1904-06-06

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Mr. RALPH SMITH moved that the order for second reading of Bill (No. 35) respecting union labels be discharged.
Mr. E. F. CLARKE.: Might I ask for some explanation from my hon. friend ?


Mr. RALPH SMITH.: It is simply to place myself in order for the re-introduction of the Bill.


[Stage Direction]
Motion agreed to, and order discharged.

Hon.   CHAS@: FITZPATRICK (Minister of Justice) moved for leave to introduce Bill (No. 132) to amend the Railway Act, 19U3.


Mr. CASURAIN.: Will the hon. gentleman explain ?


Mr. FITZPATRICK.: This Bill is for the purpose of meeting a difficulty that was suggested during the course of the discussion on the Grand Trunk Pacific Bill with respect to the apportionment of freight rates as between two companies operating under a joint traffic arrangement. It was suggested that the Railway Commission had not full control over such an arrangement. I was of opinion at the time that they had that control ; but after looking at the Act, I think that the control would be only with respect to companies operating in Canada, and would not be . applicable to companies operating partly in Canada and partly in the United States. Nor do I think the provisions of the Act go far enough to be applicable to a transportation company operating on the great lakes and under the

control of a foreign corporation. That Is tlie tlrst amendment. The second is as to the nationality of the directors of subsidized railways in Canada.


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

Ralph Smith: Before the Orders of the Day are called, I desire to ask the Minister of Labour if the parties to the strike in Sydney, Nova Scotia, have request ed the intervention of the department, or if the minister himself has volunteered any assistance in that matter ?


Sir WILLIAM MU  LOCK@: Mr. Speaker, in answer to the hon. gentleman, I have to say that neither of the parties to the dispute at the Dominion Iron and Steel Company's works at Sydney has invited the intervention of the government or the Department of Labour. The Sydney Board of Trade did so, and overtures were made by the department to both parties ; but up to the present moment neither of the parties has been willing to avail itself of the services of the department. I have the correspondence here, and, if the House will allow me, I will read it. The following is a telegram from the Sydney Board of Trade :
Sydney, C.B., June 1, 1904, The Hon. Minister of Labour,
Ottawa.
The Sydney Board of Trade, at a meeting held to-day unanimously resolved to ask your intervention in the existing trouble between the Dominion Iron and Steel Company and its employees, which has resolved itself into a general strike that threatens to very seriously affect this community. Briefly stated, the employees' contention is that they are not receiving a living wage, or their just proportion of the bounties paid by your government to the company. The company, on the other hand, contends that it is paying average wages, and offers to arbitrate upon this point. The Board of Trade has therefore passed the following resolution :-That, in view of the large bounties paid by the government to the iron and steel industries in Canada, the government be requested to intervene along the following lines, namely, to require the company to show the condition of its affairs to such persons as the government may see fit to appoint, with a view either, (a) to convince the employees that the company is not yet in a position to accede to their demands for higher wages, or, - (b) to bring such pressure to bear upon the company as will lead to an immediate settlement of the existing difficulties.
(Sgd.) S. P. CHALLONER, Secy., Board of Trade.
In response to this the following communication was sent to the vice-president of the company, the president, I understand, being at present outside of the country :
Toronto, 2nd June, 1904,
Dear Sir,-The government much regrets the existing differences between the Dominion Iron Mr. FITZPATRICK.
and Steel Company and their employees and which have resulted in a strike and a shutting down of the works and earnestly hope that at the earliest moment harmony may be restored and the men be again at work.
The Sydney Board of Trade has telegraphed asking intervention of the Department of Labour, and I beg to offer the department's services' towards a settlement of the differences. Yours faithfully,



W. MULOCK

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Minister of Labour
F. Nicholls, Esq.,
Vice-president, Dom. I. & S. C.,
Toronto.
To this the following answer was received:
14-16 King St., East,
- Toronto, Canada June 3rd 1904.
Sir William Muloclc, K.C.M.G..
Minister of Labour,
Ottawa.
Dear sir,-I beg to acknowledge, receipt of your letter of the 2nd inst., and may say I share your regret at the existence of differences between the Dominion Iron and Steel Company and their employees. At the time of reorganization of the company's affairs last December, the position of the company was fully explained to the representatives of the men and also to members of the town council and Board of Trade of Sydney, and there has been no change for the better in the iron and steel market since that date. The trend of prices has been steadily downward, and ironmasters have in some cases shut down their works and in others reduced their staff of employees and also their wages. We have made a determined effort under discouraging circumstances to keep the various mills in operation and afford continued employment to our workmen. A short time since they made a demand for increased pay, which, under the circumstances, it is impossible to concede, but as with this demand was coupled the statement that they were receiving less than the standard rate of wages in similar industries, our directors in their reply offered to submit this claim to arbitration, and I inclose a copy of the resolution adopted unanimously by the directors at a special meeting called to consider the situation.
As the men have voluntarily quit work, the company has decided to suspend operations until the iron and steel trade is in a more satisfactory condition, but with a sincere desire to alleviate any possible suffering, arrangements have been made to, so far as possible, give work to any of our late employees w'ho may desire It.
Yours faithfully
(Sgd.) FREDERIC NICHOLLS,
Vice-president Dominion Iron and Steel Co.
He inclosed in that letter the following-copy of the resolution referred to :
Copy of a resolution unanimously passed by the directors of the Dominion Iron and Steel Company :
At a meeting of the board held on Monday, May 30th, 1904, it was resolved that the director of w-orks be authorized to ask the officers

of the P. W. Association and a committee of the employees of the company to meet the president and himself on Thursday, the 16th day of June next, and to say to them that the directors of this company are of opinion that they are now paying the current rate of wages beyond what it at present is and that in event of the P, W. Association and the committee of the employees disputing the correctness of this statement as to the rate of wages, that the company will consent to a decision thereon by a board of arbitrators to be chosen, one by the company, one by the employees, and an umpire to be chosen by these two, and failing the choice, that he be a judge of the Supreme Court of Nova Scotia named by the lieutenant governor.
I also sent tlie following telegram to Mi Moffatt :
(Telegram.)
Toronto, 3rd June, 1904.
John Moffatt,
Grand Secretary, P.W.A.,
Sydney, N.S.
Sydney Board of Trade has telegraphed government suggesting its intervention with view to removal of present troubles between Dominion Iron and Steel Company and its employees. Government greatly regrets existence of these differences, and hope that without jlelay satisfactory solution may be found, and if desired will be pleased to lend its friendly services towards removing grounds of friction and reestablishing friendly relations between both sides. Kindly telegraph me whether intervention by government agreeable to employees, directing answer after to-day to me at Ottawa.

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Minister of Labour.
To this telegram the following reply was received :
Dominion, N.S., June 4.
Hon. Wm. Muloclc,
Ottawa.
We prefer to be left to settle this dispute ourselves in our own way. Thanks for kind offer.

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On the 4tli of .Tune I sent the following telegram to Mr. Challoner :
(Copy)	June 4, 1904.
S. P. Challoner,
Secretary Board of Trade,
Sydney, N.S.
On request of Sydney Board of Trade I offered to both parties friendly intervention of Department of Labour in present dispute between Iron and Steel Company and their employees, but greatly regret that replies received indicate unwillingness to accept government intervention. Am mailing you to-day copies of correspondence.
(Signed.) WILLIAM MULOCK.
On the same day I forwarded the copies of the correspondence, accompanied by the following letter :
(Copy)
Diet.   G.@: June 4, 1904.
re Request of Sydney Board of Trade for intervention of Department of Labour, in dispute between Dominion Iron and Steel Company and its employees.
Dear Sir :
As promised in my telegram to you this morning, I am inclosing you herewith copies
of correspondence between the government and the Dominion Iron and Steel Company, and the representative of its employees, in regard to the communication received from the Sydney Board of Trade, asking the intervention of the Department of Labour, with a view of bringing about a settlement of existing difficulties.
Upon receipt of your telegram I immediately offered the services of the department to both parties, but greatly regret that the replies received indicate an unwillingness to accept government intervention.
It is possible that the parties to the dispute may not desire the immediate intervention of any third party, hut that later on they may change their attitude in this particular. In which event I shall be only too pleased to lend the friendly offices of the department, should such intervention be acceptable.
Yours faithfully,
WILLIAM MULOCK, Minister of Labour.
S. P. Challoner, Esq.
Secretary Board of Trade,
Sydney, N.S.



PUBLIC ACCOUNTS COMMITTEE.

Sir. T. CHASE CASGRAIN.: Before the Orders of the Day are proceeded with I would call the attention of the House to the fact that the Public Accounts Committee has not met for some time. I do not know whether this is due to the unavoidable absence from the city of the hon. member for Annapolis (Mr. Wade), who is chairman of the committee. But we wish the committee to be convened as soon as possible.


Mr. F. B. WADE.: I have been absent from the city for a couple of weeks, and I suppose it is owing to that fact that the the committee, has not been convened. But, in addition, there did not seem to be any business before the committee. I will have the committee summoned at once, probably Wednesday.



OTTAWA ELECTRIC COMPANY.

[Stage Direction]
House again in committee on Bill (No 110) respecting the Ottawa Electric Company-Mr. Champagne.
On the preamble and amendment (Mr. Sproule) that the committee rise, report progress and ask leave to sit again.
Mr. W. F. MACLEAN.: This Bill I regard as a very obnoxious Bill and one that ought not to be passed. Through this Bill, the Ottawa Electric Company is trying to escape ah obligation that it owes to the city of Ottawa, namely, not be a party to consolidation with other companies in the same business. It now seeks to evade that res-ponsibilty and to secure the power of merging other companies and so to create a monopoly in this city. We have long heard it said in this House that competition was a great protection of the public. Competition, we were told many times, was the life of trade. Following that principle the people of Ottawa tried to secure competition and

prevent consolidation. Now, apparently, tilings liave changed, and combination is being effected, and, I am sorry to say is being aided in this House. The doctrine of the Liberal party at one time was, as I said, that competition would cure all the evils that humanity complained of. But, now, as I said the great doctrine of the Liberal party is combination in the interest of these monopolies. Another thing that I regret to notice is that the government is trying to escape responsibility for the conduct of the committees of this House. Not long ago, I drew attention to this fact ; and now I wish to read a quotation bearing on this subject. The late Sir John Bourinot has dealt with the question of the responsibility of the government for the action of the committees of the House, and his opinion must carry weight. I have here 1 The Life of Lord Elgin,' by Sir John Bouriont. At page 247, I find the following:
The Canadian minister

Meaning, of course, the Prime Minister.
-having control of the finances and taxes and of all matters of administration, is directly responsible to parliament and sooner or later to the people for the manner In which public functions have been discharged. All important measures are initiated by the cabinet, and on every question of public interest the ministers are bound to have a definite policy if they wish to retain the confidence of the legislature, *Even in the case of private legislation they are also the guardians of the public interest and are responsible to the parliament and the people for any neglect in particular.
He goes on to say
Responsible government makes the premier and his ministers responsible for the constitution of the committees and for the opinions and decisions that may emanate from them. A government that would constantly endeavour to shift its responsibilities on committees, even of its own selection, would soon disappear from the treasury benches. Responsibility in legislation is accordingly ensured financial measures prevented from being made the footballs of ambitious and irresponsible politicians and the impartiality and indignity of the Speakership guaranteed by the presence in parliament of a cabinet having the direction and supervision of business.
Now, we have that doctrine of responsible government in this country-at least, I hope we have. I hope we believe in it. Under that doctrine the government of the day are responsible for tire conduct of these committees, and particularly are responsible for all legislation that goes through this House, and so cannot evade responsibility for legislation passing through this House that is in the interest of monopoly and against the interest of the people. Now, this Bill is clearly in the interest of monopoly, as against the interest of the people, and it is being put through the House by the government of the day. Every vote in favour of this monopoly when it was Mr. MACLEAN.
considered in committee on Private Bills, was a Liberal vote. The three whips of the government were engaged in that committee in trying to put this Bill in favour of monopoly through the House. X simply take my stand on the doctrine of responsible government, and I point to the fact that this legislation is legislation in the interest of monopoly and not in the interest of the people, and I say that the government of the day are responsible-either they must protect the rights of the people against monopoly or they must stand convicted of dereliction of duty.
There is another point with regard to this Bill. Something must be added, if it is to be allowed to go through the House, and later on, I intend to move an amendment in that direction. We are hearing today a great deal about the principle of public ownership. It is the new evangel of this century.


Sir WILFRID LAURIER.: Hear, hear.


William Findlay Maclean: I am glad to say I have been one of those who have been preaching this evangel.


Charles Fitzpatrick: The only thing In which the hon. gentleman has been consistent.


William Findlay Maclean: It Is an excellent gospel. It is an excellent doctrine, and is making great beadway in this country. But if the evangel of public ownership is to make any headway, it must apply the principle of public ownership on every occasion, it must apply it in municipal affairs, in provincial affairs and in federal affairs. There is only one way to do it, and it is a practical way and that is to' adopt the principle of public ownership by putting a purchase clause in every private Bill of this kind that goes through either the provincial legislature or this federal House ; and no council in any municipality to-day will be discharging its duty to itself, no council in any municipality will be discharging its duty to its constituency unless it insists on this purchase clause being In every one of these private Bills. Now, If a man is in favour of public ownership, I don't care whether he be a Liberal or Conservative, if he does not support that proposition, he is not sound in regard to public ownership. I intend to propose in this Bill that the Ottawa Electric Company should be compelled to adopt a clause that I have drafted, and which I will submit later on. Let me give a specific instance where this clause was adopted. In 1891, the Kingston Gas and Electric Company was incorporated at Toronto. The clause read :
But at any time from and after the expiration of twenty years from the passing of this Act-
I would change that a little and make it 12 months.

-the corporation of the city of Kingston shall have the right, on giving twelve months notice to the Kingston Light, Heat and Power Company of such their intention, to expropriate the works and property of said company under and in accordance with the provisions of the general Act.
And so on. Now, if'tliis Ottawa Electric Company is in the public interest, as they say they are, it will be willing to have that clause put in this Bill, and I propose to put it in, just as the Kingston Light, Heat and Power Company liad to submit to its being put iu their Bill. Further, I am advised that this company said some time ago that it the city of Ottawa desired to expropriate it under the Conmee Act, they would be willing to do so. I am not able to say whether they can expropriate it under the Conmee Act or not. It might be interfering with Dominion legislation unless this Act is incorporated under Dominion law. But to avoid all that, I propose to have this purchase clause put in this Act of the Ottawa Electric Company, and, as 1 said before, that would be a real test of public ownership in this country. The real test of public ownership in municipal politics will be the insertion of a purchase clause in every agreement made between one of these private companies holding a public franchise and the municipality; the test will be that the legislature of Ontario, by a general Act, and this legislature, in so far as it has jurisdiction in these cases, shall put this purchase clause in every one of these Acts. Now, down in the province of Quebec, they have had some experience with these private companies. In a newspaper called ' La Fresse, ' published in Montreal, and edited by Mr. Dansereau, there was a significant article of which I will read one or two paragraphs. It was an editorial appearing on June first:
The session of the Quebec legislature for 1904 has been particularly remarkable and marked ; if custom declared that we must christen each session, this last one is certainly entitled to be called the session of the electrical trust.
Every measure throwing a shade on the Montreal Light, Heat and Power Company or on the surburban street car lines, has been pitilessly rejected ; every measure favourable to this formidable trust has heen adopted. Never before has a cabal as cynical, as brutal, been organized at Quebec. Ministers, magistrates and a cloud of lawyers have been in the service of the electrical trust and have exercised a deplorable pressure on our lawmakers.
The same thing has happened here iu Ottawa. A cloud of lawyers, a cloud of lobbyists In the interests of this corporation, and a cloud of whips in the service of the Liberal party, have been working in the interest of this corporation, and the rights of the people are being taken away from them in the interest


Mr. ALEX. JOHNSTON.: Where were you that day ?


William Findlay Maclean: I was away, and I am here to-day. Where was the hon. gentleman?


Alexander Johnston: I was not away.


William Findlay Maclean: How did the kon. gentleman vote ? The hon. gentleman voted in the interest of the monopoly, he backs up his party to-day in the interest of the monopoly. I am here to fight monopolies to-day, ai*d I will fight them, and the hon. gentleman will be in the cellar when the fight comes on. Now, Mr. Chairman, these companies are all powerful in the municipal councils, they are all powerful in legislatures, especially in legislatures that are controlled by Liberals, and they are all powerful in this House ; and we are asked to-day to strengthen this monopoly iu the city of Ottawa. Ottawa seems to be the peculiar home of a lot of grafters, the men who happen to hold stock in what I call the sawdust bank of this country. They are all more or less in the sawdust business, and they all think that the way to strengthen their monopolies


Charles Eusèbe Casgrain: The sawdust men are on the other side.


William Findlay Maclean: I am not sure about that. But their policy is to be shining lights in Ottawa society and give a certain number of dinners every session, and in that way they think they can get any legislation they desire in this country in the interests of monopolies. Now, I say there is somebody else in this country who have interests to be protected besides those who are said to be capitalists, and who are in favour of monopolies-there are the people, and are the people's rights not worthy to be protected ? Or are the people's rights to be raided, as they have been raided in this legislature, as they are being raided by this Bill ? I think they are entitled to protection, and the way to protect them is to compel this company who are asking for this legislation, to accept the purchase clause. Here is the clause that I referred to, and which I propose to put in this Bill :
4. The powers hereby conferred upon the company are granted upon the condition that the corporation of the city of Ottawa shall have the right to acquire by expropriation the works and property of the company, and such right is hereby conferred upon such corporation subject to the payment of compensation by the said corporation to the company to be determined, in the event of failure to agree, by arbitration in the manner provided for by the clauses' of ' The Consolidated Municipal Act, 1903,' of the province of Ontario relating to arbitrations, and the amount of such compensation shall be estimated by the arbitrators so to be appointed in the manner provided for by clause (a3) of subsection 4 of section 566 of the said last mentioned Act, which said subsection is commonly referred to as the ' Conmee Act,.
Here is the provision I propose to insert in their Bill. We will give this company the power they ask for to increase their capital, we will give them the power to buy out this

other company, but in giving them these powers we will impose upon them this condition, that the city of Ottawa shall have the right to purchase this franchise on a valuation.


Ralph Smith: Why didn't they make that a part of the contract ?


William Findlay Maclean: Because of the cloud of lawyers and lobbyists who surrounded their municipal council when these amendments were going through.


Ralph Smith: Will the hon. gentleman say that the* people want government ownership Why did'nt the people oppose the Bill ?


William Findlay Maclean: They have tried to get public ownership but whenever they do try to get it a cloud of lawyers, some government whips and some ministers line up their followers to defeat public ownership.


Ralph Smith: Where are the people ?


William Findlay Maclean: The people demand public ownership. .


Ralph Smith: Then why don't they get it ?


William Findlay Maclean: They have been blocked time after time, but they are going to get it. All these municipalities are going to have public ownership, and that is what wc are going to have in the city of Toronto. The people in England have it to-day and they have it because they have obtained the legislation which they desired in that direction from parliament which was favourable to the proposition, but in some way public ownership in this country is. considered to be a crime by the political parties, is considered to be socialistic, as I have said before in this House. Now, all that is changing and I say : Give the people the power to expropriate this company. In the city of Ottawa the people have had a hard fight against the monopolistic companies.


Ralph Smith: Does not the Ontario law provide for that ?


William Findlay Maclean: I do not know if it does because the Ontario law may not reach a Dominion Act. I am making provision by which the people of Ottawa, under this federal Bill, will have secured to them the right to purchase the property of this company.


Charles Eusèbe Casgrain: Have you given any notice of .this amendment ?


William Findlay Maclean: I have not given it in committee but this is substantially giving notice of it.	..


Mr. GALLIHER.: What do the council of the city of Ottawa say about this ?


William Findlay Maclean: They have uot declared upon it yet but they will declare upon it.


William Findlay Maclean: I am giving them an opportunity to protect themselves.


Some hon. MEMBERS: Hear, hear.


William Findlay Maclean: Hon. gentlemen have a great faculty of saying ' hear, hear ' and laughing when anybody proposes anything in the public interest, but you ought to see them - run to give $175,000,000 of the people's money to the- Grand Trunk Pacific Railway Company. They shine upon occasions of that kind, but whenever anything is proposed in the interest of the people they oppose it like my hon. friend from British Columbia who says he is a socialist. He i's everything. He is a workingman's candidate


Ralph Smith: I beg the hon. gentleman's pardon. I have never said that I was a socialist.


William Findlay Maclean: Well, we will change that. He has assumed to speak in the labour interest of this country and I can tell him that the labour interest is in favour of public ownership. I would like him to go to the city of Toronto and state to the working men of that city that public ownership is a delusion and a snare.


Ralph Smith: I believe in municipal ownership, but I want the hon. gentleman to give some evidence that the people desire it. If the people of Ottawa desire it why do they not get it ?


William Findlay Maclean: I will tell you why. The people of Ottawa voted a while ago for public ownership of the telephone system. They voted for it twice and the city council declared for it two or three times and yet in some way some of the men who are working for this monopolistic corporation turned up in the interest of the Bell Telephone Company and the people were defeated. The public press of the city of Ottawa has been recreant towards the people iu regard to public ownership because in that respect they have abandoned the people and are aiding the corporations.


Ralph Smith: The people are greater than the press.


William Findlay Maclean: Yes, . the people are greater than the press, they are going to realize the situation and they are going to demonstrate that they are in favour of public ownership and in favour of a purchase clause. It takes the people some time to find out what the situation really is.


Ralph Smith: But the hon. gentleman says they believe in it.


William Findlay Maclean: The}7 do believe in it, and they are voting in favour of it. This House will eventually vote iu favour of it [DOT]and'the hon. gentleman ppposite will have an opportunity of showing whether lie is in favour of this legislation or not and he will have an opportunity of showing whether he

is in favour of this monopolistic corporation.


Ralph Smith: If the people of the city of Ottawa demonstrate to me that they are in favour of this legislation I will support it.


William Findlay Maclean: I am going to go one better and I am going to say that the people of Ottawa shall have the right by law to take over this concern if they wish to do so. Now, who is the chief consumer of electricity in the city of Ottawa ? I hold it is the people of Canada represented by the government of the day. The government is the chief revenue producer of this company in Ottawa and what are the relations between the government and this company today ? It has not even a contract with the company. It has given it the right to supply electrical energy and light and it renewed the first agreement it made with the company without competition and without any inquiry in regard to the price. It is paying to-day a price which it should never pay for electrical energy in Ottawa. Who gives this company the water privilege from which this power is generated ? The people of Canada. Who are entitled to fair treatment and reasonable prices for electrical light and power ? The people. Can the right lion, leader of the government (Sir Wilfrid Laurier) and his party justify the absence of a contract with this company ensuring to the consumers a fair price? Can they justify themselves being a party to this legislation here which means a merger and which, if a merger takes place, empowers this Ottawa Electric Light Company to put up the rates ? They cannot justify it and I say as the chief consumers of electrical energy in this country and as those who have to pay the monthly bills of this corporation they should say : In our own interest we insist that there shall be no such merger. We will hold you strictly to your agreement. It has been stated in the committee that companies can find ways of getting around all these clauses designed to prevent consolidation. If that is so we ought to do what we can to strengthen the hands of the people by inserting this purchase clause. Some hon. gentlemen may have heard to-day perhaps, for the first time in regard to this purchase clause, but on every occasion upon which I can raise it I propose to raise it and to have it inserted in all this legislation dealing with these agreements. It ought to be inserted in all contracts of the same character made with this government that at any day upon giving due notice and paying a price to be settled by arbitration, the government can step in and take over the franchise,-or if a municipality is interested, the municipality may step in and take over the franchise and administer the service in the interest of the people. There is nothing so useful to the public as cheap electrical energy and we in
Canada have more electrical energy than ail the rest of the world put together. We have all the power that we require to drive all our railways, and all our machinery, to heat and to light all our houses, and we are doing nothing but giving it away to companies without any regulation as to the prices which they charge or as to treating the public fairly. Surely when we have this vast store of electrical energy and when we have no coal in many portions of the country we ought to take the greatest care to surround these grants with proper safeguards in the interest of the people. Nothing of that kind has been done in this country as yet. We have all been busy giving away concessions, giving away grants, giving away the people's money to these corporations without imposing sufficient regulations on them and without insisting upon some kind of a purchase clause agreement. 1 believe all that will be changed. I hope the government will see that it is responsible for this legislation, and especially that it will not try to shoulder the responsibility upon the committee, that it will assume the responsibility which belongs to it and that, as the chief consumer of electrical energy in the city of Ottawa, it will say to this company: We will not grant you this legislation allowing you to merge with another company. We will increase your capital if you want it increased but in the interest of the people of Ottawa we will impose upon' you the condition that they shall have the right to purchase if they desire it.


Mr. THOS. BIRKETT.: Mr. Chairman, we have been told by our hon. friends opposite that the city of Ottawa has entered no protest against the passage of this Bill. At the opening of this session of the House I presented a petition from the mayor on behalf of the citizens of Ottawa protesting against the present legislation.


William Alfred Galliher: Allow me to point out that the mayor of the city of Ottawa is not the council of the city of Ottawa. He is only one officer. What I asked my hon. friend from East York (Mr. Maclean) was if the council of the city of Ottawa had entered any protest against this legislation. So far, I as a member of this House have heard none.


Edward Frederick Clarke: The hob. gentleman must have heard the protest made on Friday about this very thing, and repeated again to-day.


William Alfred Galliher: Has any resolution from the city council of. Ottawa opposing this legislation, been placed before the House ?


Thomas Birkett: In answer to the hon. gentleman's question. I may say that at the last meeting of the municipal council of the city of Ottawa a resolution was unanimously passed authorizing the mayor and the

city solicitor to look after the interests of tlie city in connection with this Bill. I have not a copy of the resolution at hand, but a copy was shown to me this morning by his worship Mayor Ellis.


Mr. MONET.: What were the instructions contained in the resolution ?


Thomas Birkett: I do not know the details, but the instruction was to look after the interests of the city in connection with this Bill.


Mr. HEYD.: I have a circular in my hand purporting to be issued by the mayor and city solicitor, representing that if this Bill should pass it would cause the city a loss of a quarter of a million dollars per year.
ilr. BIRKETT. So it will. Now that the bon. gentleman has brought that matter to my notice, I will explain how it will be a loss of a quarter of a million, or $300,000, a year to the citizens of Ottawa. In the first place, when the Ottawa Company got their franchise from the council of the city of Ottawa, the maximum price was one cent per ampere hour and twenty-five per cent discount, which for the purpose of calculation we may say that it was 75 cents per 100 amperes. When the Consumers Company and the Metropolitan Company got their franchise, that maximum rate was reduced to 52 cents per 100 amperes, and the price they are selling at to-day is 36 cents per 100 ampere hours. If the Ottawa Company should get the privileges they desire under this Bill, it is possible for them to increase the present rate of 36 cents per 100 amperes to 75 cents per 100 amperes. The revenue of the Ottawa Electric Company last year was $217,000 at 36 cents per 100 amperes, and the revenue of the Consumers Company was something in the neighbourhood of $80,000, or, both combined $300,000 in round numbers. Now, if 36 cents per 100 amperes will produce $300,000 and if they increase the price to 75 cents per 100 amperes, will it not produce $300,000 more, which will be an additional tax of $3uO,000 on the consumers of electric light and power in Ottawa ; a sum which is nearly one-half of our total taxes in the city ? I hope I have made that plain to hon. gentlemen. The petition which is placed in my hands and which I have the honour to present to the House is as follows :



ROYAL ASSENT.

