1904-05-02

QIJ'APPELLE, LONG LAKE AND SASKATCHEWAN RAILWAY.

Mr. T. O. DAVIS (Saskatchewan).: Mr. Speaker, before the Orders of the Day are called, I have a matter which I wish to bring to the attention of the House, and to put myself in order I shall move the adjournment of the House. I do not like to take this mode of bringing a question before the House, but this is a matter of urgency, and therefore I have to plead this as a reason why I move the adjournment of the House. The question that I want to bring before the House is the state of affairs In the district in connection with the operation


Mr. NORTHRUP.: 
Hon. H. R. EMMERSQN (Minister of Railways and Canals).: My attention was called to this matter by the receipt of the following telegram this morning. I know that my bon. friends opposite will be anxious to have it read, especially when they hear the concluding paragraph of it:


Thomas Osborne Davis: -
West Prince Albert, N.W.T.,
April 30th.
To Minister of Railways, Ottawa.
B'reight, mail and passenger traffic irregular all winter and now suspended. Present condition of affairs will probably continue all summer. Ordinary foresight on part of railway would have prevented this. Same thing occurred almost every season at time when efficient railway service most, essential. Thousand men out of employment ; huge immigration turned away; large amount of projected buildings stopped and all industries paralyzed. This railway cannot begin to meet the requirements of the district. People demand the immediate construction of a road which can be operated tbo year around.
This is signed by W. E. Gilmour, the mayor, I may say in answer to my hon. friend (Mr. Davis) that this matter has been brought to the attention of the department for the first time now, and steps will be taken to have the matter inquired into so as to see where the difficulty lies, and if possible to have the remedy applied.


Hon.   S@: I suppose my hon. friend (Mr. Davis) desires to know what efforts have been made by the Post Office Department to get the mails through, and perhaps I had better state briefly the position of the matter so far as our department is concerned. When. I heard, about two o'clock to-day that my hon. friend (Mr. Davis) intended to bring up the matter, I had .a message sent to the controller of the mail service, asking him to send me a statement of the proceedings taken in order to get the mail through. I may say that at a very late hour on Friday night I received a telegram from a gentleman at Prince Albert, informing me of the interruption of traffic over the line. I have not the telegram in my possession at this moment, and I do not recollect the name of the gentleman- he may perhaps have been the mayor. I had not before heard of the matter. On Saturday morning I asked for information from the department, and in consequence, seme further despatches were sent by the Post Office Department to our officers in the Northwest, and this is the report of the controller of the railway mail service up to this morning :
Re complaint in regard to delayed mails on the Frince Albert section of the Canadian Pacific Railway, the Postmaster General is informed that the last interruption to the regular mail service on this branch took place on the 14th ultimo, and the following explains the steps which have been taken by the officials of this department, in regard thereto :
Wire from Supt. R.M.S., Winnipeg, dated 15th April :
Three spans Saskatoon bridge gone owing to moving ice. Cannot say when transferring can he made.
Reply from Controller R.M.S., to the Supt. R.M.S., Winnipeg, dated 15th April :

Use every endeavour possible to have mails forwarded.
Report from the Supt. R.M.S., Winnipeg, dated 18th ult. :
Regina and Prince Albert route,-Saskatoon bridge three spans washed away. Also another span went on Saturday the 16th inst. The Railway Company are getting the government scow fixed, and expect to transfer on Wednesday, the 20th. The service will be very irregular, as the water is likely to remain high for some time, thus preventing the replacing of the bridge in hastf.
Report from Supt. R.M.S., Winnipeg, dated 21st April :
Regina and Prince Albert route,-Transferring expected on Friday the 22nd at Saskatoon. Owing to high water and the track covered near Lumsden, trains were unable to get through on the 18th and 19th.
Telegram from Supt. R.M.S., Winnipeg, dated the 21st ult. :
About five miles track under water around Lumsden. Prospects bad for some days. Ferry not ready to transfer what mail is at Saskatoon.
Telegram from Supt. R.M.S., Winnipeg, dated 28th ult. :
Transferred carload of mail last night Lumsden, washout Davidson. Expect reach Saskatoon to-night.
Telegram from Supt. R.M.S., Winnipeg, 29th April :
Mails reached Davidson at daylight, detained until track is repaired.
Telegram from the Controller R.M.S., to the Supt. R.M.S., Winnipeg, dated 30th April :
Minister directs that you use every endeavour to get mails through on Prince Albert branch, if not by train, by vehicle or boats.
Telegram from Deputy Postmaster General to D. McNicoll, General Manager, C.P.R., Montreal, dated the 2nd May :
Wire from Prince Albert says no mails since 14th and no effort made to get it through. Passengers who left Regina 14th arrived Prince Albert 18th. Why cannot mails be conveyed as well as passengers ? This matter very serious, what can be done ?
Wire to the Supt. R.M.S., Winnipeg, from the Controller, under date of the 2nd ult. :
W'ire says no mails at Prince Albert since 14th, that passengers are taken in and out, steam launch in use in Qu'Appelle Valley, and ferry at Saskatoon. Minister desires to know why you have not had mails sent through. Wire answer.
The last two telegrams have not as yet been replied to.
Just as X began to speak, the following telegram was placed in my hand. It is from the superintendent of the railway mail service at Winnipeg to the controller at Ottawa :
Mails reached Prince Albert Sunday. Everything cleaned up at Regina this morning.
This is the record of the department np to this moment.
Mr. WALTER SCOTT (West Assiniboia.) Mr. Speaker, before the motion is disposed of, I would like to call the attention of the House to a little item of news dated, London, England, April 28. It may give
to my hon. friend from Saskatchewan, a clue to the mystery that Is troubling him, that is, where the value which the country contributed in aid of the construction of these railways has disappeared to. This ilem is as follows :
The report of the Calgary and Edmonton Land Company shows that the sale of land during the year was 129,975 acres, realizing $535,329. The average price has increased 64 cents per acre.
It is regrettable that on this occasion the hon. gentleman who was very deeply interested in the construction of the Regina and Prince Albert Railway and the Calgary and Edmonton Railway is not in his seat.
I refer to my hon. friend from West Toronto (Mr. Osier). However, I shall ask the hone leader of the opposition, who has on several occasions during this session shown a very worthy interest in the reputation of that hon. gentleman, to call this item to his attention, for this particular reason, that on more than one occasion in the session of 1903 the hon. member for West Toronto, assured this House and the people of this country that in the financial transactions in which he was concerned, connected with the building of the Regina and Prince Albert and Calgary and Edmonton Railways, It was necessary to pledge the lands contributed by the country to the bondholders for the purpose of obtaining the amount of money necessary for the construction of the roads ; and the hon. leader of the opposition may inquire from his colleague from West Toronto as to what explanation Is to be given of the fact that a company known as the Calgary and Edmonton Land Company was enabled during last year to sell 129,975 acres of land i:; the Northwest for which they received the sum of $535,329. He may inquire whether this particular area is a portion of the lands which this parliament contributed for the purpose of aiding in the construction of these railroads, and whether it is a portion of the lands which the hon. member for West Toronto assured this House and the people of this country last year, was pledged to the bondholders. Doubtless when the attention of the hon. member for West Toronto is called to this paragraph, he will be able to give to the House a further explanation as to whether or not this area of land is a part of the lands which this parliament voted in aid of the Calgary and Edmonton Railway, which was a project put through by the hon. member for West Toronto at the same time as the road which my hon. friend from Saskatchewan has been speaking about this afternoon. While on my feet, I would like to take occasion to say this. There have been many remarkable railway transactions perpetrated in this country ; hut I will venture to make the statement, and I make it advisedly, that In the whole

