, they put It as strongly as they knew how. I had made the increase very mildly and in a very small way. And these gentlemen showed their desire to assist me in bringing about better results on the Intercolonial Railway in the manner I have mentioned. And not only that, but in newspaper editorials, and in public harangues, they tried to make the people believe that this was the policy entered upon, the object of which was to impose enormous additional burdens upon the people of the maritime provinces. So, you have $280,000 of this increased expense accounted for. Then, we paid increased wages to all our men-enginemen and firemen, conductors and train hands and all our trackmen. I am willing to submit to the committee the question whether or not I was justified in increasing the wages of the men employed on the Intercolonial Railway, even though it told in further diminishing a net surplus or in further increasing any deficit. We are prepared to take the responsibility of our action in that regard. We are paying our men something less-in some instances, considerably less-than men in the same class of employment are receiving on other railways. They claimed that they were entitled to equal consideration with other men. Our men are reasonable in their views. But we could hardly expect them to be satisfied with the showing that we had not earnings enough to enable us to pay wages that were paid on other railways. We could hardly expect them to yieid to the force of such an argument. They naturally replied that the government of the country surely cannot rely upon that as justification for asking men to work for less wages than they could get elsewhere, or for less than men in similar employment are receiving. I believe that there are no considerable number of hon. gentlemen in this House who are not desirous of doing the fullest and amplest justice to the employees on our railways and canals, and giving them the wages to which they are reasonably and fairly entitled. We know, as a matter of fact that, to a certain extent in all sections of the country and to a very considerable extent in some sections, there has been an increase in the cost of living. Labouring men in our towns and cities who used to work for $1 a day without any question, now get $1.25. And in some of our more prosperous cities, where the labour market is greater, the wages are even higher. We now pay our trackmen-and we have hundreds of them-$1.20 a day. They were getting $1.10 a day. I think we could afford to give them that increase. I believe that this country-this is how I feel myself, at all events, let the consequences be what they may-this country can afford to pay its employees reasonably well for their services. On the government railway we can afford to pay wages at least approximating the wages that men are getting on other railways under about the same conditions. And I may be asked to meet the views of the labouring men in the different departments to a greater extent than I have yet been able to yield to them. But the extent to which I have gone, moved by a sense of justice, imposed upon us last year $120,000 of expenditure in excess of the previous year. This is the increase of wages, let the committee note, paid to the same number of employees, for I am not speaking of the increase of wages due to the employment of a larger number of men during that period. But even with the increases that have been made the men are not getting unreasonable wages. I do not think the government could do better than to treat our employees fairly and justly both as to wages and to everything else. While I am dealing with this matter, I may mention a point which will tend to show the spirit with which we seek to meet the needs and the wishes of the employees of the railway. I have already, in effect, organized, as respects a large portion of the staff, a system of schedule employment under which youths come into the service and rise in grade as their merits justify, and as the years go by, with each rise receiving an increase in their pay. That schedule has been thought out very carefully, and I am happy to say that it is giving very general satisfaction among the employees of the road to which It applies. It has created very good feeling. I think it is most desirable, if it can reasonably be accomplished, that a good feeling should be maintained among our employees. And I think, I can say of the employees of the road that those who travel by our trains are unanimous in their expression of satisfaction at the kindness, the attention. the courtesy, with which our train hands treat them. I wish to pay that tribute to our men as a body. I Know of no exception. Commendation reaches me on

3447
all hands from people who are accustomed to travel on our road. They say that the attention they receive and the courtesy always exhibited by our employees compare favourably with that exhibited on other roads in the country.
Now we have adopted that schedule, and it has gone into operation in shops where we have hundreds of men employed. We are preparing schedules with regard to other classes of men employed, and one object I have in view is to secure permanency in the service. I want to see continuity; I want to see the men have something to look forward to, so that they can realize as years go by that their condition is improving up to a certain point-beyond which of course you cannot increase the wages of your men. We have fixed upon that point, it is satisfactory, and is not beyond what is being paid under the same conditions elsewhere. This has led to a feeling of contentment and satisfaction among the men. The fact that men are going in young and growing up in the service, and are able to see as time goes on, their condition improving, tends to make the service more lasting, and eliminates from it an element which has been very patent in times past, and which I think will not be evident hereafter. I mean that the men hereafter will not have to depend upon political pull in order to get an increase of wages, nor a set-up in the service, or a rise in grade. Each man now knows that he has to advance by regular and fixed progress, and when he goes into the service he knows that he cannot expect to rise over the heads of others, because he may have some friends who have influence with the powers that be. That is not fair, it is not just. I think we have eliminated that element from the service, so that when a young lad goes into the service he will go with the prospect of rising by his own merit, that he cannot hope to get any benefit from the intercession of any friends, and that he need not fear to suffer any detriment from the opposition of his opponents. He stands therefore in a fair position, and I think the service will be advantaged from that system.
Then we, are doing something more than that. I am planning a system by which the men, when they get to be advanced in years, and when they become unfit for real useful work, may retire upon a pension. 1 think we have practically reached an agreement by which we make a substantial contribution towards the fund, and the men make a substantial contribution towards it out of their own wages. They have a right to the tenure of the positions in which they are employed, by reason of thein contributions to this fund, and they get the full benefit from them. I believe a fine spirit will be brought into existence amongst the employees when these plans are in full operation, as X hope they will be before long.	<
I have been passing away from the items Hon. Mr. BLAIR.
of increases in order to mention what has been done in this direction, which I hope may not be without some Interest. You see, therefore, that when you add these items together, we expended $300,000 more during this year than we did last year upon maintenance and improvements of the road out of earnings. You see we paid $280,000 more for our coal than we would have paid if the price had been the same as it was the year before. You see we have increased the wages of our men by $120,000, on the same number of men ; we had on the whole therefore to provide for $700,000 more than we did the year before. We did that, Sir, as the result of the operation, and we have got a deficit of only $488,000. I am not ashamed of the result of the operation of last year ; on the contrary, a proper understanding of what has been achieved justifies me in claiming with some pride that we have come out very well. We have shown an enormous increase in our business, we have shown an enormous increase in our earnings; we have shown a betterment; we have shown an improved condition of the men; we have shown that although our outlay was upwards of $700,000 more than it was, the preceding year, we have a deficit of less than $500,000. Taking all these things into account, not considering these other matters at all-because they are not susceptible of being stated in dollars and cents, not considering the economies which must necessarily result in the future from the improvement in our methods and manner of equipment, not taking these things into account at all, but only the mere facts which I have related, the results have followed which I have just described.
I think, therefore, there is reason to look forward to better results during the present year, there is reason to look forward to better results in the future. I am not one of those who think that the Intercolonial Railway has either reached the limit of its progress, or that it has ceased to be an important factor in the business of this country. I have looked forward, and still look forward, to the time when there will be important extensions of the Intercolonial Railway. When we reached Montreal, that was regarded by me as the first step in the onward march of progress; but I do not think it ought to be the policy of the government in the future to stop there, but that when the proper time comes we should carry that road forward to another point westward, and then perhaps still further westward. I have always felt that when the time was ripe, one of the best things that could be done in the interest of this country, would be to extend that road from Montreal to the Georgian bay. I believe that the expenditure of a moderate amount of money upon the acquisition of that road, and upon doubling the track, if necessary, would put the people of this country in a position in which they could control a national route, national in every sense, be-

cause every foot of it would be in Canadian territory, national because it would carry those western products in the winter season as well as in the summer season to ports which lie on the Atlantic seaboard. 1 believe that with a line, double tracked if necessary, running from the ports of Halifax and St. John to Montreal, and thence in the neighbourhood of Ottawa through to the Georgian bay, we would be able to control a very large portion of the traffic of the western country by our own Canadian routes. Would not that be an object well worthy of the consideration of this parliament and of the country ? I am not going to say at this moment that the time is ripe for undertaking such a scheme, that is a matter about which there might well be a difference of opinion. Many persons think it is ripe; however, I do say that we are to keep it in view, and hold it before our minds as one of the things which time will bring to us, and which a sound and progressive policy will demand at our hands, by which we may conduct a great national highway as far west as we possibly can, to the advantage of the business of the country.
Now, Sir, I do not despair at all of the Intercolonial Railway. I denounce this attempt on the part of some to belittle it. I think it is unfair and unjust. I do not think that any man who wants to be fair to the institutions of the country-because it is one of them-or who wants to be fair to that portion of the country that it traverses, should deal with this subject in a sneering and contemptuous way. Why should the Intercolonial Railway be made a question of controversy between the political parties ? It is not a political road. It has not been a political road under the present administration. I say with all confidence that it has not been a political road in the sense in which the term is used. I am not going to make any pretense of saying anything more than I can properly say. I .am not going to make any pretense that if we have positions to fill and if we can get good men among our own friends we will not take them from among our own friends, but I am going to say, that, if we have good men on the road and that if we want good men on the road and we cannot get them from among our own friends, we will take them from among our opponents, and we will keep good men even though they may have been our political opponents. I dare say I am not preaching a doctrine that will commend itself to everybody, but it has been my endeavour since I have been in charge of this department to see that the Intercolonial Railway should be raised above the level of a purely political machine. I venture to say with all confidence that it cannot be successfully contradicted that I have done that since I have had the honour of being a member of this government. My hon. friends know, my friends as well as my
opponents, being familiar with the facts, what kind of a system it was that formerly obtained. They know that the Intercolonial Railway was available for party purposes in the interest of the friends of the late administration, and that when elections came on it was used to serve party purposes. They know that people in the employ of that railway who happened to be, or who were suspected of being in political sympathy with the Liberal party, were either prevented from having an opportunity of recording their votes, or by some means obstructed in the exercise of their franchise.
I know it and I know that political favours were given to persons who were travelling in the interest of the political party which was dominant at that day. There has been a rule adopted which I have rigidly endorsed upon the Intercolonial Railway ; I have said that if elections are going on anywhere on the line of the Intercolonial Railway, if favours are extended to one party they must be extended equally to both. I have never allowed passes to go out. I have absolutely prohibited the system which was in vogue before and which was a discredit to the Intercolonial Railway and to the country. They allowed these passes to be distributed in unlimited quantities, the evidence of which we have had presented to us, and one of the instruments for the dissemination of these passes by the late government was the gentleman whom the hon. member for South Lanark (Mr. Hag-gart) was anxious to introduce as a witness before the Public Accounts Committee. I have said that we have stopped this system and we have adopted a system of giving excursion rates. There are a great many people who want to vote to whom we give excursion rates, and these rates will be given to one party as well as to another. The fact that not one single whisper was heard from hon. gentlemen opposite after the elections which took place since this administration came into power affords the strongest possible proof of the truthfulness of what I say. There has been in this respect no criticism of the conduct of the Intercolonial Railway, or of its minister, or of its officials in that regard from the other side of the House since the time that I took charge of this railway, and which shows that we have enforced that rule with fairness to both parties. I found that the employees upon the Intercolonial Railway, as a matter of practice, train hands and others, were not allowed a chance to get away to vote under the former system. I ordered a reversal of that policy notwithstanding the fact that some of our friends complained. Not only that, but I gave an order that every facility should be accorded every man in the Intercolonial Railway service to go and vote at the election whether he was a Liberal or a Tory. In that respect I am bound to claim that I am right in making that statement by reason of the fact, to

which I referred a moment ago, that there was not a semblance of a complaint made [DOT]on the other side of the House as to any favoritism shown to one party or the other during the fight of 1900. Every man upon the Intercolonial Railway was left free to exercise his franchise as any man ought to be. I am not claiming any credit for it. I do not think it would be very worthy of any man who is administering a department if he knowingly allowed the contrary to take place. I do not accuse the hon. member for South Lanark (Mr. Haggart) of being a party to knowing that a system of political favouritism was going on. The fact is that every man on the road, Grit or Tory, during the last election had a free chance to cast his vote just as he pleased.
I think I have fairly shown, in view of all the necessities which have arisen that the estimates which we have asked parliament to support in times past in favour of this road have not been unreasonable, that they have been necessary and that they have not been in excess of what the actual necessities of the service require. I claim, that as respects the year just past, we have done, I think, admirably well in view of the fact that under all the adverse circumstances against which we have had to struggle, we kept the amount down to what it was last year; besides saying which we will be able to make some large improvements. I will conclude what I have to say to the committee by giving a statement of how the accounts stand down to the present moment, so that hon. gentlemen may draw their own inferences as to the balance for the year, or the eight months which cover the full period for which we are able to give the committee a satement. The working expenses were .$3,837,119 and the gross earnings were $3,700,859, showing that up to the end of February, or for eight months, or two-thirds of the year, we have a deficit of $136,000. Hon. gentlemen might assume that this is rather an unpromising outlook and that we may expect a deficit for the whole year, but let me call attention to the accounts for the same period of last year. I had hoped to have a statement for the same period of several years back, but it is substantially the same so far as the general principle or the inference is concerned which hon. gentlemen might be justified in drawing. Last year the gross earnings were $3,260,000 for identically the same period. Hon. gentlemen will observe that that is $440,000 less than the earnings this year. The working expenses were $3,917,662, rathe deficit to the end of February 1901 was $657,000 as against $136,000 this year. With a deficit of $657,000 we picked up last year until we reduced the deficit to $488,000, which would be about $175,000 of an improvement in the year. Well, if we make the same improvement this year-and I am inclined to think that we will make a better showing, but I cannot pledge myself posi-Hon. Mr. BTAIR.
tively to the statement-but if we make an equally good showing we will transfer what is now a deficit of $136,000 into a surplus of $40,000 or $50,000. I think, Sir, I am safe in saying that it will be somewhat better than that.
At six o'clock, committee took recess. After Recess.
Committee resumed at eight o'clock.


John Graham Haggart: Mr. Chairman ; at six o'clock the Minister of Railways finished his speech, which he commenced about three o'clock, in reference to the Intercolonial Railway. I presume that he assigned some reason, in my absence from the Chamber for a few moments, for confining his discussion entirely to the Intercolonial Railway, and at some future time I suppose we will have a discussion upon transportation, and upon the canal system of Canada. Following the example of the minister, I shall confine my observations to a discussion of the Intercolonial Railway and its management from 1897 down to the present. When I left the department, in 1896, I thought I left the Intercolonial Railway in as good a state of efficiency as was possible. I thought the rolling stock was in good order, and that the roadbed was perhaps the best of any railway in Canada. I had the gratification of receiving reports, after I left office, from the managers and chief engineers of that road, telling me of its efficiency, and giving me a creditable account as to the rolling stock and everything appertaining to the railway. The Minister of Railways (Hon. Mr. Blair) prides himself on comparisons, and he puts himself on a pedestal almost too high for us sublunaries to worship at. His comparison between my management of the Intercolonial Railway and his is nevertheless somewhat ridiculous. To listen to him to-day one would think that no railway manager on the face of the globe could be more efficient than he, and that none could have more neglected the road than I did when I was minister. I left the department when the Intercolonial Railway was comparatively a small road of 700 or 800 miles, but since then, on account of the acquisition of the Drummond County Railway and other extensions, it has been increased in importance. Fortunately we have good memories. We remember the glowing terms in which the minister described to this House the advantages that would be derived from the extension of the Intercolonial Railway to Montreal. The Minister of Railways, like his right hon. leader, found that the Intercolonial Railway ended in a bog opposite Quebec, and they proposed to make its terminal in the great city of Montreal. But the Minister of Railways is not satisfied even yet. He sees a grand future for government railways in this country. He sees the day not far distant when the Intercolonial will reach out to the Georgian Bay,

