1904-04-05

Mr. SPEAKER.: I have the honour to inform the House that the Clerk of the House has received from the Clerk of the Crown in Chancery, a certificate of the election and return of John H. Sinclair, Esq., for the electoral district of Guysboro', province of Nova Scotia.



GRAND TRUNK PACIFIC RAILWAY.

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The Right Hon. Sir WILFRID LAURIER (Prime Minister), moved that the House go into Committee to consider the following- proposed resolution :
That it is expedient to ratify the agreement between His Majesty the King and the Grand Trunk Pacific Railway Company, dated the eighth day of March, 1904, transmitted by His Excellency the Governor General to this House by his message of March the eleventh ; and which varies in some respects the provisions of the agreement between His Majesty and Sir Charles Rivers Wilson and others, representing the said company ; a copy of which forms the schedule to the Act 3 Edward VII., chapter 71 ; and to authorize the government to do whatever is necessary to give full effect to the first mentioned agreement.
Ho said: Mr. Speaker, the transportation question is undoubtedly the most important of all those Which have engaged and still continue to engage the attention of parliament and the attention of the Canadian people as well. It is a question at once complex and involved, complex and involved in this, that there are several works of a national character which have to be undertaken and carried out in the course of time, but which cannot be all undertaken at this moment. There is the construction of a second transcontinental railway from tidal water to tidal water, anil which more immediately calls for the deliberation of parliament; there is the improvement and development of the waterways from the great lakes to the Atlantic sea-board ; there is the improvement and development of overland communication between the great lakes and the Atlantic sea-board, either by the construction of new lines or by perfecting lines now existing ; there is also the connection of tile great western centres of population with the waters of the Yukon Territory. All these projects deserve attention, they are all meritorious and they have all to be attended to. The question is therefore, where so much is to be done, where we should commence. Tills was the problem which faced the government and wbicn
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faced parliament last year ; and haying given the matter the best consideration we could give it, we do not think that we mistook public opinion nor failed in the proper appreciation of the events and circumstances which have taken place, in having concluded that the first of all those works which requires to be attended to is the construction of a second transcontinental railway.
There are for this conclusion, I say, paramount reasons-reasons at once political and commercial. The population of Canada today is probably six million of souls-perhaps a little over six million. Certainly not less than five-sixths of this number of people and more are centred east of Lake Superior. Though the western section is vastly inferior in number to the eastern section, it is a matter of public knowledge, of public notoriety, that the west is increasing with far greater rapidity than the eastern section, and the day is not far distant, indeed I think we can almost see the dawn of the day which will see the western population equal to and perhaps exceeding the population of the eastern section. Between these two sections of population, however, there is a gap of several hundred miles of uninhabited and hardly habitable land. This gap constitutes an interruption of communication that has to be made up and supplemented by the hand of man. This has been done to some extent already by the construction of the Canadian Pacific Railway-to some extent only, not completely. If we reflect that railway communication has become a primary necessity of civilized life, if we remember the growing importance which railway communication occupies in all the relations of civilized life, no further argument is required to show that a single line of railway between these two groups of the Canadian people is absolutely inadequate and insufficient. Then, when we remember that the western group of our population is geographically connected with another group of population largely akin in language and origin, but alien in allegiance, from which it is separated by no natural obstacles, and with which communication is established by means of several railways running north and south, the necessity is all the more apparent, not certainly that we are in doubt as to the allegiance of these people in the west, not certainly that we believe they can be seduced from their present allegiance in any manner whatever, but it becomes the duty of the Canadian people, and it certainly is the part of statesmanship, to provide, and that immediately, all sections of the Canadian people with proper facilities of communication, at least equal to those which exist amongst our neighbours to the south of us.
Then, when we reflect further that the population of the west is largely composed of foreign elements which have to be assimilated, we will no doubt agree that the Sir WILFRID LAURIE®.
best instrument of assimilation is the rat way-the railway which annihilates distanc >
which makes neighbours of men who. P1 vious to its era," would have remained 11 known to each other, and would perhai ^ not even have suspected the existence . one another.	. „
Strong as is the aspect of the quest1 ,g from the political point of view, stronger it from the commercial point of view. t western population of Canada are larg^ growers of cereals, chiefly wheat. They c't send tlieir products to market at this m°®® t only by rail, then by water, and then eita by rail or water. To-day, as soon as the c has been threshed in the month of Not® ber and up to the month of December, wi navigation is closed, the products of j people of the west have to be sent by 1 ,e to the end of Lake Superior. Then they 'ey sent over Lake Superior, and when v';e reach the other end of the lake, they ' r sent to their destination either by ra* ^ water. What is the consequence of s present condition of things ? What hapP j,. to-day ? As soon as the crop has been tbl® ( ed during the months of September, 0_ct and November, and whilst navigat301 open, the existing railways have to supreme effort in order to collect re' t,.y stock in the western section of the c°^gji7l« so as to be able to take as much as P°®j0r. of the crop to the shore of Lake Sup They have to starve all the other s®ctjjefe of Canada. Trade is disorganized, and ^ is discontent in the east, and not nine1 tent in the west either. But, as soo gf navigation is closed, the commercial J of the west, as far as- the transportafi c9ji
grain is concerned, is stopped. NothiS®g 0f take place. If there should be min10 r;eS bushels of wheat still stored in the gra t>« of that western country, if there sl>o de' a rise in price, or a sudden demand, 1 "west; mand could not be supplied from the to because, though whatever may be the contrary, the single line of railway c0jjr we have to-day is not adequate to tnrtatl01' mercial necessities or to the transp01 flde. of cereals. The statement has been tj,jS and it has been repeated on the A0.01', j,y th® House, that if wheat has been carried Canadian Pacific Railway by the sli<A shore of Lake Superior, the statistic cgr that an infinitesimal quantity has l:), do11®, ried. But it is unfortunately beyo' jm
that the grades and curvatures of ,jj a® around the shore of Lake Superior permit the successful commercial of wheat over it. Therefore, tfl sl!° |,e siderations make it necessary that1 _ct ta have another line of railway to c0' w11111 east with the west, so as to supply 1	<
of the community.	, aye 11 A,
In what I have stated so far, t i w'l1' chiefly in view the section of the r 1 t0 we have in contemplation which	*
nect the tidal waters of the St. 7je]ds and the Atlantic with the whea