[Stage Direction]
A .Message was delivered by the Gentleman Usher of the Black Rod, as follows :
His Lordship the Deputy Governor, desires the immediate attention of your honourable House in the Chamber of' the honourable the Senate.
Accordingly, Mr. Speaker, with the House, went up to the Senate Chamber.
And having returned.	;
Thomas Birkett: Mr. Speaker informed the House that His Lordship the Deputy Governor had been pleased to give, in His Majesty' name, the voyal assent to the following Bills :
An Act to revive and amend the Acts respecting the St. Clair and Erie Ship Canal Company.
An Act respecting the British Columbia Southern Railway Company.
An Act respecting the Canadian Pacific Railway Company.
An Act respecting the Atlantic and Northwest Railway Company.
Ah Act respecting the Ottawa, Northern and Western Railway Company.
An Act respecting the Montreal, Ottawa and Georgian Bay Canal Company.
An Act respecting the Atlantic, Quebec and Western Railway Company.
An Act respecting the French River Boom Company, Limited.
An Act to incorporate the Pontiac and Interprovincial Railway Company.
An Act to incorporate the Caseapedia Manufacturing and Trading Company.
An Act respecting the Collingwood General and Marine Hospital.
An Act to incorporate the Campbellford, Lake Ontario and Western Railway Company.
An Act respecting the Manitoba and Noith-western Railway Company of Canada.
An Act to incorporate the White Horse and Alsek Railway Company.
An Act to confer on (he Commissioner of Patents certain powers for the relief of the Honourable Charles Algernon Parsons.
An Act to amend the Petition of Right Act.
An Act for the relief of James E. Taylor.
An Act for the relief of Robert James McDuff Rodger.
An Act respecting the Western Assuiance Company.
An Act respecting the British American Assurance Company.
An Act respecting the Guelph Junction Railway Company.
An Act to Incorporate the Guelph and Goderich Railway Company.
An Act to Incorporate the Walkerton and Lucknow7 Railway Company.
An Act respecting the Quebec and Lake Huron Railway Company.
An Act respecting (he Kootenay Central Railway Company.
Au Act respecting the North American Telegraph Company.
An Act respecting the Strait of Canso Bridge Company.
An Act respecting the Pacific, Northern and Omineea Railway Company. _
An Act respecting the Canadian Pacific Railway Company.
An Act to incorporate the Boundary, Kamloops and Cariboo Central Railway Company.
An Act respecting the Edmonton and Slave Lake Railway Company.
An Act to incorporate the St. Maurice Valley Railway Company.
An Act* respecting the Manitoba and Is.eewa-tin Railway Company.
An Act respecting the Canadian Northern Railway Company.
An Act respecting the Welland and Grand Island Bridge Company.
An Act respecting the Ottawa, Brockville and St. Lawrence Railway Company.
An Act respecting the Nipigon Railway Company.

An Act to incorporate the Alberta Ra'iway and Irrigation Company, and to provide for the amalgamation therewith of the Alberta llailway and Coal Company, the Canadian Northwest Irrigation Company, and the St. Mary's River Railway Company.
An Act respecting the Vancouver, Victoria and Eastern Railway and Na/igtiio.i Company.
An Act respecting the Canadian Fire Insurance Company.



OTTAWA ELECTRIC COMPANY.

[Stage Direction]
House again in committee on Bill (No. 110) respecting the Ottawa Electric Company.-Mr. Champagne.
Thomas Birkett: When the House was summoned to the Senate I was about to read the following petition from the city of Ottawa :
To the honourable the House of Commons In parliament assembled :
The petition of the corporation of the city of Ottawa, humbly showeth :
1.	Bill No. HO ' An Act respecting the Ottawa Electric Company,' provides :-
(a.) That the capital stock of the company be increased from $1,000,000 to $1,500,000.
(b.) That the company may issue bonds to the amount of $1,125,000 instead of $500,000 as at present.
(c.) That the company may acquire shares in the capital stock, debentures, securities of other electric companies and that the proviso be struck out of the original Act which provides that such stock, debentures or securities shall only be issued ' as the consideration for goods, wares or merchandise sold to such other companies in the ordinary course of business.'
2.	In 1898 your petitioners granted a franchise to the Metropolitan Electric Company of Ottawa, Limited, authorizing that company to erect poles and wires for the purpose of supplying electric light and power. Maximum rates for electric light and power were fixed in that franchise.
3.	The following clause was inserted in that franchise :-
' 15. That the said company shall not at any time during the said period amalgamate or combine with any other company or companies now carrying on or which may hereafter at any time during the said period carry on in the said city of Ottawa, the business of supplying electricity for the purposes of power, light or heat, nor shall the said company enter into any contract, agreement or arrangement with any such company for such purpose or that shall have such effect, nor shall the said company enter into any contract, agreement or arrangement with any such company for the purpose, or that may have the effect of creating a monopoly of the business of supplying electricity for the purposes aforesaid in the city of Ottawa, without the permission of the council of the corporation of the city of Ottawa to be expressed by by-law.'
The purpose of this provision was to prevent the company obtaining the franchise from amalgamating or selling out to any other electric light company. The term of the franchise of the Metropolitan Company was for twenty-one years from 1898.
4.	The Metropolitan Company not having entered upon the business of supplying electric light, heat and power, your petitioners in 1901 gave a twenty-three year franchise to the Consumers' Electric Company, Limited. In that franchise the maximum rates- for commercial lighting and power were also fixed.
A similar proviso to that in the Metropolitan Company's franchise was inserted in the Consumers' franchise, providing that the latter company should not amalgamate or sell, out to any other electric light company.
5.	The object of your petitioners In granting, first, the Metropolitan franchise, and then the consumers' franchise was to secure competition in electric lighting with the Ottawa Electric Company. Your petitioners, at the "time these franchises were granted, relied on the provision in the Ottawa Electric Company's Act of incorporation, which provided that that company could only acquire the stock, debentures or securities of other electric companies ' as the consideration for goods, wares or merchandise sold to such other companies in the ordinary course of business.' It is now sought to have this protection to your petitioners struck out.
6.	When the Bill in question was before the Private Bills Committee an amendment was moved, that the power to purchase stock in other companies should not only apply to the stock of the Metropolitan or the Consumers' Company. This amendment was lost by 19 to 14. The refusal of the Ottawa Electric Company to accept this amendment indicates clearly that the real purpose of the Bill is to enable the Ottawa Company to buy out the Metropolitan and the Consumers' Company or one of them.
7.	Your petitioners are advised that the evident intention of the Bill is to enable the Metropolitan and the Consumers' Companies to get rid of the provisions against amalgamating or selling out to any other electric light company, which were inserted in these companies' franchises by your petitioners for the express purpose of securing competition, and consequently low rates for electric lighting.
8.	The rates charged at present by both the Ottawa Electric Company and the Consumers' Electric Company for electric light are about one-half less than they were before the Consumers' Company began to compete with the Ottawa Company. If the legislation now being asked for by the Ottawa Electric Company is granted, and it results in that company acquiring the Consumers' Company, the result will be that the citizens of Ottawa may have to pay from $250,000 to $300,000 every year more than at present for their electric light.
9 Your petitioners strongly submit that your honourable House should not enact legislation which will have the effect of taking away from the city the guarantee which it now has, that there will be competition in the supplying of electric light, heat and power, and consequently low rates.
10. The imposition of large rates for electric light, heat and power would not only compel the citizens of Ottawa to pay very much larger amounts each year for their light but they would have a deterrent effect upon any new industries coming to the city and would seriously retard the growth of the city.
11. In any event, your petitioners respectfully submit that the legislation now asked for



should not be granted on.the ground that parliament should not authorize a merger of any clas's^"of eompanies which would have the effect of creating a monopoly. .
12'. In the event of the Ottawa Company, the Consumers' Company and the Metropolitan Company being merged into one company, it would be very difficult, if not impossible, for any other company or your petitioners to enter upon the business of supplying electric light heat and power, because almost all the available water powers in the immediate vicinity of the city of Ottawa would'be in the hands of such a merger company or in the hands of persons or companies who could not supply power for the purposes of electric light, heat and power.
Your petitioners humbly pray that your honourable House will not enact the legislation asked for in clause 2 of the Bill of the Ottawa Electric Company, and that such clause should be struck out, or in any event that the Ottawa Electric Company should not be given authority to purchase the stock, debentures or securities of the Metropolitan Company or of the Consumers' Company.
And as in duty bound your petitioners will ever pray, &c.
The Corporation of the City of Ottawa, by
J. ELLIS, Mayor.
Ottawa, June 6, 1904.
This is the protest which the city of Ottawa has entered against the passage of this Bill. The citizens of Ottawa have no objection to any feature of the Bill except that clause. They are quite willing that the company should have additional powers to increase their capital and also additional borrowing powers. On Friday night a great deal was said about this company not being a paying concern. I then gave some figures whicn had been given to me by a citizen and which I believed to be correct; I now give you the figures direct from the last report of the Ottawa Electric Company. Something was said on Friday to the effect that the reason they wished to merge these three companies into one was in order that electricity might be supplied to the city on a paying basis. The reports which X hold in my hand will go to show that the revenue now derived from the business of the Ottawa Electric Company_would place that company on a paying basis if properly applied. The gross revenue from all sources, viz :
Arc and incandescent lighting, heating power and sales of merchandise, was	$217,386.83
Under the heading of expenditure we find :
Gross cost of management, operating and maintenance	$118,890.44
Showing gross profit for the year of	$ 98,496.39
To the expenses as above the following charges are added, viz. :


Thomas Birkett: Interest on bonds	$ 25,000.00.
Interest on current liabilities .. ..	1,379.95
Making the gross expenditure	$145,270.39
Leaving a net profit for the year of.$ 72,116.44
Now the capital stock of the company is $1,000,000, and $72,110.44 is exactly 7 2-10 per cent on the capital of that company after taking $25,000 to rest account.
There is a profit and loss account of $24,417.27 and there is a peculiarity about this report in that they only paid dividend No. 14 and 15 of 1 per cent each, making a total of $20,000 paid in dividends. Out of $72,116.44 all the shareholders got was $20,000, leaving a balance of some $52,116.44.
Then we have this statement of the profit and loss account.
Dr.
Dividend No. 14 of 1 per cent, paid
July 31st,	1902	$10,000.00
Dividend No. 15 of 1 per cent, paid
October 31st	1902	 10,000.00
Amount placed to credit of ' Rest Account'	   25,000.00
Amount placed to credit of ' Reserve Account '	to	provide for bad debts.	2,173.87
Amount placed to credit of ' Reserve Account ' to provide for depreciation of plant	 [DOT][DOT] 25,000.00
Balance at credit April 30th, 1903.. .. 24,417.27

But if you turn to their liabilities you will find that they already have a rest account there of $125,000, and with the addition of this other $25,000 their total rest account is brought to $150,000. On the basis then, of this statement issued by them and audited by their own auditors, I do not think that the p'ea of poverty by the company have any effect on the minds of the committee. I think it is only fair and right that there should bq a reasonable dividend allowed to all who put their money in enterprises of this sort. Still 1 think there is a certain limit to matters of this kind, and to go beyond that is an abuse. There is another reason why 1 object to this company absorbing the two other companies. As I pointed out on Friday night, the charter now held by the Ottawa Com pany is in effect a perpetual charter, while that held by the Metropolitan Company is only for twenty years and that held by the Consumers' Company is only for twenty-three years. So that at the end of twenty or twenty-three years the city would be in a position to purchase the plant of either of these two companies if desired, but if they are merged into the Ottawa Company, which has a pereptual charter, the city will not be able to purchase. These are two of the strongest reasons which I have placed before the committee why the company should not be given the privilege they are asking for, that that portion of the seventh clause should l) >
struck out. When we reach that part of the

Bill, I purpose moving an amendment, of which 1 gave notice to the clerk on Saturdav morning about 11 o'clock. I asked him if i't was in time, and he said he thought it wds I was told afterwards that, as the Votes and Proceedings had been printed, it could not be printed among the notices. If there were no other reason for delaying this Bill, I think that ought to be sufficient, as the notice was given in good faith and within the requisite time. The following is the notice of my motion :
Mr. Birkett, when the House is in Committee on Bill No. 110, ' An Act respecting the Ottawa Electric Company,' will move that the same be amended by adding the following providing that if the company acquires a majority of the shares in the capital stock, or in the debentures or securities of the Metropolitan Electric Company of Ottawa, Limited, or the Consumers Electric Company, Limited, the company shall not increase the prices or rates for electric light, heat or power beyond those provided for in the franchise granted by the city of Ottawa to the Metropolitan Electric Company of Ottawa, Limited, and the Consumers Electric Company, Limited, and being those contained in By-laws 1857 and 2138 of the city of Ottawa.
the city of Ottawa and the Ottawa Electric Company, and is not the city of Ottawa today trying to cancel that contract ?


Thomas Birkett: No, not at all. Mr. BRODEUR. It looks like it.


William Findlay Maclean: There is no contract.


Thomas Birkett: If there is a contract, I don't know of it. The only contract I know of between the city and the company is the one for street lighting. When the Chaudiere Company and the Standard Company amalgamated with the Ottawa Company the following was inserted in the charter :
The company shall not, without the consent by by-law or otherwise of the municipality of the city of Ottawa or of the city of Hull, respectively, as the case may be, increase the ordinary prices or rates charged by any of the said other companies for electric light in the city of Ottawa or in the city of Hull, respectively, at the time such purchase, lease or other acquirement, working arrangement or amalgamation is entered into.
Probably that is what the hon. gentleman refers to.
In view of the fact that the company, on their own statement, are paying 7-2 per cent dividend on $1,000,000 of capital, while selling light at 36 cents per 100 ampere hours, if they accept this proposition, which has been handed to me by the mayor, they will still have the opportunity, if they so desire, of increasing the price from 36 cents to, .52 cents. I am not saying that they shouul do so, but in the event of amalgamation, they will have that amount of leeway.


Mr. BRODEUR.: Is there not a contract already between the city of Ottawa and the Ottawa Electric Company ?


Thomas Birkett: There is, so far as light ing the streets is concerned ; but the reduction in price to 36 cents to ordinary consumers has come about by competition. When the Metropolitan Company started business the maximum rate it was allowed' to charge was 52 cents, and the price has been gradually reduced by competition, until now we are paying only 36 cents.


Louis-Philippe Brodeur: Besides the contract fpr lighting the streets of the city, is there not also a contract fixing the price which the citizens of Ottawa should pay to the Ottawa Electric Company ?


Louis-Philippe Brodeur: I am informed that even before that charter was granted there was a contract made between the Ottawa Electric Company and the city of Ottawa, by which a certain price was to be charged to the citizens, and that now the city of Ottawa is trying to break that contract. I do not know whether that is correct or not, but that is the information I have.


Edward Frederick Clarke: Where is that information ? I asked for that on Friday night. I said there was no such limitation, and I asked some person to give me information on the subject. Perhaps the hon. minister can tell me where it can toe got, because it throws altogether new light on this subject.


Louis-Philippe Brodeur: The hon. member for Wright (Mr. Champagne), the promoter of the Bill, sends me the agreement between the city of Ottawa and the Ottawa Electric Light Company, in which section 11 is as follows :
That the companies will not except as hereinafter in ^ this section mentioned hereafter charge a higher rate for incandescent lighting to consumers residing in the city of Ottawa than is at ^ present charged, and consumers are to receive a discount of twenty-five per cent.


Thomas Birkett: No ; the only security the citizens of Ottawa have is the maximum fixed by the charter. I have explained that when the Ottawa Company first got their charter, the maximum rate allowed to them was 1 cent per ampere, with 25 per cent discount, making t"he price 75 cents per>
100 ampere hours.


Louis-Philippe Brodeur: Was not that clause of the charter embodied in a contract between 135}
So that there has been a contract between the city of Ottawa and the Ottawa Electric Company.


Thomas Birkett: I am surprised that the hon. gentleman should ask for an explanation after I hhve repeatedly given it to him. I said at the outset that tha contract between the Ottawa Electric Company and the city of Ottawa provided for a price of 1 cent pel- ampere, or $1 per 100 ampere hours,

with a discount of 25 per cent, that is 75 cents per 100 ampere hours. This is what the citizens of Ottawa paid before the Consumers' Company started business. When that company started business the maximum price it could charge was fixed at 52 cents, and by competition the price has beeu brought down to 36 cents. So that there is really no contract. The basis of the Ottawa Company's charter is that they cannot exceed 75 cents and the Consumers' Company cannot exceed 52 cents, though competition has brought the price down to 36 cents, and the consumers of Ottawa are getting the benefit of that. That is the only contract I know of.
I hare gone over the merits of the question, and I think it ought to be plain to every member of the committee that all we ask for and plead for on behalf of the citizens of Ottawa is that the committee should consider the corporation of the city, should consider the citizens and consumers, and give them the protection that, it seems to me, they' are entitled to. X trust the Prime Minister (Sir Wilfrid Laurier) will come to our assistance and will have the Bill stand until such time as the company and the city can get together and find if an amicable arrangement can be made. I do not see why this should not be done. When the amalgamation took place in 1894, the company and the city council got together and agreed to a contract, and, after they had agreed to it, they came here and the House gave them legislation. Why should they not do that now ? I leave it in the hands of the committee. I think surely the right hon. leader of the House will come to the assistance of the city of Ottawa and will have this matter stand until the next meeting.


Mr. L. N. CHAMPAGNE.: It is not my intention at the present moment to enter into the merits of this clause of the Bill. I may have occasion later on to speak at greater length. I have been asked by the promoters of the Bill to contradict certain statements that were made on Friday night by the hon. senior member for Ottawa (Mr. Birkett). This afternoon I received a letter from the Secretary Treasurer of the Ottawa Electric Company which is as follows :
Ottawa, Ont., June 6th, 1904.
L. N. CHAMPAGNE, Esq., M.P.,
Ottawa.
Dear Sir,-In the published reports of the discussion in the Committee of the Whole in the House of Commons on Friday night last Mr. Birkett is stated to have said :
First. That the Ottawa Electric Company has no restriction upon the rates that it can ch&r^c.
Second. That the Ottawa company's rates are not lower than those charged in other
Third. That he (Mr. Birkett) had received a telegram from Hamilton to the effect that the Hamilton rates are as low as the rates charged in Ottawa.


Thomas Birkett: Fourth. That the directors of the Ottawa Electric Company are not acquainted with the company's Bill now before parliament.
Fifth. That an annuity of $15,000 per annum is paid, by the Ottawa Electric Company to some one whose name Mr. Birkett did not give.
I am directed to say that Mr. Birkett's statements are incorrect.
First. The Ottawa Electric Company by its contract with the city of Ottawa has a restriction on its rates, both for arc and incandescent lighting.


Mr. CLANCY.: Do I understand, Mr. Chairman, that the hon. gentleman (Mr. Champagne) is reading a document contradicting a statement made by the hon. member for Ottawa (Mr. Birkett). If so, he has no right to read such a statement.


Wilfrid Laurier: For what
reason ?


Louis Napoléon Champagne: The letter goes on :


James Clancy: I call your attention to the fact that the hon. gentleman (Mr. Champagne) has no right to read such a statement.


Wilfrid Laurier: I do not understand on what ground the hon. member for Bothwell (Mr. Clancy) bases his objection.


James Clancy: The hon. gentleman (Mr. Champagne) is reading a statement, coming from some outside person contradicting a statement of the hon. member for Ottawa (Mr. Birkett) made in this House.


Wilfrid Laurier: My hon. friend from Ottawa (Mr. Birkett) did not pretend to speak of the matter as within his personal knowledge. He spoke of something that he had heard and others may have information as good as his.


Thomas Birkett: The Prime Minister (Sir Wilfrid Laurier) is quite correct. As to the figures-I think ' Hansard ' will bear me out-I said that, personally, I knew nothing about the working of the company, but that I had seen a telegram from Hamilton purporting to show that the charges for electric lighting in Hamilton were about the same as here. iSo far as the $15,000 annuity is concerned, I said that that had been brought to my notice but that I did not know anything about it, but gave it as I got it. I made no positive statement.
Mr. CHAMPAGNE (reading.)
Second. The rates of the Ottawa Electric Company are lower than the rates charged in any other city in Canada.
Third. The rates charged in Hamilton for incandescent lighting are fifty per cent in excess of the rates charged m Ottawa. The rates charged for arc lights in Hamilton are $85 each ; the rates at Ottawa under the contract now being entered into with Ottawa are $52 per annum.

Fourth. The directors of the Ottawa Electric Company are fully in possession of the Bill now before parliament.
Fifth. No person receives an annuity of J15>-000 or any other amount from the Ottawa Electric Company.
As Mr. Birkett's statements were made upon the floor of the House, this company will feel obliged if this official denial can be made in the same place.
Yours very truly,



D. R. STREET,

[Stage Direction]
Secretary-Treasurer.
I think the reading of this document is perfectly in order. And, of course, will lead the committee to decide as to the value of the statements made by the hon. member for Ottawa (Mr. Birkett) and also the statements signed by the city solicitor and the mayor and the statements made by the Ottawa Electric Company.
Charles Bernhard Heyd: This question, to my ordinary mind is quite clear. I do not see what right-at least what moral right-we, as a parliament, have to override an agreement entered into by two independent corporations, unless with their mutual consent. If the city of Ottawa has entered into an agreement and granted a franchise under certain conditions I do not know why we, at the solicitations of one of the parties should override that agreement and substitute fresh conditions. At any rate we should not do that until the city of Ottawa is a consenting party. So far as I have gathered from those officially entitled to speak for the city of Ottawa-the mayor and the city solicitor-they object to this legislation. I do not think Ottawa will be treated fairly unless this Bill is referred back to the committee to ascertain the real facts of the case. When we thoroughly understand the situation, and after the city of Ottawa has had an opportunity to make her views heard upon this question, only then shall we be entitled to take an active part in this controversy.


Edward Frederick Clarke: 

COMMONS '4240

[Stage Direction]
good ground Is shown for this legislation, unless it ean be clearly shown that this company are carrying on business at a loss, the Bill should not pass in its present form. I hope the Prime Minister will see his way clear to let the Bill be sent back to the Private Bills Committee so that, all parties being heard and the committee being in possession of all facts, we may have a further report upon this matter.
Wilfrid Laurier: The matter is altogether new to me. It came before the House as an ordinary private Bill, and there was no more disturbance of public opinion in regard to it than an ordinary Bill creates.


An hon. MEMBER.: Read the press of the city.


Wilfrid Laurier: I have not seen any serious objection to it except in one of the papers. One paper has favoured it, and others have been silent. I may say this to my hon. friend : If I understand the case correctly, the Ottawa Electric Light Company made a contract in 1894 with the city of Ottawa whereby it was stipulated and agreed that a certain rate should be fixed for supplying electrical light to the citizens of Ottawa. That contract was made, as I understand. Then am I right in understanding that later on the city of Ottawa, notwithstanding this contract, made another contract with the Consumers' Electric Company ?


William Findlay Maclean: Which they had a perfect right to do.


Wilfrid Laurier: Well, we will see whether they had that right or not. As has been asked by my hon. friend from Brant (Mr. Heyd), has the city a right to make another contract with another company because it thinks it can do better ? I think not.


Edward Frederick Clarke: The reason why the corporation of the city of Ottawa w-as a party to that agreement made in 1894 is set out in the agreement itself. In consideration of the companies agreeing to certain proposals and restrictions arranged between them and the corporation, the corporation agreed to the amalgamation. But there was no provision made in that contract that the corporation should not give permission to other lighting companies to come in, there was no suggestion of a provision of that kind. It was perfectly free for the corporation of Ottawa later on to allow other lighting companies to come in. The Prime Minister should bear in mind also that Ottawa has power from the Ontario legislature to expropriate property and engage in electric lighting. I think that is an additional reason why a further conference should be held.


Mr. HAGGART.: There is no binding power on the part oi the city of Ottawa in Mr. CLARKE.
reference to the agreement that the Minister of Inland Revenue has read. It is simply a permission by the city of Ottawa to these two parties to make electric light in Ottawa, and if they do it, the city requires them to furnish light to the citizens at a maximum price. There is nothing in the contract which says that the city of Ottawa shall' not make bargains with other companies. The Bill is a harmless looking Bill, butt the effect of it is that this new company may acquire shares in the capital stock, debentures and securities of other electric companies, or of companies possessing powers similar to those of the Ottawa Company. Originally they could acquire stock in consideration for goods, wares and merchandise ; they can acquire it now for any reason whatever.


Charles Fitzpatrick: Not for any reason, only for cash.


John Graham Haggart: They can purchase the stock of other companies, they can make an agreement with the parties -who own the stock of other companies, and for any reason or for any consideration whatever, can acquire it. Where did the Minister of Justice get his authority for saying that it is only for cash ?


Charles Fitzpatrick: It is the general law of the corporation.


John Graham Haggart: If you own stock in this company and I can purchase it on any con-consideration I like, it gives power to the new company to do so in the same wray. These two companies have an arrangement made with the city of Ottawa by which they furnish light to the citizens at a lower price, and the effect of the Bill is that you can buy out the two other companies which are furnishing electric light at a lower price, and fall back on the old arrangement and charge the citizens what they had a right to do under the old agreement.


James Clancy: I wish to call your attention, Mr. Chairman, to a violation of the rules of this House. I was quite unable to understand why you took no notice of the objection I raised. I do not know whether it was because the Prime Minister took a contrary view or not, but I desire now to call your attention to a violation of that rule on the part of the hon. member for Wright (Mr. Champagne). This is what Sir John Bourinot says on page 460 :
Nor is it in order to read articles in newspapers, letters or other communications,, whether printed or written, emanating from persons outside of the House, and referring to, or commenting on, or denying anything said by a member, or expressing any opinion reflecting on proceedings within the House.
I desire to know what your view is Mr. Chairman, with regard to the violation of that rule by the hon. member for Wright.


Wilfrid Laurier: The hon. member for Wright (Mr. Champagne) only said he had seen a telegram stating that the rates in Ottawa were something like the rates in Hamilton. He does not make that statement on his own authority.


James Clancy: He said it in denial of what the hon. member for Ottawa (Mr. Birkett) said.


Wilfrid Laurier: The hon. member for Wright only said he had seen a telegram from Ottawa giving certain information ; that was not disputing the word of the hon. member for Ottawa. The hon. member for Wright then gives another statement. My hon. friend from Botliwell (Mr. Clancy) would be right in raising an objection if the hon. member for Wright was reading a newspaper or a document denying the word of another hon. gentleman.


James Clancy: No, no, that is not it at all. If my right hon. friend will permit me I will read it again.
Nor is it in order to read articles in newspapers, letters or other communications, whether printed or written, emanating from persons outside of the House, and referring to, or commenting on, or denying anything said by a member, or expressing any opinion reflecting on proceedings within the House.
The hon. gentleman was commenting upon what took place in this House. If it had any purpose whatever it was for the purpose of denying what my hon. friend from Ottawa (Mr. Birkett) had said, and if it did not have that meaning it would have been useless to have read it.


Wilfrid Laurier: If my hon. friend from Ottawa (Mr. Birkett) had made an affirmation of some fact that he knew himself, certainly, his word would have been binding and no one could have contradicted him not only outside of this House, but even in this House, but when my hon. friend only gives information which he got from outside of this House, everybody has the same right as he has.


Mr. DEPUTY SPEAKER.: The point of order was taken some time ago and I do not think it is in order to argue it out. I think the difference of opinion is more in regard to the application of these words than anything else, and I think it had better be allowed to rest.


James Clancy: Does the hon. gentleman refuse to give us his decision?


Peter Macdonald: The point of order should not be taken and pressed.


James Clancy: It was taken but you refused to take notice of it.


Peter Macdonald: No, when the right hon. Prime Minister made his explanation the hon. gentleman sat down and did not press his point of order and I therefore assumed that the point of order was passed over.


James Clancy: I assumed, Mr.. Chairman, that you knew the rules of tlie House and 1 therefore awaited your decision.


Louis-Philippe Brodeur: My hon. friend from Brantford (Mr. Heyd), a few moments ago, said that it would be better to refer this Bill back to the committee because it looked as if the Bi.ll was violating, a contract existing between the city of Ottawa and the Ottawa Electric Light Company, I must tell my hon. friend that he is- tnistak;en in that respect. This Bill does poti prp-vide for any violation of * the,, contract, existing between the Ottawa Electric Eight Company and the city of Ottawa.


Edward Frederick Clarke: What will be the effect of its passage?


Louis-Philippe Brodeur: It will not have any such effect, because the city of Ottawa today is bound by its contract with the Ottawa Electric Light Company under which this company shall charge a certain rate for furnishing light to the citizens of Ottawa, and this increase of capital will not have the effect of releasing the Ottawa Electric Light Company from the contract made between the city and the company in 1894.


Edward Frederick Clarke: There is no objection in regard to the increase of the capital.
Mr. BRODEUR, There is no objection to that ? The increase of the capital will not have the effect of violating any contract. On the contrary, I see by the papers that were handed to me a few moments ago by the promoter of the Bill that the city of Ottawa to a certain extent, has been violating the contract which was entered into by it with the Ottawa Electric Light Company. In 1894 the city of Ottawa and the Ottawa Electric Light Company' entered into a contract by which it was agreed that one cent per ampere should be charged to the citizens of Ottawa by the company. There were at this time three companies existing in the city of Ottawa. These companies were not giving satisfaction to the public. These companies went to the city council and a contract was made between these three companies and the city of Ott*w>
i which it was agreed that a certain maximum rate should be charged for furnishing light to the citizens of Ottawa. Amongst these three companies was the company now interested in this legislation. Therefore, there was a formal agreement between the city of Ottawa and this company. Now, what was done by the city of Ottawa a few years later ? Four or five years later the city of Ottawa goes and makes a con- , tract with a new company, violating to a certain extent the contract which the city , had made in the first place, by which this new company undertook to charge a less

rate than the Ottawa Electric Light Company. Therefore, the people who have put their money into the Ottawa Electric Light Company are deprived of their rights


Charles Bernhard Heyd: Did the city have a legal right to make that second agreement ?