and when later on we will have a government system of railways extending not only from the Atlantic to the Great Lakes, but on to the Pacific ocean. The Minister of Railways has grand views for the future, but let us examine for a moment his management of the comparatively small line of railway which is at present under his charge. In 1897 the hon. gentleman made this statement to the House :
Again we are told that we are adding to the public debt by this proposal. So we have been reading in the newspapers which are published in the interests of our hon. friends opposite. And so we have heard from my hon. friend the leader of the opposition. They have told us that we are adding $7,000,000 or $8,000,000 to the public debt by this proposal. A little consideration will convince anybody that there is no ground at all for that statement. I entirely and absolutely repudiate the soundness of any sueh claim. You might just as well charge a merchant who happens to think that it would be an advantage to his business if he were to remove his store from a back street to a front street, with having added $8,000 or $10,000 to his liabilities, because he has agreed to pay an increased rent of $300 or $400 a year. These gentlemen say: You are adding to the public debt. I deny it. You are entering into an arrangement, which, I will show you, as far as our foresight and the judgment and experience of the men who have been operating the Intercolonial and are responsible for it, are able to assure us, will enable us t'o pay every dollar of rental we have engaged to pay, and have a surplus besides. Is it possible that these gentlemen can say that we cannot increase the business of the Intercolonial by getting into Montreal ? Is it possible for them to make the statement, against the experience of railway operations and of business men the world over, that we cannot hope for an increase in the earnings of this road, and cannot hope to pay any portion of the rental we are incurring by means of the earnings upon this additional mileage, over and above the expenses of working and so extinguish the debt which the hon. gentleman says is being incurred under the proposal of the government ? We shall not add $1 to the public debt, unless we fail, by the operation of the railway under the conditions agreed upon, to pay the rental we have engaged to pay upon acquiring these roads. If we fail in that, then, having engaged to pay this rental for 99 years, we shall certainly be assuming what will be equivalent to an addition to the public debt. No man can say with absolute certainty wliat will be the result ; we cannot demonstrate it with geometrical positiveness, but we can form a judgment upon it, we can take the experience of business men, we can learn from -ihe experience of other railways, and draw a fair business conclusion. And if the conclusion that we arrive at is that these new roads acquired under the conditions proposed, will enable us to pay the rental, and that conclusion is justified by experience, we are incurring no debt, and the charge made by hon. gentlemen opposite is an assumption, and has1 no solid ground upon which to rest.
And so on, the hon. gentleman led the House to believe that the country was virtually incurring no fresh debt by purchasing the Drummond County Railway and acquiring the entry into the city of Montreal. The
facts are against him, as I will soon show. His purpose was, he said, to put life into the old concern, to make it a going and prosperous business, to show what the energy and ability of a man of business could do in the management of a concern that was put under his control. You would have thought that the hon. gentleman had beeu a railroad expert from his birth up. He is good at declamation ; he is good at making statements and promises, hut none of them ever pan out. Nothing he promises to the people of this country is ever fulfilled. All his promises in reference to the Intercolonial Railway have proved to be nice to the ear, so far as his supporters are concerned, but false when they come to be examined. What was the hon. gentleman's object in bringing the Intercolonial Railway into the city of Montreal ? His object was, as I will show from his speech in the city of St. John, to provide a competitor for the through traffic from the west to the city of St. John and the city of Halifax. That was his reason for asking for these enormous sums-for the purpose, as he alleged, of putting the Intercolonial Railway into good order, and acquiring rolling stock, which to a great extent he finds he cannot use on the road. That was the reason he expended over SLOCK),000 at St. John and a large sum at Halifax for increased terminal facilities. Any sane man knew that to enter into competition with the Grand Trunk Railway in carrying through freight to the seaboard, or with the Canadian Pacific Railway, which carried it a much shorter distance to St. John, was altogether out of the question. The hon. gentleman took that upon himself ; lie did it off his own bat ; for, according to the evidence of the chief engineer of his department, the chief engineer did not believe that it was possible to accomplish the object. He has shown that we could not accomplish it. Where are the large quantities of grain flowing out of the Intercolonial elevator at St. John ? What has become of the through traffic that was to he carried to that city ? Let us judge of it by the words of his own paper down there to the effect-I will not read the article, because it is too long-that although he lias not been able to accomplish his object, he has been able to make an arrangement with the Canadian Pacific Railway by which they maintain their traffic to St. John. What has become of the hon. gentleman's denunciations in which he said that no one but a stupid, a fool or a knave would enter into the arrangement which existed between the Intercolonial Railway and the Canadian Pacific Railway and the Grand Trunk Railway ? He was hound to put an end to that arrangement. Did he put an end to it ?


The MINISTER OF RAILWAYS AND CANALS.: Yes.


John Graham Haggart: He tried it for a year or two. Did you not have to cancel

the arrangement you made afterwards with the Grand Trunk Railway ?


The MINISTER OF RAILWAYS AND CANALS.: No.


John Graham Haggart: Under that arrangement you had a special rate for carrying freight from Montreal, where it was delivered to the Intercolonial Railway. You had to back out of that as you had to back out of the arrangement you made with the Canadian Pacific Railway, and you are at the present moment in precisely the same position with reference with these two roads that you were in when you took office.


The MINISTER OF RAILWAYS AND CANALS.: No, no.
Hon. air. HAGGART. You are without through traffic ; you have no oceanbound traffic, though it is increasing year by year. If the traffic of the Intercolonial Railway has increased at all, it is on account of the prosperity of the country in which the Intercolonial Railway is located, particularly on account of the development of the mines and mining industries at Sydney and elsewhere. What we told him has turned out to be perfectly true. The idea of a government entering into competition with two lines of railway which had their termini at Point LCvis, and whose interest it was to pick up freight all through Ontario and the west for the purpose of furnishing traffic to the Intercolonial Railway. He was to come to Montreal and cut them out of that business. He expected to get through traffic, but where did he expect it to come from ? From the Canadian Pacific Railway ? He could not get it from them ; they had a road to St. John themselves. From the Grand Trunk Railway ? They had their own road to Portland. Who was to furnish it to him? The Canada Atlantic. They did furnish a few loads of grain which he carried from the Georgian Bay down to St. John at 6 cents a bushel, the greater portion of which was paid to the Canada Atlantic for their part of the traffic. He carried from Montreal to St. John for the purpose of carrying out the promise which he had given to the people of this country, a few loads of through freight. But we are going to have a bridge over the St. Lawrence at Quebec ; we are going to have communication with that great system of railways to be built from Quebec to connect with the Mackenzie and Mann system, and that system will have the outlet the hon. gentleman desires. But this country is furnishing locomotives, is strengthening the road and doing everything else long precedent to anything that may possibly occur to warrant this expenditure.
When the hon. gentleman got the House to sanction the purchase of the Drummond County road, he told us that he would not touch it if it was not up to the standard of the Intercolonial Railway. But I find that nearly $200,000 have been spent on it for Hon. Mr. HAGGART.
the purpose of keeping it in repair, and 1 drew out the statement from the hon. gentleman that before locomotives of this size which he uses on the Intercolonial Railway between Point Levis and Montreal can be used on the Drummond line, he has to build new bridges on that whole section of railway. And this, notwithstanding the sworn statement of his officers before the chairman of the Public Accounts Committee, that the steel bridges, which were newly put down on the Drummond Railway line, were up to all the requirements of the Intercolonial Railway. The minister excused himself by saying that he has changed his mind as to what the requirements of the Intercolonial Railway are, and has decided that that road shall be up to the standard of modern railways, that it shall be equipped with large locomotives and freight cars and heavy rails and bridges which to sustain them. He tells us that the gradients of the road are heavy. But why is it that such expenditure is required ? The only possible excuse is that he wants to use it as a through line, for the local trade could be better served with the locomotives and bridges, and the material that were on the Intercolonial Railway when he took office than with the heavy rolling stock he is putting on at present. The hon. gentleman expected to make this road a magnificent through road, and for the purpose of carrying out that scheme of his, in competition with the different railways, and building up an ocean-bound traffic through this country over the Intercolonial Railway, [DOT]which would take its departure from St. John and Halifax, he entered on this lavish expenditure, but he has found out that he could not do it.
Why did he buy his locomotives before his road was ready for them ? Can any man in his senses explain that ? From 1807 up to the present, he has bought over eighty-five heavy locomotives, as the return shows, and after buying these, he proceeded to make his bridges able to bear them. He puts on rails which can carry these locomotives, and he orders these rails and these locomotives immediately before the election. 1 heard the hon. gentleman express his surprise at the corruption of his predecessors. We heard him tell us that he did not follow the precedents of his predecessors. That he never gave tickets to parties going to vote or prevent them from going to vote as they chose. Did any of his predecessors ever prevent a man from voting or ever influence him in any manner against voting as he thought proper ?


Some hon. MEMBERS: Yes.


John Graham Haggart: No, Sir, no corruption was ever used by the late government for the purpose of influencing the electorate. But we cannot say the same of the hon. gentleman. He let out large contracts immediately before the election. He supplied the capital and everything else necessary for the purpose of starting locomotive works

in Kingston and thus getting his candidate elected. He bought 1,250,000 ties for the Intercolonial Railway when there were only 500,000 ever used and the balance is still on hand. He could write notes himself to the contractors to hand to the inspector, instructing the inspector to pass the ties, though they were not up to the standard of inspection. He got the inspector to pass these ties just the same as if they were what the contract called for. There were 800,000 ties more than were required, but he did not care, nor did he care what kind they were. He had them accepted, although not up to the specification at all. According to the return, we find that nearly one-third of them were not up to the specifications, yet they were taken and paid for. Black spruce ties wej;e required under the contract, and white spruce were accepted and paid for, and it is geuer ally reported that the payments are in excess of the quantity delivered. There is one naked ancl bald fact which stands out clearly. It is this, that these ties were delivered in May last, and have not all been inspected up to the present and counted. That fact stands out lioldy and plainly, that ties, which were delivered in May last, have not been inspected and counted up to the present. That was the evidence of Mr. Pottinger on the subject, and this is the gentleman who talks about the corruption of his predecessors, who charges them with having corrupted the electorate, who grows eloquent on the servile crowd that was following his opponents. But besides all that, the hon. gentleman poses as a sage. He not only knows the past and the present, but, like that other great Grecian, he the future knew. While he lived or while I live, he says, there is no prospect of the Conservative party returning to power in this country. That is the hon. gentleman's Idea. But I hope that the people of my country have not become so debased, so servile, so debauched, so corrupt, that when they come to understand the position of affairs, when they come to realize how their money has been lavishly and foolishly expended for the purpose of corrupting constituencies, they will not turn the present government out of power. What other reason than corruption could there be for giving a man a price for steel rails over the price he tendered at ? What other purpose could there be for breaking into the time-honoured manner in which contracts were formerly let on the Intercolonial Railway by awarding them as was done in Kingston? Fancy a government assisting a company by advancing it the full extent of money necessary for the purpose of starting and carrying on its business. Sums were advanced on what are called ' progress estimates ' on the material to be supplied to the government. Who judges the progress estimates ? A Mr. Davis, who was not then ' an officer though he may now be on the Intercolonial Railway. We all knew him as an officer of the North Shore Railway 109
some time ago until it entered into the hands of the Canadian Pacific Railway. We knew him at a later date In the employ of the city of Montreal for some engineering purposes. But now, with the experience he has gained in these places, and being considered a fit person for the purposes of the Intercolonial Railway, he is sent to pass these locomotives in the city of Kingston, and also the supplies that came with the Intercolonial Railway locomotives.
The hon. gentleman was amusing when he spoke of my criticising his purchase of locomotives in the United States. Perhaps he referred to what my colleague said. I never criticised him for having gone to the United States. My idea is this, we afford a protective duty to encourage manufactures in this country, and having afforded them that protection, we have a perfect right to purchase in the United States if we cannot do as well here. If the hon. gentleman could get better locomotives at that price in the United States, I do not blame him. I do not know that he could have purchased them anywhere else at the time. But as to the charge against me of buying them from the United States, I heard the evidence before the committee the other day, when one witness said that one of these locomotives was purchased in 1893. That may have been before my time. Here is the evidence which the hon. gentleman (Mr. Blair) disputed :


The MINISTER OF RAILWAYS AND CANALS.: I did not dispute the evidence, but the hon. gentleman's statement of it.


John Graham Haggart: I will read the evidence as it is printed :
Q. Do you know the Cooke locomotives were purchased in 1893?-A. I am going by the re-'cord.
Q. You remember the record?-A. Oh, yes, I remember the record.
Q. Do you remember whether any locomotives were manufactured in Canada during 1893 ?- A. No, I remember they were in 1894.
Q. Do you know whether any locomotives were going

-I suppose this means locomotive works.
-were going in 1893 ?-A. No, sir, I could not state that.
I was only referring to the evidence given by that party.


The MINISTER OF RAILWAYS AND CANALS.: That is not the way the hon. gentleman stated the evidence.


John Graham Haggart: That is the way I intended to state it. I understood from the evidence of this witness that there were no locomotive works going in 1893.


The MINISTER OF RAILWAYS AND CANALS.: He said he did not know.


The MINISTER OF FINANCE.: As the hon. gentleman (Mr. Haggart) read the evidence, I understand that the witness



34C0
said, not that there were no locomotive works going in 1893, but that he did not know they were going.


John Graham Haggart: When I interrupted the minister, it was in reference to the statement made by this witness when he was examined before the committee. X offered to read his evidence, and that is the evidence he gave. I came to the conclusion which, now that I have read the evidence, I still think was correct, that he was aware of no locomotive works going in 1893.


The MINISTER OF FINANCE.: He was not aware of anything about it.


John Graham Haggart: Well, I have read the evidence. It is not a matter of much importance anyway. The bon. Minister of Railways was like a good many others who have a bad case. He did not deal with the principles, but went into details-he has a genius for details. He said that the members of the opposition had circulated it throughout the country, that he had pursued a different principle than that followed by his predecessors, and wa s charging expenditures to capital that had heretofore been charged to revenue. The whole question was a paltry one, so far as the interests of the country are concerned. The money comes out of the pockets of the people however it may be charged. But, for the purposes of a fair comparison between my record on the Intercolonial Railway and the record of the present minister, I want to see tlie books kept in the same form as that in which I kept them. It was my intention, when in office, to follow the policy advocated by Alexander Mackenzie in This House. He declared that it was time that the capital account of the Intercolonial Railway should be closed. A road that has been running since 1867 should have no capital account.


The MINISTER OF RAILWAYS AND CANALS.: The hon. gentleman did not have much respect for that principle when he was in office.


John Graham Haggart: That was my intention when in office-to abolish altogether all the capital expenditure on the Intercolonial Railway. However, it is a trivial matter whether expenditures are charged to capital or to revenue-the people must pay them in any case. But no fair comparison can be made if a change in the methods of keeping the accounts is made. The minister in his opening statement referred, as I suppose, to some statements made by me about some expenditure on the Intercolonial Railway. He said that it had amounted to the enormous sum of $23,000,000.


The MINISTER OF RAILWAYS AND CANALS.: I beg the hon. gentleman's pardon. The statement was not mine but his. He stated the other day in the House that the total capital expenditure incurred by Hon. Mr. FIELDING.
this government on the Intercolonial Railway account was $23,000,000.


John Graham Haggart: The hon. gentleman does not remember correctly. If he will refer to ' Hansard ' he will find no such statement. What I said was that the expenditure on the Intercolonial Railway and Prince Edward Island Railway, and the deficits year after year represented a sum sunk in that institution of nearlv $22,000,000.


The MINISTER OF RAILWAYS AND CANALS.: The bon. gentleman said $23,000,000.


John Graham Haggart: Here are the actual figures :
Spent on Capital Account-
1897		 $ 140,112 52
1898	
252,756	801889	
1,081,929	941900	
1,796,348	29Drummond County Railway, 1900..	1,459,000	COGovernor General's	car	
1,290	31Spent in 1901	
3,652,313	46Voted in estimates	in 1901-2	
3,255,000	00Voted in estimates	in 1902-3	
1,975,000	00Loss on working expenses over receipts in four years	514,852 00Total	$14,137,603	32
Rental on Grand Trunk Railway
capitalized at 3 per cent-


The MINISTER OF RAILWAYS AND CANALS.: Oh, oh.


John Graham Haggart: The hon. gentleman laughs at that. Of course, we are not paying $140,000 a year for the Grand Trunk, and if we are, of course, that is not worth counting.


The MINISTER OF RAILWAYS AND CANALS.: Will the hon. gentleman allow me to ask him a question ? Does he think that any sort of calculation can be justified which includes the figures he has already given of the actual rent he paid, and in addition, the sum which That rental represents ?


John Graham Haggart: I have taken care of that in my calculation, I deduct the rental paid annually.


The MINISTER OF RAILWAYS AND CANALS.: You have got it in there now, and have read it.


