1903-09-15

[Stage Direction]
For copies of all correspondence, documents, plans, estimates and cost with regard to the laying of a submarine cable between the north shore of the St. Lawrence river and the Island of Orleans, and of stretching a wire along poles of the government telegraphic system over said island between said cable and the house of the Deputy Minister of Public Works. Also copy of agreement between the Department of Public Works and the Bell Telephone Company for conditions and cost of connection and operation. -Mr. Talbot.

The PRIME MINISTER (Rt. Hon. Sir Wilfrid Laurier).: I move for leave to lay on the Table of the House, compilation of information on the resources of the country between Quebec and Winnipeg, along the line of the Grand Trunk Pacific Railway.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The PRIME MINISTER moved that the Order for the second reading of Bill (No. 138) to amend the Pilotage Act be discharged.
Mr. MONK.: Is there going to be no legislation on pilotage this session ?


The MINISTER OF MARINE AND FISHERIES (Hon. R. Prefontaine).: There will be; there Is a new Bill to be introduced.


[Stage Direction]
Motion agreed to.

[Stage Direction]
House again in committee on Bill (No. 235) to provide for the construction of a National Transcontinental Railway.-The Prime Minister.
On section 16,
Frederick Debartzch Monk: Has the government made up its mind as to what remuneration it wii! pay these commissioners ? Is it the intention to pay them a large salary ?


The MINISTER OF FINANCE.: The commissioners will have to be responsible officers, and they certainly would have to be paid respectable salaries; I would not like to use the word * large.' The government has not determined what the salaries will be.


Mr. MACLEAN.: The government were able to tell us the salaries of the commissioners under the Railway Act, and they should have such information iin connection with these commissioners.


The MINISTER OF FINANCE.: The question is a very fair one, and perhaps before the end of the session we can say, but we are not prepared at present to fix the salaries.


Frederick Debartzch Monk: The government have adopted the policy of appointing commissioners for the determination of a great many questions which ought to be determined by the government itself. What is the object of creating a commission, which must be a very expensive machinery, in connection with the construction of this road which is an

attribute of the government We want to know what the expense is going to be. We want to know what will be the status of these commissioners. The object of the creation of a commission ought be to make it independent of the government, but that is not so in this case. These three commissioners hold office during pleasure and their appointment is revokable at the will of the government. They are absolutely under the control of the government, holding no greater measure of independence than any employee of the Railway Department. We have already incurred an expense, which the ex-Minister of Railways and Canals has estimated at $100,000 a year, for the commission under the Railway Act. It will cost us that large sum yearly to carry out the duties which were formerly assigned to the Minister of Railways and Canals and the Railway Committee of the Privy Council, a body immediately responsible to the people or their representatives. And, although, from time to time, we have heard some complaint as to the decisions of the Railway Committee of the Privy Council, yet they created no more dissatisfaction than the decisions of our ordinary tribunals. The government burdened the country with an expense of $100,000 by creating that commission. We have had appointed a transportation commission to solve the transportation problem, which the government say they have now solved by this Grand Trunk Pacific scheme. That is going to cost the country at the very least, $100,000 a year more. I claim that the question of transportation, as well as the question of the building of this railway, should be studied, solved, decided on, and carried out by the government itself.
That is the old constitutional principle, that the government should decide these questions-that their execution should be confided to the cabinet, which is simply an executive committee of the representatives of the people in this House. Here are two important commissions created, contrary, I submit, to the old constitutional traditions, and they are going to cost us $200,000 a year ; and now here is a third commission. Three commissions revocable at will, and what are they going to cost us ? Surely we are entitled to know that, now that we are proceeding on this e%dl policy of confiding to commissioners the carrying out of questions which ought to be in the hands of the government directly responsible to the House. We are creating a third commission, which, I venture to say, will cost the country nearly $100,000 a year more ; and my hon. friend the acting Minister of Railways seems to treat the questions which we have raised under the clauses of this Bill with a little levity. He says the government will consider the question of salaries later. As we were informed with respect to the other commissions, I think we are entitled to know now how much Mr. MONK.
this commission is going to cost, and if it is a body which will hold office during pleasure. My view is that it is better for the government to carry out the construction itself, with proper officers and capable engineers, and that that method, which will conform to the real principles of administration under our constitution, will cost us iufinitely less than this commission, which will be a body entirely under the control of the government, and having no more independence than any other employees. It seems to me that we are entitled to have some information as to the machinery of this commission and its cost.


The MINISTER OF FINANCE.: So far as the hon. gentleman's question relates to the salaries that may be paid to these commissioners, I am not prepared to say that that is not a proper question for consideration before the matter is finally disposed of in this House. With regard to the salaries of the commissioners under the new Railway Act, I would remind him that they were not mentioned in the Bill, but were a subject for consideration, and that at a later stage a resolution was submitted specifying what they should be. I admit that before this Bill goes through the House it may be proper for the government to give some information as to the salaries to be paid to these commissioners though I could understand that circumstances might arise to render it advisable to leave that question to the decision of the government. My hon. friend has dealt with three commissions, and, if I understand him correctly, he objects to the appointment of these commissions for the transaction of public business, claiming that these are matters that should be dealt with by the government in the ordinary ministerial way. Have I understood my hon. friend correctly ?	.


Frederick Debartzch Monk: Certainly, that is what I said. With regard to the transportation question, I said we were creating a commission of an expensive nature to solve a question which, as my hon. friend contends, is solved by this. Bill ; and as regards the commission provided for by the Railway Act, I said that I thought the attributes of that commission were properly assigned to the Railway Committee of the Privy Council. Commissions have been tried in England and have failed ; they have been tried in several of the United States, and have failed there also ; and I claim, as my own individual opinion, that the time has not arrived in Canada fot burdening the country with that expense.


The MINISTER OF FINANCE.: I was only anxious to understand my hon. friend's position. I understand, then, his position to be that in appointing all these commissions we are burdening the country with unnecessary expense, and are assigning to them duties which should be performed

by tlie ministers. That is a fair question for discussion. When the hon. gentleman says that the government have claimed .by this Bill to solve the question of transportation, he is simply inventing words for his own purpose. Nobody has claimed that the problem of transportation is solved by this Bill. So the hon. gentleman is wrong on that point. He is also wrong in assuming that the appointment of the transportation commission involved the question of another transcontinental railway. It was never intended to refer that question to that commission. The transportation commission was designed for other purposes. Hon. gentlemen opposite, in numerous speeches, and in at least one resolution, took the ground that the appointment of a commission to deal with the question of transportation was pre-eminently the proper way to deal with It. Again and again they presented that view to parliament. Yet we find my hon. friend now taking the ground that all these commissions are needless, and should not be appointed at all.


Frederick Debartzch Monk: I took the ground during the last parliament, as far as the question of transportation was concerned, before this Bill was introduced, and I still say, that if, instead of passing this Bill, we had the report of a commission, that would be of some use. But after the Bill is introduced, I consider the commission a useless expense.


The MINISTER OF FINANCE.: The hon. gentleman is still confusing the question of a transcontinental railway with the broader question of transportation, which may include many matters not connected with railways. The question of transportation includes railways, but the question of i ail-ways is not the whole transportation question. There are questions of terminal facilities, water communication, harbour improvements and various other questions involved in the transportation problem, but ail of which are not included in the scope of this Bill. I come back to the point that my hon. friend, in conjunction with his associates, commended the idea of the transportation commission ; but now he rather falls back, and says that all these commissions are unnecessary. He objects to them on the constitutional ground that the government should deal with these matters directly and not by commission. Well, we know that under our system of government, both in the mother country and in the colonies, governments have been in the habit of appointing commissions for purposes which could be better accomplished in that way perhaps than directly by ministerial action. My hon. friend takes the ground that the railway commission is unnecessary, and that we should continue the old method of adjusting railway questions by the Railway Committee of the Privy Council. That is a fair question for discussion ; but I submit that my hon. friend is slightly late in the day in bringing it up. We had the Bill for the creation of a railway commission before this House for many weeks, and we discussed it in all its aspects ; and only now, for the first time, do we learn that hon. gentlemen opposite were opposed to that Bill. If my hon. friend did not want that measure to pass, the least the country would have expected of him would have been to have made a motion against its passage. But my hon. friend allowed the Bill to pass without objecting to it, and if hereafter he should be accused of being opposed to that Bill he could deny it, and refer triumphantly to ' Hansard ' to show that he had never voted against it or proposed any motion against it. If he had any objection to the creation of a railway commission, he should have raised that objection at an earlier date.


Frederick Debartzch Monk: I had objection to that feature of it.


The MINISTER OF FINANCE.: That feature is the whole Bill itself. It is for the creation of another commission, a tribunal to do that which he says should be done by the Minister of Railways and the government, a tribunal which he says will cost the country $100,000 a year unnecessarily ; and yet he never voted against the Bill.


Frederick Debartzch Monk: The hon. ex-Minister of Railways said, in answer to a question from me, that he had made an estimate, and that he expected that the commission would cost this year $100,000.


The MINISTER OF FINANCE.: That is all the more reason why the hon. gentleman should not have allowed that monstrosity to pass this House without protest. If the Bill was burdening the country unnecessarily to the extent of $100,000 a year, how does the hon. gentleman propose to answer to his constituents for having allowed that Bill to pass without any protest ? I think he takes a great responsibility in rising at this late day to attack that Bill. With regard to the question of a commission for the construction of this railway, my hon. friend thinks that the work should 1 e carried on directly by the government, and that the intervention of a commission, as proposed by this Bill, is not a convenient and satisfactory method. I can find no fault with his taking that stand. If he sees fit to propose an amendment declaring that it is not expedient to appoint a commission, and that the government should carry on that work itself, that is a fair position to take. But I take exception to liis statement with regard to an independent commission. He thinks that if a commission is to be appointed, it should be independent of the government. But to be independent of the government means to be

independent of parliament, and that means to be independent of the people ; and I say that in the ease of a commission charged with the expenditure of vast sums of public money, it is not constitutional doctrine, but the very opposite, to propose that it shall have the power to spend these vast sums and yet not be responsible to the government, to parliament and to the country.


Frederick Debartzch Monk: Is the position of the Auditor General entirely dependent on the people, and yet independent as regards the government ? What is the difference between the two ?


The MINISTER OF FINANCE.: The great difference is that the Auditor General has not the power to spend one penny. He is not a spending minister.


William Findlay Maclean: He can check spending ministers.


The MINISTER OF FINANCE.: Yes, and he can stop my hon. friend's indemnity. The power of the Auditor General is a power to obstruct, but he has not the power to spend a copper, and therefore no constitutional principle is violated when we say that he should be an independent officer. But it would be an invasion of all true constitutional principles to say that a great body, having power to spend many millions of public money, should not be responsible to this government and parliament. When we create a commission, we create a condition somewhat different from that of an ordinary official to a certain extent. While an ordinary official In one of the departments is immediately under the minister's direction, you do not exactly have the same relations with a commission. There is a degree of independence in the latter, and so far as that degree goes, it is for the public convenience and good; but if you want to carry that to the point of saying that these commissioners, charged with the expenditure of vast sums, are to be altogether independent of government, so that they can carry on their own sweet will, that is not a doctrine consistent with true constitutional principles. The situation is that while you employ gentlemen of ability and independence to do the work, if at any moment their conduct is inconsistent with the public interest, you have the power to remove them.


Mr. SPROULE.: They are the servants of the government no doubt, but in what sense ?


The MINISTER OF FINANCE.: In the same sense that they are a railway commission.


Thomas Simpson Sproule: The government are charged with the duty of building the eastern section of the railway and employ commissioners to build it. These commissioners must be the servants of the government, Hon. Mr. FIELDING.
because the government appoints them and can discharge them and can stop operations whenever they see fit. Besides any contract let by these commissioners for over ten thousand dollars must be subject to the approval of the government. In every sense they are the servants of the government. That being the case, in what position will the government find themselves when they come to determine whether or not the government is importing stuff free to build that road. If the commissioners are only the servants of the government, it is the government who are building the road.


The MINISTER OF FINANCE.: The road is to be constructed by contractors, who will get their material wherever they please, and who cannot import free of duties.


Thomas Simpson Sproule: They are only contracting with the commission for the government. The commission are charged with doing the work for the government, and purpose giving out contracts. It is really the government which is doing the work. I am afraid that when that clause comes to be interpreted by the courts, the courts will hold that it is the government for whom the materials were imported.


The MINISTER OF FINANCE.: By the same process of reasoning my hon. friend might claim-and. he could make the claim with more force, because there is no intervening commission-that a contractor on one of our canals is entitled to get his materials free of duty. But nobody has ever before dreamt of anything of the sort. The contractor is not the government. The law, which has been on the statutes many years with respect to importations by the government, provides that articles imported direct by the government for public use will not pay duty. It would be a matter of little concern if they did, because it would only be taking out of one pocket and putting it into the other. That provision has never been applied to the case of a contractor, and will not.


Mr. BORDEN (Halifax).: My hon. friend, in referring to the expenditure of this commission, gives us no information at all. When the ex-Minister of Railways (Hon. Mr. Blair) was putting through the House the Railwmy Commission Bill, he was able to give some information as to what the cost would be.


The MINISTER OF FINANCE.: Not until the end of the discussion.


Robert Laird Borden: I do not remember whether it was the beginning or the end.


The MINISTER OF FINANCE.: I do.


Robert Laird Borden: Certainly (luring the progress of the Bill through the House.


Xlie MINISTER OF PUBLIC WORKS.: It was on a resolution fixing the salaries.


The MINISTER OF FINANCE.: Introduced at a later stage.


Robert Laird Borden: The hon. gentleman's memory may be better than mine, hut my impression is that it was during the progress of the Bill. My hon. friend, the Minister of Finance, in referring to the transportation commission, seems to think that the object of that commission does not involve to any extent matters which are dealt with in this measure. He is absolutely mistaken. The terms of the Order in Council provide for a transportation commission of the widest possible character, sufficiently comprehensive to include the very measure we are dealing with to-day. There cannot be any doubt about that. The words themselves havp been read so frequently that it would be wearisome to read them again, but I have them here under my hand. The criticism of my hon. friend from Jacques Cartier (Mr. Monk) is this, that while you are proposing to spend a large amount on this transportation commission, you are, without waiting for the report of that commission, going to deal with one of the most important questions with which it can be concerned. In other words, you are spending an enormous sum for the purpose of getting certain information on a subject of the most vital importance, and at the same time you are going to deal in advance with certain matters as to which the report of the commission will be most valuable, if it is a fair criticism, and I do not think my hon. friend the Minister of Finance understood it exactly in the way it was intended, if he put any different meaning upon it. ,


Frederick Debartzch Monk: With regard to the suggestion which I made a moment ago, I would like to say, as my hon. friend the leader of the opposition has explained, that if this was to be a commission, whose tenure of office was similar to the tenure of office, for instance, of the Auditor General, if the members of that commission would hold office until the end of the construction work, and could not in the meantime be removed, except as our judges are, on an address to both houses of pai'liament, I would say that we had a guarantee of independence which costs dear, but which is worth paying for, because we will have a body, not as my hon. friend the Finance Minister says, independent of the people, but independent of the executive.


The MINISTER OF FINANCE.: The executive and the people are one.


Frederick Debartzch Monk: Independent of the .executive but absolutely dependent upon parliament, but we have not that. We have simply a body of special servants of the government revocable at will. They can he removed, and will be removed, whenever
the government experience any dissatisfaction with them. How much are they going to cost ? Well, judging from the salaries that have been proposed for other commissioners, they will cost $6,000 a year apiece. That would be $18,000 for the salaries of the commissioners. And, when you defray their travelling expenses, and the salaries and expenses of their secretaries, assistant secretaries and the whole organization of this body distinct from the department of Railways, the yearly expense will not be far from $50,000 or $00,000. And yet, these men will not be more independent of the power of the government than a clerk in any of the departments.


The PRIME MINISTER.: Does my hon. friend (Mr. Monk) object to the creation of this commission ?


Frederick Debartzch Monk: I do, surely, with the proposed tenure of office. Make the commissioners independent so that, during the period of construction, they shall be removable only as the judges are removable or as the Auditor General is removable, on joint address of both houses and that would be folly ; for then they will be able to act independently, and will be subject only to the control of parliament. And instead of spending $50,000 or $75,000 or $100,000 for a commission that will not be independent of the government, it would be better to organize less expensive machinery. Let three, four, or, if necessary, five, competent employees he appointed, who will have charge of the work and will report to the government. The expense would not be one-third of what it would cost under this proposal.


Mr. KEMP.: The Finance Minister, in answer to the hon. member from Jacques Cartier (Mr. Monk) claimed that the creation of the transportation commission was not for the purpose of dealing with this railway. The hon. member for Jacques Cartier said- or at least I inferred from what lie said- that the government had claimed to solve the transportation question by the building of this transcontinental railway. And I think it is fair to hold that the government did, really and in effect, claim to have solved the transportation problem by the building of this road. The Prime Minister, in introducing the Bill in this House said : We consider that It is the duty of all those who sit within these walls by the will of the people, to provide immediate means whereby the products of the new .settlers may find an exit to the ocean at the least possible cost.
It seems to me that if this transportation commission are able to report other routes as available through which the traffic of the North-west can be transported more cheaply than by the all-rail route to St. John or Quebec, the government null find themselves in a very awkward position. The Minute of the Privy Council, as the leader of the

opposition has said, was very broad. It said :
If necessary, new surveys should be^ made to determine whether any more economical and satisfactory channels of transportation by land or water can be opened up.
Why do not the government wait until they get the reports of this commission as to whether it would be practicable to carry the produce of the west to the sea-hoard by the all-rail route ? I do not think that any explanations have been given that make that clear to this House or to the country. It seems to me that, even now, the government should look into the question, and wait until they have found what is believed to be the most feasible route before proceeding with this construction.


William Findlay Maclean: We have had the statement made here to-day that this transcontinental railway project is not a solution of the transportation problem. The acting Minister of Railways (Hon. Mr. Fielding) lias made that statement here to-day, if I understood him aright. On what ground, then, do the Prime Minister and the government justify the commitment of this country to an expenditure of $100,000,000 or $150,000,000 on this project ? Under the doctrine of responsible government, they must justify it. But they are seeking here to provide a commission behind which they will entrench themselves, and so evade the responsibility which properly belongs to them. If we have a ministry of railways which costs us a good many hundreds of thousands of dollars a year, why are we spending that money ? Why have we a responsible Minister of Railways, if not to advise parliament and the government as to how transportation problems ought to be dealt with ? But in this single session, we have three commissions created and the corollary of what is said to-day is that ai fourth commission should be created to administer the Intercolonial Railway. If we have it in connection with this branch 'of the Department of Railways why should we not have it in the others ?


The MINISTER OF FINANCE.: Does the hon. gentleman (Mr. Maclean) forget that the commission was appointed to construct the Intercolonial ? And this deals with construction.


William Findlay Maclean: I understand that quite well, Aquila Walsh, I think, was the secretary in the old commission. But if we are to have so much of this government by commission, there is no reason why it should not be extended to other departments as well. Probably the Minister of Customs (Hon. Mr. Paterson) would like a commission to assist him. Terhaps the Minister of Justice (Hon. Mr. Fitzpatrick) would like a commission

he has several now.


Mr. COCHRANE.: There ought to be one to assist the Minister of Trade and Commerce (Rt. Hon. Sir Richard Cartwright).


Albert Edward Kemp: 


William Findlay Maclean: No doubt, the Minister of Trade and Commerce would like to have such assistance. But if we believe in responsible government in this country, if we give ministers positions and pay them to advise parliament how we ought to transact the public business, let us carry out that system ; but if we intend to abandon it and establish government by commission, we ought to have a clear statement to that effect, an announcement to the people that responsible government has ceased to exist, and that government by commission has taken its place. Here in one department- and I repeat this because I desire to impress it upon the House and the Prime Minister-we have appointed three commissions this session. That is not responsible government ; that is not what the Liberal party in this country have been upholding. They have condemned this form of government again and again and have advocated responsible government. Now they are advocates, by legislation and by example, of government by commission. I understand that a commission is all right to ascertain facts. I understand that a commission is constitutional, in its way and in its place. But there is a constitutional limitation to the appointment of commissions, and I say that that limitation has been exceeded in this case, and that we ought to have more government by responsible ministers. The proposition before the House ought to be, as it certainly is not, the solution of the transportation problem, based on the fullest inquiry and the collection of the greatest amount of information ; and, that information having been collected it should be laid before parliament and a measure based upon it prepared. But, instead of that, we have commissions appointed to do something after the country is committed to enormous expenditure. That cannot be justified. It may be carried through this House, but that will not justify it in the eyes of the people. What I contend is that there should be less commission and more responsible government, and there should be full information laid before parliament in connection with a proposal of this kind.


The PRIME MINISTER.: If our hon. friends on the other side object to the commission being appointed why do not they act according to their words ? Why should their opposition be confined to words ? Who on that side of the House has objected to the appointment of the railway commission to take the place of the Railway Committee of the Privy Council ? The appointment of that commission has been advocated by my hon. friend (Mr. Maclean) for years and years ; and when the Bill under which it was to he appointed, was before the House, the hon. gentleman did not object. If the hon. gentleman does not like government by commission, why did he advocate the appointment of that commission on this floor year after year ? What sense is there,

after tlie Bill has been passed, largely at his own suggestion, in objecting to this as government by commission ? The whole country, if we are to believe the Toronto * World ' was clamouring for this commission. And, now that we are satisfying the whole country, the hon. gentleman is not pleased, and says that this is government by commission. A man .must have some sense after all. Now, as regards the commission which is now under discussion, are hon. gentlemen opposite for it or against it ? If they are for it, let them say so ; if they are against it, let them say so. But they dare not say either. I understand the position of my hon. friend from Jacques Cartier (Mr. Monk). I can foresee the speeches that he will make in the province of Quebec by and by-' Commissions which are going to cost lots of money, and the ministers are not doing their work.'
Here Is a commission which has been appointed and created largely at the instigation of the opposition, represented by the hon. member for East York (Mr. Maclean), and it is going to cost a lot of money. But if we had not appointed that commission we would have had the same gentleman from East York now blaming us for not appointing a commission ; while now that we have created it, he is still blaming us. Evidently we cannot satisfy him. Now, the hon. member for Jacques Cartier (Mr. Monk) is condemning our policy of controlling the commission contemplated in this Bill. He says he wants them to be independent, as the judges and the Auditor General are, for the reason, he says, that the judges are responsible to parliament. This is a new doctrine for a gentleman to teach who, I understand, is a professor in Laval University, a professor, if I mistake not, of constitutional law. It is a strange doctrine for him to preach that the judges are responsible to parliament. Where is that responsibility ? I have always understood that the judges were responsible only to their own conscience, and parliament has no power over them. True, they can be removed, but only on an address of both Houses of parliament. That law has been adopted to make them absolutely independent of parliament, and they are only responsible to parliament in extreme cases of malfeasance, which cases are determined and settled by an address of both houses of parliament. My hon. friend now asks-I am sure he will not move in that direction-but he puts forward the idea that these commissioners which we are going to appoint should be responsible the same as judges are, that is to say, should be removable only by an address voted by the Senate and House of Commons. Here are commissioners which will have the spending of $30,000,000 or $40,000,000 perhaps, who will be absolutely independent. They might make a vicious contract, and yet parliament cannot pass a vote of censure upon them ; all that parliament can do is to remove them by a vote of the Senate and House of Commons. Well, if my hon. friend is serious in that proposition, let him move an amendment, but until he moves such an amendment, he will permit me to say that we cannot take his proposition seriously.


Mr.   MONIC@: I have endeavoured to teach constitutional law as well as I could in the university for some twelve years, and I And out now for the first time from the speech of my hon. friend that our judges are entirely independent of parliament. I taught differently, but it seems that I taught a heretical doctrine.


The PRIME MINISTER.: I am afraid so.


Frederick Debartzch Monk: But I am afraid I will have to continue teaching that there is a power in this land which controls even the judges, and that is the parliament of this country ; and until my right hon. friend can demonstrate to me a little more clearly than he has done that that is not the case, I shall continue to believe that under the old Settlement Act of 1701, passed under the reign of Queen Anne, and under our own Confederation Act, and a special clause therein, which I will show to my right hon. friend if he has never seen it-our judges are responsible to parliament and can be removed under an address of both Houses.


The PRIME MINISTER.: Hear, hear.


Frederick Debartzch Monk: That is what I call responsibility. But I will say this to my right hon. friend: He is always inviting us to move. We have moved a great deal; we moved for a whole year for some information on this railway, and we cannot keep moving eternally. But my position on this subject is perfectly clear and it requires no motion.


The MINISTER OF FINANCE.: My hon. friends are not going to move, they are going to stay right there.


Frederick Debartzch Monk: This is the first time I have seen the Minister of Finance get a little angry, and when he gets angry he takes our position seriously. Last evening he brushed aside the leader of the opposition for having offered some amendments, and the same with the hon. member for Hamilton (Mr. Barker). Those hon. gentlemen were serious enough, but the acting Minister of Railways brushed them aside as if they were so much trash. But to-day he seems to be more serious because he is getting angry. I will tell my right hon. friend this, that the position I take, and which I think has been taken by other members of this committee, is perfectly clear. We object to paying $100,000 to a commission of men who will be entirely dependent on the government. I say if the government are going to do the work that way through the commission, they might as well do it themselves.

But if they will give to that commission a character of independence, a character which is given in England to the judges, and which is held here by our Auditor General, a character of permanency during good conduct, and subject to dismissal only upon an address of both Houses of parliament, then I will vote for that large expenditure. Their tenure of office will then be totally different, and I will be prepared to agree to that expenditure, because the myth which the right hon. gentleman held up at the commencement of our examination of this Bill, that this project was only going to cost $13,000,000, has disappeared, we do not hear of it any more. It is going to cost $100,000,000. That is one-third of the present debt of the country ; but if it costs us $50,000,000 or $60,000,000, and that expenditure is put in charge of three independent men in the service of the government, revocable at will, then I think the money we pay them will be well spent. Now, what is the use of moving an amendment ? If the opposition were to make a motion of the nature mentioned by the right hon. gentleman, it would be brushed aside by the acting Minister of Railways and Canals, who has now recovered his good humour.


Th MINISTER OF FINANCE.: I think I owe it to the hon. member for Jacques Cartier to tell him something that occurred during his temporary absence from the House, while the leader of the opposition and the hon. member for East York gave ns their views upon the necessity of carrying on the work by the government, and without any intervention of a commission. Their chief objection was that the government are going to shelter themselves behind this commission. What we wanted, they said, was not a commission at all; they wanted the government to do the work. Well, there is some degree of responsibility in this commission, because, as my hon. friend says, it will be appointed by the government and removable by the government. So there is government responsibility. But during the absence of my hon. friend- perhaps because he was absent-the hon. member for East York went on to explain that the attempt to carry cn the public expenditure through bodies which were not responsible to parliament, was a violation of all constitutional principles, and of the good old fashioned rule. Now, our commission will have a responsibility to government, and through the government to parliament. My hon. friend wants the commission-if he wants it at all, I am afraid he does not, at all events he says he won't move-he wants a commission which *will have all the independence of a judge. Let me tell him that -when he is teaching constitutional law' down there I am afraid, if he will permit me to advise him. that he will have to go a little further than the mere abstract theory, and he will have to Mr. MONK.
teach that this responsibility of judges to parliament is very largely a dream, because wTe know that practically there is no responsibility. There are judges who are neglecting their duties, there are judges who are too old, there are judges who are ill, and there are judges who are not performing their duties, and every man in this parliament knows it.


Frederick Debartzch Monk: The remedy is here.


The MINISTER OF FINANCE.: But it is not a practical remedy, it is not applied. We do not want that kind of responsibility in men who are going to expend many millions of public money.


Robert Laird Borden: I say that if the government know of judges wrho are neglecting their duty in that way, it is the duty of the government to present their case to parliament. I am surprised to hear the Minister of Finance rise in this parliament and make the statement which he has made, and I repeat that if the government knows of such cases it is their duty to move in the matter. I think the argument which my right hon. friend has presented to the House ought to be embalmed for ever ; it is this, that the judges are not responsible to parliament because parliament has the right to remove them _ from office. That argument put in another form amounts to this, that parliament has a right to remove judges by an address to the Crown, therefore, parliament has no control whatever over the judges. That is the view presented to this House by the Prime Minister of this country. I think that my hon. friend from Jacques Cartier has not contravened any principles of constitutional law by teaching, as he says he has done for many years, the exactly contrary doctrine in Laval University.


The PRIME MINISTER.: I am no less surprised, indeed I am still more surprised than my hon. friend, to hear the two leading lights of the opposition lay down the doctrine that the judges are responsible to parliament. The judges are removable by an address of parliament. For what cause ? Not for an error of judgment, but simply for malfeasance, for some ease of gross misconduct, and causes of that kind. But a judge is perfectly free on the bench, lie is free to do wrong, because he is responsible only to his conscience, and parliament has no power over him in the character of his judgments. Will my hon. friend apply the same d ctrine to any official of this government, or to any man wffio has the spending of public money ? If an officer of this government spends money, although he spends it conscientiously, in a manner which is not approved of by parliament, parliament can dismiss him at once for making an error in judgment. Would the same doctrine apply to a judge ? Where would be the boasted independence of British judges

if they were answerable to parliament for every decision they gave whether it should he right or wrong. A judge's decision is always held to be right and in so far as they are superior to parliament they have a distinction which is unique. We have a famous example in British history where one of the most eminent members of the British judiciary was taken to task by parliament for malfeasance. Really I cannot understand how my hon. friend, who is a leading lawyer, an excellent lawyer and a professor in Laval should take this position.


Robert Laird Borden: I have no doubt in his youthful days, he, my right hon. friend recognized the doctrine taught so well by my hon. friend the hon. member for Jacques Cartier (Mr. Monk) but it is quite evident that a long course of political life has prevented him from appreciating the doctrine which no doubt he understood in his earlier days. Who is to judge when parliament proposes to deal with judicial officers ? Is there any appeal from parliament ? None whatever. Parliament can deal with these officers when a complaint is laid before parliament. Parliament is the last court of resort in a case of that kind. Parliament can deal with judges upon any such condition of affairs arising as has been stated by the hon. Minister of Finance (Hon. Mr. Fielding) and can deal with them without further resort except the resort of an appeal to the people whenever a general election comes on.