Louis-Philippe Brodeur: Perhaps it had an absolute right to make that contract, but X am asking my hon friend whether we should consider it fair on the part of the city of Ottawa, after having made a contract with the city of Ottawa for furnishing light to the citizens, finding themselves in a mess and not knowing what to do, to go to this company and say :	Let us agree that you
shall charge only a certain amount, with the result that an agreement is made and then the city of Ottawa to get a new company to start up in competition with the old company. [DOT] That -[is the situation of affairs. If we give authority to increase the capital stock there will be no violation of the contract between the Ottawa Electric Light Company and the city.


Charles Bernhard Heyd: The difficulty is not about the increase of the capital stock. There is nobody objecting to that. It is to the application of the capital stock that we are objecting.


Louis-Philippe Brodeur: I understand that somebody is moving that the preamble be declared not proven and I supposed that the main object of this Bill is to secure the authorization of an increase of the capital stock.


William Findlay Maclean: No, it is the coloured gentleman In the next clause.


Louis-Philippe Brodeur: If the preamble were rejected it would prevent an increase in the capital stock.


John Graham Haggart: Does the hon. Minister of Inland Revenue hold that the city entered into a contract for its citizens to pay a certain amount to the Ottawa Electric Light Company for light and that it was obligatory upon them to take it at that rate?


Louis-Philippe Brodeur: Certainly.


Edward Frederick Clarke: Not at all.


Louis-Philippe Brodeur: There is a maximum price fixed by the contract.


John Graham Haggart: The contract is simply to allow the electric light company to carry on their operations in the town, enabling them to construct works for that purpose and for the consideration they agree that they shall not charge the citizens more than a certain amount.


Louis-Philippe Brodeur: The contract is binding upon the city of Ottawa as well as upon this company.


Louis-Philippe Brodeur: 


John Graham Haggart: Is the hon. gentleman arguing that the city is bound to take light at that price?


Louis-Philippe Brodeur: If the company is bound by its contract the city is bound by its contract.


John Graham Haggart: Certainly it is, as far as the contract is concerned.


Louis-Philippe Brodeur: I am inclined to think that the city of Ottawa, by forming a new company and making a new contract, to a certain extent violated the old contract. But it does not matter, we are now dealing as between the city of Ottawa and the Ottawa Electric Light Company and suppose this Bill did pass there would be no violation of the contract except between the city and the company. My hon. friend from East York (Mr. Maclean) spoke about municipal ownership. It has nothing to do with the Bill. I think he will realize, after the fine speech he has made upon municipal ownership, that it has no bearing at ail upon the question which is now before the committee. But, there is a point which has been raised by my hon. friend from South Lanark (Mr. Haggart) to the effect that in this increase of capital for the purpose of subscribing stock in another company there is a violation of principle. I think in that respect my hon. friend is mistaken, because we have again and again passed legislation without any, objection giving to companies the right to subscribe to the capital stock of other companies.


Louis-Philippe Brodeur: The general law in Ontario gives this company the right to subscribe the capital stock of other companies of the same kind.


Edward Frederick Clarke: But this is not the case of parent subsidiary companies.


Louis-Philippe Brodeur: By section 79 of the Ontario Joint Stock Company's Act, if two-thirds of the shareholders consent they have a right to subscribe capital in any company.


Edward Frederick Clarke: The clause to which the hon. gentleman refers does not apply to the issue between the parties in this case, because if this company gets power to acquire the stock of the Consumers' Company the result will be great loss to the citizens of Ottawa. If the Minister of Inland Revenue argued on the supposition that the maximum price to be charged is the price now charged by the Consumers' Electric Company, then his quotation would be germane.


Louis-Philippe Brodeur: I am merely answering the suggestion of the hon. gentleman (Mr. Haggart), that the provision to enable them to subscribe stock in any other company was an extraordinary one. The hon. gentleman is mistaken as to that. Last session we gave three companies this power.


John Graham Haggart: I did not say it was an extraordinary thing to allow one to take stock in another, but I pointed to the serious result in this case.


Louis-Philippe Brodeur: Last year we gave the Dominion Gas Improvement Company the same power as is now sought, and among the incorporators were Mr. MacDougall, Mr. [DOT] George Henderson, Mr. MacCormack and others, and we did not see the mayor and aldermen here to protest : The same power was given to three Ottawa companies last year by this parliament.


Edward Frederick Clarke: Is it not a fact that in all those cases the persons whose stock was to be acquired were the only parties affected, and had the sole right to say whether the stock should be acquired or not? In this case the Consumers' Electric Light Company was created by the city of Ottawa under agreement, and so long as the city of Ottawa, which is one of the parties to the agreement, objects to this *legislation, it is not fair for the Minister of Inland Revenue to cite such examples.


Louis-Philippe Brodeur: We gave the same power last year to the Canada Atlantic Railway Company, and there was no protest. For years this parliament has been giving similar powers to other corporations, and I do not see why the Ottawa Electric Company should be refused.


Edward Frederick Clarke: It is because, in this case, the people who will be adversely affected by it, entered a protest against the Consumers' Electric Light Company which they brought into existence being wiped out, and the maximum charge of the Ottawa Electric Company substituted for the maximum charge of the Consumers' Electric Light Company.


Louis-Philippe Brodeur: If there is any violation of contract, it is a violation on the part of the city of Ottawa, who, having entered into a contract with the Ottawa Electric Company, gave another contract to another company.


Edward Frederick Clarke: If it can be shown that the Ottawa Municipal Council was a party to giving an exclusive franchise to the Ottawa Electric Light Company. I shall vote for this Bill. I have only been able to glance at the contract, but I do not believe that there is any such provision in it. If the Ottawa Electric Company assume the rights of the Consumers' Light Company of the city of Ottawa, they should assume the obligation in the Consumers' Company's charter, and accept the maximum price which the Consumers' Company may charge.


Louis-Philippe Brodeur: If the Ottawa Company buys the stock of the Consumers' Company, they will be bound by the contract which exists between the Consumers' Company and the city of Ottawa. For my part I have no
other understanding about it. There is a contract existing between the city of Ottawa and the Ottawa Electric Company, and this Bill will not vary that contract. I do not see why we should not accord to the Ottawa Electric Company, the same treatment we have accorded to other companies time and time again.


Edward Frederick Clarke: I am glad to have the authority of a gentleman so eminent in the legal profession as the Minister of Inland Revenue for the statement that the amalgamation of these companies will oblige the amalgamated company to charge no higher rate than the maximum rate now charged by the Consumers' Electric Light Company.


Mr. LANCASTER.: It is nothing of the kind.


Edward Frederick Clarke: If the statement of the Minister of Inland Revenue is correct, then the interest of the light consumers of the city of Ottawa will be protected. If the Minister is perfectly clear on that point, why not insert such a provision in the Bill so as to make it beyond peradventure ?


Louis-Philippe Brodeur: I understand that the Ottawa Electric Company is willing to stand by the contract which it has with the city of Ottawa. If they buy over the Consumers' Electric Light Company, they will be bound by the contract between the Consumers' Company and the city.


John Graham Haggart: It is not an amalgamation of two companies at all, it is an empowering Act to allow this company to purchase stock in the other. If this is passed, the Ottawa Company may purchase the whole of the stock of the Consumers' Company. It is true they would then be bound by all the obligations entered into by the Consumers' Company, but after the Ottawa Company acquires the stock of the Consumers' Company, the Consumers' Company would simply go out of existence. What is to prevent that ? What possible object would they have in working the two companies ? After the Ottawa Company acquires all the stock of the other company are they going to continue the two rates, one at 75 cents per 100 amperes, and the other at 36 cents ? The sole object is to Wipe out the company they purchase, and to carry on the business under the name of the old company.


William Findlay Maclean: Under the present legislation and without any violation of contract we, the largest consumers of this electrical energy, get electrical energy at a reduced price. Grant the legislation asked today and we will have to pay maximum prices. The Minister of Inland Revenue (Mr. Brodeur) made this proposition to the House and I never heard such a pettyfog-ging argument. It is as if I should agree with you, a grocer, to buy sugar at a maximum price of ten cents a pound. He says

that because I make that agreement I am prevented from buying sugar at four cents a pound from any one else. There is no violation at all on the part of the city of Ottawa. The city of Ottawa puts its statement most fairly.
The object of the city of Ottawa in granting, first, the Metropolitan franchise, and then the Consumers' franchise, was to secure competition in electric lighting with the Ottawa Electric Company. The city, at the time these franchises were granted, relied on the provision in the Ottawa Electric Company's Act of Incorporation, which provided that the city could only acquire the stock, debentures or securities of other electric companies * as the consideration for goods, wares or merchandise sold to such other companies in the ordinary course of- business.' It is now sought to have this protection to the city struck out.
The city of Ottawa and the people of Canada have a protection to-day in the purchase of this electrical energy, but grant the legislation desired and that protection is at once removed. The Ottawa Consumers' Company is empowered to put up the rates to a maximum of 75 cents. That is not in the public interest. Why should we give this company power to raid this House and the citizens of Ottawa. I ask the right hon. the Prime Minister, not as Prime Minister but as a citizen of Ottawa, does he think it is good legislation in the interests of the citizens ? Is it good legislation to remove this protection from the humblest citizen ? There has been no violation of the contract by the city of Ottawa ; they fulfilled their contract byi allowing the company to erect their poles and supply electricity, but now the company seeks to have removed a restriction that was placed in the contract in the interest of the city of Ottawa.


Edward Frederick Clarke: In the memorandum presented to us to-day, we find :
The rates on electric light provided for in the franchise given by the city of Ottawa to the Ottawa Electric Company and the Consumers' Electric Company are as follows :
Ottawa Electric Company. -75 of 1 cent per ampere hour net.
Consumers' Electric Company. -52 of 1 cent per ampere hour net.
What I desire to draw attention to is the next paragraph :
The present rates charged by both companies are *36 of 1 cent per ampere hour net.
If the suggestion made is accepted, the amalgamated companies could increase the rates from -36 of one cent to -52 of one cent per ampere hour, an increase of nearly 50 per cent. The hon. member for Ottawa (Mr. Birkett) pointed out this afternoon the result of the last year's operation under very difficult circumstances of the Ottawa Electric Company. We have not been able to get a statement of the last year's operations of the Consumers' Company, but I point out that if we pass this legislation ! Mr. Maclean.
the rate now charged by the Ottawa Company may be increased from -36 of one cent to -52 of one cent per ampere hour. The statement which the hon. member for Ottawa (Mr. Birkett) has presented shows that a very reasonable profit, on the investment has been made at the present rates. I would draw the attention of the Prime Minister to the fact that the Consumers' Electric Company of Ottawa is composed of leading citizens of the city ; I am sure he would concur in that statement if he knew their names ; men who have a large interest in this community, men who did not go into that company simply as a toy, men who have made it a great success, and in view of that fact it is surely not unreasonable to say that when we give power to the Ottawa Company to absorb the Consumers, which is a fairly profitable concern, the obligations now imposed by the agreement between the city of Ottawa and either of the existing companies, should also be imposed upon the consolidated company.


Thomas Birkett: I would like to have it clearly from the Minister of Inland Revenue in what way he makes out that the city of Ottawa are violating this agreement. The arrangement entered into between the city and the Ottawa Company was that the company would not charge more than 75 cents per 100 amperes. It is not a bargain it is an agreement made between the corporation of the city and the company, for the supplying of light to the citizens of Ottawa. They did not agree to take light at that price, but they agreed to give them certain privileges provided they supplied the light at that price and did not charge more. Then, when the Consumers' Company applied for a charter, that was a rival company that offered better conditions to the city. The city, not having given the Ottawa Company an exclusive franchise, said: What are your terms, what advantages are the citizens to dei'ive from incorporating a new Company V The company said : We will supply you with electricity at 52 cents per 100 amperes.


Louis-Philippe Brodeur: When the new company was formed or when the old company was formed ?


Thomas Birkett: The new company was formed in 1901, and the old company got their amended charter in 1894. But there was no violation of an agreement, because the city had fulfilled their agreement by giving the company permission to erect poles and distribute electricity through the city.


Louis-Philippe Brodeur: My hon. friend Will admit that the Ottawa Company has the right to charge 75 cents ?


Thomas Birkett: That it why we are fighting to-day. They can make money, under present conditions ; I showed a few moments ago that they made 7-22 per cent on

their capital selling light at 36 cents, and we do not wish them to be permitted to charge 75 cents. If this amalgamation is pe: mitted it may be that the Ottawa citizens .will have to pay 75 cents per 100 amper-es instead of 36 cents. .


Louis-Philippe Brodeur: Is the Consumers' Company opposing this legislation ?


Thomas Birkett: We have not the Consumers' Company before us at all, but the city of Ottawa has a certain contract with the Consumers' Company and that we want to protect in the interest of the citizens.


Edward Arthur Lancaster: On Friday night 1 stated my views on this matter, and I would not have troubled the committee again except for what has fallen from the lips of the hon. Minister of Inland Revenue. I am sorry to say that I cannot agree with his deductions. I am satisfied that the hon. minister did not read the whole Act of incorporation of this company, which we are being asked to amend, or he would not have drawn the deduction that the city of Ottawa is asking us to do anything unfair in refusing to pass section 2 of this Bill, which is for the purpose of amending section 7 ot the Act of incorporation. First, dealing with the minister's allegation that the city of Ottawa is trying to violate a contract made with this company by asking this House to refuse to pass this section, I wish to point out that the only effect of the amendment proposed to 'be made to section 7 is that a. restriction which was imposed by parliament on this company's right to buy up other companies, is to be removed. At the very most, the city of Ottawa says, leave us where we were in 1894, and leave the Ottawa Electric Company in the position in which they would be obliged to deal with us if they had not invoked new legislation. The city of Ottawa is asking for no special benefit for itself. It only asks parliament not to take away the restriction, whatever it is worth, which exists in the legislation of 1894 ; and when one opposes the amendment -which is intended to take away that restriction, surely it does not lie in tlie mouth of any one to say, you are asking that the city of Otta-wa be allowed to violate a contract. Section 8 of the statute of 1894 presupposes that this Ottawa Electric Company would want to buy up and amalgamate with it all the companies in existence at that time ; at all events, certain companies there named. It is quite clear that the Consumers' Company did not exist at that time ; it did not come into existence, I am told, until 1901 ; but the Chaudiere and the Standard Companies named in that statute did exist. What did the Act provide in regard to them ? What did this parliament solemnly declare should be done with respect to the companies that did then exist ? That the directors of those companies could sell out to the Ottawa Electric Company, and that it could buy their rights and franchises, but subject to this :
Provided that after any such purchase, lease or other acquirement, working arrangement or amalgamation as aforesaid is entered into, the company shall not, without the consent by bylaw or otherwise of t.h.j municipality of tho city of Ottawa or of the oily of Hull, respectively, as the case may be, Increase the ordinary prims or rates charged by any of.the said other companies for electric light in '.he city of Ottawa or in the city of Hull, respectively, at the time such purchase, lease or other acquirement, working arrangement or amalgamation is entered into.
That would not allow this company to buy up the companies that existed then except on condition that the rates in existence at the time of the amalgamation-not the maximum rates, as suggested by the Minister of Inland Revenue, but the rates brought about by competition or by any such force as the city of Ottawa within its rights could exercise-should not be exceeded, unless the city of Ottawa by by-law or otherwise agreed to something else. Talk about violations- where is the violation here, unless it is a violation by the Ottawa Electric Company, not simply of a contract with the city, but of an Act of parliament ? And why should this company have the right, under exactly the same circumstances, to amalgamate with the Consumers' Company without a similar provision being made applicable ? The Consumers' Company is not within that qualification of section 8, because it did not come into existence until four or five years afterwards. The only section that would apply to it would be subsection (d) of section 7 which we are asked to-day to remove. If we do not refuse to amend section 7 of the original Act, we should then, as an alternative, amend section 8 so as to include the Consumers' Company in the restrictive provision we made in 1894 with reference to other companies which were In the same position then that the Consumers' Company is in now. If this Bill passes without some such dealing with the Consumers' Company, what is the effect ? The effect is this, that the companies which are named in the Act of 1894 could not sell out to the Ottawa Company and charge higher rates than are there specified, without a by-law or agreement with the city of Ottawa, but this Consumers' Company, which came into existence in 1901, could do what we said the other companies should not be permitted to do. Therefore it seems to me that the Acts quoted by the Minister of Inland Revenue have no hearing on the case. I do not say that it is ultra vires of this parliament or wrong legislation in every case, to allow one company to buy up stock in another company. But I say that you must look at the circumstances of each case. This is all private legislation, based on an agreement between the city of Ottawa and the Ottawa Electric Company

in 1894, and if we allow this Bill to pass without some protection for the citizens of Ottawa, either by refusing to pass section 2, or by adding a clause to provide that the Consumers' Company shall be included in the provisions of section 8 of the original Act, we shall be doing away with the principle which this parliament declared should be carried out in 1894, when this Ottawa Electric Company was given its franchise permitting it to do business. To say that because the contract with the city provided for a maximum rate therefore that rate was agreed to by the city, is no argument at all. It is not common sense. That provision simply meant that the city wanted to get as cheap electricity as it could, and that it bound the company not to charge more than so much ; but it did not bind any one to pay that much if the electricity could be got at a cheaper price. The effect of this legislation, if passed without any amendment, must simply be that although the city of Ottawa has a right, by an Act of parliament which exists to-day, to prevent the Ottawa Electric Company from amalgamating with any other of the companies named in that Act, this Ottawa Electric Company could compel the city of Ottawa and its citizens to recognize rights in regard to other companies which have come into existence since 1894, and to deal with them on an entirely different basis from all other companies which were said to be seeking amalgamation with this company when the Act of 1894 was passed.


William Findlay Maclean: May I repeat, once more, the argument 1 have stated in this committee The government of the day are the guardians of the people's purse, the farmers of this country have put the government in charge of the purse of the nation. By legislation as it now exists, the people of this country are protected as to the rates they must pay for electric energy in the city of Ottawa. The Prime Minister, and the treasurer of this country, the Minister of Finance, so far as we can gather here to-day, arc deliberately in favour of removing this protection to the purse of the people. I ask the Prime Minister to bear that in mind. Also call his attention to this fact-that before any further steps are taken in connection with this Bill, we ought to have the Minister of Public Works here to tell us what we, as a nation, pay to this Electric Company in the city of Ottawa, that is now supplying this House and the various departments at Ottawa with electrical energy. The Minister of Public Works should be here to tell us whether we are getting as good a rate as the citizens of Ottawa are getting, and whether he would advise, as the one having the service in charge, that the protection that we have to-day should be removed. It is in the interest of the city, it is in the interest of the country, it is in the interest of the humblest consumer of electrical energy in the city of Ottawa, that this Mr. LANCASTER.
protection should be maintained. The removal of this protection is not in the interest of this company otherwise than as it strengthens its monopoly. We are supposed to be against monopoly in this country. We will grant the company all their rights ; but why should we give them more ? Parliament in its wisdom, some years ago, limited the company, limited them in the interest of the people of Ottawa, and, probably, of the people of Canada as represented by the government here. If that is the case, no matter what the privileges we may have given in other cases, these do not afford a reason why this protection now enjoyed by the people should be removed. That is the plain issue and I leave it here. We have a protection to-day against monopoly ; we have a protection against high prices for electrical energy,-and the proposal now is to remove that protection.


Charles Fitzpatrick: Will the hon. gentleman (Mr. Maclean) point out the legislation that protects the people against monopoly, of which he speaks ?


William Findlay Maclean: The object of the city of Ottawa, in granting, first, the Metropolitan franchise and then the Consumers' franchise, was to secure competition in electric lighting with the Ottawa Electric Company.
The city, at the time these franchises were granted, relied on the provision in the Ottawa Electric Company's Act of incorporation, which provides that company could only acquire the stock, debentures or securities of other electric companies ' as the consideration for goods, wares or merchandise sold to such other companies in the ordinary course of business.' It is now sought to have this protection to the city struck out.
The protection is there, and the proposal is to strike it out. That is my contention, and it is the contention of the city.


Charles Fitzpatrick: I presume that my hon. friend (Mr. Maclean) means that the protection is taken away by striking out the words in subsection D of section 7.


Mr. COCHRANE.: Let the minister read it himself.


Charles Fitzpatrick: I prefer, in an argument, to deal with one at a time. I presume that the hon. gentleman refers to the words in subsection D of section 7 ' as the consideration of goods, wares or merchandise sold to such other companies in the ordinary course of business. '


William Findlay Maclean: That is what the city says it relies upon.


Charles Fitzpatrick: I was not in the committee when this Bill was under discussion, and am not informed as to the effect of this legislation, nor can I say that I have gathered a great deal of information from the discussion to-day. I take it that the objection is to the amendment of subsec-

tion P of section 7. That subsection is an exception to the general law of the country, that is to say, it authorizes the acquisition by this company, which was created in 1894, of [DOT]hares in the capital stock of other companies. That was in direct opposition of section 41 of the Companies' Clauses Act of 1891, which provides :
No company shall use any of its funds in the purchase of stock in any other corporation, unless in so far as such purchase is speciallv authorized by the special Act, and also by the Act creating such other corporation.
That is to say, in 1894, this company was given special power, as against the general law of the country, to acquire this stock. That power is not being given now ; it was given in 1894. And moreover, it was given subject to this very unusual provision, that the consideration for the acquiring of that stock might be goods, wares or merchandise sold to the other companies in the ordinary course of business. The general law provided that stock was not to be acquired, but, where exceptions had been allowed, it had been the rule to provide that stock of one company acquired by another should be paid for in cash. So, this was a departure from two principles of the law : In the first place, it gave power to the company to acquire stock in other companies, and, in the second place it allowed the company to acquire such stock without paying cash for it, but by paying in goods, wares and merchandise. If there was any violation of principle, if there was any departure from principle, that violation and that departure took place at that time. Without referring to a previous debate, I may say that every one in this House will remember the acrimonious discussion that occurred when, a few nights ago, we considered a similar clause of the Grand Trunk Pacific, where we provided that the capital stock of the Grand Trunk Pacific might be acquired by the Grand Trunk without paying cash. Why, hon. gentlemen even moved an amendment, declaring that, if tfie stock was acquired, it should be paid for in cash, and they based their argument in support of that amendment on the estimate that this was the general principle of the law. So, which legislation will these hon. gentlemen stand upon ? Do they wish the general law made applicable to this corporation, or do they wish an exception made in the case of this corporation ? I do not know anything about contracts that the company may have with the corporation of the city of Ottawa. I am not concerned with that. I do not know anything about the details of this matter. But let us look at the legislation and see what would be the effect of it, if adopted. It will give this company the same powers that are given to any company incorporated under the Joint Stock Companies' Act of Ontario- no more nor no less. We are told that it will lead to monopoly. But, if so, why does it
not lead to monopoly in all these other cases in Ontario ?


Edward Frederick Clarke: Will the hon. minister allow me to ask him a question ? Are the circumstances in other cases exactly identical with those in the city of Ottawa ?


Charles Fitzpatrick: I do not know whether they are or not. I am simply asking why the argument that is applicable to other companies in Ontario is not applicable to this.


Edward Frederick Clarke: The circumstances, as the hon. minister (Mr. Fitzpatrick) knows are peculiar-unique. Nobody knows that better than the hon. minister himself. Will the hon. minister state, will he endorse the opi-ion of the Minister of Inland Revenue, that this company will be bound by the maximum rate fixed in the agreement made between the city of Ottawa and the Consumers' Electric Company ?


Charles Fitzpatrick: I know nothing of that contract the hon. gentleman speaks about, nor ami aware that there is anything unique in the position of the city of Ottawa. I have had the pleasure of living here for seven or eight years, and it is an ordinary town, governed in the ordinary way. I do not know that there is anything unique about it.


Edward Frederick Clarke: Is there not this unique about the situation so far as lighting is concerned, that in the contract read by the hon. minister's colleague this afternon, made I think in 1894, between the electric companies that were then consolidated and the city of Ottawa the maximum price was fixed for each electric light ? That since then a contract has been made with another company, and that the maximum price fixed by that contract is much lower than in the previous one ? If that is the case now and if by this legislation we are giving facilities for an amalgamation, the amalgamated company may charge the maximum price, that is the rate fixed in the contract of 1894, which is much higher than that fixed subsequently. The Minister of Inland Revenue, a gentleman well versed in law, has expressed the opinion that if these companies do amalgamate the consolidated company will be bound to charge no more than the maximum rate fixed in the agreement between the city and the Consumers' Light Company. If the Minister of Justice agrees with that opinion, then we can rely upon it.


John Graham Haggart: The Minister of Justice lays down a principle of law which I never heard of before, that is, that a corporation cannot acquire the stock of any other corporation under the General Act unless for cash.


Charles Fitzpatrick: I will read the law for my hon. friend. Section 41 of the Companies' Clauses Act, chapter 118 of the Revised Statutes of Canada, says :

No company shall use any of its funds in the purchase of stock in any other corporation, unless in so far as such purchase is specially authorized by the special Act, and also by the Act creating such other corporations.
My hon. friend will see there is no doubt about it. That has been the law since 1867, before I came to the bar.


John Graham Haggart: I am not yet convinced that a corporation cannot pay for anything except in cash where it it authorized to purchase, either by its own Act or by the General Act, and that when it buys shares in any other company it must pay cash.


Charles Fitzpatrick: The first point is as to whether a corporation can acquire the stock in any corporation unless it is authorized by a special Act. I think that point is settled by the section I have read. The other principle of law will be found in section 30 and the preceding sections of the . same Act:
Every shareholder shall, until the whole amount of his stock has been paid up, be individually liable to the creditors of the company to an amount equal to that not paid up thereon.
He has got to pay whatever he is called upon to pay in the first instance-in default of a special arrangement it is 10 per cent- he has got to pay that, and then the shareholder is individually liable to the extent of every farthing that is due on the balance. That is the general principle, that the stock must be paid for in cash. As I said a moment ago, there has been a departure from that.


John Graham Haggart: We are still at loggerheads. I know well that where a party subscribes for stock in a company he Is obliged to pay for it in cash. But my question relates to a case where a company is authorized to purchase stock in another company, that has already been paid for, perhaps. Can they make an arrangement to pay other than by cash ?


Charles Fitzpatrick: No doubt they can make an arrangement, no question about that. But the point now is what the general provision of the law- is. As I have shown, the stock must be paid for in cash. Then there may be a departure from that principle, that is, there may be a private arrangement between the twro companies, and if you are dealing with an Ontario corporation the Ontario Act makes special provision for such an agreement But you must have an agreement, and it can only be for certain considerations mentioned in the Act, and that agreement must be deposited with the provincial secretary or the Secretary of State. But that is not the case here. In the absence of subsection (d) of section 7,
[DOT] the section we are now concerned with, this Ottawa Electric Company could not acquire stock in the other company at all. The power, the authority to take stock is con-Mr. FITZPATRICK.
ferred upon them by this section. Now that same subsection would confer upon them the authority to take this stock in a kindred company, that is, a company having kindred purposes. The Act determines the conditions under which they can do it. It was you can take that stock in this kindred company provided you pay for it in goods, wares or merchandise. Now the effect of this amendment is merely to substitute the consideration that is to be paid, that is, cash instead of goods, wares or merchandise.
Now- my hon. friend argues that if that amendment is adopted it w-ill lead to all manner of abuses. I really cannot follow my hon. friend. I have no desire to support a monopoly, although this Act provided for a monopoly, this Act has a monopoly in contemplation. Section 8 of the Act of Incorporation of the Ottawa Electric Company provides for a monopoly of that company.


Edward Frederick Clarke: Read it, please.


Charles Fitzpatrick: My hon. friend is too fast for me. I have no desire to provide for a monopoly, or to be a party to any legislation which w-ill have that effect. Will my hon. friend say that if you authorize this company to take that stock for cash instead of taking it for a consideration to be paid in goods, wares or merchandise, these terrible results will follow ? I cannot see it. If they get it for goods, wares or merchandise, or if they can get it for cash, in what respect will the results differ ? How can these terrible results follow in one case and not in the other ? If they follow at all, they must follow fr6m the fact that this company will acquire the stock. Now how can the result be affected by the manner of payment ? It seems to me that is elementary. l^he hon. member for Lanark (Mr. Haggart) and myself may differ In law occasionally, but I have confidence in his business judgment, and I would like him to follow out that point and to show me how the result is to be affected by the consider- ' ation to be paid for that stock. I said a moment ago that this Act of incorporation has a monqpOly in contemplation. Look at section 8 and see what is provided for there. There were three companies in existence when this Act of incorporation was passed ; these three companies were the Standard, the Chaudiere and the Ottawa, the latter having been brought into existence at that time. Section 8 provides :
The directors of the company may, for and in the name of the company, purchase, lease or otherwise acquire and take over in whole or in part, upon such terms as may be agreed upon with the other companies hereinafter mentioned respectively, and may thereafter hold, exercise and enjoy the business, franchises, undertakings, property, rights, powers, privileges, and assets or any of them of the Ottawa Electric Light Company, hereinafter called ' The Ottawa Company,' of the Standard Electric Co. of Ottawa (Limited), and of the Chaudl6re Electric Light and Power Company.