John Graham Haggart: I will give it to you : Rental Grand Trunk Railway, capitalized at 3 per cent, $4,666,667 ; subsidy to the Victoria bridge, $500,000 ; Prince Edward Island, $1,359,911.S1, for the same time. Add to that the deficits, and you have $1,686,543, making a total of $21,317,445.39. From which is to be deducted the rental paid to the Grand Trunk Railway for the present year, as it is included in the capital expenditure, $140,000. To this is to be added the $213.000 of capital suspense account, which does not appear in the hon. gentleman's state-

ment at all, and which we would have known nothing of but for the Auditor General's account. In looking up the stores account we find the hon. gentleman had covered up $213,000 of a further expenditure in the capital suspense account of the Intercolonial Railway. Adding that, you have $21,400,445.39. Is there a single figure of that which can be attacked ? The only possible difficulty is the capitalizing of the amount given to the Grand Trunk Railway. But we borrow money at 3 per cent. The hon. gentleman may deduct it and say that we pay nothing to the Grand Trunk Railway for the right to enter Montreal. The expenditure is in the neighbourhood of $18,000,000. What have you got for it ? It is going on from year to year. The hon. gentleman says, Oh. let us do it by leaps and bounds ; do not go at a snail's pace in renewing the Intercolonial Railway, as the hon. gentleman did in renewing his rails. We laid more rails in a year when we were renewing them, than the hon. gentleman has ever done since; we charged the total amount to the revenue of the road, and the hon. gentleman is charging it to capital. Let me give him some more facts with reference to that. The Intercolonial Railway was originally laid with steel rails weighing 56 pounds to a lineal yard of track, or 8S tons of 2.240 pounds to the mile. The fish plates were 19 pounds per pair. Between 1880 and 1896 practically all the main line between St. John and Halifax and Moncton and ChaudiPre Junction, about 760 miles, was renewed with new steel rails weighing 67 pounds to the yard, or 105 tons to the mile.


The MINISTER OF RAILWAYS AND CANALS.: Did not the hon. gentleman relay at least 140 miles of the section he has named ? Were not the new steel rails on the main line taken out of capital ?


John Graham Haggart: Not that I am aware of. Is the hon. gentleman making the mistake that his deputy, Mr. Pottinger. did the other day, thinking the road that was newly built ought not to be charged to capital, the Oxford and New Glasgow road ? Before the hon. gentleman makes a statement, he ought to be informed as to the facts.


Mr. BARKER.: May I ask a question of the Minister of Railways and Canals ? Wiy the Minister of Railways and Canals point out where that 140 miles is charged to capital, a part of the old road ?


John Graham Haggart: Oh, the hon. gentleman is making a statement he knows nothing about, there is no such fact. The hon. gentleman will have plenty of time; the estimates will last a week or ten days, and we will have that threshed out with the hon. gentleman. I think he has fallen into the same mistake that Mr. Pottinger did the other day. He was asked, Where were these rails ? And he answered, On the Oxford 109J
and New Glasgow Railway-Was not the Oxford and New Glasgow Railway a new road built for the first time when you laid the rails ?-and he had to admit it. Between 1880 and 1896, as I was saying, practically all the main line between St. John and Halifax, and Moncton and Cliaudiere Junction, about 760 miles, was renewed with new steel rails, weighing 07 pounds to the yard, or 105 tons to the mile ; the angle plates, 36 pounds. The original rails and plates, and fastenings, for the 760 miles weighed 69,160 tons per mile. Although the above figures show a betterment of about
15.000	tons in actual weight of metal in the track, no additional charge was made against capital account, but revenue had to bear the whole cost. The Minister of Railways and Canals now proposes to replace those 67 pound rails with a heavier rail and heavier fastenings, weighing 80 pounds per yard, and the fish plates 110 pounds.


The MINISTER OF RAILWAYS AND CANALS.: Will the hon. member be kind enough to state what document he is reading ?


John Graham Haggart: It is a memorandum which I took myself from conversations and evidence that I secured.


The MINISTER OF RAILWAYS AND CANALS.: The hon. gentleman will have no objection to telling me whether Mr. Archibald is the authority for his statement?


John Graham Haggart: I have no objection whatever to tell the Minister of Railways and Canals that I have had frequent conservations with Sir. Archibald in reference to it.


The MINISTER OF RAILWAYS AND CANALS.: I thought likely Sir. Archibald was coaching him.


Hon.   S@: I will tell him that I have had letters frequently in reference to it, and have consulted Sir. Archibald about it, because I thought Sir. Archibald could give valuable evidence, and that no man I know in America could inform me better upon the subject than Sir. Archibald. I was prevented from furnishing this evidence before the Public Accounts Committee by the Minister of Railways and Canals, who thought that Sir. Archibald knew too much about how things are at present conducted on the Intercolonial Railway. The Minister of Railways and Canals now proposes to replace those 67 pound rails with a heavier rail and fastenings, the rails weighing 80 pounds to the yard and the fish plates 40 pounds. 67 pound rails and fastenings weigh 83,600 tons per mile, the 80 pound rails weigh 99,940 tons. This shows a betterment of about
17.000	tons against only about 15,000 tons between the original 56 and 67 pound rails. Capital instead of revenue has now to meet this charge ; and so it goes on in the estimates. My point is that when we renewed

and replaced the old rails on the Intercolonial Railway we charged them to revenue account. The hon. Minister of Railways and Canals, who is at present renewing the rails, charges them to capital account and when he makes the statement about the snail's pace at which we proceeded with the renewal of rails I will tell him that we laid 80 miles in one year. Could the hon. gentleman show such a result as that ?


The MINISTER OF RAILWAYS AND CANALS.: What year was that ?


John Graham Haggart: If the hon. gentleman will wait until afterwards I will show him that I have it in one of his own papers, published either in St. John or Moncton. The hon. gentleman is talking about the amount of the betterment of the road and the necessity of increasing the capital account and he will see in his own paper a statement of the number of miles built each year. I will hand it to the hon. gentleman afterwards.


The MINISTER OF RAILWAYS AND CANALS.: There was no year in which the hon. gentleman laid 80 miles. There is no year in which he laid more than 5 miles. I would not say 5 mile's but 5,000 tons.


John Graham Haggart: Fortunately I have the paper here.


The MINISTER OF RAILWAYS AND CANALS.: That does not prove anything.


John Graham Haggart: 
The MINISTER OF RAILWAYS AND CANALS.: Let me understand the question if the hon. gentleman would be good enough. Do I understand the hon. gentleman to say that the rails which were laid in 188G, 18S7, 1888 and 1889 were laid out of earnings ? I would ask the hon. gentleman to tell us if that is what he is referring to ?


John Graham Haggart: Certainly.


The MINISTER OF RAILWAYS AND CANALS.: My statement as to the quality of rails laid not exceeding 5,000 tons had Hon. Mr. HAGGART.
reference to the period when the hon. gentleman was managing the Intercolonial Railway, and had reference likewise to the rails which were laid out of earnings. It had no reference to those which were laid out of capital. Does the hon. gentleman say that this number of miles was laid out of earnings ?


John Graham Haggart: I made the statement before that all of the miles of rail renewals, excepting on the new portions of the road which were built, the Oxford and New Glasgow branch, and the Cape Breton branch, were charged to revenue. Does the hon. minister deny it ? What the hon. minister was speaking about was this ; he was comparing the velocity with which he was proceeding with the slow pace of his predecessors in doing work on the Intercolonial Railway, and he was saying that only so many miles of rails had been replaced. He wants me to tell him whether some of the SO miles were laid on the New Glasgow and Cape Breton branches. It is possible they may have been. I do not know. After having heard the remarks of the hon. minister this evening I happened to pick up this paper, or, rather it was sent to me. It is dated March 22nd, and it is the ' Daily Times,' published at Moncton. I do not know whether it is a supporter of the hon. gentleman or a supporter of the Conservative party.


The MINISTER OF RAILWAYS AND CANALS.: Of course the hon. gentleman knows


John Graham Haggart: No, I do not know. I do not know anything about the papers down there.


The MINISTER OF RAILWAYS AND CANALS.: What does it say ?


John Graham Haggart: It says, in reference to Mr. Pottinger's evidence :
We have been at some pains to refer to the old reports for six years previous to 1890, and find there is not a record of a dollar of this' expenditure having been charged to capital. Mr. Pottinger's own reports show that it all went to working expenses. The record of rail renewals for four years previous to 1890 is as follows :-
That I have already read. Then it continues :
That there can be no mistake about it, we quote from the general manager's own report of 1886. After describing in detail the large improvements, such, as sidings, new stations, four iron bridges, five new water tanks, 159 cars, two locomotives

That is the authority which I had not the time to look up. I did not look it up because I recollect perfectly that my instructions were that all these amounts should be charged to revenue. What is the record of the expenditures of the hon. gentleman on the Drummond County Railway, and on the

Grand Trunk Railway coming into Montreal ? Has lie performed the promises he made to this country that the acquisition of that road would pay interest on the investment besides making the Intercolonial Railway a paying concern ? Has it performed the promise that he put in the mouth of the right bon. gentleman his leader (Sir Wilfrid Laurier) when the right lion, gentleman stated in Montreal that the Intercolonial Railway was no longer to be a burden as it had been in the past upon the people of this country ? Has the hon. gentleman fullilled a single promise he made in reference to it ? Well, the hon. gentleman is going to branch out. He is going to extend the Intercolonial Railway up into the Georgian Bay. He hopes at some future date to reach the North-west. I wonder is it in the syndicate of the hon. gentleman s friends wiio are trying to negotiate the sale of the Intercolonial Railway, at the present moment in New York city. Is it under the auspices of the Dominion Securities Company ? I suppose the hon. minister has heard of that for the first time. It may be amusing and interesting for the House to know all about this concern. I did not know that the hon. gentleman intended to acquire the Intercolonial Railway. I saw some notices in the papers the other day that the president of the Dominion Securities Company, Dr. Webb, had obtained possession of the Canada Atlantic Railway and also of some railways of a speculative character in the province of Nova Scotia, and that he is also president of the Adirondack Railway.


William Ross: Not in Nova Scotia.


John Graham Haggart: The hon. gentleman (Mr. Ross, Victoria, N.S.) is entirely ignorant of anything that has occurred outside of his own little circle in Nova Scotia. 1 intend before I conclude to produce indubitable evidence, I intend to read the prospectus issued in New York and I intend to read the reports of Dow & Company


William Ross: These are the prospectuses of railways to be built.


John Graham Haggart: Are you certain of it ?


William Ross: Yes.


John Graham Haggart: I think you are labouring under an hallucination.


William Ross: Except the road from Sydney to Louisbourg, all the railways in Nova Scotia are owned by the Dominion government.


John Graham Haggart: I will be obliged, I see, to read this prospectus. I would like to have the hon. Minister of Railways and Canals hear this as it is interesting to him :
Dominion Securities Company.
A corporation organized under the laws ot New Jersey in May, 1901.
The object of the company is to acquire properties and securities of railway and other corporations in the Dominion of Canada and elsewhere, constructing and managing the same, &c..
It has acquired the properties and franchises of the Cape Breton Railway Company (Limited) of Nova Scotia, and is now engaged in the construction thereof.
It has acquired other properties and franchises since its organization, which are in the process of development. .
The capital stock is $1,500,000, all fullv paid and non-assessable. Shares, $100 each.
The company has no funded debt.
On January 15th, 1902, the company paid 2) per cent semi-annual dividend out of the earnings of the business for the six months preceding.
Officers-President, W. Seward Webb, New York city; vice-president, Henry L. Sprague, New York city; secretary and treasurer, Henry L. Meyer, New York city.
Directors-W. Seward Webb, Samuel R. Callaway, Alfred Schiffer, F. Egerton Webb, Henry L. Sprague, Arthur L. Meyer, Edgar Van Etten, Chas. H. Johnson, of New York city; Thomas Robertson, of Nova Scotia.
Corporate Office-Jersey City, N.J.
New York Office-25 Broad street, New York.
Transfer Agent-Continental Trust Company of New York.
Registrar-Standard Trust Company of New York.
Annual Meeting-First day of June, at Jersey City, New Jersey.
This was also issued by the company :
Dominion Securities Company.
(Capital Stock, $1,500,000.)
W. Seward Webb, president.


Samuel R.: Callaway, John' J. Astor, Henry L. Sprague, Arthur L. Meyer, Percival L. Clement, Thomas Robertson, M.P.P., Edgar Van Etten, Alfred Schiffer, directors.
Will build 600 to 800 miles railroad in Nova Scotia. Receive cash subsidy from Dominion of Canada, and province of Nova Scotia of $6,400 per mile; also land grant equivalent to $1,600 per mile.
Issues $15,000 first mortgage bonds per mile.
Issues $5,000 second mortgage bonds per mile.
Nova Scotia agrees to take and pay for at par 10,000 first mortgage bonds, making actual cash from government of $16,400 per mile, besides the land grant of $1,600. Engineers estimate maximum cost of construction and equipment of $15,000 per mile, leaving to the Dominion Securities Company :
Profit of cash per mile	$ 1,400
Land grants, per mile	 1,600
5.000	first mortgage, per mile.. ..	5,000
5.000	second mortgage, per mile.. 2,500 Say, at 50 per cent.
Or profit of (per mile)	$10,500
In addition to which the entire common stock of $20,000 per mile. On the above figures of $10,500 profit per mile, the Dominion Securities Company would have a profit on a minimum of 600 miles of road, $6,900,000, besides the com-1 mon stock of $12,000,000.


William Ross: That, of course, is a prospectus of a road to ibe built. They commenced that road from Point Tupper to build towards St. Peters in Cape Breton. That is really a prospectus of some American capitalists as to something they are going to do in the future.


John Graham Haggart: The names of the gentlemen attached to this statement are as follows : W. Seward Webb, Samuel R. Callaway, John J. Astor, Henry L. Sprague, Thomas Robertson, M.P.P., Edgar Van Etten, Alfred Schiffer.


William Ross: All good people.


Mr. JOHNSTON (Cape Breton).: Has the hon. gentleman (Mr. Haggart) taken the trouble to ascertain what the operations of the company had been, or whether there is any truth in the statement set forth ?


John Graham Haggart: Yes, I know all about it as far as I can possibly be informed. If you will read the letter that Dr. Webb published in the papers a couple of days ago, it will explain the connection with the Dominion Securities Company. I understand that the Dominion Securities Company had communication with Mr. Murray, the premier of Nova Scotia; that they expected to get the Mackenzie & Mann contract, and that they issued the prospectus upon that, hoping to obtain, if not the Intercolonial Railway, at least the Oxford and New Glasgow branch.


Alexander Johnston: May I interrupt the hon. gentleman.


John Graham Haggart: Certainly. I do not want to state anything but what is fair.


Alexander Johnston: Does the hon. gentleman say that they made overtures to the premier of Nova Scotia ?