William Findlay Maclean: I do not know whether this is quite germane to the subject but it is a resolution introduced into the Liberal convention of 1893, and it reads as follows :
That it is the ancient and undoubted right of the House of Commons to inquire into all matters of public expenditure, and into all charges of misconduct in office against ministers of the Crown, and the reference of such matters to royal commissions created upon the advice of the accused is at variance with the due responsibility of ministers to the House of Commons and tends to weaken the authority of the House over the executive government, and this convention affirms that the powers of the people's representatives in this regard should on all fitting occasions be upheld.


The PRIME MINISTER.: That is sound doctrine.
Mr, MACLEAN. That may be sound doctrine, but, while specific reference is here made to the investigation of charges against ministers, it is a declaration against the reference of such questions to commissions.


The PRIME MINISTER.: I will not read the Toronto ' World ' any more.


William Findlay Maclean: The right hon. gentleman is taunting me to-day with upholding Liberal doctrines and it seems to me that I am the only one in this House who stands up for wliat was preached years ago by lion, gentlemen opposite. If there is any
doctrine that they preached it was the doctrine of responsible government. Why have two instruments to carry out responsible government in this country ? If we have a responsible government why an irresponsible commission ? Why this unnecessary expenditure ? I stand up -to-day for responsible government. I stand up for holding a minister and the entire government responsible for the administration of this money and for the building of this road. We will have the work better carried out if we have good ministers. If we charge the Minister of Railways and Canals with the duty of directing the expenditure of this money we will then be able to hold the minister responsible and he will not he able to shelter himself behind a commission as be will be in this case. He will not say that this was done under a commission, a commission that can receive instructions, to use a popular phrase, on the side from the government. It will not be a commission that will have power to act independently of the government. It will be a creature of the government. Why have a commission in this case ? I justify the commission that has been established to carry out the administration of the railway law in this country and to regulate the roads. I say the government have done a good thing in bringing in the Bill providing for the creation of that commission this session, but, this is not a similar -commission. This is the creation of a commission to expend public money. If this is to be done in this case why not have a commission to take charge of the expenditure upon canals ? There is to be a large expenditure proposed this session and there will be a large expenditure proposed in the future in connection with the improvements of canals and harbours and if there is any expenditure made by Ibis parliament that cannot he justified it is the expenditure voted this session for certain river and harbour improvements. If we bad a commission above political influence that would administer an expenditure of that kind it would be justified, but it has not been proposed to appoint a commission to supervise this wasteful expenditure that is going on in connection with the harbour and river improvements. The government ought to give us a clear cut declaration whether it is their intention to enlarge tlie expenditure of money by commission. Why do we want all these ministers ? We could do with a less number of ministers if tlie expenditure were entrusted to commissioners. Is it the intention of the government to extend this principle into every department of public expenditure and if so why do they extend it to the expenditure upon canals and harbour improvements where there is to be even as large an expenditure as is proposed in connection with this railway ? Surely we are entitled to have a statement from the government upon that I point.


The MINISTER OF JUSTICE.: I presume we are now called upon to deal with section 9 of the Bill and I want to say a word about it. Section 9 was adapted from tlie Bill which provides for the construction of the Intercolonial Railway and I would also say for the special information of my hon. friend from Jacques Cartier (air. Monk) that it was taken likewise from the Act introduced in the Quebec legislature to provide for the construction of the Quebec, Montreal, Ottawa and Occidental Railway in 1S75 by the Conservative government. In respect to the Intercolonial Railway and the Quebec, Montreal, Ottawa and Occidental Railway, commissioners were appointed during pleasure and it is not to my knowledge that any complaint was ever made of the tenure of office of these commissioners.


Robert Laird Borden: My hon. friend said that we were dealing with section 9. I suppose he meant section 16.


The MINISTER OF JUSTICE.: We ought to deal with section 16 but we are really dealing with section 9 because the question has reference to section 9 which provides for the appointment of commissioners and their tenure of office. We ought to be dealiug with section 16 but my hon. friend from Jacques Cartier went back to section 9 by mistake.


Robert Laird Borden: At some convenient time-it does not matter when-I would like my hon. friend to reconsider for a few moments section 13. Perhaps it may be done when we dispose of this.


The MINISTER OF JUSTICE.: We might as well do it now.


Robert Laird Borden: I would move then the reconsideration of section 13.


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Motion agreed to.
On section 13,
Robert Laird Borden: I merely want to ask the hon. Minister of Justice, who is, of course, absolutely familiar with it, what would be the procedure for awarding compensation to persons whose land has been taken. As I understand it, under the law in regard to government railways-I am not very familiar with the later amendments to it-the land is absolutely vested in the Crown as it is vested under this section,; upon filing a plan and description in the land office of the registration district in which the land is situated. Then the Railway Act goes on to provide a procedure by' which the persons whose lands have been taken could obtain compensation. I do not see any procedure of that kind here, and it occurred to me that the provisions in the Railway Act might be wide enough to apply to the case of land taken Tinder section 13, although my recollection is that they would not be wide enough. If my impression in that regard is correct then it would seem to me that section 13 should be am-


William Findlay Maclean: ended by the addition of a subsection providing that the provisions of that Act for awarding compensation in such cases should be made applicable to the case of land taken under section 13.


The MINISTER OF JUSTICE.: My intention was to provide for that in connection with section 15 which reads as follows :
The said commissioners shall have in respect to the said eastern division, in addition to all the rights and powers conferred by this Act, ail ithe rights, powers, remedies and immunities conferred upon a railway company under the Railway Act and amendments thereto, or under any general railway Act for the time being in force, and the said Act and amendments thereto, or such general railway Act, in so far as they are applicable to the said railway, and in so far as they are not Inconsistent with or contrary to the provisions of this Act, shall be taken and held to be incorporated in this Act.
They have all the powers that a railway company will have under the general Railway Act. That was the intention when we drafted section 15.


Robert Laird Borden: Does the Minister of Justice think that will afford a more expeditious means than the Exchequer Court in case there is mo agreement as to compensation ?


The MINISTER OF JUSTICE.: I have consulted the officials of the department and the conclusion to which we came was that the provisions of the general Railway Act would be applicable, and that these commissioners would be iu tbe same position as an ordinary railway company. Of course, that would not give tbe right to go to the Exchequer Court.


Robert Laird Borden: In that case, it is in reality the Crown, through the commissioners, who takes the property of the person expropriated, and my experience is that a procedure in the Exchequer Court would be more expeditious than resorting to the appointment of arbitrators for expropriation under tbe General Railway Act.


The MINISTER OF JUSTICE.: This railway will be located in part far away from the centre where-the Exchequer Court sits, and I came to the conclusion that it would be inconvenient for a man whose property was expropriated between Levis and Edmonton, for instance, to come to the Exchequer Court. While in some respects tlie reference to tbe Exchequer Court is more satisfactory, yet I think the process we provide here will lead to a speedier solution of the difficulty, because it enables tlie question to be dealt with in the locality in which it arises.


Robert Laird Borden: Very well.


Mr. OSLER.: When this agreement was first presented, I read it and I was especially struck with two points in it. One of these points was the fact that practically the government had no security from any

one to operate tlie eastern section, and the other point was in reference to clause 17, which says that no addition should be made to the cost of construction or to the capital construction account in respect to customs duties where direct importation of material was authorized by the government. It occurred to me that in these two points the contract was weak. Accordingly, I did what I would do in my own case ; I applied to the best authority on contracts that I knew of, and I asked for an interpretation of these clauses. I got the opinion of Mr. J. F. Smith, K.C., which I read to tlie House. There was an attempt to belittle that opinion by stating that Mr. Smith is a real estate agent who did nothing but draw up mortgages, and that lie had no knowledege or experience as counsel. Mr. ,T. F. Smith is a well known leading counsel and authority on contracts. He has been for many years the confidential adviser of two of the largest of our banks in Canada. He was for long years associated with the late J. J. C. Abbott, in connection with some of the largest contracts which Mr. Abbott, as a lawyer, drew up. I look upon Mr. Smith as an eminently safe and wise counsellor, and I would take his interpretation of that agreement most thoroughly if it were for myself. However, the matter seemed so important to me that I thought I had better fortify that opinion, and consequently I asked the firm of Messrs. Blake, Lash & Cassels-Messrs. Blake and Cassels -if they would give me a legal opinion on these two points in the contract. I received a letter from Mr. S. H. Blake. I may say that I submitted the contract to him, stating simply that I wished to be advised upon it. and he sent me a note saying that possibly from the long connection of his firm with the Grand Trunk Railway Company, he .might not be able to give me his opinion. He said that after he communicated with the Grand Trunk authorities, and if he was at liberty he would give me his opinion with Mr. Cassels. If he was not at liberty, then, as I was leaving Toronto for New York the day I saw him, I asked him if he would hand my letter and the questions on the contract to the man he thought best able in Toronto to give me an opinion on the subject


Mr. DEPUTY SPEAKER.: The discussion on this question would, come more appropriately under another clause.


The PRIME MINISTER.: If the chairman will permit, we will waive the objection.


Peter Macdonald: Very well, if it is the will of the committee the hon. gentleman can proceed.


Edmund Boyd Osler: I received this letter from Mr. Blake. I did not know whether it would be quite right to read it, but I have his authority for doing so.
Toronto, September 10, 1903.
E. B. Osier, Esq., M.P.,
House of Commons,
Ottawa.
My dear Osier,-John Bell telephoned me that he considered that under the circumstances I was precluded from giving an opinion. I consulted with Walter Cassels and other members of my firm and had much difficulty in finding any person in town and able to deal with the questions submitted. We at length came to the conclusion that no person would answer the purpose better than Mr. I. F. Hellmuth, K.C., and so I have sent him over all the papers, with the request that without fail by to-morro.v afternoon he would send you his conclusion in the matter. Regretting my inability to oblige you in this matter.
Believe me,
Faithfully yours,



S. H. BLAKE.

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I have received the opinion of Mr. Hell-muth on this matter and I have further received the opinion of Mr. Donald Macmaster, of Montreal. These are to me the most important clauses in the Bill, and as these opinions confirm my own first impression of the meaning of the clauses, I think they are extremely important, notwithstanding the assertion of the Minister of Finance that there was absolutely nothing in the BUI which would warrant the assumption that materials could be brought in free of duty. When I see a clause iu the Bill which is a little unusual, it strikes me at once that it was put there for a purpose. If there is no meaning in the contention that supplies may he brought in free under this contract, I would like very much to know why clause 17 is embodied in the contract with reference to the eastern section, and is omitted altogether in connection with the western section. If it has no meaning, surely it ought not to have been embodied in the Bill to make confusion. Now, Mr. Hellmuth's opinion is as follows :
Toronto, September 11th, 1903.
E. B. Osier, Esq., M.P.,
House of Commons,
Ottawa, Ont.
Dear Sir,-My opinion has been asked upon certain questions connected with Bill No. 235, intituled ' An Act respecting the construction of a National Transcontinental Railway,' now pending before the present session of parliament. The subject-matter with which I have been requested to deal is, as I understand it, as follows :-
Clauses 15 and 16 in the Bill provide for the appointment of commissioners to superintend the work of construction, &c. In the agreement, paragraph 5 provides for the construction of the eastern division ; paragraphs 15 and 16 define the cost of construction. Paragraph 17 provides that ' no addition shall be made to the cost of construction or to the capital of construction account in respect of customs duties in cases where there is direct importation o! materials or supplies by the government.'
Under these, it is asked, whether the company, i.e., the Grand Trunk Pacific, who agree to pay the government 3 per cent upon the cost of construction, cannot insist upon the govern-
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ment exercising the power o£ importing all materials whether directly or through contractors without paying customs duties, so that the company will only he obliged to pay 3 per cent interest on the cost, exclusive of any customs duties.
The answer to this must necessarily depend upon the legal construction of the documents, i.e., the proposed Bill and the executed contract attached thereto.	.
By paragraph 1 of the agreement, the government is defined to be His Majesty the King acting in respect of the Dominion of Canada by and through His Excellency the Governor General in Council.
By paragraph 5, the eastern division shall be constructed by and at the expense of the government, &c.
By paragraph 7, the company are specifically admitted to be interested in the economical construction of the eastern division.
By paragraph 15, the expression * cost of construction ' of the eastern division is defined, and, although a large number of specific items are set out, there is nothing that even inferentially could be held to include customs duties. There is nothing whatever said about customs duties ; hut, even if it might be argued that under the words in that paragraph ' costs and expenses occasioned by the construction of the said division whether of the same kind as or differing in kind from the clauses of expenditure specially mentioned, including interest upon the money expended customs duties might be included, this is specifically negatived by paragraph 17, which paragraph is an independent paragraph governing the whole agreement, and every clause in same, including paragraphs 15 and 16, the latter providing for what might be called betterments made from time to time aFter the completion of the said eastern division. This is further made clear by paragraph 20, which speaks of 1 cost of construction ' of the eastern division ' ascertained in the manner defined in paragraphs 15 and 16 of this agreement.'
Further, by paragraph 47 of the agreement, the company have a right to have determined by arbitration any dispute that may arise as to the manner or construction of the agreement, or amongst other things ' cost of construction ' ; and it is therefore clear this question might be raised under this paragraph.
Turning now to the Bill itself by section 2 the agreement is declared to be legally binding upon the parties thereto, i.e., His Majesty and the company ; and the result is that the company are entitled to insist upon the performance of the agreement by the government in as full a manner as the government are entitled to insist upon the performance by the company ; s) that the company have a legal right to contend that the eastern division shall be constructed by and at the expense of the government, in accordance with the paragraphs of the agreement before referred to.
Section 8 provides that the eastern division shall be constructed by or for the government.
Section 9 provides that the construction shall be under the charge and control of three commissioners, to be appointed by the Governor in Council. These commissioners, therefore, merely represent the government, so far as their duties are concerned.
This is further evidenced by section 13 of the Bill,which authorizes the commissioners to enter upon and take possession of lands, the latter Mr. OSLER.
part of the section declaring that such lands shall thereupon be vested in the Crown.
Section 18 authorizes the commissioners to let the work of constructing the said eastern division ; but the proviso in that section declares that no contract involving an expenditure of $10,000 or upwards shall be concluded by the said commissioners until it has been sanctioned by the Governor in Council ; and section 21 enacts that the Governor in Council shall have the power at any time to suspend the progress of work upon said eastern division until the then next session of parliament.
My conclusion therefore is that the eastern division is to be constructed by the government, and that the company could successfully contend that whether the road is constructed by commissioners representing the government or by contractors, to whom the contracts are let by the commissioners or Governor in Council, it is still, so far as the company are concerned, a road constructed by the government and that, therefore, the company are not obliged to take into account In the ' cost of construction ' customs duties which would add to the cost of materials or supplies for use in the road, even if these materials or supplies are imported by a representative or delegate of the government. In other words, the government having undertaken to construct this section cannot add to the cost of construction by having a representative or delegate perform the work and by then charging such representative or delegate customs duties ; the 3 per cent Would, therefore, only be on the cost of construction, less customs duties.
The second question is, what security under the contract has the government against the Grand Trunk Pacific or Grand Trunk, in case at any time the Grand Trunk Pacific or Grand Trunk refuse to operate the eastern division, or to pay the 3 per cent interest ?
In answer to this, the only security provided by the agreement is contained in paragraph 35, sub-clause (c), which is a second mortgage upon $5,000,000 of rolling stock, which is to be ear-marked for the use of the eastern division, that is to say, this is the only special security that the government have in case of default ; of course, the government would outside of this have their rights as an ordinary creditor, subject to all other preference claims.
Yours faithfully

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That clearly confirms the opinion which I formed on reading the contract. I submitted the same questions to Donald Macmaster, K.C. I tried to get opinions from one or two lawyers who were government supporters; but I found that every man of prominence had been retained by the government or the Grand Trunk. So I was forced to take the opinions of men who are Conservatives; but, notwithstanding that fact
The MINISTER OF JUSTICE.: Who are the gentlemen of prominence to whom my hon. friend refers who are retained by the government ?


Edmund Boyd Osler: I said by the Grand Trunk or the government.


The MINISTER OF JUSTICE.: Just begin with the government, enumerate those who have been retained by the government.


Edmund Boyd Osler: I do not think that is a question


The MINISTER OF FINANCE.: My hon. friend conveys the impression that we retained a large number.


Mr OSLER.: I asked Mr. Blake, whose opinion I should have. He suggested at once Mr. Shepley. I also asked Mr. Walter Cassels.


The MINISTER OF FINANCE.: Are these gentlemen retained by the government ?


Edmund Boyd Osler: I said by the government or the Grand Trunk.


The MINISTER OF FINANCE.: The hon. gentleman will pardon me. He states that tiie government have retained a large army of legal gentlemen. If they are retained by either the government or the Grand Trunk, I ask him to state who they are.


Edmund Boyd Osler: I said by the Grand Trunk or tile government. I think I am quite right.


The MINISTER OF FINANCE.: That is not fair. There is nobody retained by the government in this matter.


Edmund Boyd Osler: I remember the minister himself saying that Mr. Shepley had been here on behalf of the government revising this contract-and Mr. Gormuily too.


William Findlay Maclean: Perhaps the government will say whom they have retained.


Edmund Boyd Osler: However, I do not think any legal gentleman in this House will dispute the standing of Mr. Hellmutli or of Mr. Donald Maemaster, or would suggest for a moment that because of their political leanings they would give an opinion which would discredit them in the eyes of the legal profession. I would trust their opinion absolutely as if they were on this side of politics.
Mr. Macmaster's opinion, which is a very lengthy one, is as follows :



CASE FOR OPINION.

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The questions submitted for opinion are :
1. What is the true effect and meaning of clause 17 in the contract of the 29th July, 1903, between the government of Canada, and Sir Charles Rivers Wilson and others, acting on behalf of the Grand Trunk Pacific Railway Company, and more particularly
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(a.) Is its scope limited to the remission of duties on materials and supplies imported by the government after the construction of the eastern division, and while it is leased and operated by the company, or,
(b.) Is it applicable to importations of the like materials when used in the original construction of the eastern division ? and
(c.) Is the government absolved from the obligation to remit duties upon importations o! materials and supplies when these are made through contractors to whom the government has let the work of construction ?

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Clause 17 is as follows
' No addition shall be made to the cost of construction or to the capital of construction account in respect of customs duties in casts where there is direct importation of material or supplies by the government.'
To answer these questions it is necessary to look at the whole scope of the agreement, to construe this clause, and each of the clauses, with reference to the whole agreement, and to collect the common intention of the parties therefrom.
The agreement provides for the construction of a railway from Moncton, in New Brunswick, passing through central New Brunswick, and through the province of Quebec to the city of Quebec, and thence through northern Quebec and Ontario to Winnipeg ; from Winnipeg, over the prairies to the Rocky mountains and through the Rocky mountains to a seaport at or near Port Simpson, in British Columbia, on the coast of the Pacific ocean.
The railway is subdivided into two divisions-
1.	That from Moncton to Winnipeg is called the eastern division ; and
2.	That from Winnipeg to the Pacific ocean is called the western division ; and the latter division, in turn, is divided into two sections-the prairie section and the mountain section.
So far as construction is concerned, the scheme of the agreement appears to be this : That the government of Canada should, itself, construct the eastern division, and that it should lend its credit to the extent of $13,000 a mile in the prairie section, and $30,000 a mile in the mountain section, to enable the company to raise the money to construct the western division.
The Grand Trunk Pacific Company also agrees that the Grand Trunk Railway Company of Canada shall guarantee its bonds for the balance required for the construction of the western division, exclusive of twenty millions of dollars required for the first equipment of the whole line, of which twenty millions, five millions shall be applicable in respect of the equipment of the eastern division of the railway.
The company agrees to deposit five millions of dollars as security for the construction of the western division, and for the first equipment of the whole line of railway. The western division of the railway is to be constructed at the cost of, and is to be owned by, the company. Ths eastern division is to be constructed by, and at the expense of, the government (clause 5), and the company agrees to construct, maintain an! operate the western division, and to take a lease of, maintain and operate the eastern division for fifty years, upon the terms ani conditions in the agreement set forth. The government, however, has not the decisive voice in determining how the eastern division shall be constructed. There is, in respect of that, a * joint supervision ' by the company and by the government, or, what has been, perhaps, more aptly termed, a ' dual control ' or * joint voice.' That is provided for by clause 7 of the agreement, which is as follows :-
' 7. In order to insure, for the protection of the company as lessees of the eastern division of the said railway, the economical construction thereof in such manner that it can be operated to the best advantage, it is hereby agreed that the specifications for the construction of the eastern division shall be submitted to, and approved of by, the company before the commence-
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ment of the work, and that the said work shall be done according to the said specifications and shall be subject to the joint supervision, inspection and acceptance of the chief engineer appointed by the government and the chief engineer of the company, and, in the event of differences as to the specifications, or in case the said engineers shall differ as to Ike work, the questions in dispute shall he determined by the said engineers and a third arbitrator, to be chosen in the manner provided in paragraph four of this agreement.'
And the arbitration referred to is provided for in the latter part of clause 4, as follows :-
' In case the said engineers shall differ, the question shall be determined by the said engineers and a third arbitrator, to be chosen by them, and, in the event of their inability to agree on a third arbitrator, the Chief Justice of the Supreme Court of Canada may appoint the said third arbitrator, and the decision of the majority shall be final.'
The term ' cost of construction ' is defined by clause 15 of the clause, as follows :-
1 The expression ' cost of construction ' in the case of the eastern division, shall mean and include all the cost of materials, supplies, wages, services and transportation required for, or entering into, the construction of the said eastern division, and all expenditure for right-of-way and other lands required for the purposes of the railway and for terminal facilities, accommodation works and damages and compensation for injuries to lands and for accidents and casualties ; cost of engineering, maintenance, repairs and replacement of works anl material during construction, and superintendence, book-keeping, legal expenses, and, generally, costs and expenses occasioned by the construction of the said division, whether of the same kind as, or differing in kind from, the classes of expenditure specially mentioned, including interest upon the money expended ; the interest upon such outlay in each year shall be capitalized at the end of such year, and interest charged thereon at three per cent per annum until the completion of the work and until the lessees enter into possession under the terms of the said lease ; and, for the purposes of this agreement, the amount of such cost of construction, including the principal and all additions for interest, to be ascertained in manner aforesaid, shall, on completion, be finally determined and settled by the government upon the report of such auditors, accountants, or other officers as may be appointed by the government for that purpose.'
The * cost of construction ' referred to in clause 15 is, obviously, the original cost of construction up to the completion of the work by the government, and the taking possession of it, under the lease, by the company.
Then there is provision in the contract for the treatment of sums of money expended by the government for the improvement of the eastern division after its completion and its delivery to the company for operation during the period of the lease, and that is provided for in clause 16 of the contract :
' 16. In case, after the completion of the eastern division and the taking possession thereof by the company under the lease thereof, hereinafter referred to, or at any time thereafter during the continuance of the said lease, the government shall deem it necessary to expend any sums of money for the improvement of the said eastern division, the replacement of structures by others more modern, or otherwise upon Mr. OSIA-1R.
capital account for betterments, and not being ' working expenditure payable by the company, the government may expend such sums, and the amount thereof shall be added to the capital of the construction account at the end of the year in which such expenditure takes place, and shall thereafter be considered as part of the cost of construction, upon which interest, by way of rental, is to be paid by the company; provided that no such expenditure shall be entered upon without the consent and approval of the said company.'
The ' cost of construction ' whether for original construction, or for subsequent improvements, is the sum upon which interest at 3 per cent is payable by the company to the government, which interest Is, under the agreement, the rental which the company obliges itself to pay to the government. That is provided fo * in clause 20 and in that clause there is a specific reference to the paragraphs 15 and 16 of the agreement above quoted and commented upon. Clause 20 is as follows :-
' When completed the said eastern division shall be leased to, and operated by, the company for the period of fifty years, at a rental, rayable as follows, namely :-
For the first seven years of the said term the company shall operate the same, subject only to payment of ' working expenditure ' as defined in paragraph fourteen of this agreement ; for the next succeeding forty-three years the company shall pay annually to the government, by way of rental, a sum equal to three per centum per annum upon the cost of construction of the said division, ascertained in the manner defined in paragraphs fifteen and sixteen of this agreement, provided that, if any one or more of the first three years of the said period of forty-three years, the net earnings of the said division, over and above * working expenditure ' shall not amount to three per centum of the cost of construction, the difference between the net earnings and the rental shall not be payable by the company, but shall he capitalized and form part of the cost of construction, upon the whole amount of which rental is required to be paid at the rate aforesaid, after the first ten years of the said lease, and during the remainder of the said term.'
Then, we have clause 17-the one in question :
' 17. No addition shall be made to the cost of construction or to the capital of construction account in respect of customs duties in cases where there is direct importation of material or supplies by the government, and immediately thereafter, clause 18, which relates to another subject, namely, the construction of the western division.
Clause 47 makes provision for interpreting, the agreement, the obligations of the parties to it, and what constitutes * working expenditure ' or ' cost of construction.' It is as follow's :-
* 47. Any dispute which may arise as to the meaning or construction of this agreement, or as to the performance of any of the obligatiou3 of either of the parties to this agreement, or as to working expenditure or cost of construction, shall, if not herein otherwise provided for, be determined by the award of a single arbitrator, if the parties concur in his appointment, or, if not, by the award of three arbitrators, one of whom shall be appointed by the government, one by the company, and the third by ! the two so appointed, or, in the case of their j being unable to agree, by the Chief Justice of the Supreme Court of Canada, and the award of

a majority of such three arbitrator's shall be Anal.'
It will be observed that the decisions of the arbitrators, under clause 47, as well as under clause 4. are final.
Clause 17 must be drawn into perspective with all these clauses.
Taking the clause by itself, there is no ambiguity in it, but before pointing out its clear and obvious meaning, it must be remembered that the ' dual control ' or ' joint voice ' or ' toint supervision ' referred to in clause 7 above cited, must have its full effect. The railway company which is to pay interest upon the principal expended for original construction ot the eastern division, as well as for subsequent improvements and betterments, is 'entitled, under clause 7, to say that that division shall be ' economically constructed and in such a manner that it can be operated to best advantage.' These are the berms of the clause, and it is, perhaps, the most important clause in the contract.
What, then, is the true interpretation of clause 17-having reference to the context and to all the provisions of the contract ?
It will be observed that duties are not to be added to the ' cost of construction ' or to 1 the capita] of construction account ' in cases where there is direct importation of material and supplies by the government. The ' cost of construction ' referred to in this section, means the ' cost of construction ' as defined in section 15, namely, the original cost of construction, and added thereto, any sums expended by the government for improvements and betterments during the continuance of the lease. (Clause 16). Both expenditures are treated as the cost of construction upon which rental is payable in the form of interest, to the government. The expressions ' the capital of construction account ' and ' cost of construction ' as used in section 17 of the agreement, miean the same thing, for paragraph 16 enacts in terms, that the expenditure on improvements and betterments ' shall be added to the capital of the construction account at the end of the year in which such expenditure takes place, and shall thereafter be considered as part of the cost of construction upon which interest, by way of rental, is to be paid by the company.' The remission of duties, is, however, only applicable in cases where the government makes direct importation of material and supplies whether for the purposes of original construction or for improvements and betterments. But if the government should omit to import supplies and material when they could be obtained more economically abroad than in Canada, a very serious question might arise between the company and the government, under the provisions of clause 7 by which the company, as lessees and. therefore, rent-payers on the expenditure incurred, are ' insured ' that the * construction ' of the eastern division shall be ' economical ' The agreement states that this clause is inserted ' for the protection of the company as lessees.' It must receive its full effect. Under and in virtue of the agreement the company has an appeal to arbitration, not only in respect of differences between the engineer of the company, and the engineer of the government, but as .to the meaning of the agreement itself as" to the performance of the obligations of either party, and as to what constitutes * cost of i construction.'
So much for the agreement. To confirm the agreement, a Bill has been submitted to the legislature, and it may be important to inquire whether the proposed legislation contemplates 355
a variation of the terms of the agreement. I do not find that it does. On the contrary, the second clause of the National Transcontinental Railway Bill provides that :-
* The said agreement bearing date the 29th day of July, 1903, a copy of which forms the schedule to this Act, is hereby ratified and confirmed and declared to be legally binding upon His Majesty and the said Grand Trunk Pacific Railway Company, and His Majesty and the said company are hereby authorized and empowered to do whatever is necessary in order to give full effect to the said agreement.' Section 8 provides that :-
' The eastern division of the said Transcontinental Railway, extending from the city of Moncton to the city of Winnipeg, shall he constructed by or for the government in the manner hereinafter provided and subject to the terms and provisions of the said agreement of the 29th July, 1903.'
So far as the questions under consideration are concerned, these are the two dominant clauses of the Bill.
Then follow provisions in order to enable the government to discharge its obligation in respect of construction, which is to be under the ' charge and control ' of three commissioners. The three commissioners and the chief engineer are the agents of the government, one of the contracting panties. The powers conferred upon the commissioners and chief engineer in no respect derogate from the rights of the company under the contract. The powers of the commissioners are defined. Under clause 13 of the Bill, they are ' authorized to enter upon and take possession of any lands required for the purposes of the said eastern division,' and in respect ,of the eastern division the commissioners ar,e to have the powers, &c., conferred upon a railway company, . under the Railway Acts and amendments thereto, when not in conflict with the Bill.
Then follow certain provisions in regard to construction, and i.t is enacted that ' the commissioners shall l,et the work of constructing ' the eastern division by tender and contract. (Clause 16).
Clause 18 provides that * no money shall be paid to any contractor until the chief engineer shall have certified that the work for or on account of which the same is claimed has been duly executed and that such money is due aud payable, nor until such certificate shall have been approved by the said commissioners.' Clause 21 authorizes the Governor in Council ait any time to suspend the progress of the work upon the eastern division until the then next session of parliament.
Clause 22 provides that :-
' The Minister of Finance and Receiver General may, on the recommendation of the Minister of Railways and Canals, from time to time pay such claims and accounts for work done or services performed in the construction of the said eastern division as have been approved and certified by the chairman of the commissioners : Provided, however, that no money shall be so paid until a sufficient appropriation has been made by parliament for the purpose.' And Clause 25 further provides that : -
' The commissioners shall from time to time as moneys are required for payment for work or services in the construction of the said eastern division, issue and deposit with the Minister of Finance and Receiver General, a debenture.' &c.
The commissioners and the chief engineer are the servants of the government which has undertaken to construct the road. There is no-
[Stage Direction]


thing in the Bill expressly authorizing the commissioners to purchase supplies or material, though they may ' let the work ' by tender and contract under the supervision of their principal, the government, and issue debentures 'for payment for work or services.' The Minister of Finance may, from time to .time, pay claims and accounts for ' work done or services performed ' upon the certificate of the chairman of the commissioners, when a sufficient appropriation has been made by parliament for that purpose. There is no reference here to the power to purchase supplies and materials, but that is plainly included in clause 2, which not only confirms the agreement, but authorizes and empowers His Majesty to do whatever is necessary in order to give full effect to it. A clear line of cleavage is drawn between the letting of work and the payment of ' work and services,' on the one hand, and the purchase of supplies and materials. The government has not divested itself of the power to purchase supplies and materials.
And the conclusion, after that long preamble-
Some horn. MEMBERS. Oh, oh.
Edmund Boyd Osler: If I were a lawyer, I would apologize for the length of it. But when I take a lawyer's opinion, and seek to communicate it to the lawyers in this House,
I suppose I must give the reasons for the opinion which I desire to submit. I liave seen longer opinions; but I like short ones myself.