That is to say, it provides specifically for the taking over by this new company of the franchises of the other companies that were then in existence. Now, what is my object in referring to that ? My object in referring to that is to show how my hon. friend from Lincoln has missed the point in referring to the proviso of the'Act. He did not refer to the enacting part which provides the conditions under which they could take over these companies. He simply referred to the proviso. In reference to this legislation, parliament very properly said : As we are giving you a monopoly, as we are giving you the whole field to yourselves we make the provision that any arrangement you may make with these companies under which you take them over, will be subject to the control of the corporation of the city of Ottawa as to the rates you are to charge. There could be nothing more reasonable than that, because we were giving this corporation absolute control of the field in so far as the city of Ottawa was concerned. Parliament said : Inasmuch as we are giving you a monopoly, we require that the representatives of the citizens who will be affected by:.this monopoly shall have the right to determine the rates which you are to charge. That is what the section provides.


Edward Arthur Lancaster: That prevents a monopoly.	.


Charles Fitzpatrick: It does not prevent a monopoly ; it creates a monopoly.


Edward Cochrane: No, it does not.


Charles Fitzpatrick: It creates a monopoly with the right to regulate rates on the part of: the corporation.


Edward Cochrane: You did not give us that before.


Charles Fitzpatrick: I did not because I knew my hon. friend (Mr. Cochrane) thoroughly well understood what I said and that he did not require any further explanation. Everybody knows what a monopoly means and everybody knows what the right to regulate rates means. This is a right to supply power or light subject to the right of the corporation to regulate the rates.
51 r. CLARKE. For what length of time was that monopoly given ?
5Ir. FITZPATRICK. There is my hon. friend again. There is nothing so dangerous as a man who has a book before him and who seeks to cross-examine on that book.


Edward Frederick Clarke: I ask my hon. friend for what length of time that monopoly was given ? t
5Ir. FITZPATRICK. 5Iy hon. friend has the book there before him, and he can tell.
5tr. CLARKE. I am asking the hon gentleman.


Charles Fitzpatrick: 5Iy hon. friend is too clever. I have never read the agreement, I know nothing of the arrangement with the corporation, and I trust the committee will take what I say to be a fact when I declare that I know absolutely nothing about it except what I see in the statute, but I cannot understand how it is if you take this stock for cash instead of taking it for goods, wares and merchandise, the effect will be to create a monopoly.


John Graham Haggart: That is the point I would like to have answered.


Charles Fitzpatrick: It seems to me that the position of this company will be that they will have the right to acquire shares in the other company-the Consumers' I think it is. If they become shareholders in the Consumers' Company and if the Consumers' Company have a contract with the city, the fact that they have acquired shares in the stock of that company cannot affect the contract that they have with the city. That seems to me to be apparent.


John Graham Haggart: Every one knows that unless they wipe out the company.


Charles Fitzpatrick: If they acquire shares in the company and there is a contract with the city the fact of their having become shareholders in lieu of those who are now in possession of the shares does not affect the contract with the city corporation. If that be correct I cannot see what the trouble is about.


John Graham Haggart: If they were to work the company it might be so, but they might put an end to the company.
At six o'clock, committee took recess.
After Bee ess.
The committee resumed at eight o'clock.


Mr. LAVELL.: I have a good deal of respect for the opinion of the Minister of Justice, and so I would like him to reconsider some of the points he made in connection with this Bill. The Minister of Justice referred to the original Ottawa Electric Company Act of 1894. subsection ' E ' section 7, which allows the company to acquire shares of capital stock of other companies as consideration for goods, wares, or merchandise, sold to other companies in the ordinary course of business ; and he held that that was a special privilege, and that the amendment that was now being asked for would practically restrict the company to buying that stock for cash. However, in answer to the hon. member for South Lanark, the Minister of Justice admitted that If the power were given to the Ottawa Electric Company to acquire shares in other companies without limitation, they would not be confined to payment in cash, but could exercise the privilege which they

have under their original charter. As a consequence, the amendment that is now being asked for, would very greatly extend the privilege of the Ottawa Electric Company in buying shares in other companies, as I think the Minister of Justice will on consideration, admit. It is plain, from the original Act of 1894, that the company is not simply constituted for the purposes of providing light, heat, and power for consumers, but that they can manufacture electrical appliances, and can undertake contracts to equip electric lighting and heating companies, so that it is under section 7 in which they are given the power to manufacture these articles, that they have the right to acquire shares in other companies for the purpose of paying the accounts that have been acquired through their supplying appliances to those other companies. This authority of the Ottawa Electric Company under this original charter can only be exercised to any appreciable extent, in the case of new companies of which they would be practically the promoters. That power has been given to a number of manufacturing corporations, both by the Ontario and the Dominion statutes, and except under the most extraordinary conditions it cannot lead to the merger of the Ottawa Electric Company with the old companies.


Charles Fitzpatrick: Does it permit the acquisition of stock ; that is the question ?


John Reeve Lavell: I beg the hon. gentleman's pardon; that is not the question. The question is : what is the danger of a merger 7


Charles Fitzpatrick: I am not discussing a merger.


John Reeve Lavell: I am. I have no objection to this Act whatever, if it does not lead to a merger, and to the formation of a trust. I am quite willing to see the Ottawa Electric Company prosper and grow, so long as it does not grow at the expense of the people. No old established company would need to purchase goods, wares, or merchandise sufficient to enable the Ottawa Electric Company to control an interest in it, but if this Act passes, the Ottawa Electric Company can acquire shares in any company just the same as any private individual can, and by means of their borrowing powers and without pledging their personal credit, by a vote of a majority of the shareholders, they can buy a controlling interest in several existing companies from private shareholders. The hon. minister of Justice said that during the recent debate, members on this side of the House had been insisting that cash should be paid , for the Grand Trunk Pacific stock. I do not think that case is analagous to this, but suppose it were; the fact remains that in the case of one railway company Mr. LAVELL.
buying the stock of another, the public^ is more or less protected by the law which says, that railway rates shall be regulated by a railway commission, whereas in the case of rates charged for electric lighting, and power, there is no statutory limitation on them.	.
I am not one of those who say that a monopoly is always wrong. I can see many cases, especially in the handling of public franchises, where a monopoly might be in the public' interest provided it was kept under public control and operated under proper conditions. In the case of railways for instance we at least have some attempt made to regulate their powers and rates, but there is no provision of that kind in the case of such a company as the Ottawa Electric Company. The Minister of Justice (Mr. Fitzpatrick) cited the Ontario Act and said that under the Companies Act of Ontario an opportunity was given to all companies to-do exactly what this company asks the privilege of doing. We are not responsible for Ontario legislation and there are many things in the Ontario statutes that will be changed as the people of Ontario grow wiser, but even on this particular point they were wiser in Ontario than this House would be if it passed this Act, for the Ontario House does not permit a company to buy shares in another company except by at least a two-third vote at a general meeting called under special conditions. The Ontario Act goes I think, a little farther than it should go in the public interest, but it does not go anything like as far as this Act will go if we amend it as now proposed and permit the shareholders to buy up the shares of any other companies by a bare majority, something the Ontario Act does not permit. The Ontario Act at least applies to all companies and puts them on an equal basis. If one company has the right to do it, so has every other, but if we read the Acts incorporating these companies, we will see that not one of the existing electric companies of Ottawa has that power now, and if we grant this power to the Ottawa Electric Company it will have the sole right to do these things. In other words it will have a special power and not the general power that will be given to a company incorporated under the Ontario statutes. If the government chooses to take the responsibility of creating this opportunity for forming a monopoly, why does it not take courage and suggest an amendment to the general Act 7 I do not believe it would go further than the Ontario Act; I cannot believe this House would go as far as this Act. It is admitted all over the world by students of legislation that a clause such as this allowing a company unlimited power to buy shares in other and rival companies is the strongest possible basis for the formation of a gigantic trust. We are not bound to follow precedents but every one who has been before the committees knows how strongly

precedents are urged and that if we pass this Bill in its present form we are simply paring the way for all companies that choose to ask for it to obtain similar powers and to be enabled to gobble each other until a series of trusts shall be created in towns where rival companies exist. Tile Minister of Justice said that this Act in its present form created a monopoly. As I read it it certainly did but it created a monopoly after full notice to all who are interested. It stated the companies it was intended .to buy and made special provision in the charter creating that monopoly that no change was to be made in the existing rates. But this Act gives the company power to buy up rival companies without notice to parliament or discussion by the parties interested. We are giving them that right with absolutely no provision for the defence of tne public. In this particular case I have no interest personally beyond the responsibility which every member must assume for all legislation. This is special legislation that would be cited as a precedent and as giving one company a power which none of its rivals have. If it is right to put in this clause it should be brought up in a general way and should be introduced as an amendment to the Companies Act.


Mr. E. D. SMITH.: Why should we interfere with the Act as it now exists ? The present Act prevents a monopoly in the city of Ottawa. The Ottawa Electric Company is permitted to buy shares but only under such conditions that they cannot under any circumstances buy out existing companies. If the amendment is carried this company will have unique powers such as no other company has unless it receives them by special Act of parliament. This large city enjoys competition in the important matter of electric light and power, and it has been shown that by this amendment the citizens might have to pay an additional $250,000 or $300,000. If they acquired these powers the company might charge 75 cents per 100 amperes. The first duty of this parliament is to protect the rights of the people. Today we have three members of the government rising in their places to defend this Bill and apparently they are the only ones to defend it. Nineteen members voted for it in committee and I have been wondering why some of these men who voted for it do not rise and give some good reason why this amendment should be made. The only reasons we have heard have been advanced by the Minister of Inland Revenue (Mr. Brodeur) who said that an agreement between the city of Ottawa and this company had been broken ; that the city of Ottawa is to-day breaking faith and is not carrying out its contract, but the hon. Minister of Inland Revenue has failed to show in what respect it is breaking faith. Neither he nor any one else has shown one single particular in which the city 136



REVISED

[Stage Direction]
is not keeping to its agreement. It has not been shown that the city of Ottawa agreed to take any quantity of light, heat or power for either an unlimited or limited space of time. All that is shown is that the city allowed this company the use of its streets for the manufacture and sale to the people of light, heat and power, in consideration ot which the company agrees not to charge more, than 75 cents per 100 amperes, so that the only argument really which has been advanced does not hold good. What argument can be advanced ? A great many members, including myself, are not on the Committee on Private Bills, and have not heard a single reason why this Act on out statutes should be amended as proposed. Why, then, should not the Bill be referred back to the committee, where it may be further discussed and further light thrown upon it 7 The only other argument, namely, that, we should not interfere with the rights of the company to buy ithe stock of other companies, is invalid, if the lawyers are correct in saying that the general law of the country does not allow one company to buy the stock of another. If that be not the law, and if there are many special Acts for the purpose of enabling one company to buy stock in another, I submit that that is an abuse of our power to 'legislate. I submit that we ought to go rather in the other direction, and on every occasion safeguard the rights of the people by providing that when a corporation secures a charter from this House it should not be allowed to buy stock in another company and thus make a merger or trust. Here is a case in which such a provision exists, and we are asked to abrogate the clause which prevents .the creation of a monopoly. I submit no good reason has been given why we should pass the measure, and therefore it ought to be referred back to the committee.
John Graham Haggart: A few words in reply to the argument of my hon. friend the Minister of Justice, and in support of that of my hon. friend from North Leeds. One would judge, from the argument of the Minister of Justice, that this Bill is a limitation of the powers which are at present enjoyed by the Ottawa Electric Company. Clause 7 of that company's charter gives it the power to :
Acquire stock in the capital stock, debentures and securities of other electric companies or of the companies possessing powers similar to those of the company, as the consideration for goods, wares or merchandise sold to such other companies in the ordinary course of business.
The argument of the Minister of Justice is that this is a power which is in excess of what ought to be given any company, and that the Act amending it is a limitation of that. My hon. friend from Leeds (Mr. Lavell) has struck the right key. He says that this clause enables the parent company, which manufactures all these things, to come to the aid of a subsidiary company toy taking



EDITION

[Stage Direction]
stock in payment, but the amendment will give the Ottawa Electric Company the right to control the franchise of any other company by purchasing the majority of its stock. It is a good deal worse to give that power to a company than simply to give it the power to acquire stock in exchange for materials furnished. Then there is a question whether, when one company amalgamates with another, it does not assume all the liabilities. If there is an agreement by which this company, which the Ottawa Electric Company intends to purchase, is bound to furnish the [DOT]city with light at a certain price, I have always contended that a merger of the two *companies makes the company which absorbs the other subject to all of the obligations of the company it absorbs. Therefore, if the Ottawa Electric Company should purchase the other, it would be obliged to fur nish light to the city at the same rate. But this Bill will give the Ottawa Company the power to purchase a majority of the stock of the other, and is a great extension of its powers. It gives it the power of purchasing, not only for cash, but under any other arrangement it might make with the stockholders, the shares in the company it desires to control, and the Ottawa Electric Company will become the one which will deal with the city and the consumers. The other company may be kept in existence by the election of a directorate and a president once a year and do no other business. The Bill -simply enables the Ottawa Electric Company to obtain control of this other company which has an agreement with the city of Ottawa to furnish light at nearly half the rates charged by the Ottawa Company. The other company may then go on existing in form and doing nothing, and the Ottawa Company be able to dictate its own terms.
Motion of Mr. Sproule, that the committee rise and report progress, negatived.
Committee divided on the preamble. Preamble adopted-yeas, 30 ; nays, 28.
Section 2 agreed to, yeas 30, nays 28.
Bill reported.
Peter Macdonald: When shall the Bill be read the third time ? Now ? Mr. Champagne moves seconded by Mr. La-vergne that the Bill be now read the third time.


John Graham Haggart: Next sitting of the House.


Peter Macdonald: The question was put as to when the third reading shall take place. I heard no objection to the third reading being taken now.


John Graham Haggart: I would submit the question of order whether, under the rules of the House, a Bill can be put through two stages at the same sitting.


The PRIME MINISTER.: This is only one stage.


John Graham Haggart: 


John Graham Haggart: Are the committee and the third reading only one stage ?


Louis-Philippe Brodeur: Yes, generally. It has been decided several times that, when a Bill has not been amended in committee it can be read the third time at the same sitting. It is for the House to say whether it shall be ordered for third reading or not. Mr. Speaker was1 of the opinion that the general consensus of the House favoured the third reading to-night. Then comes up the question of the third reading of the Bill.


John Graham Haggart: I objected in time to the taking of this stage.


Louis-Philippe Brodeur: It is not considered to be two stages, unless the Bill has been amended in committee. I have not the rule under my hand, but I remember having decided that question several times when I was Speaker-that if a Bill is not amended in committee the House has the right to decide whether it shall be ordered for the third reading the same day or not. It is not a question of procedure, but it is for the House to decide.


Mr. PUTTEE.: Sir. Speaker, I beg leave to move, seconded by Mr. Hackett, the amendment of which i gave notice :
That the said Bill be not now read the third time, but that it be referred back to the Standing Committee on Miscellaneous Private Bills, with instructions to that Committee to add a clause, providing that the power to acquire shares in the capital stock, debentures, or securities of other electric companies shall not apply to the capital pmck, debentures or securities of the Consumers Electric Company, or of the Metropolitan Light and Power Company, or their assigns.
It would seem to me that the case made out here by the hon. senior member for Ottawa (Mr. Birkett) would be sufficient in itself to justify this House in returning this Bill to the Private Bills Committee. That hon. gentleman was not at the meeting of the committee when this Bill was considered. He has put before the House to-day a petition of the council of Ottawa, he has submitted numerous arguments, and, altogether, it seems to me, has made out a case that, at least, the members of the House should be willing to investigate, and, for that purpose to send the Bill back to the committee. I had given notice of this amendment before I knew what position the hon. senior member for Ottawa would take on this Bill. I gave notice of this amendment because I was in the Private Bills Committee when the matter was discussed and at that time decided, and I move that amendment now because, I believe, it is but a simple act of justice to the citizens of Ottawa that we should reserve this condition as a safeguard to them against monopoly in light, heat and power in this city. And I think it shoidd go back to the committee

because I believe that in the general confusion that existed in the committee at the time this Bill was considered and passed the members did not fully appreciate the strengthening of monopoly that it involved. The amendment that was put in your hands, Mr. Speaker, is acceptable I understand to the city council of Ottawa, to its mayor and to its solicitor. It is also accepted by the officers of the Canadian Union of. Municipalities. This organization has become a power in this land, and it has taken a part in the contest for the reason that it is opposed to the encroachment of corporations on civic rights in Canada. They came forward of their own volition to oppose this Bill, they came forward to uphold the corporation of the city of Ottawa in resisting the demands that are being made by the Ottawa Electric Light Company at this time. I wish to point out that even if we throw this Bill out altogether we take nothing at all away from the Ottawa Electric Company. We are not threatening their rights or their powers. If at this time they are asking for something improper, asking for something they have no business to get under their contract with the city of Ottawa, then it is certainly our duty to see that this Bill does not become law, and that no powers are given to them which the city of Ottawa are opposed to.
During the afternoon the position of this company and of the other companies named in the amendment have been set forth clearly, and it is not necessary for me to go into that matter more than to say that the Ottawa Electric Company now promoting this Bill is itself an amalgamation of three companies. It has itself a Bill of incorporation that was granted by this parliament, but it was granted as the basis of an agreement between itself and the city of Ottawa. Under the operation of that Act the price of electric power and of light and heat in the city was not to be above a certain fixed maximum. In 1901 the Consumers' Company was incorporated. It started business with a maximum schedule as agreed upon by the city of 52 cents per 100 ampere hours against 75 cents being charged by the Ottawa Company as the maximum rate. As a matter of fact the competition has set a price, not at 52 cents per 100, but at 36 cents per 100. Both the Consumers' and the Ottawa Company are at this time charging that rate, and the people of Ottawa are getting their light and power at that rate. That has been the result, and it seems to me it has justified the action of the city of Ottawa in trying to escape a monopoly in this line of business. I may say, Mr. Speaker, that the question of public ownership is not involved in this matter that we have before us to-day. It is merely a matter of lighting the city of Ottawa that is in dispute. The matter we are dealing With relates wholly to the price the citizens of Ottawa will have to pay for their electric light, 1364
heat and energy. That is a different question altogether from public ownership. It the city went into the business of producing electric light and heat, it would be a question of municipal trading in contradistinction to municipal ownership. Bo it seems to me it is out of th'e way altogether to introduce into this discussion the question of municipal ownership. It is purely and distinctiy so far as I can see, a matter of municipal monopoly, of a monopoly in opposition to the interests of the city and the citzens.
I think I would be justified in saying that the inference to be drawn from the Bill before us is that it is the wish of the Ottawa Electric Company to have a monopoly of their business in this city. I say that is a legitimate inference. In the Private Bills Committee that inference was directly contradicted by the representative of the Ottawa Electric Company. I asked him wrhy they had this Bill before the House if that was not their object, and it was explained to the committee that the reason was thi^, that in the near future there was to be a considerable proposition put before the capitalists of this district, including and embracing the acquisition of some large water powers around the Chaudi6re, and that the Ottawa Electric Company expected to be included in this proposition, and therefore they -wanted power to go in and buy up some other water powers, buy out some other companies who have control of water powers just above the Cliaudifire Falls. I accepted that explanation, and put this proposition to the representative of the company : On your own ground, if that is why you are asking for this Bill, then, seeing that the city of Ottawa draws another inference from it, draws the inference that you want a monopoly, in order to meet their objection, will you accept a provision that you shall not invest in any stock or securities of the Metropolitan or Consumers' Company ? If that statement made by them was fair, If it was right, if it was the -whole case, then the proposition I made to them would have been accepted. If that is then-position to-day, then the acceptance of the amendment I am offering does not hurt the Ottawa Electric people at all, does not in any way hamper their movements, and will not interfere with them in carrying out the amalgamation that they expect to make next year in connection with the water powers at the Chaudiere. But, Mr. Speaker, the representative of the company refused to accept this amendment, he refused on this one ground : He said that the company objected on principle to being singled out and being forbidden to invest in the securities of these two other companies. Now I do not think that the representative of the company is the one to bother about the principle, it is for us to look after that principle. It seemed to me then that he was throwing doubts on his own frankness in stating, when this Bill was asked for, that

he objected on principle to having the other two companies exempted from the operation of the Bill. Mr. Speaker, I am led to the conviction by the arguments and facts that were put before the committee, both by the representative of the company, by the mayor and council of Ottawa and by the representations of the Canadian Union of Municipalities. I was forced to the conclusion, as I say, that the whole object of this Bill, innocent though it looks to be, is to give the Ottawa Electric Company a monopoly of the business of supplying light, heat and electric energy to the citizens of Ottawa, so that it may be able, if it thinks proper, to raise its rates up to the full maximum that is granted them under their charter. It is for that reason, and especially since it is being supported by the hon. mem-mer for Ottawa (Mr. Birkett) that X ask by my amendment that this Bill be referred back to the Private Bills Committee that we may have the whole matter threshed out there.
Mr. BIRIvETT. I desire to make one more appeal to the gentlemen occupying the the benches on the government side of the House not to force this Bill to its third reading now, but to give the over burdened citizens of Ottawa an opportunity of trying to come to terms with this would be monopoly. I said this afternoon that we had been getting light for 3G cents per hundred amperes. The maximum of the Consumers' Company is 52 cents while the maximum of the company which is seeking this additional legislation is 75 cents. Upon the business done by the Ottawa Electric Light Company last year, when they charged the consumers of their light 36 cents per hundred amperes, they realized $217,000, making a net profit of $72,000 which, on their capital of $1,000,000, represents seven and two tenths per cent. Now, Mr. Speaker, if this Bill is allowed to become law and they carry out the intention they have in view there is nothing under the sun to prevent them putting an additional burden upon the citizens of Ottawa of from $250,000 to $300,000. They have it within their own grasp to charge 75 cents per hundred amperes, that being the maximum which they are allowed to charge. If all competition is removed there is nothing to prevent them from assessing and collecting the full maximum as set forth in their charter which they obtained seven or eight years ago. I would ask the House to consider this matter seriously. This legislation will benefit a few people, I know, but I would ask the House to think of the many people vho will not be benefited by it. Surely we are not sent here to legislate for the benefit of half a dozen men who can lobby up and down these halls, but we are sent here to represent the people and the people's request is that this matter be left in abey- !


Mr PUTTEE.: ance until such time as the citizens and the council of Ottawa have an opportunity of meeting the company and seeing if they cannot came to some amicable arrangement. 1 would ask the House not to press this Bill to the third reading, but to give an opportunity of trying to come to some arrangement.


Mr. SPEAKER.: Is the House ready for the question ?


William Findlay Maclean: Mr. Speaker, I beg to call your attention to the fact that this Bill has not been printed in both languages.


Lawrence Geoffrey Power: If the Bill has not been printed in both languages we cannot proceed with it.


Wilfrid Laurier: Quote the rule.


John Graham Haggart: We would not ask Mr. Speaker to sit in review upon his own judgment.


Wilfrid Laurier: It is not decided yet.


Lawrence Geoffrey Power: I have not ruled. I do not know whether it is not printed. I say if it is not printed it cannot be proceeded with.


William Findlay Maclean: The Orders of the Day say it is not printed in the two languages. I find there is only one Bill marked ' E ' and ' F.'


Louis-Philippe Brodeur: My hon. friend (Mr. Maclean) is mistaken. The words ' English ' and ' French ' appear on the order paper only on the second reading of the Bill, not after the Bill has gone before the Private Bills Committee. I think he will find that the rules provide that the Bill shall be printed in French as well as English for the second reading and not after the Bill has gone gefore the Private Bills Committee.


William Findlay Maclean: That is special pleading and I am sorry to hear it from an exSpeaker. The rule is that a Bill cannot be proceeded with unless it is printed in both languages. The Orders of the Day say that it is not printed in both languages.


Lawrence Geoffrey Power: I may say it is not usual to state on the order paper for the third reading whether bills are printed in French or English or both languages. The orders are generally printed with that statement when they are for the second reading but if it is a fact that the Bill is not now printed in French and English it cannot be proceeded with and that is a fact that we must ascertain.


Louis-Philippe Brodeur: I am sure my hon. friend (Mr. Maclean) will be sorry to know ! that the Bill is printed in French.


John Graham Haggart: Before the vote is taken, I wish to know whether pairs will be allowed to vote.


Wilfrid Laurier: I think pairs can vote on private Bills.


John Graham Haggart: All right.


Mr. CALVERT.: We dp not propose to pair on this vote.


Mr. TAYLOR.: Pairs are only made on government questions. Am I to understand that this is to be a government question ?
House divided on amendment (Mr. Puttee).
YEAS :
Alcorn,	Lefurgey,
Angers,	Lennox,
Bell,	Macdonald,
Blrkett,	Maclean,
Campbell,	Monet,
Casgrain,	Morin,
Clancy,	Mulock (Sir William),
Clarke,	Pope,
Cochrane,	Pringle,
Daniel,	Puttee,
Earle,	Richardson,
Erb,	Roche (Marquette),
Gilmour,	Ross (Ontario),
Grant,	Sherritt,
Hackett,	Smith (Vancouver),
Haggart,	Smith (Wentworth),
Halliday,	Stephens,
Henderson,	Stewart,
Heyd,	Taylor,
Hughes (Victoria),	Thompson
Kendall,	(Haldimand & Monck)
Kidd,	Thomson (Grey),
Lancaster,	Tolton,
LaRividre,	Wilmot,
Lavell, Lavergne (Montmagny),	Wilson-50.
NAYS :
Blanchet,	Logan,
Borden (Sir Frederick),	Loy,
Brodeur,	Mackie,
Brown,	Macpherson,
Bruneau,	McColl,
Calvert,	Mclsaac, [DOT]
Champagne,	McLennan,
Cowan,	Marcil (Bagot),
Demers (Ldvis),	Marcil (Bonaventure),
Demers (St. John),	Mignault,
Fisher,	Prefontaine,
Fitzpatrick,	Reid (Restigouche),
Galliher,	Riley,
Gauvreau,	Roche (Halifax),
Girard,	Ross (Yukon),
Harwood,	Russell,
Johnston (Cape Breton),	Scott,
Johnston (Lambton),	Sinclair,
Lang,	Tolmie,
Laurier (Sir Wilfrid),	Tucker,
Lavergne	Turgeon,
(Drummond & Artha.),	Wade,
Law,	Wallace,
LeBlanc,	Wright-47.
Amendment (Mr. Puttee) agreed to, and Bill referred back to the Select Standing Committee on Miscellaneous Private Bills.



SPRAGUE'S FALLS MANUFACTURING COMPANY.

[Stage Direction]
Bill (No. 42) respecting the Sprague's Falls' Manufacturing Company, Limited - Mr. Ganong-considered in committee and reported.
On motion for the third reading.
Louis-Philippe Brodeur: I would remind the hon. member for East York (Mr. Maclean) that the original charter contains a clause similar to that which he sought to strike out in the Ottawa Electric Company's Bill.


John Graham Haggart: That does not appear in the Bill.


Louis-Philippe Brodeur: It is in the original charter.


William Findlay Maclean: Two wrongs do not make a right. Does this company enjoy a public franchise S


Mr. COWAN.: Certainly ; the Sprague's Falls,' with power to expropriate the waterpower. The Bill was passed about three years ago, and they are now back for an extension of time.


William Findlay Maclean: It has not made an agreement with the corporation yet.


Mahlon K. Cowan: I have a very distinct recollection of this Bill coming before the Private Bills' Committee.


Edward Frederick Clarke: If this Bill proposes to give this company any power to expropriate another company that has a contract with a municipality, and under which the municipality might be mulcted in heavier tolls or charges, it should stand until we get information from the promoter of the Bill.


Some hon. MEMBERS: No.


Edward Frederick Clarke: Oh, yes ; we should treat them all alike. If this Bill proposes to do what the other Bill proposed then it should be treated in the same way.


James Clancy: Is the Minister of Inland Revenue prepared to say that it contains the provision the hon. member for Toronto (Mr. Clarke) refers to ?


Louis-Philippe Brodeur: I have been informed that it is the same provision.


Edward Frederick Clarke: Then it had better stand.


Mr. HENDERSON.: I fail to see any similarity between this Bill and the contested clause in the Ottawa Electric Company's Bill. No new powers are asked for under this Bill and it merely applies for an extension of time. Can the Minister of Inland Revenue, with all his astuteness find a parallel clause in this Bill to the clause objected to in the Ottawa Electric Company's Bill ?


Louis-Philippe Brodeur: I understand the decision of the House to be that we should not per-

mit any company to subscribe to stock in any other company.


Some hon. MEMBERS: No.


Louis-Philippe Brodeur: If we decide to adopt that policy towards one company we shall have to adopt it towards all the companies. That is why I took upon myself to call the attention of the hon. member for East York (Mr. Maclean) to it.