of6thIaIries- Iu regard to the other section fii„ r°ad, from the city of Winnipeg to
the
no
Pacifi,
dissoi
c ocean, no dispute can arise, and I'herp5S0Uailce 01 opinion has been heard, on;,,; s««ms to be a general consensus of
be Miat that section of the road has to atf i*<i§
WftjYl	U1 IT
In m t0 tjie tidal waters of the Atlantic
built, and built immediately. Unfortun-! sa
to the section of road extending east-
*dely 4-U	""	iUJlUVUiWkViJ .
re8arci t same unanimity does not exist in
the *2? estimation, and in the judgment of as ife,Veininent, that section of road is just Sectiouess^ry a* this moment as' the other in thk But there has been an impression "'hieh .eountry that the section of country ls to be covered by the road from fenee eastwards towards the St. Law-,n'ession , l'en and inhospitable. That im-Pr0tBlll" "as been carefully cherished and because ate<^ even 011 t,le floor ot'tBis House,
he;
°n the floor of this House, we have
eard W ule floor of this Hoi Mth a „ statement made with some relish 'eainW800(h. 'teal of satisfaction and with epuntrv strdIes>
that that section of the Pines. 'pWas a land of muskegs and jack ®'l ls' jln,ei'haPS the first consideration after that Seoi so much what is the character of K^enatinr°-1 ot" country. The first con-[DOT]k tile ni1 ls whethei' or not, whatever may 1 . to fleeter of the country, it is poss-w-ti thene a location for a line of f Mil rip, . Sllcl1 gradients and curvatures ?! height mit tlle commercial transportation )Te have of cereals, and the information *le efjeof11+,ljaiKt>
which is abundant, is to '*h win Ktpat such a line can be found, ir?Ulltry. rr, t°und through that section of l0tlleut is t 6 information we have at this
.?* the di?+to tlle effect that for three-fourths the ,.tance between Quebec and WinniuVm' 'vhich6 *Tin run °ver a level plateau, }, h be aj 1 the construction of a railway
*vei.
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JM, even "L as res ??hhtry Las t0 the "Oh 4.J1	"
as feasible as over the prairies, eneral character of the
h that it ^ave to-day abundant informa tiai h to J„4S Possessed of a character in V-i, ful tij °u a.nd climate which will he a hsti?' have l.hPointment to those gentlemen ®tat g it. n611 a morbid pleasure in ma-We euieot r„, upon a time I made the think ft iu i. tae floor °f this House that 111?? °f counigar<1 to the character of this deal Statenim* hiountains of information.
of siiea„at was received with a great Cfl, Sreri"S incredulity, taj,, taius cannot expect that these Vj3 Win' L, niore than any other momi-thpo s of seif® to those wilful and blind
o-rv, . 'seit-i:
to p Sentlome U11posed prejudice. But, if '''on? to the „?U Wou'd only take the trouble fijm h fan ,. .onntalii themselves, the scales tty mat there11-1 t.lleir eyes and they would Dow'l good i*V? that section of our conn-hot ,.a 'arse „ fair land, quite able to sup-hlote? he. t ,1 opulation. These words are °f that °lrow them from the first ex-hW'hhiy ti,.,f 0h,ntry, because it is not only 1 Mori ?, that country lias been ex-han 200 years ago, when Canada was still under the French regime, the French Government sent an exploratory party to the region between the mountains and Hudson's Bay. That expedition was composed of M. de St. Simon, an officer of the French government, a second man whose name is not known, and) Father Albanel, a Jesuit missionary. The party left Tadousac in the month of August, 1671. They ascended tlie Saguenay river, explored Lake St. John, and traversed the rivers flowing into the Hudson's Bay. They wintered in that section and explored it thoroughly not returning to Tadousac until the month of August of the following year. The report of that exploration is available ; it is to be found in Les Relations des Jesuites, a work which we have in the library. Speaking of the character of the country, Father Albanel used this very expressive language-I quote from the American edition of the Relations des Jesuites which was published a few years ago by Mr. Thwaites (page 181).
On the 23rd and 24th of June we found a less mountainous region. Its atmosphere is much milder, and its fields are beautiful ; and the soil would bear abundantly and be capable of supporting a large population if it were cultivated.
At page 205 he continues :-
They are in error.
Perhaps he anticipated with prophetic vision the speeches which we heard last session on the floor of this House-
They are in error who have held that this region whether by reason of the intense cold and ice and snow, or 'the lack of wood suitable for building or heating, is uninhabitable. They have not seen these vast and dense forests ; these beautiful plains and these wide prairies, bordering the rivers in various places and covered with every kind of grass suited to the maintenance of cattle. I can assert that on the 15th of June, there were wild roses here, as beautiful and fragrant as those at Quebec. The season seems to be further advanced, the air extremely mild and agreeable. There was no night during my visit ; the twilight had not yet faded from the west when the dawn of day appeared in the east.
This is the character of the country that the new railway will cross. Two hundred years have elasped since these lines were written, but this country is yet unsettled. And what is the reason ? The .reason is perhaps, not so much the want of communication, as the impression that has prevailed, and is still prevailing in some quarters, that a country so far north is not fit for the habitation of man. But we have learned in recent years that the question of longitude and latitude has little to do with climatic conditions, and even far to the north we have not only found the precious metals, but we have found that it is possible for vegetables to grow and mature. Why, Sir, it is not more than forty years ago, when some of the highest and ablest men we have
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in the hind-I will not cite their names because they are well-known-predicted, that t-he fertile plains of Manitoba and the Northwest Territories-which are fast becoming the granary not only of the continent _ but of the! whole world-were unlit for agriculture. It was not that the land was not fertile, but it was because they believed that the frost would not permit of grain maturing iii a country so far north. We know how these prophecies have been falsified. We know that within the last twenty years or so, settlers have crossed the Laurentian Mountains, and finding good land to the north of the Lake St. John region, they have started a new Quebec there, which proves the truth of the statement made by Father Albanel two hundred years ago.
Having come to the conclusion therefore, that it was in the interest of the country, necessary that a new railway should be built, through that region, we believed it would be sound policy and good business to interest in that enterprise, the Grand Trunk Railway Company of Canada. 1 need not go over the full details of the contract which we made, and which was fully debated last session on the floor of this parliament. Suffice it to say, that one of the leading features, and perhaps the leading feature of that contract, was that the Grand Trunk Railway of Canada would not only be a party to this enterprise, but that they would have a controlling interest in it, and would practically take the enterprise on their own shoulders. When the moment came for us to discuss with the Grand Trunk Railway Company the terms of the contract which had been submitted to parliament and approved, the Grand Trunk Railway Company made the objection that the conditions imposed upon them were too onerous ; that they could not undertake to float, and to organize, and to finance this enterprise unless the government would relax a little some of the more binding features which had been inserted in that contract. They made several requests which are now before parliament, and after a lengthy discussion with their representatives, we agreed upon certain modifications to which we now ask the assent of parliament. The proposition which they made to us, and the concessions which were made by us are now before the House., They ara not numerous, and I venture to say that our hon. friends opposite, when they saw the narrow extent of the concessions which we had agreed to, were surprised at the moderation of the Grand Trunk Railway Company, and the comparatively unimportant modifications which we were called upon to make. Not only were they surprised at the moderation of the concessions which we made, but I believe they were vexed, because it deprived them of a good deal of the thunder which they were prepared to fulminate here. At all events, the proposition is before parliament,
Sir WILFRID LAURIER,
and the time has now come to discuss ' I would suspect from the smiles which 1 on the faces of my hon. friends opp°sl * that to-day they are not quite satisfied, suspect that they will have some fault ta ing even yet, but*I have been so accustom to that from these hon. gentlemen, that a . thing which they may say will not sujP1 me now. I am not after all surprised, n do I find much fault, if on this, as on e' e * other occasion, it has not been found 1 ' sibie to satisfy the gentlemen on the position benches. "	t),e
Let us see, however, tlie nature and extent of the modifications we have The first of these modifications relates the time within which tlie line is to be b and tlie proposition to which we tO'a'e ask tlie assent of parliament is in R terms :
coja
Sec. 1. Notwithstanding anything in the *of contract contained, the time for completlonall(l the western division of the railway shall be ; 0f the same is hereby extended to the first December, 1911, and the tenth paragraph j,y said contract is amended accordingly, a° .ord inserting the word ' strikes ' after the ' floods ' in the seventh line thereof.
By the terms of section 10 of the
coir
tontract submitted to parliament last ses® 0f it is provided that the western sectio' the line, the portion from Winnipeg to tj,e Pacific ocean, should be built within r period of five years commencing Decei 10, 1903. The company thought that rt limit of time was perhaps a little too s g(j and the only modification which they aL. to was that in case of failure on their Pflr ct, comply with this condition of the c0'" for tlie deposit of $5,000,000 should not l'eited. Their application was in terms :	,
Time for the completion of the dt,1l?tae®ber of the western division, fixed as D® c0&' 1, 1908. is considered short. Failure t ,.eat® plete within the time should at least not a forfeiture of the deposit.
We did not altogether agree to tbj^ e%-we provided that the time should u' tended by three years so that the will have until December. 1, 1911, in to complete their line.	, \vbicP
These are all of the concessions ]e<>r
liave been made except that to	* flootls1
timate causes for delay, such aS * disturbances, &c., strikes are aic , 0tbe1'
di o"
tin?
am sure that our bon. friends on , .eCUv side of tlie House will have no 0 to agree to this modification of the co je-Tbe next clause is in relation to Qjg&o posit. The demand made by tbe ^.or<JS: Trunk Railway Company is in these ,,
Upon the issue of the guaranteed ft® ^ aP forming the deposit already ma^|rand I''''idproved by the shareholders of the -	sv"~,0{
legislation to be passed confirming Rjjed * tution and acceptance in lieu of that by the agreement.
alb!
st>'
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[DOT]718
company to be entitled to a release of 8 deposit at least to the extent that it forms <livi -lty tor t*le construction of the western ti 1S10.n upon the expenditure in such construc-b0\°f $5,000,000 realized from the proceeds of nds to be guaranteed by the Grand Trunk.
hl^lle r.eason for this demand will be ex* atnecl in a moment. I may say at once that 6 did not comply with this request. What
"'as
agreed to is to be found in Section 2
il ,Ile supplementary contract, and is in u>ese words :
v'dhsianding anything contained in the sai i eilt^ and twenty-ninth paragraphs of the hav co,1tract., the company shall, when it shall ? completed the construction of the said of th11 division in accordance with the terms shall6	contract as hereby amended, and
Of fif,llave supplied rolling stock to the amount eaSf teen. million dollars ($15,000,000), if the stru®,ri\ division shall not then have been con-entit, d and completed by the government, be the V84 to the return oi the deposit made under tWel£th paragraph of the said contract, or fen ^a.rt thereof which may then remain unfor-tcrm in the hands of the government Under the shali 01 the Said contract ; and the company the 1 also he entitled to have the guarantee of *SsuM°7ernment endorsed upon the said bonds - ®d in respect of the western division, pursuant
tent" *° ParaSraPh twenty-nine of the said tj0l ract ; and if it is shown to the satisfae-Si o£ the government that the western divi-the „ "'ll be completed and rolling stock to Ooo One1'* amount o£ fifteen million dollars $15,-c°mW) supplied before the construction and apb]j ti°n o£ the eastern division and that the C0' ddtion of the said deposit will enable the ai>4 any £o so complete the western division apd ®uPPly rolling stock to the said amount depol-ft the same will be so supplied, the said shch [DOT] shall be released by the government in avi.0 'hatalmeots as may from time to time be p®ea. uPon.
stockVjae<1, however, that, of the said rolling ($15 n t° the amount of fifteen million dollars hum w>000), rolling stock to the amount of five of 11 dollars ($5,000,000), to the satisfaction ad j 6 government, shall then have been mark-
?htl
'h the
manner provided by the twenty-secbe ai)aragraPh of the said contract, ready to said Sfgncd to the eastern division under the all ffaraKraph upon its completion and to serve Said 6 Purposes in respect of the whole of the hlillJ'h'tract intended to be served by the five st0(.j. , dollars ($5,000,000) worth of rolling hl,.nUo|P the said twenty-second paragraph
explain that by section 20 of the °°hiT>
contract, it was provided that the eitije fV" would make a deposit of $5,000,000 tlia(. r "l cash or government securities, and tiU|e (leP°sit of $5,000,000 was to be a guar-diyj : tor the construction of tlie western tiopp'011 of the road within the time men-*r0 «.in the contract. By one of the other it -ty si°ns of the contract, paragraph 22. bob)' a Provided tlint the company would be i'0;i,i' as part of its contract to equip the *'.hOi'i't*1, rolling stock to the extent of $20,-'[DOT]I'n'	'* This applied not only to the westtonq'ftion of the road, but to the whole I1'oin Moncton to the Pacific ocean, hut
it was further stipulated in addition that at least $5,000,000 worth of rolling stock would be marked and set aside for the special use of the eastern section of the road. The company represented to us that the terms in relation to this deposit were too exacting, that it might happen that when the company had completed the western division and would be prepared to equip it with rolling stock and to equip the whole road with roiling stock, the government section would not be completed, and in a condition to receive the rolling stock and that then the deposit might be kept by the government for an indefinite time. The company not unreasonably thought there should be a limit to the time for which the government could retain this deposit. We thought this provision reasonable enough, therefore we have inserted in the amended contract the stipulation which I have just read, if when the company shall have completed the western section, the eastern section shall not have been completed by the government, and shall not be in a position to receive the roiling stock, then the company shall be entitled to the release of its deposit, provided that of the twenty millions of rolling stock, five millions is to be set aside for the eastern section as security that it will be equipped. We hope, and it is our intention that the construction of the eastern section will proceed pari passu with that of the western section. The government, however, would not take any chances on that, and stipulated that if at the moment it had completed its part of the road, the government had not completed the eastern section, then the company should be entitled to a release of the deposit.
This seems to be a very reasonable arrangement, and I do not think that our lion, friends opposite will have much to criticise in it.
We now pass to the third section of the new agreement which is in these terms :
Pending the completion of the eastern division.
Tlie paper as printed says :
Upon the completion of the eastern division.
But that is evidently a misprint and the word * pending ' must be inserted to make the meaning clear.
Pending the completion of the eastern division by the government, the company shall be entitled to lease from the commissioners, to be appointed under the said Act, and to operate such portions of the said eastern division as may from time to time be completed, but upon such terms as may be agreed upon between the company and the said commissioners, which terms are not to be more onerous than those of the lease of the whole division by the said contract provided for, save in so far as may be necessary to give full effect to the paramount right of the said commissioners next hereinafter mentioned, and subject always to the paramount right of the said commissioners to
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use and operate the same without any payment of toils or other compensation for such purposes as they may deem necessary or expedient in the execution of their commission.
I may here refer the House to section 20 of the original contract. It is provided in section 20 of the original contract that:
When completed the said eastern division shall be leased to, and operated by, the company for the period of fifty years, at a rental, payable as follows :-For the first seven years of the said term, the company shall operate the same, subject only to payment of ' working expenditure ' and 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, in 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 pej; centum of the cost of construction, the difference between the net earnings and the rental shall not be payable by the company, but shall be 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.
Regarding this, the company made the following request :
Upon the completion of the construction of the eastern division, the company should have the option of operating under lease the portions constructed upon undertaking to pay working expenses and to hand to the government a portion (to be fixed) of the net earnings.
Rental payable under the lease to be made by the company upon the completion of the eastern division to be made a charge only upon net earnings for the whole term, or at least for a longer period than the three years provided in the agreement (section 20).
Iu other words, the company proposed simply to pay the net profits and nothing else, but the government would not agree to that. The only amendment made to the contract in this respect is this, that pending the construction of the eastern division, as soon as a section is completed, it can he leased to the company on terms to be agreed upon, but not to be more onerous to the company than those stipulated in the contract. This is the whole departure from the contract under this head, and to this I do not think our friends opposite will have any serious objection.
The next section is of more importance.
It relates to the assistance to be given by the government for the construction of the western division. This provision of the new contract is embraced in sections 4 and 5 :
4. The 28th paragraph of the said contract Is
amended by striking thereout all the words following the word 'not ' in the eighth line thereof and inserting instead thereof the words * in respect of the prairie section exceed $13,000 per Sir WILFRID LAITRIER.
mile of the mileage thereof, although 15 P cent of the said cost of construction may ha exceeded the said sum of $13,000 per mile.
5.	Notwithstanding anything in the said c° tract contained, the government may and sh®n preserving always the proportions in the sal contract, provided as between the prairie * mountain sections of the western division. i® plement for the purposes and subject other"'! to the provisions of the said contract, guarantee of the bonds of the said c° pany to be issued for the cost of conStr^-tion of the said western division, in such m ner as may be agreed upon, so as to make proceeds of the said bonds so as to be guar 0i teed a sum equal to 75 per centum of the coB.„ei construction of the western division ascertai as provided in the said contract but not e*ce'6f ing in respect of the prairie section $13,00y l mile.
/! HF
I have here to call the attention oi House to section 28 of the original c tract. That section provided that the * j)(, ernment would guarantee the bonds of g(l company to the extent of T5 per cent the cost of construction of the western j ision. But the liability of the governm* was not to exceed $13,000 per mile in prairie section or $30,000 per mile h' mountain section. The company man® ;ji alternative request which will he fotm fettle correspondence brought down. They ^ quested first that the government _siw t() guarantee an issue of bonds sufficien^ ^ realize 75 per cent of the whole cost ^ construction, without any restriction < >er liability. Or they made an alternative that tlie government would advance
goy«,nh,eI,t
proposed that the
money.
They should-
Raiso the aid proposed to be given by j, of government securities bearing int.er.,t oaf.'
jsSae
three per cent and now quoted at or aboU(0 and accept as security for the advances , * in construction, bonds of the company. . u0i 74 5 Such bonds to form a portion of one ,, pe et>' per cent of which the government shall t0 pa titled to receive and hold, and the balance when guaranteed by the Grand Trunk the Company, used for the purpose of rai° additional 25 per cent required.	,
,	j. eithe
The government would not accept ,tj0n of these propositions, but the P1 which was finally adopted, is enib°a' ^ the section I have just read, and is - to effect. First of all the restriction the liability of the government Sn„	I>!
in the mountain section the original contract	the
guarantee was limited to mile in the mountain section ^ we undertake to guarantee 75 of the cost of construction, '	' ft)6'
it may he, without any restricts* [DOT][DOT] pt<>
we undertake also to implement s ceeds of the sales of the D as to make the amount actuaih^^ into the construction, 75 Pel' . ,g Js \ the total cost of construction- *1 agi'ee be dime on conditions to he furth
is removed- nt
goveD1 e,
py
ce"!
et
pet wr