Mr. FRASER.: You will feel that way still more when you come to pay the bill.
Some born. MEMBERS. Oh, oh.


Edmund Boyd Osler: If I have proved, as I think I have proved my original contention, 1 will gladly pay the bill, and save to this country and the manufacturers of this country, millions of dollars. This is the conclusion :
There is no reference in the contract to the construction of the eastern divsdon by contractors. That division Is to be constructed by the government, and no customs duties are to be charged by the government in respect of direct importations of supplies or material- whether for the original construction or for subsequent improvements or betterments. Economical construction being insured to the lessees by the agreement, the company is entitled to demand that the eastern division should be constructed as economically as possible, and the government could not, reasonably, or, in my opinion, legally, relieve itself from the obligation to import the supplies and material, if the effect of so doing would he to contribute to economical construction. As the Bill, in terms, confirms the agreement in all respects and provides that the eastern division .shall be constructed in the manner set forth in the agreement, it would appear to me to be a violation of the spirit and letter of that agreement to pretend that the delegation of the obligation of the government to its servants, the commissioners, in so far as the letting of contracts for the work is concerned, could have the effect of imposing a burden upon the company that, otherwise, it would not be hound to bear. The delegation of the ' charge, and control ' of the work of construction to commissioners. is a mere detail in the execution of the government's obligation to construct the-


Edmund Boyd Osler: eastern division

and to construct it as economically as possible.



DONALD MACMASTER.

[Stage Direction]
Montreal. September 12, 1903.
Now, I think I will be absolved from the charge of making rash statements, of which I have been accused, when I say that in reading this Bill I came to the conclusion that clause 17 could only have one meaning, that it was put there for a purpose, and that purpose was to enable the government to admit, if it wished, all supplies used in the construction of this railway free of duty. It struck me that that would be a very serious blow to the manufacturing interests of Canada, and I contend that my contention has been justified by the opinions I have received. I do not think that my contention required these favourable opinions, because I think that any sensible business man reading that contract would come to the conclusion that that paragraph had been put in designedly for the purpose I have stated, namely, to enable the government, if they wished to do so, to import these materials and supplies free of duty. Further, if this agreement is carried out in its entirety, I believe the Grand Trunk Company can force the government to charge that company interest only upon the cost of construction of the road constructed in as cheap a manner as possible, and still be constructed efficiently. Therefore, it would be incumbent upon the government whether they built it themselves or let it out by contract through commissioners, to provide that wherever the material could he imported for the construction of that railway cheaper than it could be produced iu Canada, they were bound under that contract to import and to admit free of duty the material so used. Now, it seems to me there should be no question of that being allowed for a moment. This government are to construct a railway-we will assume that it will be as beneficial as our friends opposite profess to believe. They are leasing it to a large railway corporation at a rental, at a price on the' cost of construction, lower than has ever been known before. They are giving a great corporation a property costing $13.000,000, as the Prime Minister says it will, or $150,000,000, as most people believe. I say it will cost a great deal more than that before the 50 years are up.
The MINISTER OF FINANCE.: 



$500,000.000 V

Edmund Boyd Osler: Yes, if the expenditure goes on in the same manner as the expenditure on the Intercolonial has been going on, especially since our friends opposite came into power, if the capital expenditure goes on in the same ratio, and I see no indication of its ceasing, this transcontinental railway will reach the figure I have named, astounding though it seems to be. As I liave said, I do not propose to deal with the policy

of building this railway and handing it over to tlie Grand, Trunk Pacific, I am only criticising the contract whicli the government lias laid before us, and every clause in the contract I am entitled freely to discuss. Here is an enormous work, here is a work which will entail an expenditure by this country of $100,000,000. Now, I say that to cut our manufacturers out of the privilege of supplying these materials is to do a great injustice to them and to this country, because it is the country itself that has to pay for the cost. It is the country itself that will have to pay for the loss, if there be a loss, and I contend that in a ease like this, where the government are spending enormous sums of the people's money, provision should be made beyond the ordinary provision, and that as a rule all railway supplies and materials used In that road should be produced by Canadian manufacturers in this country. Even if it costs a little more, it will pay us in the long run. I am told, though I have not seen it myself, that tlie Australian government have advertised for tenders for a large number of locomotives for delivery commencing now and to last for several years to come, the condition of the contract being that these engines must be manufactured in Australia, giving employment to Australian workmen, no matter whether the locomotives will cost more or not. If you are to have manufacturers in your country you must first make a strong and stiff effort to begin them, even if you have to pay a little more at first. There is a great opportunity in this contract to establish railway manufacturing in this country, there is an opportunity which would realize what we all want to see, namely, the establishment of large rolling mills. Tjie extra cost perhaps would be less than the bounty that is now being paid on iron and steel if we insisted upon all these supplies being manufactured in this country. Other members of the Committee, I hope, will discuss these clauses very fully, because I feel perfectly sure that my contention, backed up as it is by the legal opinion I have quoted as to the meaning of this clause, is correct, and I say that the government ought to strike that clause out or amend it. Now, as the Prime Minister has taunted us with talking find not moving any amendments, I beg to move the following amendment to clause 1C :
Provided further that notwithstanding anything contained in section 17 of the said contract. any materials or supplies of any kind which are not the products of Canadian labour and which are imported for the purpose of the construction of the said eastern divison by cr on behalf of the said commissioners or by or on behalf of any contractors, workmen, agents or servants for the construction of the said eastern division, or for the improvement, replacement of structures or otherwise upon capital account for betterment for said eastern division as in the 16th clause of the said contract provided, shall be liable to the usual 355J
customs duties provided by the statutes in that behalf.


Peter Macdonald: The Committee is now discussing section 13.


Edmund Boyd Osler: We have been discussing section 16.


Peter Macdonald: No, section 13, and I call attention that this discussion Is out of order.


The MINISTER OP FINANCE.: I am responsible for that. I asked that section 13 should be reconsidered, and that having been done and a satisfactory explanation having been given by the Minister of Justice, I thought we had passed it ; then we came to 16.
Section 13 agreed to.


The MINISTER OP PINANCE.: Let us now take up clause 16.


The MINISTER OF JUSTICE.: My hon. friend from Toronto (Mr. Osier) has already discussed the effect of this clause 16 of the contract, and I think he expressed at the time the Bill was under consideration for the second reading the opinion that he adheres to to-day. To-day. however, in corroboration of his opinion, he brings forward the opinions of two lawyers, Mr. Hell-mutli, formerly of London, Ont., but now of Toronto, and of Mr. Macmaster, of Montreal. Of course, it is almost impossible, listening to these opinions read hurriedly, to give any expression as to the value of them, and especially of the one we have just heard from Mr. Macmaster. It has been my good fortune to meet Mr. Hellmuth. 1 have had occasion to differ from him in regard to other things. It was my misfortune to differ from an expression of opinion be gave in tlie Supreme Court, and as to the result I will refer my hon. friend to the judgment of the Supreme Court in the case of the Calgary and Edmonton Railway.


Edmund Boyd Osler: That case lias not been decided yet. The Privy Council are still wrestling over their decision.


The MINISTER OF JUSTICE.: A reference was made to the Privy Council, but I think they disposed very speedily of the reference. It was all one way.


Edmund Boyd Osler: Lawyers will differ.


The MINISTER OP JUSTICE.: My hon. friend took tlie words ont of my mouth. These differences merely prove that lawyers like doctors agree to differ, and I am sure that my hon. friend got from these eminent counsel, Mr. Hellmuth especially, a man for whose opinion I have the very highest regard, the opinion exactly that he wanted.


Edmund Boyd Osler: I would be sorry to make that imputation against either of these two gentlemen.


Duncan Cameron Fraser: Money will do anything.


Edmund Boyd Osler: I hardly wonder at that statement coming from the hon. member for Guysborough (Mr. Fraser). It explains a great many things. I am very sorry to hear the hon. Minister of Justice make the assertion that he has made as regards either of these two gentlemen that they would give an opinion in favour of my theory against their own legal opinion and against their own better knowledge and judgment. I may state that I have never seen Mr. Hellmuth on this matter. Mr. S. H. Blake sent the letter I wrote to Mr. Hellmuth. I have not seen Mr. Hellmuth or spoken to him. Neither did I see Mr. MacMaster before he gave his decision. I wrote to Mr. MacMaster from here asking him his opinion and I had not seen Mr. MacMaster or discussed the matter with him at all. I saw him yesterday on the train coming up from Montreal after I had received his opinion. If the hon. Minister of Justice, instead of making these assertions, will confute or contradict the arguments which have been given, I think he will be doing something very much more in keeping with the position that he occupies.


The MINISTER OF JUSTICE.: I am afraid that I cannot be bound by the construction put upon my statement by the hon. gentleman. I am bound by the statement I made and not by his construction.


Edmund Boyd Osler: Mr. Chairman


The MINISTER OF JUSTICE.: If my hon. friend will permit me. We must proceed regularly after all. In reference to the question that was put before and in regard to which the hon. member for West Toronto (Mr. Osier) expressed his opiuion, I thought it would be proper for me to take the opinion of a gentleman who is responsible for the advice that is given to the Minister of Customs and upon whose advice the Minister of Customs must act. I had my own opinion on the subject, but I thought as this was a matter of the construction of the Customs Act it would be proper to consult the gentleman who under the law would be consulted by the Minister of Customs. I gave him Mr. Osier's speech to read and he gave me this opinion :
Mr. Osier, M.P., in his speech in the House of Commons on the 20th instant, quoted clause 17 of the contract .set forth in the schedule cf the Bill entitled: ' An Act respecting the construction of a National Transcontinental Railway.' See pages 9584 to 9586 of the ' Hansard.' He says that * i:t is a more serious clause affecting the interests of the country than anything else in the contract, that is that this is a case of the government building a railroad to cost at the least estimate $80,000,000 and that the whole of the materials used in the construction of the road shall come into the country at all times free of duty. He says that under this contract we bring in steel rails and everything to be used in the construction of the railway free, and that if the contract is Mr. 06LER.
to be carried out there will not be a steel rail roiled in Canada for fifty years. Again he says ' according to this contract, the fovernment, if they construct this road themselves, or through contractors, or under the supervision of commissions, are to bring everything free of duty.'
Mr. Newcombe, the Deputy Minister of Justice, wbo gave the opinion that I am about to quote, had nothing to do with the drawing of this contract. He was out of the country at the time the contract was made. This is the opinion that Mr. Newcombe gave :
It is impossible for me to conceive how such observations could have been made by any person who had carefully read and considered the provisions of the Bill and contract affecting this point, and given due value to the words used.
That is Mr. Neweombe's opiniou and as I have bad occasion to say before in this House, not only because of the position he occupies, not only because of the experience he has had in connection with the construction of the Customs Act, but because of his standing at the Bar, I am quite satisfied to rely on his opinion. Now, I venture to give my own opinion with ail due deference-


Robert Laird Borden: Is that all of Mr. Newcombe's opinion ?


The MINISTER OF JUSTICE.: I will give you my own opinion in which Mr. Newcombe concurs.


Mr. HUGHES (Victoria).: Did Mr. Newcombe give any further opinion ?


The MINISTER OF JUSTICE.: Clause 17 of the contract depends upon the preceding one. Clauses 16 and 17 are as follows :
In case, after the completion of the said eastern division and the .taking possession thereof by the company under the lease thereof, hereinafter referred to, or at any time thereafter during the continuance of the said lease, the government should deem it necessary to expend any sums of money for the improvement cf the said eastern division, the replacement of structures by others more modern, or otherwise upon capital account for betterments, and not being * working expenditure ' payable by the company, the government may expend such sums, and the amount thereof shall be added to the capital of the construction account at the end "of the year in which such expenditure takes place, and shall thereafter be considered as part of the cost of construction, upon which interest, by way of rental, is to be paid by the company ; provided that no such expenditure shall he entered upon without the consent and approval of the said company.
No addition shall be made to the cost of construction or to the capital of construction account in respect of customs duties in cases where there is direct importation of materia! or supplies by the government.
Clause 15 of the contract defines the expression ' cost of construction.' Clauses 16 and 17 provide for addition to the cost of construction. It is imperative under the Bill that the work of construction of the eastern section shall be by contract, and the Bill does not enable the

government to import or pay for materials to be U3ed in construction. Those, as I understand the Bill, are to be furnished bv contractor. Consequently clauses 16 and 17 of the contract can have no application to original construction. They apply after the completion of the eastern division and lease .of it to the company, and they authorize the government with the consent .and approval of .the company to expend money upon the eastern division for its improvement and betterment which amounts is to be added to the cost of construction as ascertained under clause 15 of the contract, but if in these improvements and betterments the government imports materials direct, the addition to the host of construction authorized by clause 16 is not to include any customs duties.
Sections 15 and 16 of the Bill require the commissioners to construct the eastern division by contract. There is, however, no provision requiring the work of improvement and betterment referred to in clause 16 of the contract to he done by contractors. The government may if they see fit carry out these works themselves, and if so, and in so far as they use material imported direct by the government they are not to charge any customs duties on the addition which is to be made to the cost of construction. This, I have no doubt,
the legal effect of the clause so far as the point in question is concerned.
That Is my conclusion, a conclusion in which Mr. Newcombe concurs.
At one o'clock, House took recess.
Committee resumed at three o'clock.
On section 16,
Mr. BORDEN iHalifax). It is to be greatly regretted that the Minister of Justice should have taken the attitude, with regard to the legal gentleman whose opinions were quoted by the hon. gentleman from Toronto (Mr. Osier), that he has seen fit to express to the House. The Minister of Justice did not express himself in quite so brutal a manner as tlie hon, member for Guysborougli (Mr. Fraser), but his intention was evidently the same, namely, to suggest to the House that the opinion of these legal gentlemen could not he relied upon, because they would expect a fee.


The MINISTER OF JUSTICE.: The fact that my hon. friend (Mr. Borden, Halifax) makes that statement would lead me to suppose that my words were capable of being construed in such a way. I entirely disavow the intention of conveying that meaning. If such a construction could possibly be put on my words. I withdraw them.


Albert Edward Kemp: The member from Guys-borough should withdraw too.


Robert Laird Borden: That is what I would have expected from the Minister of Justice, but I am bound to say that in view of the emphasis which he placed on his words, I gathered from them exactly the same impression as they evidently conveyed to the member for Guysborougii. I trust and believe that reputable members of the
Bar in Canada are not so lost to the sense of duty which they owe to the profession and to themselves, as to be influenced in the giving of legal opinions by what may be considered as the desire of those who seek these opinions. My bon. friend (Hon. Mr. Fitzpatrick) also referred to the opinion of the Deputy Minister of Justice, for whose standing at the Bar and for whose ability I entertain the very highest possible respect; but I venture to think that the well-considered opinions read by my hon. friend (Mr. Osier) deserve a little better answer than the reply, even from the Deputy Minister of Justice, that he cannot conceive how any one could entertain such an opinion. There is no one at the Bar for whose opinion I would entertain a higher respect than for that of my friend the Deputy Minister of justice, but even what amounted almost to a sneer from him, is no answer to the opinions that have been read in the House to-day. I do not know that I sufficiently followed the opinion of the Minister of Justice to be able to criticise it, but perhaps he will be good enough to send over a copy to me. I agree with him that it is absolutely impossible, upon first hearing read an opinion upon a difficult legal point, to express a very safe conclusion as to whether that opinion is sound or not. However, I followed as well as I could the opinions read by my bon. friend from Toronto (Mr. Osier) and also the opinion read by the Minister of Justice, and it does seem to me that this is not a question that can be lightly dismissed by the government. In the first place, you have certain clauses of the contract which have been adverted to in the opinions which have been read. You have clause 5, of the contract, which provides (I omit unnecessary words) :
The said eastern division shall be constructed by and at the expense of the government.
Then you have clause 7 of the contract, in which it is provided :
In order to insure, for the protection of the company as lessees of the eastern division of the said railway, the economical construction thereof in such a manner that it can be operated to the best advantage, it is hereby agreed that the specifications for the construction of the eastern division shall be submlted to, and approved of by, the company before the commencement of the work, and that the said work shall be done according to the said specifications and shall be subject to the joint supervision, inspection and acceptance of the chief engineer appointed by the government and the chief engineer of the company, and in the event of differences as to the specifications, or in case the said engineers shall differ as to the work, the questions in dispute shall be determined by the said engineers and a third arbitrator, to be chosen in the manner provided in paragraph four of this agreement. '
Then you have paragraph 16, which in short provides that certain additions to the capital account may be made during the

period of the lease and the concluding words of that paragraph are :
Provided that no such expenditure shall be entered upon without the consent and approval of the said company.
Then follows clause 17, to which attention has been principally directed :
No addition shall be made to the cost of construction or to the capital of construction account in respect to customs duties in cases where there is direct importation of material or supplies by the government.
Now the argument of the gentlemen whose opinions have been read to the House is, that the government having undertaken to construct the eastern division of this railway, and having covenanted that no addition shall be made to the cost of construction in respect to customs duties in cases where there is direct importation of material or supplies by the government; that under those circumstances the government is not able to relieve itself from that stipulation or condition by reason of the fact that it entrusts the construction of this railway to contractors. It seems to me that that is a pretty serious question for the consideration of the Minister of Justice. On a previous occasion, he expressed himself to the effect that the provisions of the contract which might operate in the way I have mentioned, were overridden in some way by the provisions of the Bill. Let us look at the provisions of the Bill and see whether there is anything that operates in that way. Section 8 of the Bill referring to the provisions of the contract provides :
The eastern division of the said Transcontinental Railway extending from the city of Moncton to the city of Winnipeg, shall be constructed by or for the government in the manner hereinafter provided 'and subject to the terms and provisions of the said agreement of the 29th July. 1903.
Section 9 provides :
The construction of the said eastern division and its management until completed and leased to the said company pursuant to the provisions of the said agreement shall be under the charge and control of three commissioners, to be appointed by the Governor in Council, who shall hold office during pleasure, and who, and their successors in office, shall be a body corporate under the name of ' The Commissioners of the Transcontinental Railway ' and are hereinafter called * the commissioners.'
These commissioners are merely a body of servants employed by the government at pleasure, and they are to have control of the construction of the eastern division. Section 15, to which the Minister of Justice referred this morning says :
The said commissioners shall have in respect .to the said eastern division, in addition to all the rights and powers conferred by this Act, ail the rights, powers, remedies and immunities conferred upon a railway company under the Railway Act and amendments thereto, &c., &c.
Is it possible that there is any answer to the argument in the two opinions that have been read, that the government cannot free itself from the stipulation or provision which is contained in the contract, merely by reason of the fact that it employs commissioners, and through these commissioners engages contractors to do the work which the government has bound itself by the terms of this agreement to do ? Is there anything in the contract which would justify a conclusion of that kind ? Is it not a controlling feature of this contract, that the cost of that railway shall not be increased by means of customs duties upon material imported into Canada expressly for the construction of that railway ? That is what the contract would seem to intend, and how is the government to relieve itself from that feature of the contract by employing commissioners ? Suppose the commissioners, acting merely as servants of the government or agents of the government, construct tills eastern division by day's labour, and if these commissioners, who are capable of being dismissed at a moment's notice by the government, should import material which must be paid for by the government for the construction of this railway ; would you say in such a case that the government could escape the effect of this stipulation ? Let us take another illustration. Suppose we have two corporations, one undertaking to build this railway for another corporation, and that the contracting corporation should undertake to build it by day's work, and should undertake that the cost of material should not be increased by reason of any customs duties upon material imported directly for that railway ; could the corporation so contracting relieve itself from liability in that regard by handing the work over to a subcontractor ? I would venture to think that there would be at least a great deal of doubt about that. As I have said, I have not been able to follow sufficiently the opinion of the Minister of Justice, in which he seeks to establish'the conclusion that the government would be so relieved from this stipulation. I would be glad if the Minister of Justice would do me the courtesy to submit the opinion which he has read to the House, and which possibly might have the effect of modifying the opinion which X at present entertain.


The MINISTER OF JUSTICE.: I am having a copy made, and my hon. friend shall have it in five or ten minutes.


The MINISTER OF FINANCE.: On the legal question which has been raised, I do not presume to offer any opinion ; that will have to be left to my friends of the legal profession. But I submit that the main question involved in this discussion is not the legal question at all. The legal opinions which my hon. friend from Toronto has obtained at such great length do not touch


Robert Laird Borden: the question which he brought before this House. The question which my hon. friend brought before this House was not a legal question, but an industrial one-the question whether or not the goods imported by contractors for the building of this road would or would not be subject to customs duties. That is not a question of law, but is in a sense a question of fact-an industrial question. We have dealt with that question fully, fairly and squarely, so that there is no room for doubt or debate upon it. We say on behalf of the government that every dollar's worth of goods imported by any contractor for the purposes of this contract will be made to pay duty at the customs house in Canada. We have said that again and again. My hon. friend said the contrary. He even went so far as to say that under this contract not a rail would would be rolled in Canada for fifty years. We state as a matter of intention on behalf of the government


Mr. LENNOX.: Why not put it in the law ?


The MINISTER OF FINANCE.: In the first place, we are advised that it is in the law.


Haughton Lennox: It is a matter of contract.


The MINISTER OF FINANCE.: It is not a matter of contract. My hon. friend from Toronto has had no legal opinion which says that that is a matter of contract at all. He has obtained a legal opinion on an entirely different, matter. The main question is an industrial one; the people of Canada who are interested in the manufacture of goods of various kinds desire to know whether the goods imported for the construction of this railway will have to pay the ordinary customs duties ? We say they will.


William Findlay Maclean: Does the hon. minister say further that the Grand Trunk Company under this contract, would be forced to pay three per cent on the amount of those duties V


The MINISTER OF FINANCE.: That is another question. I want first to deal with the main question-the industrial question. After all the question raised by my hon. friend from Toronto was with regard to the industries of Canada. The question was whether goods imported by contractors for the construction of this railway, if they have to be imported, will be subject to the ordinary customs duties. I say on behalf of myself as Minister of Finance, having something to do with the fiscal policy of the country, that every dollar's worth of these goods will have to pay duty ; I say it in my capacity as acting Minister of Railways and Canals, having something to do with the contract ; I say it on behalf of the Minister of Customs, who has to do with the ad
ministration of the customs law ; I say, on behalf of the government generally, that every penny's worth of goods imported by any contractor for the construction of this road must pay the ordinary customs duties. There is no room for doubt or dispute as to that. But my hon. friend has submitted to his legal friends in Toronto an entirely different question, one with -which the industrial element of Canada has no concern whatever. He has submitted to them the question whether on the completion of this road and the adjustment of the capital account, we shall be able to include in the capital account the duties which will have been paid on the goods imported for the construction of the road. We are advised that we can include those duties. I do not wish to dwell on that, because it may be a legal question. But that does not affect the other question at all. We shall collect the duties at the customs house, and whatever advantage there may be to the industries of Canada, they will have received that advantage. Whether or not in the final adjustment with the Grand Trunk Pacific Company we may be able to charge them interest on those duties, is a question of law which does not in any way touch the industrial question. On the question whether these goods shall pay duty or not, my hon. friend from Toronto has no legal opinion at all. There is not a line in what he has read which says that these goods shall be free from duty. The whole argument of his legal friends deals with the adjustment of the capital account after the completion of the road ; and his argument goes to claim that we shall not be able to charge the Grand Trunk Pacific Company interest upon the duties which have been so exacted, That is a legal question. We are advised against the views presented by the legal adviser of my hon. friend. But I do not wish to discuss that question at all. I am confining myself to the industrial question, and I say that he has no legal opinion at variance in the slightest degree with the view taken by the government, that every dollar's worth of goods imported must pay duty. So that the^ people interested in the industries of Canada will have the advantage of that fact, and they have no more concern than any other people in the ultimate adjustment of the capital account.


Robert Laird Borden: My hon. friend the Minister of Finance is taking a rather remarkable position with regard to this subject.


Duncan Cameron Fraser: Very effective.


Robert Laird Borden: My hon. friend the Minister of Finance may at least congratulate himself upon the fact that he has the support of the hon. member for Guysborougb. My hon. friend says he will not dwell on the question whether or not the rental to be paid by the Grand Trunk

Pacific shall include three per cent on the amount of the customs duties, a very pertinent question as to which was put to him by my hon. friend from East York.


The MINISTER OF FINANCE.: Not the industrial question.


Robert Laird Borden: I do not know what my hon. friend thinks we are discussing. I supposed that we were discussing the terms of this Bill, and whether it was a good thing or a bad thing for the country.


The MINISTER OF FINANCE.: I was discussing a point raised by the hon. member for West Toronto (Mr. Osier), confining myself to that point, and not dealing with the whole Bill.


Robert Laird Borden: The argument of my hon. friend from Toronto touches the point which I am now bringing to the attention of the House. The hon. minister says he will not dvsell on the question" whether three per cent interest will be charged on the amount of the duties on those goods. The value of the goods imported will be at least, I suppose, $10,000,000 or $12,000,000, on which three per cent interest will amount to $300,000 or $350,000 a year. The hon. minister says he will not dwell on that question


The MINISTER OF FINANCE.: I did not say that.
Mr. BORDEN (Halifax), -and wheii two opinions by eminent legal gentlemen are brought before the House by the hon. member for West Toronto, my hon. friend the Minister of Finance says they do not at all touch the question we are discussing. I think they do most closely, and I think it is somewhat important to this House to know, before we go through that clause 16, whether or not the Grand Trunk Pacific Company shall escape the payment of $300,000 or $350,000 per annum of rental for a period of some fifty years-a sum which in the aggregate would amount to some $15,000,000 for the whole period of this lease. So far as the industrial question is concerned, my hon. friend the Minister of Finance says he can assure this House of a certain condition of affairs. I do not suppose my hon. friend is above the law. I suppose that if the law should say that those duties are not payable, my hon. friend, in the absence of legislation, would not be very well able to control that matter, and if the courts held that goods imported by commissioners appointed under the provisions of section 9 were really goods imported by the government within the meaning of the statute to which my hon. friend from Toronto referred, I suppose the government would have to be bound by the decision of the eourt to that effect. Even if my hon. friend the Minister of Finance went into the court and gave to it the assurance which he has given to the House to-day, the court would Mr. BORDEN (Halifax).
not be very much influenced by it, but would still have to construe the law, the contract and the terms of this Bill. I do not know that any lawyer in the House would be quite so cocksure on that point as the Minister of Finance is. I doubt very much whether or not the argument might not be made that these commissioners, being merely agents of the government, when they import materials for the government, which will have to be paid for by the government, would not come within the meaning of the statute to which the hon. gentleman has referred. I can well believe that a very fair argument might be made on that point, and therefore I think my hon. friend the Minister of Finance is mistaken when he attaches no importance to the point raised.


The MINISTER OF FINANCE.: I regret that my hon. ifriend represents me as saying that the point is of no importance.


Robert Laird Borden: I beg my hon. friend's pardon. That is what 1 understood.


The MINISTER OF FINANCE.: I said, on the contrary, that it might be a question of importance, but it was not the question I was discussing. I was discussing the main question which, I understood, was brought before the House by my hon. friend from West Toronto (Mr. Osier)-not the question he brought before us to-day, but a question of greater importance which he brought before us some days ago. I am in the judgment of the House when I say that the question brought before the House by the hon. gentleman was not the legal question or any question with regard to the adjustment of the capital account of the Grand Trunk Pacific Railway some years hence, but the live, actual question as to whether or not these goods were to pay duty. My hon. friend did not say it as a matter of doubt, but he said positively that these goods would not be liable to duty. He is no better authority for that than I am for the counter statement, for we are both laymen, and I fancy that we are both advised. In expressing the opinion I did, I am not expressing my own view alone, but that of good lawyers, whose advice I have taken. What I wish to emphasize is the distinction between the industrial and the legal question brought up to-day. I do not say that the legal question is not important. On the contrary, I say that the question whether or not the Grand Trunk Pacific Railway shall pay interest on the money which the government itself has received by way of duty may be an important one ; but the real question brought up by the hon. member for Toronto (Mr. Osier), and which he emphasized, and to which he managed to attract the attention of the country, was the assertion that, under this contract, goods would be imported free of duty and the manufacturers of Canada

would not have any advantage from the tariff. He never dreamt at that moment about the adjustment of the capital account live years hence, but confined himself to the industrial question. The only answer is that the government do not so understand it, and that they are advised by competent legal authorities that such is not the meaning of the contract.


Robert Laird Borden: Has my hon. friend any opinion on the question that materials imported by these commissioners would be subject to the duties ?


The MINISTER OF FINANCE.: That is the opinion of the Minister of Justice, who sits behind me.


Robert Laird Borden: I did not so understand it.


The MINISTER OF FINANCE.: 
Haughton Lennox: There is no such provision in the contract.


The MINISTER OF FINANCE.: There is no provision in this contract that the goods shall not pay duty. Will the hon. gentleman show me a line which says they shall not ? He will find no such statement in the contract. All the legislation is the very opposite. The contractors on this Grand Trunk Pacific Railway will be precisely in the same position as the contractors on any other government work. I repeat that I am not dwelling on the legal question, but it does not follow' that I do not attach importance to it, because I do ; and, so far as we have gone at present, we are acting on legal advice. But that is not the question on which the discussion arose, and I leave it to be settled by others. What I confine myself to is the industrial question, and the hon. member for Toronto (Mr. Osier) has
not and will not obtain the opinion of any lawyer that these goods must be admitted free of duty.