Sir WILLIAM MULOCK.: Before the Bill is read a third time it seems to he advisable that we should have this point made clear. It has this moment been raised for the first time, and I do not know that it is necessary for the provision to be exactly on all fours with the provision to which exception is taken in the previous Bill in order to have such a company as this, objected to. If the House desires to be consistent I would suggest that the Bill be allowed to stand until a later day in oivler that the point may be looked into. If that is agreeable to the House I shall move the adjournment of the debate.


John Graham Haggart: Perhaps the Minister of Inland Revenue (Mr. Brodeur) would read
the clause, as he has it now.


Louis-Philippe Brodeur: It reads :-
Acquire the shares, debentures or securities of any other company.


Edward Frederick Clarke: I think the suggestion of the Postmaster General (Sir William Mu-lock) is timely. This is a matter that ought to be investigated and if the same objections can be urged to this Bill as to the other, both should be treated in the same way.


Charles Fitzpatrick: What is the objection ? Is it to be settled here finally and conclusively, that no company is to be organized with the power and right to buy shares in another company ? If that is to be the settled policy of this House I wish to have an opportunity to say something about it.


Edward Frederick Clarke: I do not understand that that was the decision reached by the House a short time ago. I understood that the objection then raised was that the power to buy these shares would practically void an agreement between the city of Ottawa and the company whose shares were to be acquired, and that the proposed consolidation would entail serious loss to the municipality. On that ground the action of the House was taken.
Motion (Sir William Mulock) agreed to.



WEST CANADIAN COLLIERIES ACT.

[Stage Direction]
On the order being called for
The House to go into eommitte on Bill (No 80) respecting the West Canadian Collieries, Limited.-Mr. Oliver.
Mahlon K. Cowan: Mr. Speaker, before you leave the chair I desire to move in Mr. BRODEUR.
amendment that this Bill be sent back to the Private Bills Committee for furthel-amendment ? This is an Act incorporating a company already incorporated in England, and the solicitors in charge of the Bill advised me that by inadvertence they neglected to put in a couple of clauses which are necessary to enable them to properly organize the company unde)' the laws of Canada. The promoters and solicitors have asked that the Bill be referred back in order to insert a couple of clauses purely and simply regulating their own domestic arrangements. I therefore move :
That the Bill be referred back to the Private Bills Committee.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill (No. 116) respecting certain patents of Canadian General Electric Company, Limited, and others.-Mr. Grant.
Bill (No. 106) to incorporate the Chicoutimi and Northeastern Railway Company.-Mr. German.
Bill (No. 109) to incorporate the Montreal, Nipissing and Georgian Bay Railway Company.-Mr. Campbell.

[Stage Direction]
Bill (No. 120) respecting the Montreal Terminal Railway Company.-Mr. L. P. Demers.
Bill (No. 121) respecting the Century Life Insurance Company.-Mr. Morrison.
Bill (No. 123) to incorporate the Kingston and Dominion Central Railway Company.- Mr. Harty.
Bill (No. 130) respecting the Huron and Ontario Railway Company.-Mr. Wm. Ross (Ontario.)
Bill (No. 131) to incorporate the Farmers' Bank of Canada.-Mr. Guthrie.


James Clancy: What expenses, if any, other than cost, if any, have been paid to or through the government, or to or through an agent or officer of the government, in each case, by the following persons or firms, in addition to the fines imposed, in the cases of the seizures of binder twine, since the first day of January, 1902 :-Wilber Hutchinson, Manager Fairchild Company, Winnipeg ; Alexander D. Nasmith, Wawanesa, Manitoba, Lyttle & Jickling, Carmen, Manitoba ; Charles Lunn, Winnipeg ; Blakeman & Scarth, Virden, Manitoba ; E. H. Horves, Moosomin ; A. F. Rei-necki, Regina, N.W.T. : J. W. Morton, Regina, NW.T. ; J. J. Heaslip, Alameda, N.W.T. ; H. Donaldson, Winnipeg ; William Heath, Winnipeg ; W. G. McMahon, Winnipeg ; M. J. Wilson Cordage Company, Chatham, Ontario ; In-Ltci national Harvesting Company.
JUjSTE 6, 1904


Wilfrid Laurier: No expenses have been paid to or through the government, or to or through any agent or officer of the government in any of the cases mentioned, with the exception of that of the M. J. Wilson Cordage Company, of Chatham, Ontario, in which case there was paid to the agent of the Department' of Justice the sum of $245 to cover all expenses and fees in connection with the matter.


DRY DOCK AT FOOT OF LACHINE CANAL.
Mr. GALLERY asked :: 1.	Has the government received a memorial from the Montreal Board of Trade, asking for the construction of a dry dock at the foot of the Lachine Canal, in the Harbour of Montreal, and for increased wharfage accommodations ?
2.	Has the government considered this request, and has it come to any conclusion ?


Wilfrid Laurier: The government have received the memorial in question but have not come to a conclusion.


CANADA-FRANCE STEAMSHIP SERVICE-ARRIVAL OF THE ' MALOU.'
Mr. CASGRAIN asked :: 1.	Is the government aware that a steamer called the ' Malou ' has recently arrived at Montreal from a port in France ; and that it is claimed that the said steamer is one of the steamers put on the line between Canada and France, in accordance with a contract entered into between the government and Mr. Colom-bier, during the last session of parliament, and towards the establishment of which line parliament voted a subsidy of $133,000 a year for ten years ?
2.	Is it the intention of the government to recognize that the said Colombier has begun thb fulfilment of the obligations of the said contract by putting the said steamer on the said line ?
3.	If not, why not ?	-
4.	Has the government notified the said Colombier, or any company to which the said Colombier has transferred the said contract, that it is the intention of the government to cancel the said contract ?
5.	If so, at what date, and by -what means ?
Right Hon. Sir WILFRID LAURIER
(Prime Minister).
1.	The government have no official information with reference to the arrival in the port of Montreal of the steamer
Malou.' The government is aware, not from official, hut from other sources, that the
Malou ' will be one of the steamers to be chartered under the contract made between Mr. Colombier and the government.
2.	It is not the intention of the government to recognize that Mr. Colombier has begun to fulfil the obligations of the contract by putting the said steamer on the said line.
3.	The reason is that Mr. Colombier has failed altogether to carry out most of the obligations under the contract.
4.	Yes.
5.	Not so far as regards the supposed agent in Montreal. By letter dated 17th May, and personal service on him in France.


RIVIERE OUELLE AND MURRAY BAY FERRY.
Mr. CASGRAIN asked :: 1.	Is it the intention of the government to-continue the ferry service between Riviere Ouelie wharf and Murray Bay during the present season of navigation ?
2.	If so, has any contract been entered into with any person or company ; if so, with what person and company ?
3.	What are the conditions of said contract ?
4.	Has the government any record of the number of passengers carried during last season between the said points ; and if so, what is the number ?
5.	W7hat did the said service cost the government ?


Right Hon. Sir WILFRID LAURIER (Prime Minister) :: 1.	It is the intention provided a suitable steamer can be procured for the purpose.
2.	No.
3.	Answered by No. 2.
4.	No.
5.	The subsidy paid last season was $6,000.


ST. ROCH TRAVERSE LIGHTHOUSE KEEPER.
Mr. CASGRAIN asked :: 1.	Is one Caron employed as a lighthouse keeper at the St. Roch Traverse ?
2.	If so, what is his salary ?
3.	Is he obliged to remain at the said lighthouse during the whole season of navigation ? Or is he authorized to fulfil his duties through a substitute ?
4.	Is the said lighthouse finished ?
5.	If not, when will it be finished ?


Hon. RAYMOND PREFONTAINE (Minister of Marine and Fisheries) :: 1.	Yes.
2.	Four dollars a day, and he is bound to furnish an assistant.
3.	He is employed temporarily.
4.	This lighthouse is about being finished.


Charles Eusèbe Casgrain: That does not answer question 3.


Mr. PREFONTAINE.: Yes, he is obliged to remain, or his assistant must be there during his absence.


PORT ARTHUR AND FORT WILLIAM TELEPHONE.
Mr. MACLEAN asked :: 1.	What was the reference to the Supreme Court of the decision of the Railway Commission in the Port Arthur and Fort William telephone application ?
2.	When was the reference made ?
3.	Is there any provision in the law whereby the court will give a speedy decision in such cases ?


Hon. H. R. EMMERSON (Minister of Railways and Canals) :: 4:276
1.	The reference contemplated was as to whether the decision of the board on the legal question was involved was good law.
2.	The reference has not been yet made. The offer by the board to make the reference took place on the 22nd day of March, the next meeting after the decision rendered, but the applicants have not yet decided to take the reference.
3.	There is nothing in the law to prevent the Supreme Court from giving a speedy decision in such cases.


I.C.R.-PASSENGER RATES.
Mr. CLARKE asked :: 1.	What is the local passenger rate per mile in effect on the Intercolonial Railway ?
2.	What is the through passenger rate per mile in effect from Montreal and Quebec to Atlantic ports ?


Henry Robert Emmerson: I have not received this information yet from Moncton. I have sent for it.	.


Edward Frederick Clarke: Let the question stand.
Question allowed to stand.


THE FINANCES OF CANADA.
Mr. HAUGHTON LENNOX (South Sim-coe) moved :: That a Select Committee of eleven members of this House be appointed to prepare and introduce a Bill to consolidate and amend-the Acts respecting the public revenue, the control and administration of public moneys, the raising of loans authorized by parliament, and the auditing of the public accounts, with power to send for persons, papers and records and that the right honourable the leader of the government be authorized and requested to name the members of the said committee.
He said. Mr. Speaker, I regret that, dealing with this important subject, I have to begin the discussion at this late hour of the night. But, as there might not be another opportunity for dealing with it, I think it advisable to discuss it, even though I must necessarily do so at some disadvantage, speaking to a House wearied by a long day's work. In calling the attention of the government to a question of the amendment and consolidation of the Revenue and Audit Acts, I feel that I am directing their attention to a subject of importance ; and I hope to be able to give such information to the House or bring such matters to the attention of the House as will probably convince the government that there is immediate necessity of doing something in the line of improving the Audit Act, which has now been in force for over a quarter of a century. The hon. gentleman will recollect that the Audit Act is the creation of a Liberal government. It was introduced by the present Minister of Trade and Commerce (Right Hon. Sir Richard Cartwright) as a member of the Mr. EMMERSON.
Mackenzie government in 1878. And on the 1st of August of that year the present occupant of the position of Auditor General began the duties of his office. Of course, it was, to some extent an experiment; it was a copy of an experiment, because, in 1866, the English parliament had adopted an Act of which ours was largely a copy. We have, therefore, not only an Act that has been in force in this country for twenty-five years, but we have practically an Act that has been in force for forty years. An Act not originating in our own country, but a copy of the English Act, for which reason * also we might anticipate that the time has arrived when some amendment may be required. It is true that our system of government is similar to the British .system, but our conditions are dissimilar. This affords another reason why it may be time to take stock of the situation and see whether, after the time that has elapsed since this Act came into force, and the great development that has taken place in the meantime, it may not be proper for the government now seriously to consider and amend the Act.
In 1878, when this Act was introduced, our total expenditure was, in round numbers, $30,000,000 ; in 1903 our total expenditure has doubled, and is upwards of $60,000,000. We had, from 1874 to 1878, an average expenditure of upwards of $32,000,000, and when this Act was introduced by the right hon. the Minister of Trade and Commerce (Sir Richard Cartwright) he considered that the question of the amount of the expenditure was important in the consideration of what precautions we had to take in reference to the audit of the moneys of the country. Some hon. member then remarked to the present Minister of Trade and Commerce : Why, in your time there was no audit at all. He said : We did not need an auditor, because then our expenditure was $14,000,000 less than it is now

in 1878. It was not $14,000,000 less, it was $10,000,000 less, but a matter of $4,000,000 or so, in speaking of the finances of the country, was not very wide of the mark for the Minister of Trade and Commerce. In 1878, at all events, all parties were united in the opinion that in view of the existing condition of things, with an annual expenditure of $30,000,000, it was necessary to have a strict Audit Act. If it were necessary then, and the question of the revenue was important, surely it is exceedingly important that now, with our present enormous expenditure and with the possibility of greatly increased expenditure in the near future, by reason of the construction of a national transcontinental railway, when we will be handling money upon a scale that has never existed in Canada before-it is important, I say, that we should to-day see to it that in every way the control of the finances of the country is as it should be. The object of an Audit Act in 1S78. so far as I can gather from the

speeches made a perusal of the Act itself, was that we should have a financial policy controlled by parliament, and that we should have a financial executive administration absolutely controlled by a servant of parliament. Up to that time we had a combination of the Finance Department and the Audit Department, and it was found that that system did nof work satisfactorily. The audit, in fact, was under the control of the Finance Minister. When this Act was introduced in 1S78 the hon. gentleman who introduced it promised a complete separation to all intents and purposes of the position and duties of the Finance Minister and the Auditor General. He promised that so far as it was necessary to maintain an independent audit, we should have an independent auditor. Time went on. Only a short time after the present Auditor General took the position there was a change of government. But matters progressed fairly well, and we found this fortunate state of things, that for many years the Auditor General had the confidence of both parties in parliament and the support of both parties. I am not intimating that the Auditor General has not, to a large extent, the same support yet, except when it comes to matters which affect the financial management of the affairs of the country. The experience df the last few years has shown that complete harmony in that regard does not exist. In 1896 we had the judgment of the hon. gentlemen who at present control the affairs of Canada as to the importance of the duties of the Auditor General, the great value of his services to the country, and the desirability of raising his salary to $4,200, as expressed toy the gentleman who' originally introduced the Act, namely, the present Minister of Trade and Commerce.
Now, the Auditor General has been and was intended to be more than a mere auditor, something more than an officer who could cast up accounts and see that the additions were correct. He was intended to be a controller as well, a check upon the executive administration of the government in respect to finances. This was made abundantly clear by the gentleman who introduced the Act and by those who supported it at the time, and it is also clear by the wording of sections 32 and 33 of the Audit Act in particular, and other sections as well. In 1880 it was found ad visable to enlarge the duties of the Auditor General, and Mr. Kirkpatrick moved a resolution accordingly. In 1888 an increase of salary was voted to the Auditor General, amounting then to $4,000. Several hon. gentlemen then prominent in the House-Mr. Edgar, Mr. Mills, Mr. Weldon, Mr. Casey and the right hon. gentleman who leads the House (Sir Wilfrid Laurier)-were very emphatic in the declaration of the importance of sustaining the Auditor General and preserving his functions entirely distinct from the control of the administration, of making
him emphatically an officer of parliament, and of giving him that control over the finances of the country which would practically do away with the possibility of any improper expenditure of money on the part of the executive administration. In 1895 the Hon. Mr. Mills introduced a petition asking that the decision of the Minister of Finance should practically be revoked in favour of the Auditor General, and that notwithstanding that the Minister of Finance had determined that lie could not at that time afford it, the promotions suggested by the Auditor General, this ought to be ordered.
It seemed to be the opinion of Mr. Mills and those who supported him then that not only should the Auditor General be gen-eraljy sustained but that his suggestions should practically override the views of the Minister of Finance as regards a question of policy. In 1896, and that will end the matters of review I have taken the opportunity of referring to, we had the right hon. Minister of Trade and Commerce again emphasizing the important duties discharged by the Auditor General and suggesting that so valuable had his services become that it was deemed expedient to have the present Senator McMullen read to the House from cover to cover both volumes of the Auditor General's report. Now, this appears to indicate very clearly the views of both the great parliamentary parties as to the functions and duties of the Auditor General and the importance of sustaining his hands and of giving him large powers not only in the interests of the country but of whatever political party may be in power. The more fully the Auditor General is enabled to carry out his views in regard to a careful and prudent executive administration of the moneys of the country the more fully can the government in the end be endorsed by the people who are scrutinizing their acts. I therefore approach this question, as far as a party man can approach a question of this kind, with an honest desire not to make it unnecessarily or unduly a party question. I recognize that in dealing with a matter of this kind I must refer to instances which go to show the necessity for a change and I will naturally refer to instances which are somewhat modern. In doing so I will come to deal with what appears to show the errors of the present administration rather than the errors of the preceding party. But, I am in this singularly happy position that whereas we do not like the tu quoque argument as a rule I will be delighted to have hon. gentlemen opposite instance the delinquencies on the part of those who preceded them of the former administration because the greater the number of instances that are shown of failure to carry out the intention of the Act the more effectually have I placed my case for the consideration of the government. For if I instanced failures of the Act in regard to the present government

alone and there were none during the period when the party I support were in power, it might be said that these were owing alto gether to the gentlemen who are now in power. I do not think that will be found to be the case, but I think on the other hand I can safely leave in the main instances that appertain to the former administration in the hands of the mambers of the government and their supporters. Now, are we still of the same opinion as we were in 1878 and down to 1896, as to the paramount importance of having an officer, who, on behalf of parliament and the people shall check and restrain the financial administration-I should say the executive financial administration-as distinguished from the financial policy of the government ? I have said that for many years the system worked fairly well. I say now advisedly, and I do not do so at all offensively, that it is practically a dead letter. I say in mitigation o' that that it could hardly be otherwise. The Act carried in it the germs of its own failure and when we get an Act of that kind which has stamped upon its face or engraved on its sections, the elements which go to make it unsuccessful, the more time advances, the longer it is in operation, necessarily there will grow up a greater number of precedents and exceptions to its rule so that in the process of time it will be practically a dead letter as it is to-day. Now, I say it could not work' satisfactorily because there are certain exceptions which appear to the main sections giving the Auditor General a semblance of power, but which still leave in effect the whole difficulty which the right hon. Minister of Trade and Commerce spoke when he introduced the Bill. We have not done away with the controlling power of the Finance Minister ; we have not separated the Finance Minister from the Auditor General and in the present administration the Finance Minister is still king. I will refer as to this to section 32 :
No cheque for public money shall Issue except upon the certificate of the Auditor General that there is parliamentary authority for the expenditure, save only in the following cases :-
(a.) If, upon any application for a cheque, the Auditor General has reported that there is no parliamentary authority for issuing it. then upon the written opinion of the Attorney General of Canada, that there is such authority, citing it, the Minister of Finance and Receiver General may authorize the Deputy Minister of Finance and Receiver General to prepare the cheque, irrespective of the Auditor General's Report.
By that subsection of section 32 alone, I submit that we failed very significantly to carry out what was supposed to be the object of the Bill. Mr. Mitchell said on the occasion of the introduction of this Bill:
This Bill gives us another Governor.
Meaning the Auditor General. But, the right hon. Minister of Trade and Commerce said :


Haughton Lennox: No, it gives the Minister of Finance and not the House a Governor, I am inclined to think.
If that had been the effect of the Act-I would not say a governor of the Finance Minister-but I say that If the effect of the Act had been as anticipated by the right hon. gentleman who introduced it so many difficulties as we havp to point out would not have arisen. Clause B provides for emergencies, and I am not disposed to quarrel about that clause. Clause 0 dealing with the Treasury Board, worded as it was, was almost necessarily a fatal blow to the efficient carrying out of the Act. Many difficulties have arisen under that clause and under the following section 33. These difficulties were anticipated by Sir Charles Tupper when the Act was first introduced, and time has proven that he was right. Mr. Tupper said :
The difficulty that appears to present itself to my mind is this :	you are preparing to
give the public an independent parliamentary officer, but who is to see before the payment of public money that under the law it is entitled to be paid ? If you leave the government power to override his decision and pay the money, what then is gained by the Act ?
Our Audit Act is to some extent a copy of the English Act. I am aware that there is a movement in England to improve their Act, but even' if there were not, the conditions are so different in Canada, that I am inclined to think that an Act giving the Aud itor General {or comptroller as he is called in England), less power than we would give our officer here, might be effectual in England and not be effectual in Canada. As a rule, politicians occupy a different status in Canada from that which they occupy in England, and I am! afraid we will have to admit that in Canada politicians and governments hang on to their positions more tenaciously than they do in Great Britain. Section 32 of the Act could not be expected to give reasonable satisfaction, because the application for money or for a credit as the case may be never originates with the Auditor General, hut always with the department. It,is the application of the department, or in fact of the government on one hand and the Auditor General on the other hand, it a cheque is refused an appeal is made by the department, and to whom is this appeal made ? Why, it is made to the very gentleman who is prosecuting the appeal. The Treasury Board consists of the Minister of Finance, the Minister of Customs, the Minister of Inland Revenue, the Minister of Justice, the Secretary of State and one other member of the Privy Council with the Deputy Minister of Finance as secretary, it is essentially the government on a smaller scale. And it is the minister, who applies for and is refused a cheque, and his associates to whom the appeal is made. The only difference is that the minister who made application for the cheque has 'less direct responsibility than otherwise. He throws upon the shoulders of several the

responsibility which he otherwise would have to assume, and as no reasons are given by the board, and the mere announcement of the decision is all that is of record, he is not personally responsible in the matter. Time has shown that this provision has not worked satisfactorily and more and more from time to time inroads are being made on what was supposed at the time to be an adequate protection for the people. We are now at the stage when we must consider whether wTe are going to practically abandon the theory of a controller in the financial and executive sense as distinguished from the political sense. 'Section 33 has occasioned a good deal of conflict of opinion. My main object in proposing this motion is to secure a committee that will take into consideration and revise the whole general scheme of an Audit Act. Suggestions have been made from various quarters, and more especially by the Auditor General himself, who has very great experience for over a quarter of a century, in the working of the Audit Act. We occupy in this matter the unique position that we cannot to any great extent find precedents in other countries, and so far as I know we could get any very valuable information by making inquiry abroad.
Decided changes in the 32nd and 33rd sections are required and we also require a number of minor changes as pointed out by the Auditor General in a suggested Act that appears to have been prepared in 1889, I do not know at whose instance. The lines of authority as between the Auditor-General and the various departments should be more clearly defined so that there shall not be the uncertainty that has existed in the past as to the duties of those who have the initiation of the disposition of the money and of the Auditor General, who is intended to have, to a large extent, the control of the money. Either amendments along these lines should be made to the Civil Service Act, the Public Works Act'and the Railway Act or the Audit Act should be amended in such a way as to govern these other Acts and avoid constantly arising difficulties. Take for example the question of tender. Tender is a farce to-day in the Dominion of Canada ; it is not even provided that contracts are to be let by tender, much as we discuss that subject when considering the 'estimates. Not only in certain matters affecting the Department of Railways and Canals, and whether tenders are asxed or not, once a contract is let, however outrageous its terms may be, the contention of the departments is that there can toe no inquiry into the prices that are toeing paid. Some twenty-five of the eighty sections of the Act require the consideration either of the government or of a committee.
We want also a more expeditious publication of the Auditor General's Report.
This report ought to be published in sections according to departments ; as rapidly as reports of these departments are prepared they ought to be placed in the hands of the representatives of the people, before they assemble in parliament, so that members can familiarize themselves with their contents and be able to intelligently discuss them in the interests of the people. I am not alone in thinking this. In 1887 parliament met on April 13, and the right hon. the Minister of Trade and Commerce (Sir Richard Cartwright) on the 15th insisted upon having the Auditor General's Report then. In 1886, parliament met on Friday, the 19th, and on Monday the present Senator McMullen made a violent statement in reference to the necessity of members of parliament having these books in their hands at an early date, although the time had not arrived according to the statutory requirements. Whatever other changes may be made, I think the decisions of the Treasury Board should be made public in the same way as the Blue-books are distributed. They should be published from time to time and distributed so that the people should know exactly what attitude has been taken in reference to the moneys belonging to the country. The Auditor General suggests that the occupant of the office should be styled the Controller and Auditor General. The corresponding officer in England is so called. The Auditor also advocates a Canadian exchequer account corresponding with the English exchequer account.
In support of the position I have taken it will be necessary for me to refer to some instances in which I think the Act has not worked satisfactorily. The provisions as to tender have failed to accomplish the purpose intended. I understand that it has been said by members of the government that I am seeking to invade the sacred region of responsible government toy the motion that I propose. If that is so it is rather a peculiar departure, because I belong to a party which is not given to that kind of thing. I am not wedded at all to the proposition which I make ; I ask the right hon. gentleman (Sir Wilfrid Laurier) who leads the House, by my motion, to name a committee to consider this matter and probably to bring in a Bill amending the Act. It is important that we should have such a Bill. I could have brought in a Bill myself and have submitted it to the House, and the House would then doubtless have entertained it and probably have referred it to a special committee. I do not know that there is any radical departure from the principles of responsible government in asking that a committee of members of the House shall assume the duty of investigating such a matter as this and reporting it to parliament leaving it to parliament in

its wisdom to either accept or reject it. At all events I was guided in the first instance by a reference to rule 39, which says :
Every Bill is introduced upon motion for leave, specifying the title of the Bill ; or upou motion for a committee to prepare and bring it in.
I was guided further by searching the journals of the House and finding instances in which this course had been adopted in the past. Among others I found that in 1879, as recorded on page 63~ and 64 of the Journals of the House, a motion was made by Mr. Macdonald, seconded by Mr. Bowell, that a committee consisting of fifteen members should be appointed to take evidence and send for papers and documents in order to bring in a Bill with reference to the insolvency law. That was subsequently reported to the House. Last year we had the question of the election laws referred to a select committee and we had the committee on the redistribution of seats. I may also cite another authority, which i think will commend itself to both sic.es, and that is the precedent set by the British House of Commons in April, 1893. of appointing a select committee on the question of national expenditure. So that I think I may fairly submit that I am not asking for any radical departure from the principles of responsible government when I ask the House to name a select committee to consider a question which is of such immediate importance. For forty years we have had practically the same Audit Act m force, for our Act is founded on one forty years old. Since then our expenditure has doubled, and there is no doubt that our expenditure will be on a vaster scale during the next ten or twelve years.
Before I refer to the Davis contract I want to say that i hope I shall deal with this question in such a way as not to unnecessarily excite the hostility of the right hon. leader of the government. I should be delighted to stop here and now if the right hon. gentleman would give me an intimation that he will appoint the committee I suggest or any committee. I only name eleven members as a suggestion and I want it to be distinctly understood that I do not consider this a party question. It is one from which we should eliminate politics as far as possible. Coming back to the Davis contract, I wish to refer to a letter which is found upon the first page of the Auditor General's Report, dated at the Auditor General's office, Ottawa, March 9th, 1904.
I have the honour to transmit my report on expenditure accounts, appropriation and statutory, and on revenue accounts, for the fiscal year 1902-3.
The following rather lengthy correspondence is introduced in this place because it illustrates the practical importance of several Mr. LENNOX.
amendments that this office has been asking for some years to have made to the Audit Act.
This refers mainly to the Davis contract and no doubt also to the Corry and Da-verdure contract. I propose therefore to refer to these matters and, as I wrote to the Minister of Railways and Canals the other day, I propose to also refer to the question of the Farran's Point Canal. Mr. McDougall says further.
The magnitude and number of the transactions going through this office are now so increased that I feel parliament should seriously consider also the amendment of the Audit Act along the other lines suggested in a former report, to enable this office to cope with the expansion of the business of the country. I feel so strongly on this point that if parliament does not see its way to bring the matter up this session, I shall at the end of the session ask to be superannuated.
I would like to have brought this matter up earlier, but I was advised not to do so as it would have been overshadowed by the discussion of the transcontinental scheme and would not have attracted the attention it deserves. However, on the 3rd of May I gave notice of the motion which I am moving to-night. Before that, when I had the matter in hand, I referred on the 22nd of April to the matter which I proposed to discuss to-night, in a few sentences which I will take the liberty of reading :
I repeat, and it cannot be too ;mpliatically enunciated, that there is a great constitutional safeguard of the people of Canada at issue in the question we are discussing to-night. If hon. gentlemen who are familiar with the laws and practices of parliament will for one moment reflect, they will see that three great safeguards stand out conspicuously in the constitution of Canada. One concerns the paying o''t of money of the people of Canada. The gieat safeguard in reference to that, which prevents the administration to a large extent, thouth not fully, I am sorry Jo say, from squandering the resources of the people of Canada, was the institution of the Audit Office, and the administration of that office by the present incumbent. Too much -cannot be said of the efficient manner in which that gentleman has administered that office, and of the sturdy ard loyal way in which he has stood up for the rights of the people as against the Acts of the present administration.
In seme instances, in one instance that occurs to mind, into which I shall not go at present, as large a sum as over half a million dollars was saved to the people by the activity and loyalty of this officer. And even then he failed to accomplish all he thought should have been accomplished on behalf of the people. That is one of the safeguards, which stands out conspicuously.
Now, in the controversy that has arisen between the Auditor General and the Treasury Board and the Department of Railways, although the Auditor General was fought at every point, opposed on every issue-and I must say, not very courteously