John Graham Haggart: I know nothing about it except the circular that is published by this company, which has an excellent standing before the whole world, as great as Bradstreet and others have in this country. Here is another circular issued by that company :
Dominion Securities Company, opposite Grand Central Station, 51 East 44th street, New York city (organized under the laws of the state of New Jersey), has a charter similar to the Har-riman charter, enabling it to deal in stocks, bonds and securities of all kinds, and to loan money on the same, &c.
The company has acquired the franchises, rights of way, concessions and subsidies which the Dominion of Canada, and also the province of Nova Scotia, grant upon fulfilment of its undertaking to extend the Nova Scotia system of railways, under which it is estimated that 600 to 800 miles of railroad will be built within the next four years.
They made a nice arrangement, they intended to secure this railway bonus and the committee themselves have secured a Hon. Mr. HAGGART.
majority of the stock in the contracting company, the object of which will be seen later :
The company has now 48 per cent of the capital stock of the Manhattan Contracting Company, 95 per cent of the capital stock of the Cape Breton Extension Company, and also $2,400,000 bonds of said company and assignment of the Nova Scotia government's subsidy for the building of the Cape Breton Railroad, as the first of a series of concessions, franchises, &c., receivable on account of the construction of railroads interlacing the province of Nova Scotia; all subsidies and grants, &c., by enactment of the House of parliament, as fixed under the laws of the government, together with the whole capital stock, bonds and benefits going direct to the Dominion Securities Company.
I want the Minister of Railways to listen to this part of the Subsidy Act in which he gives half of the amount to the different railway companies when the cost is in excess of $15,000 per mile :
The cash subsidies granted by the Dominion of Canada and the province of Nova Scotia are ?6,400 cash per mile. Land grants and other inducements of the governments increase this
about $1,600 additional per mile. The government permits and authorizes the issue of bonds upon this railroad construction as follows :
Per mile.
First mortgage bonds	$15,000
Second mortgage bonds	 5,000
Total mortgages	$20,000
Of which the Nova Scotia government agrees to take and pay for at par $10,000 per mile of the above first mortgage bonds.
In addition, the government agrees to advance one-half of the cost of building the railroad in excess of $15,000 per mile, up to an excess of $6,400 per mile. Thus, for example, upon railroad costing $18,000 per mile, the government will pay an additional $1,500 cash per mile, i.e., one-half of the $3,000 per mile in excess of the $15,000 per mile', cost of construction as well as all of the $6,400 cash per mile, already provided for. The Dominion of Canada and Nova Scotia governments pay a cash subsidy per mile of $6,400.
Why do they state in the prospectus that they have secured arrangements with the Manhattan Construction Company for the purpose of building the road ?


Alexander Johnston: Will the hon. ex-Minister of Railways allow me to interrupt him for a moment ?


John Graham Haggart: Yes.


Alexander Johnston: I asked the, hon. gentleman a few moments ago whether he had taken the trouble to ascertain whether there was any truth in . ae matters set forth in that prospectus in regard to the arrangements made with the Nova Scotia government. He replied to me that he had satisfied himself of the truth of the statements set forth in the prospectus.


John Graham Haggart: I read the contract with Messrs. Mackenzie & Mann.


Alexander Johnston: We are not discussing the Mackenzie & Maun situation at all. We are discussing the prospectus which the hon. gentleman has in his hands at the present time.


John Graham Haggart: Does the hon. gentleman deny that it is true ?


Alexander Johnston: I deuy certainly the statement set forth in that prospectus with regard to the arrangements entered into by the Cape Breton Railway Company and the Nova Scotia government. It is untrue, and every member of the House of Commons is aware that it is untrue.


Mr. MATHESON.: It is not true, because the government of Nova Scotia does not guarantee any bonds or give them any land grant.


John Graham Haggart: Here is a circular issued by the persons who are alleged to have purchased $19,000,000 of stock of the Canadian Pacific Railway, who own the Rutland and the Adirondack Railway, who have at present a contract for building the Cape Breton road, and it is signed by W. Seward Webb, president; Samuel Gallaway, John Jacob Astor, Henry L. Sprague, Arthur L. Meyer, Percy Clement, Thomas Robertson, Edgar Van Etten, and Alfred Schiffer. We are to understand that these gentlemen stated a falsehood when they issued this prospectus in New York.


The MINISTER OF RAILWAYS AND CANALS.: Will the hon. gentleman allow me to say a word on this subject ? I read that prospectus when it was first published by the Montreal ' Herald ' some weeks ago, and I have seen it republished since that time. I do not hesitate to say that the statements in it are absolutely false in the main; and I base my statement on this ground, that they represent in that prospectus that the< Dominion governrdent has given them certain subsidies and promised them other subsidies. I say in all confidence that these people have never had, nor has the Cape Breton Railway, from Point Tupper to Port St. Peters, received any subsidy from this government or the definite promise of any such subsidies as they allege. I do not see the relevancy ot my hon. friend's introduction of this matter now; but if it has any relevancy, then it is relevant for me to give an unqualified contradiction to the statements made in that prospectus so far as they relate to the Dominion government. It is a most extraordinary production.	[DOT]


John Graham Haggart: I saw the contract which was to be passed by the Nova Scotia Assembly; that was the contract with Mackenzie & Mann. I examined it in every detail. This prospectus does not apply to the Cape Breton extension alone.
As I stated before, these gentlemen had assurances from parties in authority in Nova Scotia, and they allege that they had in other places too, that the Mackenzie & Mann contract will be handed over to them. Are not these conditions the main ones that are embodied in the contract with Mackenzie & Mann ? And when this circular was put on the market in New York, it had reference to the Mackenzie & Mann contract which they thought they had secured.


The MINISTER OF RAILWAYS AND CANALS.: Where is the relevancy of all this ?


John Graham Haggart: I want to show the whole connection. I want to show that the hon. gentleman was down in New York in reference to it, and that he had his agents in New York negotiating for the sale of the Intercolonial Railway-Mr. Pugsley and others; it is so reported down there. I would not have brought the matter up were it not alleged that these parties had purchased the Canada Atlantic Railway, which they say is part and parcel of their scheme. Mr. Webb has published the statement in the papers that he has bought the Adirondack Railway, and that its stock has advanced from 40 to 100 or 107, and that the stock of this Dominion Securities Company, which had -not an asset in the world except the contracts or agreements which they professed to have made with the Dominion government, and the possibility of arrange-ing this grand scheme with the province of Nova Scotia, has been selling up to 5 or 7 per cent premium. Will the hon. gentleman be quiet until I finish reading this circular ?
The maximum cost of building the railroads according to the best experts and engineers will not exceed, including equipment, $15,000.
Here is a statement made by a company in New York of which these parties are members, all well known and responsible people. They say that in order to obtain a certain sum of money over and above the $15,000 a mile, they have made arrangements with a construction company by which they get half of whatever it is proved the railway costs over the $15,000 a mile; and they will divide that amongst the subscribers.
The maximum cost of building the railroads according to the best experts and engineers will not exceed, including equipment, $15,000, leaving net profits per mile of $8,900 or for minimum of 600 miles, net profits of $5,340,000. In addition to the $1,600 per mile of land grants and a stock issue of $20,000 per mile, amounting on the above minimum of 600 miles to a par of $12,000,000; the cash value of the stocks, of course, depending on the earnings of the road and requiring a period of two or three years after construction for dividends.
I notice that in the agreement it is mentioned the Nova Scotia government are not obliged to pay interest and are not obliged

to any forfeiture of the road until the earnings of the road are such that they will be able to pay the interest out of them.
The capital stock of the Dominion Securities Company, is $1,500,000. The contractors and officers are as follows :
Mr. Wm. Seward Webb, president; Samuel R. Callaway, John J. Astor, Henry L. Sprague, Arthur L. Meyer, and others.


The MINISTER OF FINANCE.: I would like to get that circular after you get through with it.


John Graham Haggart: Certainly.


The MINISTER OF FINANCE.: I would not like to buy any stock in that company.


John Graham Haggart: Here are a few words of the circular of Theodore S. Meyer & Company, Bankers and Brokers of New York :
The Dominion Securities Company holds control of stocks of various companies which have been consolidated with the St. Lawrence and Adirondack into a trunk line of railroad from the lakes to the Atlantic, together with other franchises, of immense value, including an annual subsidy of 5 per cent on the entire capitalization, in perpetuity, as soon as connecting links of road are completed, work upon which will begin as soon as the winter breaks.
Here is a circular issued to his friends and the general public by this same man and calling attention to his stock manipulations and what a good hand he is at that business :
My reason for calling your attention to my new enterprise is the fact that my purchases and stock manipulations of recently acquired railroad properties have proven so successful I desire to extend my field of operations, and want the co-operation of a large clientele.
My first venture was that of the St. Lawrence and Adirondack Railroad. This stock I advised purchasing at a round $57 per share. My friends heeded the advice, and to-day the stock is lisicd on the New York stock exchange, is selling at $135 a share, is considered a gilt-edged security, and pays 5 per cent dividend.
My next venture was in Dominion securities. This company has a subsidy from the Canadian government equal to 5 per cent in perpetuity on its capital stock. . . .
My object in quoting the above is this ; The firm of Theodore S. Meyer & Company, of which I am a member, will be able in the near future to give you valuable information relative to a large company which is about to be organized, and we will put you in a position to get you in on the ground floor and make as large, if not larger, profits than my followers made in the St. Lawrence and Adirondack and Dominion Securities deals.
I wonder wliat that large company is.


Tlie MINISTER OF RAILWAYS AND CANALS.: What is the broker's name at the bottom ?


Hon. Mr. HAGGART D. L.@: Meyer.


The MINISTER OF FINANCE.: I do not think that is the same Meyer-hut it may Hon. Mr. HAGGART.
be a connection of his-as Mr. Seward Webb's. I think the initials are different.
An lion. MEMBER. He is a brother.


John Graham Haggart: He refers, as directors of tlie concerns he is interested in, to Mr. William Seward Webb, Chauncey M. Depew and F. G. Smith. He gives the range of prices and everything else and is a broker.
Here is some current gossip of New York- a clipping from Dow, .Tones' & Co.'s circular' of Wednesday, June 19th, 1901.
Nova Scotia Railways.

 Attorney General Longley, acting premier of Nova Scotia, being interviewed in Halifax regarding the story that New York millionaires were about to engage extensively in railway enterprise in that quarter, is quoted as saying :
The names mentioned look really heavier than they are. It is doubtful if John J. Astor is a director, and the connection of the Vanderbilts with the scheme is very faint, even supposing the report to be correct. Dr. W. Seward Webb is a connection of the Vanderbilts by marriage, but is not very much more than a figure head, so far as being a factor in railroad manipulation is concerned. There is a proposal before the government at the present time to build a small railroad in the eastern part of the province, and that is the only one of which the government has cognizance. The proposition before the government is one to build a railroad from the Strait of Canso to Louisburg, with a branch to Sydney. It is from the company known as tho Cape Breton Railroad Extension Company, which obtained a charter in 1899, and was composed of the following : Lorenzo Shute, New York ; Joseph Shute, Atlantic City ; John Crump, superintendent of docks. New York, and others. The proposal to build this road is being pushed by Edward Guerin. Montreal, who probably obtained his charter from the above.
Then there is a statement in contradiction to that from Meyer & Co., to Dow & Co.


The MINISTER OF FINANCE.: That will be interesting.


John Graham Haggart: Yon can have the whole of it. This is only hearsay in New York. The Dominion Securities Co.'s officer made a statement down there that the lion. Minister of Railways and Canals was dickering with them with reference to the Intercolonial Railway.


The MINISTER OF RAILWAYS AND CANALS.: That is absolutely antrue.


John Graham Haggart: Perhaps it is entirely untrue. My informant goes so far as to state that he doubts very much the truth of the assertions. He doubts very much the power of Mr. Pugsley who is down there conducting negotiations, to make any conveyance of the kind. He states that the opinion was given by Mr. Blair after visiting New York, that there was such opposition to any proposition of that kind from both Conservatives and Reformers that it would be almost impossible to carry it through. But still Mr. Pugsley is negotia-

ting. However, my informant wrote me to this effect, that it is possible that one of the branches of the Intercolonial Railway not being of any use to that railway, might be signed over to the company when they formed their connection with the Canada Atlantic and secured the southern road- and I notice that they succeeded in accomplishing something in the way of expedition which was never known in the legislation of this country before. They introduced a Bill in the New Brunswick legislature. The same day it was introduced it passed the committee stage, got its second reading in about two hours-in connection with the same firm, which are financing it, and they intend, it is alleged, to build a railway from the state of New York for the purpose of connecting with this line. There is a grand future before it. The lion. Minister of Railways and Canals will have to be on the alert if he is going to have the Canada Atlantic Railway part and portion of that grand scheme of his from Lake Superior to Depot Harbour. I am afraid Mr. Meyer has got ahead of him. I am afraid that Mr. Webb and the Dominion Securities have made the purchase, and it surely will not do for the government of Canada- although they did it already-by assisting a competitive line from Point Lfivis to Montreal where there were two roads already in existence-to put money into an undertaking for the purpose of destroying capital which is already invested.
I have not gone into details with reference to the Intercolonial Railway. We shall have an opportunity to discuss the various items as they come up, and of getting the fullest information concerning them from the minister. What I have sought to do is to draw the attention of the country to the enormous sums of money that have been expended on that road. What the people of Canada promised the people of the maritime provinces when they came into Confederation was this-to build the Intercolonial Railway and to make it a good, efficient connection between these upper provinces and the maritime provinces. We contributed cheerfully to the building of that road, and what we expected from our officers in administering it was to keep it in a state of efficiency equal to that of any road in America. We thought we did it. We fixed the tolls at rates which would not be remunerative, though a different course could have been adopted had we desired, for 1 state upon my authority as one who has had control of that road, that by charging the freight rates which are paid by the people in other portions of this Dominion, it would have been as easy to cause that road to contribute a million dollars a year to the revenues of this country as to sink three or four millions a year by the rates which were adopted. But we said :	We will not exact the uttermost
farthing, and so we gave them the cheapest
transportation enjoyed by the people in any part of the Dominion. But we have right to say-and this is what we expected at Confederation-You have the road, now let no expenditure be made upon it beyond what will be covered by the receipts of the road itself. That would be only just nnd fair to the rest of this Dominion. It may be said that we of the upper provinces are participants in the benefits of the road. It is true that, to a large extent, we are participants, but mainly it is for the benefit of the people of the maritime provinces. And the people of the maritime provinces should not support a minister who makes it his policy to get ns much ns possible out of the funds of this country for the purpose of expending it in those provinces, buying stations at St. John, building elevators here and there, when any man who knows anything of the commerce of this country knows that not a bushel of grain can be profitably exported by the Intercolonial Railway


Mr. EMMERSON.: Will the hon. gentleman answer a question ?


John Graham Haggart: I'll try.


Henry Robert Emmerson: Who built the elevator in Halifax-the first one that was built ?


John Graham Haggart: In what year was it built ?


Henry Robert Emmerson: I cannot give the date -it was some years ago.


John Graham Haggart: It was not in my time. The last elevator that I know of was built by the present minister-


The MINISTER OP FINANCE.: In part only.


John Graham Haggart: I thought the old elevator was burned, and this one was to replace it.


Henry Robert Emmerson: Who built the first one-under what government was it built ?


John Graham Haggart: If the hon. gentleman can tell me the year, I can give him an answer. I do not know whether it was built between 1S74 and 1878, or between 1878 and 1896. I do not know of anybody who would be more likely to build an elevator in that section or who took a greater interest in the people of Nova Scotia than my old friend and leader Sir Charles Tupper. Perhaps he was the minister at the time- I would not doubt it. And I can tell the committee that when I was Minister of Railways-this is a confession-we carried grain from Quebec to Halifax at prices that did not half pay the cost of transport.


The MINISTER OP FINANCE.: How much did you carry ?


John Graham Haggart: Two or three hundred thousand bushels.


The MINISTER OP FINANCE.: Very little, for the elevator was seldom used.