Edmund Boyd Osler: I think that my non. friend the Minister of Finance is getting himself and his colleagues deeper and deeper into the mire every time he speaks on the subject. Assuming that the government are only able to charge the Grand Trunk Pacific Railway for the net amount they have to pay, how will the thing work out f Take one instance. Take the $20,000,000 rolling stock, the duty on which would be $4,000,000 or $5,000,000. If the Grand Trunk Pacific Railway have not to pay interest on the duty, but only on the net price, they will be able to buy in the lowest market. What will they do ? They will buy their materials in Great Britain, Germany or the States, wherever they are cheapest, and would make the government commissioners contract for them. But assuming that they would pay the duty on these goods, they w'ould buy an engine for $16,000 in the States, which would cost in Canada $20,000, and the government would have to refund the Grand Trunk Railway the amount paid in duty. Or the amount on which the government could charge the Grand Trunk Pacific Railway interest would be the net amount at which they could get the engine without paying duty. The government would have got the duty it is true, but would have to refund it, or, what amounts to the same thing, would not get interest on it, and would have absolutely prohibited the Canadian manufacturer from having any chance to tender. According to the interpretation of the Finance Minister, the government would have to pajt the duty. They would receive with the one hand and give out with the other. They would receive the duties on the materials imported and refund them to the Grand Trunk Pacific Railway. In other words, the Grand Trunk Pacific Railway would only be bound to pay interest upon the lowest cost at which these materials could be brought into the country. The question whether, the government pay the duty has nothing to do with the point. But the manufacturers would be in a much worse position. It would, be a much more drastic measure than I supposed it would be, assuming that the stuff would be imported without the payment of duties.


The MINISTER OF FINANCE.: I am afraid I shall have to follow the opinion of the Deputy Minister of Justice, that I cannot conceive how any hon. gentleman can reach such a conclusion.


Samuel Hughes: But the hon. Finance Minister admits that the Grand Trunk Company will have to pay the interest on the cost, say of the locomotives-


The MINISTER OF FINANCE.: I have never admitted anything of the sort.


Samuel Hughes: I must be very obtuse, then.


Some hon. MEMBERS: Hear, bear.


Samuel Hughes: Or the Minister of Finance has very little capacity for expressing himself. Will he tell us what the object of this clause is ?


The MINISTER OF FINANCE.: It has been explained.


Samuel Hughes: I have not heard the explanation, except that the Grand Trunk Company have to pay the interest on the cost of construction on the eastern division, less the amount of duty.


The MINISTER OF FINANCE.: That is not the way we understand it.


William Findlay Maclean: I would ask the leader of the House (Rt. Hon. Sir Wilfrid Laurier) if the object of this Committee is merely to criticise this contract ? Or is the object in some way to improve the contract 1 Is it the intention of the government that this discussion shall serve a useful purpose or is it merely critical and destined to have no effect ? Can the contract be improved by discussion in this Committee ?


The PRIME MINISTER.: The contract cannot be improved, but the Bill can be improved, if there is a fault in it.


William Findlay Maclean: Well, what is the objection to a declaration in a Bill intended to provide for the building of a national transcontinental railway, that national policy shall clearly obtain throughout the contract ? What is the objection to the amendment offered. by the hon. member for West Toronto (Mr. Osier), which has the effect of so declaring ? Why should we not say that, in the making of the National Transcontinental Railway, Canadian industries, Canadian workmen, and Canadian capital, shall not get the worst of it ? The hon. member for West Toronto pointed out-and this has not been answered-that the materials may be imported by the contractor and duty paid, but that the contractor will then file a claim for the refund of the duty. In that case, Canadian manufacturers and the Canadian workmen have no protection, as they ought to have. The day has come when the people of Canada, whether Liberals or Conservatives, will insist that if this National Transcontinental road is built, it shall be built of material produced in Canada and by Canadian labour. In other words, the people of Canada are in favour of national policy, and they are in favour of it being embodied in a contract of this kind. What is the objection to that ? What is the objection to our improving legislation in that direction ? Surely it is worthy of consideration. The minister has not answered the questions that have been raised here to-day. He said that the goods shall pay duty. But the hon. member for West Toronto says that Hon. Mr. FIELDING.
the importer can claim a refund. That is a question of law. I put two questions to the hon. Minister of Finance. He has answered what he calls the industrial question, but he has not answered the legal question. That question remains, and we have heard the opinions of eminent lawyers read here to-day. And my only objection to them is that they give the Grand Trunk Company a reason for asking for a refund, and the companies will probably ask for it. What is the objection, if we are a deliberate body, and trying to improve this contract, to including in this contract a declaration of national policy ? The people of Canada regret very much that occasion was not taken, when the Canadian Pacific Railway was built, to insist on this rule being applied, and every rail used on that road being rolled in this country. I regret still more that it is not made a condition of this contract.


Mr. JOHNSTON (Cape Breton).: Will the hon. gentleman (Mr. Maclean) permit me to ask him a question ? Could he inform the House why the party with which he is associated, in 1867, refused to put a duty on steel rails ?


William Findlay Maclean: I have no objection to answering that question. I regret that my party did not put on that duty. I have always been in favour of putting on such a duty on steel rails. We know what made the United States more than anything else


The PRIME MINISTER.: Let us keep to the contract.


William Findlay Maclean: Yes, and I want the right hon. gentleman to include national policy in this contract.


The PRIME. MINISTER.: It is big enough.


William Findlay Maclean: But it does not contain this provision. If there is anything the people of Canada would like to see-and I am speaking strictly to the point-it would be the idea of national policy included in this contract. For, as I said before, a mistake was made in the building of the Canadian Pacific Railway, in not including in the contract a provision that the rails should be rolled in this country. There is no reason why such a provision should not be embodied in this contract. The thing that made the United States more than anything else is national policy with regard to iron. It has put that country at the head of the iron-producing countries of the world. And we shall never be an iron-producing country unless we insist upon national policy with regard to iron manufactures, and especially in relation to contracts of this kind. This is not. as has been said, merely a contract for $15,000,000. This road will cost nearer $200,000,000.


The POSTMASTER GENERAL.: Better say $560,000,000.


William Findlay Maclean: It may be that. Speaking about the cost of this railway-


The PRIME MINISTER.: Let us keep to the contract.


William Findlay Maclean: The Postmaster General has interrupted me, and I am dealing with the point he referred to.


Peter Macdonald: Though an lion, member may interrupt, that does not justify the hon. member who is interrupted in departing from the question.


Robert Laird Borden: But there is this to be said, Mr. Chairman-that if there are to be interruptions on certain subjects and no answer is allowed, there is a remedy in the hands of lion, gentlemen on this side, as you, Mr. Chairman, know.


William Findlay Maclean: I am quite in order in discussing the cost of this work in connection with this clause. Hon. gentlemen opposite have spoken as if the interest to be paid by Canada represented the whole amount of Canada's obligation in this matter. If a man goes to the bank and borrows $100 and then goes and tells one of his creditors that he only owes $5, the interest on the amount he has borrowed, what will his creditor say when he applies for further credit ? He will say : Your commitment is for $100, not for $5. The commitment in this case on the part of Canada is for the whole cost of the road. The name of Canada is put on the note of the Grand Trunk Company for millions and millions, to build this road. So, when the hon. Postmaster General sneers at an estimate of four or five hundred millions as the cost of this road, I say that we have a better right to estimate it at that amount than he has to estimate it at thirteen or fourteen millions.


The POSTMASTER GENERAL.: I was not giving my own opinion, but the opinion given, as I understood, by the leading financier on the other side. I understood that the junior member for West Toronto (Mr. Osier) estimated the cost of this road at $560,000,000. In my interruption, I was only commenting on that, for everybody knows that that statement is an absurd one.


William Findlay Maclean: Nobody knows more about investments than the hon. Postmaster General. I suppose nobody in this House has handled more trust funds than the hon. gentleman has handled in his day. And if anyone came to him for a loan and then said that his only commitment to the estates the hon. gentleman handled was the interest on the loan, what would the hon.-gentleman say ? The point before the Chair is the amendment of the hon. member for West Toronto in favour of a declaration of national policy in this contract. If we are here to improve the contract-and I hope we are-surely this would be an improvement.
I hope that a suggestion from this side of the House is worthy of consideration.


The PRIME MINISTER.: Sometimes.


William Findlay Maclean: I hope the right hon. gentleman will consider it, and will even let this clause stand in order to make a provision against this very thing that the hon. member for West Toronto has pointed out. The goods can be imported, the duty-can be paid, so that a person paying the duty may hope to have the money refunded. In that case Canadian industries, Canadian mills and Canadian workmen are discriminated against in a way that even the government say they have no desire to do.


Mr. TAYLOR.: The Minister of Finance made a lengthy argument in the interests of the industrial classes. Now, if he wants to improve the condition of the industries of Canada let him carry out the idea that was conveyed to the House by the statement made by the Prime Minister when he first introduced this Bill. He left the impression upon my mind, and I think upon the minds of every one who heard him, that all the supplies required for the construction of this railroad would be purchased in Canada. But when the Bill comes down we find that clause 37 of the contract removes that impression altogether. It reads :
The company shall purchase all material anil supplies required for the- construction of the -western division and the equipment of the whole of the said line of railway from Canadian producers

Now, if it stopped there, the argument of the Minister of Finance would mean something, that he is looking after the interests of Canadian industries. I see no reason why that section should not be amended so as to strike out the balance. The balance of the section reads :
-when the same are produced in Canada

Now, there is not an article that will go into the construction of that road, but is produced in Canada, and can be produced, not only in sufficient quantities, but in quantities to afford competition. Therefore, strike out the balance of that clause which reads :
-when the same are produced in Canada, and when such material and supplies can he purchased in desired quantities and of equal quality suitable for the purpose desired, and for prices and upon terms equally advantageous with those procurable elsewhere.
Now, what benefit is that to the manufacturers of this country ? We have heard the legal opinions as to the meaning of this clause, that have been read to the House to-day, and I am prepared to make this statement :	Let the government through
their commissioners, advertise the sections of this road for tender. Let us say that a party is successful in getting a contract to build a section of that road, and to supply
[DOT] 11351

rails and everything else necessary to equip it completely. When he has secured his contract from the government to build that piece of road, he puts an advertisement in the newspapers of Canada, the United States and Germany, for so many tons of rails, spikes, plates, bridge material and all supplies required for the section he has contracted for. The Canadian tenderer will put in a tender, assuming that this contractor will have to pay duty on the goods that he purchases in a foreign country. Now, I am prepared to say that if 1 am a contractor, for example, I cam go to the United States manufacturer and get his prices for every article, and I will be able to compete with those prices at which they are sold in his own country. But he will deliver them duty free, or take his chances in law of getting the duty back under this Bill now before parliament. He can say to the contractor, I will furnish all supplies at the prices iin my own country, and deliver them there duty paid, because I have the assurance from the Canadian-government conveyed in this Bill. This United States manufacturer says, I will pay the duty and I will sue the Canadian government and get it back. And you can go to every foreign manufacturer in face of that contract, in face of the legal opinions that have been produced here to-day, and get contractors to furnish supplies and lay them down here duty paid, knowing that the contractor of the railroad is working for the government, and in such case the law says that when these goods are imported for a government work they will come in free of duty. Now, there is no court in the world but what will decide that these goods were for the government, therefore, they were not dutiable, and the American contractor who supplied the raw material can bring his action against the government of Canada, or the Customs Department, for having illegally collected this money, and he will get it back again. But even if he had not paid the duty, he will be putting his goods into Canada in competition with our Canadian manufacturers. The statement of the hon. member for Toronto (Mr. Osier) is quite correct, not a steel rail will be made in Canada for the next fifty years if this clause is allowed to go through as it is, because we will have English, German and United States manufacturers putting goods in at such prices that no Canadian manufacturer will be able to compete with. I say if the government wish to make provision for the manufacturers of this country, let them strike out of clause 37 all the words after ' from Canadian purchasers,' and compel the contractor, whoever he is, to buy all his supplies in Canada. In that way we will do something for the manufacturers of this country, and we will encourage them instead of giving them a blank eye" Here we say to the contractor, yon cannot go on and tender, and buy yotir goods wherever Mr. TAYLOR.
you can buy the cheapest, and we will leave it a question which can be fought out afterwards in the courts as to whether we shall pay the duty or not. All we have today is the statement of the Minister of Finance that the contractor will have to pay the duty when he imports the goods, but if the law says you collected the duty illegally, it will be refunded, so that the manufacturer will have to take his chance on the legal construction of this clause now before the House.


Mr. OLIVER.: I am wondering if these are the same gentlemen who held up the House all yesterday in the fear that this road was going to be over-capitalized and that freight rates could not be reduced because of the over-capitalization that was going to be permitted. Are these the same gentlemen, I say, who had that terrible fear all day yesterday, and who to-day are holding up the House, insisting that there shall be an over-capitalization in consequence of which the freight rates cannot be reduced '! If the expenditure that the building of this road will entail, and the legitimate opportunities that will thereby accrue to our manufacturers, are not sufficient for them, I am one to say that that is evidence of the necessity of some provision in this resolution that they shall not be able to take this country by the throat and make the treasury disgorge at their own will and pleasure. Whatever will increase the cost of the construction of the eastern section will certainly increase the carrying charges over that railroad. While I, as a citizen of Canada, am anxious to see our manufacturing industries develop and advance, I am also anxious to see those who require to transport their products over this road get an equal chance to live. This road. I understand, is being built for the benefit of the manufacturers as well as for the benefit of the farmers. To enable the manufacturers of eastern Canada to reach their natural market in western Canada, and that can only be done by providing a road at the cheapest cost of construction, which will allow the lowest rates of carriage. I say it would be a cut-throat policy for the manufacturers themselves to do anything to increase the cost of construction of this eastern section, and thereby tend to debar themselves from entrance into and access to their natural and legitimate market in western Canada. If this road has a reason for construction at all, it is to enable the manufacturers and commerce of eastern Canada to get the benefit of the trade of western Canada, and the only way that earn be done is by keeping down the cost of construction so that the government, having control of rates, can keep them down accordingly. I say that while we wish to assist the manufacturers, while we would be pleased to see the manufacturers get all they cam out of an expenditure of $100,000,000, or as some
t

people say, of $200,000,000 or even of $500,000,000, we cannot afford to allow these very worthy gentlemen the power to take the country by the throat aind unduly and inimitably increase the cost of this road as it would be if the supplies necessary for the construction of it could only be bought in Canada. It is no secret that the manufacturers of Canada constitute a huge combine not in one or two limes but in all lines. It would be a piece of idiocy to put the carrying through of any such tremendous enterprise at the mercy of such an organization ; which is apparently the object to be attained by the amendment which has been proposed on the other side of the House.


Mr. NORTHRBP.: In answer to the hon. gentleman who is just, I cannot say, about to take his seat, I would say that even if this side of the House had held up the debate yesterday, as to which statement I do not agree, still, after listening to his observations with care, I have come to the conclusion that perhaps we would be justified if we held up the House for some little time further until at least some members obtained even a faint glimmering of the question which is before the Committee. When we find an hon. gentleman from whom one would expect better things, placing himself on record, as he has done this afternoon, as being utterly unable to vote for the amendment, fighting a windmill which does not exist, protesting against an amendment which would compel all supplies to be bought in Canada, an amendment which is not before the Committee at all, but which would be rather ridiculing the gold brick in the clause which would be presumed to mean that all supplies would be bought in Canada, and when we find him condemning a certain line of policy which would justify the collection of customs duties on the materials used-because, as he very properly said, if customs duties are collected on the materials used in the construction of the road the cost would be increased, the carrying charges would be heavier and therefore he protests against customs duties being collected-surely, when he took such a position as that, he had not listened to the utterances of the hon. Minister of Finance.


Frank Oliver: The hon. gentleman (Mr. Northrup) would make a more intelligent speech if he had listened to what I said.


William Barton Northrup: I listened very attentively to what the hon. gentleman said. It was not very profound. There was no great difficulty in following it, and it was easier to follow it since nothing like it had been heard for some time past. If the hon. gentleman will take the trouble to read the amendment before the House, he will find that the amendment merely asks the government to have it in black and white in the contract so that there may be no possibility
of doubt about it as to what the intention of the contract is. It seems a pity that we should have a long discussion upon a point upon which apparently both sides of the House are agreed. In the opinion of the hon. Minister of Finance the government will collect these duties. We do not think they have power to collect these duties under the contract, and this amendment is brought forward by the hon. member for West Toronto, and if it is carried it is then practically certain that the government will be able to do what apparently they wish to do, but what nearly half of the members in this House think they will be unable to do. If I might for a moment refer to the remarks made by the hon. Minister of Finance, I would venture to say that he has not wholly understood the exact position in which the opposition stand with reference to this amendment. He spoke of the distinction between the industrial question and the legal question, and there can be no question as to what he meant. But, I would call his attention to the fact that while there is an industrial question as to the payment of the cash as duties, the question is not as to who is or who is not to pay tliege duties based upon a legal question. Until that legal question is solved conclusively nobody can speak with certainty upon the industrial question. That can only be a matter of opinion. If the legal question were settled conclusively there could be no question as to the working out of the industrial question. We entirely dissent from the parallel used by the hon. Minister of Finance, that the contractors under this Bill would be in the same position as the contractors for any other government work at the present time being carried on. He referred to lighthouse and other contractors. We are quite prepared to say that if the government makes a contract with any contractor to build a lighthouse, unless there is something in the contract relieving him from the necessity of paying customs' duties, it is perfectly clear that he must pay the customs duties. So far both sides of the House will be in agreement. But, that is not the case before the Committee at the present time. We have a contract which has already been signed between the government and a corporation. One of the terms of the contract according to the fifth clause is that :
The said eastern division shall be constructed by, and at the expense of the government.
Certain obligations will then result from that contract which has been made between the Grand Trunk Pacific Railway Company and the government, subject, of course, to the approval of parliament. When this contract was made the contract itself did not provide, because it was not necessary, that articles imported for the use of the government should be admitted free of duty. The tariff provides, by article 450. that ar-1 tides imported for the use of the govern-

ment, or of any department thereof come in free of duty. When the Grand Trunk Pacific entered into this contract with the government they did it knowing the law of the land. They bound the government to build a railway, and the law was that all materials that the government used would come in free. It is perfectly true that in this Bill the government provides for the manner in which it is to carry out this contract with the Grand Trunk Pacific Railway Company. It first provides by clause 2, that the schedule is approved and ratified, and it provides for the carrying out of the contract, only varying as to matters of detail, the procedure in carrying out the contract already made, and thereby ratifying the contract, providing that certain commissioners to be appointed are to do certain work, that these commissioners are authorized to employ certain contractors to do the work that the government has agreed to do, and the government knew at the time they made this contract that nothing we could pass in this House would at all alter the respective positions of the parties. If. the government having made the contract, we by a- vote of this House were to change that contract, tlie other party would be absolved. The contract would be at an end. I presume the intention of the government is to see that the contract is carried out as they have made it. Well then, if that be their intention let us see how it would work out. The hon. Minister of Finance says : I took down his exact words :	We say all goods
must pay duty. We say as a matter of obligation that we will see that they do pay duty. An obligation by whom and on whom? Would you say to the contractors : We are going to collect the duties. But the Grand Trunk Pacific Railway Company may say to the government :	We dare you to
collect the duty. Bet us see how it may work out in practical life. If the government has to build 1,400 miles of road from Moncton to Winnipeg, and if the Grand Trunk Pacific Railway Company contemporaneously has to build another line 1,800 miles long from Winnipeg to the coast, the construction of these two roads is provided for in the agreement. If the government is bound to do a certain thing by that agreement, if by the government failing to carry out that agreement any loss is imposed on the Grand Trunk Pacific Railway Company, they will be entitled to damages. If. as a matter of fact, the Grand Trunk Pacific Railway has bound the government that it shall not collect the duties, if then the government does collect duties, even if paid by a third party, and if damage has resulted to the Grand Trunk Pacific Railway Company it will be entitled to a remedy as against the government. If thousands and thousands of tons of rails are to be purchased in the old country by the government for its end of the line, and if thousands and thousands of tons of rails are to be pur-Mr. NORTHRUP.
chased by the Grand Trunk Pacific Company for its end of the line, anything that will promote business in those lines, anything that will cause a demand for rails and that will lower the price is in the interest of the Grand Trunk Pacific Railway Company as well as the government. Therefore, the Grand Trunk Pacific Railway Company may say : One of the objects we had was to compel you to get your rails in Great Britain or the United States. We knowing that the greater demand there would be, the cheaper would be the price for us, and therefore the more money we would make out of it.
It seems to me that under the clause of the contract allowing a reference to arbitration, we would not have to wait for the expiration of ten years before the legal .question, which the Minister of Finance wishes to avert, would of necessity arise. Immediately on the commencement of the construction of the road and the letting of the contracts, the question of the payment of customs .duties by* the contractors .for the eastern division (would arise. The 47th clause of the contract reads :
Any dispute which may arise as to the meaning or construction of this agreement, or as to the performance of any of the obligations of either of the parties to this agreement, or as to working expenditure or cost of construction, shall, if not herein otherwise provided for, be determined by the aw'ard of a single arbitrator, if the parties concur in his appointment, or if not, by the award of three arbitrators, one of whom shall be appointed by the government, one by the company, and the third, by the tw* so appointed, or, in the case of their being unable to agree, by the Chief Justice of the Supreme Court of Canada, and the award of a majority of such three arbitrators, shall te final.
There is a clear clause, that at any time during the currency of this contract, if any dispute should arise, a reference may be made to a single arbitrator ; and under this clause one individual would have it in his power-an individual outside of the Minister of Finance or the members of the government-to decide whether or not, under the terms of this contract, the government has the right to collect duties from contractors bringing in these materials. No one in this House would hesitate to take the word of the Minister of Finance ; we have not the slightest doubt in the world that it [DOT] is bis intention to collect these duties when he says it is bis intention to do so. But if, on looking at the contract, -we see that there is a clause by which the matter can be referred to arbitration and the award of the arbitrators is made final, we may well believe that the Minister of Finance may have to come down to parliament a few years later on and say : I intended to collect these duties ; I think they ought to be collected, but unfortunately, under the terms of the contract, the power has been taken out of my hands ; I must apologize, and you can-

not blame me for not doing what I am powerless to do. We are endeavouring to shield the Minister of Finance from that danger. We would avoid any such undesirable consummation, and inasmuch as he wishes to collect these duties, we suggest that this amendment would so strengthen his hands that there can be no doubt of his power to collect them.
A word as to the position of the House generally upon a question of this kind. I can well understand the embarrassment of a lay member of the House when a question. such as this Is, wholly dependent on the legal construction of a document ; I can understand a layman saying : I do not understand this, I must take some one's opinion, and I prefer to take the opinion of the Minister of Justice. I have no fault to find with any member of the House who has such respect for the opinion of the Minister of Justice that he feels justified in following it. There are gentlemen on this side oif the House who, like gentlemen on the other side, are ready to profess sincere respect for the opinion of the Minister of Justice on any legal question. But I am sure the Minister of Justice himself would not claim to be infallible, and the very fact that so many members-perhaps the majority-are personally unable to decide this legal question, and are basing their vote on his judgment, should make the Minister of Justice, if possible, doubly careful to be absolutely certain that there is not even the possibility of mistake in the opinion he has reached. The opinion of the Minister of Justice has .been fortified by the opinion of . the Deputy Minister of Justice, and the deputy minister is a gentleman whose legal qualifications we, on this side of the House, are as ready to admit as are hon. gentlemen opposite. But any one can see at a glance that, without belittling the opinion of the minister and his deputy, when we come to weigh the combined opinion of the jegjal gentlemen op the other 'side1, the opinion of the minister and his deputy does not stand on the same footing as if these two gentlemen occupied different positions, and without consultation had arrived at the same conclusion. One gentleman is the head of the department ; the other is his deputy. The Minister of Justice must have gone to his deputy to secure his opinion, either before the minister announced his own opinion or afterwards. If the Minister of Justice had gone to his deputy before he announced his own opinion, it is rather an embarrassing position for the Minister of .Justice, who naturally would not say that he went to his deputy because he was afraid of his own opinion. The minister must have gone with his own mind made up on the question.


The MINISTER OF JUSTICE.: I am not at all above admitting that I am not infallible in law. I have enough experience to prevent me from assuming that


William Barton Northrup: But the Minister of Justice is head of the department, and the deputy minister is his deputy, and wre can quite see that if before this opinion was given the minister went to his deputy, it would be a difficult matter for the deputy to lay down his views as being opposed to the views of his chief:	If, on the other hand,
the minister went to the deputy after he announced his own opinion to the public, I think every one will see that the deputy minister would hardly feel justified in setting up his own opinion against that of his chief, and especially such a very eminent chief as is the present Minister of Justice.
Mr. McCarthy. Surely the hon. gentleman (Mr. Northrup) would not say that it was the duty of the Deputy Minister of Justice to follow the opinion of his chief, and that if he differed from the opinion of his minister he should write out his opinion in the same trend as that of the- minister ?


William Barton Northrup: I hope the hon. gentleman tMr. McCarthy) has not misunderstood me. I would be very sorry indeed to think that the Deputy Minister of Justice would express an opinion in which he did not concur, in order to please his chief. Not a word I have said can be open to any such construction. I am pointing out that there is a difference between the Minister of Justice going to his deputy to get an opinion and the opinion of two independent gentlemen .in different cities, arrived at without communication. Surely, every member of the House can see that there is a difference, be it great or be it less, between the position of the two opinions. When we have the opinion of two legal gentlemen, one living in Toronto and another, one of the most eminent members of the Montreal bar ; surely there is enough to justify us in saying that the government have not made their Bill so perfectly clear that they can be certain it will attain the end they have in view. We apparently agree as to the end desired, and why not make it beyond peradventure that what both sides of. the House profess to desire shall be carried out in this contract ?
flow, Sir, a word with reference to Mr. Heilmuth. The Minister of Justice referred to this gentleman, I will not say in contemptuous terms, but he referred to him as having been a foeman whom he had met in the Supreme Court but a short time ago, and the Minister of Justice referred us to the records of the Supreme Court to see the result of Mr. Hellmuth's deliberation and argument and display of ability before the court. The impression was left on members of the House that it was nothing but an act of good-natured generosity on the part of the Minister of Justice that prevented him saying, in so many words, that lie had beaten the learned counsel from Toronto to a finish in the Supreme Court of this

country. I have always found it wise to take the advice of the Minister of Justice when I can, and my only regret is that I cannot take it oftener than 1 do. And so, the Minister of Justice having advised us to look at the records of the Supreme Court, I took the trouble to see if there was anything on that record which would justify us in holding Mr. Hellmuth in less esteem in consequence of the decision of that court, or in believing that we should attribute to his opinion less weight than his high reputation in the country demands we should attach to it. In searching the records of the court I found, as a matter of fact, that there was an appeal by the Calgary and Ed-Imonton Railway against the Grown. I found, also, that the counsel for the appellant was Mr. Hellmuth, of the city of Toronto, and that the respondent's counsel was the learned Minister of Justice. And I saw, Sir, that no doubt it was a feather in the cap of Mr. Hellmuth that he was even pitted against so distinguished a lawyer as the Minister of Justice. When I came to look at the record and the result, I found that Mr. Hellmuth was appellant in a case in which there was a judgment adverse to his side in the court below. Under these circumstances he appeared before four judges of the Supreme Court of Canada. Mr. Hellmuth did not win the case, it is true, but he won two judges out of the four, and the only reason he did not win was because there happened to ibe an even number of judges, and, under the constitution of the Supreme Court, that equal division of opinion amongst the learned judges confirmed the decision of the court below. When a counsel, pitted against the Minister of Justice, appears before four judges of the Supreme Court of Canada as counsel for appellant in a case which was lost in the lower court, and when he can succeed in persuading two out of the four Supreme Court judges that he is right, and when the only reason he did not succeed was because there was an even division of opinion on the Supreme Court bench ; when a learned counsel lias succeeded in doing so much, it is some little tribute to his success. I do not think that the learned Minister of Justice will continue to insist that there was anything in connection with that case which should lower the general opinion held of Mr. Hellmuth. And then, Sir, curious to see who it was of the four judges of the Supreme Court that Mr. Hellmuth succeeded in convincing, I found that they were the learned Chief Justice- and I am sure everybody on cither side of the House is proud of the ability and erudition which the learned judge has brought to the bench-and Mr. Justice Girouard, while the Minister of Justice succeeded in holding the late Mr. Justice Armour and his late colleague. Mr. Justice Davies ; so that Mr. Hellmuth was unable to secure what was necessary to reverse the first judgment. I only mention Mr. NORTHRUP.
this, because I concluded, from the reference made by the hon. Minister of Justice before lunch, that Mr. Hellmuth suffered a most ignominious defeat, worse than Waterloo, in the Supreme Court; and I wished to make the descent of the hon. gentleman into Hades as gentle as possible. I was satisfied that in any case, outside of political questions, it was wise to accept the legal opinion of the Minister of Justice. I have no doubt that the Minister of Justice shares the view of his colleague, the Minister of Finance, because it is incredible that two members of the administration should hold different views on this question. I hope he will accept the amendment of the hon. member for West Toronto, because it simply puts into plain language the views which the Minister of Finance has announced as the views of the government.


The MINISTER OF CUSTOMS.: 
George Taylor: Would the.hon. gentleman read the section in the Customs Act which declares that all goods purchased for the government shall come in free, and give it to the hon. leader of the opposition before he asks for his opinion ?