J?®n between tlie government and the com-uii i , *ri?e reason of this change is obvious, L1 requires very little explanation, It is Ul ,e *-oun<I in tlie altered condition of the tla-t market. It is a matter of notoriety cliffl ,tlle mo*ey market has become very Tl re.nt from what it was six months ago. been' Was easy and affluent. Now it has cred'1?6 stringent and contracted. The io-cla ^ Canada has not suffered, but is Uja ' y lust as high as ever, and Canadians kovl,. Proud of the fact that Canadian as pnrr*ent securities are quoted as high eiido ,ng. 11 consols. But even with the gov^Uon °f the bonds by the Canadian ietv nent to-day, it is a matter of notor-[DOT]- [DOT] hat these bonds could not be sold in
i'eaii Purket at the price they could have that 6C six months ago. It is notorious Cauad?Ven with the endorsation of the liig]' lan government, whose credit is as "hi'hw that °f any government in the s°kl to-day, these bonds could not be govei..XcePt at a heavy discount, and the ^UpieiT)111611* therefore has undertaken to bet\vePen^ difference which may exist and ri,U. the price realized by the bonds done ,,?u' lace value. How this is to be 'home,?,6 rle n°t prepared to say at the ljet\vee,r' If: is to be a matter of agreement for tl .p rbe company and the government, °f tin,,- reason, that the present condition
mgs
tllUl 4i	ill cl I. KtJL lb IU CUll 1111 Uc cl© it
Wyy lle bonds have to be sold at a to aqVf,,!,seouht, the government will have
UP th.'
ah<l to ulII.ei'enCe between the face value ®u°Uld ., i)llce realized ; but if the market 'J'as sK- yei't to the condition in which it [her Uihhths ago, the amount to be fur-by the government would be issiip.f. [DOT] Moreover, the bonds will not Verm a day- Their issue may take ;° be ars' and arrangements will have 'b'een the~-by mutual understanding be-
«hd
company and the government,
tiL* the
dll cl Sab°uds are i
H0Uhcih<:tirn! ,°f tbe Governor General in ;h' bv +iT- will be made still more
?6Se boim°Vernment will have to see that Co** saiictioi:ai'^ issuo<I with the approval
h
r by the^v P'11 to bo introduced, than it J?cti'act , xPlanation I have given and the f..Pt^viaj nought down. This is the most the fpai'ture that has been made L i >t is terms of the original contract, t-q be justifie(1auCharactel'' 1 think, amPly a i-6 arisg-i h by the new conditions that
highg ®ven. though it: may involve
Hn/ruuieut r 4T,7'J7V, Kjn ult3 y!l thB °Ught W, think it is very reasonable tho of tim° T$ommeiKl itself to the judg-*iPeoplo ® House, aud the judgment of can 6 iievr Cauada at large. tL1 tbe att£,?Y,estion to which I have to Thj Paylllei], ut'on of the House is as to th*® is M tlie interest on tlie bonds.
SePaEd®d for in sections 0 and - aPhs read ns follows :
outlay on the part of the
6 Notwithstanding anything in the said contract contained, the government shall not exercise any rights in respect of possession, foreclosure or sale, by reason of non-payment of interest by the company under the thirty-first, thirty-second or thirty-third paragraphs of the said contract, or under all or any of them, unless and until there shall be such default to the extent in the whole of a sum equal to five years of such interest, as the company is not relieved from payment of or permitted to defer or capitalize by the provisions of the said paragraph.
7.	In case of such default being made by the company in respect of the interest of the said bonds so guaranteed by the government as would, under the provisions of the said contract as amended hereby, entitle the government to take possession of the said western division or to foreclose or sell the same, the remedy of the government shall, notwithstanding anything in the said contract contained, be the taking possession thereof by and through an agent or manager to be appointed as hereinafter provided, whose powers and duties shall be to manage and operate the said western division, to receive all the tolls and revenues thereof, to pay thereout working expenditure as defined by ' the Railway Act, 3903,' including the expenses of such management or agency, and to distribute the surplus tolls and revenue, afterpayment of such working expenditure, pari passu between the government or other holders of the bonds secured as provided by paragraph 35 (a) of the said contract and guaranteed by the government and the holders of the bonds secured as provided by paragraph 35 (b) of the said contract and guaranteed by the Grand Trunk Railway Company, in the proportion of seventy-five per centum of such surplus tolls or revenues to the holders of the former issue of the bonds and twenty-five per centum to the holders of the latter issue, and the mortgage to be prepared under the said paragraph 35 (a) shall contain appropriate provisions in that behalf. The said manager or agent is to be appointed by the government, with the concurrence of the company, or, if they are unable to agree, by a majority of the Supreme Court of Canada,
Section 31 of tlie original contract provides that, on the prairie section, tlie company shall pay the interest on the bonds from the date of their issue, and, in default of payment the coupons shall be taken by the government which shall thereby be subrogated to all the rights of tlie creditor and be entitled to exercise all the prerogatives of the bondholders Tlie next paragraph provides that, in the mountain section, for seven years the company shall not be required to pay interest, but the interest shall be paid by the government. For the next three years, the company shall pay the net profits of the road, and. it there is a deficiency between the not protits
md tiie amount necessary to pay three per sent, it shall be capitalized and added to the debt of the road. Then, after that- that is, after ten years-the company snail my the interest, and, in default of payment, the coupons shall he taken by tl
government, which shall be subrogated to *ill the rights and powers of ciemtoi-. i'lie company represented that ibis sectio
[Stage Direction]
was altogether too onerous and made the following request :
Interest should only be made a charge upon net earnings of the company, with a proviso that to the extent that such interest is not paid in any year it shall be charged up against the company and carried over, bearing interest, and be payable out of the first surplus of earnings in any year thereafter over and above the amount required to pay the fixed charges accruing due in that year. Failing the company being able to pay the interest as herein contemplated, the whole amount unpaid to be added to the principal of the mortgage and be payable when the same becomes due.
In other words, the company proposed simply that they should not pay the Interest stipulated in the agreement which I have read, but that the extent of their obligation should be to pay the net profits of the road and nothing more. The government would not agree to that, but we made certain conditions which were accepted finally by the company, and which are embodied in the agreement whicli I have read. The first concession was that the government would allow five years of grace in the payment of interest, but, if the company defaulted for full five years, the government would be empowered to exercise, not the rights stipulated in the agreement-that is, to take possession of the road or exercise the right of foreclosure-but that the road should be put in the hands of a manager who would manage it for the benefit of all parties interested, and would distribute the earnings between tlie government and the Grand Trunk Railway Company in the proportion of 75 per cent to the government and 25 per cent to tlie company. I would like tlie House to bear in mind that, according to the tenor of the agreement, the road is to be built by the joint guarantee of the government and the Grand Trunk Railway Company, 75 per cent of tlie guarantee being furnished by the government and 25 per cent by the company. Now, if we had not agreed to this modification what would be tlie consequence ? Here is a case, in which the company could say to us- and say very properly I think-that the conditions we had imposed upon them were too exacting and made it impossible, or, if not impossible, very difficult, for them to finance the enterprise. Suppose we had kept to ourselves the right, after the road was built, to take possession of it the moment there was default in the payment of interest, naturally, tlie second issue of bonds, which lias to be guaranteed by the Grand Trunk Railway Company, would be blemished to an extent far more serious than under tlie new contract. The party who was asked to advance the money upon the second issue of the bonds would have before him the prospect that, if there was a had year, through failure of crops or other reason, and it were impossible for the company to pay tlie interest upon the bonds, the government might step in and Sir WILFRID LAURIER.
take possession of tlie road. In that cas'< the bonds would not realize the same P1'1 as they will now that we have a different * ^ rangement for the protection of all ' * creditors. The new arrangement offers '
into
inducement to investors to put money the enterprise because they know that. there is a failure of crops and the inte1'®', cannot be paid, there will be no over the road. They know that t*1 must be five years' failure to pay ^ interest before tlie government can eX.,0 else its rights under the bonds and n * that the right of the government will i bo to take forcible possession hut sb"J to have tlie road put in the hands ot' receiver who will manage it for the j of those who have put money into it- * )(j is to say, the government of Canada j, the creditors of the company. Under s e circumstances, the bonds must sell for n^e
than
they would otherwise, and so j, road will be burdened to a less degree t ' j. it would be if we had adhered to the mil agreement. These reasons seem and we agreed to them ; and I think l*eJf what we have done will commend 1 Ajc to the good sense, and also to the pah Ae sense of hon. gentlemen on the other of the House.	je-
Now, we come to tlie last important ct, parture that has been made in the com ^ It is with regard to tlie common ® g jji Section 27 of the original agreement W these words :	a
The company	undertakes that the	ge'
Trunk Railway Company of Canada s"'
stock 1
quire and take the said common st
ii
shah 0e
iCe P*
amount of twenty-five million dollars, shares held by directors, not exceedi * thousand shares, and shall hold the saIj0„g a ing'the term of the said lease, and s0ptn&e^l any of the bonds guaranteed by the g0'1 retflalP under the terms of this agreement shal outstanding unpaid.
The new departure that 1ms been to this arrangement is as follows :	(g-
Notwithstanding anything in the 2d gra® graph of the said contract contained, ^ trunk Railway Company shall not, jjarS . acquisition of the twenty-five million glia's common stock therein mentioned (*.jjousaAj! held by directors, not exceeding one p0giti ^ be prevented from making any sUC5,rand 1 of such common stock as the said G,-e(j, h , Railway may deem expedient, Pi° . vay ever, that the said Grand Trunk Raned b1., ot

ay may ueem expeuieiu,, i'' ,i«,gy ^ thX that the said Grand Trunk R® in g{ pany shall, during the delay menu joflAls
,	t/\ Vinlfl &	fill® m
said paragraph, continue to hold a e*a t0 the said stock by such title as _ -paof the said Grand Trunk Railway '	>
control the policy of the company- ,],g tl*'
I stated at the opening ol' ui.v when we determined to undertake - p°* A prise wo thought it would he b Q ^ and sound business to hrlnft ,y; t$e Grand Trunk Railway	taxis 0 0ri'
thought it would be to the a^vn'()„id country at large, because we " .n{jof>
* ate with it that powerful orgn" '

adv- West' an<l make it contribute to the an ,a'lt:aSe of the new population of the west Yji* "le old population of the maritime profile rf" ^ w«s part of our agreement that go [DOT]	Trunk Railway Company should
stii* i° enterprise and control it, and we acn,-ated that for that purpose they should idiii d-e and tiokl for all time, not only the ?2o non ^ut tlle whole of the common stock, 'tl'iii ,WX) thereof. Here again the Grand that V|1-aiiway Company represented to us agreement was a
altogether too
uec e and too onerous, that there was no aiJ(i ' ®*ty for it. They would not agree to it, Satie .y ask to be released from the obli-Doiif U lmP°sed upon them of controlling the Sir i, of the company for all time. But, to L1 order to do so it was not necessary it ^ ®° far as we did in the first agreement, twent I1°-t necessal'y to bind them to hold sufliejp ^tUions of stock for all time, it was aa>ount to bintl them to hold such an t° ij t of that stock as would be necessary i conti'ol of the company ; and if this stock , doae with twelve millions of the lions ' 0r. thirteen millions or fourteen mil-stock *+'1 any other quantity of common stock' ere was no necessity why such any ot'j '°uld not be treated as the stock of the « company, and made elastic so that et>Ihpai?Pany coul<l deal with it as any other dances' w°uld do. Under such circum-I'easonn iWe thought the demand was a ft, we oue and therefore we agreed to °f	that the company might dispose
«hvays ,de stock, provided, however, they tfietu £e^ au amount sufficient to enable !,*d t0 control the policy of the company, seeii°ntl01 tlle whole enterprise. This ! .bavturn <>to constitute a very reasonable ai<l dow, ,10111 tiie terms of tlie contract ns .Sir, irVl1,fast year.
ais kind*' doni happens that in a matter of n?terprioI * er.e a contract is made in an i!ltei'Warfl„0! t,lis magnitude, it is not found ii hhmvi to susceptible of amendment I' aco witi,Veinent. That is what has taken henk of ,, reSard to this contract. I do not ' t® of ,ui lle other two sections because they t J'i not ho 1 importance, but I am sure they , °®se ;n, criticised. 1 have laid before the ([DOT] 'Sell w explanation of all the changes n ®. contr.ioiav^ thought proper to make in Willed, >10 A0! 'ast year. If they are ex 1 Jo earn ' „ 1, 10,10 they will be examined feature A, , attention, without any bias ito s to 11 Il0,)c they will commend them-fri ls°. even'l llnhiased judgment of the O%o„ ti,o° Jhe .imlginent of our lion. Vini '"ate , °ther side. The changes are lnS(.P|1t den'nvh *ley do ,lot constitute any t 1., yenr „ . U1"c from the agreement made 1lloUve oiiiv + wllich Parliament sanctioned, 'hiii" Witj.-say in conclusion tlint T lay
'd nai. . ''ll confirm,,i.„,	 TT__________
ask
^Ir p <h\ „ Jt- 1
fov *1 confidence before the House m their '
' favourable consideration
' ®t tiie''(^0yt)RN (Halifax). Mr. Speak inclusion of the speech of the
Prime Minister last year when be introduced this measure, he asked the House to hail it with earnestness and joy. I have observed a little less of earnestness and joy in the speech of my right lion, friend to-day. Let me say that I find very little satisfactory explanation of these amendments in the remarks which he has just addressed to the House. He went over the same ground that he went over last year. He has gone back 240 years for the purpose of showing us that the northern country through which the proposed line is to pass was then thoroughly explored, and of demonstrating to us at the same time that it was much better than the region situated to the south of it. It would naturally occur 7o every one of us that if that country was thoroughly explored 240 years ago it is a remarkable thing that it has not been developed since. What explanation has the right lion, gentleman for that failure on the part of the people of: Canada to grasp the situation which he has described to us? He tells us that there were ' mountains of information ' placed on the table of the House last year, or placed before the members. There was what my right lion, friend called a mountain of information, but after further developments took place it was found that the mountain had only brought forth a mouse ; there was very little information in it. and certainly no information which would justifiy us in undertaking to build a railway in that country without further examination and without further survey.
Now there is not much in what the right lion, gentleman has said, but such as it is 1 shall have to refer to it. He says that the government had thought best to interest the Grand Trunk Railway in this enterprise. We liad all supposed, and the Grand Trunk Railway Company themselves had supposed, that they were the first to approach the government with a proposal to build from North Bay into the Northwest of Canada ; and the government of this country finding itself somewhat constrained by political exigencies, insisted in the first place that the' line should be built from Quebec to Winnipeg through a country which has not yet been explored, but which may have great possibilities ; but afterwards, constrained by certain further political exigencies, the government insisted upon adding to that the line from Quebec to the city of Moncton. That is a more accurate statement of the circumstances than the one which my right lion, friend lias given.
Now let me deal in the first place with one reason which my right lion, friend i|a® P11 forward for making one at least of these further concessions. Ho says that u -reason of the additional bond guarantee upon (lie mountain section, and uPon prairie section also, is that the ®on®-market is more stringent than it ''a	'
months ago. Let me point out that this co
[Stage Direction]
i
tract was sanctioned by parliament on the 24tli day of October last, and that this supplementary agreement was entered into by the government on the 18th day of February, I think ; and during that time I am assured by those who can speak with more authority on the subject than myself, that there was no such change in the money market as could justify the enormous concessions which have been made by this government. What does my hon. friend the Minister of Finance (Mr. Fielding) say to that ? What did he say to that during this very session ? He was asked by my hou. friend from Toronto (Mr. Osier) :
Mr. OSLER.: Seventy-five per cent of the above to be guaranteed by the government for the construction of mountain
section	$ 21,000,000
And the government agrees to pay the interest on bonds so guaranteed for seven years, that is to say $630,000 per year for 7 years.. 4,410,000

But if bonds sold at 90 per cent, then to provide above $28,000,000 there would be required	$31,000,000
Seventy-five per cent of above to be guaranteed by the government for the construction of mountain sec
tion	[DOT]	$ 23,250,000
And the government agrees to pay the interest on bonds so guaranteed for seven years, that is to say $697,500 per year for seven years.. 4,882,500



$ 28,132,500 SUMMARY OP OBLIGATIONS.

[Stage Direction]
If 3 p.c.	If 3 p.c.
bonds are	bonds are
sold at par. sold at 90 p.c. Eastern division and
Quebec bridge	$117,750,000 or $130,000,000
Prairie section	 13,000,000 or 13,000.000
Mountain section ...	25,000,000 or 28,000,000
$155,750,000 or $171,000,000
Thus if three per cent bonds are sold at par, the eastern division, and Quebec bridge would cost $117,750,000 ; the prairie section would cost $13,000,000 ; the mountain section would cost $25,000,000 ; total, $155,750,000. If three per cent bonds are sold at 90 j the eastern division and Quebec bridge xvi cost $130,000,000 ; the prairie section win cost $13,000,000, and tlie mountain section $28,000,000, making a total of $171.0OO,uw.
[Stage Direction]
That, Mr. Speaker, is a statement of the obligations to which the country has committed itself by the project of last session as amended by the supplementary agreement which my right hop. friend has brought down. Now, if we take Mr. Blair's estimate of $139,000,000, you will find that Mr. Blair in the sum of $139,000,000, which he gave as his estimate, included for the prairie and the mountain section, the sum of $23,250,000 as the amount which the government would be obliged to guarantee. But, if you look at the estimate <>f the president of the Grand Trunk, who says that the prairie section will cost $20,000 a mile, and the mountain section $50,000 a mile, you will And that the government will be obliged to guarantee bonds to the amount of not merely $23,250,000, but of $34,000,000, the difference between these two amounts being $10,750,000. If you add this to Mr. Blair's estimate of last year, it will make his estimate in the light of subsequent developments, very little less than $150,000,000.
further than that, there is another consideration. Every hon. gentleman of the House knows, that last year the member for North Norfolk (Mr. Charlton)-who I regret is not in his place now on account of illness-stated distinctly over and over again, and he spoke as the mouth-piece of the government, that it was absolutely futile to build this railway as a grain carrier from the west to the east, unless you constructed it with grades not exceeding one half of one per cent. I challenged the government, last session, to state the additional cost within $20,000,000, which that would impose upon the country, and not one gentleman on the other side was able to give any estimate founded upon any data which would be regarded as authoritative for a moment by any railway man.
Now, after looking on the obligations of ihe country, with regard to this enterprise ; what do we find, on the other hand, are obligations, which as stated by the president and directors of the Grand Trunk Railway Company to their shareholders, rest upon the Grand Trunk Railway Company ? What is it that they are to do on their part if we undertake liabilities aggregating $150,000,000. or there-r.bouts ? According to the statement of the president and directors of the Grand Trunk Railway, to their shareholders at a recent meeting, the Grand Trunk Company assume a total obligation of guaranteeing three per (lent bonds not exceeding the sum of $15,000,000, or, rather about fourteen and a half million dollars.
It has been stated by the president of the Grand Trunk Railway Company in the correspondence with the government, that this is a partnership. Let me not be accused of misquoting his words ; let me read them from the published correspondence which Mr. R. L. BORDEN.
has been brought down, and laid upon the table of the House.
It has always seemed to me that the gov®1-® ment of Canada and the Grand Trunk Company, being in point of fact partners in ( enterprise.
Being in point of fact, partners in enterprise. While the Grand Trunk fku way Company last year, as its share 0 the enterprise had to guarantee bonds * exceeding $18,000,000, certainly not feeding $20,000,000 ; this year, through ta good nature of my right hon. friend-y*®' same good nature no doubt which led hj to appoint Mr. Blair to be Chairman of dy Railway Commission-this year the obU* tions of the Grand Trunk Railway ComPaj.j, are reduced to fourteen and a half *' lion dollars or thereabouts. On the c' hand, we have obligations on the coU „(i to tlie extent of about $150,000,000, on the other hand we have the other PaL. ner in the enterprise agreeing to enter to the partnership to the extent of ie' tnan $15,000,000.	^9
What were the grounds upon which * ► vast outlay was asked from parlia1® t0 last year ? The grounds were : protect the country from the abroga of the bonding privilege ; secondly, velop new territory in the north a„ fair west; and third, to provide ail a . .pis, adian route. These, stated in a few jC|j were tlie objects of this enterprise w 9g my right lion, friend presented to the y-aeIlt aiid to the country in the very eloh ,e speech which he made last year. We not heard him to-day speak of the ' ing privilege. The crisis which a ye®1 a had developed so acutely seems to by jj0t quiescent condition to-day ; there d "which seem to be that tremendous dangei ^ ^0ge called upon us last year to put aside_ ll)0r-who would say:	to-morrow, and t
row, and to-morrow ; and those [DOT]id °f would say : wait, wait, wait. InSr! that, my right hon. friend to-day *[DOT] tlie self saying:	wait, wait, wait ;	| cpo<>
extent of three years in the constyg of this western railway ; and so fat' n°l eastern division is concerned, he c$ seem to be impelled by the same upland anxiety, and apprehension wide* ated him last year.	0|(j('L'c
Well, Mr. Speaker, we did not to legitimate railway developmei py did not object last year to develop \\ resources of the country by moved several amendments, liowe ^ter this resolution, and we proposed a native scheme to which I will ,
We proposed for example, a L'^uk ' which would commit the Grand ±	\icy
moderate rates. It was moved W J friend from Marquette (Mr. it was voted down by tlie hon. % n,o''® on the other side of the House. an amendment for insuring train l

