1904-05-03

PETITIONS FOR PRIVATE BILLS.

Mr. G. D. GRANT (North Ontario) moved:: That a petition for leave to introduce a Bill praying for the incorporation of the Kingston Dominion Central Railway Company be now received, and be referred to the Seleet Stand-inf: Committee on Standing Orders:
He said : Those interested in this Bill had been under the impression that they could utilize the charter granted to them some years ago, but a few days ago they ascertained that they could not do so, and then the time for presenting petitions for private Bills had expired.


Mr. R. L. BORDEN.: I have not the slightest objection to these petitioners getting relief, but I would point out that the more indulgent the House is the more careless and indifferent become those who seek legislation here. In future any such petitions will have to be founded upon better grounds than those which the hon. member (Mr. Grant) has presented to the House to-day. The mere fact that the gentlemen who are promoting this Bill were under a wrong impression is no reason why the House should be asked to relax its rules.


[Stage Direction]
Motion agreed to.
Mr. ATJLAY MORRISON (New Westminster) moved :: That the petition of the Ottawa Electric Company be read and received forthwith, and referred to the Select Standing Committee on Standing Orders.


Sir WILFRID LAURIER.: What is the reason for this ?


Aulay MacAulay Morrison: This motion was passed yesterday, but in deference to the objection raised toy the leader of the opposition, and the suggestion made by the Clerk of the House, I now make the motion anew. I be lieve that it is quite in order for me to insist that the motion was adopted yesterday, hut I do not wish to have this important
petition presented in any manner that would raise doubt about it. There was no objection taken to my motion yesterday at the time it was put from the chair ; the objection came afterwards on the motion of my hon. friend from North Ontario.


Robert Laird Borden: The hon. gentleman should state the reason why this petition was not presented within the time fixed under the rules of parliament.


Aulay MacAulay Morrison: Personally, I know nothing about it, as it was put into my hands only at the last moment by the solicitors of the Electric Company. The petition itself contains the reasons, and I am satisfied that good grounds for the application are given in it.


Robert Laird Borden: It may be that the petition contains the reasons, but it is usual that the member making a motion should support It by stating reasons which would induce the House to adopt it. If my hon. friend (Mr. Morrison) is not prepared to give the reasons, perhaps the petition had better be read.


Aulay MacAulay Morrison: The petition is in the hands of the Speaker, but I will get it and read the contents. The petition reads as follows :
Owing to unavoidable circumstances the petitioners were una.ble to present their petition within the time limit fixed by your honourable House to receive petitions for private Bills.


Some hon. MEMBERS: Hear, hear.


Robert Laird Borden: I may be permitted to say that I think this is quite as good a case as that of the other petition which has just been received, and contains reasons fully as unanswerable.


[Stage Direction]
Motion agreed to.

Mr.  R. G. MACPHBRSON@Burrard: Mr. Speaker, before the Orders of the Day are called, I wish to draw your attention, and through you the attention of the proper authorities who have charge of the internal economy of this building, to the fact that to-day while I and four or five others were coming down from the Railway Committee in the elevator on the west side of the stairway, a serious accident was only averted by the machinery not giving way too quickly. We got down from the second story to the first story safely enough. After that you would think the elevator was a king's plater out for fast exercise, because it went down to the bottom in a very unnecessary and indecent manner. I do not wish to magnify this occurrence at all, but I wish to draw your attention to it, and to point the moral. Besides a little scare and a severe jolt, nothing occurred of a very serious character ; but the machinery might as well have given way at the top as half way down.

and had it done so, I fancy that some of the first families of this land would he wearing crepe.


Some hon. MEMBERS: Name, name.


Mr. MACPHERSON.: However, Mr. Speaker, I think the attention of the government might be called to this point that an elevator is just as much a vehicle for conveying the people as a steamboat or any other public means of conveyance, and that the man in charge of it should know something about machinery, just as the man in charge of the wheel of a steamboat should know something about navigating. I do not wish to magnify the occurrence, but I can assure you that a serious accident might easily happen from people undertaking to run these elevators who are not capable of doing so.


Hon. JAS. SUTHERLAND (Minister of Public Works).: My hon. friend is perfectly right in saying that the man in charge of an elevator should be qualified and that the machine should be the best. I believe our elevators are so, as they are manufactured by the best makers in the country. The matter will be inquired into at once by the chief architect of the department, and if it is found necessary to make any change or improvement, it will certainly be done.



INQUIRY FOR RETURN.

[Stage Direction]
Mr. HAUGHTON LENNOX (South Sim-c-oe.) I wish to call the attention of the government to the fact that on the 6th of April last session an order of the House was made for a return of all correspondence, &c.. in reference to the Cattle-guard Commission. On the 20th of May last session I called attention to the fact that the return had not then been brought down, and the right hon. leader of the House assured me that he would look into the matter. Since then nothing has been done. I have inquired, and I find that the return has not been brought down. There seems to be no reason why it should not be.
Hon. H. R. EMMERSON (Minister of Railways and Canals).: I will take note of the matter. My attention has not heretofore been called to it. I will see that it is attended to.



QUESTION OF PRIVILEGE.

Mr. SAMUEL BARKER (Hamilton).: Mr. Speaker, before the Orders of the Day are called, I desire to call attention to an article which appeared in the Toronto [DOT] Globe ' of yesterday reflecting upon me in connection with some observations which I made in this House. The article deals with the country in the province of Ontario through which the Transcontinental Railway will run, and it proceeds :
Mr. Barker, taking pattern from a distinguished provincial leader, speaks of it as ' that Mr. .MACPHERSON.
land of jack pine, poplar and spruce.' This is meant to be depreciatory, although it might be as truthfully said perhaps of the Lake Temis-kaming and Lake St. John regions, in which many hundreds of settlers are making themselves homes.
Now, Mr. Speaker, I desire to say that these words did not originate with me. I but repeated the exact words used by the right hon. leader of the government in introducing the resolutions last year. They will be found in Hansard at page 7683. He is referring to a report obtained by the Ontario government through a commission, and the timber of the district is being particularly referred to. I do not know whether the right hon. gentleman used the words with a view to depreciate the country. Probably he did not. But if the Toronto ' Globe ' wants to make an attack on anybody for using the words, I would suggest that it had better attack the right hon. gentleman directly, and not me. The words he used are :
The Timber.
Another point equalled only in importance by the existence of a vast area of agricultural land in this country and its moderate climate is the fact that it is largely covered with extensive forests of spruce, jack pine and poplar.
I think that is the first time these words were heard in this House. The article then goes on :
Against such statements we have the observations of men who explored the country with the special view to forming an opinion as to its value.
Why, these are the very observations quoted by the right hon. gentleman from the persons who were appointed by the Ontario government to explore the country and report upon its merits. Under these circumstances the ' Globe ' is somewhat off the track, and the next time it wants to attack any person for using these particular words, it had better make its attack on the right hon. gentleman.


Rt.   H@: This matter does not concern me, but if I am to understand by what the hon. gentleman has said that he is not only quoting my words but taking their spirit, I have no fault to find at all.



RAILWAY CONNECTION AT BR.OCK-VILLE.

Mr. GEORGE TAYLOR (Leeds).: I wish to again draw the attention of the Postmaster General to the mail service we are receiving from the west. Yesterday the new time table for the Grand Trunk Railway went into force and I saw no change with reference to either the passenger or mail train. The mails from the west arrive at Brockville twenty minutes after the Canadian Pacific Railway train leaves for Ottawa, so that we are still only receiving one mail a day from all the trains east of

Toronto on the Grand Trunk Railway. Two weeks ago I drew the attention of the Postmaster General to this matter and he intimated that before the new time table came into force some change would be made, but so far there has been none.


Hon.   S@: The hon. gentleman did a couple of weeks ago state that the mails for Ottawa failed to make connection at Brockville, because the Canadian Pacific Railway left a few minutes before the 2.40 Grand Trunk Railway train arrived from the west.


George Taylor: That is the passenger train, the mail train comes later. The fast train passes the mail train at Kingston. If the hon. gentleman could have it so arranged that the mail train would deliver the mails to the first train at Kingston for Brockville, that might meet the case.


Sir WILLIAM MTJLOCK.: I have discussed the matter with the controller of the mail service and expressed the hope that it might be possible to arrange the question, and he is endeavouring to do so. The hon. gentleman asks to have some change made with reference to the limited express. That is where the difficulty offers. Of course, the difficulty could be got over if the Canadian Pacific Railway would make connection at Brockville. I have asked them to make connections but they have not answered although my communication was sent them nearly two weeks ago. I do not think there is any provision in the law whereby we can compel railways to make closer connections and I have no objection to the question being brought up frequently, because I think the time has arrived when our laws should be amended so as to give us more control.


George Taylor: The mail train last year arrived at Brockville ahead of the limited. This year it only arrives at Kingston ahead of the limited. There should be no difficulty in having the train start twenty to thirty minutes earlier from Toronto.



GRAND TRUNK PACIFIC RAILWAY.

[Stage Direction]
House again in Committee on Bill (No. 72) to amend the National Transcontinental Railway Act.-Sir Wilfrid Laurier.
Mr. LENNOX.: In the Bill as printed, the schedule showing the agreement is dated the 18th of February and the motion of the right hon. gentleman refers to a contract of the 7th of March. The contract was actually signed on the 7th of March.


Mr. FITZPATRICK.: The amended agreement was considered as bearing the date of its sanction by the shareholders of the Grand Trunk Railway. It was signed 17th of February, subject to ratification by the shareholders of the Grand Trunk Railway. Then the date of ratification was put in.


Robert Laird Borden: That is not the date of the agreement; that is an error.


Charles Fitzpatrick: Yes.


Haughton Lennox: In that case the motion of the right hon. the leader of the government was not correct, because it is a motion to introduce an agreement dated 8th of March.


Charles Fitzpatrick: It is a clerical error. The agreement produced in connection with the motion is dated 18th of February.


Haughton Lennox: As a matter of fact, it has two dates.


Robert Laird Borden: The date of the agreement is that which is set forth in the beginning. In some reports the date of the agreement is construed as that on which it is executed. Either one or the other must be the true date.
On Section-9 of the schedule,
9. Notwithstanding anything in the twenty-seventh paragraph of the said contract contained, the Grand Trunk Railway Company shall not, after the acquisition of the twenty-five million dollars ($25,000,000) of common stock therein mentioned (less shares held by directors, not exceeding one thousand), be prevented from making any such disposition of such common stock as the said Grand Trunk Railway may deem expedient, provided, however, that the said Grand Trunk Railway Company shall, during the delay mentioned in the said paragraph, continue to hold a majority of the said stock by such title as shall enable the said Grand Trunk Railway Company to control the policy of the company.


Charles Fitzpatrick: By section 4 of the Act to incorporate the Grand Trunk Pacific it is provided that the capital stock shall be $45,000,000. Section 5 provides that this stock may be divided into preference and ordinary stock, namely $20,000,000 preference and $25,000,000 ordinary. Subsection 2 of the same paragraph is as follows :
Holders of such preference stock shall be shareholders within the meaning of this Act, and shall in all respects possess the rights and be subject to the liabilities of shareholders within the meaning of this Act ; provided, however, that in respect of dividends and otherwise, they shall, as against the ordinary shareholders. be entitled to the preference and rights given by such resolution.
Section 27 of the original agreement provides :
The company undertakes that the Grand Trunk Railway Company of Canada shall acquire and take the common stock to the amount of $25,000,000, except shares held by directors, not exceeding 1,000 shares, and shall hold the same during the term of the said lease, and so long as any of the bonds guaranteed by the government under the terms of this agreement shall remain outstanding unpaid.
By the legislation introduced for the purpose of giving effect to that agreement, chapter 71 of the statutes of last session, it was provided by clause 7, subsection 2 :

2 Notwithstanding anything in this Act or in the agreement contained, His Majesty the King, acting in respect of the Dominion of Canada, shall not be bound or obliged to perform, carry out or fulfil any of the covenants, undertakings, conditions or stipulations in the agreement contained on behalf of His Majesty, acting as aforesaid, unless and until the Grand Trunk Railway Company of Canada covenants and agrees as follows with His Majesty, acting as aforesaid :-
Subclause (a) which follows, is not material to the present agreement. Then subclause (b) :
(b.) That it will acquire and take the common stock of the Grand Trunk Pacific Railway Company to the amount of not less than $24,000,000, as in clause 27 of the agreement 'provided.
And here is an important subsection of section 7.:
3. The Grand Trunk Railway; Company of Canada shall hold the said common stock to the amount aforesaid so acquired and taken as aforesaid during the entire term of the lease mentioned in clause 20 of the agreement, and so long as any of the bonds guaranteed by the government under the terms of the agreement remain outstanding and unpaid : and no pledge, transfer or conveyance of any part of the said' stock during the said period shall be valid or effectual.
Thus, it is provided not only that they shall take the $24,000,000 of common stock, but that they shall hold that common stock (luring the period of the lease. That is to say for fifty years, and so long as any of the bonds guaranteed by the government remain outstanding and unpaid, they shall hold that stock and shall not be permitted to pledge, transfer or convey any part of it. The purpose of the amendment is to provide that, having taken this common stock-and there is no change with regard to that; they have to take the same amount of stock-they shall not be obliged to hold it ; but they may pledge, transfer or convey it, provided that they hold a sufficient amount to enable them to control the policy of the company. In order to do that, it is necessary that they should control the majority of the $45,000,000 of stock-say somewhere in the neighbourhood of $23,000,000.


Robert Laird Borden: I maintain tliat 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 on the market and sold, I could at once recognize that we would have a great deal of interest in it.
The government thus spoke through the Minister of Finance. The right hon. gentleman (Sir Wilfrid Laurier) sat there and listened and did not dissent. The Minister of Justice and all the members of the government listened to this. Do they not recognize that between October and February, they have absolutely turned their faces in the opposite direction and are now doing that which in the month of February, 1903, they said was against the public interest V The Minister of Finance (Mr. Fielding) did not stop there, he went on further :
If this stock were to be put upon the market and taken over by the Grand Trunk Railway Company-I will take the figures of my hon. friend the leader of the opposition for illustration-at 25 cents on the dollar, and in latef 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 rales as will earn a fair dividend on the 100 cents that the present holder paid or on the 25 cents that originally went into the treasury, there certainly is much to be said in favour of the man who purchased the stock and who says : ' I paid 100 cents on the dollar for it.'
The government are at the present time putting it in the power of the Grand Trunk to accomplish that which was thus denounced by the Minister of Finance (Mr. Fielding). They are permitting the Grand Trunk to speculate in this stock ; last year they said it would be against the public interest to do so, last year they said it would Li wrong to do so ; last year they could not permit a measure of this kind, and within four months they have changed their minds upon this question absolutely, and they do the very thing they denounced last year, the very thing which, according to the statement of more than one of them was not to be permitted and could not be, permitted owing to the safeguards which were contained in the agreement as it was originally entered into. The Minister of Finance (Mr. Fielding) went on further and said at page 11231 of ' Hansard ' :
I think that the strength of this enterprise is to be found in the fact that the Grand Trunk Railway Company are not only behind it, hut that they are in it and of it. If the Grand Trunk Railway Company take over this new stock at 25 cents on 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.
Well, what is the position now ? It is absolutely the one which the Minister of Finance said could not be accomplished under the agreement of last year, and Mr. R. L. BORDEN.
which in fact could not he accomplished under that agreement, and one which he said last year was absolutely prejudicial and injurious to the public interest.
Further on he said at page 11851 :
The stock will not he 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 the freight rates, as capital at a fictitious value.
Well, why does the government, taking that stand they did in October, 1903, permit this stock to go into the stock market, to pass into the hands of other persons and at a later stage to be treated in fixing freight rates as capital at a fictitious value. What does the Grand Trunk give for the stock? Nothing but the two undertakings which I have mentioned. Yet, that stock, under the terms of this agreement, can he placed on the market and sold by tlie Grand Trunk Company for a very considerable sum, and afterwards that stock will come forward and will have to be considered in the fixing the freight rates as capital for which the holders may possibly have paid 100 cents on the dollar. The Minister of Finance did not stop there. He said :
We think it important, for several reasons, that the Grand Trunk should take and hold that stock and not dispose of it. Instead of that being merely a privilege given to the Grand Trunk Company, we think it is a privilege which carries certain responsibilities of value to the country. Therefore we insist that they shall acquire, take and hold that stock.
Could anything. I ask the right hon. gentleman (Sir Wilfrid Laurier), be more significant and more decisive than that ?
We think it important, for several reasons, that the Grand Trunk should take and hold that stock.
If it 'was important that, the Grand Trunk should take and bold that stock In October, 1903. when did it cease to be important that the Grand Trunk should bold that stock and for what reasons did it cease to be important that the Grand Trunk should hold that stock ? What are the compelling reasons which influenced the mind of the government in this regard ? The Minister of Finance says :
We think it important, for several reasons.
What were those reasons and when did they cease to have cogency and how is it that they ceased to be cogent within so short a period as that between October, 1903, and February, 1904?
The Minister of Finance (Mr. Fielding) said :
Therefore, we insist that they shall acquire, take and hold that stock.
If the government for these good reasons insisted that the Grand Trunk should acquire, take and hold the stock in October, 1903. there must have been some very extremely strong influences wbicli operated

upon the mind of the government between October, 1903, and February, 1904.	.
But the Minister of Finance (Mr. Fielding) has not thrown any light upon that subject. He went still further. He said, at page 11850 of ' Hansard ' :
We claim that we do get from the old Grand Trunk Company two things of importance to which I have referred-one that they should take and hold the stock and thus identify themselves closely with the undertaking, and the second that they should become the guarantors of the bonds to the extent of one-quarter or possibly more of the balance required for the building of the western division. In these two things we have obligations on the part of the Grand Trunk which we think are of value ; and, if additional obligations on the part of the old Grand Trunk 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.
He said in that extract:
We claim that we do get from the old Grand Trunk Company two things of importance.
The two things of importance were, first, a guarantee of the bonds, and secondly that they shall take and hold the stock, or rather, that which I have put last, the hon. Minister of Finance put first. He regarded as all important two things, and the one which he put first was that the old company should hold the stock and thus identify itself closely with the undertaking. But something even more significant than all this was said by the hon. Minister of Finance : The Grand Trunk Company would be delighted to have that clause stricken out, so that they might be allowed to take that stock up and float it in the money market if they pleased. no doubt.
Since the hon. Minister of Finance was not willing to give them that privilege at that time, for what reason and by what influence has the government been induced to depart from that strong, firm stand which the hon. Minister of Finance then took ?
The Grand Trunk Company would be delighted to have that clause stricken out.
Well, the Grand Trunk Company have accomplished their end, because virtually they have that clause stricken out. They have that clause stricken out, at least, as far as 812,000,000 of the stock is concerned, which is a very considerable instalment of the delight to which my hon. friend referred.


Charles Fitzpatrick: Would my hon. friend allow me to interrupt him ?


Robert Laird Borden: Yes.


Charles Fitzpatrick: The capital stock of the company is fixed tit $45,000,000. which may be divided into $20,000,000 of preference shares and $25,000,000 of ordinary stock. By subsection 2 of clause 5 the preference shareholders are absolutely in the same position in respect to electing the directors and
controlling the policy of the company as the ordinary shareholders. Therefore, if we are to give effect to these amendments ; if the men who hold the stock desire to control the policy of the company, they must control the majority of $45,000,000 of shares.


Robert Laird Borden: I do not see how that affects the point I am making.


Charles Fitzpatrick: I thought my hon. friend said that they were obliged to take and hold $12,000,000 of stock.


Robert Laird Borden: No, I was putting the case as strongly as I could from the standpoint of my hon. friend the Minister of Finance, so that I should not be accused of exaggerating. I said that at least this clause gives to the Grand Trunk Railway Company the right to place on the stock market and to speculate in $12,000,000 of the common stock of this company. I think moreover it gives them the right to put upon the stock market and speculate in the whole of the common stock which they acquire from the Grand Trunk Pacific Company. I think it does that under the concluding provision that I (iave mentioned and which I will mention again. By means of what is called a voting trust, which is a well-known institution in the United States of America, I believe that can be done. There are very significant words in the agreement which point irresistibly to the conclusion that the draughtsman who framed that paragraph had in view that verv scheme when he used certain words which are at the end of this clause. But,
I was referring, when interrupted by the hon. Minister of Justice, to the emphatic language of the hon. Minister of Finance.
I was then reading his statement as follows:
The Grand Trunk Company would be delighted to have that clause stricken out, so that they might be allowed to take that stock up and float it in the money market if they pleased, no doubt.
I challenge the hon. Minister of Justice or any one on the other side of the House to say that this clause dues not, at least, give to the Grand Trunk Railway Company the power to float $12,000,000 of the common stock of the Grand Trunk Pacific Railway Company on the stock market, and I point out to him in that connection what the hon. Minister of Finance said further. Following on immediately after the language which I have quoted the hon. Minister of Finance said this :
That, I have no doubt, would be more gratifying to the promoters of (his enterprise.
The government had insisted that there should be no speculation in this stock. The government had declared that stock should not be acquired by promoters for a nominal consideration and afterwards go into the hands of bona fide holders and be

used for the purpose of increasing [DOT] the rates upon this railway, in order that dividends might be paid upon stock for which no consideration was given in the first instance. The hon. Minister of Finance insisted that such a result should not take place. He said very frankly that the Grand Trunk Railway Company would like to have all safeguards' of that kind stricken out, and that to strike them out would be highly gratifying to the promoters of the enterprise ; yet, while we were hearing the very echo of these words, in the short interval between the 24th October and the 18th February, the government came to an exactly opposite conclusion. The government acted upon an absolutely different policy to that which the hon. Minister of Finance had proclaimed in this House, and the government did the the very thing which, according to the view that the hon. gentleman then entertained, and according to the view which I think most people In this country will entertain, will be injurious to the public interest in the future, because it will not only permit speculation in stock, but it will result in higher rates being imposed upon the people of this country by reason of the fact that stock which does not represent any real money consideration put into the enterprise will have to be treated as worth par, will have to be dealt with in the hands of men who have paid one hundred cents on the dollar for it. and in that way will very materially influence rates. The hon. Minister of Finance went on farther and emphasized the same point. He said :
We have put that limitation in, not to please the Grand Trunk Company but as an additional guarantee to the people that the stock is not going to be placed in the market and floated at a fictitious value.
Is there any answer at all in the mouth of my hon. friend the Minister of .Justice to the argument which I am quoting against him from the mouth of his own colleague, expressed only a few months ago? But, my hon. friend the Minister of Finance did not even stop there. He said:
1 say, unhesitatingly, that it would be better to give it to the Grand Trunk, even without any other condition, than it would be to have i- dealt out to be used by stock speculators m the market.
Most emphatic, most vigorous language; yet. the very evil against which, according to my hon. friend the Minister of Finance, under the agreement of last year, the country was thoroughly safe-guarded, is now permitted by the amended agreement executed only a few months after these very words were uttered. Yet. my hon. friend did not stop there. He went on further: But we are protecting the people against any such condition, because we are refusing the company the power to put a dollar's worth of that stock on the market and sell it to any Mr. R. L. BORDEN.
one. It is not negotiable, it cannot go on the stock market, it cannot be the subject of speculation ; no innocent third party will be able to come and say : ' I paid in good faith 100 cents on the dollar for that stock and am entitled to get a dividend on what I paid. We have stipulated that the stock cannot be put on the market. It must remain in the hands of the Grand Trunk Railwray during the term of this lease.
It is absolutely inconceivable, Mr. Chairman, that after the government had taken such a stand upon this question, after the government had declared so firm a policy during the past session, after this extraordinary clear, vigourous and determined language had been used by my hon. friend the Minister of Finance, the hon. Minister of Justice should rise in his place as if this were a very ordinary provision, as if this were a matter of course, and ask this House and the country to accept a clause which wipes out every one of the safeguards to which my hon. friend the Minister of Finance referred in the passages that I have quoted, and which . exposes this country to all the difficulties and dangers that were pointed out in the quotations that I have made. It can not be any ordinary influence that induced the government to change its policy in this way ; there must be some extraordinary reason for it which has not yet been disclosed to the House. What is it ? There is plain language which points to these evils, with all the vigour, and all the clearness and all the energy which are the attributes of the Finance Minister, and he spoke for the colleagues that sat around him. Why are we asked to-day to accept an amendment which absolutely stultifies every word uttered by the Finance Minister last session ? I brought this matter to the attention of the House when the Prime Minister introduced the resolutions, but no answer has been made, and no explanation has been given of this extraordinary change of attitude. The Minister of Justice merely dealt with the legal aspect of the change, but he never uttered a word of explanation as to why be should ask parliament and the country to be satisfied with this complete reversal of the government's policy. When the Prime Minister introduced this measure, he said the changes were so simple and moderate, that we on this side of the House might be expected to accept them without discussion. Does he regard as an unimportant thing, which we should accept without discussion, a complete reversal of the declared policy of his government on a question of very great public concern. I could give quotation after quotation; I could quote from the Minister of Justice and other members of the cabinet, but I shall refrain, because tbe language of the Finance Minister may be taken as a sample, and I now most respectfully ask : why it is that the policy of the government has been reversed so suddenly and so unexpectedly, and why it is

that we now have parliament asked to com- I mit itself to an exactly opposite policy to that which was proclaimed by the government last session.