history of railway legislation and railway transactions in the Dominion of Canada, there cannot be found a transaction so atrocious and so inexcusable as those two transactions in connection with the Prince Albert and Regina and Calgary and Edmonton Railways.
This country contributed no less a sum than $12,000,000 in cash guarantee and land grant, taking a very moderate estimate. By the figures in the news item I have Quoted we find that the Calgary and Edmonton Land Company is selling lands at over $4 an acre. Take the total amount of land grant given these two companies, the Calgary and Edmonton and Regina and Prince Albert, and you will find that the estimate I am making is a very moderate one. Parliament gave to these promoters in excess of $12,000,000 in land and cash guarantee for the construction of roads which only cost a little in excess of $6,000,000. The hon. member for West Toronto, the great railway financier, who was called in, so he informs us, by the late Sir John Macdonald, as the only man in Canada who could be found to finance these undertakings, went to the old country with $12,000,000 of good Canadian securities in his pocket, and the best financing he could do was to raise the $6,000,000 required for the building of the road by creating additional securities by sale of bonds to the value of $10,000,000.
These facts have been placed on record more than once, and I do not intend asking the House to listen to any further explanation at this time. I merely rose for the purpose of bringing this little item of information to the attention of the hon. member for Saskatchewan (Mr. Davis) and particularly the leader of tin* opposition, so that the latter gentleman may place it before his colleague from West Toronto, who is in a better position than anybody to give full explanations of this matter to satisfy the people who are complaining about the lack of service on the Regina and Prince Albert Railway.


Thomas Osborne Davis: I am glad to hear that the hon. the Postmaster General is taking such energetic action to have the mails taken into that country with some expedition, arid I am also pleased to hear the statement of the Minister of Railways that he will see what he can do to have the railway operated. This appears to me to be a matter which the Railway Commission might look after. In case it might be thought that I am a little biased and exaggerating, let me read what appears in the Rosthern ' Enterprise,' and I may add that Rosthern is the largest wheat exporting place in the Territories outside of Indian Head. It is a place in which there are seven elevators :


Mr. SCOTT.: The Canadian Pacific Railway service has gone from bad to worse. On Friday's train out of Regina the inside of the colonist car compared very favorably with the bracing cold air on the outside. No heat ; no water ; but plenty of suffering for the unfortunate people inside. When the train pulled into Saskatoon Judge Prendergast, a passenger in the train, interfered and called in the assistance of the police, who speedily righted matters. Things have come to a pretty pass indeed, when even ladies have to ask in vain for courteous treatment.
I need not say any more. When it is necessary to call in the mounted police to see that the passengers are not frozen to death, one can form a pretty good idea of how that railway is operated. It is time something should be done in order that the people may get some return for the money they have put into the pockets of this company.
Motion (Mr. Davis) to adjourn, negatived.
_	PETITIONS.


Mr. MORRISON.: I beg to move that the petition of the Ottawa Electric Company be read and received forthwith and refer-ted to the Committee on Standing Orders.
Motion allowed to stand.


Mr. GRANT.: I beg to move that the petition of Edward .John B. Pense and others for leave to present a petition praying that an Act do pass for the purpose of incorporating a company under the title of the Kingston and Dominion Central Railway Company be received and the same be referred to the Committee on Standing Orders.


Mr. R. L. BORDEN.: What is the necessity for so many special motions of this kind ? The one read a moment ago-I refer to the petition presented by the hon. member for Westminster (Mr. Morrison)-* does not contain the slightest ground why this House should make an exception in its favour and receive it although the time for receiving petitions is past. All it states is that the petitioners were unable to present their petition before, and it does not mention any reason or fact which bears on the case. Now we have another. Either we should extend the time, or let these petitions wait until next session. The Journals of the House should not be encumbered by so many petitions founded on absolutely nothing.


Mr. SPEAKER.: I might remind the hon. gentlemsn that the petitions will be considered by the Committee on Standing Orders and that committee will decide whether chey shall be received or not.


Robert Laird Borden: I am well aware of that, but when a motion to have a petition received and read is once passed, the rest goes as a matter of course. What I am suggesting is that it would be much better to either extend the time generally, or let those petitions stand over. Of course, after the time has expired, there may be special circumstances why a petition should be received, but none such have been shown in either of the present cases.


Rt.   H@: I am disposed to agree with my hon. friend. My attention was not called to this petition when presented. I agree that some reasons should be given why petitions should be given for presenting petitions after the time for receiving them has elapsed.
Motion allowed to stand.



INQUIRY FOR RETURNS.

Robert Laird Borden: Before the Orders of the Day are called I desire to direct the attention of the government to two motions for returns which have not yet been complied with. One relates to the papers in connection with the dry-dock facilities on the Pacific coast, and the other to the copies of contracts for the carriage of mails from the St. Lawrence ports.
SIR WILFRID LAURIER (Prime Minister). This very morning I sent a special order to all departments to hasten all these returns. I shall follow it closely.



PRIVATE BILLS.


[Stage Direction]
Bill (No. 46) to incorporate the Boundary, Kamloops and Cariboo Central Railway Company.-Mr. Galliher.

[Stage Direction]
House in Committee on Bill (No. 43) respecting the Quebec and Lake Huron Railway Company.-Mr. Malouin.
On section 3,
Mr. HAGGART.: What is the meaning of this section? I was not before the committee, and did not hear it explained. Perhaps the hon. gentleman in charge of the Bill, or the chairman of the Railway Committee will kindly explain.


Mr. HYMAN.: I have sent for the statutes that I may see what the Acts are that are referred to in this section. I would suggest that we report progress on the Bill and ask leave to sit again this day.
Progress reported.



INTERNATIONAL RAILWAY BRIDGE COMPANY OF NEW BRUNSWICK.

[Stage Direction]
House in committee on Bill (No. 57) respecting the International. Rail way Bridge
Company of New Brunswick-Mr. Chas. Marcll.
On section 1,
Mr. CHAS. MARCIL.: This should be Robert instead of Richard Noble and I move that the section be amended accordingly.


[Stage Direction]
Motion agreed to.
On section 6,
Mr.   CHAS@: MARCIL moved to strike out the word ' five ' and insert the word 'nine.'


[Stage Direction]
Motion agreed to.
On section 7,
Robert Laird Borden: I cannot understand the effect of the amendment to this section.


Charles Smith Hyman: It makes it compulsory upon the company instead of being permissive.


John Graham Haggart: I would ask the hon. gentleman if this company receives any of the old bridges from the Intercolonial.


Charles Marcil: This bridge is proposed to be erected at a point some twenty miles east of the Metapedia bridge. The intention here is to connect the county of Bonaventure with the town of Campbellton, The promoters of the Bill are the men who are now building the International Railway of New Brunswick, formerly the Restigouche and Western Railway. They have given the name of International to the bridge in order to harmonize with the name of the railway, but it is really an interprovincial brdge. Mr. Shanly the engineer, has gone over the ground and reports that the bridge will be a very expensive one, his estimate being $520,000. The bridge will be 3,300 feet long, with 14 spans, 200 feet each, resting on 14 pillars with two abutments. There are two channels, one on each side df the river. Over the south channel there will be a span 240 feet long, and 40 feet high to permit the passage of boats ; there will be a drawbridge on the Quebec side. I may say that the project is immensely popular in that country, and if it ever goes through, it will be one of the most important works ever performed. It will bring the whole Gaspe peninsula in touch with New Brunswick and with the American market.


John Graham Haggart: There were two or three spans of old Intercolonial bridges which the hon. gentleman wished to use for a bi-idge for the benefit of people in this district, and I did not know whether this was the bridge on which they proposed to use! the old spans.