John Graham Haggart: It is an unprofitable business. You cannot compete against nature. But, if you wish to make tbe Intercolonial Railway a live road, and one that will be useful, make it tbe means of reaching the port that is the nearest to Europe, and so make the road the link in the chain of communication between Canada and Great Britain. Start a fast line of steamers, with Sydney or Louisburg as the port on this side. In choosing your port, pay no attention to local politics or to anything else except the interests of the whole country. So far as I know, the question would be between Louisburg and Sydney. Then, keep your road up to a high state of efficiency, connecting with other railways in Canada and the United States. In this way you will develop the traffic that will be most advantageous in many ways, and you will have a road that will do more for the maritime provinces than all the schemes of through freight and building of elevators and other absurdities that a Minister of Railways is often urged to go into. The people will have this. As I said before, they are not so servile, so corrupt, so debauched that they will support a government in expenditures which are needless. By the course we are now pursuing, we are simply flinging immense sums of money into a sink-hole-these expenditures are of no benefit to the country whatever. This idea of developing the Intercolonial Railway as a heavy freight line, providing heavy locomotives, and then making heavy tracks and strong bridges to bear them, is an absurdity. The road can never have the heavy, long freight trains of a western road, and these new locomotives are not as suitable for traffic upon the road as were those the road already had.
The necessity to put the old road in a good style ! He says 83 locomotives of this large size within the last number of years are not sufficient to carry on the increased traffic of the Intercolonial Railway. But they have plenty to spare, they loaned 11 of them the other day to the Canadian Pacific Railway. The excuse was that the mechanical engineer said they were not fit for the use of the Intercolonial Railway. To have a railroad up to the standard you must have locomotives burning a minimum of coal with a maximum of power. You can get a good 500 horse power engine and run it with the same cost as a 150 horse power engine. Where is this traffic for which they want a 500 horse power engine, with a long train of 40 or 50 cars, unless it is from some coal mine to some port near by ? There Is nothing of the kind required. The Minister of Railways and Canals has made a statement concerning his administration of the Intercolonial Railway, which railroad men, when they read it, from one end of the country to the other will laugh at. It is a perfect farce. Look at the amount expended. What is the necessity of the increased expenditure on the Intercolonial Railway ? In Hon. Mr. FIELDING.
every department there is an increase. Let me give a few instances for the Minister of Railways and Canals. Compare the paylists and extra wages this year and last year. In 1900 the pay-list and extra wages for the Intercolonial Railway amounted to $2,700,023.71. In 1901 the expenditure on the same account was $3,403,645.92, or an increase of $697,612.21. Can there be a possible justification for that ? Now the expenditure in the Moncton office, in 1900, was $132,531.21 ; in 1901, it was $178,118. Expenditure on offices outside of Moncton, in 1900, $27,949.58 ; in 1901, $32,656.48. Car shops. Moncton, the expenditure increased from $121,000 in 1900 to $131,000 in 1901. In locomotive shops, the increase is from $145,000 to $163,000.
The hon. gentleman talks about the efficiency of the road, about the esprit de corps that he is building up. He says that no man should be dismissed on account of his political opinions, that a young man can go into the employ of the Intercolonial Railway and work up, and his position cannot be taken from him by any means. He talks about providing a retiring allowance, and everything else. But the Minister of Finance will please look at the enormous increased expenditure in 1900 just before the election. What a commentary it is upon the statement of the Minister of Railways and Canals in reference to his non-interference with political affairs during the election. I listened to him, and thought possibly that I was mistaken in my understanding of what he said. When I heard those words of wisdom and honesty coming from the hon. gentleman I was astonished. I said to myself, is it possible that an hon. gentleman who can speak in this manner has been guilty of such acts as were laid to his charge ? One would hardly believe it. It reminds us of Shaks-pere's saying, ' Methinks she does protest too much.' Whenever you hear the hon. Minister of Railways and Canals speaking on behalf of virtue, begin to suspect him.
I think perhaps, Mr. Chairman, I have said enough at present. I may have an opportunity of referring to this subject again. I want to speak on the trans-Atlantic service and on the question of transportation, and I may have an opportunity of doing so on some of the canal estimates. But as concerning my administration of the Intercolonial Railway, I think it will compare very favourably with the administration of the hon. gentleman. I am confident the country from one end to the other will be able to judge on which side economy was practiced, on which side there was an honest and efficient administration.


The MINISTER OF FINANCE (Hon. W. S. Fielding).: I do not wish to engage in the general debate, but while this matter of the Dominion securities circular is fresh in the minds of the House, I would like to say a word. As I heard it read, and as 1 read it some weeks ago, it relates entirely to rail-

ways in Nova Scotia. Whatever may happen with railways in other parts of the Dominion, there are not many railway enterprises projected in Nova Scotia that are not brought to my notice in one form or another by gentlemen who come round looking for my interest in the matter. I am bound to say that I never heard from the Dominion Securities Corporation, or any people in connection with them, regarding this great railway enterprise which appears in this circular. I think the issue of that circular, if it was issued by any respectable broker, is a disreputable transaction, and if Dr. Seward Webb permitted the use of his name in the way it is used there, I certainly think he has not given a very strong reason why we should regard him with favour in any railway enterprise in Canada. Of course his name may be used without his authority.
Hon. Mr. TIAGOAItT. If the Minister of Finance will read his letter in the paper, he says he is interested in the Dominion Securities Company.


The MINISTER OF FINANCE.: But in the letter Dr. Webb published a day or two ago he does not say anything about these huge railway schemes in the province of Nova Scotia. As a matter of fact, the company with which Dr. Webb is connected lias a contract for 35 miles of railway from the Strait of Canso to the town of St. Peters. That is the beginning and end of the whole enterprise so far as it relates to the government of Canada. I think I am in a position to say that is the beginning and end of the whole enterprise so far as it relates to the government of Nova Scotia also, though I can only speak from information in that case. But I say the issue of that circular is something which should not come from any broker of good repute. I say there is nothing in the relations between the Dominion government and that company, and I believe I can go further and say that there is nothing in the relations between the Nova Scotia government and that company, which justifies that circular or anything like it. I repeat what I have already said, that the only foundation for the whole transaction is a contract which was made for 35 miles of railway running from the Strait of Canso to the village of St. Peters ; beyoud that there is no foundation whatever for the statement.


Frederick Debartzch Monk: The hon. Minister of Railways and Canals said that these facts mentioned by my hon. friend (Mr. Haggart) and relating to a circular were false in the main.


The MINISTER OF FINANCE.: I have stated the only point in which I believe the statements to be time in relation to railways in Nova Scotia. I believe I know as much about Nova Scotia railway proposals as the hon. Minister of Railways and Canals, and I said that the only transaction
that has occurred between the government of the Dominion and the people who are connected with this circular is a contract for thirty-five miles of railway from the Strait of Canso to the village of St. Peters. There is talk of an extension at some future time to Louisburg or Sydney. But that is still in the air, and the whole matter, so far as any transaction between the government of Canada and the company is concerned, is a contract for that thirty-five miles.
Mi-. OSLER. Some of the duplicate circulars that have been referred to have been received by me at my office in Toronto. 1 have had circulars from Mr. Meyer. I do not know him, and I never heard of him until I received a circular. I have had circulars and letters advising the purchase of Dominion Securities stock. At first the stock was quoted at about 92. These were the ordinary circulars sent out from brokers offices in New York. A later circular quoted the stock as having advanced to 105, and later on a circular was received, not personally by me, but in the course of business by my firm, again advising purchase and stating that the stock had gone to 115 or 120. I do not know anything about this matter except from the circulars I have received. But the impression that these circulars left upon my mind was that the New York speculators, seeing the reckless manner in which bonuses fire given by the different provinces of this country, and by the Dominion itself, have concluded that Canada is an easy and profitable mine to work, and that they may be able to float wildcat and visionary schemes. But, evidently, the statements contained in the prospectus that has been read are statements that are believed by men who stand very high in the city of New York.
Mi-. JOHNSTON (Cape Breton). Will my hon. friend (Mr. Osier) allow me to ask him a question V I simply want to ask my hon. friend whether he is acquainted with the contract entered into between the Cape Breton Railway Company and the province of Nova Scotia, and whether he is prepared to characterize it as a wildcat and reckless scheme ?


Mr. OSLER.: I do not know anything about the matter except what I have learned from the circulars I have seen. These circulars are sent out by reputable houses in New York. The firm of Dow, Jones & Company are to my knowledge a very reputable firm. There can be only one conclusion drawn from this series of circulars, and it is that the Dominion government and the provincial government are looked upon as absolutely soft and ready to be bled, so soft that these people are able to publish the statement that they believe will not go uncontradicted, that they believe will not cause their contracts to be cancelled, saying that the province of Nova Scotia and the Dominion government will grant sub-

sidies, which will net them a profit of $G,-000,000 over and above the whole cost of the railway. In that circular, which has been issued under the authority of Dr. Webb, Mr. Astor, and other well known men, they say that they have made a contract with the governments here that will net them from $5,000 to $0,000 a mile over and above what the engineers estimate the cost of the railway. The only inference I draw from that is that both the Dominion and local governments ought seriously to look into the policy of granting bonuses to railways that are simply being built for speculative purposes, granting bonuses to railways* which are of no general benefit, but which are being used for local purposes, granting bonuses to railways which are absorbed by one or other of the great railway corporations, and the only reason for granting which is to give contractors and promoters a puli enabling them to make money. That is the result of nine-tenths of the bonuses given to local railways in Canada, and I think a good purpose will be served by the reading of the circular, *which has been quoted by the hon. member for South Lanark (Mr. Haggart), if it will bring the attention of the government of the Dominion and of the various provinces to the absolute waste of money that is being carried on through the bonusing of railways.


The MINISTER OF FINANCE.: I know that the hon. member for West Toronto (Mr. Osier) is the possessor of an idea which is shared by some hon. gentlemen on the other side of the House, but of which he is the chief father, that it is a waste of money to subsidize any road which is not a branch of the Canadian Pacific Railway.


Edmund Boyd Osler: Excuse me. For five years or more, before I entered this parliament, whenever 1 spoke in public, or whenever I expressed an opinion I voiced my belief that the time for granting railway bonuses by this government had passed.


An hon. MEMBER.: The Canadian Pacific Railway had got all it wanted.


The MINISTER OF FINANCE.: No, it had not.


Edmund Boyd Osler: I, for one, will vote against every railway bonus that is submitted, unless it be for a road in a new country, or for a line in a portion of the country which is not already served. I will vote against any bonus to the Canadian Pacific Railway or any other railway company which may be submitted.


The MINISTER OF FINANCE.: The hon. gentleman is repeating in somewhat different terms an idea which he has advanced on previous occasions, and which idea was that it was time we ceased granting bonuses to railways in the older provinces. Now it happens that the one part of the country in which he makes an exception is the part of the country where the Canadian Pacific


Edmund Boyd Osler: Railway is anxious to build branches, so that the hon. gentleman will agree to let the Canadian Pacific Railway get all it wants and deny fair consideration to those older parts of Canada which have as much interest in securing railway connection as any part of the country in which the Canadian Pacific Railway is interested. I therefore say that the position taken by the hon. gentleman on a previous occasion and repeated here to-night is not a sound position. However, what I wish to call the attention of the committee to is that the hon. gentleman, in referring to this circular, said that it was issued under the authority of the Astors, the Webbs and the Vanderbilts.


Edmund Boyd Osler: I beg pardon. I said it was issued under their names.


The MINISTER OF FINANCE.: If I issued a circular and used the names of a lot of people that would not prove that it was issued by their authority.


Edmund Boyd Osler: It has never been denied.


The MINISTER OF FINANCE.: 
Frederick Debartzch Monk: He does not deny1 that lie is interested in the Dominion Securities Company.


The MINISTER OF FINANCE.: That is not the question.


Edmund Boyd Osler: The Dominion Securities Company is the only company that I referred to. As far as I have seen, it contains this gentleman's name. I never saw that letter which was read now.


Frederick Debartzch Monk: It is no denial; it is an admission.


Edmund Boyd Osler: He admits he is connected with that company.


The MINISTER OF FINANCE.: That is not the point. The point raised by my bon.

friend (Hr. Haggart) was whether this government and the government of Nova Scotia had entered into an arrangement with these gentlemen for the granting of subsidies to many hundreds of miles of railway at a price which would give them millions of profit.


Edmund Boyd Osler: That was not the point you raised. You distinctly stated that the letter you were going to read showed a denial by these gentlemen. So far as you have read, it confirms what I have said.


The MINISTER OF FINANCE.: I will come to that later, but I have a pardonable weakness for always dealing with the main question first, and the main question was whether or not this government had some arrangements with this set of people-


Edmund Boyd Osler: I did not say that.


The MINISTER OF FINANCE.: The hon. member did not, but the member for Lanark read this circular in terms which, if they meant anything at all, conveyed the impression that the government of the Dominion and the government of Nova Scotia had made arrangements with these people for granting enormous subsidies to many hundreds of miles of railways out of which they were going to make immense profits. If that is not what the hon. gentleman (Mr. Haggart) meant I do not know what he was driving at. Mr. Seward Webb mentions the three enterprises with which he is connected. One : The St. Lawrence and Adirondack Railway ; third, the Canada Atlantic Railway, and as to the second he says :	I am interested in the Cape Breton
railroad. Now, I have stated that that is a railway of thirty-five miles in length, for which a company holds a contract. Therefore Dr. Seward Webb has stated over his own signature that the only connection he has with any railway in Nova Scotia is that k<!own as the Cape Breton Railway, which I stated is thirty-five miles long.


Edmund Boyd Osler: Does Dr. Webb deny that he has connection with the Dominion Securities Company.


John Graham Haggart: The Minister of Finance quotes that letter in order to show that my statement was incorrect. Well. I said nothing that is not contained in the exact words of that letter. I thought Dr. Webb also stated that he was not connected with the South Shore Railway or the Montreal tunnel.


The MINISTER OF FINANCE.: He says Vi lot of other things, but I did not read them as they have no bearing on the case.


Frederick Debartzch Monk: Does he deny that he is interested in the Dominion Securities Company ?


The MINISTER OF FINANCE.: That is not in question. The point is whether or not this government lias made arrangements to allow this set of American capitalists to build railways at rates which would give millions of dollars profit. Dr. Webb said that he has no connection with any railway in Nova Scotia but the Cape Breton Railway, and the railway is only thirty-five miles long.


John Graham Haggart: The Dominion Securities Company does not allege anything else. That company issued a circular to which Dr. Webb signs his name as president.


The MINISTER OF FINANCE.: I think ' Dr. Webb's name is mentioned but I do not think he signed it.


John Graham Haggart: Then it was a circular issued by the Dominion Securities Company alleging that Dr. Webb is the president.


The MINISTER OF FINANCE.: Yes.


John Graham Haggart: I can tell the Minister of Finance that they endeavoured to secure the building of that particular road and that they failed. When they issued that circular they were so sure of it that they presented it as one of the inducements to take stock in the company.


The MINISTER OF FINANCE.: I say they never tried to get it. They never made an application for any such scheme.
I take the responsibility of saying that they never made an application to this goveeu-ment in conformity with the terms of that circular.


John Graham Haggart: I am not speaking of this government at all. They wanted to Secure the control of the charter for the building of that road in Nova Scotia for which the contract was awarded to MacKenzie & Mann. They were trying to and expected to get the contract. I could give the hon. gentleman a great deal more information on that subject. I know the whole inner circumstances of the case. They did not succeed in getting it from the provincial government, and so they had to abandon that portion of the scheme altogether. Dr. Webb is! perfectly right in saying now that the Dominion Securities Company have nothing to do with any undertaking except the three he has mentioned.


Edmund Boyd Osler: I can tell the Minister of Finance that there is but one inference to be drawn from that circular issued by such a man as Dr. Webb and naming such men as his directors. The only inference is that there is a connection between these governments and that company. As a business man I state without hesitation, 'that if that circular came to my office I would place a great deal of confidence in it, because it is seldom that a circular under such auspices and with such names has not substantial facts at the back of it. If such circulars

were issued in New York or any financial centre, and were not immediately repudiated if the' statements they contained were not true, the men whose names were attached would at once lose credit and would never again attain to any respectable position. I repeat that the only inference that can be drawn from such a circular as that is that there was a solid foundation for it, and it is quite clear that the president and the directors were led to believe that there was a solid foundation for the ' statements made as to the contract with the various governments. That was believed in New York to such an extent that the stock of that company, the securities of which consist solely and entirely of the contracts which are stated to have been received from the provincial and the Dominion governments ; the stock of that company was quoted some weeks ago at 110 or 120 when I last saw it. It may be down to nothing to-day or it may be 200 for all I know, but the last quotation I saw was 110 or 120. The inference to be drawn from that was that they had substantial grounds for believing that they had, or were going to obtain such contracts. I say that it is a slur upon the legislatures of the various provinces and of this parliament, that men of financial standing in New York or elsewhere could believe that they could make such a bargain with the various governments in the Dominion of Canada.