Mr. FIELDING.: It is exceedingly grati-tying to me to find that even at this late date the hon. the leader of the oposition, has such intense admiration for my speech of last session. It enables me to indulge in the hope that I shall have only to wait for a year, when the hon. gentleman will discover that what I say now is couched in wise and discreet language.


Haughton Lennox: What about last night '!


William Stevens Fielding: Last night, I had a difference with my hon. friend from Hamilton ; he was right and I was wrong, and I said so, and that was the shortest way of dealing with it. I do not understand that the hon. leader of the opposition takes any ' exception to the opinions I expressed last session when dealing with that document which has since been changed. Why my hon. friend should labour at such great length to show that something which I said last session respecting the contract of that day, does not apply to the contract of the present day, I do not quite clearly understand. There is a change and if there were no change we should have no need of legislation to-day ; and we should have no need of discussing the question. What was the situation last year ? My hon. friends opposite had contended in their press, and by the general tenor of their speeches, and by the general trend of their whole criticism, that this railway scheme was a scheme of promoters who were to put stock on the market for speculative purposes. That was the general line of theii; argument in parliament and in the press. It was in answer to criticisms of that character that I drew attention to the provision of the contract in the clause which the hon. gentleman has read, and I indulged in the comments which he has quoted. I do not understand the leader of the opposition to say that these comments were not in every case true and correct ; I do not understand him to say that they were not correct interpretations of the contract as it then stood ; yet, I remember that when the speech was made, I did not find from the other side of the House any recognition of the justice of these comments. On the contrary, hon. gentlemen opposite continued by the general tenor of their criticism to present to the country the idea that this was some speculative scheme out of which certain promoters were to make a great deal of money. They did not say then, as they say now, that we had guarded the country's interest in that respect. They denounced that contract of a year ago on that point, as warmly as they denounce the amendment now, but to-day, the hon. the leader of the opposition, discovers that we
did guard and protect the interest of the country on that point, and that now we are removing the restrictions which were then laid down. My hon. friend asks : what is the reason that brings about this change ? I dq not think there can be any doubt on that score. We made a contract last year which in this respect and in other respects was surrounded by guards and checks greater than the guards and cheeks which ever surrounded any other contract submitted to the parliament of Canada, and as a result of our great effort to protect the public interest in that respect, we tied up the hands of the Grand Trunk Railway people to such a degree that they found themselves unable to go on with their contract.
Mr. CLANCif. The hon. gentleman then thought it necessary to do so.


William Stevens Fielding: Quite so ; I thought it necessary. I think it would have been better if we had been able to continue with the contract of last year. I think we made a great contract last year. And, although hon. gentlemen opposite decried it and stated that it was quite evident that the Grand Trunk Company had their own way, I think the contract of last year was by all odds the best railway contract that ever was submitted to the parliament of Canada. If we were coming forward to-day with this contract in its present form for the first time, we would still surprise hon. gentlemen opposite by the moderation of the contract, and by the many guards and checks which are provided for the protection of the public interest. If there is criticism of these amendments to-day, it is simply because the contract of last year was surrounded to a greater extent than ever before, by the guards and checks which it was thought necessary to insert in the public interest. The hon. the leader of the opposition now says : Why the change ? It is simply and solely because the Grand Trunk Company refuse to go on under the contract of last year. There is no other reason. What other reason could there be ? The Grand Trunk people have come to the government and have said :
* In a variety of ways you have made this contract too hard.' Perhaps we have some reason to complain of the Grand Trunk people ; but not with respect to their good faith, because we have no doubt that Sir Charles Rivers-Wilson and Mr. Hays and all these gentlemen (although they have been decried by an hon. gentleman opposite as fakirs) acted in good faith. When Sir Charles Rivers-Wilson and Mr. Hays and all their associates in the contract entered into this agreement and gave us the assurance of the co-operation of the Grand Trunk Company, we had reasonable grounds for believing that the company would co-operate in the maner indicated, but we were well aware that the Grand Trunk Company by its meeting of shareholders would have to ratify

that agreement; we were well aware that it had to pass that ordeal.
By and by the Grand Trunk people came to us and said : 1 We cannot go on ; you have tied us up too strictly ; you have made your contract so good for the government that we are not prepared to go on with it, and you must consider one of two things-either to throw up the transaction, or to consider with us the various amendments which we desire.' And the government, wisely or unwisely it is for parliament to judge, decided that a great scheme of this character should Dot be put in peril by matters which might seem to be of small detail; and therefore they agreed to enter into negotiations with the Grand Trunk people and see if they could make concessions which would meet their wishes and yet leave the public interest reasonably protected. X say at once that it would have been better if we could have held to the contract of last year, as respects this particular section, though I do not admit that the change we make creates the danger suggested by my hon. friend. Now, what was the position last year ? We had provided that the Grand Trunk Bailway Company should take and hold this $25,000,000 of common stock ; and when hon. gentlemen opposite alleged that this was to be a speculative stock, we pointed out, as the hon. gentleman has quoted, that it could not be the subject of speculation, because by the terms of the contract the Grand Trunk Company were obliged to take it and hold it, and could not put it on the market. That was an absolutely correct interpretation of the contract as it stood. What is the situation to-day ? The Grand Trunk people say they require to use that stock, or some portion of it, in order to raise money for the purposes of the enterprise. They say to us : You claim that you wanted the Grand Trunk Company to be in and of this scheme ; you wished to keep the Grand Trunk Company in control, so that the new I'oad should be identified as closely as possible with the old. And we have agreed that the Grand Trunk Company, while at liberty to pledge this stock to raise money on it, must still hold a sufficient title to the majority of the stock to control the affairs of the new company. That was one of the main purposes of the clause in the former contract. That purpose is still subserved by the amended clause, because we still provide that while the Grand Trunk Company shall be the holder of the stock, and shall have the right to pledge it for the purpose of raising money, it shall still be bound to hold a controlling title in the majority of the stock. Now, the chief objection that is raised to the overcapitalization of railways to what may be called the watering of stock, is the relation that stock may bear to the important question of freight rates. I pointed that out in my remarks of Iasi year, which have been quoted by the hon. leader of the opposition. I said that if


William Stevens Fielding: this stock went on the market and became the subject of speculation, the holders of it might at a later stage come in and say that in the adjustment of freight rates they should be considered as having paid full value for that stock, even though a smaller value had in reality been paid. That was the substance of the argument. It would be always better if we could prevent a com pany raising questions of that character. For that reason, it would have been better if we could have held by the contract of last year. But, as the Grand Trunk Company said they could not go on upon these terms, it was for the government to consider whether the amendments were of such a character as could be agreed to. Why is it that this question of the capitalization of a railway is looked on with some sensitiveness and anxiety by the public in connection with the question of freight rates ? It is because the country has had an experience- shall I say an unhappy experience ?-'by the contract made by the former government with the Canadian Pacific Railway Company. It is because that contract contains a clause providing that until a certain rate of interest is earned on the capital the freight rates shall not be reduced. It became important, then, to know what was the stock on which interest had to be earned. Unfortunately, the former government either overlooked that point, or did not have their attention drawn to it; and in the Canadian Pacific Railway contract we have no clear definition of what is to be deemed the stock on which the company must earn 10 per cent before there can be any control of its freight rates. Some of these days I suppose that question may have to be determined in the courts. In the light of that experience it is desirable that we should guard against a repetition of the danger. If we had in this contract any 10 per cent clause, then the change which we are making in the agreement on this point would be a vital and important one. But I want to call the attention of the committee to the fact that there is no 10 per cent clause in this agreement. While in the case of the Canadian Pacific Railway the right of parliament to revise the freight rates is limited and restricted by the terms of the contract, there is no limit or restriction in this contract as to the right of the parliament of Canada to exercise the fullest and most complete control over the freight rates -of this new enterprise. The consequence will be that the freight rates, in the terms of the contract, will be fixed by the government of Canada, or by any tribunal which parliament may create for that purpose. Parliament has since created a tribunal. that is, the Railway Commission. Parliament may at any time repeal the Act creating the Railway Commission, and may devise some other means of asserting parlia mentary control : but. be it noted, that there is no limit to the control of parliament over the rates of this new enterprise. Let us see

what will happen when the question of rates comes to be considered. Suppose the Grand Trunk people come forward and say : We ask you to allow us to earn interest on this common stock. If we had the contract as it was last year, we would have an extra guard and check, I admit. We are changing the contract in that respect, giving up one guard and check winch we had last year. But let us see what sort of guard we shall still have. When the Grand Trunk people conie before the Railway Commission or before any other tribunal which parliament may create to deal with the question of freight rates, the tribunal will have the full and unlimited right of determining the freight rates, and investigating the circumstances under which every dollar of the capital may have been floated ; and, therefore, if that capital be the subject of specu Iation. in such a manner as to claim dividends on stock which is not bona fide, which never entered into the road, we have no 10 per cent clause limiting us, as in the case of the Canadian Pacific Railway ; but we have the most full and absolute right in a tribunal created by the parliament of Canada to investigate that matter and to see that freight rates are only fixed with reference to the capital bona fide invested in the enterprise. I think that is a fair answer to my hon. friend. We have undoubtedly made a change in this contract which gives. the Grand Trunk Company liberty to deal with this stock in a way in which they had not a right to deal with it a year ago, limited no doubt by the controlling power they must retain. They may pledge the stock for raising money, and to a certain extent there may be an element of speculation in it ; and we have given up some of the guards and cheeks which we had in the contract of a year ago. But we had to consider the question, in respect to that and several other matters, whether these changes were vital and important enough to induce the government to give up the whole enterprise. The conclusion of the government was that, while the contract would be in a less desirable form than it was a year ago, it was still a good contract, free from evils which could be found in other contracts, and that in this particular matter of freight rates the government had amply and adequately protected the interests of the public by inserting in the contract a clause which is not in any degree modified, namely, that the freight rates must, without any limitation, be subject at all times to the control of a body created by the parliament of Canada.


Robert Laird Borden: My hon. friend the Minister of Finance adopts the same argument which was used by the Minister of Customs the other evening. He says the Grand Trunk Company demanded this, and therefore they could not do anything but allow it.


William Stevens Fielding: 


Robert Laird Borden: Or give up the contract. Well, I suppose we might say again that we should be gratified at the moderation of the Grand Trunk Railway. Are the promoters of the Grand Trunk Pacific or the Grand Trunk Railway the only persons in Canada with whom the government should negotiate ? Is it absolutely necessary to accept everything they dictate to the government ? Apparently it is, according to the argument of my hon. friend the Minister of Customs. But that is not the view which was taken at the meeting of the Grand Trunk shareholders, because we have Mr. Smithers, first vice-president of the company, saying this :
I can tell you-and Mr. Hays will support me in saying it-that there are many schemes in Canada, as there must be in all new countries- there are many schemes in Canada which are only waiting to come out, but we consider the scheme we propose to you to-day, after long examination, is the best means for defeating those competing schemes-and we believe-not that we are leading you into new dangers today, by asking you to pass this scheme, but that we are putting the Grand Trunk into a position in which it has never been before, that we are strengthening it from the large increase of points from which we shall draw traffic, and to which we shall give traffic.
It does not seem, according to the view of the Grand Trunk authorities that there was any special reason why, when the Grand Trunk Railway dictates, the government should obey. Yet, according to the statement of two ministers of the Crown, that is the basis on which the government acted. My hon. friend has not shown one reason which justifies him taking a ground to-day absolutely different from that which he took six months ago. He admits frankly that the contract of last year was better than the contract of to-day. Why then should not the government stand by the contract of last year ? My hon. friend said last year that to permit speculation in this stock would be injurious to the public interest and lead to increase in rates.


William Stevens Fielding: I did not say it would. I said it could be used as an argument that it would.


Robert Laird Borden: The gentleman whom he has put at the head of the Railway Commission has taken the ground that watered stock must inevitably lead to increase of rates. The fact, he said, that innocent holders have paid one hundred cents in the dollar for that stock must be taken into consideration in fixing the rates, even though nominal figures were given for the stock in the first instance. In that regard Mr. Blair followed the suggestion of the Minister of Finance last year, because the Minister of Finance stated that if this stock should go into the hands of the general public, the rights of innocent holders be considered even though the
Or give up the contract, would

stock they paid for did not represent any money value in the first instance.
My hon. friend goes on to say that the Grand Trunk Railway want this for the purpose of raising money for the enterprise. Looking through this document, I do not see any obligation on the part of the Grand Trunk Railway to raise money for it. That obligation has been referred to by two ministers of the Crown, but what minister will put his finger on one stipulation in the contract showing anything of the kind ? The position we took last year with regard to this matter was very distinct, and my hon. friend the Minister of Finance, by referring to it, was evidently trying to draw a red herring across the trail. We stated last year that the Grand Trunk Railway should pay par for the stock, and we stand by that position. When that argument was put before the government, what was the answer made ? It was this, that it is not necessary they should pay par for that stock, because they are not allowed to put it on the market. We stand by the position we took last year, that the Grand Trunk Railway should subscribe and pay par for the stock, but we were voted down on that point. We were met by the government with the very reasons I have quoted. It was not necessary, said the Minister of Finance, that the Grand Trunk Railway should pay par for that stock, because they are obliged to hold it during the whole fifty years of the lease and shall not be permitted to speculate with that stock in the market for one moment. The government said, through the Minister of Finance and other members of the cabinet, this is a matter that would concern the interests of the country and you would be absolutely right in your objections if the Grand Trunk Railway were allowed to put that stock on the market, but .because they are not so permitted, everything you have said as to the necessity of their paying	for	that stock at	par is	beside the question, and does not really concern the interest of the country. More than that. They said the Grand Trunk Railway would be delighted to have this clause stricken out, and even asked to have it struck out, but the government refused. The government, they said, stood firmly by the interests of the country and would not permit that clause to be stricken out.Then	my	hon. friend the	Minister	ofFinance falls back upon the statement that, even under the contract of this year, the Grand Trunk Railway would control	the	Grand Trunk	Pacific.	Iwould	like	to ask what	the special
advantage of that control is. Has not the Minister of Finance told us, has not the First Minister told us that the Grand Trunk Railway has its interests Mr. R. L. BORDEN.
bound up very largely in Portland, that it has expended in that port from $20,000,000 to $25,000,000, and that all its interests would lead it to take the products of the Northwest to Portlandi instead of to Canadian ports ? Under those conditions what is the special advantage of having the Grand Trunk Railway control the policy of the Grand Trunk Pacific ? You have $25,000,000 common stock. The Minister of Justice says you have $20,000,000 of preference stock. My hon. friend is not exactly accurate, because the provision is simply this : there shall be $45,000,000 of stock, of which $20,000,000 may be made preferred stock by resolution of the shareholders. The whole $45,000,000 may be common stock and may be handed over to the Grand Trunk Railway in consideration for its support. The Grand Trunk Railway is to control. But would it not be better for the government to control the policy of this road ? The Grand Trunk Railway is to receive $25,000,000 of common stock in return for the support it gives the company. But which gives most support to the Grand Trunk Pacific ? Is it the Grand Trunk Railway which guarantees one-fourth of the bonds, or the government which guarantees three-fourths of the bonds ? If the Grand Trunk Railway, in return for guaranteeing one-quarter of the bonds necessary to construct that railway, is to receive $25,000,000 of common stock, why did not the government put in a word for the people and suggest that three-fourths of that stock at least should be handed over to the government instead of to the Grand Trunk Railway ? Which would be of most advantage to the people-that the government, by controlling a majority of that stock should control the policy of that company, or that the Grand Trunk Railway, with one terminus at Chicago and another at Portland, shall at all times in the future control the policy of that company ? Which would be most in the interests of our Canadian ports, which would tend more strongly and more directly towards the consummation for which we are all working, I hope, the consummation of having our traffic carried along Canadian roads and shipped to Canadian ports, when destined for points across the sea. These are considerations which have not been met by anybody. They have not been met by the Finance Minister. He simply says that because the Grand Trunk Railway dictates, the government must obey. There was no one else with whom we could negotiate or with whom we cared to negotiate, and either the contract had to go-or the request had to be complied with -a request, which could only be complied with, in view of the declarations of the government last session, by very seriously prejudicing the interests of the people with regard to railway rates in future.


Wilfrid Laurier: *248?.

24S4
borrow upon it. Well, this is a view that is not to be gainsaid. But we represented : We want you to keep control of the coin-pany and do not want you to speculate in the "stock ; that is the reason why this condition has been made. Surely, then, it was a reasonable concession we made to the company when we said : You may use a portion of the stock to assist you in hnanc-ing the enterprise and carrying out the purposes of the agreement ; but you must keep a sufficient portion in your hands to enable you at all times to carry out the spirit of the contract, and, for this purpose to control the policy of the company. Again I appeal to the fairness and judgment ot the House to say if that was not a reasonable concession. If we cannot defend it upon its merits we are liable to censure. I contend that it was not unreasonable ; that, on the other hand it was going too far for the purpose we have in view that we should compel the company to make no use at all or this part of its assets, but to put this stock in their coffers and keep it there. My non. friend (Mr. R. L. Borden) says that this is a complete reversal of our policy. I contend that it is no reversal of our policy. Our policy last year is the same as it is now. it is true there has been a modification ot the spirit of that policy and of the letter ot it nlso. But wliy should not this reasonable concession be made ? The Minister of 1* in-ance (Mr. Fielding) has given the reasons why we adopted the policy which we announced last year and which we still hold. The reason for inserting this condition of the contract last year was that we wished to prevent speculation in the stock. M ell, Mr. Chairman, the Grand Trunk Railway Company must raise money to carry out this enterprise. They cannot build the section from Winnipeg to the Pacific ocean simply upon the guarantee of the government, for that will cmmk-taily three-quarters of the cost of-c5nstructing tluH pail uf im road. And then the equipment of the road is also to be raised from the public, 1111 there are only two manners in which that can be done, either by the issue of bonds, or raising money on their stock. The methods we have adopted will enable them to go into the money market and obtain some money with which to carry on the work. Unless we had done that we would have put them in a position in which they would encounter greater difficulties than they should have to encounter in carrying on an enterprise of this kind. I hold the opinion that with the slight concessions we have made we have retained in the contract safeguards sufficient to protect the public and still allow greater latitude and opportunity to the company to carry out the object they have in view.


Mr. TARTE.: If I had been in Mr. Hay's position, I would have done just what he has done-I would have tried to improve my position. I am not prepared to say that the government, from their standpoint, has


Wilfrid Laurier: gone very far wrong in changing the the clause which we are now discussing. Their policy was last year, and is to-day, to insist on the Grand Trunk Company having and keeping the control ot the new enterprise. That is their settled policy and the right hon. gentleman (Sir Wilfrid Laurier) has again insisted upon it to-day.
I have given some attention to the map ot this continent, of Canada and the United States, especially, perhaps, when I was Minister of Public Works. If the right hon. gentleman (Sir Wilfrid Laurier) will look carefully at that map he will not fail to note that the Grand Trunk Railway has an American line from Chicago to ' Buffalo and Portland. The Grand Trunk has now made arrangements with the Wisconsin Central to get to St. Paul. These arrangements are made and are in lull operation. The Wisconsin Central has a branch line reaching to Ashland, a point within 70 miles of Duluth. I hope that the right hon. gentleman (Sir Wilfrid Laurier) will take my words in the spirit in which I am addressing them to him. We will all soon be gone, within ten years there will not be perhaps many of us here ; the older ones at an rate will be gone. But the map of the country will be what it is to-day ; it [DOT]annot be changed. The Grand Trunk people, Sir Rivers-Wilson and Mr. Hays may have gone to a better or a worse world-I do not know. This government and others of its may be gone, but distances will remain the same-there are only 76 miles between IIninth and Ashland. Between Duluth and Chicago there is only 500 mile's, a.nd from Winnipeg to Duluth in a straight line there is only 360 miles. It would be the easiest thing in the world for the Grand Trunk to build, within a year or two years, a railway from Winnipeg to Duluth, if they do not arrange with Mr. Hill, or, with other existing lines. The map is very instructive to any gentleman who is willing to look at it carefully and from the standpoint of Canada. I am a friend of the Grand Trunk : I have always been ; I admire their great energy. I say it again, the people who control the Grand Trunk Railway maj be gone to-morrow, but the map will remain the same. The distance between Winnipeg and Moncton on the national line to which the government is asking the House and the country to agree will be in round numbers 1900 miles. How much will that load cost ? I am below the mark in believing it will cost at least $50,000 a mile, but I will put it down to $40,000. The Grand Trunk will have to pay on that line at 3 per cent $2,280,000 interest. My right hon. friend (Sir Wilfrid Laurier) and his colleagues say they will control the freight rates ; they will insist all the same on getting 3 per cent interest in accordance with their bargain. It the government insist on putting the rates so low that the Grand Trunk Pacific cannot exploit the line where ary.-they to obtain the