Albert Edward Kemp: Both the hon. Minister of Justice and the hon. Minister of Finance, on different occasions, have clearly stated that it was not the intention that the materials used for the construction of the eastern division of this railway should come in free of duty. But, as has been pointed out, a legal interpretation of the Bill and the contract is contrary to their views in that respect. The Minister of Finance, I am inclined to think, did not take from the opinions which the hon. member for West Toronto read to the House the meaning which they conveyed. He stated that there were two questions-the industrial question and the question of the company paying 3 per cent interest upon the total cost o<* the. eastern division, which the government are to build; that when the hon. member for West Toronto spoke a few days ago on this question, he referred to the industrial question only; and that the legal opinions which he has read have reference solely to the question of the payment of the 3 per cent interest. I am bound to believe that when

tlie lion. Minister of Finance reads these opinions, as they will be found in ' Hansard,' he will have reason to change his mind in regard to that, because my understanding, and I think the understanding of most of the members of this House, is that the provisions set forth in the Bill and the agreement mean that these goods will have to come in free of duty. I am a layman like the lion. Minister of Customs, and do not pretend to give my view on these questions. But, according to my limited knowledge of the matter, if the government constructed this road, they would not pay duties, because they would be simply taking money out of one pocket and putting it into another; if the government delegate their powers to a commission, I am inclined to think the commission will not have to pay duties ; and if the commission delegate their powers to men who construct the railway by day's work or to contractors, they will not have to pay duties. This is an important matter to the working people of this country. I would have gone further than the hon. Minister of Finance. If our credit is sufficient' to enable us to raise $100,000,000 to build, this railway, surely the time has come when the ordinary cars and locomotives, and everything used in the building and equipment of the road, should be made in this country. I am prepared to admit that we have not at present the facilities in this country to make, in a short space of time, all the locomotives, cars and other articles required for this railway. But what X do say is that the very fact that we can go abroad and borrow $100,000,000 or $120,000,000, a considerable portion of which will go into the handis of alien workingmen in foreign countries. is evidence that the time has come when we should look this question fairly and squarely in the face; and, Instead of putting in this Bill a clause like section 17, I would be inclined to go as far as to provide that the equipment and everything required for this railway should be made in this country. The hon. member for Alberta (Mr. Oliver) took a peculiar stand in reference to this matter. I would like to say to that hon. gentleman that I believe the time is coming when he will be glad to have car shops in Edmonton, and when the people in the great cities of the North-west, which are bound to rise in the future, will be glad to have every thing required for this railway made in the Northwest. All the people of that country are not going to till the soil. Among the thousands and tens of thousands of people who will go into that country, a great many will not want to till the soil, but will flock into the centres of population; and the time is coming when the towns and cities in the North-west, in the natural course of things, will need to have industries; and I would be inclined to make it obligatory that the rolling stock for this road should be made | 356
in this country. If this clause is meaningless to some extent, as I understand hon. gentlemen claim that it is, why is it there? It must be there for something. Was it the clever lawyers of the Grand Trunk Kailway that got it put in or those responsible for the drafting on behalf of the government? Somebody must be responsible for it; and if the Minister of Customs and the Minister of Finance want all doubt removed, they will consent to the amendment. We believe that the time has come when we should not vote money to be spent in foreign countries.


The MINISTER OF CUSTOMS.: With reference to section 37 and the contention that the company should be compelled to purchase all its materials in Canada, without any qualification whatever, it is obvious that such a condition would be impracticable. It might retard the completion or the equipment of the road for years. It is well known that all the locomotive works we have in this country are now engaged up to their full capacity. It is impossible for them to meet all demands, and many leading railway companies have had to go to the United States, England and Germany for their locomotives. But suppose you were to put in a clause compelling this company to purchase everything in Canada without any qualifications, and business were to go on increasing as I think it will, it might be impossible for the company to get in Canada, within any reasonable time, the equipment it will require. When I addressed the House some days ago, I alluded to the fact that one-half the materials might be purchased in this country and the other half might be imported and furnish a revenue. We thus secure to the Canadian manufacturer the protection afforded by the tariff.


William Findlay Maclean: What we want is to get the goods manufactured here.


The MINISTER OF CUSTOMS.: Our manufacturers will get the full benefit of the tariff.


William Findlay Maclean: But they do not get the work.


The MINISTER OF CUSTOMS.: They will get all they can do and they will have an advantage of $35 dollars in the hundred over the Americans. If they can sell their goods at $35 over the American price, they will get the orders.


Edward Cochrane: The whole discussion has been why there should be any ' if ' at all. Why not make it so plain that there will not be any ' if ' about it.


Samuel Hughes: Will the hon. minister tell us exactly what clause 17 of the agreement does mean ?


The MINISTER OF CUSTOMS.: I have said that I am a layman and I am giving my view of section 37. If the Grand Trunk



Pacific Railway import any of its material, it will have to pay the duty, and that duty will be a protection for the Canadian manufacturer. It is very probable that, with the rapid construction of the road and increasing business, they will not be able to get all the equipment they want in Canada and they will have to import some. In such a case, they will have to pay the duty ; and if the Canadian manufacturers sell all they can make and the country is getting a revenue from the balance, I cannot see why any one should complain. As we have had the opinion of the hon. member for Toronto (Mr. Osier) and the hon. member for Leeds (Mr. Taylor) on section 37, would the hon. the leader of the opposition have any objection to stating whether, in his opinion, under clause 37. the Grand Trunk Pacific Railway will not have to pay duty on the materials they import.


Robert Laird Borden: I think that my hon. friend the Minister of Customs has enough on his mind in connection with section 17, which he does not seem to understand very well, to justify him in confining his attention to that section. Let me assist him in coming to an understanding of clause 17 first, and then we will come to clause 37. What is the purpose of section 17, lie-cause that is the one that is prior in the Bill and with which the opinion of the Minister of Justice, which I have before me, is concerned. Perhaps the Minister of Customs, who understood the matters very well, will give his view of the purpose and object of section 17.


The MINISTER OF CUSTOMS.: I have been very courteous with my hon. friend, and I think I am justified in insisting that he should give me the information I ask. The reason I ask it is because the hon. members for Toronto and Leeds say that all the materials mentioned in clause 37 will come in free, and I would like to have the legal opinion of the hon. gentleman as to whether there is anything in that contention. My own opinion as to section 17 would not be a legal opinion. My hon. friend knows my view with reference to the industrial question, but I think it is germane to the discussion and only fair that he should give us his opinion on section 37.


Albert Edward Kemp: Why is clause 17 there ?


Robert Laird Borden: Since my hon. friend the Minister of Customs, cannot be persuaded to give us the slightest information as to the purpose of clause 17, I propose in the first place to endeavour to enlighten him with regard to that clause. It is really the clause with which we are concerned in the matter we are discussing. It is the clause which is dealt with in the amendment of my hon. friend from West Toronto and is properly considered in the opinions read by the hon. member for West Toronto, and the opinion of the Minister of Justice which I have before me. The


Hon. Mr. PATERSON.: Minister of Finance states that section 17 is put there for some wise purpose, but up to the present, neither he nor any other minister of the Crown, with the exception of the Minister of Justice, has given any suggestion whatever as to the reason why it is inserted in the contract.
I have looked over the opinion of the Minister of Justice, an opinion of course which commands every respect and which is commendable because it puts before the House in very clear terms the view which he entertains of the legal question we are now discussing. My hon. friend the Minister of Justice in the first place recites clauses 16 and 17, he does not recite clause 15, which I think has an important bearing upon the matter, though he refers to it later on. He says that clause 15 of the contract defines the expression ' cost of construction.' He says that the expression ' cost of construction ' means and includes all the cost of material, supplies, wages and many other things ; and he says :
Clauses 16 and 17 provide for additions to the cost of the construction. It is imperative under the Bill that-the work of construction of the eastern section shall he by contract, and the Bill does not enable the government to import or pay for materials to be used in construction.
The Minister of Justice takes that ground, but I am unable to concur with him. Then he continues as follows :
These, as I understand the Bill (section 15), are to be furnished by the contractor.
My hon. friend makes no argument with regard to that, he simply states it as a bald conclusion. But he hinges everything upon that, because his further conclusion is as follows :-
Consequently clauses 16 and 17 of the contract can have no application to original construction.
Well, he does not seem to me to have given sufficient weight to the expressions used in clauses 15 and 16. In clause 15 you have the expression ' cost of construction ' defined, and that cost of construction applies to construction In the first instance. Clause 16 applies to the expenditure after a lease has been taken of the eastern division, and it uses an entirely different expression. Clause 16 is as follows :
In case, after the completion of the said eastern division and the taking possession thereof by the company under the lease thereof, hereinafter referred to, or at any time thereafter during the continuance of the said lease, the government shall deem It necessary to expend any sums of money for the improvement of the said eastern division, the replacement of structures by others more modern, or otherwise upon capital account for betterments, and not being ' working expenditure ' payable by the company, the government may expend such sums, and the amount thereof shall be added to the capital of the construction account.
Now, here you have two expressions contrasted with each other. The words ' cost

of construction ' In clause 15 are applicable to construction In tlie first instance before tfie lease, and tbe words ' capital of tbe construction account ' are used in respect of the expenditure made by the government after the lease. Then when you come to clause 17 you find both these expressions used, obviously for a purpose.
No addition shall be made to the cost of construction or to the capital of construction account.
The very expression which is defined, if I may say so, in section 16. Therefore, you have the two expressions well defined, one, the cost of construction, relating to original construction, and the interpretation of which is to be found in clause 15 ; and tbe other expression, 1 the capital of the construction account ' the meaning of which is defined in clause 16. But you have both these expressions referred to in clause 17, the all important clause to which attention is being directed. It does not seem to me for these reasons that I could concur in the conclusion of the Minister of Justice that clause 17 is not sufficiently comprehensive to include not only additions to construction after the lease comes into operation, but also the cost of construction in the first instance. My bon. friend's opinion seems to depend upon that consideration, and upon this further consideration, that he thinks he finds somewhere in this Bill that which would prevent the government from importing material for purposes of construction. Well, I hardly think we can find anything in this Bill to lead to that conclusion. The Minister of Justice bases his conclusion upon the terms of section 16 of the Bill which we are now considering. That section provides that the commissioners shall let the work of construction after the plans and specifications thereof shall have been duly advertised, and they shall accept the lowest tender. Suppose you have this road graded and ready for laying the rails, is there really anything in section 16 to prevent the government, or the commissioners acting for the government, from importing these rails and then letting by tender the work of putting them in place ? I do not find anything in section 16 which leads to any such conclusion, and for that reason andi with all respect I would not be inclined to concur in the opinion of the Minister of Justice in that regard.


The MINISTER OF JUSTICE.: In view of the statement made by the leader of the opposition with respect to this section, I think it is the part of prudence, so far as I am concerned, to ask that the section be allowed to stand so that I may further consider it. In making this suggestion, I think I ought to refer to what has fallen from my hon. friend from East Hastings (Mr. Northrup). In what I said this morning, I thought I had been careful not to say anything that might be considered disrespectful of the legal gentleman to whom he referred and 356J
for whom I entertain tbe highest regard ; but I have looked over the ' Hansard ' report of what I said, and I fear my language was, to say the least, unfortunate, and calculated to convey a wrong impression. I wish to repeat what I said before, that I had no intention of saying anything disrespectful of Mr. Hellmuth, of whoni I entertain the highest opinion because of his great reputation at the bar. I want to add in that connection, that I was mistaken, perhaps, and conveyed a wrong impression this morning with respect to the result of the appeal. The appeal to the Privy Council in the case of the Calgary and Edmonton Railway is still pending.


Albert Edward Kemp: Might I ask the Minister of Justice if, in his opinion, the supplies which go into the betterment of tbe road shall come in free of duty ?


The MINISTER OF JUSTICE.: If these supplies which go into the betterment of the road are imported directly by tbe government, then of course they would come in free of duty. If they were imported directly by the government, and not through any contractor, and to be used by the government for the construction of the road, in that event they would fall under the general terms of the Customs Act which has been in force in this country since 1886, and would come in free of duty. But if these goods are imported by a contractor in connection with the construction of the eastern division, or imported by the Grand Trunk Pacific in connection with the western division, it was the undoubted intention of tbe parties that these goods shall certainly pay duty, and that that duty shall be added to the cost of construction upon which the Grand Trunk Pacific are to pay 3 per cent. That was the undoubted intention of the parties- to this agreement, and of course it is our duty to see that that intention is made so absolutely clear that there can be no possible doubt about it.


George Taylor: There must be some reason why that clause was put in the contract. What'is the reason that clause 17 was put in there ?


The MINISTER OF JUSTICE.: If the government, after the road is constructed, and has been handed over under lease to the Grand Trunk Pacific, required to have certain improvements or betterments made as provided in section 16, and if the government imported these goods directly, if clause 17 were not in the contract, notwithstanding that the importation was made directly by the government, it would have been possible for the government to add them to the cost of construction and to make the Grand Trunk Pacific pay interest thereupon.


Samuel Hughes: Not under the Customs Act, would it ?


The MINISTER OF JUSTICE.: Yes. I "will read the Customs Act.


Mr. HEYD.: What is the use ?


The MINISTER OF JUSTICE.: It is of use.


Charles Bernhard Heyd: It will not convince anybody.	[DOT]


The MINISTER OF JUSTICE.: I do not know whether it would convince anybody or not, but I want to satisfy myself. Section 5 of the Customs Act provides :
Subieot to the same provisions and to the further conditions contained in schedule B to this Act, all goods enumerated in this schedule B may be imported into Canada or may be taken out of warehouse for consumption in Canada without the payment of any duties of customs thereon.
Then, article 50 of schedule B reads as follows :
Articles imported by or for the use of the Dominion government, or of any of the departments thereof, or by and for the Senate or House of Commons, including the following articles when imported by the said government or through any of the departments thereof for the use of the Canadian militia: military clothing, musical instruments for military bands, military stores and munitions of war.
That is the clause in force at the present time. It is that if the government imported these goods direct they would come in under the operation of schedule B, clause 450, and would not he liable to customs duties. That is the law which has been In force since 1886.


George Taylor: It is not necessary that the government should import them direct. It says 'by and for,' and therefore these goods could be imported1 by the contractor for the government.


The MINISTER OF JUSTICE.: "it is useless to argue the question.


Edmund Boyd Osler: I understand that under this clause the government are allowed to bring in these articles free of customs duties ?	[DOT]


The MINISTER OF JUSTICE.: Yes, but not in connection with the construction of this road.


Edmund Boyd Osler: Any articles used by the government could be brought in free?


The MINISTER OF JUSTICE.: If the the government by day's labour and if the government imported the articles that were used by the government in the construction of the road these articles would be imported free of duty. Section 16 of the Bill is intended to prevent that, because it says that the government cannot construct the road, but that it must be constructed by a contractor. Then, it will be dealt with absolutely in the same way as the construc-Mr. HUGHES (Victoria).
tion of canals, and canals are being constructed in this country every day. Contracts are given for the construction of canals. The contractors import the goods and when they do so they pay the duty.


Edmund Boyd Osler: In view of the legal opinions which have been given and considering the bargain with the Grand Trunk Pacific Railway Company, this certainly does not look like an ordinary contract. We have the opinions of these gentlemen given very straightly that they think the Grand Trunk Pacific Railway Company are bound to bring in these goods free of duty. The liou. Minister of Finance says that they mean to collect the duty.


The MINISTER OF FINANCE.: I cau go a little further even than my iron, friend the Minister of Justice did and I will take a case where government to-day have the right to import materials without passing them through the customs. The fact is that in the Department of Railways and Canals we do not avail ourselves of that privilege when the goods are produced in Canada. When tenders are invited from people in Canada the rule of the Department of Railways and Canals is that these tenders shall quote the duty-paid price; so that the government do not avail themselves of the privilege where the goods can be got in Canada of importing direct.


Edmund Boyd Osler: If the government ac-i cept that position why not put it in the contract ?


The MINISTER OF FINANCE.: That might be necessary if we were considering the old Canadian Pacific Railway contract, as there was a difficulty of that kind in connection with that. There is none in this. The conditions here are entirely different.


Mr. BELL.: Apparently a distinction is drawn by the government between the work to he done in the first construction of the road and the work to be done subsequently. The intention apparently is that imported materials going into the first construction of the road shall pay duty and that imported materials going into the later improvements or betterments shall not pay duty.


The MINISTER OF JUSTICE.: If the importation is made directly by the government-with that qualification.


John William Bell: Why do the government draw the distinction and why do they make that provision ?


The MINISTER OF JUSTICE.: Because the general Customs Act which has been in force since 1886 makes that distinction; because it is the law of the land to-day.


John William Bell: Then, apparently the hon. Minister of Justice does not understand that the law is being interfered with, kept in abeyance as far as the first construction

of the road is concerned, but is allowed to go into operation as far as subsequent betterments are concerned.


The MINISTER OF JUSTICE.: Not at all. The first construction must be carried on by the interposition of the contractor, the goods must be imported by the contractor, and if imported by the contractor they would not come within the provisions of section 17, which apply to goods directly imported by the government. The words,
' directly imported,' are in the clause.


John William Bell: Could not subsequent work done upon that road be done by a contractor ?


The MINISTER OF JUSTICE.: Then, the goods would not be directly imported by tlie government and would pay duty.


John William Bell: If after the work of construction is completed the case arose that was mentioned by the hon. leader of the opposition that the government should undertake to bring into the country a large quantity of rails and rolling stock, which would not be done through a contractor, wouldi they not come in free of duty ?


The MINISTER OF JUSTICE.: Then the government would deal with those rails as they deal with them on the Intercolonial Railway, and have dealt with them on the Intercolonial Railway for years past.


John William Bell: In what way is that ?


The MINISTER OF JUSTICE.: They do not pay any duty on them.


John William Bell: Then, the contention of my hon. friend from West Toronto (Mr. Osier) is sustained and supported by the hon. Minister of Justice.


The MINISTER OF JUSTICE.: That is my hon. friend's view, and he is entitled to it.


John William Bell: The hon. Minister of Justice sustains that view. He has said that in that case the same course would be followed as is followed by the government today, and that they would import these goods free of duty.


The MINISTER OF JUSTICE.: If there is direct importation of rails for the Intercolonial Railway by the government for the use of the government on the Intercolonial Railway .these rails come in free. If it is in connection with a contract let upon the Intercolonial Railway for the purpose of construction that an importation is made, then the contractor will have to pay the duty. That is the distinction.


John William Bell: The result of it is that after the work of construction on the eastern division is done if the government choose to import rails directly they will import them free of duty. That is exactly the same position that the hon. member for West Toronto is trying to guard against. The whole purpose of his amendment is to secure for the manufacturers and rolling mills of Canada the production of these rails, and apparently the hon. Minister of Justice has admitted that the provision that my hon. friend wishes to introduce must be introduced or else the government would be in a position to import these rails frtee of duty.


The MINISTER OF FINANCE.: There is nothing which says that even for the first construction the goods shall not pay duty. It says that if you see fit to import rails for later betterment and duty is levied thereon, then the duty shall not be charged up to capital account, but there is nothing to prevent the government buying the rails in Canada if they wish to do so.


John William Bell: Or from buying them abroad if they wish to do so?


The MINISTER OF FINANCE.: Certainly, the government must be perfectly free to buy them wherever they please. If the government buy the rails in Canada, then there is no question of duty in the matter at all. If the government see fit to bring these rails from abroad then they cannot charge the duty on these rails to capital account of the Grand Trunk Pacific Railway Company, in the account for the betterments on the road. But there is nothing even then which obliges the government to import the rails at all. They can purchase them at home, and there is no question of duty entering into the matter.


Robert Laird Borden: I did think some time ago that I understood the purpose of clause 17, but I am now beginning to doubt whether I have a correct realization of it. It is really very peculiar, as I think the hon. Minister of Justice will admit. Clause 17 says that:
No addition shall be made to the cost of construction or to the capital of construction account in respeot of customs duties In cases where there is direct importation of material or supplies by the government.
For the purpose of what I am going to say I will take the view of the hon. Minister of Justice as to the object of this clause. Let us assume that he is right and that I am absolutely wrong. What purpose does this clause fulfil after all ? If goods are imported directly by the government they must come in free under the provisions of the Customs Act which has been read by the hon. Minister of Justice. Then, under clause 16 you cannot charge customs duties to the Grand Trunk Pacific because it would be excluded by the very terms of clause 16. What does section 17 do ?


The MINISTER OF JUSTICE.: As the law is now, any importation of material by the government under section 16 would

come in free of duty, and of course in that case there could he no addition to the cost of construction or to capital account for customs duties. But this contract has been made for fifty years, and the law as we have it now with respect to the importation of materials by the government may be changed next year, or at ainy time, but with respect to this particular contract it will remain as it is to-day.


Robert Laird Borden: The sole purpose of it then is to provide against the possibility of customs duties being charged some time in the future upon direct importations for the government.


The MINISTER OP JUSTICE.: That is my opinion.
Section allowed to stand,
Section 17 agreed to.
Section 18 agreed to.
On section 19,


Robert Laird Borden: This clause prevents any member of either House of parliament from being appointed to any position of emolument under the commissioners, or from being a contractor or party to any contract with the commissioners for the construction of the eastern division. It is a very desirable clause so far as it goes, but has the government considered the desirability of having it go a little further ? From what was said by the Finance Minister to-day we would understand that the office of commissioner will be an office of emolument, and the clause does not say that no member of either House shall be appointed to be a commissioner.


The MINISTER OF FINANCE.: No member or senator could hold am office of emolument under the Independence of Parliament Act.


Robert Laird Borden: Not if he were to retain his seat in parliament.


The MINISTER OF FINANCE.: It is not contemplated that he should be a commissioner and retain his seat in parliament.


Robert Laird Borden: I had in mind as to whether the government considered the advisability of saying that no member of the Senate or House of Commons should be appointed to the office of commissioner, even at the risk of being compelled to resign his seat.


Samuel Hughes: The Postmaster General formerly contended that no member or senator should he appointed to office until a year after he had resigned his seat.


The MINISTER OF FINANCE.: I can frankly say that we have no member of parliament in view at all. If he were appointed he would have to resign his seat, and my hon. friend (Mr. Borden) would-not


Hon. Mr. FITZPATRICK.: ask more than that even if some suggestions were made in former times that a year should elapse.


Robert Laird Borden: The Minister of Finance is putting it very mildly when lie calls it a suggestion. My recollection is that there was a motion made, accompanied by a very strong speech from a gentleman who is now a very prominent member of the cabinet. It would seem as if the reasons which were so forcibly advanced only a year before this government came to power, should be equally cogent with the ministers to-day. Has the Prime Minister had recent occasion to consider these statements which were formerly made by his Postmaster General. Perhaps the opinion then held by the Postmaster General and his present colleagues has not been entirely dissipated.


The PRIME MINISTER.: I agree with my hon. friend (Mr. Borden) that no member of parliament should be a member of this commission, and there is no intention that he should be. There is no provision in this Bill to prevent the appointment of a member of parliament, but the Independence of Parliament Act would immediately apply and the member appointed would at once have to vacate his seat. It seems to me that in this respect the clause goes far enough. Does my hon. friend think there is any doubt that a member of parliament cannot be a member of this commission ?


Robert Laird Borden: I thought that) the Prime Minister might have been so far impressed by the speeches of the Postmaster General, as to conclude that it would be unwise to appoint a member of parliament until one year after he had ceased being a member of this House. A very Tiigh authority in the government has advocated that principle, and although we may not all agree with it, yet in view of the fact that it was so forcibly presented to the House by so able and distinguished a minister, I thought that the government might have considered it, and arrived at a matured and well considered decision with regard to it.


The PRIME MINISTER.: I agree with my hon. friend that it is advisable for the government to take that into consideration," and arrive at some mature decision upon it.


William Findlay Maclean: There is nothing in this clause to prevent a senator or a member of the House of Commons being a shareholder or a director of a construction company to build this road.


The MINISTER OF JUSTICE.: I am afraid that is right.


Mr. BENNETT.: If there is nothing to prevent either a member of the House of Commons or a senator being a member of a construction company, and as the independence of Parliament Act precludes the

possibility of a member of either of these branches of the legislature being a contractor, what is the necessity for this clause at all ? Would not the Independence of Parliament Act preclude either a senator or a member of the House of Commons being a contractor ?


The MINISTER OF FINANCE.: Yes, inevitably.


William Humphrey Bennett: As they may be members of a construction company, why not eliminate the clause altogether ? It is simply surplusage.


The MINISTER OF JUSTICE.: This provision is applicable to a contract taken from these commissioners, and it was adopted word for word from section 19, of the Intercolonial Railway Act. In the Independence of Parliament Act a member of a company which has a contract is exempted from the application of the Act.


William Humphrey Bennett: That is all very well ; but the Independence of Parliament Act precludes a senator or a member from being a contractor.


The MINISTER OF FINANCE.: This clause is necessary, because the contract would be made with the commissioners, and not with the government directly, and therefore it would not come under the operation of the Independence of Parliament Act.


William Humphrey Bennett: The commissioners are acting [DOT] under the government, and they would have to be treated as one and the same.


The MINISTER OF FINANCE.: If the clause were struck out, members of parliament could take contracts from the commissioners.


William Humphrey Bennett: Does the Minister of Justice hold that view ?


The MINISTER OF FINANCE.: It is open to that. The object of the clause, I take it, is to place a member of parliament in exactly the same relation to the commissioners as he holds to the government. If there is any doubt about that, this clause makes it absolutely certain.


William Humphrey Bennett: Under this clause all that is required is for several senators or members of the House of Commons to unite themselves together in a construction company, to enable them to take contracts from these commissioners.


The MINISTER OF JUSTICE.: That is the case to-day.


William Humphrey Bennett: Another clause pi'ovides that the contracts must be ratified by the government. So that the government will have the farming out of all the contracts, and will be able to brush aside the commissioners, and let every contract to construction companies composed of senators and members of the House of Commons.


The MINISTER OF JUSTICE.: My hon. friend is not aware that section 15, of the Independence of Parliament Act permits that very thing to-day.


William Humphrey Bennett: Under the present law, I understand that any member of either of the legislative branches may be a member of a joint stock company which has a contract with the government; if that is not correct, the Auditor General's Report proves that the Act is being violated, because I need not refer to a certain senator who is connected with a company whose name figures prominently in the Auditor General's Report for supplies furnished. Surely the hon. Minister of Justice does not contend that members of the Senate or House of Commons should be able to combine themselves into a construction company to take contracts under this Act.


Robert Laird Borden: The difficulty about the present situation is that the sud-posed safeguards for preserving the independence of parliament are more apparent than real. Any member of parliament or senator can practically make himself a corporation by associating with himself four other people, giving each of them one share, while he holds, let us say, the remaining 996 shares, thus making himself practically as much interested in contracts bet,ween that corporation and the government, as he would be if he made the contract himself. Yet there is no doubt, as the Minister of Justice observed, that that is a perfectly legitimate transaction, a transaction which cannot be attacked under the law as it exists at present ; and the consideration of that subject in connection with the section which we are now discussing, opens up a pretty wide range. If it is desirable to preserve the independence of parliament-and I do not think any of us can have any doubt in regard to that-is it not a serious question for the consideration of this House whether some amendment should not be made in the present law ? I do not minimize the difficulties of dealing with the situation ; because I have put an extreme case. You might have a case quite as extreme the other way. You might find a member of parliament interested to a minimum extent in a company which has a contract with the government. Still, it seems to me that parliament should give some consideration to the question, either in connection with this clause or in connection with the Independence of Parliament Act. Half a dozen members of this House might form themselves into a construction company, and be vitally interested in contracts virtually made with the Crown, and the Act relating to the independence of parliament would not permit us to criticise their action in that regard in the slightest degree.


The PRIME MINISTER.: This question is not new. I remember it being discussed

In he early eighties at some length, when the same difficulties were suggested as have presented themselves to the minds of my hon. friends to-day. X am sorry to say that no satisfactory solution has yet been found. I remember when in 1878 several seats were vacated on the most trifling offences. Some members of parliament were members of printing companies, and because there had been a government contract taken by a company for three or four dollars, thejy were deprived of their seats. We had a case somewhat similar this year, in which the hon. member for Glengarry (Mr. Schell) was concerned, and we can easily imagine cases in which the independence of parliament might be violated unconsciously. I remember that the best solution devised was that when a member of parliament was also a member of an incorporated company, the fact that he held shares in such a company and that it had a contract with the government would not be a violation of the Independence of Parliament Act. He did (not contract individually, but simply in his corporate capacity. But the law is very likely to be abused, and some abuses were brought to the attention of parliament some time afterwards. A firm, for instance, might take out letters of incorporation and practically all the stock be held by one man who was a member of parliament. There was no satisfactory remedy, but in the case of the Canadian Pacific Railway it was decided specifically that no member of parliament could be a member of the corporation except under specific circumstances. This is a public work, and the law could be applied that no member of parliament can be interested in a corporation that has anything to do with public works.


The MINISTER OF JUSTICE.: The view taken by my right hon. leader is no doubt correct. The general principle of the law is that no member of the House of Commons can be interested in any government contract. Section 15 of chapter 11 of the Revised Statutes says :
This Act shall not extend ho disqualify any person as a member of'the House of Commons by reason of his being shareholder in any iu-oorporated company having ,a contract or agreement with the government of Canada.
If the law stopped there, It would be perfectly clear, but the statute goes on to provide an exception :
Except any company which underbakes a contract for the building of any public work.
I think that in view of section 8 of the Bill, which provides that [DOT].
The eastern division of the said Transcon-ential Railway extending from the city of Moncton to the city of 'Winnipeg, shall be constructed by or for the government in the manner hereinafter provided.
That provision of the Bill makes this a public work within the meaning of section 15 of chapter 11 of the Revised Statutes. Therefore no member of parliament can be Sir WILFRID LAURIER.
interested in a 113' contract under this Bill, even as a member of an incorporated company. That Is my view at first sight, but it is a serious matter, and I would like to hear how far hon. gentlemen opposite share that view.


Robert Laird Borden: It would be a little difficult to speak off-hand on a provision of the statute. There is one suggestion I would like to make in connection with the observations of the Prime Minister. The situation is a little different to-day from what it was in the early eighties. The tendency during the last ten years has been to put everything into the shape of a corporation. Business enterprises, which were conducted in the form of a partnership twenty years ago, are now incorporated. Men are incorporating themselves because by doing so they escape some of the contingencies which beset the ordinary partnerships. For instance, their liability is limited to the amount of capital invested by them. Therefore the evils, which were apparent in the early eighties with respect to contracts between the government and corporations are very much greater at present. I suppose that nine-tenths of the great commercial business houses of the country are now conducted in the shape of corporations, whereas fifteen or twenty years ago they were ordinary partnerships. The illustration to which the Prime Minister has adverted indicates how slight a difference there is between the two cases. One of the cases, I think, was in Nova Scotia. Certain gentlemen had associated themselves in a partnership, but bad not taken the precaution of filing articles of Incorporation and were held to be disqualified on account of some printing contract with the government, whereas if they had gone through the form of filing articles of incorporation, not the slightest question could have been raised. In 1880 no further legislation was thought necessary, but the conditions were somewhat changed to-day. and it might be desirable for the government to consider whether or not-although I see the difficulty of it-some advance might not be made in our legislation in that regard.