Charles Marcil: The old project of utilizing the Intercolonial Railway bridge at Matapedia has not been accomplished yet. The Canadian Bridge Company which has the contract has put up two spans of the

new bridge and left three of the old. An Order in Council has been passed giving the old bridge to the governments of Quebec and New Brunswick, they assuming the additional cost. The province of New Brunswick, which realized the importance of the work, at once passed an, Order in Council accepting the offer and a statement was made to that effect in the legislature of that province on behalf of the provincial government, the other day. Unfortunately Quebec is called upon at the present moment to erect a second bridge over the Matapedia river which is just one mile distant. That being the more urgent caSe, it has undertaken to build that bridge first. As this bridge can be of no use on the Intercolonial Railway or on Prince Edward Island Railway I hope the government can see its way to permitting its use at this point.


Henry Robert Emmerson: I would suggest to the promoter of this Bill the advisability of changing the name of the company, not to call it the International Railway Bridge Company but to call it the Intel-provincial Railway Bridge Company. It is true that it will connect with what is known as the International Railway which crosses the St. John river and joins with the Bangor and Aristook Railway. But this bridge will also connect with the Intercolonial Railway at Campbellton and it will connect on the' Bonaventure side with the Atlantic and Lake Superior Railway. Why it should be given the name of the International Bridge Company I cannot quite understand beyond the fact that there is an International Railway Company there. But, there are other railways and it should not have this particular ear mark any more than it should be called the Intercolonial Railway or the Atlantic and Lake Superior. It seems to me that the name, ' interprovincial ' more clearly describes the character of the bridge because it will connect the province of Quebec witli the province of New Brunswick.


Charles Marcil: I have no objection to changing the name. This name was suggested by the promoters because * international ' is the name of their railway. The name 'interprovincial' more accurately describes the bridge than ' international.'


Mr. DEPUTY SPEAKER.: On the motion that the Bill be passed, the title can be amended.
Bill reported.


Charles Marcil: That Bill (No. 57) entitled 'An Act to incorporate the International Railway Bridge Company of New Brunswick ' do now pass and that the title thereof be not as reported by the Committee of the Whole House, but that the title be entered on the 'order paper as ' An Act to incorporate the Interprovincial Railway Bridge Company of New Brunswick.'
Motion agreed to ; Bill read the third time and passed. .


Charles Marcil: 



QUEBEC AND LAKE HURON RAILWAY ' COMPANY

[Stage Direction]
House in committee on Bill (No. 43) respecting the Quebec and Lake Huron Railway Company.-Mr. Malouin.
On section 3,
Charles Smith Hyman: Section 2 is the usual clause granting an extension of time. Section 3 reads as follows :
Nothwithstanding the limitation of time for the commencement of the rai 1 way of the company enacted by section 2 of chapter 93 of the statutes of 1902,-
That section is just the usual clause providing that if the construction of the railway does not commence until a certain time and 15 per cent of the capital is not expended within two years, or if the railway is not finished within five years, the powers of the company shall cease in respect to so much of the railway as then remains uncompleted.
-all the other provisions contained in the Acts relating to the company, except section 10 of chapter 74 of the statutes of 1900 are declared to have continued to apply to the company and to its undertaking and to be in full force and effect.
Section 10 of chapter 74 of the statutes of 1900 reads as follows :
If the construction of the railway is not commenced and fifteen per cent on the amount of the capital stock is not expended thereon within two years after the passing of this Act, or if the railway is not finished and put in operation within five years after the passing of this Act, the powers granted by this Act or by the Railway Act shall cease and be null and void as respects so much of the railway as then remains uncompleted.
The Bill provides that this section, section 10 of chapter 74 of the statutes of 1900, shall not apply, hut that all the other clauses contained in the Acts relating to the company shall apply. I see that the words in the amended Bill * are declared to have continued to ' are struck out, and that the word I* shall, ' is substituted. The word ' to,' in the 25th line, should also have been struck out, so that it will read ' shall apply to the company and to its undertaking, and be in full force and effect.' I would move that the word ' to ' be struck out.


Peter Macdonald: It is struck out in the Bill which I have before me.
Bill reported ; read the third time and passed.



SECOND READING.

[Stage Direction]
Bill (No. 87) for the relief of James E. Taylor.-Mr. Grant.


Mr. W. J. ROCHE asked :: 1.	What amount was paid to the Winnipeg ' Free Press ' by the government, for all purposes, for the year ending June 30th, 1903 ?
2.	Also the Winnipeg ' Der Nordwesten ' ?
3.	Also the Winnipeg ' Loyberg ' ?
4.	Also the Winnipeg ' Canada ' ?


Rt. Hon. Sir WILFRID LAURIER (Prime Minister) :: 1.	$5,299.62.
2.	$2,456.10.
3.	$2,228.60.
4.	$765.85.
QUEBEC CENTRAL RAILWAY COMPANY. Mr. MORIN asked :
1. How much has the government received annually from the Quebec Central Railway Company, from 1896 to the present day-
(a.) For the passage of its trains over the Intercolonial from Harlaka to Levis ?
(b.) For the storage of its freight ?
(c.) For water supplies ? and (d.) For any other object.


Hon.  H. R.@: EMME'RSON (Minister of Railways and Canals). The information is too voluminous to give it in the form of an answer to a question, but if the hon. gentleman (Mr. Morin) will move for a return the information will be facilitated.


PROPAGATION OF LOBSTERS IN PACIFIC OCEAN.
Mr. MORRISON asked :: 1.	What steps are being taken to experiment iu the propagation of lobsters in the waters of the Pacific ocean in British Columbia ?
2.	Have any experiments ever been made to breed lobsters there ? If so, when, and with what success ?


Charles Smith Hyman: In the absence of the Minister of Marine and Fisheries I beg to answer :
1.	No steps are being taken at the present time.
2.	In 1896 six hundred lobsters, a great many of them carrying spawn, as well as a quantity of eggs-about 100,000 placed in sea-weed-were shipped in a refrigerator car. The details of the shipment are given on page 289 of the Fisheries Report, 1896. Sines that shipment arrangements have been authorized for two other shipments; but on account of unfavourable weather conditions when the lobsters could be procured, the arrangements were not carried out, though, in 1901, a quantity of other fish- chiefly black bass-were sent to the Pacific coast. The departmental officers report that owing to swift currents in the strait of Georgia, and low salinity of water, the lobsters planted have probably been carried down Puget Sound direction. Those retained inshore, near Nanaimo, were observed to be doing well for some months until liberated.
and have no doubt bred and established themselves ; but no 1 fishdnfe experiments have been carried out to test the matter. On one or two occasions lobsters have been captured and sold by fish dealers in Victoria-the result of planting iu 1896.


CHANGES IN ONTARIO COUNTY JUDICIARY.
[Stage Direction]
Mr. BENNETT-by Mr. W. J. Roche-asked :
1.	What changes in the Ontario county judiciary have taken place since the first of January last ?
2.	Are there any vacancies in Ontario^ county judgeships at the present time ? If so, in what counties ?
Hon. CHARLES FITZPATRICK (Minister of Justice) :: 1.	The following have been retired :-Judge Hughes, county court judge, Elgin county ; Judge Elliott, county court judge, Middlesex ; Judge O'Brian, county court judge, Prescott and Russell ; Judge Deacon, county court judge, Renfrew ; Judge Woods, junior county court judge, Kent.
Judge Coulter was transferred from Halcli-mand county to Elgin county.
The following appointments have been made G. B. Douglas, county court judge, Haldimand ; T. Macbeth, county court judge, Middlesex ; A. Constantineau, county court judge, Prescott and Russell ; D. J. Donahue, county court judge, Renfrew ; J. L. Dowlin, junior county court judge, Kent: J. J. O'Meara, junior county court judge, Carleton.
2.	Vacant-Junior judgeship, Prescott and Russell.