24S6
money to pay the interest ? It is out of the question to believe that that long line of railway can compete with the American railways with the Grand Trunk itself as it is today. The Grand Trunk have, as I have said, a line from Chicago, Buffalo, and Portland, which is ctoubtar tracked for almost the entire distance. By building a line or by mak-, ing arrangements with the Wisconsin Cen-' tral or Mr. Hill, they will get a connection with their own line at Chicago which will give a haul of less than 900 miles from Winnipeg. The Grand Trunk will have, in round numbers, only 900 miles to reach at Chicago their system of American railways. X say their system of American railways. I will explain. The Grand Trunk are a two-fold company. They have an American system which they must exploit and on which they must earn dividends. Their Portland line alone cost them over $25,000,000, and they must earn money on that. They have that line between Chicago and Buffalo and Portland, but they have also their Canadian lines. One of the most important branches of their Canadian lines is the Midland branch. Six months before I left office, the right lion, the Prime Minister and I negotiated with Mr. Hays with a view to inducing him to make some arrangement with the Canadian Pacific Railway, with the object that the two companies would work together from Midland to the waters of the St. Lawrence. Having that object in my mind, I managed things in Montreal in such a way that the Harbour Commissioners gave a site to the Grand Trunk on which to build an elevator, warehouses, &c. They have that Midland branch, but that branch will be perfectly independent from that Northern Railway to which my right hon. friend (Sir Wilfrid Laurier) attaches so much importance. I would be as anxious as any other Canadian public man to have a line built through the province of Quebec. I am just as anxious as anybody else, but that is not the point. Building a line 1,900 miles long will not make matters better if we cannot compete with existing lines. Will my right hon, friend (Sir Wilfrid Laurier) think over this position ? Does he believe that the Grand Trunk, having already a line from Chicago to Portland, well built and well organized, will insist on the trade going by that northern line, which we are invited to approve. Moreover, let us not forget that it is not the Grand Trunk Railway Company which will be the owner of that line.
The Grand Trunk Railway will direct the policy" of the Grand Trunk Pacific Railway Company, but their main interest. nearly their whole financial interest, will be in their other lines. So, I would like to have some explanation upon this point whi<*h I consider of the very greatest importance. We cannot forget this fact that the Grand Trunk Railway Company are a two-fold company. They7 have an American sy7stem that this country has 791
helped them to have. Reading some time ago speeches made in Montreal in 1849 by Sir George Etienne Cartier and Sir John Rose, men of high standing, I found that they were encouraging the people in the city of Montreal to give subsidies to the Grand Trunk Railway Company to help them to run their line to Portland. How things change in the world. It shows how careful and prudent we have to be. I would like to have some explanation upon the point I have raised and which I believe is of capital importance. The point, perhaps, is not new, but I want to emphasize it with all the energy that I can put into my words.
I cannot possibly7 see how, with that line 1,900 miles long, going for many years through a wilderness, we can induce the Grand Trunk Railway Company to divert their trade to that line to the detriment of their existing lines. The Grand Trunk Railway7 Company are not the only people that we must take into consideration. My right hon. friend says that we are keeping the right of controlling the rates. Again, if we make the rates so low that the road cannot pay, the country will have to pay the interest. I expect the country will be obliged to pay, not. for ten years, but for 25 years. But" if the road had a useful purpose I would not object to paying interest for a few years more than the number of years that w7e are called upon to agree to now. That is not the main point on which I wish to insist. The point upon which I wish to insist as emphatically as I can, is that the expenditure of the large amount of money that we are called upon to sanction to-day will not give to this country a commercial route in the proper sense of the word. Because better and cheaper routes will simply destroy that route unless we make up our minds to operate it at a dead loss all the time. The Grand Trunk Railway Company w7ill be the first to divert as much of the trade of the west as they may be able to their own lines. Now, w7e have other lines. Again, I say : Look at the map. In this House there are a good many business men. Suppose that a business man buys a cargo of wheat at Winnipeg or Brandon : the first question that the grain dealer has to ask is : How much will the cost be to send that wheat to the market of Liverpool? The American railways are there, they are well equipped and they will offer rates. But my right hon. friend has not to grapple exclusively with the American railways, well equipped as they are. He has to grapple with the water-ways. How much will it cost to carry a bushel of grain from Winnipeg down to Quebec or Moncton? How much will it cost to carry a bushel of grain to the sea-board by the American railways and by the American water-ways? What are our American friends doing to-day? Not only are they equipping better and better every year their system of railways, but they are changing their whole system
24f;T

248S
of water-ways. They are going to spend one hundred million dollars in deepening and widening the Erie canal. That will be a great competitor. In the summer months we may possibly compete with these waterways by making use of our own waterways if we continue to improve them as we will do, I hope. Looking at this enterprise as a possible competitor of the American water-ways, I say it is out of the question to expect any serious advantages out of it. There is no business man in this House or outside of it who can stand up and say that by building that new railway we will be placed in a position to compete with the American water-wrays or even with our Canadian water-ways. What I earnestly plead is that we will not engage the credit of the country and the attention of the country to that enterprise, while we would he losing most precious time which should be devoted to developing and improving our water-ways. I have mentioned the Erie canal. The work is going on.


Wilfrid Laurier: No.


Joseph Israël Tarte: The money has been voted,


Wilfrid Laurier: It has yet to be ratified by the people of the state of New York.


Joseph Israël Tarte: The legislature has voted the money and it has been ratified.


Wilfrid Laurier: WhenV


Joseph Israël Tarte: Four or five months ago. Five commissioners have been appointed, three of them belonging to the Republican party and two to the Democratic party, showing that the Americans mean business. They have not made it a party question. They have appointed men belonging to both of the political parties, three strong Republican engineers and two strong Democratic engineers. The work will begin immediately. But, there is another rival of the Canadian route, which is becoming more and more dangerous. There is the Mississippi route. Last year a very large volume of traffic in grain and flour was diverted to the Gulf of Mexico. The city of Chicago, which has spent about $40,000,000 in building the drainage canal, is offering at this very moment to the government of the United States as a free gift the whole of that work on condition that the federal government will take hold of it and complete the work, so as to make it a thorough water-way to the Gulf of Mexico. Let my right hon. friend-I say it again-take my words in the spirit that dictates them. The reason why the people of New York and the eastern part of the United States are proceeding so vigorously with the improvement of the' Erie canal is the fear they have of this improved outlet. We will have to compete against these two improved American water-ways. Who Mr. TARTE.
is the business man in this country who would say on his reputation that we will be able to compete from a commercial standpoint with the northern line which we are now debating ? I am prepared to agree that the government is acting in perfect faith-There is no doubt that governments do not pledge their future, and that public men do not pledge their reputation to an enterprise in which they do not believe. This we understand. They believe in it-well, some of them believe in it, I am inclined to think that others of them do not. I know that a great deal can be said in defence of the scheme on the ground that it will benefit colonization.


Mr. LEMIEUX.: Hear, hear.


Joseph Israël Tarte: I am prepared to listen to an argument on that point, but as a commercial, venture it cannot be defended-It cannot be defended as a means of keeping Canadian trade within Canadian channels. If the Prime Minister and his colleagues would this session propose a measure to improve our Canadian waterways, so-that they may compete with the improved American water-ways, then they would propose a policy of great national importance. But, if we stand idle and rely upon this Grand Trunk Pacific to carry western trade to our maritime provinces, not only will we lose our money, but we will lose our trade, and waste time into the bargain. I am r ot speaking from a sectional standpoint ; I have studied the question carefully and conscientiously, and I know that the only way to compete with our neighbours to the south is to take a leaf out of their book, and improve our water-ways, while we are improving our railways. The geography of the country is in our favour ; the city of Quebec and the chief cities of the maritime provinces will always get more trade by water than by rail. The St. Lawrence is a natural trade route ; the Americans know it, and that is why they are making such strenuous efforts to improve. their waterways. We are a young nation ; we ere not as powerful as they ; but we are growing bigger, and we understand our 1 osition better now than ever before. I again impress upon the Prime Minister that freight rates can never be controlled by this transcontinental national railway. It is impossible to make that northern road a commercial route. Our' friends from the Northwest know as well as we do, that they must continue to use the great lakes as an outlet for their products, and they know very well also that they will use Canadian or American outlets, just depending on which Is the cheaper. The Grand Trunk may tomorrow build a road between Duluth and Winnipeg, or they may enter into an arrangement with Mr. Hill, and if the rates under this arrangemtent are cheaper than the rotes by the Canadian route, the Canadian [DOT][DOT]oute will lose the trade. There is no pos-

sible doubt about that. I do not find fault with the Grand Trunk ; their geographical position gives them the preponderance of interest in the United States ; and Canada has helped them to locate their line tin it is at present located. Confederation was not accomplished then, and we were not a united nation. But, we are a united nation to day. Let me tell my right hon. friend, that I never understood him ; 1 cannot understand him now when he says, that his main object in this Bill is to give the control of the enterprise to the Grand Trunk Railway Company. I cannot make out what he means by that. The Grand Tiunk Company is a great company, and an energetic company controlled by energetic men. When we have all passed away, the Grand Trunk will have to look to how it can best earn money. I hope I am mistaken in the prophecy, that to serve their -own interests they will have to give much of that Canadian western trade to their American connections. On the other hand, if we improve our water-ways, and encourage our railways leading to the Georgian Bay and to the St. Lawrence, we may expect that the Grand Trunk Company will send a great deal of traffic to Canadian seaports. With that object in view, a couple of years before I left office, I placed before the Prime Minister a public document-not a private document-in which I suggested, amongst *other things, that the Montreal harbour <lebt should be assumed by the federal government, and that the port of Montreal should be equipped to handle the trade that is in store for it. If we had more ele ' ators in Montreal, and if we had elevators at Levis and Quebec then in the fall months the steamers carrying grain would do for our Canadian ports, what such steamers are doing for American ports.' Grain would be accumulated, and the Intercolonial Railway and the new railway, if it is ever built, would have so much more trade to carry in the winter months. Let us not forget that we have about seven months of summer trade, during which the railways cannot possibly compete with the waterways1. What business man will say that a cargo of grain will leave Brandon or Winnipeg in the sum iner months, and be carried to Quebec oi to our maritime ports by an all-rail route.
'1 liat will never be done ; in summer the grain will go by water and by rail and water. This Transcontinental Railway will start from Winnipeg, and go to Quebec and Moncton, through a country which is not settled.
I hope the land through which it runs will be found of good quality-as to that we have now no evidence-and if the land is of good quality, the country will be settled in the course of time. But for many years to come there will be no local trade available for that railway. How many millions of bushels of grain will be taken all-rail in the winter months ? Well, at the present day, neither the American nor the Canadian
railways carry any considerable quantity of grain in the winter months1 for export, because it cannot be done on a paying basis.
I cannot insist too strongly on this point, that that route cannot possibly be a commercial route to carry through trade from the west to the east and from the east to the west. We have, then, only one thing to do. If we do not want the Grand Trunk to carry all the Canadian trade from the west to American ports, we have to improve our water-ways in such a way as to induce the Grand Trunk, the Canadian Pacific, the Canadian Northern, and even the great American railroads, to direct their trade to our route because it will be the cheapest. Mr. Chairman, I have not taken part in the discussion on this question so far; but I wanted to lay my views before the House to the best of my ability with the main object that we have all at heart-to keep our trade within Canadian borders, and how to divert traffic from the American centres of trade to our route, which we can do, because it is the shortest. From the head of Lake Superior to Liverpool the Canadian route is about 600 miles shorter than the American route. Let us improve our water-ways, but let us not of course forget our railways. If we improve our water-ways so as to make them co-operate with our system of railways, we shall certainly keep our trade and improve our position. But if we rely on this project to keep our trade, we shall certainly not succeed. Mr. Chairman, I apologize for having said so much.


Mr. T. O. DAVIS (Saskatchewan).: Mr. Chairman, as I have not taken part in this debate up to the present time, I would like to say a few words in reply to the hon. gentleman (Mr. Tarte) who has just taken his seat. The facts which he has presented are not new. He has in season and out of season advocated the water-ways against the rail route. But I am afraid that his conclusion is not right, for the simple reason that he has not taken into account the fact that the grain crop of the Northwest does not mature until late, and it is late when we get our threshing done. Before it is ready to ship navigation is closed, and it is necessary for our farmers to store their grain for six months at the head of the lakes. Now, I want to inform the hon. gentleman, if he does not know it, that it costs six cents a bushel, if not more, to store that grain at the head of the lakes.


Joseph Israël Tarte: Will the hon. gentleman allow me to ask him a question ? How many millions of bushels of grain were stored last winter ?


Thomas Osborne Davis: It dees not matter how much was stored last winter. There have been millions of bushels stored there during the winter; and if we believe in the great development of that country that is going to take place, we must believe that in the

near future it will produce several hundreds of millions of bushels of grain every season. Under the best conditions, it is not possible to get more than half the grain crop out of the Northwest during the season of navigation. The balance would have to be stored at the head of the lakes for six months, at a cost of six cents or seven cents a bushel to the producers. Moreover, this would prevent them getting the benefit of any possible rise in the market, that might'occur during the winter. Then, it is not only the grain trade of the Northwest that we have to look to. We have a vast area of grazing lands in that country, and our cattle trade is going to assume enormous proportions in the future. That trade will not be carried over the canals. It must also be remembered that the population of the Northwest is increasing by leaps and bounds, and in a short time will be very large. Does the hon. gentleman suppose that those people are going to do business only six months in the year V Does he suppose that they are going to wait until the ice gets out of the canals every season before doing business ? As a matter of fact the supplies for that country go in during the winter months. If a merchant waited till navigation opened, by that time the spring trade would be over. We in the west expect to consume goods made by the eastern manufacturers in Quebec and Ontario, and these goods will come in during the winter months. If we could get the grain out during the season of navigation, thei-e might be something in the argument of the hon. gentleman ; but he knows that that is not the case. With regard to his statement about the Grand Trunk being able to get a short collection with Duluth, I fancy Uie hon. gentleman is aware that the Canadian Pacific Railway now has a line to Duluth. I do not know what position the, hon. gentleman occupies. I do not know whether he is supporting the proposition of the hon. leader of the opposition or not. If he is, his argument was not very logical, because he says that the Grand Trunk people pay 3 per cent on their bonds. Where .are they going to get the money to do that if the trade is taken from them ? It appears to me that if the proposition of the hon. leader of the opposition were carried into effect, and the government were going to build a road such as he proposes, we would have to spend a lot of money to operate that road. We would be taking more chances than we are doing now, because we have the Grand Trunk Railway Company behind this proposition, and they are obliged to pay 3 per cent on the cost of the road ; whereas, if it were a government road, we would not know, with the object lesson of the Intercolonial Railway before us, whether we eould operate it at a profit or not. What is the proposition of the hon. leader of the opposition ? Last year he proposed


Thomas Osborne Davis: and I do not suppose he has changed his mind since-to cut a big piece out. of the Canadian Pacific Railway system. W hat would that mean ? Where would the whole of the trade go which the Canadian Pacific Railway now brings from China and Japan ? Would it go through Canadian channels ? I think my hon. friend will agree that if you took a piece out of the middle of the Canadian Pacific Railway system, that trade would go by the Canadian Pacific Railway Soo line to Duluth and find an outlet through the United States. I fancy the proposition of the bon. leader of the opposition would have that effect. The hon. gentleman seems to have modified his proposition this year. Last year he did not come out fiat footed in favour of government ownership ; but this year I believe that both he and some of the hon. gentlemen behind him have come out in favour of government ownership. When the hon. member for Winnipeg (Mr. Putteei moved a resolution last year on the lines of government ownership, many of these gentlemen, who are to-day advocating government ownership did not support him. But I understand that the scales have since fallen from their eyes, including the hon. member for West Toronto (Mr. Osier), and they now think government ownership would be a good thing. Speakingas. n Wft&teim man, I think it would brTTTore in the interest of the country to have a strong, powerful corporation like the Grand Trunk Railway Company running its lines through the country and giving the people competition for all time to poyne tlnuv-trr~TnTve government ownership if hon. gentlemen opposite got into power. Frorrr'fny~knowledge of how they ran the Intercolonial Railway some years ago, government ownershipwould then mean Canadian Pacific Railway control! That is whaTTfiSTJeopie-crf the Northwest want to escape from. We want competition -actual competition.	.
I am afraid that under the government ownership, which my hon. friend the leader of the opposition would give us, we would not get that competition. Supposing there should be a change of government and hon. gentlemen opposite took office, with a couple of Canadian Pacific Railway directors as cabinet ministers. I would like to know what kind of competition the people of the west would secure from government ownership. We have a government railway as it is, which these hon. gentlemen controlled during the eighteen years they were in office. Mow did they run that railway ? They let it run into decay. They let it end in a buckwheat field-near the city of Quebec. They never made a move to bring it to Montreal where it could compete for freight. They never thought of extending it to Georgian BajT or anywhere else, but actually subsidized another road to run through the state of Maine for the purpose of competing with it. They actually assisted the Canadian Pacific Railway to build a short line through

the state of Maine down to our maritime provinces in order that it might take away trade from the Intercolonial Railway. Anil then they leased to the Canadian Pacific Railway the best paying part of the Intercolonial Railway. With What result 1 With the result that the Canadian Pacific Railway started their trains from the different stations half an hour ahead of the Intercolonial, and took up everything along the route, express, freight and passengers, then the Intercolonial Railway came junketing along in charge of a conductor and a couple of brakesmen, burning up coal and doing no business. That is not the kind of competition we want out in the west. When we see lion, gentlemen opposite, who have been in this House the past twenty years, and who, during all that time, have been opposing, in season and out of season, in the strongest possible manner, government ownership-when we see these men change front in the short space of twelve months and come out in favour of government ownership, we are inclined to view their professions with some suspicion, and we cannot help coming to the conclusion that these hon. gentlemen are inspired in their sudden change by the Canadian Pacific Railway authorities. Should the government scheme go through, the Canadian Pacific Railway will have to encounter live competition, but should hon. gentlemen opposite have their way, and should a government controlled by them own the road, then the Canadian Pacific Railway would be again on top. That is the way I look at the matter from a west* ern standpoint. I would rather a thousand times over have the Grand Trunk Pacific build the road under proper government control, such as this contract provides for, than have the kind of government owned road we might expect if hon. gentlemen opposite were in power. Why should I come to that conclusion ? Why, Mr. Chairman, every move made in the last two years by hon.' gentlemen opposite has been a Canadian Pacific Railway move. Last year they wanted us to buy7 some 636 miles of useless road, with high grades and short curves, running along the north shore of Lake Superior-a road which is a white elephant on the hands of the Canadian Pacific Railway. They wanted us to buy that road from the Canadian Pacific Railway, and there can be no doubt that we would, in that event, have had to pay the Canadian Pacific Railway $36,000,000 for it. And that is a road which the Canadian Pacific Railway do not need, because they have the Soo line, which gives them the outlet they require. That road, however, hon. gentlemen opposite would like to buy and convert into a government road. But if the Canadian Pacific Railway cannot operate it at a profit, how is the government going to do that ? That was a Canadian Pacific Railway move No. 1. Only the other night I heard these gentlemen getting up one after another and advocating the construction of the Grand Trunk Pacific right at once across the prairies. It was rather strange to see these hon, gentlemen take such a sudden interest in the people of the west. But if we look behind the scenes, we will find that the reason they are so anxious to have that done is because the Canadian Pacific Railway owns the spout. You may build all the roads vou like on the prairie, so long as the Canadian Pacific Railway own the spout from the city of Winnipeg to the east, the people of the west will get no relief, because, when you come to the spout, everything has to go through it. The same thing applies to the road further west. That would equally suit the Canadian Pacific Railway, because, if constructed at once, it would be a feeder to that line. That again was another move in favour of the Canadian Pacific Railway. Now we find these hon. gentlemen wanting government ownership. That is another move to benefit the Canadian Pacific Railway. If these hon. gentlemen had control of a government road to the west, the same thing would occur as did occur in the past, and we would have that government road run in the interests of the Canadian Pacific Railway. If the leader of the opposition could carry out his proposition to buy this rocky piece of road along the north shore of Lake Superior, some 636 miles, which would cost $36,000,000 of the people's money, what would that mean ? It would mean the handicapping of the government road at once, so that it could not compete with the Canadian Pacific Railway. The hon. gentleman wanted the government to purchase a road which every one knows is far from being up to date. Take that line to-day, and the best locomotive they can put on it' will only haul eighteen cars of cattle, whereas on the Grand Trunk Railway, between Chicago and Port Huron, one locomotive can haul thirty-five cars of cattle, and the new Grand Trunk Pacific, with the grades specified in this contract, will be able to do the same. That shows that the hon. gentleman's proposition would handicap the government road right at the start. But hon. gentlemen opposite have been very careful not to give too much explanation of their leader's scheme. Last year it fell like a wet blanket on the House. Hon. gentlemen opposite told us we could not have running powers over" other roads. They said that running powers were a myth, and it was no use talking about them. But since then we have had their leader proposing running powers over two lines from Port Arthur to Winnipeg. Last year he came down with a proposition to build a road, but hon. gentlemen opposite did not enthuse over it to any great extent, and have not taken much pains to explain it. There are two propositions before the country. There is the proposition of the right hon. the First Minister, which has been explained over and over again, and then there is the proposition of the
249?;

leader of the opposition. But these hon. gentlemen have not taken the pains to explain their proposition. In that they have not followed the example set by the government, and I have no doubt that if the leader of the opposition, instead of wasting time with tu'-penny ha'penny criticisms on the policy of the government, would explain his own-if he would let the country know what he proposes to give the Canadian Pacific Railway for that piece of road on the north shore of Lake Superior and what ho proposes to pay the Canadian Northern for the renting of their road, also what he proposes to pay for the prairie and mountain sections and the Canada Atlantic Railway, he would throw a little more light on the subject; and if he did I am confident that the people would have no difficulty in coming to a decision in favour of the government proposition as against his. The ex-Minister of Public Works (Mr. Tarte) does not appear to approve of either scheme. He wants us to give all our attention to the water-ways. He says that the people of the United States are going to spend $100,000,000 on the Erie canal. That may be, the hon. gentleman is better informed than I am. I know that such a proposition was before the legislative assembly of the state of New York and may have gone through. That canal, however, after it is built, will be only open some six months in the year. Unfortunately, in our northern country our canals freeze over in the winter so that during these six months the hon. gentleman would have the whole trade of the country tied up. I am of the same mind with regard to canals as my hon. friend. I think they will do good work. During navigation we will use them, but we cannot move the crops of the Northwest Territories that we are growing now and what we will grow in the future through the canals. The whole trade of the country cannot be tied up six months in a year. If something be not done, the very object my hon. friend has in view, the building up of a great Canadian nationality, will fall to the ground, because you will divert the trade across the boundary to the United States if you do not open and build this^ road, and do it quickly.
Now, what does it mean? It means that if you build the government road through that northern country as a colonization road, and also to give connection with the west, you must look for business for that road to do. Well, where are your feeders; where are your connections? The provinces of Ontario and Quebec are grid-ironed with railways to-day, and those railways are in the hands of two companies, practically. Suppose you have a government road built through to the Northwest. Freight will be gathered up by the Grand Trunk in every city, town, village and hamlet that it touches, and carried to the Northwest through American channels. And the' Canadian Pacific Railway will collect freight from all the many places Mr.' DAVIS.
with which they connect and will run it over their own system. Where, then, is this government road that hon. gentlemen eposite talk about going to find anything to do? We have heard about deficits on government roads before, but they are nothing to what we would have on nuch a road as this. The effect of this contract will be to place the people of eastern Canada, every community whether small or great, in touch with the people of the west; and it will have this effect at once. Every little hamlet in Ontario will be able to send its goods and manufactures through to the Northwest.


Mr. SAM. HUGHES.: Will the hon. member (Mr. Davis) allow me to ask him a question?


Thomas Osborne Davis: Certainly.


Samuel Hughes: Does not freight for the Northwest, originating in towns in the east, go right tlirougn to its destination?


Thomas Osborne Davis: Over the Canadian Pacific Pacific Railway and it takes in many cases seven months to get there. I have pointed out that in the town in which I live we have not had any freight since last January. If lion, gentlemen imagine that the people of tile Northwest will put up with that state of affairs they are quite wrong.


Joseph Israël Tarte: You cannot stop floods.


Thomas Osborne Davis: This is not a case of floods. There were no floods in January, nor were there any' in February or March.


Joseph Israël Tarte: There was snow.