Alexander Johnston: Before the discussion closes, I would like to ask for a few words of information. I do not know that I have followed correctly the position taken by the leader of the opposition and the hon. member for Simcoe. But I understand that they take the position if any member of the Senate is interested in any ^enterprise of this country, that enterprise shall thereby be prevented from doing any business with a contractor or the commissioners who are to be intrusted with the building of the eastern section. I would like to know whether that is the position taken by these hon. gentlemen ?
Mr, BENNETT. As far as I am concerned, I wish to have it publicly under-

stood, by an expression of opinion from the government, that senators and members of parliament may combine themselves into a construction company, particularly under view of clause 15 which reads to this effect:
Provided always that no contract under this section involving an expenditure of ten thousand dollars or upwards shall be concluded by the said commissioners until it has been sanctioned by the Governor in Council.
In other words, every contract on this work will be at the will of the government, because there will be no contract under $10,000, and they are practically going to settle who shall have the contracts. If It is to prevail that senators and members of the House of Commons combine in a company, the friends of the government may be able to make contracts with the government.


The MINISTER OP JUSTICE.: It is not to prevail. It is not the law now that senators and members of the House of Commons can form an Incorporated company to take a contract for the construction of the eastern division ; and in order to make the matter perfectly clear, if the hon. gentlemen will read section 15 of chapter 11 of the Revised Statutes of Canada, he will see that no member of parliament can be a member of an incorporated company, if that company takes a contract for the construction of public works. This would be a public work in the meaning of that section.


Mr. BARKER.: Would that apply to the case of a member of parliament furnishing rails or rolling stock.


The MINISTER OF JUSTICE.: That would come within the meaning of that section.


Samuel Barker: Furnishing mere materials or supplies would hardly come under the heading of a public work.


The MINISTER OF JUSTICE.: The supplies are for a public work. I understood the hon. gentleman to refer to a corporation furnishing supplies for this particular enterprise. Then it would be a contractor for a public work.
Section 19 allowed to stand.
On section 20-salaries of commissioners and employees,


The MINISTER OF JUSTICE.: I wish to move an amendment to that clause, to strike out the words ' in the first instance,' at the end of the first line.


Samuel Hughes: Has the government considered the names of the persons whom they are to appoint as commissioners ?


The PRIME MINISTER.: They have not.


Samuel Hughes: No one in sight at all ?


The PRIME MINISTER.: Not yet.


The MINISTER OF FINANCE.: We have strong hopes we may be able to find somebody.


Samuel Hughes: It is ail important matter, and the government should consider the appointment of these commissioners.


The PRIME MINISTER.: Let us consider the Bill first.


Samuel Hughes: Yes, I suppose that is important, too.


Robert Laird Borden: The amendment of the Minister of Justice (Hon. Mr. Fitzpatrick) leaves it to the Governor in Council to determine absolutely tlie salaries of tlie commissioners at all times ?


The MINISTER OF JUSTICE.: Yes.


Robert Laird Borden: Would it not be proper for the government, as they are asking parliament to entrust this power to them, to give some idea of what the proposed commission will cost and what the compensation of the members is likely to be fixed at ?


The PRIME MINISTER.: Not at this stage.


The MINISTER OF FINANCE.: Before the Bill has left the House we shall be able to make some intimation on this point. But tlie matter has not been determined yet.
Section 20 agreed to.
On section 21,
The Governor in Council shall have the power at any time to suspend the progress of the work on the said eastern division until the then next session of parliament.


Robert Laird Borden: This is a very important section on the face of it. I think it would be desirable that we should have some explanation of it before the committee is asked to pass it.


The MINISTER OF FINANCE.: This is taken from another Act of a somewhat similar character. The Minister of Justice informs me that it is the Intercolonial Act. It is simply a general power to suspend the operations of the commissioners, if, at any time it may be found necessary. There is no special transaction in mind-this is simply a reserve power in the hands of the government to properly supervise the whole work.


William Findlay Maclean: When the construction is suspended, there is no responsibility on the part of the Grand Trunk Pacific to carry out the patriotic proposal of shipping grain over Canadian lines and through Canadian ports. If the construction of this line is suspended, the Grand Trunk will be free to ship western grain by Chicago, Duluth and New York.


Samuel Hughes: They are going to do it any way.


Samuel Barker: There is a difference between this case and that of the Intercolonial. In the case of the Intercolonial, there was no contract with a company for the building of the road, it was a matter which the government had entirely in its own hands ; it was building for itself, it might suspend operations when it pleased. But here you have contracted to build this road ; and you have no clause in that contract to suspend operations, alliough you are putting it in this Bill. Has the Minister of Justice considered what will be the effect of the suspension ?


The MINISTER OF FINANCE.: It is only a suspension between two sessions of parliament. We do not attach such importance to it that we want to struggle for the clause.


Samuel Barker: That might mean a year or nine months.


The MINISTER OF FINANCE.: I wish there were a year between sessions, but unfortunately we cannot count on that.


Samuel Barker: This might involve the country in liability to the contracting company in the case of suspension of the work. One provision of this contract is that the Dominion shall construct this eastern division. The Grand Trunk is building the western division in the expectation, they will say, of making an enormous sum of money by running their traffic over the eastern division. If you suspend operations for nine months, no doubt the Grand Trunk would point to the language used in this House to sustain their contention-that they have sustained enormous loss by not having this valuable road under their control.


The MINISTER OF FINANCE.: We do not attach great importance to the clause, except as it assures governmental and parliamentary control. As I say, we have nothing special in view ; this clause is only to keep the country on the safe side.


The MINISTER OF JUSTICE.: Has the hon. gentleman (Mr. Barker) read section 22 ? Under that section, the work cannot be carried on, unless there is money available, and there cannot be money available unless there is a parliamentary appropriation. If the appropriation became exhausted, it might be useful to have statutory power to suspend the work.


Samuel Barker: My observation applies to that section also. It is in the Bill, but not in the contract. You are agreeing in the contract to carry on a certain work, and then you take the power, in the Bill, to suspend the work. Should not these provisions be inserted in the contract ?


William Findlay Maclean: 


The MINISTER OF JUSTICE.: There is no time limit within which we are to provide the road.


Samuel Barker: But the contract is that you are to go on with reasonable despatch ; and a deliberate refusal on the part of parliament to make, or the government to ask for, appropriations would hardly be consistent with your contract. I do not say we object to this clause, but I do say it should be accompanied by some provision that the exercise of the power under this clause shall not subject the Dominion of Canada to damages.


Mr. MCCARTHY.: I would ask the Minister of Justice-it will be useful information- whether refusal or neglect on the part of Ministers of the Crown to take an appropriation ever gives rise to damages ?


The MINISTER OF JUSTICE.: This clause is to be found in all the contracts of the Department of Public Works.


Samuel Barker: That is the point I am raising ;-this provision is not in the contract, but it is in the Bill.


The MINISTER OF JUSTICE.: But there is no contract, so far as the construction of the eastern division is concerned, beyond this, that we are to supply the road, after const ruction, to the Grand Trunk Pacific Railway Company. There is no provision in the contract with respect to the construction itself.


Samuel Barker: But the contract implies that you are to go on with reasonable despatch with the construction of that road. And, if you suspend operations deliberately for six or nine months, that is not going on reasonably.


The MINISTER OF FINANCE.: Unless you have good reason for the suspension.


Samuel Barker: I do not know that that would be an answer to your contract. Here you are making a contract, and then in an Act of parliament you are enacting a clause by which parliament authorizes the government to suspend the work-in other words, authorizing you to impair your contract. Now, the question is whether, when putting in that clause you should not have protection against liability.


The MINISTER OF JUSTICE.: I cannot see that there is any question of liability. But I may say this clause was drawn with, the express purpose of reserving absolute parliamentary control over this work, and it seems to me it forms part of the clause that follows after, which makes provision that no payment shall be made until after a parliamentary appropriation has been made for it. I am not entirely committed to this clause, but I thought it would be wise and in the public interest to reserve absolute parliamentary control over the eastern division.


Samuel Barker: 1 think they are prudent clauses, hut you want something more, you want a provision in this Bill that will bind the Grand Trunk Pacific so that they cannot claim damages against you for exercising control under the provisions of this Act. *


Robert Laird Borden: For example, it occurs to. me at the moment that a difficulty' might arise in this respect:	There is no
doubt this is a contract between two parties, and I would think that in the absence of parliamentary appropriations or otherwise, there would be a claim for damages, if any damages could he proved upon a breach of that contract. The contract says that the parties contract and agree with each other that, according to clause 5, the said eastern division shall be constructed ; and according to clause 8, that:
The construction of the said eastern division shall be commenced so soon as the government has made the surveys and plans and determined upon the location thereof, and shall be completed with all reasonable despatch.
Then assuming you have once commenced the construction of the road, and this section 21 implies that the work has begun, you might have a claim for damages from the Grand Trunk Pacific. Suppose they had provided $5,000,000 worth of rolling stock, but owing to the default of the government in not proceeding with the work with reasonable despatch, that rolling stock became useless and remained on the hands of the company for a considerable time-there might be then a legitimate claim for damages. The difficulty witfi regard to the clause is, it seems to me, that while it gives the Governor in Council power to suspend the progress of the work, there is no corresponding clause in the contract such as is usually found, that the suspension of the work by the government shall not be the foundation of any claim for damages at the suit of the other party.


The MINISTER OF JUSTICE.: That would be a proper clause in a contract between the commissioners and a contractor. But I cannot see how it would he possible in the construction of the eastern division, with which, of course, the Grand Trunk Pacific has nothing to do.


Robert Laird Borden: I may be wrong, hut I will lay before the Minister of Justice the way that clause presents itself to me. The clause to which I have referred is a very usual one as between the government andi the contractors. The government usually embodies a stipulation in a contract that it may suspend operations upon the work, and that such suspension shall not involve a claim for damages. The Minister of Jus-tive truly says that this would be a proper clause in n contract between the commissioners and a contractor. But would it not also be a proper clause in this contract itself, for the reason I mentioned a moment ago ? Suppose the Grand Trunk Pacific Company made provision for the operation of this road, suppose it made provision under the terms of the proposed lease for rolling stock and many other things which involve the expenditure of money. Well, the government suspend operations, and cannot the Grand Trunk Pacific Company go into court and file a petition of right against the government, and say :	Yon have not
proceeded with this road with reasonable despatch-because you have acted upon a clause which is not a part of this contract at all, a clause in the Bill affirming this Act, it is true, but which does not in that respect modify the terms of the contract between the company and the government- and for this reason we are entitled to claim against the government such damages as have accrued to us by reason of the delay. That may be improbable, but it is certainly possible, in view of the contract and the terms of the Bill.


Samuel Hughes: Under the operation of the clause, might not the government, if they saw fit, drop the eastern section entirely ? Might they not, if they wished, drop any other part of the scheme, or any part of the section which this Bill deals with ?


The MINISTER OF FINANCE.: But we have no intention of doing that.


Samuel Hughes: If, after the government have made surveys and found out that the mountains of information did not materialize, and that they would not he justified in going on with this road, would not this section give them an opportunity of getting out of it ?


William Findlay Maclean: I was going to make that very point. Could not the government and the Grand Trunk Pacific, by connivance, from time to time suspend the operation of work on this eastern section so that it will never be built, and thus the patriotic policy will never be carried out ? Now this provision may be for the purpose of enabling the government and the company, by connivance, to suspend the construction of the road. Therefore there is no guarantee in the Bill that the patriotic portion of the contract is really to be carried out.


John William Bell: It would appear as if this would allow a considerable amount of latitude to the government in dealing with the construction of the eastern portion of the road. This applies to the whole road from Winnipeg to Moncton, and if at any time the government is disposed to suspend the progress of the work upon the eastern division, does this imply that they can suspend the work upon the whole of the eastern division ? It is to be presumed that the government would commence the work at different points, for example, from the west

ern terminus at Winnipeg, and at Moncton, and perhaps at three or four intermediate points. Now suppose under this provision the government suspended the work upon one part of this road and continued it upon another. They might, for instance, continue it upon the western portion of the road and not continue it upon the eastern portion. For instance, they might start work at Winnipeg, and working towards North Bay, they might go on with that portion of the road which would give the Grand Trunk Pacific a connection with its Grand Trunk system in Ontario; because if that work were completed from Winnipeg to North Bay or the neighbourhood, and a branch were constructed from North Bay to the main line north of North Bay, then that portion of the eastern division might go on to completion, giving the Grand Trunk Pacific and the Grand Trunk their connection with the Grand Trunk system in Ontario, and with the ports of Montreal and Portland. But it must not be forgotten that a large part of the promise made in this Bill is to the people of the province of Quebec and to the people of the maritime provinces. The Bill is so drafted as to hold out the prospect of a large amount of railway extension and construction throughout, not only the province of Ontario, but through'Quebec and through New Brunswick. Now it would almost seem possible that the government might use such a clause as that introduced here to proceed with the work in such a manner as best to suit their own interests as a government, or perhaps the interests of the Grand Trunk Pacific Company ; they might suspend work on any portion of the eastern division, because they are expressly empowered at any time to suspend the progress of the work upon the said eastern division. According to that language. I would suppose they could suspend the work upon one part of the eastern division, but not upon others. They might in that way carry on the work in such a manner as to disappoint to a large extent the anticipations of the people of Quebec and of New Brunswick. If the government really have not very much faith in the possibility of carrying grain from Winnipeg to Quebec over this new road, if they have a doubt, a doubt in which I would be inclined to share, (they might suspend indefinitely the construction of the eastern division. It would scarcely seem to have been made clear to tills House that with the water competition with which that road would have to compete it would overcome the difficulty, and there might be some necessity for delaying the construction of the eastern part of the work. The government, by this section, are providing an easement of a very extensive character. Then again, I think the members of the government might explain what is entirely meant by the language of the section. It says that:


John William Bell: That the Governor in Council shall have the power at any time to suspend the progress of the work upon the said eastern division until the then next session of parliament.
Does that imply that immediately the next session of parliament is convened the work must be resumed or is it intended to mean that the government are to be allowed to suspend the operation of the work because they require to get a new authority from parliament or require the advice of parliament in reference to some difficulty that may have arisen, or that they require the intervention of parliament to supply them with funds which are to be expended undersection 22 of the Bill which provides that no money shaM be paid until sufficient appropriation has been made by parliament for that purpose ? The language of the section is not very illuminating, it does not give a great deal of light, and reading it in the form in which it appears in the Bill, it would seem to give the power of suspension of the work until the next session of parliament is convened. It may be that the suspension may continue not only until the next session of parliament is convened but until any date that may occur during the next session of parliament, or possibly the suspension may continue until the end of the next session of parliament. I do not see anything objectionable in the clause because it gives the government power to suspend the work in a case where it might be of national importance that the work should be suspended. There might be some question of great urgency in our national affairs, some great national distress, or something which would make it important that the work should be suspended, but I think it would be well if the lion. Minister of Justice would inform us as to what is the exact intention and to what extent the government would use the provisions of this section.


The MINISTER OF JUSTICE.: This Is a clause that seems very clearly to confer upon the government a discretionary power which is to be exercised subject to the control of parliament. All it provides is that the work may be suspended until the next session of parliament. Then the matter is in the hands of parliament to be disposed of by parliament. It seems very clear, especially if we look at section 22 which makes special provision for the appropriation and which says that no work can be done in connection with this enterprise unless provision is made by parliament for the payment of the work to be done. The intention of both sections 21 and 22 is to reserve the matter to the control of parliament so that parliament may have absolute control over the whole work.


John William Bell: Is it amply understood that iu case such power is used and the work is suspended under the authority of this section and the matter submitted to parlia-

ment at the next session what the position of this public work would be ? Would it be submitted to parliament for further authorization to proceed with the work and for further aid ?


Samuel Hughes: May I draw the attention of the hon. Minister of Justice to another point ? Suppose the Grand Trunk Pacific Kailway, having constructed their line from Winnipeg to the west, having completed it within five years, find that the government have not possibly more than commenced the construction of the eastern section of the line, they would, of course, be compelled at the outset and during the very first year to find an outlet other than the eastern division for their freight. Suppose they find that the government have been slow in the construction of the eastern division, as I would suppose it will not be constructed for ten or fifteen years, they will run a line following the red line indicated on the government map as far as Winnipeg, then, having already their line to Duluth and Minneapolis, all they have to do is to get a connecting link from Winnipeg to Duluth and they have a through line to the sea. If the Grand Trunk Pacific establish the route by way of Duluth they will have a vested right. In case the "government delay the construction of the eastern division would it be possible for the Grand Trunk Railway Company to make an excuse that they have a grievance against the government and refuse to carry out then-part of the contract in relation to traversing the eastern division when it is completed ? I do not think that any mam who understands anything about business considers that the Grand Trunk Railway have any intention of running one car over this eastern division. I think they would be very foolish to do so. Therefore, would it not be well to make provision against any excuse whereby the Grand Trunk'Pacific Railway Company could advance ainy plausible reason why they should not carry out their part of the contract to operate the eastern division of the system ?


The MINISTER OF FINANCE.: I am afraid there is only one remedy that I can suggest to meet such a condition of affairs. If, at the end of five years, which is the time mentioned for the western section to be completed, we find as my hon. friend (Mr. Hughes, Victoria) suggests, that the government are just about beginning the eastern section of the road, all we can do is to get rid of that government very quickly and get another government into power.


Mr. GOURLEY.: There is another and a more serious difficulty from the maritime point of view. This matter should not be thrown into politics every year and that is the object of this section 21. Why should the building of the eastern division be thrown into the legislative wrangle every
year 1 If this is a national railway there ought to be no provision in regard to coming to parliament about it every year. Parliament should be absolutely committed to the building of the eastern section us an inter-oceanic transcontinental line and there should be no question about the matter being brought before parliament every year. The only question that should be brought before parliament is the question of providing the funds. We should be absolutely committed to the building of the eastern section. The eastern section is more important than the western section. The Atlantic seaports are more important. No country is worth a cent that is not a maritime country and I believe the eastern section is more important than the western section if you are going to have a transcontinental railway. I am bound to say, however, that I think the location is absolutely fatal. But, parliament having taken a different view, I say that the eastern section should not be made a football from this time out and that there should be no question about parliament having to deal with it beyond the duty of providing the money. Otherwise it would be very easy for the Grand Trunk Pacific Railway to bring on an agitation hereafter. The easiest way the Grand Trunk could devise to defeat this scheme, would be to work up an agitation to get the government to suspend work, and have the whole question thrown into the arena of public debate again. Once we have settled on this scheme, it should be final, and the Minister of Justice should take that section out of the Bill.


Alexander Johnston: Would my hon. friend permit me to ask him a question ?


Seymour Eugene Gourley: Any number of them.


Alexander Johnston: Is he in favour of this eastern section of the railway ?	,


Seymour Eugene Gourley: I have debated that.
AVliy does not the hon. gentleman (Mr. Johnston, Cape Breton) make a speech, and give us his views on the subject ?


Alexander Johnston: What are your views ?


Seymour Eugene Gourley: I have delivered iny
views on this question, and I will let you have them in a few days in a very interesting form, so that you can read them. The question is, does the hon. gentleman from Cape Breton favour the building of this eastern section being thrown into parliament year after year as a football for debate ?


Alexander Johnston: A reference to the vote will show the decision to which I have come to on the question. The vote will show that I am in favour of it, and the same vote will show that the hon. gentleman is opposed to It.


Seymour Eugene Gourley: Then the hon. gentleman should be opposed strenuously to the retention of clause 21, because it is an attack on the eastern section. Since parliament is committed to this scheme, I must regard myself as charged with making this Bill as palatable as possible to the maritime provinces. It is a very bitter dose for the maritime provinces; because we believe that no line south of Lake Winnipeg can possibly bring us any trade. That is the united opinion of the business men of the maritime provinces, and we opposed this Bill chiefly because you have yoked it up with the old Grand Trunk, with its system all through Ontario, taking its trade through the lakes and to Portland. We are bitterly opposed to that. We wanted a new line of railway ; we wanted a new company that had no associations with Ontario.


Some hon. MEMBERS: Hear, hear.


Seymour Eugene Gourley: Yes ; no associations with Quebec, because these associations link the Grand Trunk to Portland. That is so well known to the whole world that the Grand Trunk is regarded as an American company. Magazine and newspaper writers regard the Grand Trunk as a Yankee company having a right of way through Canada.' They have one terminus in Chicago and another terminus in Portland, and they exploit Canada just as a man would exploit a right of way he did not own. They have exploited us as a mere highway through Canada. This new railway project is not what we in the maritime provinces expected from a government that boasts of having made Canada a nation. We did not expect this from a Prime Minister who boasts of having laid his hands upon a few broken provinces and suddenly they became a nation. We expected that if this transcontinental line was built it would recommend itself to every constituency in Canada as a national highway.
At six o'clock, Committee took recess.
After Recess.
Committee resumed at eight o'clock.
On section 22-advances to commissioners,


Samuel Barker: Sections 22, 28 and 30 pertain to the accounts, statements and auditing, and I think they, ought to receive special attention. Therefore. I would ask, as several clauses of the Bill have been postponed for consideration of the Minister of Justice, that these three clauses should be allowed to stand for consideration on both sides of the House. They are very important. They relate to the whole question of checking and controlling the expenditure, and I do not think too much time can be given to their careful consideration. No one can discuss them or form any proper opinion upon them without considering Mr. JOHNSTON (Cape Breton).
two or three Acts of parliament, including the Audit Act, which, as every one in this House knows, is not easily understood. Section 22 relates to the advances and methods of making advances by the Finance Department to the commissioners; section 28 relates to the keeping of books; and section 30 relates to the auditing of the accounts. I am sure the lion. Minister of Justice would say that it is of vital importance, when the country is undertaking such an enormous expenditure in connection with this Bill, that the most careful consideration should be given to these clauses, so that we may be absolutely sure that whatever expenditure may take place shall be made under the most careful supervision and under all the protection of the Acts of parliament relating to audit.


William Findlay Maclean: This section says :
Provided, however, that no money shall be so paid until a sufficient appropriation has been made by parliament for the purpose.
Is an appropriation to be made this year, or is the necessary appropriation contained in the Act ?


The MINISTER OF JUSTICE.: The appropriation is not made in the Bill. There will necessarily have to be an appropriation this session. These clauses, of course, might very well stand over for consideration, as my hon. friend from Hamilton thinks further consideration is necessary. Rut in the interval would it be possible to have from my hon. friends such criticisms as they may have to offer on these clauses, so that on considering them I may know what views my hon. friends entertain with regard to them ? I may say, with reference to these financial clauses, that they, have been drawn by a gentleman connected with the Finance Department, and I would like to have the criticisms of hon. gentlemen opposite upon them so as to know in what direction I might go in amending or improving them.


Samuel Barker: My chief difficulty in this matter is this. It is quite evident that there is a great deal of friction between the Finance Department and the Audit department at present; and, without at all attempting to form any opinion as to which of the departments is to blame, it is quite clear that the system of auditing and checking is not quite as well understood as it ought to be. The Finance Department profess that the Audit Department has too much control, the Audit department complain that the Finance Department are seeking to get away from all control. We are entering here into a question involving an expenditure of about 8100.000.000. a sum of money equal to about one-third of the whole national debt of Canada. Under these circumstances, I think we ought to be extremely careful-more careful, I think, than has been possible for anybody who has had this

Bill before him up to the present time-that the cheeks upon the expenditures, the method by which the Finance Department shall make advances, the method of keeping the books as between the commissioners and the government, and the system of checking both the government departments and the commissioners, should be very carefully considered. The Audit Act was passed for a particular purpose-to check the accounts of the ordinary departments of the government. We are suddenly, apparently, to treat that as adapted to a state of things that is utterly new. We have had no example of this kind, I think, in the history of this country. There has never been an occasion on which commissioners have been given the power of expenditure that this Bill purports to give to the commissioners who will be appointed under it.


Mr. EMMERSON.: There was the case of the construction of the Intercolonial Railway.


Samuel Barker: The Intercolonial was a very different thing; it was constructed by the government for their own use. This railway is to be constructed under a contract to hand it over to a company, who have interests opposed to the interests of the government. We ought to see that) every possible check shall be afforded. A company may build a railway for its own purposes and1 the auditing of its accounts may be a comparatively simple matter; but when that company enters into a contract with another company to construct a railway up to certain standards, and with all sorts of conflicting interests, it is of the utmost consequence that we should have the fullest confidence in those who are to settle all questions of account, not only between the government and the contractors, but with regard to the ultimate lessees' of the property. I do not mean to say, for one moment that the Bill as it stands' is not sufficient for the purpose; but I think it would be madness on the part of parliament to go ahead without any consideration of these special clauses add pass them, especially as we on this side of the House feel that the Bill has been drawn somewhat hastily, and that there are clauses in it which absolutely require improvement in the interest of the country ; and we do not know but these audit clauses may need improvement more than any others. For that reason, I ask the Minister of Justice whether it is not fair to us on this side of the House, if not to those supporting the government, that we should have a little time to consider these clauses. I do not see that there can be any objection to granting that request, considering that the hon. Minister of Justice has already three important clauses held up for his consideration, which prevents us from bringing forward our own amendments that we desire to
move. What I ask with regard to these three clauses will not delay the consideration of the Bill. If we can find that they are sufficient, we shall have nothing more to say about them. If we can point out that something further is required, I am quife sure that hon. gentlemen opposite will be glad to receive suggestions from us in that respect. No one on either side of the House can dispute the necessity of providing a perfect check on the expenditure. That is all we ask, and I am sure that all hon. gentlemen opposite are in accord with us on that point. I therefore ask that these three clauses should stand, not with a view to delay, but simply to see whether we cannot improve the clauses or make suggestions that would be acceptable to the other side.


Samuel Hughes: I would ask the Minister of Justice to compare sections 18 and 22, which bear on the same subject. In the one, all the commissioners must certify to accounts, and in the other only the chairman.


The MINISTER OF PUBLIC WORKS.: My hon. friend the member for Hamilton has drawn attention to what is certainly a very important matter. While I understand there is no objection on this side to reasonable delay, I might say that this Bill has been printed a long time and been long under consideration, so that those who take an interest in it and who have any suggestions to make, have had ample time in which to prepare them. The difference of opinion between my hon. friend and myself is this : I do not think it is well to try and provide for every detail. My experience with regard to the Acts of parliament, in which endeavour is made to provide for every detail, is that they furnish a good deal of scope for legal controversies and litigation. My view would be to make a general provision requiring that every facility be given for proper bookkeeping and accounting for the expenditure of the money, rather than go into details. I should think it would be better to provide for the fullest possible control iu a general way, and ask authority to enforce that control, rather than endeavour to provide every detail.


Samuel Barker: I by no means ask that these clauses should provide anything in detail. I only want general clauses, but I want them to be very ample in their scope, such clauses as will ensure proper protection to the country.


The MINISTER OF PUBLIC WORKS.: Then my hon. friend and myself quite agree, and I am sure that the Minister will be glad to receive any suggestion that will give fuller scope than exists at present.


Thomas Simpson Sproule: There is another question as important as the keeping of accounts,

if not more so, which might engage our attention a short time. We would like to have some information from the government as to liow they purpose raising the money. Clause 22 provides that no money shall he paid for work done until a sufficient appropriation has been made by parliament for the purpose. That, I take it, will be an ordinary appropriation ' in the estimates. Then, clause 23 provides that the Governor in Council may raise by way of loan such sum or sums of money as may be required for the purpose of making any payment on account of the said work. Then clause 24 goes on to say how this loan shall be effected :
The sum or sums of money by this Acit authorized to be raised by way of loan shall be so raised in accordance with and under the provisions of chapter 29 of the Revised Statutes of Canada relating to the public debts and the raising of loans authorized by parliament, provided always that the rate of interest shall not exceed Si per cent.
Then section 25 provides :
The commissioners shall from time to time, as fnoneys are required for payment for work or services in the construction of the said eastern division, issue and deposit with the Minister of Finance and Receiver General a debenture of the commissioners in an amount sufficient to cover such payments.
And according to section 20, the debentures so Issued shall be in such form as the Governor in Council may approve. Then when you turn to chapter 29 of the Revised Statutes, you find different ways provided by which money may be raised. It may he raised by means of terminable annuities, chargeable to the consolidated revenue, or by debentures of Canada, or by tlie issue of Dominion stock, or by issue of exchequer bills or bonds. I take it that the money will be borrowed on the usual plan, on which we have negotiated our loans heretofore, and that the government will not resort to the other devices described in the Act, chapter 29 of the Revised Statutes. Will the government Inform us how they propose raising the money ? We have a large amount of money to raise in the next few years, about $45,000,000 or $40,000,000, for the purpose of redeeming debts that are falling .due, and it must not be forgotten that in raising the additional amount required for the purpose of this Bill, we may embarrass our standing in the money market and be obliged to pay more interest than we would like. The government provide that we shall not pay more than three and a half per cent. Are they satisfied that the money can be got at that rate ? What plan have the government in view for the raising of the money, if the work is gone on with ?


The MINISTER OF FINANCE.: The government may resort to any of the various methods mentioned in the Act referred to by the hon. gentleman. As a matter of fact Mr. SPROULE.
when a loan is issued, in the ordinary sense of the word, the securities are offered at public sale in the money market of London, and are usually in the form of stock having fifty years to run. It is not customary to tie ourselves up to any particular method, but to leave ourselves open to take advantage of any of the methods recognized by chapter 29 of the Revised Statutes. Practically, however, there is only one method, other than that of temporary loans which may be raised in Canada, and that, is by issuing stock, which is always issued in the London money market.


Thomas Simpson Sproule: The premier of Ontario has devised another method, and .I thought perhaps the Minister of Finance would take a leaf out of his book. He endeavoured to pay debts by issuing another kind of securities. By what means does the hon. gentleman purpose raising the money ? Is it by way of ordinary loan or by terminable annuities or railway debentures redeemable in fifty years ? Or will the money be raised as an ordinary loan to be charged to tlie consolidated debt of the country ?