TREATMENT OF CANADIAN BRITISH VESSELS IN UNITED STATES POSSESSIONS.
Mr. SAM. HUGHES asked :: 1.	Do United States vessels or goods enter any of the following ports upon more favourable terms than those of Canada and Great Britain do :-(a) the Hawaiian islands (b) the Philippine islands ; (c.) Cuba ; (d) Porto Rico ?
2.	If so, what are the differences ?
3.	May British or Canadian vessels carry Canadian, British or United States goods from any United States port to any of the ports referred to in (a), (b). (c) and (d) ?
4.	Have Canadian or British goods or vessels any preferences over those of the United States or other foreign nations in entering the ports of South Africa, Egypt, British Guiana, Newfoundland, British West Indies, India, Bur-mah, and other British colonial possessions ?
5.	If so, what are they ?
6.	What steps have been taken by the Canadian government to induce the British government to secure for Canadian and British vessels and goods similar preferences and treatment upon entering the ports referred to in question, as are accorded United States vessels and goods entering British colonial ports ?
7.	What steps have been taken in the same connection in regard to all other foreign countries' vessels and goods entering British colonial Iports, so as to give them the same treatment as is accorded British and Canadian vessels and goods entering their colonial ports ?


Rt. Hon. Sir RICHARD CARTWRIGHT (Minister of Trade and Commerce) :: 1.	Yes.
2.	It would be difficult to point out the differences, as the islands, with the exception of Cuba, are United States possessions and vessels and goods enter those ports on the same terms as they would United States ports. As regards Cuba, there has recently been negotiated a treaty which, it is understood, gives the United States a preferential of 20 per cent. Official copy not yet received.
3.	No.
4.	No.
5.	Answered by fourth.
6.	Steps have been taken at various times to secure reciprocal treatment of British vessels and British goods in United States ports, but without result.
7.	Vessels and goods of other foreign countries entering colonial ports have the same treatment as is accorded to British and Canadian vessels and goods entering their ports, except in so far as the same are affected by the preferential tariff.


VOTERS' LISTS, VICTORIA AND HALIBURTON.
Mr. SAM. HUGHES asked :: 1.	Are the voters' lists for the riding of Victoria and Haliburton yet !printed ?
2.	If not, what is the reason, and when will they be printed ?
-'** If all the municipalities have not yet sent in the local municipal lists, what ones are not yet in ?


Hon. Sir WILFRID LAURIER (Prime Minister) :: 1.	No.
2.	Because of the large number of lists which had to be done, the work could not bo overtaken.
3.	The lists for Victoria and Haliburton are now complete.


SOUTH AFRICAN MEDALS.
Mr. SAM. HUGHES asked :: 1.	Have any Canadians who have made applications for the King's South African medal, been /denied it ?
2.	If any, what are their names, and what is the general basis of negation ?
3.	Has any application, or have applications, been made by the government, or any department thereof, to the imperial authorities, for recognition, other than for medals, for any Canadian who served in South Africa ?
4.	In what condition do the applications of those of the last South African contingent for medals now stand, and have they been granted ?


Hon. Sir FREDERICK BORDEN (Minister of Militia and Defence).: 1.	Yes.
2.	(a) Application was made on behalf of certain members of the 2nd Regiment. C.M.R., who had served twice.


Mr. SAM. HUGHES.: (b) Had not completed 18 months actual service in South Africa.
3.	Yes, in several individual cases.
4.	The applications for medals of the 3rd, 4th, 5th and 6th regiments, C.M.R., comprising the last South African contingent, have been refused by the imperial authorities. An application made on their behalf for the medal, owing to special circumstances, has not been favourably considered.


SHERBROOKE DRILL HALL.
[Stage Direction]
Mr. POPE-by Mr. W. J. Roche-asked :
1.	Has the government determined to construct a drill hall at Sherbrooke ?
2.	Has the site been definitely /settled ?
3.	Were the local military authorities consulted in reference thereto ? If so, does the location, if made, meet with their approval ?
4.	Has any deputation waited upon the government in reference thereto ? If so, who composed the deputation, and what was the nature of the interview ?
5.	Is it true that strong representations have been made in opposition to the proposed site by the local military officers and the citizens of Sherbrooke ?
Hon. Sir. FREDERICK BORDEN (Minister of Militia and Defence).: 1.	Yes.
2.	Yes.
3.	Yes-Lt. Col. H. R. Fraser, commanding 53rd Regiment, was consulted. He did not approve of the proposed site.
4.	Yes, two deputations.
The first deputation was composed of. Lieut. Col. E. N. Worthington, Dr. Camir-and, Mayor of Sherbrooke, Dr. Pelletier, M.P.P.
The first deputation presented arguments in favour of the site selected and also in favour of selecting Sherbrooke as the site for cavalry camp and school.
The second deputation was composed of . Lieut. Col. H. R. Fraser, Lieut. Col. Dr. A. N. Worthington, Dr. Austin, Mr. C. E. Armitage, John McIntosh, Esq., M.P., Major H. A. Odell, Major R. J. Spearing.
The second deputation strongly opposed the selection of this site.
5.	Yes-representations have been made in favour of and against the site.



WINNIPEG ' FREE PRESS.'

Mr. W. J. ROCHE asked :: What amount has been paid to the Winnipeg ' Free Press ' by the government, for all purposes, from 30th June, 1903, to April 1st, 1904 ?


Hon.   S@: 



LIGHTHOUSE KEEPER, BURNT ISLAND.

[Stage Direction]
Mr. TAYLOR-by Mr. W. J. Roche-asked :
1.	Is Mr. J. A. Acton lighthouse keeper at Burnt island, near Gananoque ?
2.	If not, have his services been dispensed with ?
3.	If so, for what reason ?
4.	How many years has Mr. Acton served as lighthouse keeper ?
5.	Has he been allowed a retiring allowance ?
6.	If so, how much ?
7.	If not, is it the intention of the government to grant him a retiring allowance ?
Charles Smith Hyman: In the absence of the Minister of Marine and Fisheries I beg to answer :
1.	No.
2.	Yes.
3.	Lighthouse converted into an automatic gas light.
4.	12 years 2 months and 12 days.
5.	Paid 3 months salary-to 31st March, 1904.
6.	862.50.
7.	No.



DOG-FISH PEST.

[Stage Direction]
Mr. KAULBACH-by Mr. Bell-asked :
1.	Did the government recently cause the commissioner of fisheries to make an investigation into the dog-fish pest in the waters of the Atlantic coast of the Dominion ?
2.	If so, what was the umuro of the report of the commissioner ?
3.	Does the government intend offering a bounty for the capture of these fish, as suggested by me last year ?
4.	What steps does the government intend taking towards minimizing this nuisance, which is doing so much injury to the fisheries of Canada ?
Charles Smith Hyman: In the absence of the Minister of Marine and Fisheries, I beg to answer :
1.	The Commissioner of Fisheries was authorized to hold an investigation into the dog-fish pest and other fishery matters on
the shores of northern New Brunswick. The investigation concluded on April 21st.
2.	The report is in preparation, to be laid before me in a few days.
3.	The report referred to is awaited before deciding the question of a dog-fish bounty.
4.	A large number of suggestions are before the government, and steps will be taken when the report referred to is presented.