Thomas Osborne Davis: There was snow, certainly. But the railway companies of this country know that there is going to be snow in the winter, and they should be prepared for it when it comes. There is such a thing as building snow fences; there is such a thing as having enough coal for their locomotives; there is such a thing as recognizing that the winter brings snow and getting ready for it. One winter's experience should be enough, instead of having this kind of thing occur year after year. But I was showing the absurdity of the proposition of the leader of the hon. gentlemen opposite. I was showing that even if he built this government road that he speaks of, it would have nothing to do. I suppose that even freight carried by the Canadian Pacific Railway from the east would go through by the United States, because if mis middle portion of the line around Lake Superior, were taken over by the government, the Canadian Pacific Railway would run their freight through the American side line on the Soo. And so, all the freight collected in this country would be taken out through American territory. I suppose that portions of this government road would be a colonization road. But, as for through-freight, it

lias never been explained so that I can understand it, where the freight is coining from that it is to carry from the eastern country to the west. And. if this government road were run by hon. gentlemen *opposite as they ran the existing government road when they were in power, the whole thing would turn out a pretty tough proposition, I am afraid. And, so far as the Northwest is concerned, we would still have the Canadian Pacific Railway on our backs, like the old man of the sea. We are trying to throw him off. We want competition-good live competition: and the way to get it is by the construction of this road. So far as this contract is concerned, it seems to me it is pretty fair. Let hon. gentlemen opposite compare it with the contract that their party made for the construction of a great railway some years ago I do not forget that that was at a time when conditions were not as favourable as they are now. But even allowing a large margin for that, this is a far better contract. So far as the western part of this road ig concerned, it is true that this government guarantees three-quarters of the cost. But then the government have a mortgage, and. K tlle contract is not carried out, the road will belong to the people. The eastern portion of the road is to be built by the government and handed over to the Grand Trunk to operate for fifty years. , The hon member for West Toronto (Mr. Osier) said that in the House a day or so ago. that after a company began operation of a road they would have to spend $10,000 a mile on it in a few years to get it in good shape. If that is the case, then, the Grand Trunk will have to spend a great deal of money m the future in improving the road ; so I fancy that when the road is handed back to the government it will be worth three times as much as when the Grand Trunk took hold of it. So. we will have three per cent interest on the money spent in constructing, we will open and develop a new territory, we will give a new outlet to the people of the west and, when we get the road back it wili be a property greatly increased in value. Then, so far as this railway is concerned, there is no exemption fropi taxation. These people are going to bear their share of the burdens of the country like the rest of us. There is full control of rates retained by the government, so that oppression of the People in that way is impossible.
Now, I would like to say a word about a statement of the leader of the oposition as to the stock of this road. He says that even if the stock is sold at ten cents on the dollar, the freight rates would be made high enough to pay the interest on the par value. But, if he looks at the records of the United States, he will find that not half the railways of that country pay dividends on the stock. There is a railway commission for every state, and you have
the interstate commission besides, and these authorities do not take the stock into consideration in fixing the rates. They count the bonds as being the money that built the road, while the stock represents the speculative element, and the stock is not taken into consideration in settling the rates of transportation. Nor will it be in this case, I think. So long as the road is not bonded at too high a figure the stock does not matter so much. The eastern part of this road is to be built by the government, and it is to their interest to build as cheaply as possible. And, as the Grand Trunk have to pay interest on the cost after ten years, they also will try to keep down the expense of construction. I venture to say, though I am neither a prophet nor the son of a prophet, that the company will be able to pay that interest and make a good return for themselves during the time this contract runs. This country is advancing rapidly. We are bringing in at least 128,000 people a year to fill up our unoccupied territory, and that number is not going to diminish. The production of wealth is increasing by leaps and bounds. Surely, with the progress Canada is making we can afford to have another outlet to the east. Surely we are not always going to be hung like a fringe along the edge of the rivers and lakes, but are to have depth as well as breadth to our country. This road will give us depth. I do not pretend to know about the northern country, but I do know about the western. That country has passed the experimental stage. We know what-it is producing and will produce. We are in a position now to say that the western provinces of this country will occupy the same relation to the eastern provinces that the western and middle states occupy to the eastern states at this time. Practically the whole wealth of the United States is concentrated in the western and middle states, and the same state of things will be brought about in this country. Let hon. gentlemen opposite explain to us the policy that they advocate in contrast with this, and not confine themselves to the small criticism we hear in connection with this Bill. We challenge them to explain their scheme. Let them put it in their newspapers and explain to the people what they propose to do. But no, they keep harping away about such little things as the building of this prairie section inside of three years. Any reasonable person understands that that prairie section must be built before the mountain section can be touched. They have only eight years in which to build the whole road, and it must necessarily fellow that they will build the prairie section in three years, because that leaves them only five years for the Rocky Mountain section. They know that, but in order to lead the public to believe that there was something wrong they keep on with

this petty criticism day by day. I would like them to explain their position and if they take the proposition of the leader ef the opposition (Mr. R. L. Borden) and place it alongside that of the government, I have ro fear of the result. I think the people of this country will decide quickly that this contract will be much more in the interest of Canada than the one which the hon. leader of the opposition (Mr. R. L. Borden) has proposed.


Joseph Israël Tarte: I am dealing with the project which is submitted to us by the government.


Mr. HEYD.: What about the other one


Mr. COCHRANE.: None of your business.
cr untry is bordering on the American states, where'there is already a complete system cr railways. How many times have I heard try hou. friend who has just taken his seat (Mr. Davis) suggest that the trade of tae Northwest might go to American ports.


Thomas Osborne Davis: I say that now.


Joseph Israël Tarte: I say that also. That is the main Point. The Grand Trunk is located on the other side of the line. My right hon. friend and his colleagues tell us they will prevent the American railways from taking the trade from us by building a road 1.900 miles long. That cannot be done. Build your road, as you have made up your minds to do so, but supplement your policy by something else.


Joseph Israël Tarte: When the hon. member lor Halifax (Mr. It. L. Borden) is in office, if I am a member of this House and if he ermes down with a proposition I will deal ^ ith it then. 1 have heard a good many business men discussing this question in the last few weeks. They are trying to understand the ministerial project. As to the proposition made last year and the other one made this year by the hon. leader of the opposition (Mr. R. L. Borden). I for one do not feel justified in dealing with it row.


An hon. MEMBER.: Keep away from it.


Joseph Israël Tarte: It is enough for me, in my humbleness, to deal with a strong govern ment; I feel it enough now. It is no vse trying to draw herrings across the track. We are discussing a very grave matter indeed, and the question to which I have tried to call attention has not yet been grappled nvith. The Grand Trunk is two-fold ; it has its system between Chi cago. Buffalo and Portland. My right hon. friend (Sir Wilfrid Laurier) and his colleagues have not explained in what way they will be able to force the Grand Trunk to send Canadian traffic through Canadian channels. It has not been explained as yet, I should like to have it explained. The plan of the leader of the opposition is one thing which may be submitted later on, but as far as I could see, the government will carry the day now, their project will certainly be adopted. There is no doubt about that. How is the government going to arrange matters so that Canadian trade, especially that of the Canadian Northwest, will not be diverted to the existing Grand Trunk lines on the American side? This is the main point of the discussion, in my view. The Prime Minister has said, and so have some of his colleagues, that they want to send the trade of the west to the maritime provinces and to Quebec. I say that the present scheme cannot succeed unless it is supplemented in some way. We cannot lose sight of the fact that our Northwest


Thomas Osborne Davis: The hon. gentleman is talking about a road 1.900 miles long from M in-nipeg ho the Atlantic ocean. Let him estimate the distance from Winnipeg to the ocean by the route which he fears u ill get the trade, and see how the comparison stands. All wheat has to go to the Atlantic.


Joseph Israël Tarte: The point I am making is clear to any one who wants to discuss this matter from a business standpoint. The Grand Trunk Railway has a line built from Chicago to Buffalo and Portland, a complete and fully organized system of railway from Chicago. By building a short line or by making running arrangements between Duluth and Chicago, with some existing line, they will be able to obtain a road 900 miles to Chicago, where they will join their existing lines, and will have not to spend a cent further. Is it not clear that their interest is to divert as much trade as they can to their existing lines, in order to pay better dividends to their shareholders? We cannot blame them; trade has no love. They are there on the American soil, they have their American ports. My friend is speaking of the Canadian Pacific Railway. He sees the Canadian Pacific Railway everywhere, but lie must not forget one thing, that the Canadian Pacific Railway is essentially a Canadian railway, built on Canadian soil, they have not settled in Portland, they have settled in St. John, N.B. He has reproached the late government with having given them a subsidy to go to the maritime provinces. He should not forget, nobody should forget, that that short line between Montreal and St. John has been subsidized so as to enable the Canauian Pacific Railway to compete with American lines in taking trade to Canadian ports. I am glad my hon. friend from the Northwest has brought up the Canadian Pacific Railway once more. The Canadian Pacific Railway has vast connections in the Northwest. It comes down to the head of Lake Superior, it goes down through


Thomas Osborne Davis: the most fertile parts and through the great centres of trade of Ontario and Quebec. It goes to Toronto, to Montreal, crosses the St. Lawrence and on to port of St. John.
I know as a positive fact that the Canadian Pacific Railway are spending half a million dollars a year by going to the port of St. John, that they would have by not going. Still, they are passing through two large provinces and they are tapping large centres of trade. Where is the trade of the northern line which is going to be built to come from ? My hon. friend says that we must not be isolated for six months in the year. I grant all that. I do not object to the Grand Trunk Railway Company going to the Northwest, but I ask the government to find the means that will make the Canadian trade of the Northwest go through Canadian channels. That is all I want. The position is a very dangerous one. It is not the fault of the Grand Trunk Railway managers. The location of the Grand Trunk Railway is settled for all time. I cannot say too often or too loudly that it is part an American railway and part a Canadian railway. Their winter port is at Portland. It will always be their winter port. It cannot be anything else. We made it ourselves. The question is whether the government have been wise in insisting that the Grand Trunk Railway Company shall control altogether this new enterprise. Public ownership has been alluded to on many occasions. As it is six o'clock I shall say a word or two on this subject after recess.
At six o'clock, committee took recess.
After Recess.
Committee resumed at eight o'clock.


Joseph Israël Tarte: This afternoon I reminded the House of the fact, that the Grand Trunk is partly an American and partly a Canadian railway. That is not their fault, but is nevertheless a fact, and we cannot lose sight of it in this discussion. I have prepared a short memorandum of the distances I referred to this afternoon. From Winnipeg to Duluth the distance on a straight line is 360 miles ; from Duluth to Ashland ou the Wisconsin Central 76 miles ; from Ashland to Chicago 437 miles, or a total of 873 miles from Winnipeg to Chicago. It is estimated that a road could be built from Winnipeg to Duluth and thence to Ashland for $35,000 per mile, but for the purposes of my calculation I shall place it at $40,000. The road from Winnipeg to Duluth would therefore cost $14,400,000 ; and from Duluth to Ashland $3,400,000 ; total $17,800,000. The Grand Trunk Railway Company-if they have not done so already-could get possession of the Wisconsin Central from Ashland to Chicago for $13,000,000, which would make all told a sum of $30,000,000. which it would be necessary for the Grand Trunk to invest to get a
straight line from Winnipeg to Chicago. Let us say that they will pay four per cent for that money which will not be guaranteed by the Canadian government. That will give them an annual interest charge to meet of $1,200,000. When they reach Chicago they are in their own territory, connecting with their own line which is fully equipped, and the trade from the Canadian Northwest would simply add value to that line as a first class feeder. What is the position of the Grand Trunk in relation to the government project 1 From Winnipeg to Moncton the distance is in round numbers 1.900. Time v\ ill tell whether I am right or wrong, but my own conviction is that that line will cost $50,000 a mile to construct; however I will put it at $40,000 a mile. That would make $76,000,000 on which, at three per cent, the Grand Trunk Pacific would have to pay an annual interest amounting to $2,280,000. In view of this, I ask every businessman of the country to tell where the interest of the Grand Trunk Company lies. Are they going to lose $1,000,000 a year for the love of Canada ?	Is it not in
the interest of the Grand Trunk Railway Company, to take the trade of the Northwest to their own line ? What business man will gainsay that proposition. I approve of the GrarnTPruuk entering into the Northwest. Thev are anxious to go there, and the Minister of Justice stated a great truth when he reminded the House, that the prairie section of the Grand Trunk Pacific will he a very paying line. The Canadian Pacific Railway are tohlay building branches without a sking^any Assistance from this parliament.


Mr. McCREARY.: What branches ?


Joseph Israël Tarte: I cannot name them, but my hon. friend knows that they are building branches right and left.


William Forsythe McCreary: I do not know.


Mr. CLARKE.: Are they building any branches ?


William Forsythe McCreary: They are and getting subsidies for them-name your branches.


Joseph Israël Tarte: I have not the names on my fingers' ends to-night, but the Canadian Pacific Railway are building some branches without asking for subsidies. Of course they would be glad to have subsidies given ; any railroad would. However that argument is not essential to my case, and I will dismiss it. I agree with the Minister of Justice, that the government will perhaps never have to pay a dollar for the guarantee on the prairie section, because it will pay as na business enterprise. The Grand Trunk Pacific Railway will build that part of the line as quickly as they can ; they will centre in Winnipeg as then1 western terminal. From Winnipeg are they going to take the trade to their American lines which I have just described ; or will they take it over the

government line, or will they take a good deal of it through the lakes in the summer months ? All sensible men who have studied the question, agree that in summer time it is out of question that these long stretches of railway can compete with water carriage. I am glad to see the right hon. the Prime Minister now in his seat, and for his benefit I will repeat the figures which I have already given. I say this seriously, because a public man such as he is has not the time to study these questions from all points of view.
The Grand Trunk is at Chicago, and it requires a little over S00 miles to connect the Chicago, Buffalo and Portland line with Winnipeg. I say again, I do not see how the Grand Trunk Railway Company can do otherwise than favour their American connections in the winter mouths. Portland is their port. The distance from Winnipeg to Portland is in round numbers 2,000 miles, against 1,900 miles from Winnipeg to Moncton which is not of course a sea-port. The Grand Trunk will run on its own lines* which are already built, for a distance of 1,138 miles, without spending one cent of additional money. It seems to me that these figures, which cannot be successfully contradicted, are very important in the present discussion. Well, what are we going to do ? The government have made up their minds to build the eastern division. They say it will be a great colonization road.
I hope it will be. I hope I shall live long enough to see it a successful colonization road. But it cannot be a successful commercial road now or for many years. I have reminded the House of the position of the Canadian Pacific Railway. It is tapping all the important centres of trade in Canada. It as also an important feeder in the Soo line. I was very much surprised to hear the hon. member for Saskatchewan (Mr. Davis) refer to the Canadian Pacific Railway branches on American soil in a disparaging way. They are feeders to the main line on Canadian soil ; they are nothing else. And let me say within the hearing of the business men of the country that without the Soo line I doubt very much whether the Canadian Pacific Railway would be in a position to go to the Canadian port of St. John. My hon. friend from Saskatchewan says : We cannot be isolated. That is not the point. Nobody desires to see the Northwest isolated. It is not isolated to-day. It is better served with railways than any other part of the country. In my own province we are not served as well. We know that we have a great realm there, and we want to develop it; but we want to develop it in the interest of Canada, and it is only fair that we should do so. My hon. friend from Saskatchewan and the members of the government, with the right hon. gentleman at their head, have alluded to the Asiatic trade. We have heard able arguments


Joseph Israël Tarte: on that subject. Will my right hon. friend kindly pay attention to the present state of affairs in China and Japan, so far as trade is concerned ? The trade of China last year amounted to $330,000,000, imports and exports, and the trade of Japan amounted to $250,000,000. In listening to the arguments on this subject, one would suppose that those countries had no fertile lands. Manchuria, Mongolia and Siberia have just as much wheat lands as we have. They are only beginning to develop their lands and trade. They have done marvellous things thus far. Last year Siberia exported to the English market $15,000,000 worth of butter. It can grow wheat, corn and everything that we can, it can raise cattle. In a few years, when we have peace-and let us hope we shall have it soon-all these countries will be producing and exporting. I am afraid we shall not be able to export to them much wheat or butter or cheese. We may expect to export manufactured articles. But we are not alone in that. The Americans, the English, the Germans and the French have already taken a firm hold there. Then, Canadian trade is not yet much in sight. The Grand Trunk Pacific will certainly take from Asia, tea, rice and articles of that kind and we may send to Asia manufactured articles to a certain extent. But it will take many years to develop that trade. I will not discuss at any length that part of the scheme. It may materalize all right. The government guarantee the interest on 75 per cent of the cost of the road. The Grand Trunk authorities believe that it will be eighteen years before they will have to pay any interest on 75 per cent of the cost. Well, I will dismiss that part of the enterprise. I desire to confine my remarks to the position of Canada, so far as the trade of the Grand Trunk is concerned. I verily believe that unless the government supplement their policy to-day with a strong and energetic water-way policy, their present policy will be a destructive one. I would hope time will prove that I am wrong ; but that is my candid opinion, for this excellent reason, that railways cannot compete with water-ways, and the summer season is the season of trade, both export and import. My hon. friend from Saskatchewan asked us this afternoon whether there would not be a large import trade. Let us look at the records of this country. The import trade of St. John represents only 20 per cent of the export trade in the winter months. Our hon. friends who are in the grain trade know very well that the export of grain is mostly carried out by railway's and water-ways in the summer time. Some of our hon. friends say that a good deal of American grain is carried from Chicago to New York. Let them look at the records of the export of grain. There is very little grain exported in the winter months. American railways carry grain in the winter months for local con-

sumption, to a very large extent at any rate. Then, what I humbly suggest to the government is that they do not go too fast. They have pledged the administration to building the Transcontinental Railway. My right hon. friend is entitled to be a proud man. He has been a very successful political man ; and I quite understand that he may desire to have his name associated with a great transcontinental railway. I don not blame him for such an ambition. But is it not the part of prudence to go slowly, at any rate so far as a certain part of the enterprise is concerned V The Grand Trunk Railway would not undertake themselves to build the road from Winnipeg down to the maritime provinces.


Mr. SIFTON.: Hear, hear.


Joseph Israël Tarte: I was in the Railway Committee when that question came up, and the Grand Trunk Railway would not, undertake to do this, because they thought it would not be a paying enterprise. From their standpoint they were right. They were not eager either, to build that part of the road from the Rockies. They were anxious to get a charter, but were not anxious to go on immetli-ately with that enterprise.


Clifford Sifton: Hear, hear.


Joseph Israël Tarte: They wished to get a share in the development of the Northwest and to be in a position to handle their own traffic east and west. We are all agreed that they should be put in that position. But I wish to ask my right hon. friend to pause before undertaking to build that part of the railway between Winnipeg and the maritime provinces. I know that what I am saying will be interpreted by opponents as being inimical to the province of Quebec and the maritime provinces. I am used to that kind of argument, and am not afraid to say what I think is right. There will be a survey before that enterprise is undertaken. That survey will last a couple of years, at any rate more than a year. When we have that survey, if it be demonstrated that there are large tracks of good, arable land in that section, I will stand by the scheme myself, from the point of view of colonization. I do not believe in it as a commercial enterprise, but will stand by it as a colonization road, although I am quite prepared to admit that there are many other and better ways of developing colonization. But it will serve, to a limited extent, as a comercial enterprise, and to a great extent as a colonization enterprise, should there be in that country large quantities of arable land. These are my views on the question before the House.
Some of my hon. friends ask me what I think of public ownership. In the position I occupy. I have no hesitation in saying what I think. I am free to speak my mind. The question of public owner-ship is not a new one. Not only has it been discussed, but it has been tested. Out of 220,000 mites
of railway, which are in operation in the world outside of the United States, there are about 160,000 miles which are owned by governments and administered by states. The railways in Germany, Russia, Belgium, Holland, Australia are all owned by the respective governments of these countries. In other words, the countries in which there are government owned railways are countries where the government owns them all. In France the government has practically built the railways. It has guaranteed the money required to build them, and the railways become gradually the pi-operty of the state. Its Minister of Public Works has full and complete control of the rates ; and these rates, moreover, are regulated by the fact that the government own and possess 12,000 miles of canals, which are indeed a great regulator of rates, so far as railways are concerned. In Germany many people may suppose that the roads are administered from a military standpoint, that is not the case. When Bismarck undertook to buy the railways of the German states, he had no doubt in view the military interests of the empire, but he had specially in view its commercial interests. In 1901 the net profits on the 32,000 miles of German railways were $178,000,000. In Germany the state owns all the railways, and Germany has a population of over 50,000,000 people. In Russia-I do not speak of the Siberian Railway-there are 30,000 miles of railway, also owned by the state.' The government of Russia owns all the railways, and they are a paying property. In Germany the state earns about six per cent interest on the money invested. In Russia about the same. In Belgium the government last year earned about three and a half or four per cent on the amount Invested. And the rates in those countries are a great deal lower than they are in England, where the railways are not owned by the state. It must be remembered .that in those countries all the railways are owned by the state. It would be difficult to own one railway, as is proposed, in this country. We have subsidized the Canadian Pacific Railway, the Grand Trunk Railway, the Canadian Northern, and many other companies. Suppose we own a railway, we would either make it a paying business, and in that case we would be obliged to charge rates that would yield a good return, or we would have to face a heavy annual deficit. Then it would be very difficult indeed not to charge the same rates ns other companies.


Clifford Sifton: Hear, hear.


Joseph Israël Tarte: Because, if we were to charge lower rates, we would simply ruin all the other companies. The question is not a new one for my former colleagues and myself, and I may be now defending opinions which I advocated in the past. This is an interesting question indeed, but we are not called on to discuss it now. It is true, the leader

250S
of the opposition has placed a suggestion before the House.


Charles Bernhard Heyd: Let its hear about that.


Mr TARTE.: I say, that this is but a political argument and not a business argument. My bon. friend will admit that. We are now discussing a business matter. We are discussing the government project, With part of if I agree, I shall not lose much time in discussing the details. The Grand Trunk Railway have no doubt obtained an advantageous agreement. But what I am anxious about is the fact that my right hon. friend and his colleagues place so much importance on leaving the entire control of the enterprise in the hands of a company which is partly American and partly Canadian. That is the danger, and it is a great danger. Let my words be weighed by those who have studied the question and who have no party interest to serve. My right hon. friend and his colleagues may avert the danger to a certain extent by properly equipping now our-water-ways. They may in this way avert the danger to a pretty large extent; but let them not forget that unless they do so, they will have to fight against American railways and American water-ways.


Mr. WRIGHT.: The hon. gentleman gives us to understand that by constructing or purchasing a road from Winnipeg to Chicago, the Grand Trunk Railway would have a through road from Winnipeg via Chicago to Portland, which would only be a hundred miles longer than by the Canadian road to Moncton.


Joseph Israël Tarte: Yes.


Aaron Abel Wright: And that by sending their freight over their road by Chicago they would save over a million dollars a year ?


Joseph Israël Tarte: Yes.


Aaron Abel Wright: That being the case, why is it that the Grand Trunk people, who are certainly good business men, have anything to do with the construction of this Grand Trunk Pacific road, when they are going to save $1,000,000 a year by going by the other route ?


Joseph Israël Tarte: I am very glad indeed that my hon. friend has called my attention to that point

which.' however, was on my memorandum. What is the amount the Grand Trunk Railway Company are putting into this enterprise? The Grand Trunk Railway Company have made a good bargain. I congratulate them. They have acquired the control of the whole transcontinental railway without putting money into it. That is the position.


Aaron Abel Wright: And they have done it in order that they may injure their own road?


Joseph Israël Tarte: My hon. friend is a sound
business man


Joseph Israël Tarte: 


An hon. MEMBER.: No.