The MINISTER OF FINANCE.: That would be tlie ordinary method, although it is quite possible that we couid provide for this money from time to time out of our surpluses.


Thomas Simpson Sproule: That would be tlie most acceptable way.


The MINISTER OF FINANCE.: If our finances should continue as flourishing as they have been the last year or two, our annual surpluses might be sufficient to meet our annual appropriations on this score. The usual method will be employed of raising the money, if raised by way of loan, and that would be by the issue of a loan on the London money market, open to public competition.


Thomas Simpson Sproule: What does the hon. minister expect he will be obliged to raise in the next few years, in connection with this undertaking ?


The MINISTER OF FINANCE.: I couid not say very definitely. We will have to ask each year for an appropriation. The first year the amount will not be very large, I should not imagine more than a million dollars. However, I would not like to be bound to that sum without closer examination. After the first year, the work, it is expected, will be carried on more rapidly. The impression I have formed from conversations with the engineers is that we might run as high as $10,000,000 or $12,000,000 in a year.


Samuel Hughes: Will the hon. gentleman name the engineers ?


The MINISTER OF FINANCE.: No objec-ton-Collingwood Schreiber, C.M.G., Deputy Minister of Railways and Canals.

51i*' HUGHES (Victoria). I thought the . hon. gentleman said 'engineers.'
, The, MINISTER OF FINANCE. My hon. friend (Mr. Hughes, Victoria), did not understand me. I had reference to conversations I had with the deputy minister who is also chief engineer of Railways and Canals.


Samuel Hughes: Will the hon. gentleman bring down the estimates ?


The MINISTER OF FINANCE.: No, I cannot bring down conversations.


Samuel Hughes: ' Estimates ' I said,-I did not ask the minister to bring down conversations. Will he be good enough to bring down the estimates ?


The MINISTER OF FINANCE.: I told the hon. gentleman the estimates are conversations I had with the deputy minister.


Samuel Hughes: The conversation must have been based upon estimates Table'6 W'Sl* t0 liave Uiese estimates on the


The MINISTER OF FINANCE.: I am afraid we cannot give them now.


Samuel Hughes: Then before this Bill passes we will require them to be placed betore the House.


The MINISTER OF FINANCE.: 
Thomas Simpson Sproule: This is very important, because we should have an approximate estimate of what we are likely to be committed to, whether it is to be paid from our surpluses or from other sources. If we have surpluses from which to pay, that is the most favourable condition that can be had i hope it may turn out so. But we cannot overlook the fact that we do not always have good times, and we may anticipate bad times when we shall not have a surplus. It was to learn approximately, what we are committing ourselves to that I raised this question. I pointed out that within the next five years, we must expect to be called upon to raise between $45,000,000 and $47000,000 to meet our known requirements * If, in addition, we are called upon to raise $10,000,000 a year for this work-and even at that rate the work will occupy ten years for I assume that it will cost $100,000,000- we shall need to raise in live years about $50,000,000 for this purpose. This means that, within the next five years, we shall require to raise about $100,000,000.


The MINISTER OF FINANCE.: We shall have to raise whatever is necessary to carrv out the work.


Thomas Simpson Sproule: I am assuming that we shall go on with the work at a reasonably rapid rate, and that the work shall cost somewhere about the sum I have named. If we are not to raise the money in the ordinary way, it would be well for the government to give the House the benefit of the information how else the government expect to raise it, in case the money market is not as favourable to their needs as tbev would desire.


The MINISTER OF FINANCE.: I do not anticipate that it will be necessary to adopt any unusual method in raising this monev. The money will be raised in the same wav as in the past. My hon. friend (Mr. Sproule) is acquainted with the method.


Thomas Simpson Sproule: By ordinary loans ?


The MINISTER OF FINANCE.: Yes
thvlo S!,>U01:IL1?- Not to pay more than three and one-half per cent.


The MINISTER OF FINANCE.: The practice is that the Loan Act fixes a maxi- * mum rate. We do not always pay the rate thus fixed.


Thomas Simpson Sproule: I take it that, with securities sold at par, we could not hope to borrow money at much less than that rate to-day.


The MINISTER OF FINANCE.: Monev is tight to-day.


Thomas Simpson Sproule: If the market got much more stringent, we could hardly hope to borrow at that rate. In what position should we be then ? We should be obliged to change the rate of interest.


The MINISTER OF FINANCE.: We should be obliged to amend the Act.


Haughton Lennox: The wording of this section has been referred to, and I would like to call attention to it again. It provides that the Minister of Finance may, on the recommendation of the Minister of Railways and Canals, from time to time pay such claims and accounts for work done or services performed in the construction of the eastern division ' as have been approved and certified by the chairman of the commissioners.'
I have not heard it explained why this section is worded in this way. It seems to rest the matter entirely with the chairman of the commissioners, both as regard approval and as regards certificate. Of course we can understand that it is necessarv that somebody should certify, and the chairman would be the proper person. But I do not see why he should also approve these claims and accounts. An hon. friend near me suggests that this is covered by section 18. I have not examined that section closely. It



refers to payment upon certificate of the chief engineer, I would like to hear from the minister on this point.


The MINISTER OF FINANCE.: Perhaps I did not hear all that my hon. friend (Mr. Lennox) said. I do not see how we could do otherwise than have the chairman of the commission certify. Section 18 provides that the chief engineer shall certify the work before the money is to be paid to the contractor. The certificate might be only a formal matter, but the chairman must certify that the money is due. There may be some accounts that do not come within the purview of the chief engineer, and these should be certified by the chief commissioner.


Haughton Lennox: Section 18 does not appear to have any bearing on the matter to which I have referred. As I understand it, we have three commissioners to supervise the construction of this railway. All accounts are to be certified as the work progresses by the chairman of the commissioners. It is quite right that he should give a certificate, as the minister says. But it seems to me that the approval of the [DOT]accounts should be the work of the commissioners, and not of the chairman of the commissioners. Accounts approved of by the commissioners should be certified by the chairman. If the commissioners are to exercise important functions, as I suppose they will, it is important that we should have the approval of the whole body, or the majority of them. If it were provided that accounts are to be approved of by the commissioners and certified by the chairman that would meet the point.


The MINISTER OF FINANCE.: I think there is something in the criticism of the lion gentleman (Mr. Lennox). Of course, we assume that the chairman would only certify what the commission approve, but the section might be amended to provide that accounts shall be approved by the commissioners and certified by the chairman or other executive officer. I understand^ that my hon. friend the Minister of Justice is reserving this clause for further consideration. In that case, the hon. gentlemans suggestion could be incorporated.


Robert Laird Borden: There is one observation I would like to make along t'ie line of that made by my hon. friend from West Simcoe (Mr. Lennox), and it is that, taking this section 22, together with sections 28 and 30, the Audit Act does not seem to have a very general application to the case. I may be under some misapprehension with regard to that, because I do not profess to be as familiar with the mode in which those payments are made as the Minister of E m-ance undoubtedly is. But should there not be some provision in some of these clauses that the payments should be subject to all the restrictions and provisions of the Con-


Haughton Lennox: solidated Revenue and Audit Act ? Is that the effect of the provision at the present time ? I would hardly think so.


The MINISTER OF FINANCE.: The effect of the clause is that there will be an audit after payment. All these accounts will be referred to the Auditor General for examination and report, but it will not be an audit before payment. We assume that the commissioners, the officers, the engineers, will take all necessary precautions and see that only proper accounts are paid. To a certain degree the government will have supervision over that as provided in the Act. But it is intended that the Auditor General shall make an examination into all these accounts after payment, as he . does in some other cases.


Mr BORDEN (Halifax).: In that respect the expenditure of this pubile money will not be subject to certain restrictions that prevail in regard to payments of the public moneys of this country in ordinary eases. Should there not be such a safeguard ? These commissioners are servants of the government for the time being, they are subject to dismissal at pleasure; whereas, the Auditor General is an independent officer of parliament, and can only be removed by the vote of both branches of the legislature. Is there any reason that we should not have in respect to the payment of these moneys exactly the same restrictions as are in force in regard to the payment of all public moneys ?


The MINISTER OF FINANCE.: We have the intervention of the commission as a check upon these expenditures. Besides the accounts being examined by the officials, they would be passed by the commissioners and certified by the chairman. Then if there were anything improper, both the Minister of Railways and the Minister of Finance would have vetoes. Then the Auditor General would examine all the accounts afterwards, and make his report to parliament. AVe think that in this there is every protection to the public interest.


Mr BARKER.: Does not the Minister of Finance think that in the interests of the country the commissioners should be checked ? The commissioners are very human, like other people, they will haveeon-trol of an enormous amount of money. What we are seeking to get is a check on behalf of the Dominion against all who are concerned in the expenditure of this money. The commissioners are the people who are primarily to expend that money, and we want them to be checked perhaps more than anybody else.


The MINISTER OF FINANCE.: I do not know any occasion where money has been expended through a commission that that course has been adopted. I think l am correct in stating that in all cases where public moneys have been applied to the

public service through the intervention of commissioners, there has been no such audit as my hon. friend suggests.


Robert Laird Borden: That may be true, but still the Minister of Finance will recognize the fact that there is a certain safeguard in the case of ordinary expenditure which there is not here, namely, that you cannot make an ordinary expenditure without the concurrence of the Auditor General.


The MINISTER OF FINANCE.: In the ease of payment of letters of credit, that is an audit after payment.


Robert Laird Borden: It practically comes down to this, that in the one case you do have the Auditor General, an independent officer, standing between the public and the government, checking the government on behalf of the public ; in this case you do not have any such safeguard at all, you do not have any safeguard of that kind. You do have an audit of the expenditure of these moneys by the Auditor General, but it is an audit which has been made after the money has been paid, and when there is no recourse. It is very difficult for the Auditor General or any one else to deal with these matters after the money has once been paid. Where from the standpoint of the public interest, is there any objection against making these payments subject to the restrictions in the Audit Act ?


The MINISTER OF FINANCE.: My hon. friend speaks of an audit after payment as something very unusual. There is no use of an audit of that kind.


Robert Laird Borden: I want to know if there is any pratical objection to having, in respect to these payments, exactly the same kind of audit that we have in respect of the ordinary expenditure of this country. We have departed from the common audit. It was under a Liberal administration, I think, that the present audit was first instituted, under the administration of the late Alexander Mackenzie that the present Auditor General was appointed. Now it was thought necessary in the public interest at that time to have a different kind of audit for the public expenditure of this country from that which is commonly understood in every-day transactions. That system has, notwithstanding some friction from time to time, worked fairly well in the public interest. That being so, the principle having been recognized in 1877, I think it was, why should we depart from it in the case of an expenditure of this kind ? I am willing to be convinced on the subject. If the Minister of Finance will show me any good reason why, in the public interest, that audit should not be adopted in this case,
I will say no more about it. I would like to hear some reason for departing from the usual course, some reason for not inserting
357*
in this clause a provision that these payments shall not be subject to the restrictions contained in the Consolidated Revenue and Audit Act. There must be some reason in the minds of the government for making this omission from the Bill, for making this different provision with regard to this expenditure, and the Minister of Finance suggests nothing beyond this, that the approval by the chairman, the certificate of the chairman of the commissioners, stands properly in place of the inspection audit, as you might call it, which now prevails in regard to ordinary expenditures. As I have pointed out, the chairman and all the commissioners are liable to be dismissed by this government at a moment's notice. Suppose they refuse to certify a sum of money for a contractor which is payable to him, suppose that contractor happens to have a strong political influence with the government, suppose the government suggests to the commissioners that the certificate should be granted, suppose the chairman of the commissioners, suppose all the commissioners, refuse to acquiesce in that course-well, those commissioners can be dismissed in five minutes, and they know it, they can be subjected to pressure by the government. Of course, we have to look at these matters from that standpoint. I am not suggesting that would be the case, but I am suggesting the possibility, and wei have to guard in the public interest against possibilities of that kind. Now that is not the same kind of a safeguard as we have under the present inspection audit, under the restrictions contained in the Consolidated Revenue and Audit Act, and for myself, up to the present moment, I cannot see any good reason why that audit should not prevail with regard to these moneys.


The MINISTER OF FINANCE.: We have not yet reached that clause, and I would have no objection when it is reached, that it should stand for further consideration. At the same time, I may say that I think my hon. friend is mistaken when he speaks of departing from the usual practice. I think he will find on examination that in every case where public money has been expended through the intervention of a commission, the method has not been that which he desires in the present case. I think he will find that is correct, but it is worthy of inquiry.


Robert Laird Borden: Of course, the Minister of Finance is more familiar with this than I am. Expenditure by commission is not very usual. Some one mentions the Intercolonial. I am not at all familiar with the safeguards in that case.


The MINISTER OF FINANCE.: I 'will have it looked into.


Robert Laird Borden: I only mention it now because it seems to me that it would be proper to make this suggestion in con-

nection with the proposed certificate of the chairman of the commissioners. I am aware that there is a reference to the audit in section 30 of the Bill.


Samuel Hughes: In a recent inquiry before the transportation commission Of the United States a very prominent business main gave testimony to the effect that he would prefer being chairman of the Interstate Commerce Commission to having free access to the treasury of the United States. In view of the fact that the statement which was made by the hon. member for Guysborough (Mr. Fraser) to the effect that money will do anything was received with rounds of applause by hon. gentlemen on the treasury benches, I think it is necessary that the hon. Minister of Finance (Hon. Mr. Fielding) who, we know is anxious to keep all things iin proper shape, should give this subject very serious attention and that when this clause is brought down again I hope he will have some very correct system so as to reduce to a minimum the possibility of anything going wrong. I might also suggest to him the advisability of considering well the proposed change in the Audit Act because We should strengthen rather than weaken the hands of the Auditor General.


Haughton Lennox: I would draw' the hon. minister's attention to the fact that this question is peculiarly involved in the section that we are now dealing with-section 22-although I am aware of the fact that the hon. minister said that the question which was being discussed by my hon. friend the leader of the opposition (Mr. Borden, Halifax) would come up later on section 30. Perhaps we cannot get any better illustration of how important it is to consider this matter than by looking at section 22. It provides that:
The Minister ol Finance and Receiver General may, an the recommendation of the Minister of Railways and Canals, from time to time, pay isuch claims and accounts for work done or services performed in the construction of the said eastern division as have been approved and certified by the chairman of the commissioners.
That involves necessarily a different principle from that under which we are working now in connection with certain branches in the Auditor's Department, and as I submit it is most important that we should not depart from the principle which is established at the time that the Audit Act was first introduced in having one who shall be beyond party controi, beyond the control to a certain extent of the ministry and who shall be responsible only to parliament. It has .been pointed out already that evils may arise in this connection and we can understand very well that they may. The contractors may have very great influence with the commissioners. We do mot know but that they may have. Some one has said that they will probably be exceedingly hu-


Robert Laird Borden: man. If the commissioners should he influenced by the contractors the only safeguard we have is that which is afforded by the Minister of Finance and Receiver General. We may not always have the same Minister of Finance as we have at the present time and we cam very well understand that if it should arise at any time that the ministry for some reason desired that items should pass through it would not be at all difficult under /this section to have these accounts passed. The commissioners would not feel themselves to be in the independent position that the Auditor General occupies and they would not be able to stand upon the defensive in the interest of the people. I do not mean at all to claim that that will happen, but I know that the horn. Minister of Finance (Hon. Mr. Fielding) and those who are discussing the matter will see the importance of it in connection with this section as well as in connection with section 30.
Section allowed to stand.
On section 24,
The sum or sums of money by this Act authorized to be raised by way of loan shall be so raised in accordance with and under the provisions of that portion of chapter 29 of the Revised Statutes of Canada relating to the public debt and .the raising of loans authorized by parliament ; and the sums so raised shall form part of the Consolidated Revenue Fund of Canada : Provided always that the rate of interest to he paid on any loan to be raised under this Act shall not exced three and one-half per centum per annum.


Edmund Boyd Osler: Does that authorize the sale of bonds at a discount ?


The MINISTER OF FINANCE.: Yes.


Edmund Boyd Osler: There is no limit as to the discount V


The MINISTER OF FINANCE.: No, it is considered very good finance to place loans at a rate that will yield something less than par so that they may have a chance of advancing to liar.


Edmund Boyd Osler: That is quite right. I only wanted to know what the intention was.
On section 25,
The .commissioners shall from time .to time as moneys are required for payment for work or services iu the construction of the said eastern division issue . and deposit with the Minister of Finance and Receiver General a debenture of the commissioners in an amount sufficient to cover such payments, which debenture shall bear date the day on which it wias issued and shall he repayable in fifty years from the 1st day of July, 1903, and in the meantime shall hear interest at the rate of three per centum per annum payable half yearly on the first days of January and July in each year.


Haughton Lennox: The section says that:
The commissioners shall .... issue and deposit with the Minister of Finance and Receiver General a debenture of the commissioners

in an amount sufficient to cover such payments.
Are we to liave the commissioners issuing debentures payable by the government or in what way is this to be carried out ?


The MINISTER OF FINANCE.: This follows the method employed by the present government and our predecessors in regard to money expended by commissioners; for example, the Montreal Harbour Commissioners. They do not issue debentures to the public. The government raise the money. Of course the government can raise the money more advantageously than can any board of commissioners. We advance the money from time to time and these commissioners place a debenture which is practically a receipt or acknowledgment and we keep that in our possession. These debentures are not issued to the public at all.


Haughton Lennox: It is practically a voucher V


The MINISTER OF FINANCE.: Yes.


Thomas Simpson Sproule: 
The MINISTER OF FINANCE.: I did not say that it was only a receipt. I said the debentures were issued in the usual manner where the government advances money, and which becomes chargeable upon the enterprise. If you want to place it on the market it becomes a security, but it remains in the possession of the government.


Thomas Simpson Sproule: It is quite clear that it is a negotiable paper, or otherwise you should not provide that it should bear interest at three per cent payable half-yearly.


The MINISTER OF FINANCE.: The government will hold it, and any interest that may be earned will be paid to the government. If the commissioners do not earn interest they cannot pay it.


Mr. LAVELL.: Debentures generally have some fund from which they are to be paid, or otherwise there would be no meaning in issuing debentures. From what fund are these debentures to be paid ?


The MINISTER OF FINANCE.: Debentures do not always have a fund. These debentures will be chargeable on the property, and if it were desirable to place them on the market the property would be there ; practically these debentures remain in the
hands of the government as in the other case.


John Reeve Lavell: The title remains in the Dominion of Canada, and not in the commissioners.


The MINISTER OF FINANCE.: There may be a point there. If the commissioners were to hold the property in this way, I am inclined to think the title should be vested in them.


John Reeve Lavell: From what I can read in the agreement, the title is vested in the Crown.


The MINISTER OF FINANCE.: I will ask the Minister of Justice to look into that.


Robert Laird Borden: Section 13 says that the lands taken by the commissioners shall be vested in the Crown, and therefore the entire property would be vested in the Crown. The anomaly is that the commissioners will be issuing debentures upon the property of the Crown, and handing these debentures over to the Crown. It is a mere matter of convenience possibly, but it does seem to me to be another step in freeing the expenditure of this money altogether from the provisions of the Audit Act.


The MINISTER OF FINANCE.: The commissioners will not get money direct. The payments will be made by the government upon the certificates of the commissioners but the commissioners from time to time will have to deposit debentures equivalent to the moneys paid, the, commissioners will not receive this money at all. This money is paid by the government upon the application of the commissioners, but the money will not be handed over to the commissioners to be expended by them.


Robert Laird Borden: I think that is a proper qualification to my remarks. What is the object of the debentures after all ?


The MINISTER OF FINANCE.: This is following the method adopted in previous cases where the money is advanced for public purposes to commissioners, as in the case of the Montreal Harbour Commissioners.


Mr. OSLER  .@: But the Montreal harbour is indebted to the government.


The MINISTER OF FINANCE.: Quite so, and this railway would be indebted to the government.


Edmund Boyd Osler: No, because the railway belongs to the government. I do not see the object of the government issuing debentures to themselves on their own property.


John Reeve Lavell: The next clause says that these debentures shall form the first lien and charge upon the eastern division. Is It the intention of the government that they are to take the form of bonds ?


The MINISTER OF FINANCE.: The debentures will become a species of railway bonds, but they will not be issued to the public.


John Reeve Lavell: That involves the question of title.	'


The MINISTER OF FINANCE.: The question of title has to be looked into.


William Barton Northrup: Did the Minister of Finance consider the possibility that some future government may not be as honest and capable as the present, and that they may find in their possession a number of debentures which are really a charge upon the property of the country, and yet could not be sold at as good a figure-because the road may not pay-as the rate the country could borrow money. It might be a temptation to that subsequent _ government to dispose of these debentures in an impro-' vident manner.


The MINISTER OF FINANCE.: That may be possible, but not probable. However, we will consider the point.
Section allowed to stand.
On section 26,


The MINISTER OF JUSTICE.: I beg to move the following amendment to this section :
27a. It shall not be necessary, in order to preserve the priority lien, charge, mortgage or privilege purporting to appertain to, or be created by any bond, or debenture or other security issued or any mortgage executed under the provisions of this Act or on the said agreement that such bond, debenture or other security or such mortgage should be registered in any manner, or in any place whatsoever; but every such mortgage shall be deposited in the office of the Secretary of State, of which deposit notice shall be given in the ' Canada Gazette '; and a copy of such mortgage, certified to be a true copy by the Secretary of State or his deputy, shall be received as prima facie evidence of the original in all courts of justice, without proof of the signatures or seal upon such original.


Edmund Boyd Osler: I can see that it might be convenient to have debentures issued and held by the government for a reasonable outlay if the amount is fixed, but under this clause it is contemplated that from time to time during the fifty years the commissioners would have to issue debentures to the government for outlays on capital account all along. That would complicate matters very much, because evidently the future expenditure would have to be treated in the same way, and debentures issued from time to time. Some method would have to be devised as to bow and when these debentures are to be issued, unless you are going to earmark them as a special security. I understand that there is no intention of earmarking them as a special security for the money market.	_


John Reeve Lavell: 


The MINISTER OF FINANCE.: No, these would not go to the money market. They would be set apart as a security representing this particular work.


Edmund Boyd Osler: Is it intended! to keep them apart as security for the money borrowed on the money market from time to time ?
. The MINISTER OF FINANCE. These securities will not be issued to the public. The loans will be effected on the credit of Canada irrespective of these securities.


Edmund Boyd Osler: There will be no reference to these in the moneys borrowed by the government ?


The MINISTER OF FINANCE.: That is correct.


Edmund Boyd Osler: Then it is a mere matter of bookkeeping, and I do not see that it is going to do much good to issue them.


Robert Laird Borden: I do not see that it is going to be of any value. It is something like my employing a man to build a bouse for me, and then giving him power of attorney to make a mortgage of that bouse to myself, and then taking elaborate precautions to have the mortgage registered. If you were going to float these debentures in the money market, I could understand the necessity of the provision which my bon. friend the Minister of. Justice proposes to add.


The MINISTER OF JUSTICE.: I am afraid, on reflection, that my amendment is unnecessary, because there can be no mortgage.


Robert Laird Borden: That is what I was suggesting. It is the property of the government on which the security is created, and the government is going to bold that security. If you were going to float these debentures, I could understand the provision; but it merely amounts to making an entry on each side of the ledger. There may be some abstruse reason for it; but so far as I can see, it only .means what I have suggested.
Section 26 allowed to stand.
Section 27 agreed to.
Section 28 allowed to stand!.
On section 29-annual report by commissioners,


Robert Laird Borden: It is not provided here that this report shall be laid on the Table of the House at any particular time. Would not that be desirable ?


The MINISTER OF FINANCE.: It is contemplated that it should be. I think we bad better add that such report be laid on tlie Table of the House.


Robert Laird Borden: Within fifteen days of the commencement of the session.


The MINISTER OF FINANCE.: Like all other reports, as quickly as we can get it down. t


Robert Laird Borden: Is there not, with regard to certain reports, a statutory provision that they shall he laid on the Table of the House within fifteen days of the opening of the session?


The MINISTER OF FINANCE.: There is in one or two cases, but I must say that we cannot always comply with it.


Robert Laird Borden: Perhaps the Minister, of Justice will introduce an amendment containing the appropriate words.


Thomas Simpson Sproule: This is a special expenditure referred to the commissioners by a special Act, and it seems to me that there would be no more difficulty in the commissioners making their report at one part of the year than at another, provided they are instructed so to do. So that they could have their report ready at any time, unless the session of parliament happened to be at a very unusual time.


The MINISTER OF FINANCE.: There is no objection to that.


Edmund Boyd Osler: Is there any fixed time when the commission shall go out of existence ?


The MINISTER OF FINANCE.: No, that is left for further legislation. The chief duty of the commission is to construct and manage the railway until it is completed. What might happen after that would have to be provided for by subsequent legislation.


Edmund Boyd Osler: Section 27 provides that the commissioners shall furnish accounts of all expenditures and liabilities. Are they likely to be in charge during periods when there might be receipts ?


The MINISTER OF FINANCE.: Yes, they might be when operating, any portion of the road. Section 29 includes the word 'receipts.'


Edmund Boyd Osler: Why not include it in the accounts which the commissioners shall be required to furnish under section 27 ?


The MINISTER OF FINANCE.: There is no objection to insert there the word ' receipts.'
Sections 29 and 30 allowed to stand.
On section 2-agreement in schedule confirmed.


Robert Laird Borden: I should think that the consideration of section 2 would to a considerable extent depend on some of the sections which are standing.
Section 2 allowed to stand.


Robert Laird Borden: The Minister of Justice asked for a suggestion with regard
to this audit clause. If my hon. friend will look at section 28, he will find that the books shall be at all times open to the inspection of the commissioners, the Minister of Railways and Canals, and any person appointed by the commissioners or the said minister or the Governor in Council. After the words ' Governor in Council ' I would suggest that the words ' or by the Auditor General ' would be inserted so as to give him the power to examine the books.


Thomas Simpson Sproule: I gather from the explanation of the Minister of Finance that the duty of the Auditor General is to examine the accounts after the money is spent. Clause 30 provides that the expenditure Shall be subject to examination and audit by the Auditor General in the same manner as is provided by the Consolidated Revenue and Audit Act, with respect to the accounts mentioned in section 50 of that Act. That section says :
Besides the appropriation accounts of the grants of .parliament, the Auditor General shall examine and audit, if required so to do by the Minister of Finance and Receiver General, the accounts of all receipts of revenue, &c.
If he audits the accounts of this railway on the same principle, he must see that the expenditure of money is in compliance with the Act, because that is one of the elements of the audit. Therefore the audit must be made before the money is paid. It would be of little value otherwise. We might have the same result as in the bridge case, when the auditor did the work after the money was spent and the over expenditure of money could not be got back. Is this to be another case of that kind ? Will the rsame lax business methods be allowed to prevail, and the commissioners be given the opportunity of spending the money, perhaps improperly, and then have the auditor go over the accounts when it will be too late to record anything ?


The MINISTER OF FINANCE.: We will have to consider my hon. friend's suggestion. This clause is allowed to stand.
Progress reported.



JUDGES OF PROVINCIAL COURTS- SALARIES.

[Stage Direction]
House again in Committee on Bill (No. 250) to amend the Act respecting the judges of provincial courts.-The Minister of Justice.
On section 1.
Robert Laird Borden: I was not in the House when the resolution was discussed. What increase in salaries is effected by this Bill ?


The MINISTER OF JUSTICE.: The object is to create an exchequer division of the High Court of Justice. There will be a new chief justice for that particular division, to whom will be paid a salary of $6,000,

and the puisne judges will receive $5,000. There is no provision for any increase in salary, but only for the payment of two additional judges.


William Barton Northrup: I should be very sorry to let this clause go through without entering a protest regarding the item of salaries, and I trust that the Minister of Justice, since be has taken a step in the direction of dealing with judicial salaries will consider one among many questions in connection with that subject. I have no hesitation whatever in saying that if the Minister of Justice had brought down a Bill to increase the salaries of all the judges of the Superior Court in Ontario, I would have given him my support without the slightest hesitation, but he has not seen fit to do so, and I have no desire to oppose the salaries being put at the figures mentioned. There is one item which the government should consider, and if they did they would see that it stands on a different footing to the others.
I refer to the item of the four judges of Appeal at $5,000 each. If the matter were understood by members of this House, there is not one, whether lawyer or layman, who would not say that there is something illogical and absurd in having the judges of the Ontario Court of Appeals less than the judges of the division below, on whose decisions they sit in appeal.


The MINISTER OF JUSTICE.: I think, perhaps, the position would be better understood, if the hon. gentlemen were to say that they receive less money because of certain allowances.


William Barton Northrup: I was about to explain how this condition arose. It does seem to me that, in this parliament, the* highest court of Canada, we ought to be able to take a common sense view of matters, and to observe what is the practicable result of the arrangements that have been made. I quite agree with the Minister of Justice that, so far as this House is concerned. the judges of the Court of Appeal are paid the same salary as judges of the divisions of the High Court of Justice. But we in Ontario all know that the judges who hold circuits are given a certain allowance for holding circuits. And, as a matter of fact and of experience, the judges are able to save something by economy, not living as they did in the old days, when every judge who held circuit in a country town gave a bar dinner. By dispensing with' such luxuries, the judges are able to save something out of the circuit allowances. The result is that, if a lawyer takes a position in a high court of justice, he is in receipt of a higher salary than if he were promoted to the Court of Appeal. It is true that the nominal salaries are the same ; but it is idle to ignore the fact that the judges of one court go on circuit while the judges of the other court do not ; and, as a matter of fact the judges of the lower court Hon. Mr. FITZPATRICK.
are in receipt of a higher salary than judges of the higher court. I am sure that no one can advocate that state of affairs. On the question as to whether the salaries are right as they are, I think the salaries are too low; but I am not discussing that point now. But I would appeal to the Minister of Justice, and the Prime Minister to see to it that the dignity of the bench and the standard we wish to see maintained in our Court of Appeal is maintained. And any person must see that the inevitable result of the present condition of affairs must be that, if our judges in appeal are left in receipt of lower salaries than are given to the judges of the inferior courts, the day will come-I do not pretend to say that it has been reached as yet-when the Court of Appeal will be inferior to the other courts whose judges are better paid.


The PRIME MINISTER.: What would my hon. friend (Mr. Northrup) suggest '!


William Barton Northrup: Instead of having this $5,000, I would make it $6,000.