LIGHTSHIP LURCHER.

[Stage Direction]
Mr. KAULBACH-by Mr. Bell-asked :
1.	Who was the designer of the lightship Lurcher, now stationed on the Lurcher shoal, Bay of Fundy ?
2.	Has the government had another lightship built on the same model as the Lurcher ?
3.	If so, where is she to be stationed ?
Charles Smith Hyman: In the absence of the Minister of Marine and Fisheries, I beg to answer :
1.	The engineers of the United States Lighthouse Board. We adopted their latest design, considering that their great experience in operating lightships on the Atlantic coast would ensure the best design extant.
2.	Yes.
3.	Off the east end of Anticosti.



ROSS RIFLE FACTORY.

Mr. BELL asked :: 1.	Has Sir Charles Ross, or the Ross Rifle Factory Company, or any person on behalf of either of them, applied for more land on the Cove Fields at Quebec ?
2.	If so, how much more, and in what direction ?
3.	Has the government granted such application ?
4.	If not, has the government the intention of granting said application ?


Hon. SIR FREDERICK BORDEN (Minister of Militia and Defence) :: 1.	Yes.
2.	A portion of the plateau lying to the north of the rifle factory.
3.	No.
4.	Under consideration.



GRAND TRUNK PACIFIC RAILWAY.

[Stage Direction]
House in Committee on Bill (No. 72) to amend the National Transcontinental Railway Act.-Sir Wilfrid Laurier.
On section 4, of the schedule,
4.	The Grand Trunk Company may enter into an agreement or agreements with His Majesty respecting the guarantee of the second-mortgage bonds of the Pacific Company, to be issued pursuant to the provisions of the scheduled agreements, and also respecting any other matter or thing which the directors deem necessary or expedient for the purpose of carrying into effect the scheduled agreements.
Mr. LENNON.: expense on the country would be, by reason of the amendment in clause 4 of the agreement, and the other clauses which are connected with it ; nor had he made any calculation as to the amount of our increased liability by reason of these amendments. In fact as the matter developed from stage to stage we extracted from the Minister of Finance the admission that no calculation whatever had been made by him as to the expenditure that was involved by reason of these amendments, or as to the increased guarantee that would be undertaken by reason of the changes. I understand that the Minister of Finance was not only speaking for himself, but he was speaking for the ministry, and we therefore have it admitted that the government made these alterations without having gone into any calculations as to the additional amount we would be compelled to pay for interest, or as to the extent of the increase of the guarantee that the country has undertaken. I am prepared to anticipate, in fact it is quite plain, that the government has been to a large extent going it blind in this matter. The only conclusion to be derived from what has been said ; beginning with the Prime Minister ; following through the speech of the Minister of the Interior ; taking up the speech of the member for Annapolis (Mr. Wade) who was put forward in place of the Minister of Railways and Canals, and judging by the statements made by the Minister of Finance, who spoke briefly once or twice ; the conclusion we must arrive at is, that these gentlemen thought that these alterations would only involve a nominal increase of liability, and an infinitesimally small increase in the payment of interest account. In order that I may not be unfair to any of these hon. gentlemen, I will refer to what they have said. In revised Hansard, at column 799, the Minister of the Interior says :
My hon. friend spoke briefly of the change in the contract respecting the removal of the limit of cost upon the mountain section of the railway and upon the alteration in the remedy which is provided in case of default.
The section which the hon. minister is there referring to is, in the first place, the section which we are now dealing with, and, in the next place, the section with regard to our taking possession of the railway or allowing an accumulation of five years' interest before we take possession. In this connection I may say that clauses 4 and 5 of the agreement are to be read together, that is, the clause which deals with the removal of the limit to our guarantee, changing it from a fixed limit of $30,000 a mile to an absolute guarantee of 75 per cent of the cost, and the clause dealing with the implementing of the bonds in order to make them produce their actual face value. There is also clause 1 of the supplemental agreement, which deals with the extension of time. It will be found, Mr. LENNOX.
on investigating-the government have not found it out yet, because they have not investigated-what increase the government has to pay, and what increased liability the country is incurring, that you have to take these three clauses together. If you take clause 1 alone, it is harmless so far as interest and liability are concerned; if you take clause 4 alone, it is pretty serious, but not so serious ; but it is when you take them all in combination, as a trinity, if I may so express it, that the disaster to the country is worked out. It is a kind of machine-and we are getting the machine introduced into politics more and more from time to time. The hon. gentleman to whom I have been referring, after speaking of the alteration in the section, and referring to the shareholders of the Grand Trunk Railway Company, says :
We are prepared to meet these gentlemen, who for their part are afraid, and show our confidence by releasing the old provisions and inserting provisions which can only come into effect in ease of default, which we do not anticipate.
What does this show ? It shows just this, so far as the Minister of the Interior is concerned-and he cuts a pretty wide swath in this matter, I imagine-that he has never put his pencil to paper to ascertain what the cost of this is. If he is speaking candidly, and giving honest information to this House-and I would not assume that he is doing otherwise-he does not anticipate that these payments provided for in this supplemental agreement will cost the country anything. Now, I am not going to quibble-it might be called quibbling by hon. gentlemen opposite, who are accustomed to use that word-by saying that it is the duty of the right hon. gentleman who leads this House, when he hears a supporter of his make a definite and distinct statement, to contradict it if it is wrong. The position the right hon. gentleman may take in that regard must be a matter for his own consideration. It may be said perhaps with a good deal of reason, that when the government puts up a private member of the House as almost the only exponent of the position of the government, and when that gentleman upon a vital matter makes a mis-statement-I will assume an unintentional mis-statement-it would be the duty of the government not to let it pass unchallenged. Be that as it may, that is not the position which the government took in regard to the hon. member for Annapolis (Mr. Wade) when he made a statement, sustaining to the last degree the position which I take against the government today, namely, that they went into this matter of changing and recasting this agreement with the Grand Trunk Railway Company without making any calculation whatever on either of these two points-either