Joseph Israël Tarte: Yes, he is a sound business man. He has sound judgment; I know him well. It is greatly to the interest of the Grand Trunk Railway Company to gain access to the Northwest

Mr. WRIGHT, But they could go by the other route-


Joseph Israël Tarte: Will my hon. friend permit me? The Grand Trunk Railway Company, as I have said is a two-fold company. They have an outlet in Chicago and an outlet in Montreal and an outlet in Buffalo and an outlet in Portland. Between Chicago and Portland they own a magnificent piece of railway 1,138 miles long. They own also a system of railways in Canada. They have a strong incentive, then, to gain access to the Northwest. They asked for a charter; they wanted to build a road from a certain point in the province of Ontario to the Rocky mountains. My hon. friend (Mr. Wright) is a member of the Railway Committee and he remembers the debate. The Grand Trunk Railway Company secured the control of the Grand Trunk Pacific Railway Company without putting any money into it, .the government agreeing to build from Winnipeg to Moncton at their own expense, borrowing the money for that purpose and renting the line, when completed, not to the Grand Trunk Railway Company, mind you, but to the Grand Trunk Pacific Railway Company, a company that the Grand Trunk controls, but into which it has put no money.


Aaron Abel Wright: They have to pay three per cent on the cost of the road.


Joseph Israël Tarte: The Grand Trunk Pacific Railway Company have to pay three per cent, but the Grand Trunk Railway Company have not to pay anything, have they? They pay no money toward the enterprise, and yet they control it. They have invested a very large amotfht of money in their system from Chicago to Portland, have they not? And on that they have to pay not only working expenses, but dividends as well. But on the railway between Winnipeg and Moncton they will not have a dollar to pay. The bargain is that three per cent shall be paid. Very well. If the Grand Trunk Pacific is a paying business they will pay three per cent ; but if it is not' a paying business, they will not pay. And we can not complain. I expect-and I do not blame the government for it ; I am very frank in saying that-I expect not only that we shall receive no interest for the ten years provided for in the contract, but, perhaps for another ten years and perhaps more. I do not say that we shall have to bear the whole interest, but I would be very much and very agreeably surprised if. before I die, I find that piece of railway

paying three per cent. I appeal to the business men of the country on that point.
However, I am not discussing the financial aspect of the question. I am addressing myself to the national aspect-the question of the future of the country. If I am wrong, in my financial calculations, if the road between Winnipeg and Moncton pays three per cent after ten years, I shall be glad. I do not expect it, but I shall be glad if my expectation is not realized. But that is not the great point at issue. 1 invite my right hon. friend (Sir Wilfrid Laurier) and his colleagues to deal with this matter in a businesslike way. The great point; at issue, is where is the trade of Canada to go when that line of railway is completed?


Charles Bernhard Heyd: To Quebec.


Joseph Israël Tarte: Will it go to Quebec in the summer months?


Charles Bernhard Heyd: Yes.


Joseph Israël Tarte: Well, when we know that grain is being carried by water from Duluth 1Quebec for less than three cents per bushel, and a business man like my hon. friend (Mr. Heyd) says that the prospective railway will carry the grain from the Northwest to Quebec, I have no answer to give. The answer is in the minds of all business men. My hon. friend (Mr. Heyd), is not serious, i know. In the summer months Quebec will get trade by the water-ways. I hope that navigation at Quebec in future will be kept open a little longer than it has been in the past. I expect that that will be the case. In the winter months the trade will not go to Quebec. Our friends from the maritime provinces expect it, and if there is any trade they must get it, because Quebec is closed during the winter. No. The old city of Quebec has a great prospect, but it is bound up with the carrying out of the policy of water-ways. We must not neglect railways, of course, but I say that, from a commercial standpoint the St. Lawrence route, that is to say, the water-ways, are the route par excellence. I do not know what the government will do; I am not in their secrets. But it seems to me they have ahead of them a clear-cut policy. Let them build this road, if, after the surveys are made they decide to do so. But. even before they have made up their minds fully to build the eastern section of this road, let them make up their minds to develop our water-ways to the fullest extent. Let them equip our harbours; let them help the organization of the railways from the Georgian Bay down; let them apply their energy and ability to completing and improving the St. Lawrence route from one end to the other. I believe that my suggestion is a good one, that it is a practical one: and I am inclined to believe that the right hon. gentleman (Sir Wilfrid Laurier) will not dismiss it without giving it a careful second thought.


Wilfrid Laurier: Though the-observations of my hon. friend (Mr. Tarte) are not at all germane to the paragraph in the contract we have before us, still, as we have not, for some time, had the pleasure of listening to my hon. friend,. I am sure we are all willing to stretch the rules a little for the pleasure of listening to his observations. But I must say to my hon. friend that I have listened to him [DOT]with some surprise. He is not the same man I used to know. He used to be strongly national in his aspirations. Now, he advises me to look at the map of the continent. If that advice and what went with it meant anything at all, it meant that, looking at the map of the continent, the government w-ould not build this railway but would allow trade to take its natural course.
If we were to look at the map and to take into account only geographical considerations this railway would not be built-no Canadian railways would have been built. If in the past we had looked at the map and regarded geographical considerations alone the railways of Canada, instead of running east and west, would have run north and south. This the natural consequence of the advice of my hon. friend (Mr. Tarte) has given me that we should observe the position in which we are placed, that the American harbours are nearer to the wheat fields of the west than the Canadian harbours, and that therefore we should allow the trade to go to the nearest harbours and not force it to the more distant ones. My hon. friend Air. Tarte) in the course of his remarks this afternoon recalled the discussion which took place in 1849, when the Grand Trunk project was first brought to the attention of the country. He recalled the mistake made by Sir George Cartier-who, I am proud to sav was a Canadian of the Canadians-he recalled the fact that Sir George Cartier made the great mistake of considering the geography of the country, looking only at the map and not at national consideration and favoured Portland in foreign territory instead of some port in British territory as the terminus of the road. If Sir George Cartier had then followed the policy we are now following, of not observing the map except in order to rectify the features of geography that are against us, Portland would not have been made the winter terminus of the Grand Trunk Railway, but probably some maritime province port would have been selected. The policy we have in view is to endeavour to correct the mistakes of the past, to force the Grand Trunk Company to have a harbour in Canadian waters, as well as a harbour in American waters. We cannot undo the past altogether ; Portland has been made the winter terminus of the Grand Trunk Railway Company. I do not expect that they are going to abandon what they have. I expect, on the contrary, that Portland will serve the Grand Trunk as a winter port for the trade that they now have.

But I expect that the trade of the future which is to be gathered by the Grand Trunk in the west will be brought down to some Canadian harbour on the Atlantic shore. At all events that is our policy.
Sir, my hon. friend (Mr. Tarte) stated a moment ago that we should not forget the St. Lawrence route and the water-ways, that the water route after all, is the most natural. There is no doubt about one thing that in summer time, all railways in the west wTill seek the water just as the duck seeks the wrnter. Trade will go by water route in summer. I wish to ask my hon. friend (Mr. Tarte) although the water-way is the more natural, does it follow that where you have a water-way you are not to have any railway communication ? I may say that our policy is not at all antagonistic to the policy he is laying down, the development of the waterways. The two should go hand in hand together. I would be sorry to say that the policy wTe are advocating at the present time, of another transcontinental railway, should be held up by myself as against the development of our water-ways. On the contrary, we are most clear that we must develop our water-ways and it seems to me that we are doing it at the present time. There is not much more to be done in improving the St. Lawrence. We can improve the channels here and there and facilitate the handling of trade at the terminals, but I do not see that *we can do much more than that. At all events X would like to hear now, or at some other time, what further development my hon. friend (Mr. Tarte) advises. If we had followed the policy which my hon. friend (Mr. Tarte) now indicates, would we have built the Canadian Pacific Railway ? I doubt it. Why, Sir, we should have allowed the trade to go to the American harbours. It would have been as short for the Canadian Pacific Railway to take the trade by the southern as by the northern shore of Lake Superior. When the Canadian Pacific Railway charter was passed in 1880 and 1881, the parliament of Canada gave the Canadian Pacific Railway the power to go both north and south of Lake Superior. The first railway which penetrated the Northwest came from American territory and at the present time there is trade, I am glad to say, for the Canadian Pacific Railway on both shores of Lake Superior. Of course the Grand Trunk will develop it's trade by the north shore, but why is it that the Grand Trunk when they first put their proposition before parliament, forgetting all the advantages which my hon. friend (Mr. Tarte) has just brought to my attention, asked to be allowed to penetrate the Northwest Territories, not by the south shore of Lake Superior, but by the north shbre-because my hon. friend remembers and knows very well that the first proposition of the Grand Trunk Railway was to build from North Bay to Winnipeg, on the north shore of Lake Superior. According to the statements of my Sir WILFRID LAURIER.
hon. friend a moment ago, it would have been easier and cheaper for the Grand Trunk to penetrate into the Northwest Territories by the south than by the north shore of Lake Superior.


Samuel Hughes: Lake Superior ?


Wilfrid Laurier: Yes, if I correctly understood my hon. friend (Mr. Tarte) he stated the company could by easy stages open a line from Winnipeg to Duluth and from Duluth to Chicago. The Grand Trunk may or may not have that power, but they value the advantage of penetrating into the Northwest on Canadian soil, they wanted to bring that trade to Portland. But there the difference between them and us came in. We told them that we would not agree, and that unless they agreed and consented to bring their line over Canadian territory to the harbours on the Canadian shore of the ocean, we would not enter into any arrangement with them. What is the inducement to the Grand Trunk Railway Company to do this ? The reason that they agree to pay 3 per cent upon the cost of the line from Winnipeg is that they expect to develop trade upon, that part of the road. They expect there will be valuable local traffic upon that road. As to the character of the country along the proposed road so far as agriculture is concerned, we have no information of any consequence at this moment ; I admit that. But we have information which cannot be gainsaid that there are upon that section of the northern part of this country valuable forests, that there are water powers of unknown quantity, and that there are indications of very valuable mineral deposits. If we have in that northern country water powers, forests, and minerals we have everything required to give local traffic for that road. At all events the Grand Trunk have so much confidence in the enterprise that they are ready to lease the line and pay 3 per cent interest upon it. My hon. friend says that he will not discuss the financial aspect of the matter now, nor shall I. The Grand Trunk control this company. But my hon. friend says they put no money in it. They will have to put some money in it, otherwise they cannot fulfil the contract. At the present time if the enterprise is successful they have to pay 3 per cent for the lease. Why are the Grand Trunk willing to pay 3 per cent on the lease? Because they cannot default upon the payment of the lease of the portion of their line from Winnipeg to Moncton without defaulting on the whole road, and if the whole road is successful they must pay the rent in order to have the valuable western section. At all events that is our expectation and that is the bargain we have made with them.


Robert Laird Borden: My right hon. friend (Sir Wilfrid Laurier) has said that the Grand Trunk Railway Company is under obligation to pay 3 per cent on the cost of the road from

Winnipeg to Moncton. I do not find one word in any of the contracts which obliges the Grand Trunk to pay a dollar. Does my right hon. friend know of any section that does ?


Wilfrid Laurier: I know that the Grand Trunk is bound under this contract to maintain that line, to control it.


Samuel Hughes: The Grand Trunk ?


Wilfrid Laurier: If the Grand Trunk is bound under this agreement (o emtrol the Grand Trunk Pacific, of course, if is to its interest to see that the enterprise is successful. I say that if it wants to take advantage of the line it can take advantage of it, but it must take the good and the bad at the same time. Otherwise if cannot maintain the enterjirise at all.


Robert Laird Borden: All I wanted ro understand was whether my right hon. friend and 1 were at one as to whether there is any legal obligations whatever on the part of the Grand Trunk to pay any part of the rental.	[DOT]


Samuel Hughes: In case the Grand Tiunk declines to pay the rental of the eastern division, where is the penalty in the contract ?


Wilfrid Laurier: The whole o.' the stock is security for that part of the enterprise. My hon. friend will find tlirt in the contract.


Samuel Hughes: Where is it ?


Wilfrid Laurier: I am sorry I have not the clause at hand, but I will show it to my hon. friend in a few minutes. This in a few words, is what I have to say to my hon. friend in regard to this enterprise. Take the case of the Canadian Pacific Railway. I want to bring this fact to the attention of my hon. friend (Mr. Tarte) who wanted to discuss it from a business 1 oint of view. When the Canadian Pacific Railway had reached Montreal, it desired ro have a winter terminus. It would have been quite easy to have followed the line of geography and found an eastern terminus in American territory. The Canadian Pacific Railway might have gone to Portland, or Boston, or to three or four other different ports in the Atlantic shore in American territory. But, it went to a port in Canadian territory. It adopted a line which up to the present time has not given it much profit. Why did it do that 7 It was compelled to do so on account of national sentiment. It was compelled to develop the trade of St. John and although the trade of St. John is not giving much profit to the Canadian Pacific Railway at The present time. I think it is a trade which is very important, and the Canadian Pacific Railway expect in the course of time to make it a very profitable trade. Well. ir is the same consideration which is moving 80
the Grand Trunk Pacific Railway Company. Canada, is coming to the front, it is becoming a large country, it is becoming a great country and the Grand Trunk Pacific will find it to its advantage to be a national line as well as the Canadian Pacific Railway. The Grand Trunk Pacific will find it to its advantage to have a line upon Canadian territory as well as upon American territory. Of course my hon. friend may say that the Grand Trunk Railway can go to Chicago. So it can, but if it goes to Chicago, it forfeits its rights under the contract, and it takes all the consequences.


Mr. DEPUTY SPEAKER.: Before any other member of the committee speaks, I would draw attention to the fact that this discussion which has been going on since eight o'clock is irregular. But, I was just going to say that if the committee is of opinon that it should still go on, I have no particular objection. Still, I want to draw the attention of the committee to the fact that it is not regular.


Joseph Israël Tarte: I have only one word in answer to my right hon. friend's statements. I am very glad indeed that he has told us that the government is not losing sight to-day and will not lose sight in the future, of the great importance of the waterway policy, if I may call it such. We will see before the end of the session what the statement of my right hon. friend means. My right hon. friend will not forget, I am sure, that the Canadian Pacific Railway was under the control of one company. There was no Canadian Pacific Railway Company having a railway partly in Canada and partly in the United. States. It was a Canadian road from beginning to end. It was located on Canadian soil from west to east. I remember just as if it were yesterday the debate which took place in regard to the Canadian Pacific Railway, and when my right hon. friend was on his feet one of his speeches came 11 my mind. I sent for the book. My right hon. friend then had so little confidence in the connecting line between the west and the east, that in a speech of great eloquence lie suggested that the sectiou upon the north shore of Lake Superior should not be built.
I have the book in my hand. I am very much afraid that we are divided on the same lines to-day as we were then. The Conservative party to which I belonged then - 1 was a newspaper man in those days- wanted to build the railway on Canadian st il from one end of the country to the other. My right hon friend and his friends were suggesting that the section north of Lake Superior might be postponed, and that the Bade would go where it was pleased to go. Put, the idea of a Canadian transcontinental railway tool; hold of the Canadian public (/pinion and the road was built. I say again to my right hon. friend, that I do not ob-



.ieet to the Grand Trunk going into the Northwest, but I ask him, and he has not answered the question, and none of his colleagues have answered it, how he can teil us that the Grand Trunk Railway Company v. hich has its line from Chicago to Buffalo and Portland and which is using that line to a very large extent in handling Canadian tiaffic, is going to be induced to send traffic by this northern line. My right hon. friend and his colleagues cannot point to a single clause of the contract which binds the Grand Trunk Pacific Railway Company to pay three per cent interest. The government will borrow the money. Let us not forget the position. The government lias undertaken to build the line. Well, and good. To build the line it will borrow ihe money on our own credit. We must borrow the money to build the line. We will appoint commissioners, they will build the line, they will pay for the cost of the line and then we will be bound to- pay the interest ourselves. We have made an agreement with the Grand Trunk Pacific Railway Company, not with the Grand Trunk Rail-v*ay Company, that it will pay three per cent interest after a certain time, but if it does not pay, who is bound to pay ?-The Canadian people are bound to pay. But again I say the financial question is not the one about which I am most anxious. What I am most anxious about is that the Grand Trunk Railway Company has every inducement to divert the trade to its American lines, and the government cannot remedy that danger which. is a great one, unless it improves our water-ways immediately. I am very glad that my right bon. friend has taken my remarks in the spirit that dictated them. If he would weigh again the arguments that have been placed before him, not only by myself, but by many business men in connection with our water-ways, I think he would not hesitate even during this session to bring down a policy that would satisfy the country. I believe that the danger is more serious, perhaps, than my right hon. friend has thought. I would remind him again, end this is my last word, of the energetic efforts that the Americans are making in the improvement of their water-ways.- It -costs inside of three cents a bushel for wheat and less for corn on the Erie canal. On the New York Central in the summer time i< costs about four cents a bushel. With the completion of the improvements to the Erie canal and the deepening of St. Mary's river, the Americans will carry grain from Duluth or Chicago to New York, for about two cents a bushel. It costs only one cent and a fraction to take a bushel of wheat from Chicago or Duluth to Buffalo. Mr. Noble, an eminent engineer, believes that with the improved Erie canal, wheat can be carried from Buffalo to New York for even less than one cent per bushel. We have to face that state of affairs. Besides our great rival, the Mr. TARTE.
Erie canal, we have to reckon with the Mississippi and the Missouri and the Gulf of Mexico routes. Unless we take good care to handle our Canadian transportation policy in the right way, these rivals will certainly take away from us the trade of the Canadian Northwest that we have a right to expect.


Charles Bernhard Heyd: 
Joseph Israël Tarte: I would ask my hon. friend (Mr. Heyd) to take the facts as his best guide. My hon. friend should not forget that Sir Sandford Fleming advocates a line further north, and not the location proposed

by the government for this line. But auj^-way, what are the facts ? I have here the report of the New York ' Produce Exchange,' and that shows that during the season of navigation the rates are low and when the season of navigation closes up go the rates. At Minneapolis, St. Paul, Chicago, Buffalo and Duluth, the Americans have erected immense elevators in which to store grain, pending the opening of navigation. Every one knows that only a small quantity of grain is carried in the winter months, and that for local milling purposes, very little for export. Sir Sandford Fleming's words are very respectable, but the facts are against him, the practice of all the railway companies is against him. The Grand Trunk itself have a large fleet on the lakes ; hundreds of boats plied last year between Sarnia and American ports ; all the railway companies follow the same policy. Mr. Booth, of the Canada Atlantic, has three American registered vessels and two Canadian registered, he has his agents at all lake points, and carries grain and general cargo to Parry Sound, sending it over his short piece of railway to Coteau and Montreal. He would adopt other means if it were more profitable for him to do so. The opinion or Sir Sand-ford Fleming is very respectable, but I would venture to say that there are not two other railway engineers on the continent who share it.
Mr. MeCREARY. The hon. gentleman (Mr. Tarte) has stated that the Grand Trunk would not require to use this road from Winnipeg to Quebec, because they can secure a road very cheaply from Winnipeg to Duluth and from Duluth to Ashland and secure the Wisconsin Central from Ashland to Chicago. He says that you can build a railway from Winnipeg to Duluth in 360 miles, but my opinion is that it will be more like 460 miles. Anyhow do you suppose the Wisconsin Central is going to sell a small piece of their road to the Grand Trunk Railway unless they take the whole road and its terminals? I do not think so. It is stated now that Mr. Rockfeller has purchased the Wisconsin Central, or has an option on it. The Grand Trunk were supposed to have an opinion on it but that option has expired. But even suppose the Grand Trunk could reach Chicago as the hon. gentleman (Mr. Tarte) states, then if that were the cheapest way to carry the grain of the Northwest, why in the name of Heaven should these business men of the Grand Trunk come here and ask the government to give them a road from North Bay to Winnipeg ? It is much easier to construct a railway from North Bay to Quebec, than it is from North Bay to Winnipeg.


An hon. MEMBER.: How do you know ?
Mr. MeCREARY. I believe any engineer will say so. I make that statement, just the same as the hon. gentleman (Mr. Tarte)
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made his statement; I make the statement because I have been informed that it is much more difficult to build from a point north of Lake Nipigon and thence to Winnipeg, than it is to build a road from a point north of North Bay to Quebec. And yet these people, who according to the hon. member (Mr. Tarte) could have got to Chicago by Duluth and the Wisconsin Central, came to this government and asked for a charter from North Bay to Winnipeg and guaranteed to make it pay. If they could make that pay they could make the road to Quebec pay very much better, because they have to haul from North Bay to Portland

	.


Joseph Israël Tarte: On a line which is alreadv built.
Mr. MeCREARY. But they have to pay the interest on the bonds of that line.


Joseph Israël Tarte: Certainly ; it will help them to pay the interest.
Mr. MeCREARY. They will have to pay the interest on the cost of that road just the same as they will have to pay the interest on the cost of the road from North Bay to Quebec.


Joseph Israël Tarte: Are they bound to-day to build that part of the line ?
Mr. MeOREARY. If they had asked for a charter from the Dominion parliament and got a subsidy, I suppose they would have been bound to do it.. It was stated the other day that they got only $3,200 a mile. I think there is evidence that they asked more subsidy for that road than would build it to-day. The hon. gentleman talks about carrying grain by water. We all admit that grain can be carried by water at a lower rate than by rail or by rail and water. At the same time a great deal more than the difference may be lost by the grain lying idle. A farmer's binder may be used only three or four weeks in the year, yet he has to pay interest on it all the year round. It may surprise the hon. gentleman to know that there are still this season 15,000,000 bushels of wheat in elevators and in the farmers' hands west of Lake Superior ; I have a report from the warehouse commissioner to that effect. What does it cost to hold that wheat over from the close of navigation, say the 1st of December, to the end of May 1 That would put the grain into seven terms of storage at f cent per bushel per term, or a total cost for storage and insurance of 5J cents per bushel ; and if you value that wheat at an a verage of 80 cents per bushel, the bank interest on 1,000 bushels at 6 per cent would add another $4 per month to the cost of the wheat, which would bring the total carrying charges per month to 1 -15 cents per bushel, or, for the six months, the total charge for storage, insurance and bank interest is say 6'90 cents per bushel. Now, the freight rates by the Canadian Pacific Railway last
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winter on grain to west St. John for export were 22J cents per 100 pounds, or 13J cents per bushel, whereas the water rate from Fort William and Tort Arthur to Montreal is from 5 to 5J cents per bushel. This rate fluctuates from time to time. For instance, there may be held at Superior and Duluth from 10,000,000 to 15,000,000 bushels, and the vessels that wintered there might carrs-that wheat ou their lirst trip at as low as 1J cents per bushel. Thus the shipper who is compelled to carry his grain over in store until he can ship it out by water to Montreal only effects a saving of about li cents per bushel over what it would cost him if he shipped by all-rail to St. John, and it is interesting to any one who has studied these matters to note how' closely the all-rail rate to St. John and the winter storage charges added to the lake rates to Montreal agree. My friend who gives me this information remarks :
It is unnecessary to point out to you who so thoroughly understand the requirements of all western interests how essentially important it is to bend every effort to remove from the back of the farmer this heavy winter-carrying charge of nearly 8 cents per bushel, and in these competitive times it is a burden he should not he asked to carry.
The farmer has that much surplus to com? and go upon if he wants his wheat carried by all-rail. I do not say that the railway can compete during the summer ; but in winter, as the box cars are there, why not use them ? They will certainly pay expenses. Then, what about the merchandise coming west V I mentioned the other day that one train had arrived at Winnipeg two weeks ago last Saturday which was the heaviest train that ever went to the west. It had 83 cars loaded with manufactured goods from the east. When these goods are delivered, what will the railway do with the empties ? All these cars will be empty in two weeks. The navigation on the lakes is not yet open, and these cars will have to run back empty. I say that these box cars could bring back wheat at a rate that would pay the farmers better than to leave their wheat in store all winter, paying charges for storage, insurance and bank interest. 1 will put any member of the grain exchange of Winnipeg on evidence before the Committee on Agriculture, and I believe that he will prove that to he the case.