so far as the Deputy Minister of Railways and Canals was concerned-in the end, although the Treasury Board overruled the Auditor General on every contention he advanced, and found that Mr. M. P. Davis was entitled to all that he asked, to all that the contract named, and to all that he had sent in his hill for, including the right to obtain payment in some manner for 79 years to come, yet after all that had been done, the government, for some reason as yet unexplained, saw fit to withdraw their decision, to consult with the Auditor General and get him to agree to a substituted contract, a vast improvement it is true upon the contract which was made in 1900, but which yet does not fully secure the interests of the people of Canada. Now the results of that substituted contract carrying out the reversal of the judgment of the Treasury Board, has been that at least three-quarters of a million dollars have been saved to the people of Canada. It will be necessary for me to read a portion of the memorandum of the Minister of Railways and Canals upon which the Order in Council was made.
On a memorandum dated September 26, 1900, from the Minister of Railways and Canals representing that, in the opinion of the chief engineer of the Department of Railways and Canals, in which he (the minister) concurs, it is highly desirable that the system of electric lock operation and electric lighting which has been satisfactorily adopted on the Soulanges canal and is about to be adopted on the Lachine canal, should be brought into use on the Cornwall canal, where facilities for the creation of the necessary power already exist.
The minister further represents that under lease, dated June 25, 1896, issued to Mr. Michael P. Davis, the following provisions are inserted :-
I am not reading continuously, I am paraphrasing to some extent.
That the lessee shall apply electric power to the satisfaction of the Chief Engineer of Railways and Canals for the working of all the locks on the Cornwall canal at $63 per horse power per annum ;
That the lessee shall also supply and work electric direct current arc lights of not less than 2,000 candle power, in perfect working order, at such points and in such number as shall from time to time be deemed necessary by the chief engineer aforesaid, running all night wherever so required, along the canal, at the rate of 30 cents a night. The minister recommends that In pursuance of the said lease, provisions, he be authorized to enter into a contract with Mr. M. P. Davis for lighting the Cornwall, canal, the number of lights not to be less than 250 arc lights of 2,000 candle power, or more than 270, at the discretion of the Department of Railways and Canals, to be paid for at 30 cents per lamp for each night during which the light Is required and supplied ; further, for the supply of electric power for the operation of the lock gates and valves, and of bridges throughout the said canal ; the amount to he paid for such service to be $63 per horse power per annum for a minimum of 400 horse power.
The minister says that it is highly desirable that this contract should be entered into. Why it was highly desirable I have been at a loss to ascertain. Was it for economy ? It may have been, but it is pretty hard to make that out. Whatever else "the government have failed in-we all fail more or less-the present administration I suppose have not failed in the matter of economy-rigid economy, I expect those hon. gentlemen on the back benches would say. Rigid economy in'every department of the public service is still the warp and woof of the banner of the Liberal party. They all appear in that. Now, I have read the memorandum of October 9, 1900, that was to adopt the contract for 21 years. We cannot have too much of a good thing, and consequently on October 16, 1900, an Order in Council was made-[DOT]
On a memorandum dated the 15th of October, from the Minister of Railways and Canals, recommending that the Order in Council of October 9 authorizing the entry Into contract with Mr. Davis in respect to the lighting, &c., by electricity of the Cornwall canal, be amended to such effect that the terms of 21 years therein named as the terms of said lease may be extended by successive renewals July 1st, 1979, thereby bringing it into conformity with the lease the water power granted to Mr. Davis mentioned in the said order.
Now, what was our position in November, 1900, at the time when the contract was entered into ? We were paying, for the year which ended on 30th June, 1900, salaries, wages, care and operation of the Cornwall canal $18,181, and we were paying for lighting $342, a total of $18,423. Mr. Davis had a terminable lease. We were receiving $1,000 and we were carrying out a policy which was inaugurated many years ago of giving leases along the canal "for the purpose of developing the power and so encouraging industrial life along the various canals ? The rental, it is true, was not very much,-but the benefit to the country was considerable in that way. Light and energy were available under the contract that existed at that time, in which it is recited that we can take that light from Mr. Davis and can procure electric energy from him if we desired it,-we could take it or not as we preferred. And there had been nothing done under the terms of the contract, so that, if the government had seen lit to terminate the lease in 1900 they could have done so without the sacrifice of a dollar. It was provided in the agreemnt entered into in 189t>:
Provided always that these presents are upon the express understanding that the lessor reserves the right as follows, namely :	If, at
any time hereafter, the land hereby demised and the quantity of surplus water leased or which may hereafter be leased, according to the Intent and meaning thereof or any part thereof, are or Is required for the use of the canal or for any other purpose whatsoever, or if the lessor shall elect to take over any and

all buildings and works or erections constructed upon the land hereby demised or the increased flow of water so passing or ,to pass through the works of the said lessee through Hoople's creek, and to take over any and all works and land through which the said increased flow of water passes, thereupon on reasonable notice (not less than twelve calendar months) being given to the lessee to that effect, this lease or lease for the term then current and all the covenants, privileges and rights of the said lessee shall cease and be void, and the lessor shall pay the then value of all such buildings, lands and works with an addition of five per cent thereto, that may be at that time erected or connected therewith and belonging to the lessee ; and that in default of agreement as to the valuation of such buildings, lands and works, their value shall be ascertained by three arbitrators, one to be chosen by the Minister of Railway and Canals, another by the lessee, and the third by the two arbitrators so chosen, and the award of the said arbitrators or any two of them after hearing the evidence offered by either party shall be conclusive as to such value.
As I say, nothing has been done, no building had been erected and the government were in a position-I am not saying they were bound to do it, but they were in a position if they saw fit-to terminate the lease. It was, as far as I can see-it will to be for the government to give their pronouncement on the matter-a prudent lease. It provided that so much of the surplus water, if any, at lock 30 level at Cornwall canal, as the lessor might deem advisable after navigation and existing mills and mill sites hereafter to be leased shall be supplied, should be granted to and taken by the lessee. It appeared, I say to be a prudent lease. I suppose I need hardly anticipate that the government will say it was not a prudent lease in face of the fact that they afterwards implemented it and put it in operation by fixing prices and entering into the contract to which I will now refer.
It will be necessary for me to read but few clauses of this lease, Let me read first the recital:
An agreement made this nineteenth day of October, one thousand nine hundred, between Her Majesty the Queen represented herein by the Minister of Railways and Canals, acting under the authority of an Order in Council dated the ninth day of October, A.D. 1900, as amended by Order in Council datpd the sixteenth day of October, A.D. 1900, of the first part ;


And Michael P.: Davis, of Ottawa, in the county of Carleton, contractor, of the second part ;
Whereas, by indenture No. 12,336, dated twenty-fifth day of June, 1896, made between the parties above named, the said Michael P. Davis among other things agreed-
-to supply certain electric power and also electric light at 30 cents per night per light, as by reference to the indenture will more fully appear. It provided that the said Michael P. Davis should supply such light from 1st May. 1900, and current for power from 1st October, 1901. The agreement, so Mr. LENNOX.
far as the light is concerned, was extended by the deputy Minister of Railways and Canals to 1st August, 1901. It was extended by the acting Minister of Railways, under Order in Council to 1st October, 1901, and it was extended to the l'5th November, 1901, by the Minister of Railways and Canals. It was provided further that nothing herein shall be taken to vary other than as above speci-field or provided any of the provisions of the last indenture. I have read over the clauses which are material tor the purpose of reference later on. Now, it is stated in the minute presented to the Governor in Council that the Soulanges canal had been found to work satisfactorily. This was a case of government ownership and operation. And it is a proper inquiry in this regard to ask why it is that, if the Soulanges canal was working satisfactorily under government control and operation and was costing a comparatively small sum of money, why it was that the government thought it necessary to incur this enormous expense of some 852,000 a year involved in this new contract and more than $52,000 a year when the matter would be in full operation, perhaps-why it was 'that the government thought it necessary to enter into this new contract making necessary this large expenditure of money.
Now, taking the highest estimates of Mr. Munro, the superintending engineer at Co-teau Landing and Mr. Hoffmeister the resident engineer with the electrical company on the Soulanges Canal, the total expenditure for the operation and interest account of the Soulanges Canal would not exceed $11,700 a year. We have made a change and what did we affect by the change ? Instead of paying at the outsidie siome $18,000 a year all told, for the operation of the Cornwall Canal, and I will show that the average operation for the last seven or eight years has not amounted to such a large figure as I have mentioned, we incurred an additional expenditure-not a complete expenditure-of about $52,000. We undertook to take 250 lights every night in the year for 79 years at 30 cents per light per night, wanted or not wanted, used or not used, in contrast with what we were bound to take under the contract entered into in 1896 by which we were to have :
2,000 candle power in perfect working order at such points and in such numbers as is from time to time deemed necesary by the chief engineer aforesaid running all night when required.
In other words, we could take or not take the light just as we liked and we could take just such a quantity as we saw fit. We bound ourselves also to take four hundred horse-power, wanted or not wanted, for the same period of time at $63 per horse-power. This means that for lighting we have 250 x 365 x 30. making $27,275 ; 400 horse-power at the rate of $63

per horse-power, making $25,200, or a total expenditure for these two items of $52,575 a year. Multiply that by the time to which we are committed'. Mind you that this not only committed us to an additional expenditure for the time to come, that this did not begin at the end of the old contract which had 17 years to run, but it took immediate effect and put upon us that additional burden for 79 years which would represent, if you multiply the $52,575 by 79, $4,153,425. I will not say that that is the fair way of looking at it. We have to borrow money from year to year and if we borrow the money certainly it will not be less than $4,000,000. However, I do not propose to look at it in that way. I have the figures taken from the public accounts to show the expense of operating the Cornwall Canal from year to year and I will give the years as terminating with the 30th June in each ease.
Total
Year.	Expenditure. Lighting.
1896	
$16,128.95	$300.921897	
15,791.68	281.231898	
13,794.89	318.941899	
15,629.44	331.35


Charles Fitzpatrick: What lighting is my hon. friend speaking of?


Haughton Lennox: The lighting of the canal
as given in the Auditor General's Report.


Charles Fitzpatrick: It was not lighted at all at that time.


Haughton Lennox: ciples of responsible government and the safeguard of public audit introduced by the Liberals in 1878. Taking the contract of 1900, I have shown that according to its reading, and according to the account presented by Mr. Davis, it amounts to $52,575 a year. That contract has been changed ; and the present contract, made in 1908, after the Auditor General had protested, after he had called the attention of the government to various matters which requiring further consideration, after he had called attention to the fact that there had been no tenders called for, the Deputy Minister of Railways took it upon himself to say that there should not be even a certificate that the price was fair and just according to the concluding words of section 33. Well, after the Treasury Board had overruled all the objections of the Auditor General, then the government decided to retrace their steps, and we have a new contract changed in some particulars from the old. We have a contract by which for 243 nights in the year 250 lights are to be supplied at 30 cents a light making $18,225 if they are supplied. For 122 nights 100 lights are to be charged for at the same price making $3,300 and 125 horse power instead of 400 horse power at $63, making an annual charge of $7,875 or a total outstanding charge so long as the present condition of things remains, of $29,700, a saving to the country of $22,815 a year or taking it at its present cash value for 79 years, counting money at 3 per cent, a saving to the country of three-quarters of a million practically, or at all avents of $084,450. The Auditor General has shown that he investigated the Soulanges canal and found it to be practically the same, corresponding in all essential particulars with the Cornwall canal. He found that it was similar in the matter of light and expenditure and he obtained engineers to investigate it. Their report was presented to the government and I am at a loss to understand, when the total operating expenses of the Soulanges canal is not more than somewhere between $10,000 and $12,0U0 a year including the interest, that we should be justified in paying $30,000 for practically the same work on the Cornwall canal.


John Graham Haggart: Did you say that included interest on the investment ?


Haughton Lennox: That is the way the Auditor General put it and that is the way the engineer put it. That is the way I understood it. If the Auditor General's figures are correct I would not be satisfied with the $30,000 we are paying under the amended arrangement of 1903.
It is surely a strange proceeding to begin the supply of electric current on the 1st of October. It may be that the government will explain that this is perfectly correct. When the government entered into this contract with Mr. Davis and he was to begin [DOT] Mr. LENNOX.
furnishing the light on May 1st,'it appeared to be all right but it seems to me to have been very unfair to allow Mr. Davis under that contract to begin supplying electric energy on October 1st. It seems also unfair that the people of this country should have to begin to pay this large amount of $63 per horse power, at a season when for four or five months at all events we would not require it. Under the original contract light was to be furnished by the first of May but that condition was altered and finally there was an agreement that instead of furnishing it on the 1st of May it should commence to be furnished on November 15th, 1901. That date is significant as I shall point out later on. Mr. Davis, claimed that light and power were furnished on October 24. It was one of the questions in dispute between the department and the Auditor General, whether as a matter of fact light was turned out on October 24. If we were discussing this question to-night from a political stanpoint I should ask the government to explain how it is that on October 26th, two days after the date at which Mr. Davis says he turned on the electric lights, keeping them continuously in operation until the month of April following, we find the hon. the ex-Minister of Railways and Canals (Mr. Blair) under the authority of an Order in Council, signing an extension of time for the completion of this work until [DOT]November 15th.
At all events until, the loth of November or later, there was not a light supplied by M. T. Davis along the Cornwall canal. I think the conclusion is irresistible. I have not gone into the details of the correspondence and the discussions between the Auditor General and the government, but have simply indicated some of the difficulties existing. Mr. Aylesworth, who was consulted by Mr. McDougall, was of the opinion that the Auditor-General was not legally correct in some of the positions he took. But whether the position which he took was on all points sustainable as matter of law or not, it was a position, in the interests of the country, and upon the merits he justified in taking it. Mr. Aylesworth thought the government was bound by the contract, although no public tender was asked, and although he thought the government should have limited the contract to the number of lights actually in use and the number of horse-power. Having regard, however, to the literal construction of the contract, Mr. Aylesworth thought the government are bound to pay. So far as the argument I am now making is concerned, it does not matter whether they were or not, but let me say that much as I admire Mr. Aylesworth's great ability, 1 am inclined to think that if we look to the initiation of the contract and to the basis upon which it was founded, we cannot come to the conclusion that Mr. Aylesworth is correct in his opinion that the country was bound by the contract entered into in November, 1900. I take this ground,

that when the Minister of Railways, on the 2tith of September, 1900, submitted his memo, to the council, he submitted it too upon the basis of a lease which then was in existence, and which provided that the electric lights should be in perfect working order, to be set at such points and in such numbers as the chief engineer shall deem necessary from time to time, and to run all night whenever required. The minister recommends that he be authorized to enter into a contract with Mr. Davis for the lighting of the canal in pursuance of the lease which then existed, and an Order in Council was made upon the basis of the memo. I have read. Then when the new contract came to be made, it is said that the Minister of Railways and Canals was acting under the authority of the Order in Council dated 9th of October, 1900, as amended by the Order in Council dated 10th October, 1900. And it concluded with those words :
For lighting of the said canal at SO cents per night per light, as by reference io the said indenture will more fully appear, and be it further provided that nothing herein shall be taken to vary, other than as herein specifled or provided any of the provisions of the said indenture.
So that I submit that upon the proper construction of the memo, presented to council and the Order in Council and the contract made in November, 1900, the government never were bound to Mr. Davis, and their proper duty was to have paid him for what he did furnish and put an end to the matter altogether. I do not propose to lay any weight upon the fact that this was entered into on the eve of an election. Politically speaking that may be of significance, but I do not attach any importance to it in the matter with which I am dealing now. I do not attach any great importance to the fact that the Auditor-General claims-whether rightly or wrongly-that at the time this contract was en-! tered into, electric energy was being furnished in Ottawa at $15 per horse power, instead of $63. This matter is not perhaps of great moment in the question I have brought up, but it is all-important that the contract was let without tender at a time when we had upon our statutes a law recuring tenders to be called. I do not think the government will say that by reason of the existing lease, they were preeluded from calling for tenders. That cannot be argued with any degree of force in view of the fact that no work had been done under the arrangement which was entered into in 1896. that it was practically a mere license authorizing Mr. Davis to use the waters of Hoople's creek and get such surplus water ns remained after the government had supplied all that was required for navigation, &c.
137	'


REVISED
[Stage Direction]
Seeing that there was a complete and perfect right of putting an end to that contract any day they liked, seeing that electrical development which has progressed in such a marvellous way had made considerable strides in the years from 1896 to 1900, and was yet in its infancy, and it was not desirable that the government should commit itself rashly where the possibilities were so great of even more wonderful achievement from year to year resulting in lotver-ing the prices-under all these circumstances-the government will hardly claim that they were handicapped or hindered by the terms of the lease of 1896. However, that remains to be seen. I say it is important then, in view of the evidence we have not only in this matter, but in numerous other matters spread over the pages of the Auditor General's Report of preceding years, that we should take steps not only for the improvement of the Audit Act but also for the improvement of the various Acts under which the government let public contracts not only in reference to railways, where some of the greatest abuses have existed, and of canals which are in harmony with the railways in this respect, but in the matter of public works generally. I think it important also that we should consider very carefully the effect of the provisions, or what were intended to be the provisions of the 33rd section. I barely referred to that before. I want to make only one suggestion before I close-for 1 have decided, mainly out of consideration for hon. gentlemen opposite, but also for myself, not to give to-night the other matters I referred to ; perhaps there will be another opportunity to deal with these. I will confine myself to this operation and the others to which X have referred. I had overlooked, in the course of dealing with this question, the matter I particularly wished to present to the government, and that is-assuming that the government are of opinion that there can be and there ought to be some change in regard to the management of the finances of the country-the need that exists for giving some more effective control to the Auditor General or, if not a more effective control to the Auditor General yet, less power to the Treasury Board which is practically the administration. In case the government are of opinion that it is a matter worth considering. I might suggest that something might he done in the direction of committing some matters of the department to a court, say the Exchequer Court or the Supreme Court, not by way of a trial but by way of a reference. just as if matters were referred to the Treasury Board. I anticipate that I may very well be met with the objection : Surely that is the invasion of constitutional government ; are you going to suggest that we should carry on the administration of the affairs of Canada through a legal tribunal ? It does seem to have a very significant hearing upon the argument. I feel that there
edition
[Stage Direction]
may be some force in the argument, but the matter is for the government to consider. I am not as strong an advocate of judges as I used to be. There was a time when I thought we could wisely commit even the distribution of our seats in this House to the judges. I remember I used to argue that when I was young, up in the country. But I do not think so now.
Charles Fitzpatrick: But there is a good time coming.


Haughton Lennox: Well, of course, it goes "without saying that I would rather depend upon the Conservatives in power. But I would infinitely rather depend upon the present administration or any administration, than' upon judges in matters of that kind. But, yet, in this matter, which, probably, does not involve a question of political expediency or policy, which pertains to a matter of detail to a large extent very often involves a very nice question of law, and, as a matter of executive administration, I am not sure at all that that might not be a line which could profitably be pursued. I make the suggestion so that the government may consider the matter ; or, if the matter gets to committee, the committee will have it before them and it will come up for further consideration. Now, I think I am right in assuming from what I have shown that there is a necessity for reconsidering this question. And I am strongly in favour- every man in this House is entitled to his own opinion-of enlarging to some extent the powers of the Auditor General. I am not speaking of the present officer particularly. I have a great deal of faith in him. I have so much faith in him that I would like to see the Auditor General who is in office to-day or any succeeding Auditor General receive a much larger salary than he receives. I think we should give our Auditor General a large salary, and that that salary should command the service of the best man of that class in the country, the class whose minds run in the direction of finances. I am in favour of extending the power of the Auditor General, but more particularly of defining clearly the limits of the powers of the Auditor General and of those with whom he comes in contact and to give to the public ready, prompt, and complete information from time to time of what is transpiring between the government and this official. The more you extend the power of the Auditor General in the hands of a suitable man,-within reasonable limits- the more satisfactory will be the management of the money of the country and the more satisfactory account will the administration be able to present to the people of the country.
I am convinced that many times departmental matters are put through by a department which the government, as a whole, probably would rather had not gone through, Mr. LENNOX.
but the government has to take the responsibility of them as a whole. I believe that the trend is towards the enlargement of the powers of officials standing in this relation to the government. I have inquired in reference to France and Germany, and have not been able to get the information ; and therefore, like the Minister of Justice, 1 won't try to talk about a thing that I know nothing about. In regard to the United States, I have looked over a consolidation of their statutes, and it appears to me that they manage this matter in a way that might be beneficially considered in Canada. I do not think we should take our methods from the United States, but we need not hesitate to look anywhere for suggestions. I understand from reading their statutes that they have six auditors and two comptrollers. The chief controller appears to have a staff of officials, for instance, engineers and architects whom he brings to his service from time to time for the purpose of acquainting him with what is going on, and giving him correct estimates. We might find that unduly expensive in our j case. But the controller of customs also .has the right to say whether an account shall be passed, and he can at any time, within a year after it has been investigated by his subordinates, that is by the auditors, finally determine the matter himself, and this binds the executive department. In addition to that, it appears that after that remedy has been adopted by the controller, it is for the individual who is affected, the contractor, to bring the matter intr>
the courts to have it determined. If the United States is entitled to -a verdict, then the controller is justified, if not, he is overruled by the courts.
I will refer to only one other country which can give us any basis upon which to form an opinion, except such circumstances as exist within our own country. I find that so far as I can judge, the tendency in England is to extend the powers of the Auditor General. I understand from reading occasional reports that the Auditor General seems to have been inclined to extend his powers. In the report of the Select Committee on National Expenditure last yeat'7 1 find on page 4, section 2, this statement :
Under the Exchequer and Audit Act of 1866 this officer (who is completely independent of all departments, including the Treasury, and whose tenure of office is similar to that of a judge), was appointed not only to see that no money was issued without .authomy, hut also to examine on behalf of the House if Commons the accounts of the expenditure of the grants in supply, and to report to parliament.
That is a pretty broad proposition in itself. Absolutely independent of all departments, including the treasury, tenure of office similar to that of a judge, and who is appointed to see that no money is issued without authority. Now if that is to be taken lit-

erally, that no money is to be issued without the authority of the Auditor General, then we need not ask for anything more.
The Comptroller and Auditor General in examination before us sticad that he conceived his functions to go beyond mere audit, and that encouraged by the Public Accounts Committee he entered also into the merits of expenditure.
That is what our Auditor General did upon the occasion to which I have referred.
Your committee consider that this retrospective examination, both by the Comptroller and Auditor General and by the Public Accounts Committee, has been well done, and they recommend the Public Accounts Committee, even more than in the past, to encourage the Comptroller and Auditor General to scrutinize and criticise improper or wasteful expenditure, and to indicate where censure is in his opinion required.
It appears therefore that there is a tendency in England to enlarge rather than to curtail the powers of the Auditor General. Now I desire to read the 33rd section of our Audit Act for the benefit of those persons who may not have access to it. It is of great importance :
No payment shall be authorized by the Auditor General in respect of work performed, or material supplied, by any person in connection with any part of the public service of Canada, unless, in addition to any other voucher or certificate which is required in that behalf, the officer under whose special charge such part of the public service is, certifies that such work has been performed, or such material is supplied as the case may be and that the price charged is according to the contract, or, if not covered by a contract, is fair and just.
This was a matter upon which the late Mr. Mackenzie was more pronounced than upon any other. He foresaw, apparently, the difficulties that have arisen, namely, the conflicting questions that arise in regard to extras, and he intended by this section as it now stands to put an end to the question of extras. He said that he had an invincible repugnance to the word ' extras ', and that he would consent to amend the section, which was then the 34th section as it was proposed, and which was much looser than it is now, and he would consent to have it include, as section 33 does now, a provision that the price charged is according to contract, or, if not covered by contract, then there must be a certificate of the officer in charge that the prices were fair and just.


Wilfrid Laurier: Though the hon. gentleman (Mr. Lennox) has done me the honour to request me to name the committee which he has proposed to the House, I am sorry to say I do not think I can avail myself of his courtesy nor do I believe that my hon. friend has made out a case for the appointment of such a committee as he contemplates by this motion. My hon. friend's motion states that he wants a committee :
137i
To prepare and introduce a Bill to consolidate and amend the Acts respecting the public revenue, the control and administration of public moneys, the raising of loans authorized by parliament, and the auditing of the public accounts.
I did not observe from the remarks of my hon. friend that he stated anything in regard to the raising of loans authorized by parliament. The speech in which he dealt with the motion was sufficiently comprehensive of itself to perhaps make him leave aside that question which, however, he thought it advisable to introduce in his motion. I cannot see that the hon. gentleman gave us any reason at the present time even to consider what amendment could be devised to the Act which exists to-day for the raising of loans authorized by parliament. Then, I do not remember having heard anything from my hon. friend suggesting the necessity of revising the statutes in regard to the public revenue. I cannot see in that direction what parliament could do more than we have done up to the present time. The levying of the public revenue is controlled by parliament under the direction of the Minister of Finance who delivers his budget speech every year and suggests to the House what is necessary and the sources from which the revenue is to be levied. But, my hon. friend, concentrated his remarks upon the control and administration of the public moneys and upon those points it will be sufficient to follow him. My hon. friend stated that the Audit Act had been on the statute-books since 1878 and that it ought to be revised and amended. The first reason which he gave in favour of amending the Audit Act was that it has existed with very little alteration, if any, since 1878 and that it is now somewhat antiquated. He says that it has been in existence for twenty-six years, or rather, as he said, for nearly forty years since it is a copy of the English Act which has been in existence since 1866. The fact that the Act is forty years old is certainly not of itself a reason why we should endeavour to amend it or think of amending it unless some further and sufficient reason for amending it is presented. My hon. friend stated that the revenue had more than doubled since the Act was put on the statute-book. So it has.


Haughton Lennox: And so has the expenditure.


Wilfrid Laurier: I do not think that this fact militates against the disposition of the Act itself. In so far as I understand the matter I think the principle and details of the Act are quite sufficient to take care of the present revenue and of a revenue much larger. If there were any evidence required of that we would have it in the fact that our Act is copied from the English Act and the English Act has been found sufficient to deal with a revenue ten times greater than our own. It may be true that

the tendency to-day is to enlarge the power of the Auditor General, but it has not been found in practice, and if the tendency is in that direction, a statement which I am not prepared either to affirm or deny, all X have to observe to my hon. friend is that that tendency has not been crystallized into an Act of parliament, so that if it be the tendency there is a contrary disposition to leave his power where they are. Therefore all these reasons have no practical value In my judgment. But, my hon. friend has based the better part of his argument upon sections 32 and 33 of the Act. He thinks that under section 32, subsection (c), of the Act the powers of the Auditor General are not broad enough and that they should be extended. Well, the powers of the Auditor General under section 32 are that if an appropriation is asked for any expenditure it is for him to give his opinion to the government whether this appropriation has been voted by parliament and whether it is an expenditure which ought to be incurred and for which there is authority. When he has done that he has exhausted his authority. His opinion is submitted to the Treasury Board and is passed on by the Treasury Board which is simply a sub-committee of council itself. Oases may arise, as they have arisen more than once during the twenty-six years that the Act has been in operation, where the Auditor General will be of the opinion that an expenditure is not authorized by parliament, that it has not been voted, that it does not come within the purview of the appropriation because all the power that the Auditor General has is to say whether or not the appropriation that is asked from him is authorized by law. When he has done that and when he has come to the conclusion, for instance, as many times it will be the case that the appropriation which is asked by any of the departments of government is not justified or is not authorized, there must be some authority to decide whether he is right or wrong and what authority has to do that ? The only authority in my estimation, and I think it is the only authority in the estimation of my hon. friend, is parliament, which will sit in judgment not only upon the Auditor General but upon the Treasury Board and upon the government. After the opinion of the Auditor General has been given it goes to the Treasury Board and the opinion of the Auditor General may be sanctioned or it may be rejected. If it is sanctioned the matter is ended there. If it is rejected there comes into operation all the check which is intended by parliament not only in this country but in Great Britain ; that is to say that then the Auditor General has power to constitute parliament a court of appeal to decide between him and the government. It is true that the payment may have been made in the meantime and will have been made, but if the payment had not been made in the meantime it might be


Wilfrid Laurier: that, the whole power of the government might be blocked, it might be that the whole administration of the government might be blocked, and therefore it has been thought proper in the judgment of the British parliament, as it has been thought proper also in the judgment of the Canadian parliament, that under such circumstances the administration should have the final word taking of course the responsibility of it and having to abide the judgment of parliament. My hon. friend has stated and stated truly that the reports of the Auditor General have been filled year after year with a diversion of opinion between him and the administration, but if that is the case he has it in his power to make any report he wants to make and to make it as strong as he pleases. There is no authority over him, there is no control, he is absolutely independent. He has the power to make the case as strong as possible and to bring it to the attention of parliament which is the court of appeal to decide between him and the government. I do not think that any more salutary check could be placed upon the administration of public moneys in any country.