for the purpose of ascertaining how far our liability was increased, how much larger a guarantee of bonds we would have to enter into, or how much more cash we would have to pay by way of interest. This is what the hon. member for Annapolis (Mr. Wade) says on this point :
Under these circumstances the promoters came back to the government and asked for a modification of the agreement. The government is in this position : either the whole scheme must fall through or the concessions would have to be made which have been agreed to. With regard to these concessions, X wish at once to place myself on record as saying that the agreement as amended will not cost the Dominion government one extra dollar.
. Now, if language means anything, that is about as definite as it could be made. If repetition makes it any stronger, the hon. gentleman repeated :
It will relieve the situation, so far as the railway company is concerned.
That is true. I will show that it relieves them to a very large amount. I have made a calculation if the government has not :
It will relieve the situation so far as the railway company is concerned. It will enable the company to finance the project, but will not impose an extra dollar on the people of Canada.
Now, I said that I would not urge the point as to whether it was the duty of the premier to correct a mis-statement of that kind. That the leader of the government would be expected to know what the truth was, anybody will admit; but I leave it just in that position, so far as the hon. member for Annapolis is concerned, emphasizing this point, however, that he was put up as the special exponent of the government in this connection, in place of the hon. member for North Norfolk (Mr. Charlton), the railway expert, who would give us all the information we required-and we certainly have not got very much from the right hon. gentleman who leads the government or from the Minister of the Interior. I will also refer to what the right hon. leader of the government himself says upon the question. The point I am endeavouring to make plain is this, that aside from the Finance Minister, not one member of the cabinet has thought it worth his while to go into the question of how much extra interest we will have to pay by reason of these alterations in the contract, or how much our increased liability will be. Like the ostrich, they prefer to hide their heads in the sand and not look at the statistics. They may have anticipated that if they investigated the result would be very disappointing, but the fact remains that not a member of the government, and as far as we know not one of their supporters, has calculated what difference these changes will make either in the matter of interest or of liability. The right hon. gentleman said, speaking of clauses 4 and 5 :
These are important sections. We undertake also to implement the proceeds of the sales of bonds so as to make the amount actually going into the construction, 75 per cent of the cost of construction. This is to be done on conditions to be further agreed on between the government and the company	If the market
should continue as it is, and the bonds have to be sold at a heavy discount, the government will have to advance a little more in order to make up the difference between the face value and the price realized.
It is evident that the right hon. gentleman who leads the government knew nothing whatever as to what this change was going to effect. He says he is not a business man, and has given additional proof of it by showing that he has not even considered how this matter of implementing is to be carried out. He does not know that the most suicidal policy which the government could adopt, even more suicidal than anything it has yet perpetrated, would be to'adopt his suggestion, and advance sufficient to make up the difference between the face value and the price realized. In other words, if this should amount to a difference of $1,000,000, or $2,000,000, instead of issuing bonds to a larger amount and paying interest on them for seven ears, and then have the company assume the bonds and the country be liable merely for our guarantee, we will pay out that $2,000,000 hard cash and will have no recourse for that money. We have been told by the Minister of Finance that he knows nothing as to what that deficit would amount to, and I would again call attention to the position of the Minister of Railways. From day to day we have the Minister of Railways flitting in and out- principally out-without venturing to say a single word on this great transcontinental scheme. In the old days, if a minister of the Crown had signed his name to a contract and then refused to stand up in the House and take the responsibility for everything in that agreement, he might possibly find himself charged with treason. But I suppose we ought to congratulate ourselves on the fact that while the hon. gentleman keeps clear of the question before us, he occasionally makes himself heard on minor questions. The government are giving an extraordinary exhibition of incapacity by refusing to give an estimate showing what this change is going to cost the country, either in interest and increased liability. It seems impossible to arouse the ministers out of the somnolence into which they have fallen. Let me draw their attention to the fact that they have been completely outwitted * by the railway magnates, particularly by Mr. Hays and Sir Charles Rivers-Wilson. This little extension of time, which may be a harmless thing in itself, is of very great con-

23S4
sequence, when we get the whole machinery into motion. It is ' the combination ' that forms the patentable device. Once you get the different parts in combination, as they say in the patent laws, then you have the real thing which is going to put the screws on this country and grind out for the Grand Trunk Railway an additional million dollars or two. Let me illustrate. Take the contract as it was originally, for five years. That would involve the payment of interest for probably two and a half years at three per cent. The official magnates who control the Grand Trunk Railway have told us that the cost of the mountain section will be $50,000 per mile. Three per cent for two and a half years or seven and a half per cent on $50,000 makes $3,750 per mile, or a total mileage rate of $53,750. 500 miles of mountain railway at $53,750 gives $20,875,000. Now we begin to feel the implementing section. To realize this amount, we will have to issue bonds to the extent of $29,861,112. Although we have done that, if there was not this combination of provisions, there is no great harm, so far as the money is concerned, done to Canada. Why ? Because in that event though it costs to build the railway $29,861,112, yet under the clause in the original contract, which provides that Canada is only to pay $30,000 per mile in the extreme, all we would have to pay would be $30,000 per mile and the company would have to pay the balance, $14,861,112. Under the old contract the utmost liability that the country assumed would be $15,000,000 and the utmost amount that we would have to pay for interest, assuming it to be at three per cent, would be $3,150,000.
Now, if, for the purpose of understanding this thoroughly I refer to what it will cost upon the construction period of eight years, it will be found also that the extension of time alone is not what is fatal to the country. With eight years as the period of construction, the cost will be $56,000 a mile, or a total of $28,000,000. To implement that will require $31,111,112. If we had only the extension of time and no other change, Canada would still be protected by the limited guarantee in the old agreement, and, notwithstanding that the figures had increased by the prolonged construction, Canada would still have to guarantee only $15,000,000, and the company would have to provide $16,111,112, a slightly larger sum than the country would have to provide. The interest which we would have to pay would not be increased.
It is then when you come to the increase of guarantee, that the machine begins to operate, as I have said, and it hardly operates in the way my right lion, friend (Sir Wilfrid Laur.ied) says when he tells us that the cost to the country will be ' infinitesimally small sum '-a big word for a very small subject. Now let me say before I deal with the figures here-and


Haughton Lennox: I will make it good-that this little innocent extension, aside from all other questions of interest involved, costs this country $300,000 at least in cash paid out; not a question of * liability,' but extra cash outlay. But, when I say that the extension of time aside from these other clauses will not be injurious to the country as matter of money or direct payment, I do not for a moment want to be understood as allowing it to be inferred that it is unimportant as regards the conditions of things in the west. The extension of time is very important in that regard. The extension of time, they say, they gave for the convenience of the company. I see the company did not urge this at all, but merely suggested that perhaps five years was too short a time. It has an important bearing, for in addition to denying the people in the west the facilities that were promised by the government last session it increases the total cost of the construction of the railway. Whenever a railway is begun, interest begins. You have to provide for interest for, perhaps, half the period of construction. Instead of supplying the interest for two and a half years, you have to provide for four years. It increases the total cost of construction ; and just in proportion as you increase the cost of construction you make it necessary that the railway shall charge higher rates for the transport of the people's goods. And so, the government, in addition to all other things, have put an additional burden upon the people of the west and the people of this whole country by this simple extension of time. There is no use of arguing for a moment that this will not be the effect. When it comes before the Railway Commission, or any other authority it is the total amount that the railway costs to construct including interest, that is going to be the measure of its tariff of rates.
Now, let me refer to what it costs when we construct during a period of five years. Leave out of consideration the extension of time, but give the company the benefit of the implementing clause, which provides that we shall guarantee the bonds to realize the amount desired, and give them also the privilege of a guarantee not limited to $30,000 a mile, but an absolute guarantee of seventy-five per cent of the cost without limiting the cost. Taking these elements alone, and leaving out of account,* for the moment, the question of the extension of time, I wish to show what the expenses will be. And I do this with one principal object-to show what I will venture to say the government did not anticipate, and what I will challenge the government to admit they did anticipate, namely, that when we granted this extension of time we paid the company for accepting it. I say I challenge the government if they dare to take the other horn of the dilemma and say that they did anticipate it. Now, let us see how it works out, assuming that the road is 500