Samuel Barker: I suppose, Mr. Chairman, there is no gentleman in this House who does not desire that the government railways should be worked at a profit, or at all events without loss ; and if any gentleman does wish that these railways should be worked in that way he must also desire that the accounts shall be so kept that it will be possible for us to say whether a surplus when one is claimed has really been earned ; or whether when there is a deficit, that that deficit is not less or is not more than is represented.
Now, Sir, if we are to have a reliable statement as to profit or loss in the working of railways, we must have a certain and distinct system of keeping the accounts. The hon. minister seems to think that there is some distinction between a railway owned by shareholders who may be looking for dividends and a railway owned by the government of Canada. I think the people of Canada take a sufficient interest in this question to desire that accounts shall be properly kept so that we shall know, positively whether the returns made by the minister are correct or not. I want "to do again what I did last year-state in as few words as possible what is the well recognized rule as to charges to capital account and charges to maintainence account on railways. The a b c in this matter-and there is no exception in this respect in any railway company between this and Mexico- is that when capital has once provided a 1 Mr. OSLER.
property, whether it be a rail or a locomotive or a coach, the going concern shall maintain that at the expense of its revenue. That is the first principle, and that nobody disputes. If capital has provided, say a 50 pound rail, when that rail comes out, either in a week or a month, if broken, or after 20 years service, the revenue of the concern must replace it. If a company has 200 locomotives, it must maintain those locomotives at the expense of revenue. If locomotives are smashed up or worn out, revenue must replace them. When it has done so, when it has kept every locomotive of the 200 up to a state of efficiency, and the company buys 50 more, it may charge those 50 to capital, but it cannot charge one locomotive to capital so long as the old list is incomplete, and so as to coaches and cars, and indeed everything provided by capital. That is the rule, a throroughly recognized rule, which there is no question about any where, except, apparently, in the mind of the Minister of Railways. I wish to apply that rule to the hon. gentleman's charges on capital account; and having done so, I shall take the liberty of showing what the hon. gentleman's deficit would have been if he had thus applied the ordinary rules of railway companies.
Before doing that I wish to say a few words on the little controversy that arose a few minutes ago between the hon. member for South Lanark (Mr. Haggart) and the Minister of Railways as to the system adopted by the ex-minister of railways and the present minister. I have gone back only as far as the year 1895-6. In that year the hon. Mr. Haggart laid 45 miles of rails of a heavier description than had been on the track before. Every pound of those rails was charged to revenue. In 1896-7, the present Minister of Railways was in office. That hon. gentleman, in his first report, said :	' I have continued the system of
renewing the track with heavier rails ': and the hon. gentleman himself charged the whole to revenue. In the year 1897-8 the hon. minister laid 19J miles of heavier rails, every pound of which was charged to revenue ; he was following the example of the hon. Mr. Haggart, and very properly so. I will admit presently that perhaps he was not obliged to charge every pound of the heavier rails to revenue, but certainly he was right so far as he charged to the extent of the weight of the old rails. Now, we come to the year 1898-9, and the minister will recollect that that was the time he was preparing for his first surplus, the surplus just anterior to the general election. The hon. gentleman does not report that he laid one rail in that year. If he had done so. his little surplus would have gone to Halifax. In the next year, 1899-1900, the hon. gentleman set off on his new career. In that year he asked parliament to give him $420,000 for heavier rails, to be charged wholly to capital. By some means the hon. gentleman man-

aged to get that through ; there does not seem to have been any discussion about it; and for the first time the replacing of rails, which ought to have been charged almost entirely to revenue, was charged entirely to capital. In the last year, the accounts of which are before us this session, the hon. gentleman spent $402,000 upon rails, and charged every dollar of that to capital. I will show in a moment or two Just how much of that ought to have gone to revenue. I have calculated it here, and 1 rather think the hon. gentleman knows it ; at all events, I will give him the figures. Before giving these figures, I may say that the hon. gentleman is asking in his estimates $000,000 for rails and fastenings for the coming year; and in the current year he is expending even a larger sum for the like purpose ; the whole to be charged to capital, and added to the public debt of this Dominion. So something like $2,000,000 for rails will have been charged to capital when nearly two-thirds of that amount ought to have gone to revenue account. I asked Mr. Pottinger what he thought of charging to capital all the cost of replacing rails. The hon. gentleman will recollect Mr. Pottinger's answer : 1 Why should I object so long as parliament votes' the money ? ' The general manager knew peVfectly well what the proper system was, but it was a little too much to expect him to want to charge to revenue what parliament was so willing to give on capital account.
At page W-41 of the Auditor General's report, we find the details of the hon. gentleman's capital expenditure for rails. He began with 82 miles laid upon the Cape Breton division. These were old 50 pound rails which were admitted by Mr. Pottinger to be worn out. They had served their day, and the time had come to replace them in the ordinary course. If those 56 pound rails had been replaced by rails of similar weight, nobody for a moment would have supposed they would have been charged otherwise than to revenue, along with the fastenings, and the expense of laying the new rails ; and the hon. gentleman would have credited the revenue with the value of the old scrap rails taken up. That is the ordinary system. Bue he laid 80 pound rails, and charged the whole cost to capital. All he was entitled to charge to capital was the extra 24 pounds of rail laid. If he charges the 80 pounds to capital, he has a great deal more in his capital account than is represented by the weight of rails on the road ; that is, he has the original 50 lbs. and the new 80 lbs., in all, 130 lbs. He charges $350,491 for these rails. It was his duty to charge 5G

80ths of that amount to revenue. That would be $245,33G.	He was entitled to
credit to his revenue the old rails taken up, which would have given $108,240, leaving a net charge to revenue of $137,096. In the same way. the fastenings would have cost revenue $17,197 and the stores $7,000. Then
the hon. gentleman decided to charge the expense, i.e., the labour of relaying the track to capital. Why, these rails were there some 20 years. We had to replace them by new rails. The expenditure was an ordinary working expense, and yet he charges $200 per mile to capital account, thus adding to the debt of the country and relieving this deficit. That amount alone is $16,400. Adding all these together, we find that on that Cape Breton division he charges $177,692 to capital which should have been charged to working expenses. In other words he improves the appearance of his deficit by that amount.
Take the Moncton and Truro division, where we may make the same calculation, except that he took up 67 pound rails and replaced them by 80-pound rails. His charge against revenue should have been. $47,240. On the Campbellton division in the same way he should have charged $33,133 against revenue. And totalling up these three divisions, he should have charged against revenue $258,548, and his charge against capital should have been only $144,000. But he charged $402,000 to capital. If he had added that $258,548 which he should have charged against revenue, to his $488,000 ue-ficit, he would have come so much nearer the mark.
Now take his rolling stock. He reports that lie has 228 old locomotives and has added during the year 20, making 248. If the hon. gentleman had kept up his 228 locomotives in a thorough state of efficiency, he would have been entitled to charge the extra twenty to capital, but, let us see exactly how lie kept them up. The committee called as a witness the present mechanical superintendent, Mr. Muhlfeld. The report of the hon. gentleman, giving the 248 locomotives. is brought to the first of July last year, and Mr. Muhlfeld entered on his duties the 1st September, just two months later. Here is how this gentleman found these 248 locomotives. He was asked :
Q. What about the locomotives ? I suppose they were in good condition ?-A. Some were cud some were not. Some were pretty old.
Q. Some were pretty old.-A. Yes, it is not a matter of age, it is a matter of the time of service they have been in. There are some of the age that they are being condemned.
These are the locomotives which the hon. minister affects to think are in an efficient condition.
Q. How many of them ?-A. I cannot say exactly, I presume 25 or 30 that I know of.
That is the evidence of the mechanical superintendent. He says that 25 or 30 of the locomotives are in a position to be condemned, and yet the minister adds the 20 new ones to capital account, instead of charging them against revenue account as replacing so many of the 25 or 30. Further on this gentleman says something more on that subject:

Q. Would you hang on to a number of old locomotives, you could not work economically, wlren you could get some revenue out of them, and charge up to capital account those you replaced them by ?-A. No, sir, X would charge them up to revenue.
That is the statement of the hon. gentleman's own officer. It shows that the lion. Minister should have taken those new locomotives to replace condemned ones, which are either old scrap or should be sold to some people who are constructing new railways and would give $1,000 or $2,000 a piece for them. But the 20 new locomotives he has charged to capital account, and I repeat he had no right to so charge them until he had replaced the 25 or 30 condemned ones by 25 or 30 new ones. What is the result of that ? The 'hon. gentleman paid for his locomotives, which he bought this year, $346,000.- Assuming that he could have sold the condemned ones' for $46,000, that left a clean $300,000 that he had to charge against his revenue account. Take his admitted deficit of $488,000 and add the $258,000, that he ought to have charged for steel rails and these $300,000 for locomotives, and his deficit would be $1,046,000, and that is what any railway company would have made it.
The hon. gentleman took a lot of pains to show that if he had not spent so much his deficit would have been less. That is hardly controvertible, but I point out that if he charged to revenue what he did spend on revenue account, the deficit would be a great deal more.
Before I leave this question of locomotives I want to point out something else. The hon. gentleman got in all in the year 28 locomotives. He says that 20 were added to his stock. He really added 22, so I suppose there is some clerical error. But he charges 6 to revenue. He went that far but did not go far enough. He should have charged not only the 6 but the other 22 as well. The 6 are numbered small numbers, showing clearly that they replaced old locomotives, thus recognized the principle I am contending for, but he would not go far enough lest it should make his deficit worse.
He knows that he is bound to buy locomotives to replace the old ones that are condemned, or should be condemned, but it is too much for him to charge the whole to revenue, so he quietly charges 20 to capital.
Mr. Mulilfeld was examined about some locomotives leased by the Canadian Pacific Railway. He said that they were very old ones, which could not be used economically, and so they leased them to the Canadian Pacific Railway which could afford to use them. The very .fact that the hon. gentleman had, in addition to the 25, 10 or 11 that were so old that he could not use them economically, shows that even the 25 or 30. which Mr. Mulilfeld speaks, of, are not all he should have thrust aside and replaced out of revenue account.
The same with his ears. The hon. gentleman saves his expenses on car account as Mr. BARKER.
he does on locomotive account at every poiut. Mr. Muhlfeld is asked about the condition of the rolling stock, and he said it was in a very fair average condition. Well, considering that in the past three years the minister has added 1,861 new cars to his stock, or 27 per cent of the whole, at the expense of capital, I do not suppose that we need be surprised that a new man would think that the rolling stock was in pretty fair average condition. It must have been in a terrible state, if the 27 per cent addition did not bring it up to a pretty fair average. '
Let us see what he did to maintain his old stock. At the beginning of the year there were condemned cars, 442 of all kinds. During the year he condemned 145 more, making a total of 587 that were unfit for business. These were not cars which were laid aside for repairs, but condemned absolutely. He says in his report that he rebuilt 223. But still he leaves 364 unfit for service-condemned cars. I do not know that anybody would object very much to the hon. gentleman leaving these 364 cars to be re-built on a future occasion, provided he did not want the cars. But in the year we are dealing with, he buys 1,119 cars, and charges every, one of these to capital. His duty, clearly, was to charge 364 of them to revenue account, and then the remainder he could charge to capital. The 346 cars cost him a little over $250,000. That was a charge he made to capital account every dollar of which should have gone to revenue account. If we add this to the other items, we find that the hon. gentleman's real deficit, carrying every charge to revenue that any other railway company would, is $1,296,000. But by his system of accounts he comes out with an apparent deficit of $a8S,-000. No wonder the hon. gentleman wants to draw a distinction between what ordinary shareholders would expect and what the government expects in the administration of a railway. The hon. gentleman may say that this is mere book-keeping. The hon. Minister of Finance last year asked us what it mattered-that. If you had a deficit of $1,000,000, it is added to the debt of the country, and if you have a charge of $1,000,000 to capital it is added to the debt of the country. But there is more than that in it. What can be expected of the staff at Moncton if they are told in effect that it matters not how wasteful they are or how little attention they pay to the economical maintenance of the property. The effect of the hon. gentleman's method is to encourage waste and destruction. A mechanical superintendent finds that he has four or five hundred cars which will cost him a good deal to repair and maintain. What does a long-headed mechanical superintendent do when he is operating under methods such as we find here ? He says : Let the cars run for a year or two and the minister will get us others out of capital account, and so we will not have to repair them at all. And the same is

true of locomotives. I do not care liow honest a man may be, the temptation you put in his way by this method is too strong. He is not going to run up his maintenance account, upon which his very reputation depends, when he has an opportunity to keep that account down by having items charged to capital. With such opportunities offered him, an official will not repair anything if he can avoid it. Laxity and indifference are induced. That is the policy the hon. minister deliberately encourages. The result is shown in the enormous proportion of actual working expenses on this road, as admitted by the hon. minister himself.
The hon. minister spent about three-quarters of an hour before six o'clock re-feri'ing to various items of expenditure in the old accounts of the ex-Minister of Railways (Hon. Mr. Haggart). He spoke of new bridges constructed, of extending sidings, and enlarging accommodation at stations. Nobody has ever disputed that all these items might be charged to capital. What we question is the hon. gentleman's charging other items to capital. We question also the hon. minister's methods in dealing with charges properly against capital. I call attention to it because I think it is high time that the estimates of the Minister of Railways were more carefully considered. In 1900 the hon. gentleman took a vote for improvements and increased accommodation at Sydney, $39,000. Did the hon. gentleman limit his expenditure to that r No; he spent $137,324 on that work-$58,000 being for land alone. I am speaking now of real capital expenditure, but I want to show how the hon. minister deals with these things. Having spent $137,324 he transferred $41,324 of that to an entirely different item, a blanket item to which he had no right to charge one cent of this expenditure. He came down the following year and asked for a vote of $57,000 to make up the balance. Now, it would be far better and more business-like if we had given the hon. gentleman power to spend what he pleased, and held him responsible. He gets these estimates, but does not hold himself bound to them-spends what he pleases. The Minister of Finance has taunted us with taking two days for the examination of the Auditor General, and thought it was ridiculous, because the Auditor General knew nothing about the matters we asked about. It is true that we spent an hour and a half on each of two days in an earnest effort to show that the Auditor General did not know anything about these matters. The Minister of Finance seems peculiarly happy over the fact that the Auditor General could not tell us anything. But that was the very thing we were trying to demonstrate. People think when they see the Auditor General's great Blue-book, with the Auditor General's certificate to the accounts, these things must be 110
all right. But the Auditor General freely admitted that he knew nothing about many of these matters, and the hon. Minister of Finance was


The MINISTER OF FINANCE.: If the hon. gentleman will allow me, I think he is hardly right in his representation of what I said. It was not that I objected to the cross-examination, but I did call attention to the fact that the greater part of the time was occupied in asking the Auditor General about matters of which he could not know anything, was not expected to know anything, but the facts concerning which could be ascertained best from the officers in the department.


Samuel Barker: We asked the Auditor General concerning nothing except items in his report to which he had certified.


The MINISTER OF FINANCE.: But what I said was that the hon. gentleman again and again asked the Auditor General questions which could only be answered by a railway expert.


Samuel Barker: Our object was to show that the Auditor General who had professed to certify to these expenditures did not know what he was certifying about, and he admitted that himself. I will take another example to show what we object to with regard to the expenditures at stations. Our objection was not with regard to charging to capital account all these expenditures, but to the way in which the expenditure was made. Take, for instance,Westville. The minister obtained authority to expend $8,000 to increase the station accommodation at that place. The minister advertised for tenders for that $8,000 work, and it was pointed out in the committee and proved that he paid $649.99 in advertising. He would not go the $650, but he got within one cent of it.


Frederick Debartzch Monk: That must have been the Montreal ' Herald.'