this f1* Canadian routes. We insisted that G,' government should impose upon the o]j]j„r((,. th'imk Railway Company the same heedp!lons-because they were much more tract	it was imposing in this conv.'ay pi)011 the Grand Trunk Pacific Rail-voted °mpany' an(i again the government 118 down, and my lion, friend the Hot jlaei' °t Finance said that we could beCa '!ve any amendment to the contract, hut wf everything had been agreed upon. Cv*vthmn t.he contract is opened up, when is a .. . lu* i* not agreed upon, when there 1 d0 , commencement and a new deal, "'hich 1aud ^lat any these amendments Put «, ,We suggested last year have been atttendri	contract. We moved an
capita|i~eat calculated to prevent undue stock L'1^011 I to guard against watered Again ?, Preyent speculation in the stock.-Juid	'"e '"'ere voted down. We were
was 1T Nothing could be changed, and G'Uld n£°lnted 0llt to us that the stock J'l'aiid t [DOT] ':>e speculated in because the !'°ld	. runk Railway Company was to
tets shoiu1! fifry yeal'S- But all these mat-e°Utract v llave been corrected when this ??Vernino *s agi,in opened up between the , bpiim, Ut anct the Grand Trunk Railway ?P}' cone and not in any single respect has 10 the co Ss on been made by the company j'very r uti'y ; but in every respect, almost 1;is beer,>ect nt least, in which any change ?, uPe 0f made-it has been made in the 'J1And m a concession by the country to the u^'hat \V.."k, ,Rail'vay Company.
'hy slim.ii Ae Position of affairs last year? (s^b'act [DOT]>
d. there be any change in this lv,11' Wilf',.;,, ,°es uot my right lion, friend l, thber f.4, Laurier) know, does not every £?]>- frL.wi *his House ku
'<) j d the Minister ot . ____________ v____
hon 5ai'ticular know that he and my
v-On.-
si,11- trio.,,1 ,, s House know, does not my t°n) the Minister of the Interior (Mr. (,®ut il0 ^articular know that he and my do atercp l,ia}ld the Minister of Trade and that . Richard Cartwright) de-bi.f vay n.„ was one of the most splendid it °l-e am- i °Sitious that was ever placed wu°t (lp,'.i,, g!slature in any country. Was ot ?1' of &d by the right hon. the Mintio,? Seutfema?nd Conlmeree and by many ... Pse fi. . 'con on the other side of the
T
\
bridge i?.XI!f whatever lias arisen for any 'tVhat did ihe terms of iwie ai!dtho rieUt
e®0ftea pouimer
an [DOT] 6 that +r- tlie other side of the t'a* bPnieii'spi,:118 ntfiway project must be
tin-"16 * if \ Paying one in the very near an??11 at thw. se declarations are to be y 0"

 eir face value why is it that
this agreement ?
ade .'i.'.i tlLe right lion, the Minister of in < rrnmerce say V He said, as Hansard,' page 9361 :
MiAfheve a r ,,
*hl,k >
to n ea"y good bargain may be one s0ft that this .advantage of both parties. I '	ls notably an instance ot this
Sol^ then ,Vl,
hi ,. bargain ,as uotably an instance of a IttaVetv of i, f°r the Grand Trunk. IVhy ster of M)ht solemn declaration of a speaking with allot 4.1 OT,cu|"
01 tlie Crown.
thority as we know he did, is there auy further concession to the Grand Trunk?
What did the hon. the Minister of the Interior say last session ? In the first place he pointed out that the net annual profits of tlie Canadian Pacific were $15,000,000 and then he proceeded to compare this proposition with the Canadian Pacific proposition very much to the advantage of the former. After declaring that the Canadian Pacific Railway ran through a very barren territory, over about tlie worst route that could have been selected in the west, he said :
(Hansard, 1903, p. 8677.)
But this new line o£ the Grand Trunk Pacific Railway will run from Winnipeg to the mountain pass, through a territory, every mile of which is fertile and productive. It is hardly conceivable that such should be the case, yet the information in the possession of the government amply justifies the statement I have made. There is no such fertile stretch of country in the world.
And further he said :
(Hansard, pp. 8678 and 8679.)
The Grand Trunk Pacific, on the other hand, will go from the Rocky Mountains Pass to the coast through as rich a timber and agricultural country as there is in Canada-a. country rich in timber, mineral and soil. Then we must not forget that when the Canadian Pacific Railway was projected, there was no movement of settlers from the outside ; there were no farmers coming to Canada in 1881 from foreign countries. . . . But wrhat is the position now ? We had an immigration into the Northwest of 125,000 people last year. If it keeps on at that rate for the next ten years, think what that will mean to the Grand Trunk Pacific Railway. Think of the difference in that company compared with that of the Canadian Pacific Railway, which went travelling on for years and years before there was any appreciable influx of settlers.
One would think this would be a consideration which would induce tlie government to say to the Grand Trunk : We have here a magnificent railway proposition for your consideration. We are bearing nearly all the cost of the construction of the railway ; go on with it and if you do not see fit to go on with it, we have a proposition here which will induce capitalists from almost any part of the world to embark upon that enterprise. We have faith in it, they will have faith in it. There is no need of further inducements and we will not permit you to have one further concession.
But the hon. Minister of the Interior (Mr. Sifton) went further. After pointing out that the Canadian Pacific Railway had startd off with no eastern connections and with no lines through Ontario and Quebec he said :
(Hansard, p. 8679.)
The Grand Trunk Pacific Railway, on the contrary, will start with a magnificent system of connections, ready to open business the very day the road is finished. What does that mean. It is impossible for us to conceive the diner
[Stage Direction]
ence that will make in the volume of business which the railway company will do. Consider these facts. Consider the prospects of the railway, and ask if there is the slightest reason why any sane, reasonable man, should think this company will fail in its obligation to the government.
Yet not satisfied with tlie proposition stated with such force and such eloquence by the lion. Minister of the Interior (Mr. 'Sifton) all the Grand Trunk Company have to do is to go to the government and the government immediately concedes almost everything they ask.
What is the view of the Grand Trunk directors with regard to this ? Let us hear what Lord Welby, one of them, said at a recent meeting- :-
With the rapid settlement of the country, which will follow the establishment of the line within a very few years, it will be a very profitable line.
And yet it is not enough that the country guarantees three-fourths of the cost) of the western section, it is not enough that the country builds at its own expense the eastern division and allows these corporations to have the use of it free of cost for ten years. Further concessions must be given. An opportunity must be afforded the company to deal in $12,000,000 of stock, and to deal in bonds which will be sold below par. This is done at the mere request of the Grand Trunk, and yet my right lion, friend (Sir Wilfrid Laurier) stands up and says that the concessions are very reasonable and moderate and that the country will be surprised to find that they are so very reasonable and moderate. What did Sir Charles Rivers-Wilson say :
Passing as it will do through the most fertile and most promising belt of country in the whole of the Northwest Territory, there cannot be the slightest doubt that this portion of the road, built, as I have said, under such favourable and economical conditions, will immediately produce excellent results, anil will by itself more than justify the adoDtion cf the scheme in its entirety.
If we are to guarantee three-fourths of the cost of that road in the Northwest, which by itself will more than justify the adoption of the scheme in its entirety, why is it that, when the Grand Trunk asks for further concessions of a very Important character from the country, the government, without even consulting parliament in the first instance, should make these amendments and allow them to be announced to the country by the Grand Trunk people themselves ?
Sir Charles Uivers-Wilson further said :
As regards the prairie section, the government, not unfairly, held that it would be selfsustaining from the day of its completion, and in this view we are willing to concur.
Mr. R. L. BORDEN.: 


Mr.   C@: Hays said :
Here is the Grand Trunk, the parent coT pany, standing with a large traffic ready t0. " B liver it west bound. This traffic is now to a competitor. It does not have to wait h .j ten or fifteen years to build up a traffic >
starts with a traffic right from the begin111 ' and that is of a most remunerative eharaci/ This enterprise which we are advocating t0,"aaj-ladies and gentlemen, combines points and vantages that no other transcontinental lhie the United States or Canada can have.


Mr.   A@: Smithers said :


An hon. MEMBER.: 


Robert Laird Borden: My hon. Hants says, hear, hear.


An hon. MEMBER.: friend

West
From	.,q


Robert Laird Borden: 

P. 8569.)

[Stage Direction]
be the
..."baity _/ Speaker, whatever may 1 a,.Un,c, \Ve [®ngth. an<i power of the Grand 6 n°w «„v!aTe it all in the undertaking we Aga}" subfflitting to parliament.
(Han,, 1 We llaye him saying :
s>
haV903- p' SB™-)
havnpa behind0,1; be4n ®ontent that they shall ana reaanv „ We have required and they ° °f it *LC^nsente'i that they shall be in it Aggjr( 01 form the whole thing.
(han„ * 6 spol£e with equal emphasis :
* b**eV?5 p' 8™-)
hay611 to ns * *" !^e obligation that they have fin® a('oeptpist,given in good faith, that they Uve Oondition - national responsibility which
yn	*1 Vi H i r,... *	mt w w y J '[DOT] " * o n
hp t0	mvolves and that they mean to
hvPCah And m contract, and I am satisfied that UP to it eans' i£ necessary, to make them
live 0 \
Trnn6,. those means when the Urn*. C0lltraet \ Railway did not live up to &etion aL? +„Wbat tben became of the S(;w,to lily , " the safeguards which, accord-givi';,l 1	'll-11' Wend, the government posn 111 g hs thief and my hon. friend further
(tW CUls assurance :
Jt
^arq
Gr '>
p. 11852.)
tcrPr<B*,1't'unk a^/^e^stood' 1 think, between the ®aine tat>on of A. the government that our in
'[DOT]ton of tV. sviornmem mat our m-ISeiiL. However e contract and theirs is the ;?1UUSl°n I ma, wlthout reviving a previous they ' and tifo,Sa^Lthat this is what the Act w,,r® Prena'..j . "'ey have assured us that g0!;llat jj 1	0 to do what the Act requires.
... 'bis a	of that assurance ? Is
Jw ,a business
i>ar6riy hayfi „
° flo whafUr*ld Us that they
government ?
are preto, no irhat'T'u uo lnar rney ar Vy^OCu ^	1 the country requires.
v'h'e i^rinfassurance withdrawn ? tely ..Placed thetagen in such form as would b°n it *>
government in a position to %>g him£^n w? A"*1 my bon. friend (h„	[DOT]	eIf iwith even more emtb^bionai' pf 11853.)
nq Trun o ligations on the part of the *	company are asked as in the
amendment of my hon. friend, all we can say is that they are not in the contract, and we have no right to demand them.
The country, it appears, could not demand anything which was not in the contract, but the Grand Trunk Railway could do so r.nd could obtain what it demanded. Again we have my hon. friend the Minister of the Interior thus describing the agreement :
(Hansard, 1903, p. 8635.)
A clear, distinct and unambiguous contract with a responsible company.
Why, then, is it that this session has been called specially, as we are told by the directors of the Grand Trunk Railway, to consider these amendments which they have exacted from the government, after this great measure had been agreed to and adopted ? My hon. friend the Minister of Agriculture (Mr. Fisher) was not behind his colleagues in his appreciation of this wonderful contract. He said :
(Hansard, 1903, p. 9529.)
Sir, we make a clean cut proposition embodied in a contract signed and sealed with a reputable corporation of great resources which is going ahead with the project as rapidly as possible.
Instead of going ahead rapidly, this com pany has come to parliament to obtain further concessions before one single stroke of work is done in the construction of the road through the west ? And what did my hon. friend the Minister of Customs (Mr. Paterson) say ?
(Hansard, 1903, p. 10292.)
The government's plan is there in black and white, signed by men of repute, signed by the ablest railway men in the world. These men are not mere promoters.
If they are not promoters, how is it we have this demand made on the government, and acceded to by them, that there shall be at least $12,000,000 of this stock of the Grand Trunk Pacific taken over by the Grand Trunk Railway for no consideration, or a mere nominal consideration, and be disposed of by them upon the markets of the world, just at the price they see fit and when they see fit ? What did my right hon. friend himself say ? And I have reserved his remarks to the last, because they are more enlightening perhaps than any of the other quotations I have made. This is perhaps the most significant scrap of the heap :
I do not deny that the Grand Trunk Railway is at the bottom of this enterprise. ... It cannot default upon the eastern part, because, if it defaults upon the eastern part, it defaults upon the western part. It cannot default upon one part without defaulting upon the whole, and therefore we hold them tight to their bargain and they cannot deviate from it.
In the light of what my hon. friend has said to-day, let me again point out those words :
Therefore we hold them tight to their bargain and they cannot deviate from it.
[Stage Direction]