The MINISTER OF JUSTICE.: All round,
or just for the Court of Appeal ?


William Barton Northrup: The question has been asked. As I said in the beginning, I think personally that the salaries should be raised

but that is a different question.


The PRIME MINISTER.: But it is a question on which we would like to have the views of my hon. friend, because it is a question to which we must apply ourselves at an early day.


The MINISTER OF JUSTICE.: The hon. gentleman (Mr. Northrup) was not here the other day.


William Barton Northrup: I am sorry that I was not here. My own opinion is that, if one compares the incomes of the leaders of the bar of the province of Ontario with the salaries paid to the judges, he must see that the salaries paid to the judges are sadly inadequate. And I believe-speaking now not as a lawyer, but as a representative of the people, and believing that I understand something of this question-that the truest economy, the greatest possible saving to the people will be found in getting the best men we can on the bench of this country. I think that no one will dispute that the honour of the bench in our country has been a source of pride to every man, lawyer or layman, for many years. At the same time, I must admit, without casting any aspersion upon the bench to-day-and I hope I shall not be understood as casting the slightest reflection-the day will come when, if the income of the lawyers at the bar are to be so grossly greater than the incomes of the judges on the bench, we shall not have a bench that will maintain the dignity that has attached to the bench in days gone by. I wish all these salaries to be raised. Yet, I understand the difficulty of

the government. I think it would he unfair for a member of the opposition, recognizing the feeling of the country, recognizing the difficulties that the government has to meet in passing this salary Bill, to bring in an amendment which the government might be compelled to vote down, though individually every member of the government might wish, if possible, to carry out the proposal made in such amendment. I am not now, therefore, proposing an increase of any salaries except those of the Court of judges of Appeals. As I say in answer to the right hon. the Premia-, if I have the honour to be a member of this House at any subsequent time, and the government bring down a measure to increase the salaries of the judges, I have no hesitation in pledging myself to support it to the best of my humble ability. The point I make is the one single point : Assuming that the salaries of the high court of justice are as high as the government, under the circumstances, feel justified in proposing, I would ask the Minister of Justice and the Prime Minister to consider whether it is fair, or just, or in the interest of the country, whether it is likely to promote economy and prevent appeals, to have judges of the higher court in receipt of lower emoluments -I will not use the word ' salary '-than the judges of the lower court.	We who
have had experience at the bar all know perfectly well that a very few appeals in the course of the* year would cost the people of this country vastly more than the additions I have suggested to the salaries of these judges. We all know perfectly well that the higher the reputation of the judges, the less probability there is of appeals from their judgments. In the province of Ontario, we Have an appeal to the Supreme Court and to the Privy Council. It is quite within the understanding of every member of the House that, if we had a Court of Appeal which possessed absolutely the confidence of the people of the province, there would be practically no appeals. The greater the confidence in the court, the fewer the appeals. In other words, the higher the court the less expense on account of appeals. I put it, then, on the two grounds : First, that the chief justice and judges sitting in the high court should be paid at least as much as judges of the lower court ; and, second, I would have no hesitation in defending it before the people, apart altogether from the standpoint of the judges-in the interest of the people of this country, it would be true economy, it would be a saving of money, to pay the judges of the Court of Appeal such salaries that we could, in the long run- and I am casting no aspersion upon the present court-have always at least as good judges in the Court of Appeal as in the lower courts. There is no member of this House who can be unaware that, if the judges of the Court of Appeal are paid
$1,000 less than the judges of the lower court, the day is not far distant when the standard of the judges of the Court of Appeal will be lower than that of the judges of the lower court. I appeal to the Minister of Justice and the Prime Minister- without approving the salaries paid to other judges, but recognizing the circumstances which, I can quite understand, surround the case-I ask them to consider the exceptional case of the judges of the Court of Appeals.


Leighton Goldie McCarthy: Has the hon. gentleman considered the meaning of the word ' salary ' ? If it were ' considered as in the way the hon. member for Hastings commenced his speech this evening, it might cause difficulty. The justices of these three divisions receive an actual salary of SO,000 specified and additional emoluments in the form of an allowance of $1,000 for circuit. If you add $1,000 for circuit, and call it salary, you make it $7,000. If they should be promoted to the Court of Appeals they would draw as puisne higher than the chief justices, and so an anomaly would be created which should not exist. I shall not now burden the House with any more in regal'd to the increase of judges' salaries than to say that I reiterate and endorse all that the hon. gentleman has said. I said it the other day. But, under this section, reading the word 1 salary ' in the limited sense in which we all understand it, you would have a Court of Appeals composed of the chief justices, drawing $6,000, three puisnes, drawing $7,000 each, and one puisne drawing $5,000, which would be an anomaly which should not be created or allowed to exist. If, on the other hand, you say that ' salary ' simply means an allowance of $6,000 provided in this Bill, then, you might have a court consisting of a chief justice at $6,000 and three puisnes at $6,000 and one puisne at $5,000, an anomaly which does not exist in any other court, and which. I submit, should not be permitted in this court.


Samuel Barker: I have very great pleasure indeed in endorsing every word that has been said by the hon. member for East Hastings. I will only take up the time of the committee, to point out that if his suggestion is adopted, it will do away with what I consider a very objectionable clausa in the Bill, subclause 2 of clause 3. That is a provision made especially for the appointment of a chief justice of the high court, and the Court of Appeal, the clause as it stands being required by the very fact to which the hon. member for East Hastings (Mr. Nortlirup) called attention, that a chief justice of the high court actually receives a higher salary than the chief justice of the Court of Appeal. So the Minister of Justice has found himself compelled to provide in this clause that if he promotes a chief justice of the high court to the Court

of Appeal, lie must allow him to continue the higher salary that he has been already enjoying. Now, if he gets the increase of $1,000 suggested by my hon. friend, there would be no necessity for that clause at all.


The MINISTER OF JUSTICE.: I make a distinction between the salary paid to a judge and the allowance which is given him by way of gratuity, in order to enable him to meet the expenses he must incur when he goes on circuit. I do not think it is possible to confound a salary with a circuit allowance. The intention of the law is that the judge who goes on circuit shall receive an amount sufficient to enable him to meet all his expenses as he goes along, and to keep him free from any additional expenditure as a result of going on circuit.
I do not think the law ever contemplated that a judge should derive any particular benefit out of the fact that he is In receipt of this circuit allowance. To continue on that line, I would like to draw attention to the fact that in our province those judges who are obliged to travel about are paid actual moving expenses. We have no circuit allowance with us, because under our law, the judges are not supposed to reside in his district, but it may sometimes happen, when a judge is disqualified for any reason that it may be necessary for the judge in the adjoining district to take his duties, and in that case travelling expenses are allowed, but it is merely the moving-expenses that he is allowed.
I do not see how it would be possible to increase the salaries of the judges of the Court of Appeal without increasing the salaries of all the high court judges. My views on the subject are well known, I make no secret of them. I have not this session made any particular statement of the view I hold with respect to the salaries of judges, because I feel that, not being in a position to give effect to what I believe to be necessary in the interest of the public and in the interest of the bar, I ought not unnecessarily to discuss the question. I am convinced that an increase in the salaries of the judges is called for, is an absolute necessity. I would have been pleased if the hon. member for Hastings, who is a prominent member of the bar of Ontario, had been here when this question was up the other day, because he would realize that if there is a class of mem in this country who do not appear, so far as I could judge-expressing the opinions that I gathered the other day from the discussion-if there is a class of men in this country who do not appear to enjoy the favour of the public, that class of men is the lawyers and the judges. I may say that I did not take any part in the debate merely because I did not think 1 could do it with that sense of restraint that one ought to exercise in discussing matters of that sort. I think it is time that the bar should assert itself, and the time is not far Mr. BARKER.
distant when it will be necessary for us to take hold of this question seriously. I agree with what my hon. friend from Hastings has said, and it is the experience of every man who has had any practice at the bar, that the leaders of the bar at the present time, we can count them in great numbers, are in receipt of incomes far in excess of what the judges are getting. There are men practising at the bar to-day-I make this statement in the hearing of men who know what I say is correct-who receive for one single case a fee equal to the salary paid to a judge for a whole year. Now, what is the result of that ? That the leaders of the bar will go on as they have been going on in the past, practising until they get beyond the position to do really good service, and they are put on the bench when they have got beyond the time when they can really do good service to the country. Now, there is no practical use in discussing the mattter just now. The government cannot entertain the idea of increasing the salaries of the judges at this session, that matter is settled. But I agree that it is a matter which must necessarily be considered in the near future, and when it is considered I shall be prepared to present some figures, for the consideration of this House, in fact I have some figures that I intended to use when this question arose, unfortunately I have not got them with me. But on a future occasion I intend to make some observations, and I hope to be able to corroborate my statements by giving soma figures that will enlighten us as to the position the members of the bar occupy.


Robert Laird Borden: One of the difficulties in connection with the salaries of the judges arises from the fact that while the government and parliament of Canada fix the salaries of the judges, we have no control over the number that may be appointed in the different provinces. I think that difficulty was realized by the Prime Minister years ago when the government of which the late Sir John Thompson was Prime Minister, undertook to introduce a measure increasing the salaries of the judges. If I am not mistaken, the Prime Minister, the Minister of Trade and Commerce and the late Hon. David Mills stated, either publicly or privately, that they would not be prepared to sustain the government of the day in that measure.


The PRIME MINISTER.: Not I.


Robert Laird Borden: I understood my right hon. friend entertained the view then, that the judges were too numerous for the work which was to be done, and that the Conservative party having control of the number of judges in the province of Quebec at that time, ought to see that that matter was regulated, and that no increase in the number of judges should be asked

for. Of course, if my right hon. friend states that that was uot his view at that time, I accept his statement at once, but I so understood it on the authority of Sir John Thompson himself.


The PRIME MINISTER.: I think my hon. friend will agree with me that there is an anomaly in our constitution at the present time.


Robert Laird Borden: That is what I was saying, I commenced my remarks with that observation. If you take the aggregate amount paid for judicial salaries in .Canada at the present time, I am inclined to think it is quite enough to secure us a good bench in all the provinces of Canada. I think we are paying quite enough in judicial salaries in this country. The difficulty is that we have too many judges, and they have to live on too small salaries. I do not profess to know to what extent it is proposed to increase the number of judges in the province of Ontario.


The MINISTER OF JUSTICE.: Possibly two.


Robert Laird Borden: Two additional judges are to he appointed in the province of Ontario. I am not familiar with judicial matters in that province and I do not know how far they may be necessary. But I would be inclined! to consider in connection with that increase the fact that one of the judges of the high court of that province is at present absent from his judicial duties, and is engaged in performing work on a commission in the Yukon. That would not seem to me to indicate that there is any present need of more judges in the province of Ontario, because I can hardly suppose that a judge would accept a post of that kind if there were any pressing need for the performance by him of his judicial duties in that province. It is a difficulty that we will have to meet iin some way in this country in the future. I do not know how we shall meet it. There are many judges in the Dominion of Canada at present who are fully paid, if not overpaid. I know of judges who are receiving salaries at the present timp greater than the average income that they ever earned at the bar. I know that some of these judges have not more than three or four months work to do in the entire year. Now, the increase of the salaries of these gentlemen is a matter not lightly to be undertaken. On the other hand, we have judges in the city of Montreal-I am relying on statements made to me by members of the bar in Montreal who tell me that the judges there are not only driven with work all the time, absolutely occupied from one end of the year to the other, but they are forced to maintain themselves on salaries that are absolutely inadequate in view of their position, in view of the necessity on their part of living in a certain style befitting that position.
That is not a matter that is easy to deal with and I do not know just what remedy we ought to adopt unless we undertake the task of discriminating in some way and that would be a very difficult task indeed, I know, for this parliament or for any government. But, it seems to me that something may possibly be done in this regard. Would it not be possible for the government to suggest to the governments of the provinces when they undertake to provide new judges whether or not the appointment is necessary ? We are not obliged to provide the salaries. This is a matter entirely within the control of the government and of this parliament and if the provincial government insist upon appointing judges, if this government has valid reason to believe that these additional judges are unnecessary, it may be desirable at some time in the future that the government should take upon itself the responsibility of declining to provide the salaries of judges who are appointed in addition to the number that is necessary. I agree entirely with what the hon. Minister of Justice has paid in regard to some of the judges. As to the other judges in the Dominion I do not agree with him, and I am inclined to think that he would agree with me in my contention that some are underworked and that some, I am almost inclined to say, are overpaid, while there are many others who are overworked and underpaid.


The PRIME MINISTER.: The question is one of the anomalies that we have in our constitution and for my part, though I have had occasion to think a good deal over it, I have never been able to satisfy myself as to the remedy which we should adopt unless it be a radical one. I remember very well that when Sir John Thompson was Minister of Justice the matter was brought up and for my part I expressed the opinion then that in the province of Quebec the system of judicature was very unsatisfactory. We have no county court judges in our province. We have only Superior Court judges and I thought that the system which prevails in Ontario would be far more suitable to our province. I do not know if Sir John Thompson communicated at that time with the local government, but, I do know that my hon. friend from Montmorency (Mr. Casgrain) who was then attorney general introduced a Bill in the direction of changing our system and introducing the Ontario system. Unfortunately that Bill was defeated and for my part I always regretted it. Since my own friends have been in office in the province of Quebec I have urged repeatedly to try and change their system but they have told me that it is impossible because the opinion of the province is against it. I hope that some day there will be a change in public opinion and that we will have a different system introduced into the province of Que-

bee. But even then the anomaly would still exist if it is in the power of the local legislature to create the courts and fix the number of judges and leave it to the Dominion parliament to provide for the salaries. It goes without saying that there could not be a greater anomaly than this one, because the legislative authority which creates the court should also provide for the payment of the judges. Perhaps we should find some remedy for this condition of things if we could have the system which exists in the United States of having provincial courts and federal courts. If we had provincial courts to administer the laws of the province and federal courts to administer the laws of the Dominion I think it would possibly be a more logical system and perhaps be more useful to the different provinces and to the country as a whole. But, that is far away and we could not have it under our present system. Under our present system we cannot do anything else than try to reason with the provincial legislatures. If they amend the constitution of their courts and force us to provide salaries for the judges I do not see that we can refuse to do so. If the legislature in the exercise of its sovereignty as a legislature declares that such and such a court is needed and that it is to be composed of so many judges, I do not see that it is possible for us to substitute our wisdom here and to say: You are wrong and we shall not provide for the payment of the judges' salary. If we had reason to believe that the thing was done under motives which were not warranted and if it were to be akin to fraud, or something of that kind, then, this parliament would be justified in refusing to act. But assuming that the legislature has acted in good faith, I do not see hoy wb can fail to provide for the salaries. My hon. friend the Minister of Justice has just given notice of a resolution providing for the salary of another judge in the province of Quebec. Though I say that the Quebec system is not satisfactory I do not see how we can avoid doing that. The judges in the district of Montreal who have been referred to by my hon. friend the leader of the opposition (Mr. Borden, Halifax) are certainly overworked. But, there are judges in some parts of the province of Quebec who have very little work to do and who perhaps have more leisure than work during the year. But, we must remember that the geographical distribution of the population is such, that, whereas, one man in one part of the province may have little or nothing to do, another man in another part of the province may have more work to do than he can perform. Take the county of Gaspd for instance, which is the peninsula at the other extremity of the province. There is a very small population and very little work to dojbut that district must have a judge. Even if there were only three or four cases in a year, some one must be there Sir WILFRID LAURIER.
to attend to them. I wish the distribution of judges were made in Quebec in accordance with the system they have in Ontario but we have not that system. If I may be allowed to anticipate the proposal of the hon. Minister of Justice it is to provide an additional judge for the county of Pontiac. The county of Pontiac is a part of the judicial district of OttawTa, the judge of which presides in Hull. It is a fact that the judge residing in Hull cannot personally attend to all the work which he is- obliged to perform and therefore we have to provide an additional judge in the province of Quebec. But, all this is very unsatisfactory. We have no word to say as to the constitution of the courts and at the same time we have to provide for the payment of the judges. As to the salaries of the judges we have to make up our minds that it is impossible for the judges to remain upon the salaries that they have been receiving. The remark is often made to me :	Well,
you have no difficulty in finding judges when there are vacancies. It is not that there are very severe difficulties in filling vacancies-I admit that-but since we have been in office we have offered vacancies to some of the best talent in the provinces and the appointments have been refused. [DOT]


William Findlay Maclean: I would like to call the attention of the Committee to the fact that those who have spoken have spoken of the donstitutional anomaly in connection with this matter. Is not constitutional revision within the purview of this House ? Are there not a lot of these constitutional anomalies springing up in regard to different things ? Under the constitution that vve have we have been going along for thirty years. A number of difficulties have been discovered. The province of Ontario to-day is agitated over the apparent loss of its municipal rights, and the province of Quebec may be agitated to-morrow over the prospective loss of its rights, and it seems to me if lawyers get up in this House and talk about constitutional anomalies they are bound to find a cure for them. Every parliament is bound to provide a cure for constitutional grievances. These grievances are increasing every day and I believe the time has arrived when this parliament, both in this House and in the Senate, will be compelled to take up the question of constitutional revision. It is a very difficult question to face, but it must be faced by parliament. I believe the time has arrived to face that question. I would like to see this parliament, after a conference between the federal power and the provinces, approach the imperial government and ask for some kind of remedial legislation.


Seymour Eugene Gourley: I cannot agree with the idea that because a provincial legislature passes an Act' creating a new court, this parliament is bound to acquiesce and provide the judge and the salary. I do not

believe that is a proper construction of the constitution. I read a very able article some years ago in one of our legal journals, and that article was strongly in favour of this parliament having a perfect constitutional right to refuse to provide the salary, that we were really sitting as an appeal parliament, and that while the local legislature may have the right to create a new judge, this parliament under the divided responsibility in this matter has the right to refuse to appoint him. We have the fullest constitutional right in this parliament to act within the power given to us, just as the legislature has the fullest right to act within its power. No construction of the constitution would be tolerated which would make this parliament, which is ;i superior parliament, into an inferior parliament. As a lawyer, I want to say that I do not concur in this view, and I trust that neither the Minister of Justice nor the Prime Minister will commit themselves to such a theory. This parliament having power conferred on it to control the appointment of judges and pay their salaries by the same Act which gives the local legislatures power to create a court, all parts of that Act must be construed in harmony, and it must receive such construction as will give us full play for our discretion in the matter. It would never do to say that this parliament must be controlled bolus bolus by the local legislatures in such an important feature of the constitution as the appointment of judges and the payment of their salaries. I do not criticise the wisdom of the legislature in this particular instance. But I hold that it is for this parliament to say whether it will carry out the recommendation of the provincial legislature. It is for us to interpret the correct policy that will apply in such a case. Of course, ultimately, the people will have to determine on this question as on all others. I do not like this idea of tinkering with the constitution suggested by my hon. friend from Toronto (Mr. Maclean).


The PRIME MINISTER.: Hear, hear.


Seymour Eugene Gourley: We have an admirable constitution, and upon a true construction of its different sections there is perfect harmony in it. Now, I want to make reference to another matter. The other day, the Minister of Justice said, that there were two classes who had not the confidence of the public, and these were the judges and the lawyers. If that were mere badinage of the Minister of Justice, I would not object,
' but if he were serious I refuse to be bound by such a statement. In the county in which I live the lawyers of both sides of politics are the men who dominate and control public opinion, and make it and unmake it. They have absolutely the confidence of the people, and the people send them as their representatives to parliament. When the people want men of brains, and men of experience, they select lawyers, and
they trust their affairs to honest lawyers. I am bound to say that in this House the lawyers claim the confidence of the people of Canada in a larger degree than do the members of any other profession. There are infinitely more lawyers in this House than there are members of any other occupation. I respect the laymen, and I must say that they have the good grace on all occasions, in matters of difficulty, to seek the advice of some sound lawyers. I can say for the members of the Bar in my portion of the country, that they occupy the highest standing in the community. There is nothing on earth that pleases me more than to get overhauled by these intelligent laymen. Such criticism helps us. I look upon their criticism in the same way as I look upon the conduct of an indulgent and kindly wife who criticises her husband ; not that she does not respect him, but she thinks an unreasonable animal needs a little advice. These laymen think that an unreasonable animal like a lawyer perhaps, needs a little reasonable advice, and so I do not object to it. I have no doubt that these gentlemen have the deepest respect for a good, honest, well-trained lawyer, who is the safest adviser they can have under any circumstances.


Thomas Simpson Sproule: I have heard it frequently stated in this House that the salaries of judges are too small, because these judges could earn more by practising at the bar than their salaries as judges. On that parity of reasoning, a judge's salary is tooj low unless you pay him as much as he could earn in the practice of his profession.1 In my opinioin that is not a proper stand-' ard to go by. Let us look at it from the' view point of how long it takes a lawyer to acquire a knowledge of his profession and how much it costs him as compared with a civil engineer, a physician, or a member of: any of the learned profession. Let us first compare the lawyer with the doctor. From the day the lawyer commences to study his profession he Is earning money.	I


An hon. MEMBER.: No.	I


Thomas Simpson Sproule: Well, I notice that he generally makes enough to put him through his course of studies. But the very reverse is the case with the doctor. He has to study for five years to fit himself for his profession; from the day he commences to study he has to incur a coustant outlay ; and it costs him from $1,000 to $2,000 of expenditure, besides five years of his life, to acquire a knowledge of his profession before he can begin to earn a dollar. I am assuming that both the lawyer and the doctor start with the same educational qualification. The lawyer, on the other hand, takes four years to acquire his profession, and during that time, instead of paying out money, he is earning money. Is it a fact that doctors earn more than or as much as

lawyers ? Although it costs them more to acquire their professiou, they really earn less. I say that the standard of salary paid to a judge should not be what a lawyer will earn before he goes on the bench, but it should be what is a fair remuneration for professional men in other lines of life, who are as intelligent as the lawyers, and who have spent as much time and money to acquire their profession. The number of medical men who have a net income of over $4,000 a year is very small, and yet we hear of lawyers who earn $10,000, $12,000, $15,000, $20,000, $25,000; and we are told that you cannot get the best men to go on the bench, unless you give them a salary equivalent to what they earn when practising their profession. Lawyers, in my judgment, are paid more than their services are worth; in other words, we give them power to charge more. Men who start with equal brains to those of the lawyers, who spend as much to acquire knowledge in any of the learned professions, should, after they acquire their profession, bave an earning capacity equal to that of the lawyers ; or else they are paid too little or the lawyers too much. Medical men do not usually complain of what they earn in their profession. It is only the lawyer and the judge who are always complaining because there is no limit to their avarice. I knew a lawyer a few years ago who got for conducting one case a cheque for $10,000. Will any one tell me that he actually earned that much ? I do not think he did ; but because he happened to answer the purpose, and was intelligent enough to enable those for whom he acted to evade the law or to checkmate others who were playing that game of checkers called law with him, he was paid that amount of money. Can you properly say that he earned it ? In my judgment, he did not. I do not think there is a lawyer in Canada to-day who, if he were paid exactly what he is worth, would earn $20,000 or anything like it. How many medical men are earning that much or one-half of it ? There is not one in every thousand who is earning half of it-I mean iu net earnings; and yet in the pursuit of their profession they are obliged to incur much greater expenses than the lawyers. They are also obliged to live a much more exhausting and arduous life; they have to be on duty night and day, without any time to call their own;l while the lawyer can work in reasonable hours, and the rest of the time he can rest or play as he sees fit. I believe doctors usually do for nothing more than the lawyers earn, if they were paid what they are worth. Take professors in the universities, who are very able and intelligent men; what do they earn ? Take ministers of the gospel, who, I think, are paid fairly good salaries; how much do they earn? Take civil engineers, provincial land surveyors, or men in any other line of pro-Mr. SPROULE.
fessional life whom you can fairly compare with lawyers. A railway expert canuot fairly be compared with a lawyer, because he is a man who by nature is adapted for the work, and has given close and assiduous attention to it perhaps for a period of from 20 to 25 years before he reaches the maximum of his earning capacity. But, you say, take men who are managing large financial corporations. Well, their estimated earning powers are about in proportion to the elements of the Jew which they have in their nature-those who have no bowels of compassion, no mercy in their composition, who are prepared to drive everything before them and make everybody comply with their requirements just as they might make a piece of machinery turn round; that is how they* show their great earning powers. It is not because they are humane, kind and sympathetic, or because they give away a lot to the needy, but it is because they are heartless, and show some ability to arrange schemes for getting out of the state for nothing a very large amount of money, or taking it out of the people who are compelled to deal with them by borrowing money or otherwise. If they can arrange a system by which they can take more out of the earnings of the people than they ought to take, they will command very large salaries. This should not be the criterion by which we should estimate what is the proper salary to pay to a judge; but it should be, in my judgment, what men of equal ability can earn in other lines of life, taking into account what it costs them to acquire their profession and how many years they have to spend in acquiring it, and then how much they earn in the pursuit of their profession.


William Humphrey Bennett: May I ask my hon. friend what is the usual charge of a prominent city doctor from Toronto who is called to give evidence as an expert in a case ?


Thomas Simpson Sproule: The law allows him $4 a day.


William Humphrey Bennett: Yes, but the party to the suit has to pay him $75 to $100. I know that, because I have experienced it.


Thomas Simpson Sproule: It is optional with him to go or not; but if he goes, all he can claim is $4 a day and his mileage.


Seymour Eugene Gourley: I was going to say one thing when I was speaking with reference to the question whether this parliament had to appoint judges when the legislature provided a court. The legislature of Nova Scotia provided for the county courts of Nova Scotia for six or eight years. The government of Sir John Macdonald was in power then, and, on the advice of some people that these courts were not necessary, he refused to appoint the judges for seven or eight years. So that we have a precedent for this parliament refusing to accede to the

view of a local legislature. The decision of this parliament was not to accede to the view of the local parliament, and we had to put up with that decision. We recognized 'that this parliament had the right to consider the policy as well as our local legislature.


Haughton Lennox: My hon. friend from East Grey (Mr. Sproule) has thrown out a challenge to the lawyers in a rather amusing fashion, and it is no doubt very instructive from a medical point of view. I do not think that there is any quarrel between the medical profession and the lawyers, and I do not want any. I think it would be dangerous for the lawyers, as we have to submit to the doctors at certain times, and had better keep in their good graces. There is no doubt considerable difficulty in settling the question of the judges' salaries. X do not believe in keeping them down to too low a point, but it is possible that we are wrong in thinking that gentlemen elevated to the bench should necessarily get as large an income as they were earning at the Bar. There are many anxieties connected with practice at the bar, and the strain cannot be kept up at the high rate necessary to command a large income for the whole of a man's lifetime. So that it might be quite possible that we are not bound to give such a large salary to a judge as he would make in practising at the bar. There is another point to which I might refer. We make a mistake in assuming that in all cases the most brilliant counsel makes the best judge. There are instances in which they do, but there are probably a greater number of instances to the contrary. It requires a different class of qualifications to constitute a good judge. I have noticed in the course of my professional career, as no doubt, not only members of the bar, but laymen, have done, many noticeable instances in which we have been disappointed to some extent 'n the appointment of very brilliant men to the bench, and there have been many instances in which men of isound judgment, but lacking in brilliancy, have made excellent judges. The matter will have to be considered calmly, without setting one class against another, and solely with the desire of securing such men on the bench as will do most credit to the position. The doctors do not want anything. They are not looking for any appointments, though I do not suppose they would refuse to take them if there were any to be had. I therefore disclaim any quarrel with my hon. friend from East Grey (Mr. Sproule) on this question, or on the question as to whether the lawyers earn the money they are paid. There is some difficulty in judging how much a lawyer earns, but there is no criterion by which you can judge, with any exactness, how much a doctor earns. It is a question of kill or cure, and in many instances the pay I is the same. There is also this about it, |
that the medical profession regulates its own fees. They say what their tariff shall be, and that tariff is recognized. The lawyer's tariff is regulated by law, so that I do not think there is any good purpose to serve by introducing comparisons.


[Stage Direction]
Section agreed to.
Bill reported ; read the third time, and passed.

[Stage Direction]
House again in Committee on the following resolution :
Resolved, that it is expedient to make provision for a subsidy, not exceeding $133,333.33 a year, for a steamship service between Canada and France.-The Minister of Trade and Commerce.
George Taylor: As the hon. Minister of Trade and Commerce and the leader of the opposition are not here, I think that item might stand.


The PRIME MINISTER.: I moved the House into Committee so as to bring down the information, which my hon. friend the leader of the opposition asked for, and I now lay it on the Table. I would suggest that the resolution be reported, so that I may introduce the Bill, and that we may have the further discussion on the first reading.
Resolution reported ; read the first and second times, and agreed to.
The PRIME MINISTER moved for leave to introduce Bill (No. 252) to amend the Acts relating to ocean steamship subsidies.


[Stage Direction]
Motion agreed to, and Bill read the first time.

[Stage Direction]
' The PRIME MINISTER moved the adjournment of the House.
Thomas Simpson Sproule: What will be taken up to-morrow ?


The PRIME MINISTER.: The Redistribution Bl!l,


Thomas Simpson Sproule: We are now in our seventh month of the session. From the intimation given us some days ago, the government intend bringing down railway resolutions which may have a very important bearing on the railway Bill we are now considering. Will the right hon. gentleman give us any information as to when the railway resolutions are likely to be brought down, and the supplementary estimates ?


The PRIME MINISTER.: The supple-mentaries will be down early next week,

an'd the railway subsidies shortly afterwards.


George Taylor: When is the dead-lock with the Auditor General likely to come to an end ? A number of members on both sides find it very inconvenient on account of not being able to draw their indemnity or something on account. Judging from the accounts in the newspapers the Auditor General says it is not his fault.


The MINISTER OF FINANCE.: The question is a pertinent one, especially as this is exhibition week, and hon. members may require a dollar or so to take part in the festivities. But I am sorry that I cannot give any information. As the matter now stands, it is in the right and power of the Auditor General to establish a dead-loek and it pleases him to do it.


Seymour Eugene Gourley: Could not the Minister of Finance make a personal advance in the meantime ?


The MINISTER OF FINANCE.: I am afraid that my credit is not good enough.


Thomas Simpson Sproule: We will have to put the government in insolvency.


[Stage Direction]
Motion agreed to, and House adjourned at 10.45 p.m.
[Stage Direction]
Wednesday, September 16, 1903.