miles long and that the period of construction is five years ; five hundred miles of railway, at $53,750 a mile will cost $20,875,000. Of this, Canada guarantees 75 per cent, or $20,156,250. To produce this sum with bonds at three per cent, selling at 90-and nobody, so far as I kno.w has suggested that better than that will be done-will require an issue of $22,395,834. Now I will ask the government if, before they made this change -this trifling change as they call it-in the contract of last year, and God knows everybody thought that was bad enough, they realized the difference that the change would make. Under the old contract, at the utmost we were called upon to guarantee say $15,000,000. The government will not take that back. They proclaimed it from the housetops last year.
They cannot take it back ;	$15,000,000
was the utmost of our guarantee last year lo-day we guarantee $22,393,834, or just $i,395.834 more, without the extension of time, to which I will come later on. We do more than that ; we increase our guarantee by $7,500,000 or 50 per cent on the original amount of $15,000,000, but yet the right hon. gentleman (Sir Wilfrid Laurier) is so content with the condition of things-or is densely oblivious to his position. I don't know which-that he announces it as just a trifling change, nothing of any importance. In fact he said : the changes are so extremely moderate that I shall be surprised if any hon gentleman on the other side takes objection to them, although they are so fond of taking objection that possibly they may. As the right hon. gentleman often says :	that is not all.
We have the question of interest. The interest on this $22,000,000 odd for seven years as 3 per cent amounts to $4,603,123. The total interest as I have stated, which we were to pay under the former contract [DOT] was $3,150,000. so that by the mere alteration of the guarantee, removing the limit and implementing the bonds, we have' a net increase of $1,453,225 or, in round numbers. $1,500,000 of increased interest to pay. But that is not all, not by a great deal. We have now to provide for the extension of time, and I said a moment ago, and I will prove, that when the government made this change they did not know that it would involve an additional cost to us in round numbers of $300,000, to get the company to accept this extension of time. $300,000 is not a large amount ; it is a small amount, but it is enough to show that we had a government which either did not know or did not care what they were doing. No government with any regard for the interests of the people would knowingly have made such an arrangement. When these people sought an extension, a careful government would have said :	You will be putting upon us an
increased burden of $300,000, and you must provide for that at all events, because 76
it will be rank robbery-that is what 1 think a careful government would say, and 1 could not contradict them if they said it- it will he rank robbery of the people if this country to enter into this arrangement alal not provide for this. Now what is the fact-and it will be for the Minister if Finance (Mr. Fielding) when he gets time, or for the Minister of Railways and Canals (Mr. Emmerson) when he wakes up or gets permission, to show us if they can, that these figures and substantially incorrect. In the meantime 1 regard it as the duty of every n ember, whether he be a cabinet minister or otherwise to go into this matter at once and ascertain to the best of his ability, what will be the increase in liability by reason of these changes. Here are figures -it may be a little tiresome to hon. gentlemen opposite to hear them, but I am going to have them down on ' Hansard ' so they will confront lion, gentlemen in years to come, when they are sitting on this side. Then we will be able to remind them of just what we tell them now, and I fear that our figures will be verified by costly facts within a very few years.
Five hundred miles of mountain section a t $56,000 a mile will cost $28,000,000. Can-fida will guarantee 75 per cent or $21,000,000. If 3 per cent bonds sell at 90, that will require $23,333,334. Under the contract of 1903, the utmost amount that we were called upon to guarantee was $15,000,000. The increase with this little innocent extension, mounts up by $8,333,334 or more than 50 per cent of the amount of the guarantee in the original proposition submitted to parliament a year ago. ' A mere trifle' says the right hon. gentleman;
' nothing worth speaking about,' echo the members who support him and loud applause comes from every seat. But it is not a mere bagatelle so far as the railway company is concerned ; it suits them first rate, and yet, according to Mr. Wade, if the government had not conceded these things, the company would have been out of the field, and would not have entered into the bargain. Does any one believe that ? I certainly do not, and do not believe that any one else does. The government made an ignominious surrender in Ihis, and that is the only way of expressing the situation. If the government had come to this House and said ; This company wants so and so, what do you think about it? you are among the representatives of the people and you have a right to express j our opinion. If this had been done the company would have been standing at the doors and haunting the lobbies in an effort to get the Bill through, and to get such a contract as the House would give them-because no one would ask them to accept an unreasonable contract; if they came here and gave us a chance. It costs us just $8,500,000 more by way of guarantee by reason of the change, not in the whole

[DOT]2387

supplementary contract, but simply in these three sections.
Well, what does it cost us in additional interest ? The interest on $23,000,000 odd at 3 per cent, amounts to $4,090,000, or in round numbers to $5,000,000. That is including the extension of time and the implementing. Tinder the original contract the utmost amount of interest that we were bound to pay was $3,150,000, so that we have an increased payment of interest by reason of the change of $1,750,000, or a million and a quarter. And yet the members of the government echo the statement of the right lion, gentleman who leads the House, when he says in all sincerity and all candour : it is a little thing, it does not amount to anything, a mere trifling change. If there had been no extension of time, the interest we would have to pay would be $4,003,000. Deduct that from the present interest, which we have found to be called for with the extension, and we have $296,875. That is the money we have to pay to the Grand Trunk Company, as a bonus for accepting this additional concession, the extension of three years upon the contract.
I state this as a fact and it will be very much in order for the members of the government to say that it is not a fact if they can. Now, I want to make it perfectly clear, because either intentionally or accidentally hon. gentlemen on the other side of the House sometimes quote part of a statement and say that a certain hon. gentleman said so and so, that in quoting the figures X have given, I am only dealing with the effect of clause 1 extending the time, clause 4 removing the limit to the guarantee and clause 5 providing for the implementing in the supplementary agreement. In addition to those figures we have this possibility, this inevitable result, under clause 32 of the contract of 1903, that we have possibly to pay the interest for a fur ther period of three years in case the company does not realize enough to pay that interest. Then, it has to be capitalized, sc that we have to pay in addition, when capitalized, the sum of $1,890,000. We have to keep in mind too that under clause 6 of the amended contract which we are coming to in a few minutes, or a few days-I do not know which it will be-we have these deferred payments


Mr. PATERSON.: A few weeks, I guess.


Haughton Lennox: Weeks and weeks. The more light we have shed upon this contract the more objectionable we find it. We have these deferred payments because it is provided that the company need not pay the interest and still they can defy the government of the country. The present government does not seem to think that the country will object, but I think that the country will get rid of the present government and then we will have an-Mr. LENNOX.
other order of things. These deferred payments, capitalized for four and a half years -you may go as near five years as you like-amount to $2,835,000. This is entirely outside other incidentals that we will deal with later on. I only mention this for the purpose of making it.clear that I confine myself for the present to these three sections. But, that is not all.


Mr. FITZPATRICK.: Would my hon. friend (Mr. Lennox) allow me to draw his attention to the fact that we are not discussing two clauses ? We have not yet reached the clause that he desires to discuss. If it is the desire of the committee to discuss and pass these all together there will be no objection to that.


Robert Laird Borden: I suppose that for the purpose of making a comprehensive calculation it is necessary to take up the two clauses.


Charles Fitzpatrick: Either for that purpose or for the purpose of making a speech,
I do not know which.


Haughton Lennox: A little of both. I am quite prepared to say I want to make a speech. I think it is important that we should make speeches. I think it is very important that these matters should go to the country. I think it is most important that the country should be seized of this startling fact that not one member of the cabinet, and in so far as we can ascertain, not one of their slumbering supporters, has made a calculation as to what these obligations amount to. I am not going to deal with that subject further. It is not necessary. In the course of the calculation I have made I have adopted the basis of three per cent, but I think that three per cent is too low and that in order to ascertain just what is the true burden upon the people is we would have to count it at three and a half per cent or possibly four per cent. Sir Charles Rivers-Wilson spoke the other day of four per cent and if you sell the three per cent bonds at ninety the buyer will not get 4 per cent. I think there is good reason to believe that we will not be able to finance this scheme for three per cent. Now, there is just another matter I will refer to and that is in reference to this implementing. I have shown


Peter Macdonald: I think the hon. gentleman will be getting into another clause if he speaks of the implementing of this matter.


Haughton Lennox: I am not getting into any other clause whatever.


Peter Macdonald: That question does not come up under No. 4.