Well, Mr. Speaker, if then my right hon. friend could hold them so tight, why did he not do so ? Why did he permit them to deviate from their bargain ? If they were bound by the terms of their agreement, why does he make these further concessions ? If the bargain was an excellent one for the Grand Trunk Railway, as the right hon. gentleman and his colleagues declared last session, if it was a bargain made with responsible men, and a bargain so made that the other party could not deviate from it, but could be held tight to it, what is the meaning of this spectacle to-day of a parlia ment called specially, as we are told, to consider this further proposition ? What is the meaning of it all ? Is there anything behind it ? My right hon. friend has not given us any explanation. Is there any minister of the Crown who will explain to the people all these matters which my right hon. friend put to one side, but which he should have dealt with ? The country is entitled to an explanation of this extraordinary volte face. My right hon. friend has thrown no light on the subject.
Let us go back and consider what took place after last session. Shortly after the session closed rumours arose that the Grand Trunk Railway would not make its deposit. Then we were told that a deposit was made, but made after the time it should have been, and not such a deposit as the contract called for; but it was declared by the Liberal organs from one end of the country to the other that the stock which was deposited in lieu of cash was just as good as the cash itself- even better, because it could be sold for more in the market. We were assured that the deposit of stock was not due to any difficulty or financial stringency, but merely for the purpose of convenience. Not one word was then vouchsafed to the country concerning any proposition for any amendment to the contract. The Liberal organs everywhere all said that, although technically the deposit was not in accordance with the contract, it was practically so, and all that was required was some merely formal legislation for the purpose of overcoming any technical objection. Well, the government then gave out a statement, which was published in its organ, the Toronto ' Globe,' on the 19tli of December, 1903. That statement was as follows :
The Grand Trunk Railway has deposited £1,000,000 of their guaranteed stock as security for the carrying out of the agreement entered into last session between the government and the Grand Trunk Pacific Railway Company subject to ratification of their shareholders at a general meeting. Inasmuch as the contract requires cash or government securities for the deposit, legislation will be required to confirm the acceptance of the securities which have been deposited, though such securities are worth to-day more than par and their value is unquestionable.
Robert Laird Borden: 
Mr. BROCK.: By way of Halifax.	co&'


The MINISTER OF JUSTICE.: Hal*'"be A'"' peting with Portland ? It is double ^ tance practically.	toilcin^ '


William Rees Brock: What is the use of ta*


The MINISTER OF JUSTICE.: 
The MINISTER OF FINANCE.: They might carry it to Portland if they were perfectly free ; hut under the present contract they are obliged to give the same rate to St. John or Halifax as
to Portland.	.


Mr BORDEN (Halifax).: They will give the same rate, but it will be to their interest to carry it to Portland.


The MINISTER OF FINANCE.: Undoubtedly they would make more money by carrying it to Portland, but we do not intend to permit them to carry it there.
Where was the obstacle to their carrying it there ? Where was the stipulation within the four walls of this contract, which prevented them carrying it there ?


Robert Laird Borden: Where is the restriction to prevent them ?


The MINISTER OF FINANCE.: By the fact that the Canadian rate is not greater than the American rate, and we will trust to the patriotism of the Canadian shipper, that when the rate to a Canadian port Is not greater than to an American port, he will ship by the Canadian port.


Some hon. MEMBERS: Oh !


Mr. FIELDING.: Hear, hear.


Mr.  R. L.@: BORDEN-And then I said :


Robert Laird Borden: Then, it is not sections 42 and 43 that the hon. Minister of Finance relies on to prevent them, hut the patriotism of the Canadian shipper ?


Some hon. MEMBERS: Hear, hear.


Robert Laird Borden: Hon. gentlemen on the other side applaud. We are to incur obligations to the extent of $150,000,000 to accomplish a certain object, and then we are to rely in the end on the patriotism of the Canadian shippers. That is the position in which the government finds itself. Would not Canadian patriotism be just as great if we did not incur this obligation to the extent of $150,000,000 ? How does the expenditure of this money in that way increase the patriotism of Canadians ? Fhe patriotism of Canadians is great; no one respects and values it more highly than I do, but these corporations will carry this freight just where they are making the most money out of it ; and the Minister of Finance has admitted [DOT] distinctly in the quotation which I have read, that the Grand Trunk Railway Company will make more money by carrying this freight to Portland. And it they will make more money by carrying that freight to Portland, and if there is no stipulation in the contract to prevent them from carrying it to Portland, where do yon think it will be carried ? Can there be any two answers, to that question in the mind of any hon. gentleman in this House ? There being no stipulation to I>re vent them and they making more money by carrying it to Portland, then to Portla" if will go in the future exactly as it has gone to Portland in the past.

When the Minister of Justice tells us that you cannot carry freight to Halifax and St. John on a profitable basis, I take issue with him. The records of the operations of the Intercolonial Railway within the past six months have demonstrated the contrary, if the truth has been told us in the answer given recently to a certain question by this government. The government has been experimenting-let me say it was when a general election was believed to be imminent-in sending certain cargoes of grain to Halifax, and a question was asked the House with regard to that, and an answer given, and here are the question and the answer :


Mr. KENMP asked :: 1.	How many bushels of grain have been hauled by the Intercolonial Railway during the six months preceding March 1st, 1904, for delivery at Halifax for export ?
2.	What was the proportion delivered in each month ?
3.	What lake ports was it shipped from ?
4.	What was the rate per bushel from such lake ports to Halifax ?
5.	What was the mileage of each railway over which it was hauled ?
6.	What were the earnings per bushel of each railway ?
7.	What was the estimated cost per bushel for the service the Intercolonial Railway performed ?


Hon. JAMES SUTHERLAND (Minister of Public Works) :: 1.	The number of bushels of grain hauled by the Intercolonial Railway during the six months preceding March, 1904, for delivery at Halifax for export was : Wheat 87,8264 bushels, corn 59,611 bushels.
2.	Proportion delivered each month was :
Bushels.
November, wheat	 47,836
December, wheat	 23,99025
January, wheat	 16,000
February, corn	 59,611
3.	All of it was shipped from Depot Harbour.
4.	The rates from Depot Harbour to Halifax
were:
Per bushel.
16,000 bushels wheat	 5 T5
#1,836 bushels wheat	 4-90
39,9904 bushels wheat	 5.40
25,7184 bushels corn	 4 "94
33.892J bushels corn	 5"00
5. The mileage of each railway over which It was hauled was :
Miles.
Canada Atlantic Railway	 346
Grand Trunk Railway	 34
Intercolonial Railway	 828
6. The earnings per bushel of each railway were ?
Cents.
Canada Atlantic Railway on 16,000
bushels wheat	 2 271
Grand Trunk Railway on 16,000
bushels wheat	 -60
Intercolonial Railway on 16,000
bushels wheat	 2 [DOT] 27J
Canada Atlantic Railway on 31,836
bushels wheat	 2 15


Robert Laird Borden: carried forward any more speedily than were the surveys during the last six months; what will be the result ? The Grand Trunk Railway will have its project exactly as that company proposed it to the government in the first instance. Something has been said, I think, about a portion of the line being probably premature. A whisper of that kind, it is said, is contained, in a circular which was passed among some of the Grand Trunk directors before the recent meeting, and probably further reference will be made to that before this debate is over. My remarks have extended so far that I shall not stop to consider it at present.
With regard to paragraph 4, that certainly is a most valuable concession to the Grand Trunk Railway ; and as we examine one after another all these paragraphs, we are met everywhere with the same situation-concessions to the corporation and none to the country. With wearisome monotony, we see that idea expressed all through the amended contract. Every concession is made to the corporation, but where does the country come in ? We have not so far seen any concession to the country, but perhaps we may strike one before we are through.


William Stevens Fielding: I did not catch something my hon. friend said about some circular distributed to the Grand Trunk meeting. Would the hon. gentleman be kind enough to repeat what he said ?


Robert Laird Borden: I say there had been mention of a certain circular or memorandum referred to by some of the Grand Trunk shareholders at their general meeting. I have seen a reference made by Mr. Allen, in his speech at that meeting, to a a circular which had been sent, I think, to the directors, and I think it was made known to some of the shareholders, and in that circular a certain portion of this line, amounting to some 500 miles or hereabouts, was spoken of as probably premature.


William Stevens Fielding: Of that line which the Grand Trunk Railway was to build ?


Robert Laird Borden: No ; the line which the government are to build.


William Stevens Fielding: Does the hon. gentleman know from whom the circular came ?


Robert Laird Borden: I only know that I saw this reference to it.


William Stevens Fielding: My hon. friend said somebody would produce it.


Mr.   I@: I will give my hon. friend, before this debate is over, everything we have in our possession with regard to it. There was a reference made to it beyond doubt. I can assure my hon. friend of that, if the report we have of the meeting is correct, and I have every reason to believe It is. As to exactly what the circular was or its terms, I do not know, but the expression which caught my attention was the reference to a statement in it that a portion of
the line was probably premature. We nia.v have an opportunity of discussing that late on.


William Stevens Fielding: Will we have the circular ?


Robert Laird Borden: We have not got tfce circular. I thought I made myself plain 1 my hon. friend. We have not the circuia < but it can be produced by the Grand Trun Railway. I am not in their confidence, uw hon. friend is, and he can produce it it a sees fit.


William Stevens Fielding: My hon. friend has referred to a circular. It was not I who } ferred to it, and if there is any obligatl to produce it, it is on his part.


Robert Laird Borden: 
Robert Laird Borden: 
Robert Laird Borden: No. But I understand that this gentleman is a responsible man. I do not know that publishing it in any newspaper would add to its authenticity. But if my hon. friend thinks otherwise^ "it could be published In a newspaper during the week.
In the course of my remarks I have examined the provisions of this supplemental agreement as far as section 5. I come now to that section. It provides as follows :
The government may and shall, preserving always the proportions in the said contract provided as between the prairie and mountain sections of the western division, implement for the purposes and subject otherwise to the provisions of the said contract, its guarantee of the bonds of the said company to be issued for the cost of construction of the said western division, in such manner as may be agreed upon, so as to make the proceeds of the said bonds so to be guaranteed a sum equal to seventy-five per centum of the cost of construction of the western division ascertained as provided in the said contract, but not exceeding in respect of. the prairie section, thirteen thousand dollars ($13,000) per mile.
As I have already remarked, this obliges the government to increase the guarantee to a somewhat Indefinite extent and it opens up means of manipulating the bonds so as to secure great profits. There does not seem to be any check on the commission to be charged for placing the bonds-the section does not contain any direct provision of that nature. Under this section, it seems to me, the road could be very largely constructed at the expense of the government, even as to that portion intended to be provided for out of the bonds of the Grand Trunk. The government, apparently, has no control over the rates at which the bonds shall be placed-there is no express provision In the contract to give them that control. Can they control the commissions to be charged for placing the bonds ? This section seems to be enormously in favour of the corporation, and the checks, if any have been provided to control the placing of these bonds, are altogether insufficient.
Now, I come to sections 6, 7, and 8, which, I think, may be considered together. They have been quoted by my right hon. friend the Prime Minister. They relate to
the period of time which shall constitute a default on the part of the Grand Trunk Pacific Railway Company in meeting the bonds guaranteed, by the government, and they also deal with the remedy of the government if that default proceeds to such an extent as to justify the government in taking action. Bast year, very great stress was laid by the members of the government, and particularly by my hon. friend the Minister of .Justice (Mr. Fitzpatrick) upon the provision that, if default was made ir respect of these bonds the government could at once enter into possession. " could do more than that-it could foreclose .



COMMONS '60

[Stage Direction]
it could have this property sold, could buy it in, I suppose, and operate the line itself. But what is the provision we have here V No action can be taken by the government unless the company is five years in default to the government in respect of the bonds which the government shall have guaranteed. But the company may be in default for four years and six months, and may so remain during the entire period for which the bonds were issued, and apparently, under the terms of this supplemental agreement, the government can not take any action at all. Therefore, it is open to the company to allow the government to provide interest for four years and six months on the bonds guaranteed ; then the company can made the subsequent payments, leaving the government during the remaining years for which the bonds are to run without any remedy at all, and without receiving any interest upon the amount which it had advanced. If I am wrong in believing that to be the effect of the contract my hon. friend the Minister of Justice will be able to correct me when he comes to consider the ' question in committee. But if the company becomes in default for more than five years, what is the position of the government ? Last year, great emphasis was laid on the fact that the government could foreclose. But that remedy is gone ; the government cannot foreclose. It can require that a receiver be appointed. But during the continuation of the receivership, capital will be required for the maintenance of the road and for improvements. Who will be called upon to provide this capital ? The government, of course. A road operated by a receiver or manager appointed under such circumstances is usually not so efficiently run as by a strong and financially capable corporation. Great emphasis was placed last year upon the fact that the government had a first mortgage. It is not a first mortgage now, because, if any surplus arises during the period of the receivership, that is not to be appropriated to the , bonds guaranteed by the government, but 75 per cent only is to be appropriated to the bonds guaranteed by the government and 25 per cent to the bonds guaranteed by the Grand Trunk Railway Company. The government is placed in exactly the same position, it seems to me, as the Grand Trunk Railway Company in respect of the bonds guaranteed by it. The government does not get really a mortgage at all. For, you cannot foreclose it. It is simply an instrument creating a charge under which the government cannot foreclose, but can enter into possession and operate the road, using the surplus earnings of the road for the purpose of defraying interest upon the bonds guaranteed by the government and the interest upon the bonds guaranteed by the company, in the proportion of 75 per cent for the one and 25 per cent for the other. Now, what is Mr. R. L. BORDEN.
the reason for this change ? Is it not trfl ' as was stated by the Minister of Finan and the Minister of Justice last year tfl the conditions of the original agree®® . were thoroughly understood and assent ^ to by the Grand Trunk Railway Company ^ Why should the country occupy a differ® position from that which was absolutes agreed to last year ? For what purpose P this change been made ? What PreS®L,. has been brought to bear upon the £° ,„gt ment to do away with that which, j year, was thought to be of importance on which, in their official statements^
* "	"''Vr
to me that this provision opens up a i'a curious possibility. And it is this :	st
During a time of prosperity the intei upon the bonds guaranteed by the g<>v w ment may be paid by the Grand eo
the House and the country the govern®®1, placed a great deal of reliance. It se.
Pacific Railway Company, and that mn? „,
iod of oommornlfll
on during a period of commercial exp®11® during a period when the country ifl perous. The company may even during period remain in default for four years six months. But when a time of dePr® yj,jit
comes, when it may not be convenient g(j that railway should continue to be op®, pj-by the Grand Trunk Pacific Railway yage pany, the government will be obliged tor[,pen hold of it if further default is made.	ypfor five, ten or fifteen years, this d ment will be allowed to keep tljatoUefs in its possession, to advance any ® apc® necessary for its operation and mainte pgji
during a period of depression ; but the time of expansion again comes.
wbeU
back interest has been paid up, then ajiA ernment will have to give up the roam,h $
'cbJ
ciuuj^ui, Will 11U. V C lAJ JjlVW Up	- V\iC**
the Grand Trunk Pacific Company, the only another name in that regard t VS Grand Trunk Company, will take , tiljp®" and earn all the profits that can be o ' ^ 0t out of the road during the further P®p ® commercial expansion. It does not b® ^ gti' me that there is any justification t° jfl w pulatiou of that kind which was u°L)tiU'tlCi contract as originally framed, a c r which had obtained the assent and BVg fo of the gentlemen who are now nsn these modifications.	A ;t d°e„
and gof
deals with a matter that was discussed in this House last year
I come now to paragraph u, au^e S' y seem to me that in this paragraph ,apU
ernment has excelled itself. I>ar"Z {Pa%
very oSsi
bility of speculation by the Gfra® Railway Company in a very of stock of this company which adni ^ jja* to be handed over to the Grand 1 iaiderflS,j3 way Company without any c0'of except what is called their supP°	_
scheme. Let me read the clause .
,	,.j,p 27tb
Notwithstanding anything in U,B, t],e u '	-	tained, 1 (ter ' {
n0t' doll*rfre8
graph of the said contract con Trunk Railway Company shall acquisition of the twenty-five mil11 g9 s' , m/Ml tionc^* '
common stock therein men