James Clancy: This check only comes after the harm is done.
Sir WILFRID LAURIER, Yes, but the harm can be undone by parliament, which can censure the government for haying acted contrary to the opinion of the Auditor General, and that is the only possible solution of the difficulty. If the Auditor General had power to do as he liked, without any control over him. doss the hon. gentleman (Mr. Lennox) deny that the consequences might be to stop the wheels of government. For instance, last year the Auditor General had the opinion at one time, that he could deprive the members of parliament of their indemnity. He -was right or he was wrong ; but members of parliament were not slow to complain that he was wrong, or, that if he were right, then, some means should be found to solve the difficulty. There may be civil servants or contractors to whom the government owes1 money, and there must be some power to decide as to whether they shall be paid or not. It seems to me that the proper authority to decide in such a case is the body which is intrusted by parliament to administer the affairs of the nation. If they go wrong, then they are responsible to parliament and it is for parliament Jo decide upon their conduct. If this is not a sound principle, then all our formalities of government are useless, and we had better have something like they have in Russia and make the Auditor General himself the omnipotent adviser as to when and where payments are to be made. For my part, I think there is in England more political wisdom in matters of government

than in any other country in the world. I do not believe there is a country under the sun where the principles of responsible government are so well understood and; practiced as in England, and I may point out that our Audit Act is copied word for word from the Act in force in England. Although my hon. friend (Mr. Lennox) declared that the powers of the Auditor General should be supplemented in some way. I noticed that he was careful not to mention any one particular in which they should be supplemented.


Haughton Lennox: I merely asked for a committee, and I realize that it would come with poor grace from me to lay down rules as to what should be done by that committee. I did throw out some suggestions, very few, but my chief object was to get this committee appointed and leave it to them to decide.


Wilfrid Laurier: I did uot expect that my hon. friend' would lay down any cast iron rules, but we had the right to expect that he would not remain absolutely silent as to the reasons which he would indicate for the consideration of the committee. The hon. gentleman thinks that the Treasury Board has too great power over the Auditor General, and he thinks that once the Auditor General has given an opinion that he ought not pay any appropriation that is asked for by a department, the Auditor General's opinion should not be revised by the Treasury Board. But the hon. gentleman (Mr. Lennox) has uot told us by what authority the Auditor General's opinion should be revised, nor whether the Auditor General's opinion should be final. For my part I do not think we should appoint a committee, for I do not believe that any better arrangement can be found than the one provided for now in the Audit Act.
Perhaps my hon. friend will pardon me for saying that it is my opinion that everything he has said with regard to the powers of the Auditor General, and with regard to the necessity of this committee, was merely a preface to the discussion of the Davis contract. I shall not pretend to discuss the Davis contract in detail, but I may be permitted1 to give the hon. gentleman my opinion as to its general outlines. The hon. gentleman complains that when we made the contract of 1900, we did not ask for tenders, but the hon. gentleman knows that the second contract of 1900, be it wise or unwise, was simply a completion of and implementing of the contract of 1896. I understand that my hon. friend (Mr. Lennox) has no very serious objection to the contract of 1896. He called it a prudent contract, and in many ways I am disposed to agree with him. It provided that Mr. M. P. Davis was to furnish electric light and electric power to work the machinery on the canal.
It provided a price at which that was to be done. The hon. gentleman (Mr. Lennox) says that that was a prudent contract, and it being a prudent contract the new government coming into office could not have done better than to have accepted it. The hon. gentleman (Mr, Lennox) cannot seriously complain then that we did not ask for tenders to light the Cornwall canal, when we had a contract already made between Mr. Davis and the government for lighting that canal. In fact we were precluded from calling for tenders. Let us go further, if the contract of 1896 was prudent, was the contract of 1900 imprudent ? It was provided in the contract of 1896 that Mr. Davis was to develop electric power, and having developed it. he was to supply the Cornwall canal with electricity and with motive power for working the machinery of the canal. It was provided that the price should be thirty cents per light per night, and $63 per annum per horse-power.
In 1900, Mr. Davis wanted to implement his contract. He was then in the process of developing the power as therefore ready to supply the lights to the government and to furnish the horse-power for the Cornwall canal. But before he finally put in his apparatus it was indispensable for him to know the quantity of light and the number of horse-power required. My hon. friend (Mr. Lennox) will agree with this. Mr. Davis could not put up t'he plant, he could not put up his machinery, he could not take a step to fulfil his contract until he knew exactly the maximum of light and the maximum horse-power that would be needed. He would not have the same plant to supply a maximum of fifty lights as to supply a maximum of 250 lights : he would not instal the same plant for 100 horse-power as he would if he had to furnish 400 horse-power, and therefore it became necessary that the chief engineer of railway department should determine the amount of power and light required and to form a contract accordingly. Thus was made the contract of 1900 which provided that there should be a maximum of 250 lights and a maximum of 400 horse-power to work the machinery of the canal. My hon. friend does not state that these figures are in any way exaggerated. It has been shown beyond doubt in the record that these figures were not exaggerated, but my hon. friend says : You are paying for light which was supplied in winter when there was no necessity for it. The answer is very obvious. When Mr. Davis had put up this plant it did not matter to him in the least whether the canal was lit or not lit, because the moment he had installed his plant upon the Cornwall canal, that plant being moved by machinery, it was of no consequence to him, as has been abundantly 1 proved, whether the lights were used or not:

the eost was the same and all the time the same. Therefore all of the argument made by my hon. friend is beside the point and does not apply in this matter.
Let me call the attention of the committee to the reports of the experts in reference to the examination and it will be seen that it disposes of three-quarters of my hon. friend's argument. The experts say :
In an electric plant where the motive power is water, the cost of operating is practically the same whether the plant carries a -load or not. It follows that the price of electrical energy cannot reasonably be based on energy supplied, but must in whole or in a large part take into consideration the capacity of machinery at the disposal of the service.
Therefore, Sir. it matters not whether the machinery which had been placed there to supply a maximum of 250 lights, which it is admitted is necessary in summer, was operated in winter or not, the expenditure was the same for the contractor, and it had to be paid. Everything was based on the value of the plant installed by the contractor :
The machinery and station capacity placed at the disposal of the government for this service does not depend on the number of arc lamps in actual service, but is entirely fixed by the maximum number called for at any one time.
Although the energy consumed may vary, the generating plant capacity is1 not changed. Moreover the energy available, but not supplied, cannot be sold to any other party, for systems at present employed to do this service keep a constant draught of current independently of the lights in use. The station operating expenses are not changed, the only possible difference would be in the cost of carbons, trimming and care of the lamps, which would not amount to more than $200 to $300 per year.
This disposes I think altogether of all the objections made by my hon. friend (Mr. Lennox).


Haughton Lennox: I do not think so. If my right hon. friend will permit me, the objection I take is this. How is it explained. when the government had committed themselves to a $52,000 expenditure that within a year or two afterwards, they could make a new contract and cut off a matter of $22,000 a year ?


Wilfrid Laurier: I can give the explanation very easily. I was simply justifying the contract of 1000 upon the fact that that expenditure had to be calculated upon the amount of energy necessary to furnish the light and to move the machinery. The Auditor General objected to this and the Treasury Board overruled him, and I think I was right in saying that the Treasury Board was acting within its rights because the Auditor General, even in the opinion of the legal gentleman whom he con-Sir WILFRID LAURIER.
suited, Mr. Aylesworth, was altogether wrong legally, and if he was wrong legally, the Treasury Board was right in overruling him. But after the Treasury Board had overruled the Auditor General the matter was taken up again. He had done what was suggested by the report of the Committee on Finance which was quoted a moment ago by my hon. friend. He had gone into the merits of this contract and the objections which he had made, the reasoning which he advanced, and the views which he had set forth were such as made it appear to the government that it was advisable to have the contract investigated by experts, and this is what was found, this is the reason we modified the contract. There is no alteration at all in the number of lights required ; it was stated and was found that the maximum of 250 lights was right. But, Sir, it happened also that the government Department of Railways and Canals have not yet installed all the machinery to move the weirs, locks and bridges and therefore, the amount of energy. 400 horse-power was not required at that time. It will be required later on, in fact 435 horse-power will he required when all the machinery has been installed. We therefore decided that since all the machinery was not installed and since 400 horse-power was not necessary at this moment, hut only 125 horse-power, that we would pay only for 125 horse-power. Let me call my hon. friend's attention to this fact which is very plainly set forth in the new contract :
Upon the present installation being added to or increased, pursuant to such requisitions, payment therefor shall be computed and made as follows :-the present installation, requiring for efficient operation a line load estimated at one hundred and eleven horse-power, is taken, for the purpose of this agreement (with allowances for extra line load, at one hundred and [DOT]twenty-five horse-powers, and shall form the basis of computation. The additional installation, according to capacity, shall be estimated on the same ratio of line load (with the same ratio of allowances for extra line load), -the proportion of the capacity of the present installation to one hundred and twenty-five being always adhered to in the result.
This is the reason why we modified the contract which we had made. My hon. friend stated that there was quite a difference in the cost to the government of the lighting and the supply of energy for the Cornwall and Soulanges canals. My hon. friend is altogether wrong in this. In the Cornwall canal he has taken notice only of the actual salaries, and has taken no notice of the wear and tear nor of the interest on the capital supplied. My hon. friend (Mr. Lennox) makes comparison between the present expenditure of the government for lighting and the expenditure for that purpose when the canal was lighted with coal oil. If my hon. friend is ready

to blame the government for having substituted electricity for coal oil, we are prepared to take the blame, but I do not think that those who use the canal will take the same view as he does. For my part I give credit to the late Minister of Railways (Mr. Haggart) for having been the first to introduce the system of lighting our canals by electricity. Not only should we have our canals lit by electricity, but I hope to see the St. Lawrence all the way down lit in this way, and then navigation will be much more safe than it has been.


John Graham Haggart: At this late hour I shall not make any very lengthy remarks. As regards the motion of my hon. friend (Mr. Lennox), I had a good deal of experience, when I was Minister of Railways, with the present Auditor General. He has powers equal to those given to any Auditor General in any country I kuow of. Let him have all the possible powers he can desire to draw the attention of the country to any anomaly or wrong there may be in the government accounts, and I have no objection, but the idea of making him the arbiter and sole judge as to the expenditure of the country is another question altogether. Our public expenditure is a matter in which the government must rule. Whether the government administer affairs wisely or badly, the country has given them that power and has not given it to the Auditor General. The proposition of my hon. friend is to give the Auditor General the power of judging whether an expenditure has been properly voted by parliament or not, and to take from the government, after he has expressed his opinion, the power of overruling him. It would be impossible to carry on the government if any such rule were established. Let us by all means have a true and faithful audit ; and where there is any wrong done by the government, let the Auditor General report upon it and draw attention to it in the fullest possible manner, and goodness knows he exercises that power to the fullest extent.
I have said enough upon that point, and I intend to make some remarks, which must necessarily be brief, on the other question raised. I do not wish to adjourn the debate, because we may not have another opportunity of reaching the motion again this session. In the matter of leasing water powers upon the canals, what is the system which has been adopted ever since we have had a government ? It is this. We first get a report from the department as to the value of the horse-power in any particular canal. If the energy or power is at the disposition of the government, we first fix a price per horse-power. Then it is the duty of the minister to see that the horsepower is utilized for the development of the particular section of the country in which the canal is situated. That has been the
rule hitherto followed on all the canals. I have never heard of any horse-power or of any power on any canal being offered to public competition. That was the plan, adopted on the Cornwall canal. It was necessary, on account of the erection of the Shiek's Island dam, that a waste weir should be built for the purpose of letting-the water out of the dam in qase of repairs. At the end of that, there was the possibility of energy being utilized for the purpose of electric lighting or other purposes. What I wish the government to do is this. I would ask it to bring down all the documents in the office of Railways and Canals and to give the names of the parties who have applied for that particular power. I would like to have the dates of the applications, &c., the report of the deputy minister and the minister regarding the value of the power. I want also the report in reference to the leasjng of this particular work and the price that ought to be paid for the lights on the canal. To my own knowledge I ordered the deputy minister to inquire into the prices that were paid in the different cities in Canada, particularly Ottawa and places where there was plenty of waterpower available ; and the prices which he recomended us to pay is the lowest that was known in Canada at that date. I also instructed him to inquire what was the value per horse-power of the energy required for the purpose of working the different gates and the swings of the different bridges. As my right hon. friend has said, I was the first in Canada to decide upon lighting the canals by electricity, generated by water-powers along the canal, and to use the electric power for the purpose of opening and shutting the gates and swinging the bridges. There was not at that time in Canada any electric energy, that I know of, generated by water-power, sold by the horsepower. I asked the deputy minister of Railways to report as to the value, and he based the value upon what power could have been generated by the actual use of a particular work. He arrived at $63 per horse-power, and his report showed that instead of 400" horse-power being required to open and shut the gates, 50 would be all that was necessary. The newspapers are giving importance to the fact that this bargain was made on the eve of an election, that the price was an exorbitant one, that the price now paid in the city of Ottawa is $15 per horse-power. There is a report, it is true, in the Auditor General's Report, which shows that the bargain I made was a fair bargain at the time. No person would erect a plant, such as was proposed, down there for the purpose of generating power, if it was only 50 horse-power which was required. The price agreed on was $63, which the experts in my department recommended as a fair price." The price paid for lighting the canal was the lowest paid for arc lighting in any

part of Canada. The water used for this particular work was taken from the summit level of the canal and might have interfered with those who had powers below; and I made the condition that if it interfered with navigation or -works operated below or any works to be hereafter erected, the government would have the right of stoppage.
The only right given to the agent was this -the right to deepen Hoople's creek to take into the level of the Cornwall canal sufficient water for the undertaking that he proposed and the development of this energy for electrical purposes. He had a perfect right to that. The only question is were the government receiving a fair price as compensation for the privileges they gave him? I say they were receiving a fair price, larger price per horse-power than was given for any undertaking on the Lachine, Welland or Cornwall canals. There were no exceptional advantages given to Mr. Davis. I do not think that Mr. Davis was an applicant in the first place, but that he acquired the right from some other person ; or, at least, that some other person joined with him in making application. I do not remember the circumstances, but I know that the contract had nothing to do with an election. What I want to get from the department is when the application was entertained. It strikes me that it was in 1894 and was entertained in 1895 and that the Order in Council was passed on the 17th of February, 1896. I would like the memorandum to Council, which, I think, was 7th February, 1896. The Order in Council a few days before election did not alter the order of 17th February one bit, except that the description of the land in the memorandum, if I remember aright, was larger in extent than in the Order in Council of June 23rd or June 22nd or whatever the date was. The only change was to restrict the area of land to be granted to carry on the undertaking. So that the lease was founded, not on an order passed a few days before an election, but on an order passed on the 17th of February and a memorandum of 7th February, and a bargain made months-yes, I venture to say a year-before. Yet the Auditor General draws the attention of the people to the extraordinary coincidence that this was done on the eve of an election.


Haughton Lennox: Who says that ?


John Graham Haggart: The Auditor General. He speaks of it as a remarkable coincidence that the Order in Council was passed a few days before an election and the lease a couple of days afterwards, and also that the changes made by hon. gentlemen opposite were during an election. The facts are as I have given them; and an election had nothing to do with the matter. The result of an election may have done something to hasten the signing of the lease. After an election, the head of the department may change. In view of that, what is done ? The minister Mr. HAGGART.
sees to it that every bit of the work in the department is cleared up, if it can be cleared up. If he has made promises for senator-ships he tries to get the Order in Council through which is to carry the amount. In this case the Order in Council has been passed that there was nothing to do but sign the lease. It was simply an item in the back-work of the department, and was carried out by the minister and was brought over to the council to receive consent. And this is the scandal that some of the newspapers say is greater than the Pacific scandal-a greater scandal than has exercised the people for a number of years past. I do not know what hon. gentlemen oxiposite have done ; I am only defending what took place in my own time. It was a simple transaction and perfectly justifiable. As to the figures, I could not follow my hon. friend (Mr. Lennox's) figures very well, but they seemed a little confused in reference to the Soulanges canal.


Haughton Lennox: I am sure that the hon. gentleman (Mr. Haggart) will find the figures perfectly correct. He can go over them any time he likes.


John Graham Haggart: I think I can show they are not correct.


Haughton Lennox: Then do so.


John Graham Haggart: The cost of the installation on the Soulanges canal is given on the authority of Mr. Hoffmeister, resident engineer of the Canadian General Electric Company on the Soulanges canal, at $197.000 ; then for lighting the canal and operating all the lock gates, sluice gates and highway bridges by electrical energy, $160,000. The electrical energy which Mr. Davis supplies according to Mr. McDougall's statements amounts to $15,800 a year. But if the hon. gentleman (Mr. Lennox) will look at the preceding part of it he will find the cost of operating it by this gentleman's estimate is $10,000 a year. The cost of the plant was, approximately $225,000 with contingencies and items that might be under-estimated, making an addition of $33,750 was $258,750.


Haughton Lennox: That is the Cornwall canal.


John Graham Haggart: Yes. And the cost of operating, if ail the plant ran continuously would exceed $10,000 a year.


Haughton Lennox: I did not mention that at all.	.


John Graham Haggart: Then what would be the value of that ? Say 12 per cent for depreciation and interest-that would be nearly $30,000 alone and after that $10,000 for operating, and you have $40,000 a year.


Haughton Lennox: The hon. gentleman (Mr. Haggart) seems to think Mr. Davis is losing by it.


John Graham Haggart: He is not making much, if the cost is as this gentleman states.

According to the report from Mr. Keefer, the engineer employed by the Auditor General to report upon the value of the property, the cost is $225,000, with addition for contingencies and items under-estimated $33,750 or a total of $258,750.


Haughton Lennox: The Soulanges canal, which is the only one I mentioned, cost $190,000.


John Graham Haggart: Call it $200,000 and allow 12 per cent-


Haughton Lennox: We count it at 8 per cent.


John Graham Haggart: But surely you allow for depreciation in the value of the plant of eight or ten per cent. The cost, according to the hon. gentleman, is $200,000 ; 10 per cent on that is $20,000 as the cost of operating the plant, which is $5,000 less than the Auditor General makes it. I do not wish to go into the details, as I suppose all the papers will be contained in the report when it is brought down. I want, first of all, the memorandum from myself, or whoever was minister at the time. I do not know whether 1 made a memorandum or not, I mean the memorandum to Council of the 7th of February, on which the Order in Council was passed. Then I want the Order in Council of the 23rd of June, and all applications in the department in reference to this particular work, and particularly the report of the deputy head of the department as to the value of the lighting and horse-power, and as to the value which I ought to attach to the water power which was leased to Mr. Davis.


Charles Fitzpatrick: I will follow the example of those who preceded me, and be brief, taking up the facts in their chronological order. On the Sth of February, 1896, the then Minister of Railways and Canals made a memorandum to Council recommending that authority be given to lease to Mr. M. P. Davis a certain amount of land in the immediate vicinity of the Cornwall canal- the description of the land is in the memorandum here-and, in addition, a ter-tain quality of water power. That memorandum, dated on the Sth of February, 1896. was adopted by Council on the 18th of February, 1896, on which day an Order in Council passed authorizing the leasing of this land and of this water power. On the 2oth of June, 1896, a lease was passed which was merely for the purpose of giving effect to that which had been decided on the 18tli of February, 1896. Now, what is the lease ? The lease is to be found on page 6 of the Auditor General's Report, and refers to a lot of land at the lower end of Sheik's island. I will not read that. That which is important is contained in the next paragraph, and that paragraph is of such importance that I will read a certain portion of it :
And as pursuant to the said lot of land, and subject to the restrictions, reservations and
conditions contained, described and expressed herein and in the annexed general terms and conditions, the lessor has granted, demised and leased, and by these presents does grant, demise and lease to the lessee, the use for manufacturing and mechanical purposes, as hereinafter set forth,

I would like to draw the attention of the House to what I am now going to say, because I want the House to understand what was given to Mr. Davis. What was given to him was the use of-
-so much of the surplus water, if any, on lot number 30 level, Cornwall canal, as the lessor may deem advisable, after navigation and existing mills and mill sites hereinafter to he leased, are supplied

He is to get the surplus water, whatever it may be, that is left after all the necessities of navigation are complied with, after all the mills then in existence have been satisfied, and after all the mills to be built hereafter on all the mill sites are satisfied with water-he gets what is left. That is the contract, that is the lease.
-and the lessee shall also have the privilege of using, at a weir hereafter to be constructed by him, on or adjacent to the land hereby demised and as shown on the plan hereunto annexed, for the purpose of power, the amount of water flowing and to flow into the said canal from Hoople's creek, and any increased flow of water into the said canal from the said creek through any works hereafter to be constructed by the lessee.
The next clause provides for the term of the lease. The clause which has reference to that reads as follows :
The privileges, rights and easements are granted for a term of tw'enty-one years from and after the 1st day of July, 1896, and ended on the 1st day of July, 1917, and thereafter for a term or period of twenty-one years, renewable as is provided and mentioned in the annexed general terms and conditions.
Now, an attempt has been made designedly to lead the public astray with reference to the condtions of this lease. It has been falsely stated to the public that the original lease had in contemplation a lease for twenty-one years. As a matter of fact, the original lease had in contemplation, not only by the terms I mentioned last, but also by the terms governing all leases to which reference is made in this, an extension of that lease to 1980, or for eighty-four years. That is the term of the original lease. Then, in addition, you have got the power leased, you have got the object of the lease, you have got the term of the lease-eighty-four years -and you have got all that is necessary to constitute a lease of the power to Mr. Diavis. But in connection with that lease there is a reservation, that is to say, the government provide that while they give that power to Mr. Davis on the terms I have indicated, for a rental of $1,000 a year, for the period I have mentioned, he is then obliged to sup-

ply them with power for the purposes of the canal, to move the locks, gates, sluices, and so forth, and also for the erection of a lighting power for the canal. That is the reservation of the lease. The lease provides also :
That the lessee shall supply electric power to the satisfaction of the chief engineer of Railways and Canals for the working of all the locks on the Cornwall canal at $63 per horse-power per annum.
That is the price fixed in the original document. Then it goes on to say that in addi tion to that he shall supply and work electric arc lights of not less than 2,000 candle power, in perfect working order, at such points and in such number as shall, from time to time, be deemed necessary by the chief engineer. So he is obliged to supply power, he is obliged to supply light to an extent that may be ordered by the chief engineer. Then you have got this extraordinary provision in this document to the effect that, not only in the case of failure on his part to perform any of the conditions of the lease the whole thing is forfeited to the Crown, but also that at any time after he has made his expenditures the government may turn around and, after giving Mr. Davis a year's notice, take over the whole lousiness from him-his plant, machinery, everything, paying him for it the then value with 5 per cent added. They have at any time the right to enter into possession of the whole thing, take it all out of his hands. That is the original contract. My hon. friend spoke of that contract as having met yvith the disapprobation of the Auditor Gen-"eral.
That is quite true. The Auditor General, dealing with this matter, found it necessary to criticise everything. He starts out with criticising the original contract and suggests all sorts of sinister motives in connection with the making of it. On the 29th of May, 1902, the Auditor General, at page 19 of his report, says that this contract is defective because it does not make proper provision for the payment of the price foi; the light. Then he goes on to say that the letting of this contract is a violation of the Act, 49 Vic., chap. 37, which provides for inviting public tenders in letting contracts of this sort. I do not require to deal with that part of the question because my hon. friend from Lanark (Mr. Haggart) has dealt with it. I venture to say, however, that there have been hundreds and hundreds if not thousands of contracts for leases of water powers made in this country, there was one made within the last few days, and it has never been suggested that these leases of water powers should come under the public works Act.


Haughton Lennox: Does the hon. gentleman understand me to advance the idea that leases should not be made without tender V


Charles Fitzpatrick: 


Charles Fitzpatrick: I never would have accused my hon. friend of having harboured such a thought. I am dealing with the position of the Auditor General. Then, at page 20 of the Auditor General's Report, I find a letter dated the 4th June. 1902, in which he deals again with the original contract. He says :
Apart from the very manifest principle which should hold in such cases, that the country should be protected from applicants getting prices at their own dictation, there are two Acts, viz. : The Audit Act, section 33, and the Act with reference to the Department of Railways, section 11, which seem to have been disregarded.
Then at page 25 he deals with the same contract. He says :
Then I may call your attention to the rather singular fact that there were two arrangements in connection with the matter : the first was made 11 days before the election of June 23, 1896.	.
Of course, he is out there because the contract bears date the 25th of June, two days after. But he is so anxious to find fault that he says the contract was made on the 23rd of June, 1896, and of course he suggests all sorts of improper motives on the part of those who made the contract. The Auditor General deals with it again at page 26 of his report. He says :
It must be forgotten that in addition to the $51,000 a year, Mr. Davis also has the right to all rental which the water power will bring.
Then again at page 29 he discusses it in these words :
The government in 1896 might, it seems to me, have'kept in view the fact that the first-class water power which was being leased to Mr. Davis should have been held by the government until a lessee was found who would have accorded the government power and light on the most favourable terms,
Now I am done with that part of his criticism. But, what do we find at page 35 7 Hon. gentlemen who have followed me in whit I have said will recollect that portion of his criticism in which he states that this contract was made on the eve of an election. What does he say at page 35 of his report '! Under date of October 11, 1902, he says :
Bear in mind that the present Deputy Minister of Railways and Canals was in office when the agreement of 1896 was made, that he presumably was either the author of the carefully prepared agreement of 1896, the one which so fully guards all the public interests by providing against a successful claim by the contractor, for either electric light or energy, the use of which is not obtained by the public.
There you have the Auditor General's views as expressed in his own report in reference to this contract at these different dates. But that is not all. Let us take the opinions of the experts who were selected with the approval of the Auditor General to

deal with this matter. You have Mr. Herdt, who is a professor at McGill College, Montreal, and who from a technical standpoint is one of the most competent electrical engineers in the country. You have also Mr.l Dion Who is at the top of his profession and Mr. Parke, of Toronto. I find, at page 45 of the report, that they say :
We are of the opinion that-for the time (1896) and the service to he rendered, namely, to supply power for 24 hours per day in small units, and to furnish lamps and light them, the whole scattered over a course covering many miles-the prices to be paid were reasonable. It has been possible since, under certain conditions, mode of delivery, &c., and in very large quantities, to sell power ajt comparatively low rates, but the lease must be judged from the conditions prevailing at the time it was made and what might reasonably be expected as to the future from the data at hand.
That Is as to the price. Then they go on to deal with the time which the lease had to run and they say :
Under the lease the lessee was required to construct costly works, and it was necessary to have it cover a long period of time.
So, yon have the justification in so far as these gentlemen are concerned for the price paid and for the period during which the lease was to run. Now that is the contract of which the Auditor General speaks ill such high terms of praise at page 35 of his report and which is approved of by the engineers whose names I gave a moment ago. 1 say now, that, dealing with the contract made in 1896, and of which the Auditor General speaks in such high terms, that not a single line of that contract, not a single word of that contract has been changed by the present government. It remains in the condition in which it was and there has been no departure from it to the slightest extent. It has been suggested that the renewal of that contract for 21 years is provided for by the contract of 1900. Nothing of the sort. It was provided for by the original contract, wisely and properly provided i'or, because there is a clause in the original contract which enables the government at any time to step in and take possession ot the whole work paying the contractor merely the then value of the work which they take over. What was done by the second contract of 1900 ? By the second contract ot 1900, provision was made merely for the number of lights to be used on the canal and for the amount of horse-power which was required in connection with the working ot the gates, locks, weirs and so on. As I said a moment ago this was provided for in the original contract of 1896, which also provided that the engineer of the government, should, when the necessity arose, that is when the canal was ready to be put into operation, determine the number of lights and also determine the amount of horse-power required to effectually operate
the canal. The engineer did that ; that is to say that when the canal was finished in 1900 it became necessary to light it. The engineer was applied to and he said it would be necessary to have 250 lights to properly light the canal. Is it doubted for a moment that that was the proper number of lights '! Experience establishes the fact now, after the canal has been in operation, that we have not one light more than is necessary and as we have had a comparison made with the Soulanges canal I will take occasion to show that notwithstanding the statement made by the Auditor General and by the hon. member for Simcoe there are fewer lights in operation on the Cornwall canal than on the Soulanges canal. You will find that the experts say that the number of lights required by the engineer is merely sufficient for the purpose of lighting the canal and in addition to that we have our practical experience of the operation of the canal and when the engineer said that 250 lights were absolutely necessary our experience has shown that he was absolutely correct. What was done in 1900 ? I shall not ask the House to take my view of it. 1 do not want the House to take my opinion because I was not a member of the government at that time and had nothing to do with the making of this contract, although I think it was a very ^proper contract notwithstanding what the hon. gentleman for Simcoe has said. I will lake the opinion of the gentleman selected by the Auditor General to advise him in respect to this matter. I take the opinion of the gentleman selected by the Auditor General to advise him in respect to this matter ; and in regard to the contract of 1900, Mr. Aylesworth says :
There appears an Order in Council of October 9th, 1900, authorizing the agreement of October 19th, 1900, under which the claim to payment is now made, but it is to be observed that this agreement of October, 19, 1900, in fact amounts to nothing more than a fixing of the quantities of electric horse-power and electric light the contractor is to supply.
The original contract was not departed from to the extent of a hair's breadth ; all that was done by the supplemental contract of 1900, was to do that which the orignal contract had in contemplation, viz. : to provide for the number of lights required, and the horse power necessary, and which were fixed by the engineer who made the original contract. As Mr. Aylesworth says, all that was done under the second contract was to fix the number of lights and the quantity of horse-power the contractors were to supply.
The lease previously entered into and dated June 25th, 1896, seems to have conferred upon Mr. Davis the right to supply such electric power and light on the canal as the chief engineer of the department might require, and if it was, under this lease, the right of Mr. Davis to supply the light and power in question, there was no possibility in October, 1900, that