Samuel Barker: Well, he let the contract. The minister knew he had authority to spend only $8,000 at that station, but what did he spend ? He spent in the year $15,719.53, and there is $1,575.26 yet to pay, making a total expenditure of $17,249.79, upon the authority of this House to spend $8,000. That is the objection we are making. The Auditor General said such expenditure was all wrong, and he would write that that sort of thing must not occur again.
Then I will take another item. The Minister of Railways and Canals got the authority of this House to build three engine houses. He advertised for tenders, and what do you suppose the hon. gentleman spent in advertising for that work ? One thousand three hundred and sixty-four dollars and ninety-eight cents. The hon. gentleman wonders that we criticise his accounts ; he says we are objecting to them



as capital expenditure. We are not objecting to them as capital expenditure, but we object to the methods of the hon. gentleman.
Take another station in which tne hon. gentleman has great interest. He happens to represent the city of St. .John. The expenditure there was $219,752 in this one year. That is a very small item compared to the expenditures there since the hon. gentleman has become Minister of Railways and Canals. I think in that city something over $1,000,000 has been spent. Now he wants to make a fine station yard at the outskirts of the town. He got 36 acres of marsh land and paid $475 an acre for. it, or $17,138 for marsh land upon which to lay sidings. Well, he did more. He charged for the materials for those sidings. He is going to lay 12 miles, and he charged for the rails and other materials for these sidings, $46,620.77. That was in 1900, and to this hour not more than one mile has been laid. That is another thing that we object to. The hon. gentleman says: You are objecting to capital expenditure, you are objecting to the sidings at stations. It is convenient for him to put it that way. I repeat again, it is the method of the hon. gentleman we are objecting to. If he had spent that money properly for needed sidings, nobody would raise any objection. But he charges capital with material which, it is admitted by Mr. Pottinger, is lying along the track at this hour. It is not at St. John at all. He has charged for ties 30 cents apiece that are lying in heaps 100 miles away, he has charged for spikes, and bolts and rails that are not delivered there at all. Yes, he charged in 1900 to capital $46,020.77 . on that account.
There is another thing I may as well comment upon, showing the methods of the hon. gentleman. He charges capital account $20 per ton for these rails that have just been taken out of the main line, and into store at only $15. So he makes for his store account 33 per cent profit in that transaction. That is a pretty fair profit, even if you are selling to a stranger. But what is the result of it ? He has a store account of three or four million dollars in the course of a year, nearly every item of which is charged out at some profit; thus every year or two there must be a considerable accumulation of profits in that store account and nobody hears what becomes of it. I do not charge the hon. gentleman with pocketing it, but I have no doubt whatever that it goes to the benefit of his working expenses, and that the deficit would otherwise be so much the worse.


The MINISTER OF RAILWAYS AND CANALS.: Not at all, you are mistaken.


Samuel Barker: I do not think I am. I asked Mr. Pottinger how much of that went into working expenses, and lie did not know. I said: A hundred thousand dollars in the
year ? No, he would not be sure, but he did not think so much as that. That was the answer Mr. Pottinger made. Well, there is another example of the way in which the hon. gentleman deals. There were the Copper Crown works at Pictou. Those are smelting works started at Pictou that nobody ever expected would amount to anything, they have become a bankrupt concern as I am told. The hon. gentleman has spent $20,000 for sidings at those works at the expense of this country. The ordinary course of a manufacturing concern dealing with a railway company is, when they think the wrorks will pay, to put in the sidings and if they have got traffic they get rebates until the amount is wiped out. But the hon. gentleman was more generous than that. He led them to expect that if they would put in the siding he would pay for it in due time, just as soon as he could get the order of this House. Let us see how this was done.	One peculiarity about
this business is that there was a Mr. E. N. Macdonald, who was a candidate at the general elections on the ministerial side, was the solicitor for this Copper Crown Works Company.


The MINISTER OF RAILWAYS AND CANALS.: I suppose somebody had to be solicitor for it.


Samuel Barker: I null read where the coincidence comes in. This is a letter dated at Pictou, December 20, 1899:


Hon.  A. G.@: Blair,
Minister of Railways and Canals,
Ottawa.
Dear Sir,-I learn that the department are preparing estimates for next session, and that the estimated cost of the Copper Crown extension is about $17,500. The extension and the consequent extra work will necessitate a larger yard at Pictou beyond all doubt, and I would like to ask that that vote be made $20,000 for the whole extension to the copper works, and improvements of the public service at Pictou.
But the richest part is still to come, and I call attention to it:
Any possible discussion of the vote would be avoided in that way.
This gentleman wanted to get $20,000, hut we were not to have the opportunity of discussing it.
And there are other reasons of an important character why this should be so made, which 1 could personally explain to you better when I see you.


Mr. BROOK.: That is disgraceful.


Samuel Barker: I think it is a pity we have not Mr. Macdonald here as a member, it would be so pleasant to hear him and the Minister of Railways and Canals go through that little conversation again, tell us what it was which is so interesting, and which he could so much better explain verbally than in writing.


Frederick Debartzch Monk: Was he defeated ?


Samuel Barker: 


Samuel Barker: Undoubtedly he was.


Alexander Johnston: He will be here at the next election.


Samuel Barker: But there Is another little picture of this Copper Crown Company that I may as well mention. Approaching the period of the general election, Mr. Macdonald became very anxious to get the money. Letter after letter and telegram after telegram were sent. Mr. Potting-er would telegraph the minister, and Mr. Macdonald would write to the minister. There was about $15,000 claimed by the Copper Crown Company, and on the 1st of November, just six days before the polling day, Macdonald's friends got a cheque for $14,500 on account. That is another coincidence. It is all perfectly innocent, of course.


The MINISTER OF RAILWAYS AND CANALS.: Macdonald did not get a cheque at all.


Samuel Barker: I just take this as an illustration. Now leaving the capital feature of the question I want to say something about the earnings of which the hon. Minister of Finance (Mr. Fielding) was so proud, and upon which he congratulated the hon. Minister of Railways and Canals. The hon. Minister of Finance, in his budget speech, which he intended to be distributed in print all over the Dominion, from the Atlantic to the Pacific, congratulated the hon. Minister of Railways and Canals upon the magnificent results of last year. He told the House and through the House, every public and business man of this country that the hon. gentleman had earned $4,972,235 and he congratulated him upon that, just as he was congratulating everybody else about him ; but the hon. gentlemau on the very page, and almost in the very sentence in which he found these figures, would have also found that to earn this $4,972,235 the hon. Minister of Railways and Canals spent $5,400,422. He did not tell that to the public.


The MINISTER OF FINANCE.: There was nothing kept back. I stated the deficit. The hon. gentleman (Mr. Barker) is wrong.


Samuel Barker: That is one of the hon. gentleman's mild weaknesses. He will just tell that which would suit his own purposes.


The MINISTER OF FINANCE.: I said that there was a deficit of $488,000.


Samuel Barker: The hon. gentleman just told half the truth.


The MINISTER OF FINANCE.: The hon. gentleman has no evidence of that.


Samuel Barker: I say that not with the idea of casting a personal reflection upon the hon. gentleman. I have taken some little trouble to look up the working expenses of other roads both in Canada and the United States, and at the outset, I may say that the working expenses of the hon. Minister 1104
of Railways and Canals on the Intercolonial Railway are just 110 per cent of the gross receipts. I think he stands alone in that. He is unique. I think it was the hon. member for Annapolis (Mr. Wade), who, the other night, timidly gave ns a hint that the rates were low on the Intercolonial Railway and that therefore the hon. minister could not be expected to keep to a low ratio of working expenses.


The MINISTER OF RAILWAYS AND CANALS.: They are just the same as they were in the past.


Samuel Barker: The hon. gentleman last year and the year before claimed that he had made a profit. Did he reduce the rates ?


The MINISTER OF RAILWAYS AND CANALS.: No, the rates have not been reduced.


Samuel Barker: The hon. gentleman claimed a profit last year and he was as boastful about his service the year before. He claimed a profit of $60,000 last year and of $120,000 the year before. According to my contention he was behind fully half a million dollars on each occasion. I am going to show that under the methods of hon. gentleman it is a wonder he did not have working expenses of 150 per cent instead of 110 per cent. There is no excuse at all for the hon. gentleman. He is getting a very good traffic upon the Intercolonial Railway. It is not at all, as the hon. gentleman perhaps thinks, that this large traffic is due to himself.


The MINISTER OF RAILWAYS AND CANALS.: I do not claim that.


Samuel Barker: I am glad he does not. I was afraid he would do so.


The MINISTER OF RAILWAYS AND CANALS.: I am too modest for that.


Samuel Barker: There is no railway in the United States or Canada which has not increased its traffic in proportion to the Intercolonial Railway, but we find that all these railway companies are workink at a lower rate owing to their improved receipts.


The MINISTER OF RAILWAYS AND CANALS.: And they were increasing their traffic during a period when our earnings were absolutely stationary.


Samuel Barker: They all increased their traffic during the last four or five years owing to the great prosperity of the United States and Canada. The hon. gentleman gets $3,820 per mile. This is the revenue for a road 1,302 miles in length. Let us compare that with some other roads that are not in anything like so good a condition. There is, for instance, the1 Canada Eastern Railway in the hon. gentleman's own district having a mileage of 136 miles. The gross earnings per mile are $981. It is much more difficult to work a short road of that kind having a small traffic at anything like a low rate.

That company works the road at 91 per cent. It is a high rate. But, if the rate at which the company works that road be applied to the Intercolonial Railway the latter would have given a profit of $447,500 instead of a loss of $488,000. We will take a still smaller road, the Massawippi Valley Railway in the province of Quebec, a very small line. Its earnings per mile are almost up to those of the Intercolonial. That company works its railway at 85 per cent. It is a high rate, but if that ratio of expenses were applied to the Intercolonial Railway it would give a profit of $745,000, instead' of a loss of $488,000. I would like to point out some lines which are a little greater in length. There is the Canada Atlantic with a mileage of 458 miles which is worked at 79 per cent, the Lake Erie and Detroit River Railway with a mileage of 180 miles which is worked at 60 per cent and the Quebec and Lake St. John Railway which is worked at 76 per cent. All these roads are worked at a disadvantage as compared with the Intercolonial Railway.


The MINISTER OF RAILWAYS AND CANALS.: That is not so.


Samuel Barker: I beg your pardon.


The MINISTER OF RAILWAYS AND CANALS.: I beg your's.


Samuel Barker: Some of those I have just mentioned are in a better position than that of the hon. gentleman in one respect. They earn more per train mile. That is the only difference. But, take the Canadian Pacific Railway for example; that company only earns $4,170 per mile as against $3,820 per mile of earnings on the Intercolonial Railway, and it works the road at 60J per cent. I have taken one hundred railways in the United States, roads of all classes, long and short, roads that run at high rates and roads that run at low rates, having all classes of traffic, and I find that the highest working expenses of any road amongst the whole one hundred were 78-5 per cent, while the average of the one hundred roads was 65-57 per cent. The Canadian Pacific Railway's working expenses are 60J per cent, the Grand Trunk Railway's working expenses are 67 per cent and the government's 110 per cent. But if we cannot have the profits in money, let us see if we cannot have the figures. If the Intercolonial Railway were worked even at the highest ratio of expense, amongst those one hundred railways of the United States it would have shown a profit of $1,029,000. As the hon. minister is working at a loss of $488,000, that makes a difference of $1,517,000 in the comparison of their work. If they worked at the average rate of 65-57, the profit would be $1,690,000. which considering the loss of $488,000. makes a difference of $2,178,000, against the hon. gentleman. And I desire to add that, as I have already Mr. BARKER.
shown, $488,000 is by no means the full deficit.


The MINISTER OF RAILWAYS AND CANALS.: The hon. gentleman (Mr. Barker) should regulate the British North America Act before he begins to make that comparison.


Mr. CAMPBELL.: It would be very interesting to give us the figures before 1896.


Samuel Barker: I shall be glad to do so at the proper time. Now, * station expenses ' is a thing that does not vary much from year to year, but the salaries of station masters, agents, clerks, telegraph operators and so on, have been increased by $74,000 over the previous year. The salaries of the general manager, traffic manager, and so on, have increased by $29,000 over the previous year, and in the chief accountant's office there was an increase of $6,500. But there is another account here, the general stores account, which deserves some comment. The minister purchased in the year on this account $3,433,823 as against $1,752,911 in the preceding year. That is a very important difference. He purchased just about double in the year of the general election what he did in the preceeding year. The minister issued stores during the year to the extent of $1,665,000, so he purchased twice as much as he issued, and he carries over in stock at the end of the year, beyond what he used, to the extent of $1,824,977 or nearly $900,000 more than he did the preceding year. I just mention these items to give a general idea of the extravagance of the minister in this year and as tending to show why he lost $488,000 in working in 1900 when he claimed a profit of $120,000 in the preceding year.
We have heard a great deal about the purchase of ties. That is a public scandal in the province of New Brunswick. I have given a good deal of attention to it and I intend to deal with it to-night, because I believe it requires the utmost attention of every hon. gentleman in the House. It is one of the most extraordinary stories that lias ever been narrated as regards any administration whether by a government or by a private railway company. In 1900 the number of ties actually used was 495,000. Mr. Pottinger told us that the largest number ever used in any year in the history of the road was 650,000. The minister began the year with 127,000 in stock so that if he bought half a million he would have been still on the right side and would have at least 120,000 surplus at the end of the year, after using the 495,000. But I must repeat again, and it cannot be repeated too often, that this was election year. Mr. Pottinger tells ns that about September he had a conference with the minister, and decided to ask tenders for 800,000 ties, but he got only about 335,000 under the tenders.


The MINISTER OF RAILWAYS AND CANALS.: Is the hon. gentleman (Mr. Barker) quite certain about that, because my recollection is that Mr. Pottinger had no conference with me as to the quantity he would purchase, but that he had a conference with me after tenders had been received.


Samuel Barker: I gave my recollection as to what Mr. Pottinger said, but I will take the ministers explanation.


The MINISTER OF RAILWAYS AND CANALS.: Has the hon. gentleman looked up the report of the evidence upon that point.


Samuel Barker: I have a very distinct recollection of what Mr. Pottinger said, but I will accept the ministers statement and that is enough I suppose.


The MINISTER OF RAILWAYS AND CANALS.: I have a very strong recollection that Mr. Pottinger did not make that statement.


Samuel Barker: Well, here are the facts. Mr. Pottinger represented that in August or September, 1900, he decided to take tenders for 800,000 ties. He called for tenders and he got a limited number. Having got that smaller number he fixed upon a price and he made arrangements directly with certain people who were willing to furnish ties at the price he fixed. He said that he gave out these contracts and did not limit the number, and that instead of getting 800,000 the result was that he got 1,300,000.


The MINISTER OF RAILWAYS AND CANALS.: I doubt if that is exactly correct.


Samuel Barker: That is the original statement, but I will at once refer to what the papers show.


The MINISTER OF RAILWAYS AND CANALS.: I know the hon. gentleman does not mean to state the facts incorrectly but he is astray. He says that Mr. Pottinger gave out orders without limitation in awarding on tenders and that he got 1,300,000 ties. My recollection is that under the tenders he awarded the contract or notified the parties what he would take from them and that it was much below the quantity which he required. He gave some additional orders following that up, and later, away along in November or December, being still in his opinion short, without any conference whatever with me and on his own judgment as to what it would be well for him to do, he arranged with some parties to furnish a quantity. It was only to two or three parties whose names he mentioned that he gave that carte blanche order. They furnished more than he anticipated or expected they would supply. That is my recollection of it.


Andrew B. Ingram: If the hon. gentleman will allow me, perhaps I can set him right by the evidence :
Q. Will you tell me how many ties you purchased during the year ?-A.. I have not got the exact number, but it was in the neighbourhood of 1,250,000 or 1,300.000.
Just exactly what my hon. friend stated.


The MINISTER OF RAILWAYS AND CANALS.: That does not bear on the question.


Samuel Barker: I think I may accept the minister's statement that he was not consulted. These statements have been brought down. One statement gives all the ties delivered after the 1st of July, 1900, on contracts made previous to November, 1900, and quantities supplied. The quantity contracted for prior to November, was 405,792, according to Mr. Pottiuger's report. The quantities delivered from July to October, were :	July, 10(5,579 ; August, 98,741; September, 86,935; October, 170,705; or a total delivered up to October of 408,900 ties. On the same contracts there were delivered afterwards 150,777, making a total delivered under the contracts made prior to November, 019,737. Now, I want to call the hon. minister's attention to this. Under contracts made prior to November, he had delivered 019,737 ties, and he had in store 127,000. That gave him about 750,000 ties. Now, 495,960 were all the hon. gentleman used in that year, so that it is quite clear that under the contracts made before November, the hon. gentleman had nearly 50 per cent more ties than he needed for the whole year. Now, let us see what the hon. gentleman did in November.


The MINISTER OF RAILWAYS AND CANALS.: What I did ?


Samuel Barker: I presume the hon. minister is going to take the responsibility of his officers ?


The MINISTER OF RAILWAYS AND CANALS.: I do not pretend to say that I am not responsible.


Samuel Barker: I speak in reference to the hon. gentleman's department. His department made contracts after October on which there were 681,489 delivered.