Mr. HAGGART.: I have listened with a good deal of interest to the remarks of the hon. member for St. Mary's (Mr. Tarte), and t think his solution of the transportation question is the correct one. At least it agrees with the opinion I have formed. He made the statement that for nearly seven months of the year transportation by water from the head of Lake Superior to the ocean is the solution of the problem. I wi's venture to say that the consensus of opinion among railroad men in the country is that no road built either north or south of Lake
Mr. .McCreary.
Superior can compete in the summer months with the water communication of the St. Lawrence. Then, what is our duty in the matter ? Our duty is to see that the canal system and the water-ways from the head of Lake Superior to the ocean are made as perfect as possible. As I have stated again and again in this House, nature has placed this country at an advantage over the neighbouring country to the south of us in regard to transportation. By means of the St. Lawrence and the lakes we have the control of freights to the seaport from the head of Lake Superior.


Wilfrid Laurier: What should be done with the canals ?


John Graham Haggart: The right hon. gentleman evidently was not in the House when I made a speech on that question, in which I explained fully what ought to be done We have 20-foot navigation down to Port Colborne. I think that ought to he extended by building another canal past Niagara Falls. That would give us 20-foot navigation to Prescott. To carry it from Prescott to Montreal would require an expenditure which we, perhaps, would not be justified in making at present. At any rate, the expenditure required for this would build what, in my opinion, is the best solution of the question-a 20-foot navigation by the Ottawa river and the Georgian Bay canal to Montreal. Then, as I have stated before, we ought to see that the facilities at the port of Montreal are the best. We ought to see that the navigation from Montreal to Quebec is made so safe that a boat could pass by night or day between these two ports without the slightest danger. That could be done by ndoptiug the system which the Americans have adopted at Hay lake below the St. Mary's river, where the channel into Lake Michigan is so well lighted by electricity that there is no more danger to vessels during the night than there is during the day.
Notwithstanding the statement of Sir Sandford Fleming or of any other gentleman, I here state that the consensus of opinion among all parties interested in the transportation question is that during the season of navigation no railway can compete successfully with water communication. My right lion, friend criticised the opposition for granting a charter to the Grand Trunk Railway, but my hon. friend (Mr. Tarte), was not objecting to tbe Grand Trunk Railway getting into tbe Northwest. What he said was this: you are building a railway from Winnipeg to Quebec and giving it to the Grand Trunk Railway, what object has the Grand Trunk Railway io carry freight from Winnipeg to Quebec ? And my hon. friend pointed out that the Grand Trunk Railway could secure a road from Winnipeg to Duluth, thence to Ashland and Chicago and thence to Portland, and the interest on the expenditure involved would be a million dollars a year less

than they would have to pay the government for this road which the government are to build. What object, then, have they to go to Quebec? That was the argument of my hon. friend. Then the hon. member for Selkirk (Mr. McCreary) asked: why is it, if they intended to utilize that road, that they should ask a charter to build a line to the head of Lake Superior? Evidently the reason is that if they had a road built to Chicago, and a rival line had the railway to Quebec, the Grand Trunk Railway would have to compete with the other line in carrying grain to the seaboard and would require to have some means of carrying it as cheaply. The only possible way would be to get to the head of Lake Superior as quickly as possible, put the grain on boai'd their boats, carry it to Midland. and thence over their own line to Portland.
My hon. friend objects also to our placing the control of the Grand Trunk Pacific in the hands of a company whose interests, financially and every other way will lead it to carry the freight over its own line to Portland. However, 1 am strongly of the opinion that if we consider the opportunities given us by nature and otherwise, we would find that the cheapest line of transport is through our own country, and that if we take proper advantage of our opportunities, we will be able to command the immense trade which must be developed in the Northwest and Manitoba. There are three ways in which that trade may go to the ocean. Mr. Hays in his address to the Grand Trunk Railway shareholders, said that the day is not far distant when there will be a greater quantity of grain carried to the Pacific coast than to Lake Superior. The parties who control the Canadian Northern Railway think t that the solution of the transportation question, as far as Manitoba and the Northwest are concerned, is to get to Hudson Bay, and they intend to build a line to that point. They are in earnest. They believe that the greater portion of the surplus grain of that immense region will find a market in Europe, not by Lake Superior, but by Hudson Bay. Messrs. Mackenzie & Mann are at present contemplating the building of a line to Fort Churchill and building large elevators there, and are interesting parties iii Great Britain to build receiving elevators there. They say that they can solve the question of feeding the British empire with all the cereals at command by facilitating transportation by Hudson Bay. But the people of the eastern section are interested in making the transport to our section of the country as cheap as possible. We say that nature intended we should stick as closely as possible to our water-ways. The right hon. gentleman read an extract from Sir Sandford Fleming's opinions to prove that railways built on
modern principles-that is, with four-tenths of a foot per hundred-can compete with water-ways. Well, four-tenths of a foot per hundred means virtually a level road, because a locomotive will draw on a four-tenths grade just as much as on the level.


Charles Bernhard Heyd: Not at all.


John Graham Haggart: 1 say yes, and I can give authority for the statement. The reason is simply this, that to start a locomotive at a station requires as much power as when it is in motion to carry it over a four-tenths grade. Read any engineering authority. Read the ' Scientific American.' Like my hon. friend, X used to have some doubts as to the reason, but the reason is sound, and there is no object whatever in having a railway level, because a four-tenths per cent grade is practically the same as a level road. To obtain that grade from Winnipeg to Quebec and from Quebec to Moncton, does my right hon. friend contemplate what the cost will be? To make a 26-foot grade going easterly, and even doubling the amount goiifg westerly, would entail an expenditure of $50,000 per mile. To reduce the gradients to a four-tenths per cent would require an expenditure of nearly $80,000 per mile. Are the people prepared for any such expenditure? I have always been in favour of developing the Northwest by railway communication. My idea has always been that the starting point should be North Bay or Lake Superior, and go north of Lake Winnipeg, and I was glad to see that a company with the enterprise of the Grand Trunk were interesting themselves in this. I believe that that company has done a great deal for the benefit of this country, and if any assistance be given to any railway at all, it is perfectly justifiable that the government should give it to that railway. But I have always objected to the expenditure of money for a road which I believe is entirely useless, and which I believe now will never be built. I never could understand any argument in favour of building a road from Quebec to Moncton. The argument in favour of a road from Quebec to North Bay is that it may develop that portion of the country. As the right hon. gentleman says, there may be in that country many waterfalls, from which electricity may be developed, and there may be mineral and timber resources, but before we spend money on a railway, we should have accurate surveys. We should have some knowledge of the country. We should know whether it possesses anything of the kind, and in the first instance we should develop it by a cheap colonization road, and not waste the resources of the country in useless extravagance.
Let us return now to the question before the chair, namely, the issue of stock to the
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Grand Trunk Pacific. Let us see the position of the Grand Trunk Railway with regard to this enterprise. They go security for the building of one-quarter of the road from Winnipeg to the Pacific ocean. That gives the Grand Trunk Railway no monetary interest in the undertaking except this, that, should the undertaking not pay sufficiently to meet the interest on that quarter section, they will be liable for it. Of what benefit, then, to the Grand Trunk Railway will be the building of this particular portion? Under the Act of last year, it is provided that $45,000,000 of stock may be issued, of which it was obligatory on the Grand Trunk to own $25,000,000. That gave them a vested interest in the road. That gave to the Grand Trunk Railway, if ever the undertaking was a paying ope, over and above the interest payable on the bonds, rolling stock and working expenses, an interest in the road. I can understand how the Grand Trunk Pacific Railway are interested in the undertaking, for they have to operate the road. But, this bargain gives to the Grand Trunk Railway Company power to acquire the whole $45,000,000 of stock, the only obligation being that they shall hold a majority of the said stock by such title as shall enable the Grand Trunk Railway Company to control the policy of the company. The Grand Trunk Railway Company need not own one dollar's worth of stock, all they have to do is to control a majority so as to direct the policy of the company. Hon. members may ask how they can do that without holding the stock. It is done every day in reference to railways. The right to vote, the power to control the franchise, may be vested in one individual -and the stock in another.


Charles Bernhard Heyd: How can that be done V Will the hon. gentleman (Mr. Haggart) please explain the process ?


John Graham Haggart: It is done every day. You get permanent power of attorney to exercise the right of voting on the stock. It is done in the United States in many instances so as to give the voting power to parties who have not invested a dollar in the stock.


Charles Bernhard Heyd: The hon. gentleman says that, in the sale of stock this follows as a matter of course, or does he say that it can be arranged ?


Robert Laird Borden: Yes, it can be arranged ?	,


John Graham Haggart: And it is done every day. A man can buy the stock, and yet the power to vote on it may remain with the vendor. I do not know whether the stock is absolutely transferred or whether it is only for a number of years-fifty or ninety-nine years


Wilfrid Laurier: Is it legal ;


John Graham Haggart: 


John Graham Haggart: Yes, it is legal in the United States and it would be here. What do the government contemplate by this section if not some such condition as this ? Here is the whole section :-
% 9- Notwithstanding anything in the twenty-seventh paragraph of the said contract contained, the Grand Trunk Railway [DOT] Company shall not, after the acquisition of the twenty-five million dollars ($25,000,000) of common stock therein mentioned (less shares held by directors, not exceeding one thousand), he prevented from making any such disposition of such common stock as the Grand Trunk Railway may deem expedient, provided, however, that the said Grand Trunk Railway Company shall, during the delay mentioned in the said paragraph, continue to hold a majority of the said stock by such title as shall enable the said Grand Trunk Railway Company to control the policy of the company.
It is not ownership at all, but simply to hold it by such title as shall enable them to control the policy. Now, what interest has the Grand Trunk Railway in the undertaking ? They may part with the whole of the stock and not have even an estate in expectancy in it-they may not expect that the stock will be returned to them in any way. They have only this, which may be indirectly profitable to them-they control the policy of the road and may make such arrangements as may be of benefit to themselves. . I cannot understand and have never been able to understand the argument of the Minister of Finance In reference to this question of stock. You issue certain securities which you call stock and you issue certain other securities which you call bonds or debentures. And they become complicated at once. But here is the simplest kind of a proposition. You provide for the issue of $45,000,000 of stock as to the majority of which the Grand Trunk Railway Company is to bold the voting power on a majority. But they may absolutely dispose of the stock itself. Then, what interest has the Grand Trunk Company in the road ? Their only interest is that they are liable for one-quarter of the cost of construction-for which they have first-class security-pari passu with the government, on the whole undertaking

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Samuel Hughes: On the Grand Trunk Pacific only.


John Graham Haggart: On the Grand Trunk Pacific from Winnipeg to the coast. The right hon. gentleman (Sir Wilfrid Laurier) stated that the Grand Trunk Railway Company would control the policy of the company and that it would be liable for three per cent on the value of the eastern division. The Grand Trunk Railway Company are not liable for a single dollar of the interest. The contract with reference to that is made with the Grand Trunk Pacific Railway Company. The liability of the Grand Trunk Railway Company is that described

by the president of the road to his stockholders ; and the whole liability of the Grand Trunk Railway Company in reference to this undertaking is simply one quarter of the cost of the line from Winnipeg to the Pacific ocean.


Robert Laird Borden: And merely a guarantee at that.


John Graham Haggart: And merely a guarantee at that. The Minister of Justice (Mr. Fitzpatrick) may say that we have the promise from the Grand Trunk Railway Company that they shall hold the majority of the stock so as to control the policy of the company. In what way is he going to enforce that ? Will he apply to the courts to compel the Grand Trunk Railway Company to retain such a hold upon the stock as to enable them to control the policy of this company ? There may be some legal process by which it can be done, but I do not know what it can be. There are no penalties under this Act, and if penalties are provided anywhere, I would like to know what they are. So, that is the position-the Grand Trunk Railway Company are liable for one-quarter of the cost of construction of the western division and no further. The interest that they have in the undertaking is not given to the Grand Trunk Railway Company, but, if I may call them so, to the speculators who constitute the Grand Trunk Pacific Railway Company. Under the original contract, they had only a half interest in the undertaking, but now you give them absolute control. All the stock may be in other hands, and the Grand Trunk Railway Company may receive no benefit from the whole proposition except that they control the policy of the Grand Trunk Pacific. And, if I calculate rightly that will be just as long as the Grand Trunk Railway Company see that it is to their interest to do so. '


Samuel Hughes: We hear a great deal of discussion over the clauses about the stock of this company and about the policy being controlled by the Grand Trunk Railway Company. And the government would give us to understand that to keep the Grand Trunk Railway Company in control is to the interest of the people of Canada. One would naturally suppose that the Grand Trunk people in securing that control would be looking for the interest of the Grand Trunk Railway Company. Now, we have the Minister of Railways and Canals (Mr. Emmerson) here. And, as I have been studying up the views of that hon. gentleman, and as the Prime Minister (Sir Wilfrid Laurier) does not seem at all confident of the views of his colleague, I shall endeavour while we are upon this aspect of the case, to give to the Prime Minister and to the House the views that I have learned from the utterances of the Minister of Railways and Canals, whose voice is singularly silent upon this great question. Now.
the Grand Trunk Railway Company is to control the stock of the Grand Trunk Pacific. The Grand Trunk Pacific western division, extending from Winnipeg to the Pacific coast is to be constructed on the guarantee of three-fourths by the government and one-fourth by the Grand Trunk Railway Company. And the people of Canada are to build, I presume under Grand Trunk supervision, the road from Winnipeg to North Bay line, from the North Bay line to Quebec, and from Quebec to Moncton.
The Grand Trunk Pacific Railway Company are not obliged to take over one mile of the government road, not even by agreement, until every foot of it is completed to Moncton. Am I right or wrong ? If the company choose to take over any constructed portion of the road east of Winnipeg, they may do so, but upon conditions which the Grand Trunk Pacific Railway Company lay down. The Grand Trunk Pacific Railway Company control the stock of its own road, and control the entire read from the Atlantic to the Pacific. The Grand Trunk controls the Grand Trunk Pacific. Does any one suppose that the Grand Trunk are going to manage the Grand Trunk Pacific to the detriment of the Grand Trunk. If they do, I must say that Sir Charles Rivers-Wilson and Mr. Hays and the gentlemen associated with them are not the business men that the people of this country took them to be. The Prime Minister made a very important admission to-night. If we keep on we will have important admissions all along the line. The Minister of Customs (Mr. Paterson) made one last night when he said that the government were obliged to do so and so by the Grand Trunk. In reading this matter [DOT] up from start to finish and examining it in all its features, we find that the whole business has been dictated by the Grand Trunk Railway. We cannot accuse the gigantic intellect of the present Minister' of Railways (Mr. Emmerson) of evolving this scheme. We certainly cannot accuse the late Minister of Railways of doing so, and judging by the half-hearted support of members of the government and the blank faces of their supporters, the Prime Minister and the Minister of the Interior are alone responsible for this agreement. I believe the Prime Minister has been carried awa.v with the notion of a great transcontinental railway. Why did he not follow the policy of the Minister of Railways and the member for Cumberland (Mr. Logan) and those who were behind them in reference to this ? We will come down to the question of control of this railway and I want to say, if the government is honest, as I believe they are, if the Grand Trunk Pacific Company is honest-although the hon. member for Cumberland (Mr. Logan) said that they were-not honest in any undertaking they ever made-if the government, if these people who govern the Grand Trunk and the Grand.

Trunk Pacific, are all honest in this matter, the company should be ready to give a guarantee to the country for the faithful execution of this contract. The Prime Minister said a moment ago that there was r. penalty. I searched in vain in the agreement, in the amended agreement, in the contract, and in the charter, for any penalty direct or indirect, upon the Grand Trunk or the Grand Trunk Pacific for non-operation of this road from Winnipeg east. He said that the whole stock of the company would be a penalty for the non-carrying out of the contract in relation to the eastern division. I trust the Prime Minister will look it up as lie promised and have it. ready and be aide to show the House and the country where it comes in. It has not been shown yet, and his skilled Minister of the Interior (Mr. Sifton), who made a very able speech on this matter, has not pointed this out. How does the matter stand ? T.et us take for purposes of illustration in a concrete form, two carloads of freight which start from the Pacific coast and come down across the continent. They come to Winnipeg over the Grand Trunk Pacific. The Grand Trunk Pacific, of course, will get all the freight arising from that traffic. Once it gets to Winnipeg on this new line, wii! the Prime Minister be good enough to point out to me whether the Grand Trunk Rail-nay Company or the Grand Trunk Pacific Railway Company is going to be benefited by that freight over the Eastern Division. I have looked in vain, I have asked in vain, for an answer. On the other band, supposing that the policy that has been outlined so ably to-night by the member for St. Mary's division, Montreal (Mr. Tarte), a policy which I had the honour of pointing out to this House last year, and which every one who knows anything about the matter knows is the true policy of the Grand Trunk is carried out in regard to one car. They have their connection south through Minneapolis as their main line with a branch to Duluth, and connect with the present Grand Trunk system at Chicago, on the .way to Portland and Boston. Supposing that policy is carried out in relation to one car and then let us contrast the two. The two cars of freight go from the Pacific to Winnipeg, one deviates south from Winnipeg and goes over the Grand Trunk via Chicago to Portland. Supposing the charges on that car are $3(30, the Grand Trunk Pacific and the Grand Trunk will get every dollar of that freight, and they are not paying three per cent interest on their line, they have to maintain the line through the United States, and are under no burden ; they owe allegience only to their stockholders. The other car proceeds to Moncton and on to some Canadian port, Halifax or St. John. The whole $360 of that freight does not go to the Grand Trunk Pacific ; part if Mr. SAM. HUGHES.
it has to go in paying the indebtedness of 3 per cent on the cost of this government section, and the balance of it, for the haul only as far as Winnipeg, say $160, goes to the Grand Trunk Pacific. Does any on-1 suppose that the Grand Trunk stockholders, who control the Grand Trunk directors, who control the Grand Trunk Pacific, are going to permit that state of affairs to continue and have their road and their terminals at Portland lose this traffic ? I am satisfied that the Grand Trunk shareholders will rot permit any such state of affairs to exist for one instant. We have the statement made by the Minister of the Interior, in his speech as to the obligation of the company. He says that we have the obligation that they are to make a deposit of $5,000,000. But he himself goes on and points out that after all, that is no obligation, for it is paid back to tlie company, and it is only a question of financing. The minister says the money does not have in be ultimately provided. Tlie next obligation he points out, has less in it even than that. The next obligation is to build the western section of the railway, and for the purpose of doing this, they have first the government" bonds for tliree-quarters and then their own bonds for one-quarter of the cost. This will dispose of the original construction of the railway. Tt e obligation of the Grand Trunk in regard +n this is practically nothing. The Grand Trunk guarantees one-quarter and the gov-eminent the other three-quarters of the cost of construction and the rolling stock is provided by another clause, and has been pointed out by the hon. member for West Toronto (Mr. Osier), will lie controlled by a rolling stock trust. Thus that obligation falls to the ground. By the third obligation he says they are obliged to lease and operate the eastern section and pay the rental. I want the Prime Minister to be good enough to point out wherein they are obliged to lease and operate the eastern section aud pay the rental ? I grant that ic is in the agreement, but only when every mile is built from Winnipeg to Moncton. If that line is one mile short of Moncton, the contract falls. I am satisfied there is not one member of this parliament and I very much doubt if the grandsons of the members who are sitting in this parliament will be in existence when that road is completed all the way from Winnipeg to Moncton. Therefore, until that hour arrives the contract does not begin to have effect, and in the meantime any part of the road which is finished may be taken over by the Grand Trunk Pacific Railway Company upon their own terms. Even though the road is constructed, I want the right hon. Prime Minister to point out any penalty which will be invoked as against the Grand Trunk Pacific Railway Company in the event that they refuse, as I think they will refuse, to take charge of that road. I want to see

where the penalty is by which we can com- | pel the Grand Trunk Pacific Railway Company to turn one wheel on that road in case they do not consider it to be in their in terest to do so. The next obligation is to equip the road with rolling stock to the value of 820,000,000. That has been reduced to $15,000,000 in the new agreement, and, as has been pointed out, there is no obligation whatever on the part of the Grand Trunk raeific Railway Company, or of the Grand Trunk Railway Company, because they will simply give a mortgage to a rolling stock trust. The next one is that the Grand Trunk Pacific Railway Company shall induce and procure the Grand Trunk Railway Company to guarantee the second mortgage bonds on the rolling stock. As I pointed out, that rolling stock will be controlled by a rolling stock trust, and although it may be included in the agreement it is really ultra vires of the agreement. The next one is that the Grand Trunk Pacific Railway Company shall enter into an obligation to carry their freight through Canadian channels and give as good a rate by the Canadian route as is given by the United States route. These are all the obligations that even the hon. Minister of the Interior (Mr. Sifton) can conjure up that the Grand Trunk Pacific Railway Company and the Grand Trunk Railway Company are under to the people of Canada. Now, to sustain these obligations there is not the value of a farthing in case the Grand Trunk Pacific Railway Company or the Grand Trunk Railway Company default in their agreement. To show that I am justified in coming to this conclusion, I shall quote the [DOT]words of wisdom uttered by the present hon. Minister of Railways and Canals (Mr. Em merson). It is true that when he uttered these words of wisdom he was not tied up by the iron hand of the right hon. Prime Minister. He was not under an obligation to sacrifice his will and to bend his genius to that of the right hon. Prime Minister. He was a very independent member of parliament. When this debate was going on during last session the question arose as to the route and as to the general policy in connection with the construction of the road. The present hon. Minister of Railways and Canals then said :
I say that the government of Canada is not prepared and the people of Canada will not sustain them in at once immediately subsidizing a road south of Lake Winnipeg. (Hear, hear.) I say that the necessities of this country do not demand it.
A little later on, in answer to a question by the hon. member for Cape Breton (Mr. Johnston), who said :
"You are discussing the matter of a charter now.
He said :
Precisely, I am discussing the matter of a charter, and I say that this committee should not place the government in the position, or
permit any government if it would do it, to be placed in the position whereby they could subsidize a line south of Winnipeg at this stage of the history of Canada. (Hear, hear.) Now that is the position which I take. I take another position. I say that we should not incorporate any body of men. I have nothing to say against the gentlemen whose names appear in this first section, but I say that the parliament of Canada is not qualified in giving such rights to any man at this time with the possibility, no probability, that it would be followed by large government assistance.
These are the words of the present hon. Minister of Railways and Canals. I do not know whether the right hon. Prime Minister heard them. I know they will have no effect whatever upon the hon. Minister of Agriculture (Mr. Fisher), because the hon. Minister of Agriculture Is known to have no opinion upon anything. But I would like if the right hon. Prime Minister would be good enough to listen to the words of his own Minister of Railways and Canals. He has been so impressed with the views of his late Minister of Railways and Canals that he now considers him as the first railway expert on the continent of America, if not in the universe. Possibly the words of wisdom that I am quoting from the present hon. Minister of Railways and Canals may influence the right hon. Prime Minister yet. and before this session ends we will see him rise and withdraw this Bill in order that it may he further amended. If he does he will have our endorsation. There will be no division upon that question. Now, the present lion. Minister of Railways and Canals went further, and. speaking from the same subject, said :
But on the other hand, if you subsidize the railway, if you subsidize only one now, you would haVe a large indebtedness, but wherein are you going to have the benefit ? Wherein do you have the returns ?