i, .
be Droy directors, not exceeding one thousand), of s11ei',ente<1 from making any such disposition ^ailw common stock as the said Grand Trunk that nf may deem expedient, provided however Shan 1 i ?aid Grand Trunk Railway Company ®araer U£ins the delay mentioned in the said Said Lap," continue to hold a majority of the Grand u- hy such title as shall enable the said J>oljev r/unk Railway Company to control the y °t the company.
Very6 [DOT] words of that paragraph are Lter S1fnlfi®ant, and 1 will deal with them then i
[Stage Direction]
With members of the government took
^	.°n' Mr. Speaker, every hon. gentlet'oa th this Mouse will remember the posi-Witt, , a*- members of the government tool; tQei,to16gar<^ to this stock last year. Amendllousio Were moved from this side of the Qranl More than once, requiring that the stoeh >
t Un'1 Company should pay for that on t^('*t Par, and arguments wen
were advanced
iVoui'J °ck should pass, as we apprehended it Ti'hnl. Pas,s>
into the hands of the Grand aiinalv ttailway Company for a mere no-that Ponsi,leration, or for no consideration, C}ra11(} ^ 1; being afterwards held by the Used f Al'unk Railway Company would be e.\-act(l|1r the purpose of increasing the rates the	the people of this country for
stockl lP®se of paying dividends on that attitn'lo N°w there is no doubt as to the the government then took, *h the was repeated over and over again [fiend strongest possible terms by my hon. h*h. Minister of Finance, and by my °hce, ;Ulea<i the Minister of Justice at least [[lent. ' x by other members of the goveritdei
Wer
oi<i t do arePMi°ns,
then
not know whether the official tlie solemn declarations, which
[he Unn, ' friend as having been relegated to [ few b, scraps. But let me read to him ;[l°re B^L_them, and if there ever was a
[hat whi ^[[ordinary change of front than ['My lf). 011 is presented by the document J°n, i ' e(t before parliament for ratifica-\r °th*,. °Ut* bke some hon. gentleman on -i. hop fs'.(ie °f the House to point it out. aMvei. 't„r,eP[t the Minister of Finance, in oi the tv objections made from this side *Ji0 of tlUs®>
used this language ; at page ue Hansard ' :
ct°«r,stocv! Pr°yiiled that practically the combo, 25.00() non1 tais company, to the full extent
^ C	UU, Shall Lev Vvwivl

,	-U„
tbo, 6vcn V,,. ' shaH be held, not by promoters, han rs Indii.iv o!<3 Grand Trunk Railway pro-C'vay Com^ 'L but by the Grand Trunk
2C theyrPoath®re ia a chance	
[Stage Direction]
.uoo, an only hold 1,000 shares against
I want to for promoters
b'ari[Lthe stock
isi now to be put upon the
th rhet, is	_____________ ___________
hw r®Hson 11,°iV- to *>e speculated with, and kjpbs ana ,, , cb was put forward as a W ahCe lsmr 4?ent reaRon by the Minister of quo /6" absolutely disappears. But 11 a Utttr. ag!|in from that hon. gentle-Ue further on :
(Hansard, 1903, p. 8570.)	.
If the Grand Trunk Railway acquired that stock at a comparatively small sum and afterwards floated it on the market at a higher sum, that would be a proceeding which might be open to objection.
Well we know from the declarations made at the Grand Trunk meeting, we know from the comment upon those declarations made in financial papers of the highest class in London, that the Grand Trunk Railway Company expects to receive that stock, the whole of the $25,000,000 of that stock, for the support which they are giving to this enterprise. I will deal with the amount of that support later on. But the Minister of Finance continued as follows :
(Hansard, 1903, p. 8570.)
But the Grand Trunk Company must not only take this stock, but hold it for all time ; they cannot put a dollar of it on the market. It is absolutely impossible to buy a share of that stock ; it must be held by the Grand Trunk Railway Company itself and no person can buy or sell a share. Where then comes in the chance of speculation ?
That was my hon. friend's standard argument. Yet in face of that declaration by this government, we have a clause which puts more than $12,000,000 of that stock in the market for speculation. But we do not know for what reason the government is permitting this, because my right hon. friend this afternoon absolutely threw no light whatever upon that question. But that is not all. The Minister of Finance, if I may quote him again, and if I ihay be permitted to regard his official declarations in this House as not scrap, went on further ;
(Hansard, 1903, p. 11230.)
I maintain that we are not at all concerned as to what these two companies do in reference to that. If it were stock that was to be placed in the market and sold I could at once recognize that we would have a great deal of interest in it.
That interest, Mr. Speaker, seems to have been absolutely lost when this supplementary agreement was entered into by this government. My hon. friend continued :
If this stock were to be put in the market, taken over by the Grand Trunk Railway Company at 5 cents on the dollar, and in later years it passed into the hands'of other people at 100 cents on the dollar, If the question of freight rates comes to be adjusted at any time and it becomes a question whether we are to have such freight rates as will earn a fair dividend on the 100 cents that the present holder paid, or on (he 25 cents that originally went into the treasury there certainly is much to be said in favour of the man who purchased tho stock and who says : I paid 100 cents on the dollar for it.
That is to snv, when this Grand Trunk Company takes' $12.000 000 of this stock which it receives for the support it gives to this enterprise, and puts that in o t hands of bona fide purchasers, those men
[Stage Direction]
will be entitled, according to the admission of the Minister of Finance, to come by and by and say : We have paid 100 cents on the dollar, and we want you so to fix the rates upon these western lines that we shall receive fair and just dividends upon the money. But Sir, that is not all. Let me quote further from my hon. friend the Minister of Finance, because of all the Ministers of the Crown he was the most pronounced and the most emphatic on this subject. He said :
(Hansard, 1903, p. 11231.)
The strength of this enterprise is to he found In the fact that the Grand Trunk Railway Company are not only behind it but they are in it and of it. If the Grand Trunk Railway Company take over this new stock of 25 cents cn the dollar, they cannot sell it to anybody at 26 cents on the dollar the next day, and they cannot sell it later on for 100 cents on the dollar. It must stay in the treasury of the Grand Trunk Railway Company.
But, in order that there may be no doubt about the position of the government in this regard, my hon. friend the Finance Minister was even more emphatic than that later on. Although he was assisted on one occasion by the hon. Minister of Justice, he apparently took charge of this matter on behalf of the government, because he put forward forcibly and cogently, as he always does, the best argument that could be made in support of the position which the government assumed at that time. He continued as follows :
(Hansard, 1903, p. 11851.)
The stock will not be allowed to go into the market and pass into the hands of other persons, and possibly at a later stage, be treated, in the fixing of freight rates, as capital at a fictitious value.
The stock will not be allowed to go into the market, he said. Well, under this provision, as I understand it, stock to the extent of $12,000,000 is to be allowed to go into the market, is to be allowed at a later stage to be treated, in the fixing of freight rates, as capital at a fictitious value. I would like to know the reasons, if there are any, which have induced the government to make this tremendous concession, fraught with so much importance to the people of this country with reference to freight rates. My hon. friend the Minister of Finance continued as follows :
We think it important, for several reasons, that the Grand Trunk should take and hold that stock and not dispose of it	Therefore, we insist that they shall acquire, take and hold that stock.
When and why did they stop so insisting ? That was the position of the government at that time. They were insisting. If they were so insisting at that time, why did they afterwards assent to this provision of an exactly contrary import ? We are treated to-day to an entirely different position of affairs, to a new contract, a new stipulation, Mr. R. L. BORDEN.
which permits every one of the evils agad' which my hon. friend the Minister of ** ance last year said that the country was { solutely and entirely safeguarded. But,1 ' is not all. I do not wish to weary the with these quotations, but I think it is ot r portance to have these declarations might call them pledges

which were m® to the country by so important a member the government as my hon. friend the M ister of Finance placed at some length fore parliament and the people for the Pe pose of eliciting an answer; if answer tm^ be, as to why it is that in respect to this m important matter so extraordinary a efia of attitude is presented by the governingi ( My hon. friend the Minister of Finance n farther. He said :
(Hansard, 1903, p. 1185.)
We claim that we do get from the old o Trunk Company two things of importan which I have referred

one that they shoul® eS and hold the stock and thus identify tbems ^ closely with the undertaking, and the s tj,e that they should become the guarantors ® bonds to the extent of one quarter or P jjdirf more of the balance required for the bu* ;Bg!3 of the western division. In these two we have obligations on the part of the . if Trunk which we think are of value ; a o1" additional obligations on the part of 1 th® Grand Trunk Company are asked, as gsf amendment of my hon. friend, all we w® is that they are not in the contract, a have no right to demand them.	,, rlly
Apparently the Grand Trunk B'l1
Uic maiiu j-iu,..-	, {1)9®
Company had the right to demand 0t this position taken by the £°ve ^011$! so strongly and so firmly through the
[Stage Direction]
of my hon. friend the Minister of 1 , should be absolutely departed from, speculation in the stock which is pnt>" to be so fraught with evil to tn glg1) lie should be permitted for some $3 which has not been fully disclosed House. But let me give one or twe be quotations from my hon. friend, heck pjjtSi lias placed the evil, which he now so strongly and forcibly before the c 0tn that I cannot do better than let the jj it-have the full benefit of the opinion !! e$ was not slow to announce at that ti
said :	delict
The Grand Trunk Company would be lg0 ed to have that clause stricken ou >
toCK they might be allowed to take UjWi ey ple" and float it in the money market if tn ed, no doubt.	^ tl)6
My hon. friend thoroughly reaH?,ued ^ situation at that time, and he com follOWS :	atV
nl°rrii
tifying to the promoters of this ent® ^
That, I have no doubt, would be ferpr*36 Tying to the promoters of this on
Well, the promoters of this enterp1 every reason to be gratified n0''r' fi'if ( they have exactly that which my n ' w'1' e said they should not have, aD" j us. Kq means they got it he has not inform oglJa* has not been quite so eloquent a®