The MINISTER OF RAILWAYS AND CANALS.: Was it not after November ? Was it not in December ?


Samuel Barker: The first deliveries ended in October. Mr. Pottinger said he began to get the tenders in about September, and they ran on until November.


The MINISTER OF RAILWAYS AND CANALS.: The tenders were in before that.


Samuel Barker: I am only taking Mr. Pottinger's statement.


The MINISTER OF RAILWAYS AND CANALS.: Mr. Pottinger did not state that.


Samuel Barker: There is the fact that he had 619,737 on the first contract, 127,000 in store, making 746,737 or 246,000 more than he needed for the whole year; and yet in November he entered into contracts under which there were delivered up to June, 681,489, making a total of 1,301,226. The point is this, that the hon. gentleman knew he did not want those 681,000 when he ordered them.


The MINISTER OF RAILWAYS AND CANALS.: You mean the manager knew '!


Samuel Barker: I am stating that Mr. Pottinger or the Railway Department had
746.000	ties already purchased and in stock when they entered into contracts under which 681,000 more were delivered during the fiscal year.


The MINISTER OF FINANCE.: Is the hon. gentleman right when he says that they entered into contracts for 681,000 more V Is it not a fact that the general manager gave the general order to go on and get out all the ties they could, thinking he would be short ? What the hon. gentleman is stating, that he made a contract for a specific number, I do not think is quite correct.


Samuel Barker: The numbers and 'the contracts do not come out quite the same; but I think I can give the contracts. The contracts in November were for more thun a million. They did not deliver anything like the number the contracts called for, fortunately for the country.


The MINISTER OF RAILWAYS AND CANALS.: If there is any point at all in informing the committee, it is just as well that it should be informed correctly. My hon. friend knows that Mr. Pottinger says that he held no conference at all with the minister, and that the minister was not informed of the matter. He says he told those people to go ahead and get out what ties they could, and in doing that he did what every railway company does. Sir Thomas Shaugnessy told me only the other day that his men did it repeatedly.


Frederick Debartzch Monk: The hon. gentleman Is responsible for it all the same.


The MINISTER OF RAILWAYS AND CANALS.: I do not shirk the responsibility.


Samuel Barker: Mr. Pottinger's statement is under two distinct heads. One is : ' Ties delivered after July, 1900, on contracts made previous to November, 1900, and quanti-tities supplied.' The other is : ' Under contracts made after October, 1900, and delivered subsequent to November, 1900.' I will give you the figures. They contracted before November for 405,792 and they deliv-tered 468.960. After October they contracted for 1,113,449, of which 681.489 were delivered subsequent to November.


Samuel Barker: .


The MINISTER OF RAILWAYS AND CANALS.: We had not any contract at all, and Mr. Pottinger does not say so.
Mr. BARKER, All I can say is that he gives every man's name, the date of the contract, the price and the place of delivery.


The MINISTER OF RAILWAYS AND CANALS.: Suppose he does. He says the contract consists of a letter, and he said it was in December, if my memory serves me, that he gave the firm of Curran and some one instructions and authority to go ahead and get out all the ties they could. That was not a contract made in October, or a contract for any specific quantity.


Samuel Barker: All I can tell the hon. gentleman is that the statement is there in writing. Mr. Pottinger in his evidence refers to the different qualities of ties. He said the life of a white spruce tie was about four years, the life of a black spruce tie six years, and the life of a cedar tie from six to ten years. But what 1 wish to call the attention of the committee particularly to, is the difference between white spruce and black spruce. The white spruce tie is practically worthless. As it only lasts four years, it is hardly worth the expense of putting it into the track and taking it out again. When you add the price to the cost of putting the tie in and taking it out again, the road was better without it. I wish to call attention to that, because there were enormous quantities of spruce ties ordered without specifying whether they were to be black or white spruce, and of course the contractors delivered the white spruce. And I may also say that owing to these enormous orders in that year, the result happened which might have been expected. Up went the prices from 25 per cent to 30 per cent, owing to the enormous demands made by the department when they did not need anything iike the quantity they ordered. They have now on hand a supply for two or three years ahead, and are only ordering in consequence a very small quantity, and the prices this year have gone down to the normal figures from 17 cents to 20 cents so far as any purchases have been made.


Nathaniel Boyd: Was that election year ?


Samuel Barker: That was election year. Mr. Curran, of whom we heard a good deal in the committee, delivered 185,819 spruce ties. There was no word about white or black, and no body has heard much about black spruce being delivered or found anywhere. He got 25 9-10 cents per tie, which is a high price even for cedar ties. He got a contract for 185,819 spruce, and was given a monopoly over 100 miles of railway to get out the ties, the government undertaking not to buy spruce from any one else in the district. Another contractor delivered 49,201 cedar ties of the same dimension at 24 cents. Mr. Curran got 25 9-10 cents for white

spruce, the life of which is only four years, and in the same district the government got 49,201 cedar ties, good for six to ten years, and paid only 24 cents. Mr. Curran, I believe


Nathaniel Boyd: He had a pull.


Samuel Barker: Yes, he had a strong pull. Mr. Curran. I believe, is the treasurer, or something of that kind, of the political district.


Frederick Debartzch Monk: That was just a coincidence.


Samuel Barker: Let us see what a good thing this Mr. Curran had. He had a contract for 105,070 Princess pine at 29 and 30 cents ; 84,224 cedar at 2S cents ; and 1S5,819 spruce at 25 9-10 cents. Then he had 25.S93 hemlock, 3,380 tamarac, and 33S juniper. altogether his contract was for 408,724 ties, or nearly one-third of the whole quantity purchased that year, and he was paid $177,248. Thus Mr. M. Curran got in the election year $25,000 more than the total sum paid for ties on the Intercolonial Railway in the previous year. They did not require one of those spruce ties. They had more ties than they needed of a good class, yet they were so anxious that this Mr. Curran and a few others should get contracts that they purchased an enormous quantity which they did not want and got ties the road would have been better without. One hon. gentleman on the committee suggested to us that the real owner of these Curran ties was a Conservative. He seemed to think that that was an answer to the whole thing, that it was all right because a Conservative owned the ties. It struck me that it was the old question of the intermediary. The contract was given where it would do most good, and Mr. Curran, a friend of the government, got it. A Conservative probably could not have got it in any other way. It went where it would do most good, and among gentlemen no doubt who understood. as another minister has told us on one occasion, that ' business is business.' There is another extraordinary feature about this. In May of last year a complaint was made to the engineer of construction that a great many bad ties had been received. Mr. Pottinger was asked at the Public Accounts Committee about these bad ties, and he knew absolutely nothing about them in April of the following year. He had heard that complaints had been made and that there had been an investigation. but he did not know whether any report had been made. Several meetings later he heard that a report had been made in November last, and that nothing had been done since. That is all Mr. Pottinger could tell us. Well, Mr. McManus was called, but before I refer to his testimony I would like to read the result of the investigation or reinspection of these ties so far as it has gone. A Mr. Williams was detailed by the
engineer of construction to inspect these ties which Mr. McManus had passed. On the 4th November, Mr. Williams made a report. I have gone carefully through it, and I find that he inspected 300,000 ties, over about seventy or eighty miles of road, that is, up to November, 1901, he had inspected less than one-quarter of all the ties purchased in 1900-1.


Mr. BRODER.: Were they paid for before being inspected ?


Samuel Barker: They were inspected by Mr. McManus at the time of delivery and after his inspection of course they were paid for.
The following summer an investigation was ordered, and Mr. Williams was sent to inspect the work of Mr. McManus, and as so far has reported on 300,000 of the ties with these results :
The ties are of two classes-a tie eight or nine feet long, six inches thick, and seven inches face. Another class, six inches thick and six Inches face. Those would he classed as passable ties under the contract. Of the 6x7 there were 55,113 good ties. Of the 6x6 there were 54,941 good ties. That made 119,054 out of 306,000.
Let me tell you what the others were :
Ties, 6 in. x 5 in	41,760
Ties, 6 in x 4 in	19,605
Under 4-ins face	 4,654
Ties less than six inches thick, and now mark what Mr. Williams means by ' less than six inches thick.' He says that ' under six inches thick,' means any tie under six inches and down to three. Of those there were 103,307. Rotten hearts, 4,954. And there is this note :
Except in cedar, rotten hearted or hollow headed ties mean bad ties. In cedar only ties with a very bad heart or hollow hearts are shown.
He passed to ones that were not very bad in cedar. Then were fir ties, which everybody agrees should not have been used as ties at all, 21,172 and poplar, 57. Or a total of 195,509 bad ties out of 306.000, and less than one-quarter of the whole inspected.


William Rees Brock: All paid for.


Samuel Barker: All paid for. The money all gone out. Then there were switch ties which are very much more costly than the ordinary ones, especially the ties for what are called three throw switches. Out of 59 three throw switches, not one came near the specification. They were utterly useless for switch ties, and Mr. Williams points this out. Of 194 two throw switch ties, only three were up to the standard. That is the result of this inspection up to date. I do not wonder that the inspection has not gone any further.
In connection with this inspection Mr. McManus was brought up and examined. He, it appears, had been sent for by Mr. Burpee, when he got his report in Novem-


Henry Robert Emmerson: The trouble with the hon. gentleman is that the letter was delivered.


Samuel Barker: I read the hon. gentleman's statement as taken down by the shorthand writer, and there is no mistake about it


Henry Robert Emmerson: I stand by it.


Samuel Barker: 
Henry Robert Emmerson: Was not the greater part of that coal purchased some time after the election, during the winter season ?


Samuel Barker: I am speaking now of what lie purchased during the year, the fiscal year. \


Henry Robert Emmerson: You spoke of the election year, and I ask if the chief part of the coal was not purchased after the 1st of January, 1901 ?


Samuel Barker: I have no doubt a good deal of it was. especially the 60,000 tons that were purchased in the States.


Henry Robert Emmerson: For the reasons stated.


Samuel Barker: Now, Mr. Pottinger tried to excuse this enormous purchase by saying that they were threatened with a strike ; they were afraid of a strike in the coal mines in Nova Scotia, and he produced a bundle of papers to the committee to show that a strike was imminent. Well, he read letter after letter until he came to one from the manager of a coal mine down there who conveyed the information to him, and as he went on reading it turned out that the manager of that mine was telling Mr. Pottinger that they expected some trouble with their men, and there might be an interruption in the delivery of coal for a day or two. Mr. Pottinger having read that far read no further. I think that is about the extent of the threatened strike. But after all, what possible excuse was there for buying this 128,935 tons more than the manager wanted ? Was it because it was convenient to rush off to St. John and give a contract of $46,000 to Thompson & Co. for freight of coal from the United States ? That was a nice little contract by itself. They bought 60.000 tons from the States at high prices. It seems that in the excitement of buying the hon. gentleman in that year wanted to purchase everything that he could lay his hands on, cars, locomotives, an enormous quantity of supplies, enormous quantities of bolsters from Chicago, $67,000 worth, bolsters from Moncton, or neighbourhood-everything on a most gigantic scale, until he ran his purchases up to $3,000,000 odd in that year, double what lie had ever purchased before. Yet the hon. gentleman comes here to-night and speaks as if the fact that he bought so much and paid so much for the materials was an excuse for his high expenses. No doubt it had a great deal to do with it, but I do not think it is much of an excuse for the hon. gentleman. An ordinary business man, when he found prices for ties were high, would have curtailed the quantity in every possible way. When he found the price of coal was high he would have done the same

thing. But the hon. gentleman does the opposite, he seems to think the way to bring the price of ties and coal down is to order all you can. I do not know whether there is any other explanation of it. But I would like to show how the hon. minister is getting on, as he grows older as Railway Minister. His stocks carried in 'store at the end of the year 1897-98 were $108,402. That is a pretty good quantity. The next year, 189890. the .stocks remaining in store amounted to 553.177 : in 1900 the stocks) carried were $971,054, that is the surplus at the end of the year. This last year, this wonderful purchasing year, the stocks carried were $1,824,977, four times what they were in 1898. That is good administration, that is successful administration. It is very successful for the dealer, the people who want to sell ties and all that sort of thing, and probably for the coal dealers and other merchants down there. But I think that even the people of New Brunswick, notwithstanding the enormous purchases that are made along the line, would prefer to see this railway economically managed and to see its business done in a proper manner. The people down east have just as much interest in the economical management of the road as we, in this part of the country, who have to share in paying the cost. I do not think that there is one man in New Brunswick but would stamp out this thing to-day if he could, and the sooner they stamp out these things, such as the letter to McManus, and these extravagant purchases the better it will be for New Brunswick and this Dominion.
Now, I have only a very few words more. I have a little regard for hon. gentlemen opposite and I am sorry that I have taken so much time. If any hon. gentleman wants to understand and appreciate the extent of purchases let him take the Auditor General's report and give half an hour to wading through that and he will see the most marvellous state of things that has ever existed upon any railway. Just one word as to what lias led to this. The hon. Minister of Railways and Canals a few years ago made up his mind that he would enter into competition and have a fight with the Canadian Pacific Railway. He was determined to be the railway king. He was going to show all these railway magnates at Montreal a thing or two about the working of railways. He was determined to centre business in St. John. He built an elevator there, enormous expenditures were made for heavy rails, heavy locomotives and a large quantity of cars. Millions upon millions have been spent upon that project and the hon. gentleman was going to fight the Canadian Pacific Railway. Well, Sir, he has practically abandoned the fight. It is very like the King of France who, with 30,000 men, marched up the hill and then marched down again. The hon. gentleman has spent his Mr. BARKER.
millions and we are no farther advanced from a railway point of view than we were before. In fact, we are worse off. There is an enormous expenditure of capital which we cannot get back and the expenditure of that money might as well have been distributed over five or ten years instead of taking place in one or two years. What was the hon. gentleman intending to do ? He was proposing, while working the Intercolonial Railway at 110 per cent, to enter into a fight with a company that work at 60J per'cent. He attempted to compete with a company whose line to St. Jo fin was 481 miles while his line was 50 per cent longer, or 740 miles, so that the hon. gentleman was going to carry the traffic 259 miles for nothing and fight the Canadian Pacific Railway. That was the contest he entered into. I think it is very fortunate that It is nearly stopped. It is a good thing for the country. I ask again was there anything in all this to justify the congratulations of the hon. Minister of Finance. That hon. gentleman must have known all this. He must have been familiar with all this expenditure every ten days throughout the year, because he gets the returns of the Railway Department and publishes them in his ten day statement; yet, In the face of the knowledge of these enormous expenditures, the hon. gentleman congratulates the hon. Minister of Railways and Canals on what he termed the success of the Intercolonial Railway. I do not know whether it is necessary to say anything more upon that. What can the hon. Minister of Finance possibly condemn if he congratulates anyone upon results of this kind ? I am sorry that I have had to occupy so much time. There is a great deal more which I could have said but I have taken so much time to-night that I will not further presume upon the indulgence of the committee. I can only say that I have been very careful in extracting these figures from the various documents and I doubt whether the lion. Minister of Railways and Canals can find one error in them. If there is an error it is a very small one and I shall be the first to acknowledge it if he points it out.


Archibald Campbell: Shall this item be adopted ?


Samuel Barker: Is that the first item ?


The MINISTER OF FINANCE.: It is the vote for the general working expenses of the Intercolonial Railway.


The MINISTER OF RAILWAYS AND CANALS.: This is the only item we want to pass to-night.


Andrew B. Ingram: I expected to hear the hon. member for Westmoreland (Mr. Emerson) defend himself in regard to this letter when he was so brave a short time ago in saying that he was going to defend himself.


APRTT 25. 1902
The MINISTER OF RAILWAYS AND CANALS.: You will hear front him likely later on.


Andrew B. Ingram: Now is the time. The hon gentleman (Mr. Emmerson) has been accused of stealing the letter and he has not defended himself.


The MINISTER OF RAILWAYS AND CANALS.: If the hon. gentleman (Mr. Ingram) will allow me, unless he particularly desires to go on, I would ask the com-mittee'to allow the chairman to report progress and ask leave to sit again.
Progress reported.
On motion of the Minister of Finance, House adjourned at 12 a.m. (Friday).

Friday, April 25, 1902.