Mr. ALEX. JOHNSTON.: The people would benefit.


Henry Robert Emmerson: Certainly, I grant you that. You subsidize the roads and the people get the benefit ; I am willing to admit' that, but if you take the same amount of money and construct a road, instead of giving a subsidy, you have an asset for [DOT]your expenditure. You do not have that when you pay that money out in the way of subsidy.


Henry Robert Emmerson: Hear, hear.


Samuel Hughes: I am delighted that the hou. Minister of Railways and Canals adheres to his convictions. Following out the principle of the joint responsibility of the cabinet, he must either stand by his convictions or go back upon them, and if he does stand by his convictions he must get out of the cabinet. If he gets out of the cabinet we will have another exhibition of a Minister of Railways and Canals leaving the cabinet in justification of what he believes ought to be the government's policy. I would like the right hon. Prime Minister to listen to this particularly. I would like

even the hon. Minister of Agriculture, if be can grasp the idea, to listen to it:
You may put in this charter, or add to it a clause which you may think would guarantee to the people of Canada an ail-rail route over Canadian soil, and guarantee that the exports shall go through Canadian ports, but you will not accomplish what you propose to do.
These are some of the opinions of the present hon. Minister of Railways and Canals, and we want him to stand up in this House, because we want to see if he has lost his voice on this subject, and tell the people whether he has changed his views or whether he still adheres to his views, and, if so, why he still retains his position in the government. He goes on to say :
It will be evaded at every point, and it seems to me that the gentlemen who are promoting this Bill gave evidence of it at every turn, that they do not consider and have not taken into consideration the proposal that the products of Canada shall be shipped over an alternating line, through Canadian seaports ; they have not it in their minds, the history of the Bill, the remarks of the hon. president of the company, gave evidence of that in every sentence which he uttered.
Let me add that every sentence which has been uttered by the president or manager of the company since, and the whole conduct of the negotiations from that day to this, carry out the words of wisdom uttered by this simple-I mean simple in the honest sense of the term-honest member for Westmoreland. I do not know whether it is advisable to quote that hon. gentleman still further or not, but he says :
I say and I am impressed beyond measure with the idea that you cannot carry out any suggestion contained herein and guarantee to the people of Canada what we all would like to see. And the only other alternative is by the government constructing a line of railway over the shortest route and having control over the rates.
Then he goes on to say :
But I say attempt as much as you will, exercise your endeavours with all the acumen with which you may, you will not control to the people of Canada their seaport with an allCanadian route.
These are the words of the member for Westmoreland (Mr. Emmerson) now the Minister of Railways. He goes on :


Henry Robert Emmerson: The point is this. Do you want to help western people get their grain to the sea-board ? Do we want to help them to get it to a Canadian seaport ? Do we want to help them get it there over an all-Canadian line ?
And do we want to make our help effective ?
Well, then, I say that the only way you can do it is by demanding and insisting upon the carrying out of the idea, the extension of the government owned road across this continent. (Hear, hear.)


Samuel Hughes: Such are the views of the present Minister of Railways and Canals. I regard the control of this stock as a guarantee that the Grand Trunk interest first, the Grand Trunk Pacific interest second, and the interest of the people last, are going to be looked after. If these private negotiations are ever made public, I venture to say it will be found that the Grand Trunk people insisted upon these clauses being placed in the contract so that they might control not only the Grand Trunk Railway interest, but corner the entire freight for their own system and render the whole government road nugatory. There is another feature of this : the Ontario government have given a cash subsidy per mile, and also a subsidy of 6,400 acres of land per mile, to a branch of this road to Lake Superior.


Mr. WILSON.: Surely not a Reform government.


Samuel Hughes: Oh, yes, a Reform government did it; although they are opposed to land subsidies, they swallow their principles to suit the occasion. The1 Prime Minister has been exercised to make it appear that he is bent upon having a Canadian port on Lake Superior, instead of Duluth. In his own province of Quebec his name, rightly or wrongly, has more or less of magic in it, and his name carries more weight there than it does where his policy is understood ; but he found that even the people of Quebec demanded a Canadian port. The Prime Minister himself has admitted to-night-it is one of the secrets that has leaked out-that it was the original policy of the Grand Trunk to come south of Lake Superior, and that they had the hardihood to propose that to him.


Wilfrid Laurier: To propose what to me ?
Mi-. SAM. HUGHES. The Prime Minister admitted to-night that the Grand Trunk Company first proposed to go south of Lake Superior.


Wilfrid Laurier: I admitted nothing of the kind.


Samuel Hughes: Certainly ; the first minister said south of Lake Superior, and I said south of Lake Winnipeg ; and he repeated it and said : south of Lake Superior.


Wilfrid Laurier: I made no such admission, and I do not- think ' Hansard ' will verify the hon. gentleman's statement. At all events, I never intended to make any such statement, because there is no truth in it.


Samuel Hughes: I thought the First Minister meant north of Lake Winnipeg.
Sir WILFRID LAURIER, North of Lake Superior.


Samuel Hughes: I interrupted by interjecting the words, 'Lake Winnipeg' and

the Prime Minister said the first proposition was to come south of Lake Superior.


Wilfrid Laurier: No.


Samuel Hughes: I venture to say that Hansard will bear me out. I am neither deaf nor blind, and I interrupted the first minister because I thought he was making a mistake.


Wilfrid Laurier: I certainly would have made a mistake had I said that.


Samuel Hughes: The Prime Minister admitted that the first proposition was that they should go south of Lake Superior.


Wilfrid Laurier: Oh, no.


Samuel Hughes: The ' Hansard ' will show who is right.


Wilfrid Laurier: Well, if I did say it, it was a slip of the tongue. There was never such a proposition made to us.


Mr. INGRAM.: The right hon. gentleman was referring to the remarks made by the member for St. Mary's (Mr. Tarte), and that is how he came to refer to the south of Lake Superior.


Wilfrid Laurier: Perhaps so.


Samuel Hughes: Well, anyway 1 know it was the first proposition of the Grand Trunk.


Wilfrid Laurier: I do not want to contradict my hon, friend any more, but if he wants to say that we received from the Grand Trunk Railway Company any proposition to asist a line south of Lake Superior, he is all wrong.


Samuel Hughes: The first proposition was not made by the company because it was not then organized as a company, but the first proposition was that there should be an extension of the Grand Trunk Railway from Chicago, through to Minneapolis and Winnipeg, and on to the coast. I know it.


Wilfrid Laurier: But it is not so.


Samuel Hughes: I know it was the proposition, and I have every reason to believe that it was submitted to the government, and then it was pointed out that the country would not endorse it, and that they must come to North Bay.


Wilfrid Laurier: No such thing.


Samuel Hughes: I know that the first charter was asked to North Bay, but the negotiations before that were for an American road.


Wilfrid Laurier: Never.


Charles Fitzpatrick: Never.


Samuel Hughes: Why, the Quebec bridge had not commenced to dawn on the
people at that time, and my hon. friend was asleep until he saw the possibility of extending the line from North Bay to Quebec. The Minister of Justice then became interested, and said we must force this on to Quebec, and then the gentleman from the maritime provinces took the thing up, and said it must be continued to Moncton.


Charles Fitzpatrick: There are very few people who pay much attention to the wild statements made by the hon. gentleman (Mr. Sam. Hughes). Perhaps he thinks that in order to be forcible and interesting he must be insulting and impertinent, and that is what he is now.


Samuel Hughes: There is nothing insulting about it. Every one knows that the Minister of Justice took no interest in that Bill until he suddenly saw it could go to Quebec, and then he woke up on the stage of the Railway Committee room and in this House. He knows it, and he cannot by any little bit of an exhibition of his Hibernian temper alter the facts. He will understand that the people of this country can size him up as far as they can see him. The whole business from start to finish shows that this government has been dictated to, and that they rushed into this without consulting even their colleagues in the cabinet, or the members behind them, much less the parliament and the people of Canada. The whole matter has been forced on by one or two men in the cabinet to the detriment of the people of Canada. If the people of the country are not appealed to before this Bill becomes law, then when they are appealed to and in case the verdict of the people should be against it; despite any efforts that may be made to the contrary, every contract gotten and given under this charter and under this legislation will be cancelled in the interests of the people of Canada. I would be delighted now, and I am sure the whole House and the country would be delighted, to hear the Minister of Railways give his views on this subject.


Charles Bernhard Heyd: Having spoken last year on the general proposition, but I did not intend to say anything in connection with the Bill this session ; but so many statements have been made, coming from such eminent authority, that it almost seems necessary for some one who has got the cheek to get up and dispute the correctness of these statements made by gentlemen on the other side. I heard to-night, with what confidence and with what assurance the late Minister of Railways made the statement, that a railway of four-tenths grade is equal in capacity to a practically level road. When the ex-Minister of Railways makes a statement like that, with so much confidence, one should scrutinize almost afraid to dispute the accuracy of this assertion. But I have under my hand the Canadian Pacific Railway standards with respect to the grades of

[DOT]2530
railways, and also the standards of Mr. Wel-'ington, and these statements are diametrically opposed to the statements made hy the ex-Minister of Railways.
Every statement that he makes with that degree of assurance and confidence must be just as carefully scrutinized as the statement he made to-night with respect to the gradients of the railway. He stated that a four-tenths grade railway was equal to a level road. What does Mr. Wellington say in his table ? He says that an engine with an 18-inch by 24-inch cylinder is capable on the level, of drawing 2,183 tons, while on a four-tenths grade it is capable of drawing 1,058 tons, or just about cne-half. Yet the lion. ex-Minister of Railways has the assurance to try to force it down the throats of the members of this House that a four-tenths grade railway is practically equal to a level railway; and when I dared to question the statement, he said, who denies this? I said I did. Of course, I did not of my own knowledge, but I had the statement in my hand which proved the incorrectness of the hon. gentleman's statement. The Canadian Pacific Railway tables say the same engine is capable of drawing 1,500 tons on a one-tentli grade, or 1,200 tons on a four-tenths grade. So the statements of 'the Canadian Pacific Railway authorities and Mr. Wellington are diametrically opposed to the statement made by the ex-Minister of Railways. Therefore when one of the hon. gentlemen on the other side of the House gives his opinion or makes a statement, it is necessary to make a careful examination to ascertain whether it is really true, and I am in the habit of verifying the correctness of a great many of their statements. Now, if everything the hon. gentleman has said in regard to that railway is no more truthful than his remarks as to the equality of the gradients, they are entirely unworthy of consideration. I was very much interested in the remarks made by my hon. friend the late Minister of Public Works (Mr. Tartel. He speaks with such a degree of assurance and of confidence as to almost convince one that he tnorouglily understands the subject about which he is talking? I am willing to admit that he has had opportunities of acquainting himself with these matters; but with all respect to the good qualities of my hon. friend, his mind is not logically inclined, and he is often apt to dwell in the realms of imagination.


Joseph Israël Tarte: You found that out very late.
Mr. HEY'D. Oh, you are all right. When I ventured to ask him how he harmonized his statements with the opinions of one whom he esteems and respects, he did not say that Sir Sandford Fleming was an old lady, but he did not exactly accept as correct the statements which that gentleman Mr. HEYD.	'
has made. I think that an opinion expressed by Sir Sandford Fleming is entitled to serious consideration, because he has had years of experience, and any statement he makes we are always satisfied is made with the honest intention of informing the general public. In addition to the statement I have read, he went on further to say:
A railway constructed on the northern route would, at all times and seasons, be a reliable outlet from the granary of the empire in the heart of Canada to tide-water. Moreover, at Quebec in summer, and at the open ports of the maritime provinces in winter, the ships transporting produce to Great Britain would, when necessary, he placed under the express protection of the British fleet.
Such a railway constructed between Quebec and the western prairies on the northern route would be a national highway in every sense. Its immediate effect would be to broaden the Dominion, to add strength where strength is so much needed, to establish many new centres of industry, and thus the country would steadily become populated and consolidated. What is now a widespread wilderness would be converted into one of the most important divisions of the Dominion.
1 am quite willing to confess that the opinion expressed by Sir Sandford Fleming has considerable weight with me.


Joseph Israël Tarte: Not on this scheme. Eet my hon. friend be frank.


Charles Bernhard Heyd: 
Samuel Barker: Would the hon. gentleman allow me to put him a question ? Does he know that the statement of the hon. member for North Norfolk, based upon a letter of Mr. Scott, was that one dollar was the cost of a train mile on the Grand Trunk Railway, and that he overlooked how many cars were contained in the average train of the Grand Trunk Railway on which the dollar was based, and multiplied it by nearly four in order to deduce an argument as to what he could work on the northern line for ?


Charles Bernhard Heyd: I remember perfectly well my' hon. friend's reply. Bet me point out that Mr. Ledyard also was quoted in a letter which he wrote in respect to the Canadian Southern.


Mr HARTY.: Who is he ?


Charles Bernhard Heyd: President of the Michigan Central. The Canada Southern road is of a three-tenths grade, and on that railway they carry 2,400 tons, or nearly 80,000 bushels, to the train mile, and the average cost in 1892 was 81.1(1 per mile and $1.60 in 1903.


Samuel Barker: I am sure the hon. gentleman does not want to misrepresent. The train mileage of $1.16 is the average of all their trains. Some have only four and some have forty cars. It is the average of the lot. The hon. gentleman applies that to a six-car train or a fifty-car train, as if you could apply the cost of hauling the average, say' of fifteen cars, to a train of fifty or sixty !


Charles Bernhard Heyd: I heard the hon. gentleman's argument last year, and gave a great deal of attention. The Grand Trunk Railway7 train mileage costs 9S cents ; the Canada Atlantic, 91 cents ; the Canadian Pacific Railway', $1.11 and last year $1.23 ; and the cost of the government road per train mile was 92 cents. That was the average train mileage, including passenger trains and freight. There are large trains and small trains, and we have a right now to begin to approximate, and to that extent the argument I intend to present may be attacked. What train mileage will it be fair to apply on the Grand Trunk Pacific from Winnipeg to Quebec over such a road as the government intend to build ? If it is a four-tenths grade road, it is capable of hauling with one engine of the same power a load three times as large as that of almost any road in Canada, except the Canada Southern. That is one of the facts which must be taken into consideration. Therefore, for the purposes of argument. I have assumed that the inside cost will be $1.60 per train mile. If that is not a fair margin, to the extent to which it is not fair, my argument will be incorrect, but assuming that $1.60 per mile is correct, then this railway could haul grain from Winnipeg to Quebec under the following

,2540
conditions : Assuming the haul over a four-tenths grade road would be 40,000 bushels per train, and taking the freight rate of 12 cents per bushel from Winnipeg to Quebec, you have a gross receipt from that train of $4,200.


Haughton Lennox: The assumption is all wrong.


Charles Bernhard Heyd: It is a matter of multiplication. A train capable of hauling 40,000 bushels, which an engine and the gradients of our road will warrant us in assuming can be done-as a matter of fact, to-day 80,000 bushels are being hauled-but we will only assume it at 40,000, for the sake of argument, at $1.60 we have the following results : One train of 40,000 bushels at 12 cents per bushel will give $4,800. Assuming the train mileage to be 1,475-which are the figures given by the Minister of Finance, and not 1,400, as given by Mr. Blair-at $1.60 per train mile, you will have an expenditure of $2,360, or a profit on that individual train of $2,440. I may be wrong in my assumption, but the calculations are right. Assuming one train per day, or 300 per annum, of 40,000 bushels each, this would mean 12,000,000 bushels of wheat, or a profit of $732,000. Assuming that a train costs in winter from Winnipeg to St. John, a distance of 1,875 miles, $1.60 per train mile, you will have $3,000, according to the methods adopted by railways to get at the train mileage, while 40,000 bushels at a freight rate of 15 cents per bushel will represent $6,000, or a direct profit of $3,000 on the one train per day, or two in the winter time, of 40,000 bushels each, or 12,000,000 bushels in all, that will represent a profit of $900,000. Assuming that we could carry wheat in summer from Winnipeg to Quebec, say 12,000,000 bushels, we can make $732,000 if these figures be correct. And in winter time, we make $900,000. Or, on that wheat haulage alone, there will be a profit to the railway company of $1,632,000. Now, I am not relying altogether on my own estimate in this matter. I have submitted these figures to the railway authorities here at Ottawa, and they say that my premises, my reasoning and my deductions are correct. And I have not the slightest doubt that it is just upon such reasoning as that that the Grand Trunk authorities believed they could carry grain successfully from Winnipeg to Quebec and Sr. John, and compete, as they have a right to think they could, being endorsed in this matter by Sir Sandford Fleming, with the ;ail and water route. Now, the freight ( barges from Brandon to Montreal by lake and rail are 16-5 cents per bushel ; by lake and rail, with winter storage, 21-375 cents per bushel ; by rail direct to St. John, 21 885 cents per bushel. Against that competition this railway can successfully carry grain. To show that this calculation is incorrect you have first to show that an engine will not do on the Grand Trunk Paci-Mr. HEYD.
fie what it is doing on other railways, that a Canadian railway cannot be as economically run as another, or that on other railways under similar conditions, it costs more than $1.60 per train mile. If it costs $2 per train mile the profits would be correspondingly small.
Now, I give these figures for what they are worth. They certainly have made an impression on my mind. When I consider (he results I have brought forward together with the willingness of the Grand Trunk Railway Company-capable, careful business men, who know what a railway is capable of doing-I am satisfied I am not far out of the way.


Mr. CLANCY.: Would the hon. gentleman (Mr. Heyd) permit me to ask him a question ?


Charles Bernhard Heyd: Why certainly.


James Clancy: Can the hon. gentleman understand why the government gave the excuse that the Grand Trunk must take this up or it would not go on, if there is such an immense fortune in this traffic?


Joseph Israël Tarte: The whole experience of (he American railways tells against the argument of my hon. friend (Mr. Heyd). Take, for instance, the transportation between Chicago and Buffalo. By rail the distance is only 510 miles ; by water it is nearly 900 miles. Yet, let my hon. friend look at the record of the grain trade and be will find that the lake carriers year by year have been taking nearly everything from the railways. Every argument that my hon. friend has deduced is contradicted by hard facts. Figures are strong, but facts are stronger, surely.


Charles Bernhard Heyd: It is very singular, if all the facts contradict me, that so many bushels of wheat are hauled by the Grand Trunk from Midland and by the Canada Atlantic from Parry Sound in competition with this very water route.


Joseph Israël Tarte: By water and rail.


Charles Bernhard Heyd: But it could be all by water. To the extent that it goes by rail, the fa ?t is demonstrated that it is cheaper to go by rail than to go by water, because it could go by all-water if there was any advantage in sending it that way. Yet, notwithstanding the competition, millions of bushels go over the Canada Atlantic, the Canadian Pacific and the Grand Trunk in competition with the water route. The conditions under which these railways operate are not so favourable as those of the Grand Trunk Pacific will be. This road will be at Winnipeg itself. Our friends opposite always t: ke Fort William as the objective point, just as if grain from Edmonron. Prince Albert, Brandon or any of these other western towns and cities, could be carried for nothing to Fort William. Add the freight from any distant inland town in the Northwest

Territories to Fort William, to the cost of transportation by the water route to Montreal or Quebec, and you will see that the Grand Trunk Pacific could successfully compete. The Grand Trunk Pacific may get its load a thousand miles inland. To carry the load of 40,000 bushels over a railway of small gradients to Quebec would be almost as cheap as to carry it on an ordinary road to Fort William. For instance, the Canadian Pacific Railway and the Canadian Northern have to carry grain nearly 600 miles over a low grade road before it reaches Fort William. The Grand Trunk Pacific carrying from Winnipeg to Quebec, -over a road of low gradients, would be half way to Quebec by the time the other had reached Fort William. You have to go into these facts much more carefully than my iion. friend has done, and not jump at such hasty conclusions. But it is said that the Grand Trunk has no motive in carrying their grain over the Grand Trunk Pacific. If it can be demonstrated that they can do it profitably, then we have the strongest guarantee that they will do it independent of the legal compulsions under the agreement. It is said that they prefer to build a railway from North Bay to Winnipeg, and, oast of North Bay to utilize their present system. What advantage would this be to the Grand Trunk Railway ? I can readily understand why they were willing to abandon their former scheme and take adi antage of their present one. The road is actually as short as theirs would have been, while it goes through a practically fertile territory, capable of evolving a large amount of local freight, while from Winnipeg to North Bay, under the conditions under which the Grand Trunk intended to build, the road for a thousand miles would hove been through a territory from which they would derive no freight. Now, take this Grand Trunk Pacific road from Winnipeg to the point about 175 miles north of North Bay, where it would be tapped by the Ontario government's railway. From Winnipeg to this junction point is about !;50 miles. It is said that even assuming this road was built, the Grand Trunk would bring the traffic down over their road through Ontario to Montreal and Portland. Well, let us see whether it is to their iu-terest to do that. If the mileage Is favourable and the conditions not less favourable, we have the strongest reasons to believe that they will go to Quebec instead of Portland. Now, this is the table of distances :
Miles.
Winnipeg to junction point	 950
From that point to North Bay is.. 175
To	Orillia	
150To	Belleville	
250To	Belleville	
200To	Montreal	
200To	Portland	
297
Or a distance from Winnipeg to Portland, via the new line, via North Pay and the
present Grand Trunk system, of 1,973 miles. But Mr. Blair himself said that the distance from Winnipeg to St. John was only 1,835 miles. Mr. Fielding, making a liberal allowance for the length of the road, said it was only 1,875 miles, so the present road, if the estimates of the Minister of Finance are to be accepted, is 98 miles shorter than the Grand Trunk would be, and if Mr. Blair's figures are accepted, it is 138 miles shorter. Assuming that this road is built from Winnipeg to Quebec, why should the Grand Trunk be willing to carry grain over poorly constructed railways with heavy gradients, 138 miles further, in order to take it to Portland via Montreal when they can carry it over their own road, upon which they are bound to pay interest, to a point 138 miles nearer? The Grand Trunk have no motive whatever to violate the terms of their contract with the government. That is a plain proposition and one which I am sure every member of this House will see. We have however, a reasonable presumption that the interest of the Grand Trunk, independent of every other consideration, will require that they carry this grain to a Canadian port, for under present conditions, .when grain is once landed on the Canadian Pacific Railway, it can be conveyed to St. John more cheaply than by any other method by any line to a point upon the Atlantic ocean.
There are a great many more reasons why I support this proposition, but the ground has been so fully gone over that it is hardly necessary for me to traverse it once more. But these various arguments appeal to us in different ways. I wish to draw once more to the attention of the House the necessity of carefully considering any propositions that come from our friends on the other side. Not that they would wilfully misrepresent, but that they sometimes make mistakes. My hon. friend the leader of the opposition (Mr. R. L. Borden) whom I personally believe to be the soul of honour, affords one of the best instances of how a well-informed man who is trying to give the facts as he knows them to be, is capable of falling into the most profound errors and of giving out statements which will influence the country, but which are neither accurate in fact nor in substance. The hon. member for Haldimand (Mr. A. T. Thompson alluded to the error into which the leader of the opposition (Mr. R. L. Borden) fell when, after having estimated the cost of the Grand Trunk Pacific Railway, he added to it an amount of $18,000,000 that had been discovered by Mr. Blair.


Robert Laird Borden: I beg my hon. friend's pardon; it did not enter into my estimate at all. My estimate is absolutely outside that. It does not enter into the $150,000,000 or the $170,000,000.