Plainingthese matters, certainly not nearly eluent as he was in regard to this rail-'y last year. Let me continue the quota-1011 which I
(Han
am reading :
ansard, 1903, p. 11875.) the r>
kave Put that limitation in, not to please Suit	Trunk Company but a.s an additional
g0j antee to the people that the stock is not at	he placed in the market and floated
L a fictitious value.
Trunk* did not put it in to please the Grand tool- -4.Railway Company, but evidently they Wav n out please the Grand Trunk Railfihv i °mpany>
and tlley t00k Jt out wltll0Ut so fnis.tiflcati°n whatever, if the arguments
ecuu°r1'Cibly Presented to the House and the ate f* Iast year by the Finance Minister °t any value whatever. He continued '
t° gjay'. hnhesitatingly, that it would be better other 6 lt; to the Grand Trunk, even without any dealt c°n|Htion, than it would be to have it tfiarlcet 1 to be used stock speculators in the
thatlcl n°w the company is presented with joy !se- Does the country hail with be dent aUse wllicl1 permits that stock to ih the11 ou* to use6 by stock speculators friend ®a,rket ? Is that what my right hon. hiodero? ls an exceedingly reasonable and guag ate Provision in the light of the lanin cl}s„„ e? by bis most important colleague year [DOT]>
this subject in the House last
littu'yelb it would seem to me that a find th °le exPb;ulation is due to the House yet heirriCountry than anything we have tep,	from the right hon. Prime Minisjittle nnUt, fbat is not all. I have one other t«ter of °r?tion from my hon. friend the Min-the jj I mance, with which I will trouble t° to0 R 1 am not inflicting his views the om,?5eat an extent on the House and c°untry. He sald :
„ BhtS we' 1903' p- H221.)
"o conrrt? Protecting the people against any j°topanv "'"on, because we are refusing the It . stock*16 power to put a dollar's worth of ls hot r,°n *"be market and sell It to any one. J?*rket lt egotiable, it cannot get in the stock a? ihhocenfuuot be the subject of speculation; (W say * Tl third party will be able to come dn * r for tvPaili ln sood faith 100 cents on the tkVi?end on v v,Stock an|f am entitled to get a
nat the	1 Paid. We have stipulated
must no0ck cannot be put on the market.
Unk Ran main In' "	'	' -	
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Mr, gWai,way durin;
??ns of efi!ve,r' i® It conceivable that deelara-SW	should be made by the
important n of tllis country in regard to so bR blade in+nlatter as this, that they should ofr' 1903 ,,,,, month of September or Octo-]., r'l-diru;',,,'!'1'! that in the following month {,,, execute o*'j government would deliberat-hav8 evo,.,-11' enter into a contract stultitbe6 quoted ?neT0f lts words which 1
ten rlght >7 Is it conceivable that. DayUtry wPrIme Minister of this lfHhent ,3), 'lure to come down to without some better explanation than he has given to-night in regard to this most extraordinary change ? What is the meaning of it all ? Here is language of the most pronounced character, here are evils pointed out by my hon. friend the Minister of Finance, here, in these quotations, he declaims upon the dangers of stock speculation. He says here that not one dollar of this shall be placed upon the stock market for the purpose of speculation ; he says that the Grand Trunk would be very glad to strike out the restriction, but the government will take good care that it shall be kept in-and yet, within four months after that, this stapulation is taken out, and more than $12,000,000 worth of this stock is handed over to be speculated in.
But my hon. friend the Minister of Finance was not th'e only member of the government who took that position. My hon. friend the Minister of Justice (Mr. Fitzpatrick) took the same ground, and here is his argument :
(Hansard, 1903, pp. 11219-11220.)
My hon. friend's fear is that this stock, issued at a low figure, and falling into the hands of the public, will afterwards be taken into account, and the question of freight rates will be considered. My hon. friend has overlooked the fact that the $25,000,000 of common stock, under the contract, is to pass into the hands of the Grand Trunk Company and will not be dealt with on the same principle as it would be if it had passed into the hands of the general public. That company will have to take this stock and hold it, which would not be the case with the general public.
Let me say, that if the Minister of Justice overlooked something on that occasion, the government would seem to have overlooked something on this occasion, viz.:	That all
the evils that have been portrayed by these gentlemen1 are now before the country, that the country is face to face with them, and that the country will have to encounter them if parliament sees fit to ratify this contract which contains a stipulation wholly inconsistent with the declarations of the government last session, as to what is in the public interest.
But that is not all. There was a gentleman) with us last session who is not with us now ; I refer to Mr. Blair, the Chairman of the Railway Commission. The judgment, the ability, and the integrity of Mr. Blair have been certified to by the government in every possible way. They have been certified to, not only by his appointment to the chairmanship of the Railway Commission, but by the declaration of the Prime Minister in this House during the present session. Let me quote what I believe to be the words of Mr. Blair, and which, if my information is correct, were communicated by him to his colleagues ; let me quote his views on the subject; and if I am mistaken in any wav as to the authenticity of this memor andum from which I am quoting,Jet me say that the words which I attribute to Mi.
[Stage Direction]
Blair and which I believe were used by Mr. Blair in discussing this matter with his colleagues, are words which carry great weight of themselves whether they are uttered by Mr. Blair or by any one else. Mr. Blair said :
Any new transcontinental lines should be built under conditions which would make every dollar of bonds and every share of stock available in cash as near the face value as possible. If bonds may be disposed of by companies at a large discount, and stock distributed gratuitously, or on terms which produce little or no cash at all for construction and equipment purposes-which has been forbidden by law-the business such railways may do will for dividend purposes be always unduly burdened and will be a grave handicap for all time to the development of the interior. With capital shares and bonds ultimately coming into the hands of innocent buyers at prices increasing with the growth of the railway traffic, it will be. impossible for either a Railway Commission or the government itself to reduce tolls below a dividend-paying basis.
That is the opinion of an expert who is certified as such, by the Prime Minister of Canada ; certified as the best man in Canada for filling the position of railway commissioner-. That is. the deliberate opinion of this gentleman, and it is absolutely at variance with the position which the government takes in asking that parliament shall amend this contract by inserting the stipulation now proposed. Mr. Blair continues :
An appeal from the holders of the company's bonds and shares, to fix tolls sufficiently high to ensure a moderate dividend, cannot easily be resisted, and as a consequence the country, through its business and traffic, is in effect as much charged, though Indirectly, with the weight of these obligations as if the amount was covered by an issue of government bonds.
Moreover, the system is not sound. Why should a few people be allowed to make themselves millionaires in such a way ? No OEe nowadays puts his money into the capital shares of a railway company at the Inception of the undertaking. It has been done hitherto, it is not done now, and why not ? Because with the government assistance supplementing the sale of bonds the railroad can be built. And yet capital shares are issued by the million and appear later, when the enterprise becomes a success, in the hands of the purchasers who clamor for dividends upon them.
This is the way in which the question will present itself to the very man whom the government have put at the head of that railway commission which has to regulate these rates. He says : They are not easily to be resisted ; issue that stock for nothing and place it in the hands of promoters who can put it upon the stock market, and afterwards it will come up in the hands of men who have paid one hundred cents on the dollar for it, and their demands for dividends, as Mr. Blair says, are not easily to be resisted. He continues :
Robert Laird Borden: 

COSfMOlSTS

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of the Grand Trunk Pacific Company at the end of 50 years. Paragraph 10 is as follows :
Paragraph twenty-one of the said contract is amended by adding thereto the following cld(US6 *	*
* Provided, further, that, in the event of the government determining to undertake the operation of the said eastern division, the^ company shall be entitled for a further period of fifty years to such running powers and haulage rights as may [DOT] be necessary to continuity of operation between the said western division and other portions of the company's system and the Grand Trunk Railway system upon such terms as may from time to time be agreed upon, or as may from time to time, in case of failure so to agree, be determined in the manner provided by paragraph 24 (2) hereof, which is hereby made applicable to cases arising under this paragraph.
Paragraph 11 of the agreement declares that:	-
In case, during the currency of the lease of the eastern division, the company shall have constructed a branch line or lines running from a point or points in the said eastern division, the government shall, if at the expiration of the said lease, it shall determine to undertake the operation of the said eastern division, take over such branch line or lines as the company may elect not to retain, at such value as may be agreed upon, or as may, in case of failure so to agree, be determined in the manner provided by paragraph 24 (2) of the said contract, which is hereby made applicable to cases arising under this paragraph. If any such branch line or lines shall have received any grant or grants under the provisions of any Act of the parliament of Canada, the amount of such grant or grants without interest, shall be deducted from such value and the difference only shall be payable by the government upon the taking over of such branch line or lines.
The company will build branches and during 50 years it will find out which of these branches are profitable and which unprofitable. At the end of 40 years it can simply say to the government:	This
branch and that ' branch and the other branch we have found to be unprofitable. We have made a mistake In building them, they have been of no use to us as feeders of our line, we elect not to retain them, and you must therefore take them .over and pay for them. But all the valuable branches, those which control the trade of the country, without which the eastern division may be of very small value indeed-all these the Grand Trunk Pacific will retain. And by the erection of terminals at important junction points, thei Grand Trunk Railway may also control the situation In another way ; so that at the end of the period of forty years, the government will find itself absolutely at the mercy of the Grand Trunk Pacific and be forced to accept such terms as may be dictated by the company.
Needless to say, the original agreement, as amended by this subsequent agreement, puts Mr R. h. BORDEN.
hilt
out of sight not only for fifty ypa1®' 0i possibly for a century, any possibility q. extending the government system ot '0f ways throughout the length and bread g;J. this continent. That possibility is P°1 e0t>
tirely in the background. This govern^ ^ I say, has no mandate at present to ^e into any such agreement as will pm- q,js possibility of government ownership m js
country absolutely out of sight.
There
„	_____„	___ _	. fftV'
a feeling growing among the people m ^e\-our of government ownership. Tb®* sti! ing may or may not develop, but I that it is not wise or prudent for * ernment, and the government has u? tjjiS
date to impose such a condition
untry
to
nilie'
at
do,
in*
contract as will prevent the co some future time, if it desires so from extending the system of govei railways across the continent.	reg^i
Let me now say a few words with jagt to the general subject. Our propos-year was to extend the Intercoloiua way to Georgian Bay. That is a P d V>
by which I for one am still PreI)i qjiP^' stand. My right lion, friend said- *oUlice0 on one occasion, that Mr. Blair de pN' our proposal as a mad scheme. But_ _„{!.
posal to extend the
ixu r-:Ln;ui-. - ' - .-olll'w .1 Intercolonial to ^ eJ#, Bay is one which has always co® ^ jflJ itself to Mr. Blair, and as to which gtr0® expressed himself publicly in v®Vln,j language. When my right hon. In„lftjr Prime Minister suggests that Mr. ^ ft tflK nounced the scheme we proposed	ar®* ,
one, I do not think he will find any e(j for that statement in any language Mr. Blair. Mr. Blair certainly	0pl?
XVII. JJ1RU [DOT] 1VAI. U1X1X1 LCf uaiuij - - J.	.Jj
the scheme of the government, n mad, but as an unjustifiable	1
waste of public money, but he n gard use of any such language with use aioi1 the scheme we proposed. If he eve eXte>l3|)t->
such language with regard to tne gay, * of the Intercolonial to Georgian would have expressed himself ah arefi>
;. contradiction to what he said ih „moi prepared memorandum. In that dum Mr. Blair said this :
[DOT]	tpe u°if
The observations thus far made by tj,at 1 tpi signed amply justify the conclusm tggt 01 quite misleading to look for a ta
quite unoicaunife	~
principle of government ownersn *	tv
perience of the Intercolonial, or tcauSe s principle as inherently defective	a rr
perience
principle	oo	iuuo*vu«,v	choWiJ1B,rfnVe'>
comparison of net results the s	go
tween the corporation railways ai tlJ0 >
teo* ment railway is unfavourable There is no good reason which or which in the opinion of the	of 0
tually exists, why the S°veJrn?[L prlj, ** l cannot apply and work out t	e$bei
government ownership as S!IC itisft &eV is being worked out in other r. cies and	in	foreign lands.	of**,f	aiv	ftorThat is	the language, not	P	is	$
nary individual, but of a man ' ,,]e tb!l ed by the government more cM other in Canada to deal with
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Placed ua<\,w1'0' for that reason, has been i'nfiUv-,, ,. is government at the head of the ^ Commission. Further on Mr. Blair
and would place that road on a very good and paying basis. Mr. Blair then continued as follows :
Til
^tercoinn8! i°ne certain means of putting the and that *?13; upon an interest paying basis, ^ c is by the extension of its line.
tlie S** stl'ike you, Sir, as characterizing It strime w^icIi I proposed as a mad one. S(-'hem<TeS rather as commending that Th as wise and prudent.
3 hirthi^n*'rea* extension has done much ; but ^everim-e extension will do more. While tho Part oj tl?t railway has captured the larger l3estihed t tr.afl5c originating in Montreal and Points, u if1' inIau|I eastern and even export 6<1 to tak "as no eenuections west and is allow-railways h °nly w^at traffic the two corporation ^'oter ov,-° tlot care to retain themselves. All feach ths lpnients from the west ordinarily i e CananiSeaports of St. John or Portland via lvely, ana , Pacific an(i Grand Trunk respect-pja although the Intercolonial is fairly ~°V it m t0 carry height to Halifax and St, Portion ofuat itiways remain excluded from that eal, So j the business arising west of Mont-j	® as Present conditions continue.
|ht<l nJ.? an elaboration of what Mr. Blair
t said- 1
tvh0 hastUSte.r s o°t only yeceiyed his highest approbation, , °tt|h)isi; by appointment to the Railway , ehd's b?' but also by my right hon. Ses**ion. yrogium of him during the present The	^*air continued as follows :
r!lat a pnrfsighed has long held the opinion tj athed b on the Georgian Bay should be
tralha<i with%ln„te/colo,nial- and ,thus a connects .P°rt nrT tae Caaadian Northern by water Ca„ x Greeks fn ant* Practicable for from four thf* lan No>.f^nser than caaal navigation. The 'Va^Sc>Vernm(1„* rn. woul<i gladly co-operate with the c°nnecti 01 ra'lway, as it has no other rail-"'o\,i?0vernin2,ntnor any interest antagonistic to dire . he in , 1 SJ'!te"- Duluth and Chicago tre^f fhroue-h0ucb with the Intercolonial, and to J °r Lgvio rates could be arranged to Monst- John e ,ring the summer season, and Ann	n° Halifax during the winter,
bj- n1. the
and I commend it to the as the statement of a man
the
EV Ration it gave the House this at ®tain f-absoIute feasibility of carry-
"	GeOrsrinn Ttoyy	TTelifnY
government has demonstrated,
than ®«rl;
h a ...
I	Which ihe
Georgian Bay to Halifax
that-	Profit-a profit far better
tyur Very ,	me Intercolonial earth) ve.ltlf,. 'ar«e Portion of its freight, 0 say . e to say. But Mr. Blair went
^ «y ^	*
?°iiig*ei1t scalp1,1!1 ll?n °f storage elevators on a
o!4 6Ver^ard' until10,ld ?rail1 in iuantities not Ver r.er'incre;ia,„i aav£gation closed, a large
, n. [DOT] <ncrpoo) """gallon oi,
to'ltn<liah term trafflc would find its way
KL?? Would6' bllt
coi,
way In In-at such fairly paying
o^MaCof^P® out tlie deficit on' the which we hear so much,
The advantage of such extension to the Intercolonial can hardly be over-estimated. If the Canada Atlantic system were acquired a traffic-producing section of the country, with a growing local business already created, would be found on the western portion of *he line ; while St. John, Halifax and Sydney at the other end would equalize the existing conditions and carry the intermediate section, a section which, it is only fair to say, has within the last few years shown signs of considerable progress and before the lapse of many years may be expected to be self-sustaining.
Let me state that argument in my own words, as I understand it. Mr. Blair says we have in Nova Scotia and New Brunswick a splendid paying portion of the Intercolonial, but that portion has been handicapped by the fact that the line from Moncton north to the province of Quebec has not been a paying portion. He says the Intercolonial is cut off from western connections. Acquire the Canada Atlantic, or expropriate it, and you will have these results. In the first place, you wil have in the east of Canada a splendid paying portion of the Intercolonial. In the second place you will have in the west the Canada Atlantic system, or some other system possibly constructed by the government itself, and that will be a paying road running, as it will be, through a country where there is no water competition.
And further than that, you have tho possibility of an enormous through-traffic, by the Canada Atlantic, if acquired by tbe government, over the Intercolonial to Halifax and St. John. And, putting all these things together, he says there can be no doubt of the wisdom of acquiring that railway and thus completing the extension of the Intercolonial which was begun when it was extended from 1,4vis to Montreal. That is the view which I am commending to the government because it is the view of a man upon whose judgment they cannot pass any reflection. If Mr. Blair does not understand something about transportation in this country,! surely he would not have been put in the position he now occupies. If he had not made a study of railway problems, he would not have received this mark of the government's confidence. But my right hon. friend was so impressed with his ability, that putting to one side the strong speech Mr. Blair bad levelled at his project, putting aside even the reflections which Mr. Blah-had cast upon the government, but looking only at the public interest he said : Here is the man of all men In Canada to deal with these questions. I give my right hon. friend this gentleman's opinion as to what ought to be done. Does this seem like calling the acquisition of the Canada Atlantic a mad scheme ? On the contrary, he says it win prove the salvation of the Intercolonial Kan-
[Stage Direction]
way? And why has not the government adopted this course ? The only reason that has ever been given to the House by my right lion, friend, I think, was that celebrated vision of his when he stood at Depot Harbour, and, looking out upon the wild waste of waters, came to the conclusion that the government could not engage agents to canvas for freight and could not have anything to do with steamships. These considerations do not seem to have impressed themselves upon Mr. Blair, who, of all other men in the country, according to the opinion of the government, has most closely studied and best understands the problems which attend the question of transportation. Mr. Blair continued :
If the Canada Atlantic system were taken over by the Intercolonial, the tolls now in force on that line could be maintained. No complaints have been made with respect to these tolls. That they are moderate and acceptable to the people who use the railway is shown by the entire absence of agitation, public or otherwise, against them. That these rates are also profitable is shown by the net results for the year 1902, which amounted to $618,000, or 4 per cent on $15,000,000 after paying all operating expenses for the year and making large outlay upon betterments.
Then, Sir, summing up the whole situation, Mr. Blair's view is this :
From the purely Canadian, national point of view, the Intercolonial would then have advantages over any other railway in Canada. Its traffic would find an outlet during the summer months at Montreal and Quebec, and during the winter at Halifax, and St. John, and there is good reason to believe that it would give -.he two Atlantic seaports (the Canadian Pacific also serving at St. John) all the business they could conveniently handle for some time lo come ; and moreover, from the point of view of its paying prospects, the outlook is in the highest degree encouraging. At present there are 400 miles of good paying railway at the eastern end of the Interco'onial Railway. Extension to the Georgian Bay, by way of the Crnada Atlantic Railway, would give 300 or 400 miles of profitable railway at the western end, and, as has already been pointed out, these two ends together would be able to carry financially the less productive and intervening section and afford a substantial surplus towards paying interest on the capital outlay.
Let me commend this view of the situation to my right hon. friend, and let me ask him whether, in view of these strong and forcible words of this man whose judgment he so much) commends, there is not- reason for drawing back from what the government are doing at the present time-reasons for seeking some better solution of the transportation problem than is afforded by this measure ? The government need not be afraid of drawing back. They have already receded from their position on a dozen or more different points, even from the most solemn declarations have been made by Ministers of 'the Crown. It would be impossible for them to depart further Mr. R. L. BORDEN.
from their professions than they havei ready done. And, though they have culed the idea of extending the Intercowa^ to the Georgian Bay it is not tod la];etijj9 them to draw back. Let me commend -t to my right hon. friend in the same seoJ) which prompted him to believe that W gg this side would regard this agreement eminently reasonable and satisfa® There is time for repentance, even ^ this government, and the extension ,(j the Intercolonial to Georgian Bay "0 {e-be a bringing forth of fruit meet f°J ^ pentance, at which I am sure, the co 0t would! greatly rejoice. The develop®? gt the Intercolonial Railway, the operati the government system upon a larger. ' ,t than at present, would probably bring ' a better management of that railway) would tend to produce better J 0li;y than we have hitherto had-not ted for the reasons to which I have aov ^ and which have been put forcibly by .gyg-Blair, but for the reason that if f^1 ^efc® :em became a very great system, the ;j ight of public opinion beating uP°b jtflbj
llgni oi pumic opiinuu ueauui, "v-	}
all parts of the country would neC®LtaD® better and more economical manage® * ^ one less subject to political influenc ^
has prevailed In the past.
revanea m me past. As I session, I would like to see the Inte ^ jiti-absolutely free, if possible, from pawjed 10 cal interference. And, if it were ext p1', Georgian Bay I believe not only \Ve,.' vince of Ontario, but the great west would receive very great hepen [DOT] should thus have better control c°^t than we could obtain by any rail' , mission or any similar tribunal, fl efficient. Every reason that has 0f v>
vanced by the able men at the ae* oSl)i** Grand Trunk Railway Company	t0 ia
that railway int< -	