there should be competition, or the consideration of tenders, before the agreement then made with Mr. Davis was entered into.
There is the opinion of the gentleman selected by the Auditor General to advise him on this matter, and who says that in view of the contract made in 1896, Mr. Davis had a fair right under the contract to supply the light and power and that the government had no right to call for tenders and no possibility to provide that there should be competition. I draw the attention of my hon. friend (Mr. Lennox) to page 13 of the Auditor General's Report, where he Will find that so far back as the 1st of December, 1901, there were then in operation on the Cornwall Canal, 216 lights. In the report of the experts (page 47) the hon, gentleman will find the following statement :
The agreement of 1900 calls for a minimum of 250 lights and 400 horse-power. The 250 lights appear to be no more than sufficient to light the canal, as the lamps which are placed is 400 feet apart, are not too close for proper illumination.
The experts conSrm the opinion of the e' g nrer of the Department of Railways and Canals, who was himself selected when the contract was made in 1896 to determine the number of lights. There is no doubt about the number of lights, required. And now as to the horse-power required, it was intended that we should have power required to move the locks, and the gates, and the bridges, and to operate the workshops, and in addition to haul boats moving through the canal by means of wenches, run by electric power. This was a new departure inaugurated by my hon. friend (Mr. Hag-gart). When the time came to determine what was required under this contract the government's engineer gave a detailed statement to the effect that to do the work in contemplation it would require 417 horsepower. The contract was made accordingly, and as the Prime Minister pointed out, it would have been lacking in prudence on the part of the contractors to have installed a plapt there without knowing how much power he would require to generate. His contract was to supply not less than 250 lights, and not less than 400 horse-power, and it was proper on his part that he should say : If I am obliged to supply that, give me some assurance that when I have expended my money to supply it, I should have a demand for it. The contractor set to work, and he had his plant installed before the machinery built by the government was ready to use the power. The contractor was ready to supply the electric energy, but the government were not ready to utilize it because it was necessary for the government to determine the extent to which the power should be applied to each particular machine. The contractor said:	I
am ready to supply the power, and you are Mr. FITZPATRICK.	.
not ready to utilize it, and why should I be deprived of the money to which I am entitled under the contract? The government said : Here is a contract which we must abide by, but we have a provision in the contract which enables us to expropriate your plant, and let us see if we can came to a fair understanding about it; we are not ready to utilize the power, but it is not fair to ask us to pay for something we are not getting. It was not the Auditor General who did that, it was the government that did it. Then the government said to the contractor : We have so much plant installed now and for that plant it is necessary for us to have so much horse-power; we will pay you for the power necessary to operate the plant we have installed, and as further plant is installed we will pay you proportionately for the power required for it. There is no mystery about that. We want to keep nothing back in connection with this matter. The whole difficulty arises from the fact that when the government contractor was ready to deliver power the government was not ready to receive it to the extent he was ready to deliver it. In law he was entitled to' be paid because he was ready to execute his part of the contract, but to the credit of the hon. member for Lanark (Mr. Haggart) let it be said there was a provision in that contract by which we could turn around to the contractor and say : Very well ; if you exact your pound of flesh we will exact ours.
You will be entitled to be paid for what you contracted to deliver and what we are prepared to take, but we will expropriate your plant. Mr. Davis, I say it now, never asked for anything to which he was not fairly entitled, and when the matter was properly put to him, all he ever took payment for was what was delivered to the government, notwithstanding, that according to the strict letter of his contract, he might have been paid for more. There is the whole case. What is there in it which we need to hide, and what is there in it to make all this scandal about ? I have not said a word that I have not corroborated by reference to the Auditor General's Report, and not a word that cannot be so corroborated. I do not find any fault with the very deliberate statement of my hon. friend (Mr. Lennox). I want to deal with the Auditor General, who makes a comparison between the cost of the Cornwall and Soulanges canals. In one instance he says : You have the government plant on the Soulanges canal, and the installation there cost so much and the operation costs so much ; and then he says, you have let a contract for the Cornwall canal, and the operation will cost just so much. Let us see if it is possible to compare them. At page 27 of his report the Auditor General says that the cost of installation of the Soulanges canal is $160,000. That statement is contained in his letter, dated July 14th,

1902. He says that -the cost of operation is $5,000 a year ; that is the cost of running a plant, and he puts in $4,800 for interest. He, therefore, says our charges are $9,800. At the time he made that statement, on July 14, he had in' his possession a letter from the man who installed the plant, Mr. Holfmeister, which was written on July 12th, and which will be found on page 29 following of his report. In that letter Mr. Hoffmeister tells him that the total cost of the installation was $200,000. That is on the next page from the page I quoted. At the foot of that page, he tells him that the operating expenses may go up to $5,700. There is the position of the Auditor General with respect to that statement. Then he goes on and says he has derived the cost of installation from his report, and gives it at $100,000. I have a statement from the Chief Engineer of the Department of Railways ; and also one which I have made up from the Auditor General's Report. From the Auditor General's Report it will appear that the cost of installation of the plant was, not $100,000, but $212,820 ; and from the Chief Engineer of the Railway Department, I have a statement carried down to date, which shows that the cost of installation on the Soulanges canal is $218,175, and the cost of operation is not $5,000, as was stated in the letter, the cost of operation is $11,131. If to that cost of operation you add six per cent, which is a very small amount for depreciation of plant, and you add three per cent for interest, you have got $29,000 for the Soulanges canal. His statement here is simply as to' the cost of operation, to which may be added interest-and the government cannot to-day borrow money at 3 per cent -and you cannot allow less than 6 per cent for depreciation. Thus you have $18,000 and if you add to that $11,000 for operation, you have $29,000 as the cost of the Soulanges canal instead of $10,000, practically three times the amount given in the Auditor General's Report.
A statement appears at page 23 of the Auditor General's Report of the amount of power required to operate the Cornwall canal. As a matter of fact, you have two canals at Cornwall, but the Auditor General does not think it necessary to refer to that. There is, however, the old canal and the new canal, both of which have to be equipped and looked after. The new canal has twenty-six locks and two guard-gates. The old canal has twenty lock gates. On the Soulanges, with which he compares this, you have four lift locks, one guard-gate and one guard-lock, as against forty-six on the other. On the new canal you have sluice gates or valves, 26 ; on the old canal, sluice gates or valves, 20. You have six winches on the new canal, five winches on the old canal, and in addition to that you have on the Cornwall canal a workshop which is now being built to provide
for the service on both the Cornwall and Williamsburg canals, and that workshop requires 60 horse-power.
What have you got at the iSoulanges ? Four lift-locks, one guard gate, one guard lock, twenty sluice gates, five weirs and seven bridges. Of these the lock gates, sluice gates and five bridges are worked by electricity. You have no winches and no workshops, although one is being built but is not in operation. How could you, in justice or in conscience, compare the conditions existing at Cornwall with the conditions existing at Soulanges ? There is no comparison to be made between the two. Mr. Schreiber, at page 33, very properly says :
In dealing with the question of the application of electricity to the several purposes of the Cornwall canal operation (which at the present date is a matter of theory and estimate, rather than of conclusive calculation, based on definite experience), provision had to be made, on both the old and new canals, for the lock and guard gates, for the sluice gates or valves, for bridges, and for winches to assist vessels through the locks. In addition, power had to to be furnished for the workshops, which serve not only the Cornwall canal, but also the three canals constituting what is known as the Williamsburg canals.
That is wh'at the Chief Engineer of the Railways and Canals Department says with respect to the Cornwall canal.


Haughton Lennox: What do you state is a fair annual cost of operating the Soulanges canal ?


Charles Fitzpatrick: I do not think I can give the average cost of that, because, in my judgment, it altogether depends On what we have to pay to operate that. The price for the power was fixed in 1896. There is no doubt but that at that time the price was fair and reasonable. The amount we will have to pay for the operation of the Cornwall canal is dependent on the amount of power to be used in connection with its operation ; if 200 horse-power is used, 200 times 63 will be the cost; if 400 horse-power is used, then 63 times .400 will be the cost. For 200 horse-power it would be 200 times 63, and for 400 borse-power 400 times 63.


Haughton Lennox: That is operated by the government.


Charles Fitzpatrick: Cornwall is operated by Mr. Davis.


Haughton Lennox: I am asking about Soulanges.


Charles Fitzpatrick: I cannot tell any more than my hon. friend. All I know is that up to the present.we have expended $218,175, and that the annual charge, independent of interest and depreciation, was $11,131, and they have not equipped one-half the canal. There are five weirs not equipped, which have no electric plant.


Haughton Lennox: As I understand the hon. minister, he cannot tell us, by way of comparison, how much it does cost on the Sou-langes canal for the same service as Mr. Davis is supplying.


Charles Fitzpatrick: I do not like to make comparisons. I prefer to state the facts and let my hon. friend make the comparison. My figures are official.


Haughton Lennox: If you will give them.


Charles Fitzpatrick: I have given them. Perhaps I had better give them again. On the Soulanges canal there are five weirs not equipped. There are two bridges which have not got the necessary appliance to utilize the power. There are no winches to help the vessels through the locks, and you cannot tell what the work is going to cost. But the small equipment that is on it we do know has cost $218,175 and the annual outlay, independent of interest and depreciation is $11,131. But we have something better than that.


James Clancy: When the work is completed, will the work have to be increased on the Soulanges canal ?


Charles Fitzpatrick: I am not an electrical engineer, but I should say it will and 1 will give my reasons. On page 30 of the Auditor General's Report, Mr. Hoffmeister
says :
The maximum power required for operating the Soulanges canal, that is, if a lockage is made at every lock and all the highway bridges are operated all at the same time, it would only require 40 horse-power.
That is what he tells us. It is only going to take forty horse-power to work the whole canal. Then he goes on to say :
But the average power required with a fairly good traffic passing through the canal, it would only require about 20 to 25 horsepower to operate the canal.
All that is wanted is forty horse-power. What we have got already has cost $218,000 and it will cost $11,000 per year to keep it going, independent of depreciation and interest. Providence protect us from government ownership if that is a sample of it. I do not know that it is necessary forme to go further into this matter. The position I take is this, that the first contract of 1890 was made at a time when it was necessary to dispose of this power, and at that time the term of the lease was fixed, the price of the light to be supplied was fixed, and also of the horse-power.


Haughton Lennox: We wjere not bound to take anything.


Charles Fitzpatrick: On that point I happen to differ from my hon. friend. All that was left over for this government to do was, when it became necessary to utilize Mr. FITZPATRICK.
the lights and the power, to fix the number of lights and the number of horse-power. That is what was done in 1900. The only difficulty that has arisen arose out of the fact that the contractor was ready to deliver his power before the government was ready to utilize it, and on a strict reading of the contract he was entitled to be paid for the power he was ready to supply. But after having considered the matter, and when it was found that the quantity required would be 126 horse-power, he agreed to reduce his claim to that amount, and in any addition to that up to 400 horse-power, he would be paid at the price fixed in the lease. The contract of 1896 was made by our hon. friends opposite and we think-in the words of the Auditor General-that it was a provident and a wise contract, and we think that the contract we have made is equally provident and wise because it gives effect to that of hon. gentlemen opposite.


James Clancy: I am not going to discuss the question of the Davis contract at all further than to say that in the speech just delivered by the hon. Minister of Justice (Mr. Fitzpatrick) he has shown an impatience which is hardly the proper accompaniment of a good case. He has taken particular pains to discredit if possible one of the chief officers of this House. The hon. minister is not wanting in courage, but if evidence were wanting I do not think he has given any evidence of it in taking the stand he has done. I am not prepared to say that the Auditor General makes no mistakes or tha't the government made no mistakes, but the House must be very much struck by the admission of the Minister of Justice that a wise provision was put in the contract by the Minister of Railways in the late administration (Mr. Haggart), which they took advantage of when they said to Mr. Davis : We will either use the power of expropriation or you must come down. , Without going into the merits of the contract, I say that the government should have been prepared to utilize all the power that Mr. Davis was ready to furnish them. I cannot agree with what has been said to-night, even by the hon. member for South Lanark (Mr. Haggart), to the effect that the Auditor General should be reduced to the position of a mere clerk in the office.


Wilfrid Laurier: No one has said that.


James Clancy: That is absolutely the contention of the government and that was the position taken by the Minister of Finance last year. Naturally an officer or that kind will be sometimes wrong. And that the government have greater inducements to do wrong is a thing that must go unchallenged. What is the position of the
/

government-and I refer to no particular government ? It is simply governed by tile political and party exigencies of the case. They have no other guide. They give the people no reason, and the opposition is powerless. The Auditor General makes his protest year after year, but how does that cure it ? The government are not checked by their own supporters. Would the Prime Minister be prepared to say that the government would look for the condemnation of their own party to uphold the Auditor General or check the overruling of his decisions by the government. He knows there is nothing of that kind. As to the case of England, no complaint has ever been made there that the Auditor General encroaches upon the rights of the government. The strong opinion is that the authority of this important office, the Auditor General ought to be increased. But the tendency here is to diminish it. It can hardly he that in every case of difference between the government and the Auditor General the government is invariably and [DOT] wholly right. The Prime Minister himself would not say that.


Mahlon K. Cowan: How about the opposition, are they ever wrong ?


James Clancy: It is not a matter of the opposition. It is a matter with the people. The Auditor General stands between the government and the people. It is not a matter for the opposition at all. If the Auditor General is only to be an officer to see that the columns of figures are added up right and that receipts are duly filed, he will fulfil the duties cut out for him by the Minister of Finance. But should not the Auditor General have more power than that ? Should not he call in question irregularities? Should not he consider whether the expenditures are made according to law ? I think nobody will contend that there should not be an officer charged with that duty. We find the two extremes, on one side the contention that the Auditor General is never wrong and the other that the ministry is always right. True, the Prime Minister said, and I think it was repeated by another hon. gentleman opposite, that the remedy is for the Auditor General to make his report, which comes before parliament and can be here discussed, and parliament is to be the judge. But, is parliament an unbiassed body ? Under our system of party government-using the words in the restricted sense .in which we generally use them-can it be said that parliament is a body without bias to judge such matters ? The ministry will be supported, and not a man on the other side will venture to call its actions in question.


Mr. CAMPBELL.: What remedy would the hon. member propose ?


James Clancy: I do not think I would be justified in presuming to offer a specific remedy.


Mahlon K. Cowan: How about a genera' remedy ?


James Clancy: I do not know what my hon. friend (Mr. Cowan) means ?


Mahlon K. Cowan: The hon. gentleman (Mr. Clancy) said he could not offer a specific remedy. I suggest that a general remedy would be sufficient.


James Clancy: If the hon. gentleman (Mr. Cowan) would be more general in his silence, it would be better. He is merely trying to be clever.


Mahlon K. Cowan: Not with you, not for a moment.


James Clancy: I have escaped the hon. gentleman (Mr. Cowan) because I have rarely found it my duty to reply to what he has to say. That is the only way to escape the honourable member's filth, f said a moment ago that I was not prepared to offer a specific remedy, but what I do offer the suggestion that this is of sufficient importance-and I think the Prime Minister might agree to that-to justify an investigation. There is no proposal to change in any sense the authority of the government. I am not contending that the Auditor General is all right. But surely there should be some medium between the two extremes, and, the way to find this medium is worthy of inquiry. I do not think the country will receive with great favour the remarks made on behalf of the government.
If I have exceeded the time I should have taken at this hour, I apologize to the House. I think the matter is worthy of greater consideration than has been given to it.


Mr.   I@: My only apology for saying anything at this hour in the morning is that the works referred to in this discussion are located in the county I represent. The hon. member for South Simcoe (Mr. Lennox) in his very able argument in favour of the motion he has presented to the House, took occasion to bring up the question of the lighting of the Cornwall canal. Now, I do not pretend to go over the ground that has been gone over so well this evening, but I will endeavour to confine myself to a very few points. The hon. member for Simcoe laid some stress upon the statement contained in one of the letters of the Auditor General calling attention to the fact that power could be purchased by Mr. Eddy at $15 per horse-power, while, in this contract, the price was fixed at $63 per horse-power. That price per horse-power, as has been explained by the hon. member for South Lanark (Mr. Haggart) ex-Minister of Railways and Canals, was fixed by the Order in Council and in the lease which was executed in June, 1890. I have here a copy of the Order in Council of February 18, 1896, under which this property was to be leased

to Mr. Davis and under which he agreed to supply electric power for the working of the locks on the Cornwall canal at $03 per horse-power, and also direct current arc lights of not less than 2,000 candle power at 30 cents per light per night. Now, it struck me, when I first read the correspondence in connection with this matter that the price charged for power was an excessive price.
I do not think I would detain the House in discussing this matter if it were not that it seems to me the press have got an entirely erronous idea of it. and I think it is well that the facts should be thoroughly ventilated. After hearing the explanation of the hon. member for Lanark (Mr. Haggart) I can readily understand why the price was fixed at $6 per horse-power. I can understand that no contractor would develop power, the fifty horse-power which was supposed to be at that time the amount required for the canal, at a rate of $15 per horse power. It is possible in large deals to supply power for such a concern as Eddy's, in blocks of three, or four, or five hundred horse-power. But that is an entirely different proposition to supplying power in small units. Now we find on the Cornwall canal-I think I am familiar with almost every foot of it-that not only for the new canal, as the Minister of Justice explained, but also for the old canal, we have the different wreirs and we have the bridges. Now this ' power has got to be suplied in units running down as low as one and a half or two horse-power. That means that there have to be transformers to take away down to these small units. The consequence is that there is a bank of transformers at every lock gate for the whole distance of eleven and a half miles, and there are transformers at the sluiceways and at the bridges. So I say the power delivered in these small units is of much greater value than the power delivered in large quantities of 100 or 150 horse-power at a time. However, the fact remains that by the Order in Council signed by Sir Mackenzie Bowell. in February. 1896.- the price was fixed, and there could he no variation in regard to that.
I wish to say this, that I think, irrespective of politics, the residents of Stormont desire to see our canal lighted by electricity. We desire to see our canal operated by electrical energy ; we desire to see this power developed so that if there is any surplus energy after supplying the requirements of the canal, it may be utilized for manufacturing purposes in that district. I am not going to compare the cost of coal oil with electricity. Where it is possible to aid navigation with electric lights, I think it is the duty of a progressive government to give the advantage of electric lights and also the advantage of electric power. Let me go back a little further. The Conservative government that *was in power some years ago built at Sheik's Mr. PRINGLE.
Island a dam from which this power is derived, and that Sheik's Island dam I think I am correct in saying has been an immense aid to navigation on the St. Lawrence river. Instead of vessels taking five or six hours to pass through the Cornwall canal, by that Shiek's Island dam to-day they pass through in half the time. Now by having all our locks operated by electricity, and the canal lighted by electricity, boats can pass through at- any hour of the night, and on any kind of night, with perfect safety, and they also go through the locks very much more readily.
If these articles that I have read in the newspapers were any way true, I would feel it was my duty in this House to criticise the contract that has been made. But, Sir. I have looked into this matter as carefully as I could, and I can see nothing unreasonable in this contract. I can see no unreasonable revenue going to the contractor. Why Sir, take the contract as it stands today. We find that the greatest revenue which he can receive, to the limit of a cent, is $29,850. We find by the evidence of experts that the cost of operating, maintenance, &c., would be $20,000, made up in this way :	They allow $9,400 for depreciation,
then they allow for operating expenses $5,800. Let me say here that I have knowledge that the operating expenses at $5,800 are nearly $2,000 too small. The pay-list of the contractor to-day for operation is $700 a month, which would be $8,400 a year, though I am willing to take these figures for the purpose of argument. Then they allow for accidents not elsewhere provided for, $1,000', rental of water power, $1,000, making in all $20,000. Deduct that $20,000 from the utmost revenue that he can receive at the present time, $29,850, and you have net $9,850, or less than 4 per cent upon his investment on that plant. Some one may say : What is that investment'.' I am informed the investment is over $250,000, but I am willing to take the statement of the Auditor General's engineer, the engineer that he put on of his own volition, Mr. Keefer. Mr. Keefer estimates the cost of that plant at $258,000. Mr. Hoffmeister and Mr. Munro also went into that matter. Mr. Hoffmeister put it at $204,000. But I understand the actual investment on that plant is $250,000. So the contractor at the present time has les than 4 per cent upon his investment of $250,000.	.
Let me say another thing in regard to this canal. Last year an accident occurred by lighting which cost the contractors $5,000. That is not provided for in any way, that is a contingency he has got to meet. The winter before last during the ice shove, a large number of bis poles and his electrical appliances were destroyed. I happened myself that afternoon to be watching that ice shove, and saw' these poles snapped off like pipe stems. He suffered much loss then

Only a short time ago there was an accident on the line. A poor unfortunate man through some carelessness of his own came in contact with a live wire and was killed. His widow could not have brought a successful action, but he gave a generous settlement to the family of the man who was killed. Now all these accidents in connection with a plant of that sort have got to be taken into consideration. Why, Sir, we have heard here about the Soulanges canal, and about the expense of operating it. I took the trouble myself to go into the Auditor General's Report to. see whether the statement made by the Auditor General was correct, and I found, just as the Minister of Justice has stated to-night, that the cost of these works was very much larger than the Auditor General puts it. He makes a ridiculous statement in regard to the costs of operation. The cost of operation is away in excess of the figures that have been given by the Auditor General. I found further that they are also liable to just the same accidents we have on the Cornwall canal. It might be well to refer you to the page of the report to show you where it costs them some thousands of dollars for little accidents that occur and are likely to occur at any time on those works, and that is a risk that the contractor, or the owners of the work, have got to incur. Let us take one little accident that occurred on March 10th 1901.
Repairs on pole lines due to storm Sunday night March 10, 1901, $2,452.49.
I only give that as an instance of the accidents that are likely to occur.


Mahlon K. Cowan: I understand that in your calculation you had allowed a certain amount for depreciation which you said, with interest on the investment on this contract, did not exceed 4 per cent. Have you in these figures taken into consideration those contingencies and accidents on the lines and that sort of thing ?


Mr. PRINGLE.: No, I have not taken these contingencies into consideration. I was speaking of the additional expenses incurred on the Soulanges canal. These are expenses which are incident to these works. I do not think I will trespass upon the time of the House any further. The ground has been covered so completely by those who have spoken before me. I was rather struck myself, at the decision arrived at by the Treasury Board and afterwards to find that they rescinded that order. I could not quite understand it, but we have now had the explanation of the hon. the Minister of Justice. I felt that the decision of the Treasury Board was a right decision. Of course I view it from the legal standpoint. Mr. Aylesworth, at page 39 of the report gives his opinion in very clear language He says :
I think that was the position of matters and the right of the government in the premises
138.	.
prior to the agreement of October 19, 1900, but by the document of the last mentioned date the number of such lights has been, I think, fixed by the agreement of the parties at not less than 250, and I think, therefore, that if on any night any lights at all are required Mr. Davis has the right, if he wishes, to insist that not less than 250 shall be paid for.
Then he says :	-
As matters stood, so long as this lease was the only contract, it rested with the chief engineer to define the points along the canal at which lights were required, and from time to time to determine the number of lights. The prices and various particulars in regard, to the lights are specified by the lease.
The Order in Council of October 9, 1900, and the agreement of October 19, 1900, specify in distinct language the number of lights to be furnished. They are to be, in number, not less than 250 nor more than 270, at the discretion of the department, and the government having by this Order in Council and subsequent agreement exercised the right reserved to it under the lease of determining the number of such lights which Mr. Davis should supply, he is, X think, entitled to rely upon such Order in Council and subsequent agreement, and to say that if any lights at all are required from him on any particular night, the number of them shall be not less than 250.
I am not going to say that the Order in Council of 1900 was a proper order. I believe that possibly an arrangement could have been made at that time fixing the number of lights for the season of navigation and during the winter months. However, as we find the Order in Council fixing the minimum number of lights at 250, if Mr. Davis supplied those lights or if he was ready to supply those lights, I contend that he would be entitled to be paid for them. Under Mr. Davis's contract there was a minimum quantity of power fixed and the moment Mr. Davis was ready to deliver that power it was no fault of his if the government were not ready to receive it, and therefore I say that legally he was entitled to be paid for it and that consequently he was quite justified in filing a claim for the amount he did claim. However, as the hon. the Minister of Justice has explained the Treasury Board followed as they considered the law and they reversed the ruling of the Auditor General, but subsequently a compromise was made and under that compromise the contractor is now paid for 125 horse-power and 244 lights for the season of navigation for 100 lights during the winter months computed at 121 days. There was a good deal of criticism last session in regard to these lights during winter. I do not know whether all the members understand it, but not only are the lights necessary, but power is necessary in the winter time. It is not all necessary for the lock gates, but the weirs and sluices have to be operated during the winter months, so that some power is required in winter as well as in summer, and some lights are required



during the winter months. Now, I am glad to say that the experts who were put on this work found that it was a splendid plant. I think everybody who is familiar with the plant knows that it is a splendid plant and that the plant is in the hands of one who will certainly fill his contract with the government. Some stress has been laid on the fact that the government inserted a clause in the lease of 1896, by which they had the right to take over these works at any time. In view of that I think probably that the experts were quite right in finding that it was not unreasonable to enter into this contract for a long term of years as the government had reserved the right to determine it at any time and take over the works. I apologize for having taken up so much time, but it seemed to me that when there have been so many mis-statements in the press in regard to this matter, it was my duty to say something in regard to this work and these contracts.


Haughton Lennox: I think that although it would be very unfair to ask the House to listen to me for any great length of time, I shall have the indulgence of the House in the exceptional position I occupy just now for a minute or two. I had the ambition to be an independent member on some one occasion and I always wished to vote for the government once if I possibly could. Seeing that there is no opportunity, and probably will not be an oportunity of voting with the government, entertaining the convictions I do, I am not at all sorry for standing pretty well alone to-night. I am proud of the able support of the hon. gentlemen on this side of the House who supported my arguments and I am not at all discouraged. I have the idea that it would not be a difficult matter to dispose of such arguments as have been advanced, even by gentlemen on this side of the House, if the opportunity presented itself. I hope I made it clear to the government that I only took this as a sample of many other cases. As the member for Cornwall said, there are a great number of eases which upon the face of them seem to indicate something wrong. Not only as to those I mentioned to-night, but as to others I shall court an opportunity during this session perhaps, of bringing them to the attention of the House. I expected that we would have had some argument from the governement to explain away the fact that the instrument entered into by the government in 1898 amounted to nothing more than a mere option giving Mr. Davis the right to occupy these premises at $1,000 a year, and binding the government to nothing whatever. Therefore, the government were in an easy position to get rid of that option if they thought fit, and they must not now attempt to screen themselves behind the document of 1896. I have not Mr. PRINGLE.
heard any argument to dispose of the established fact, that whereas we were committed by the government to pay upwards of $52,000, that has been reduced to $29,000 by the activity of the Auditor Generali, and the figures produced by the hon. member for Cornwall show that we are paying about full value for the service, when we pay $29,000. I do not complain of my hon. friend (Mr. Pringle) discussing this matter, although his advocacy of it was a little stronger than anything offered by the government side. Although we are apt to get a little careless about it in this House, we must remember that we are commanded to love our neighbours as ourselves, and as this work is in his own county, it follows I suppose that the hon. gentleman has a very strong affection 'for the work and for the contractor. I have no brief to defend the Auditor General. He is an appointee of the Liberal government; he has the esteem and confidence of the Liberal party in Canada. There may be reasons why the present government find him inconvenient. It is not the first time in history, that parties have promoted men to power and have afterwards been most anxious to get rid of them. It is more than whispered that the government find the guardian of the treasury inconvenient. The attempt last session to deprive the Auditor General of the undoubted powers he possesses, has not been forgotten. I shall endeavour when the opportunity occurs later on to discuss more of these Treasury Board overrulings, but in the meantime, I may say that there was absolute power on the part of the government to begin anew this contract in 1900, and by a stroke of the pen, they could have terminated the previous contract, if they wished to do so.
Motion (Mr. Lennox) negatived on division.
Sir WILFRID LAURIER moved the adjournment of the House.


Charles Eusèbe Casgrain: What business to-morrow ?


Wilfrid Laurier: The Budget speech.


[Stage Direction]
Motion agreed to, and House adjourned 2.25 a.in., Tuesday.
[Stage Direction]
Tuesday, June 7, 1904.