Charles Bernhard Heyd: There is one of the curious things that take place in discussions of this kind. It is a little funny too that there should be such a great discrepancy. 1 Shall come a little later to the point to which my hon. friend made reference. If we are to listen to the Minister of Finance ns to the financial burdens that the country is called upon to bear in connection with the eastern portion of the railway


James Clancy: Which is doubtful.


Charles Bernhard Heyd: It will amount probably to $05,000,000. If we listen to Mr. Blar, who had the strongest reasons to magnify the cost, it will amount to probably $75,000,000, but if we listen to the leader of the opposition (Mr. R. L. Borden) who is expected to properly instruct the people, it will amount to $117,000,000. Somebody :s wrong, either the Minister of Finance (Mr. Fielding), Mr. Blair, or the leader of the opposition (Mr. R. L. Borden). We can take our choice, but there is a tremendous discrepancy there. I do not propose to deal with the western section at all, because I do not myself believe that the western section places any financial obligations upon this country. Both sides of the House have always admitted that that was the fat end, and that the mere right to build that railway was worth something to the company, and if it is so rich and will be a l>aying concern from the very start, there can be no cost to the country arising from it. But the eastern end is a people's railway. I am sorry that the anxiety of our friends opposite will magnify its cost so much. I would like to have followed the Minister of Finance (Mr. Fielding) who has a reputation to lose in this House, as a Finance Minister, in his estimate of $65.000.000. or I would like to have believed the late Minister of Railways (Mr. Blair), in his calculation of $75,000,000, or $80.000.000. but I am somewhat forced to discredit them, when the leader of the opposition (Mr. R. L. Borden) tells us it will cost $122,000,000 and that he omitted this $18,000,000. Now why did he allude to it at all if he did not intend that it should have a certain influence on the minds of his hearers? Having figured up the entire cost of this road, after having discounted the. bonds and sold 1hem at 90 cents on the dollar, and having added $12,000,000 for the loss, he says, not with the intention of influencing our minds at all:
This does not include any interest on the twenty half-yearly payments of interest which the government will be obliged to make during the period of ten years in which the Grand Trunk Pacific will pay no rental.
And it does not include $18,850,000 estimated bv Mr. Blair as our loss during 40 years in which we shall receive from the Grand Trunk Pacific three ner cent, while we shall probably fie tnv't'r at least three and one-half per cent.


Robert Laird Borden: Why did the leader of the opposition (Mr. R. L. Borden) make the statement at all if he did not add In the $18,000,000-? Were his figures high enough already? Did he stagger at the idea that the people would not accept; appalled by the monstrous figures he presented and that he, therefore, did not include them? But he mentioned them with the idea of producing an effect and had he assumed Mr. Blair's process in the reasoning he would have been correct. The leader of the opposition (Mr. R. L. Borden) started quite properly assuming his estimates to be right, and he calculated that after selling the bonds at 90 cents on the dollar, whereby a a loss of nearly $13,000,000, would have been incurred, the road would have cost $123,000,000 without the Quebec bridge. But be winds up by quoting Mr. Blair, saying that this road will have to be paid for by an issue of bonds and that the bonds will likely be three and a half per cent bonds upon which the government will lose one-half per cent per annum for fifty years, or $18,000,000. But, if he is going to pay for the road the three per cent bonds issued at ninety there is a loss of $13,000,000. If he is going to pay for this road at the rate of three and a half per cent and we onlv receive three per cent, there Is a loss of*$18,000,000. But. you cannot add in $13,000,000 for the loss incurred in the sale of the bonds at ninety, and then add in $1S,000,000 more and tell us that is wliat we would lose if we issued the bonds at three and a half per cent. He is issuing two sets of bonds for one single railway. But, that is not the only amusing part of it. My hon. friend from Haldimand (Mr. Thompson) said that:
The hon. gentleman was whittling that stick at both ends.
And so he was. He had either to drop out the $18,000,000 in the one case or the $13,000,000 in the other case because be could not add them both together. That is a certain proposition and we might not have noticed it if my hon. friend from Haldimand had not drawn attention to it. The hon. leaden of the opposition had got himself into a hole. There are hon. gentlemen in this House who, when they become recognized as authorities upon matters of finance and upon railway matters may think they make statements on those subjects which go a long way. But in this particular instance it was necessary to get the hon. leader of the opposition out of the unfortunate position in which be bad placed himself although he did not even add in the $18,000,000. My bon. friend from Hamilton (Mr. Barker) took bold of this after he had eight or nine days in which to consider it and he made the following explanation to show that my bon, friend from Haldimand was only a child and that the

reasoning of the hon. leader of the opposition was perfectly correct.
The position taken by the leader of the opposition as to that $18,000,000, is a perfectly simple and reasonable one, and I am surprised that the hon. gentleman from Haldimand should not have seen it at once. The discount on the bonds after the first ten years of the lease the rent begins to become payable, the government is in this position, it has issued bonds bearing three per cent ; it has to meet the interest on these bonds every six months ; the government cannot afford to have any doubt on the market about its paying to the hour ; it must be ready every six months with its gale of interest. The Grand Trunk does not pay its rent until the end of the year ; the government, on the 1st of July let us say, has to provide something like $1,690,000 to meet the half yearly payment on the interest of the bonds. At the end of the year the Grand Trunk returns precisely that sum, but the government has been carrying that temporary loan for six months and the Grand Trunk does not pay cost of it. tinder this most extraordinary arrangement which probably the Minister of Finance has devised, the government, every six months for forty years, has got to raise $1,690,000 in the bank, in advance of the rent, and that is a loss of money. You cannot raise temporary loans of that kind without paying interest, and the sum of your loss is said to be $18,000,000 in the forty years.
Now what are the facts of the case ? Seeing the position in which the hon. leader of the opposition had placed himself, a new theory had to be introduced. This $18,000,000 had to be looked for in some other quarter, and therefore, because we have to pay interest on our bonds every six months and receive the rents at the end of the year ; we lose six months interest upon that amount. Now, let us see what that amounts to. It is said to be $18,000,000. A half year's interest on $1,690,000 at three and a half per cent is $29,575 ; $21-351 put out at interest at three and a half per cent will pay one dollar per annum for forty years. Multiply 2Y351 by $29,575 that we must pay and it gives us for forty years $631,000 instead of $18,000,000 that we were gravely told was the amount that would have to be provided for to make up this extraordinary loss. Now, if this statement of mine can be contradicted I would be very glad to allow any hon. gentleman the opportunity of contradicting it, but as it is my hon. friend from Hamilton simply undertook to Introduce a new theory. That never was in the mind of the hon. leader of the opposition when he made that statement. He never had any conception that the $18,000.000 covered that. As for Mr. Blair it never entered into his mind. It was a direct loss of one-half per cent per annum between the interest and the rent for that whole period of time. It was not even then explained fully but my hon. friend qualifies himself after damage has occurred. He says :
I have not myself calculated the loss. But the bon. gentleman (Mr. Thompson) says : you nr.- cutting us at both ends.
liEVTSED
Guaranteeing, apparently, the correctness of the statement by ridiculing my hon. friend without having contradicted what he had said. Here we have $18,000,000 of a loss trumped up which $631,000 will wipe out. I only make this statement to induce our friends on this side who are sometimes influenced by statements made on the other side of the House to carefully verify all these figures because the best of us are liable to err. I do not think the hon. leader of the opposition would intentionally make a misstatement of that kind. I assume he made that statement because he believed it to be true and that he really thought at the time that he made it that this amount should have been added. My hon. friend from Hamilton thought he would get a loop-hole in order to work the hon. leader of the opposition out.
Now, I think I have taken up considerable time In order to discredit some of the statements made by our hon. friends on the other side of the House. I am a little surprised at the sudden conversion which has taken place on the other side of the House as to a government owned railway. I can tell yon that I have no confidence in government managed anything, particularly railways. We have had an experience of Conservative management of railways for eighteen or twenty years. We have had an experience of a Liberal government managing a railway for six or seven years, and it is as big a failure to-day, notwithstanding probably an honest effort to manage it, as it was seven years ago. We are losing just as much money when we take interest at three per cent on the additional amount of capital that has been invested in the road into account, in fact, we are losing more than was lost ten years ago, and that satisfies me that as long as the party system prevails which is incapable of being changed as long as we are animated by such strong political view's as we hold to-day, it is an unwise thing for the people of this country to place in the hands of any government, no matter how honest they may he, the management of an institution in which so much money is involved and in which the prosperity of the country is so intimately bound up. I am quite willing that we should build the road from Moncton to Winnipeg and hold the key to the situation.
Fifty years hence public opinion may have grown to that point, when the people of Canada may trust a government and a parliament to manage such a large financial institution, but public ownership at the present time has generally been a failure from a financial standpoint. Occasionally, you will fiira inelT like the Minister of the Interior, the Postmaster General and the Minister of Finance, who can manage public departments successfully and well, but as a general thing, waterworks, electric light



EDITIOX

[Stage Direction]
plants, street railways, when operated under public ownership, are a dead failure. Toronto is a good example of that. It is the most advanced city in Ontario, but the citizens themselves have the least confidence in the management of their affairs by public bodies. They have been fooling with the gas works for ten years; for fifteen or twenty years they have been trying to get control of the street railway; everything touched in the line of municipal ownership appears to be a dead failure, except the water-supply in a few of the municipalities in Ontario and Quebec. And until the people of Canada are educated up to managing their local affairs in cities and towns. I would not be disposed to trust an immense work of such great importance as this railway, in the hands of practically the same men who now unsuccessfully managed municipal institutions^ I shall look forward with considerable confidence to the good this railway will do. Some people are frightened at the enormity of the burden; I am not. The membei foi East Grey (Mr. Sproule) figured out to his own satisfaction, the' liability it would place on the farmers in his own riding, and I presume he will have that speech printed and circulated among the farmers. But the lion, gentleman will not tell them that each immigrant that comes to this country assumes a certain proportion of our obligations; he will not tell them that last year 140,000 people came into Canada who assumed a one-fiftieth part, not only of the cost of this railway, but a one-fiftieth part of the national debt. In fifteen years from now our population will have increased probably by 2,000,000, and there will be 2,000,000 more tax: payers who not only have assumed their share of the liability for building this railway, but their share also of the $261,000,000 of the existing national debt. Will the member for East Grey tell his constituents that each individual farmer will have a less burden to bear then, even though this railway is constructed, than he has to bear now ? I do trust- that our friends opposite will quit hair splitting and pettifoggy, and trying to throw petty obstacles in the way of this national undertaking. They will not catch the public ear by pursuing their present tactics. The people know what this project means, that for all time to come the government of Canada control the key of the situation; and that they believe in building a road from Moncton to Winnipeg and owning it ns a government enterprise. It will be handed back to us in fifty years enhanced in value, and that narrow link that is almost like a thread binding the east and the west, will be broadened by at least 200 miles, and the hope that inspires such men ns Snndford Fleming, and the members of the present government will be more than i enlized. Notwithstanding the changes that Mr. HEYD.
have been made by this modified agreement, which makes it easier for the Grand Trunk and worse for us, still, bad as our friends on the other side say it is; it is a good thing for this country, and it is infinitely preferable to the scheme of our friends on the other side of the House.
Mr. BENNETT.: Will the hon. gentleman allow a question ?


Charles Bernhard Heyd: Certainly.


William Humphrey Bennett: Does he think that this tailway will resurrect the cutlery factory that died in Brantford a little while ago ?
Mr. 'HEYD. I do not know that it will resurrect it, but if it succeeds in doing what '[DOT]we think it will; it will develop this country so that the market for cutlery will be increased ; so that specialties will be manufactured successfully, and the cutlery establishment will be able to exist then that finds it imposible to exist under the present conditions. Now, while I would have preferred the original agreement to have stood, and while I look with considerable-I won't say dissatisfaction-at the present changes; still they are infinitely preferable to what we might expect if our friends on the other side had their sweet will. They would land us into a scheme which would not open up any new territory; that would not broaden the back of this country ; that would not add to the exporting power of Canada ; that would not open up the farming lands of Ontario and Quebec, but that would cost us a great deal more money than the present scheme. From the standpoint alone of opening up new territory, every citizen of Ontario should be willing that; his money should be contributed for the purpose of opening up that new Ontario of ours. I look forward with considerable confidence to the outcome of this work, and even though the government cannot do all that our friends on the other side would wish, still I believe they have done the best that, under the circumstances they could have done for the country.


Mr. KEMP.: I wish to say, Mr. Chairman-


Peter Macdonald: I want to say a word or two


William Humphrey Bennett: About the cutlery factory ?


Peter Macdonald: am going to appeal to the good sense of the committee. We have been discussing the question generally since eight o'clock, it is now nearly midnight; and I would urge hon. gentlemen to return to the discussion of clause 9, which is before the chair. I hope that we will limit ourselves to the discussion of clause 9, during the remainder of the night. Let ue start fresh now. and conduct the business properly. Clause 9 is the question under discussion.


Albert Edward Kemp: Very well, Mr. Chairman


Peter Macdonald: Allow me to read It if you please.


Albert Edward Kemp: I think I have heard it read before.


Peter Macdonald: If the hon. gentleman has heard it read, it will save me the trouble of reading it.
Mr. KEMP, i agree with you, Mr. Chairman, that it was a very great waste of time for the member for Brant (Mr. Heyd) to go into the general question, and discuss the freight rates which may be charged on this railway. However that may be, might I ask the hon. member (Mr. Heyd) how many million dollars he deducted from the estimate. of the leader of the opposition ?


Charles Bernhard Heyd: I cannot tell you. I did not deduct anything: I merely gave his statement.


Albert Edward Kemp: I understood that you deducted about $18,000,000 ?


Charles Bernhard Heyd: I gave the figures that the leader of the opposition gave, and I mentioned that he omitted $18,000,000, which he thought should be included.


Albert Edward Kemp: May I ask the hon. member for Brant (Mr. Heyd) what he said was the estimate of the Minister of Finance of the cost of this transcontinental railway ?


Charles Bernhard Heyd: I do not remember just whav ii was. I gave my figures to the reporters, r think it was about $65,000,000 for the government section. I may be wrong ; I am speaking from memory.


Albert Edward Kemp: Then the hon. member does not express his opinion as to who was nearer the truth ?


Charles Bernhard Heyd: I am quite willing to express it. I think the Minister of Finance was.


Albert Edward Kemp: I thought the estimate of the Minister of Finance was something between $8,000,000 and $9,000,000.


Charles Bernhard Heyd: I am speaking of the government end. I did not touch the western section.


Albert Edward Kemp: It seems to me a remarkable thing for the hon. gentleman to endorse this railway project as he has done to-night. He accused the hon. member for East Grey (Mr. Sproule) of making a speech which he intended to circulate among his constituents.
I venture to say that the hon. member for South Brant will not send a copy of his speech to the farmers of Brant. The hon. gentleman has been pounding into them for some time past the idea that he was against bonusing or assisting railways, and that he believed that the time had come when the people who wanted to build railways ought to build them out of their own resources. I think the hon. gentleman misunderstood
81A
the remark of the hon. member for South Lanark (Mr. Haggart) in regard to hauling a train of freight on a four-tenths grade. What the hon. member for South Lanark said, as I understood him-and he based his statement on a recent article in the ' Scientific American '-was that to start an ordinary freight train' standing still on a level track was equal to going up a four-tenths grade.


Charles Bernhard Heyd: I understood him to say that a grade of the quality to which we had reference was something that was almost impossible-that it was equal to a railway that was absolutely level, because you could haul as much on a four-tenths grade as you could on a level road.


Albert Edward Kemp: I accept the hon. gentleman's word ; but if he looks at ' Hansard ' and at the article in the ' Scientific American,' he will find that he misunderstood the hon. member for South Lanark. Now, I do not wish to take up the time of the committee in discussing a subject which is foreign to the clause under consideration, and I think it was a mistake for the hon. gentleman to do that. He brought up the whole question of whether freight could be carried as cheaply by rail as by rail and water or by an all-water route. Last session the discussion of this question occupied a great deal of the time of the House ; and when this Bill was first under consideration this session, I thought that question had been dropped out of the discussion. I based my belief on the following statement of the Minister of the Interior :
What I say is, that when the wheat gets to Port Arthur and Fort William It does not make any difference what the Grand Trunk Railway will or will not do. In summer time the wheat will go out by water to Montreal or Quebec or by the Erie canal to New York, so that the question of what the contract with the Grand Trunk is, in respect of summer traffic in wheat is absolutely immaterial ; it has nothing to do with what will happen to the traffic. We expect that owing to the improvements that have been made to the water-ways of this country, Montreal and Quebec will be able to compete successfully with the route to the south. It is now competing successfully. Wheat was hauled last season from Duluth to Quebec for 3J cents a bushel and certainly a railway will not compete with this ; that may be taken as evident. But during the winter months, during the four and a half or five months when rolling stock would otherwise be Idle and when ships are coming to our ports and demanding cargoes, then the railways will and do haul wheat all-rail.
Now, the hon. member for Brant has attempted to prove in theory to-night what has never been carried out in practice either in the United States or in Canada, and in my opinion never will be ; and in view of the statement of the Minister of the Interior on the 6th of April last, we might as well drop the discussion of this question of the competition between rail and water car-

riage of wheat. Therefore, I am coming to the clause under consideration. It has been stated by the Prime Minister that what the government have been trying to do is to force the Grand Trunk Pacific Railway to carry the products of this country to Canadian ports, and the Prime Minister said it was important that the Grand Trunk Railway Company should hold $25,000,000 of the stock of the Grand Trunk Pacific. In order to accomplish this, hon. gentlemen opposite have made it plain that they are desirous of developing Canadian ports, and we on this side of the House have made it plain that we are in favour of that also. The difference between us is that we on this side contend that clause 42 in the contract will not have the effect of accomplishing what the government intend. What we say is that, in order to make the Grand Trunk Pacific Company carry out that part of their bargain, there should be a penalty clause attached to clause 42 ; and further that the Grand Trunk Railway Company itself should be made a party to the agreement in respect to that clause. We say that, because it has been demonstrated by the remarks of the hon. member for St. Mary's (Mr. Tarte), the hon. member for South Lanark (Mr. Haggart) and many other hon. members of this House, that the interests of the Grand Trunk are largely in the United States, at Chicago and Portland. In committing this country to an expenditure of $150,000,000 or upwards-you can call it anything above that figure you please-the people of the maritime provinces have a right to contend that we should be very careful what we do in respect to the wording of this contract, so that ten years hence, when this road is in operation, nothing will happen to enable the Grand Trunk Pacific Railway Company to evade fulfilling the spirit of the contract. If the Grand Trunk Company, holding the controlling interest in the Grand Trunk Pacific Company, are willing to assist in carrying out this project, then I say it should be willing to become a party to the agreement, and the Grand Trunk Pacific Company should be willing to have some sort of a penalty attached to the agreement as an evidence of its good faith. If the Grand Trunk Railway Company and the Grand Trunk Pacific Railway Company were in earnest about this matter, they would have demanded froth the government an agreement in respect to the Intercolonial Railway from Moncton to Halifax, St. John or some other port in the maritime provinces, and would have embodied that in this contract.
In ten years hence when this road is op>en ior traffic, the government will go to the Grand Trunk Pacific Railway and say : We want you to carry these products to a Canadian port, as provided in the agree ment. But the Grand Trunk Railway will naturally reply : It will cost us more as the mileage is longer; you must make Mr. KEMP.
it cost us the same as it does to tak >
the traffic to Portland, and if you cannot, we will carry it to Portland. That would be a fair proposition. To my mind the promoters of the Grand Trunk Pacific are not showing their good faith unless they consent to a bargain between the government and both corporations ; defining the terms on which the Grand Trunk Pacific will get the use of the road from Moncton and the ocean terminus in the maritime provinces. Hon. gentlemen talk of the Transcontinental Railway from ocean to ocean, but there is no such thing. This is only to Moncton, and there are many opportunities for misunderstanding with regard to this particular point. It is a loose contract in this respect, which affords the best evidence, notwithstanding the argument of the hon. member for St. Mary's division, that the Grand Trunk Railway do not intend to carry out their part of the agreement, and I do not believe they will, unless some penalty be provided and unless the Grand Trunk Railway itself becomes a party to 42 clause.


Robert Laird Borden: We have been discussing everything except the clause itself, and I think it would not be a bad idea to have a little discussion of that before we close. I would like to ask my hon. friend, the Minister of Justice, what is the meaning of this provision :
Provided, however, that the said Grand Trunk Railway shall during the delay mentioned in the said paragraph continue to hold a majority of the said stock by such title as shall enable the said Grand Trunk Railway Company to control the policy of the company.
Those were the words to which I drew attention on the 5th of April, when the resolution was first discussed. I expressed the opinion then that they were intended to enable the Grand Trunk Railway to dispose of the whole of this stock and to do that by means of an arrangement, not unusual in the United States, under which stock is sold without conferring upon the person who receives the dividend the power to vote. I am not speaking without information on that point, because I have been informed by persons who bold stock in that way, that in the United States that this is sometimes done. There is no legal difficulty in the way. It is quite competent for any one holding a block of stock to agree that another shall receive all the dividends during a period of five years, and that at the end of that period he shall receive, not only the dividends, but all possible rights including the right to vote.


Charles Fitzpatrick: I would not like to say that this is intended to accomplish v luit my hon. friend says is the practice in the United States. I have no personal knowledge of any such practice. What are the conditions which existed at the time the amendments were made .[DOT] Under section 27 of the contract, the Grand Trunk Pacific undertook that the Grand Trunk

Hail u ay would acquire $25,000,000 of stock in tile Grand Trunk Pacific. When the contract came before the House for ratification, it was provided that not only should the Grand Trunk Railway take and hold ffiat $2o,uuu,uuu of stock during the fifty years of the lease, but also that they should not be in a position to either pledge, transfer or convey it. Assuming that file Grand Trunk would be obliged to give either cash or its equivalent for the stock, they would have, after they had used their fund's to acquire it, to take it and put it into their coffers and leave it (here and not lie able to raise a dollar on it. The intention o'f the amendment is to relieve the company of the obligation to keep that stock in the condition I have described and to enable them to make use of it, provided they keep such title in it as will give them the voting power connected with it. That is to say, the title to the stock will remain vested in the com pany, but the equitable interest-dividends and all that-may pass to the holders of the stock. The company must not part with the voting power. The company must hold it under such title as will enable them to exercise the voting power. That is the intention of the parties to the agreement.


Robert Laird Borden: So that it really amounts to this, that the whole $25,000,000 may be disposed of, provided the Grand Trunk retain- the voting power which is essential for controlling the policy of the company.


Charles Fitzpatrick: Yes. Perhaps 1 should point out the anomalous position in which the holders of the stock will be. The control of the corporation will be in the hands of the Grand Trunk Railway and they will control the dividend producing power of the company to the detriment of the holders of the stock and this will continue for fifty years. It will be apparant, therefore, that the effect is simply to give the company, while owning the stock, the right to borrow money on it.


Mr. NORTHRUP.: Although the discussion has been varied and interesting, practically this section, which is one of the most important, has not been fully discussed so far. I have no wish to follow the broad range of discussion, but simply to confine myself to this clause, but I venture to suggest that at this hour it is a little late to begin the discussion of so important a clause. If the government would be willing to adjourn, we will be just as far ahead to-morrow night as if we were to go right on discussing the clause. However. I am prepared to go on with the discussion.


Wilfrid Laurier: As we have no desire to curtail discussion, I will agree with the suggestion of my hon. friend.
Progress reported.
On motion of Sir Wilfrid Laurier, House adjourned at 11.40 p.m.

Wednesday, May 4, 1904.