	-
to be applicable
These gentlemen of the Grana -'-'"Weir it as imperatively necessary that ,g should reach the Northwest. Mr- , plainly points out that if they do to the Northwest they may not u>
- * able to pay dividends on stock w* returning something to the sn	e
Well, if It is a good thing f?r tlie >Tfa < Trunk Railway to extend into rea « t<>
west, why is it not, for the sai good thing for the Intercolonial	,
" "	*	0{

is it not, for the ®a, UflijW"0jjS for the Intercolonial * ^9,
xtend to Georgian Bay 7 r..apO **;. oi [DOT]hlcli make it desirable for the gli®1 ,ltit o go into the Northwest to iSjible. raffle make it not only a<' jj It lecessary for the Intercolonia. p tr j9j) >ose to secure a part of the w ge° o have its line extended to	j,t
r	.j
ow, I suggested last session tb w d® possible for the govern® 0f rfll0# >ine means by which the	rjoi- gpe
)w running north of Lake * ,e tfffi 3 utilized for the purposes or n
ipd
!ay.
Now﻿777

is eastern. I pointed out that that road titoefe of handling, I believe, five or ten 7 rm,ri eJraffic it handles at present; and sHbleeft e suSgestion-which I said was rv„j u to first obtaining expert advice and
expert ,
n0om? to aeific,
opinion-that the government could an arrangement with the Canadian
(J}.a-T"' the Canadian Northern and the atilizpri l'unIi i*y which that road might be a . the purpose of the three rail-^nntrv^t a dollar of expense to the What t ^ome unfair representations of been o ProP°sed have been made. It has c°UntrvSfeSted tllat 1 desired to put this benefl.v to an enormous expense for the it w , the Canadian Pacific Railway, and ll°Use h®en hinted, if not asserted, in this lariiarn Jat standing as a public man in instanf?eilt' made that suggestion at the Sir, j ? °t the Canadian Pacific Railway. ^°ssible eflle rePudiate, in the strongest
Ua
tnent Ia.?guage which the usages of par-that. Wl11 Permit, any such suggestion as
h°r ^Canadian Pacific Railway did not, ?"eh si,„any ,one on their behalf, make any its or <wes*.ion- Whatever may be the mer-;key are ne,rits of the proposal I then made, lhese rail 10lly my own- 1 suggested that 8heh a 'way companies pay to the country ^Quirij.^tdul as would meet the cost of gj g 'he control of that road, and that listens, also Pay for the operation and the fir-i-oV, 6 °f it upon a wheelage basis. If n?s'on Jent °f *he Minister of Finance last tliat , as worth anything, the utilization v°Uld i10(.aea for three roads instead of one ®ht. rj,,. Cost the people of this country one 7'Ve)1 the Policy would immediately have h(l the rand Trunk access to the west , <ls3t. x *. anadlan Northern access to the a.ve been satve that while the government f,d'lwavs 1sleeping as to this matter, other l^hi an	taken it up, and I quote
[DOT] here L rtlcle in the
hi
is
Tore
News ' of Toronto, r, the Tv, a report to the same effect vahaclia phto ' Globe.' I observe that the a 3hern i>ri„e!1/lc Railway and tlie Canadian I'nf 'Hfir way are now entering into e'Te(j rp.augement to that which I have It lg he ' News ' item is as follows :
that the Canadian Pacific tfon/Th an i,r?iIan Northern authorities have °ronte Uerstandlng respecting the line have to Sudbury. The Canadian Pa-Nortv,runnins rights over it, and the <?*6nt over*? wil1 secure a haulage ar-nadian the Lake Superior section of Sw8 a fiir ' Paciflc- The latter road thus [DOT]v 6q this . 6 for passengers and freight W°W, x i y an(l fho west.
Thtv'011 °f tho% !?een sPeahlng of the ex-ti0l; ahd w htercolonial to the Georgian lin1uehtireiv say before I leave that ques-hii, h;'l	^ while I understand liow
*«8g .foils l];i,.!!Rfn of navigation Is after y®ar I 7 Points* been harvested, neverthe-' * beii- O out to the government last Ve that by a system of icebreakers the period during which grain -can he shipped from Fort William and Port Arthur might be considerably extended. That subject does not seem to have been investigated by the government, at least I have heard no official utterance upon it. If it would be possible to accomplish that, and those who are familiar with these waters say it would be possible to accomplish it, then we have still another argument in favour of the extension of the Intercolonial to the Georgian Bay; because of course the longer you make that season of navigation the greater opportunities you create for traffic to pass from! Thunder Bay over Lake Superior to the shores of the Georgian Bay and. to be transmitted by the Intercolonial to Halifax and St. John.
Now, Mr. Speaker, I do not say that the Intercolonial ought to stop at the shores of the Georgian Bay. I believe that its extension should only be limited by the western confines of the Dominion. There is no good reason why it should not be extended to the city of Winnipeg, or why the people of that city should not have communication by means of the Intercolonial with Ontario, Quebec and the maritime provinces. I submit that by that means the Intercolonial would reach into the Northwest, and not only secure a considerable portion of the traffic which passes from the west to the east, but also a considerable portion of the traffic which passes from the east to the west of Canada in agricultural implements, merchandise and commodities of a hundred different kinds which must he sent from the east of Canada into the west for many years to come. I still advocate the extension of the Intercolonial to Winnipeg. It would be wise also, if necessary in order to overcome congestion, to aid in double tracking or otherwise improving the line between Fort William and Port Arthur and Winnipeg. I say, as I said last year, that in doing that we should only give! reasonable public aid in return for the most absolute and thorough control of rates upon those lines, so that we might give to the people of the west every possible facility and the cheapest and most economical means of transportation that could be devised in this country.
But, Sir, I am prepared to go even further, and I say that rather than enter into the present contract, I believe it would be infinitely wiser and more in the interest of this country that the government should itself immediately construct a line from Winnipeg to the coast. What is the position at present ? Let us examine it for a moment. We are committing this country to obligations to the extent of $150,000,000. If we consider the probability that the bonds must be sold at 00 cents we are committing this country to obligations to the extent of $170,P00,000; and the (Grand D'U'1'' Railway Company, the other partner to the contract, is committing Itself to obligations
[Stage Direction]
to the extent of only $14,500,000, or a little less than $15,000,000. What is the result of the contract at present 7 The result is that 1,500 miles of railway built in the west of Canada as part of an enterprise to which the government contributes $150,000,000 or $170,000,000, and to which the Grand Trunk Company * contributes only $14,500,000, is to become the absolute property of the Grand Trunk Pacific. If we are going to expend $150,000,000 or $170,000,000 for the construction of this line and hand over 1,000 miles of the most profitable portion of it to the Grand Trunk Pacific Company what is the objection to our incurring the other $14,500,000 of obligations and owning that whole stretch of road ? We are to build 1,875 miles from Moncton to Winnipeg, a portion of the line which is declared by the Grand Trunk to be infinitely less profitable than that portion which lies further west. We pay for the whole of that, we build the whole of that, we hand it over to the Grand Trunk for ten years for nothing, and we hand it over to them for forty years for a very small rental, a rental which, according to the opinion of Mr. Blair, will involye us during 40 years in a loss of $18,500,000. We build in the west 1,500 miles of railway, and we guarantee bonds to the extent of $13,000 a mile on 1,000 miles of that, and bonds to the extent of $37,500 on the remaining 500 miles ; we make provision that if the bonds are sold at a discount we shall increase our liability. After building 1,500 miles of railway in that splendid country, a country and a railway, with enormous possibilities, possibilities transcending those of the Canadian Pacific Railway which earned $15,000,000 of profits last year-I am quoting the opinion of the Minister of the Interior as to that-after building that railway we hand it over to a corporation without any control of rates, without any assurance of cheaper transportation, without any assurance even of the transport of our traffic over Canadian lines and to Canadian seaports. Is there any good business in accepting that position ? Is there any sound statesmanship in taking that position ? If we are to incur obligations to the extent of $150,000,000, why should we not go the whole figure and incur the other $14,500,000 of obligation and own that line in the west, which may at some future time bring a revenue to the people of this country of $15,000,000 a year, as the Minister of the Interior has pointed out.
If we are to incur all the obligations of this contract, why should we not take some part of the profit of this contract 7 Why should we own only the eastern division of this railway ? Why stop at that ? Why is there to be no participation by the government in the profits of the 1.000 miles of splendidly paying property in the west 7 What are the obligations of the Grand Trunk Pacific ? Bet us take them as stated at the recent meeting of their shareholders.
Robert Laird Borden: that: $20,000,OCX) will be required. Well, I want to bring to the attention of the government, the method which the Grand Trunk 'Railway, propose 'to adopt with regard to that. Last year when my hon. friend from Hamilton (Mr. Barker) urged that the security taken upon the rolling stock would r.ot amount to very much because the rolling stock could be acquired by means of a lease, the Minister of Justice and the members of the government disputed that argument very earnestly. Let us see how the Grand Trunk directors regard it. Sir Rivers-Wilson says :
As regards the five millions ior rolling stock, it is not five millions-it is estimated at three millions. With that the Grand Trunk has nothing to do. That rolling stock will be provided by the Grand Trunk Pacific Company, and, as the general manager will tell you, they have laid their plans for providing that rolling stock by a trust fund. Therefore, you may wipe it out and call it four milions.
The ' Financial Times ' of London, commenting on what took place at the meeting said :
The roiling stock it appears is to be provided for by a separate trust.
Therefore the twenty million dollars of supposed preference stock is not to be used, according to the views of the Grand Trunk directors, for the purpose of providing rolling stock, but it is to be kept in the treasury, or placed in the stock market, we do not know which. It may be reserved for an opportune occasion, and then placed upon the stock market for speculative purposes. The government is surely as well able to provide the rolling stock for the equipment of a profitable line in the Northwest of Canada, as is either one or other of these corporations. Under the modus oper-andi of these gentlemen they will provide this rolling stock by means of a trust and the rental for the rolling stock will be paid out of earnings. They propose to deal with it in that manner, so that the obligation to provide this rolling stock will not impose one dollar of capitalization upon this company. It will be provided for out of earnings, it will be leased, a trust will he created which will provide the rolling stock and lease it to the Grand Trunk Pacific and then the rental will be paid out of earnings. The advantage of that operation to the company will be that the capital stock of the Grand Trunk Pacific can be reserved for some other purpose, can pass to promoters, can be used for speculative purposes, and the rolling stock will be provided for out of the earnings. The disadvantage to the country will be, that this supposed security which we were to have upon this rolling stock will probably not he worth five cents; and there will he further fictitious capitalization. That will be the advantage to the Grand Trunk Railway Company on the one hand, and the disadvantage to the country on the other hand.


Robert Laird Borden: 
Hon. CLIFFORD SIFTON (Minister' . the Interior).: I hoped to be able to r, some remarks this evening. Mr. Spei but as we have reached ihe hour 0	^e
o'clock, I beg to move that the clet>a adjourned.


[Stage Direction]
Motion agreed to.
* .. rtotfe
On motion of Sir1 Wilfrid Lanrier, adjourned at 10 pm.
[Stage Direction]
Wednesday, April 6,