Haughton Lennox: That is all right; we will take it in another form. The hon.

gentleman wlio leads the House told, us that this was not serious at all that-
If the market is to continue as it is, and the bonds have to be/sold at a heavy discount, the government will have to advance a little more

	'	.
Of course if it were a low discount it would hardly be worth considering.
-in order to make up the difference between the face value and the price realized ; but if the market shall revert to the condition in which it was six weeks ago the amount to be further advanced by the government would be infinitesimal.
The infinitesimal amount is the difference between $23,333,334 and $21,000,000 or $2,333,334. That is the infinitesimal amount that the right hon. gentleman has referred to. The right hon. gentleman dealt with the 4th and 5th sections and you cannot separate them. The increased liability of the country is this : We have an increased liability to the extent of the difference between ,$15,000,000 and $23,333,334, or $8,333,334, or more than fifty per cent, aye more than fifty-five per cent of an increase beyond our original liability of last year. Instead of paying out $3,150,000 for interest we have to add to that the sum of $1,750,000 more, and we have to pay for the privilege of getting the company to extend the time another three years and so deprive the people of the west of what they stand in such urgent need of, the use of a railway, and in also this way increasing the cost of the railway and increasing the cost of transportation. We have the construction of the railway deferred at a cost to this country of $300,000 ; that is, we pay the railway company a bonus-to deprive us of the privilege -amounting to $300,000. We have the language of the right hon. leader of the House himself to the effect that it was important to have this project go through rapidly. He said last year, although it is somewhat different this year :
Exception has been taken to the immediate necessity of building such a road, exception has been taken to the policy -which we have to suggest for the immediate construction of such a road : but as to the idea 'itself I have never heard a word of opposition.
Let me just pause there. That was all right last year, but I would like to ask the hon. gentleman, if he is accurate, in that statement in view of the memorandum of Mr. Blair, who urged upon every member of the cabinet last year before this measure was ever introduced, a different policy from that of the government. It is one of these little inaccuracies ; nothing untruthful, nothing dishonest, but little slips and inconsistencies which appear conspicuously in the speech of the right hon. gentleman.
Exception has been taken to the immediate necessity of building such a road, exception has been taken to the policy which we have to sug-
764	.
gest for the immediate construction of such a road ; but as to the idea itself I have never heard a word in opposition >nor do I believe that such a word will be heard in debate. The first of these objections that is to the immediate construction of such a road can be disposed of I believe with a single observation. To .those who urge upon us the policy of tomorrow and to-morrow and to-morrow ; to those who tell us wait, wait, wait ; to those who advise us to pause, to consider, to reflect, to calculate and to inquire, our answer is: No this is not a time for-deliberation, this is a time for action.
And even now it is not a time for calculation, and the government do not know what the cost to the country will be. It is peculiar that we should pay the company for delaying the building of this railway, in face of the fervent declarations of the Prime Minister a year ago. The right hon. gentleman was avowing that there was urgent necessity for this road for the sake of the settlers in the west, and also because the abrogation of the bonding privilege would ruin the country, as he said. He indulged in the prayers : Heaven grant that it may not be too late. What is the object of paying this $300,000 now ? Is it done in order to keep the right hon. gentleman praying. He says further : Heaven grant that whilst we tarry and dispute the trade of Canada is not diverted to other channels. .


Hon.   W@: We are told to pray without ceasing.


Haughton Lennox: But the Prime Minister was praying in the House and fighting out of the House. The disputes, and the fights, and the tarrying that he refers to, were all done in the cabinet prior to the introduction of this measure. It was only when the Prime Minister came to the House and was confronted by the good example of the opposition, that he began to pray. Well, I am not a pious man, and I will leave the right hon. gentleman to his prayers. But I do say that, nothwithstanding his prayers he and his government did not adopt a business system in conducting these negotiations with the Grand Trunk Company. It is evident to any child that, before the government came down with these modifications in the contract, they should have made a calculation as to what the increased burden would be upon this country. It is a most significant fact that in a gigantic scheme such as this, not only the government made no calculation as to what the increased liability on the country would be, but they attempted to force this measure through parliament without giving any explanation whatever of its cost to the country. I hope, Sir, that we shall have some information on that subject before this Bill goes through.


Hon.   W@: I have no desire to follow the hon. gentleman (Mr. Lennox) in discussing the whole Bill. It has been made a matter of reproach that many gentlemen on this side of

the House have not spoken during the committee stage, but I suppose they felt, like myself, that it was unnecessary to do so. the Bill having been so fully discussed last session, and the echoes of these speeches being almost in the chamber when we met again this year. I believe that sufficient of reply has 'been given by gentlemen on this side to meet the courtesies of debate. It was said that mine was the eighty-fifth speech delivered last year on the question, and, as some others followed me, one would think that was a pretty full discussion. I am not now rising to make any general remarks, but I shall endeavour to confine myself <as the last speaker, I am sorry to say, did not) to the consideration of the question before the House. There is no doubt that there may be an increased obligation on the country under the change that is being made in this clause ; there may be, I say ; it is not known what it may be. Evidently the Grand Trunk shareholders thought there would be. They hesitated to accept the contract, they thought the bargain that this parliament had ratified was too binding, too stringent, too one-sided for them to agree to. They asked for certain modifications, one of which was that, instead of guaranteeing three-fourths of $40,000 per mile on the mountain section, we should guarantee three-fourths of the cost of that mountain section,' even should it exceed $40,000 per mile. It is for the House to consider whether it was wise to grant that concession, among others, in order that this contract might be carried out. The government thought it was, and the House, by assenting to the second reading of the Bill by a majority of fifty-five, evidently thought the same. What the increased obligation of the government may be, gentlemen opposite ask us to say, and these gentlemen have given figures themselves. I want to put the question from a point of view which has not yet been presented, and I think the House will be bound to take it into consideration in determining whether we have done wisely or not. For the purpose of argument, let us take the statement that was made by the hon. member for Hamilton (Mr. Barker), who has given a good deal of thought to this subject.
1 think he based his remarks upon a calculation made by the Grand Trunk president, in which he estimated that the mountain section might cost $50,000 per mile, and to which he added for interest during the course of construction another $6,000, making $56,000 in all. The hon. gentleman (Mr. Barker-) took it for granted that instead of guaranteeing up to $30,000 per mile on the mountain section, as we did under the original contract, that we virtually guaranteed !i>42,000 per mile.
He puts the mileage at 500 miles. Well, it has not been definitely ascertained to the mile what the mileage is. I suppose Sir Charles Rivers-Wilson would not say that he had ascertained by actual tender what


William Paterson: it would cost. If we take the mileage at 500 miles, which is given by hon. gentlemen opposite, at $30,000 a mile that would cost $15,000,000, on which interest at 3 per cent would amount to $430,000 a year, or, for seven years, to $3,150,000. If we assume again-I take the hon. gentleman's figures without committing myself to them-that three-fourths of the cost will be $42,000 a mile, that would amount on the 500 miles to $21,000,000, on which 3 per cent would be $360,000 a year, or for seven years, $4,410,000. Therefore, on these figures, we would have to pay in consequence of this change an increase of $1,260,000-not all at once, but during seven years. I presume that the lion. Finance Minister, though I have not discussed the question with him, when he makes his estimate would take into consideration the fact that the mileage which he adopted was not exactly the mileage given by lion, gentlemen opposite. Now, is it wise to make this change ? The contract could not be approved as it was. Concessions had to be made. This is one of them, perhaps the most important-the only one, I think, besides another on which there can be any possible enhancement of the obligation of the country. If we had not consented to this, and if the bargain had not been carried through, if the scheme had failed, was there to be no road built ?


Mr. CLANCY.: Does that follow ?


William Paterson: 
Some hon. MEMBERS: No.


William Paterson: Yes, and you have a road over which you may run your trains, belonging to the people of Canada, just as if you had built the road yourself and leased it to another company. Contrast the two plans. The hon. gentleman who has taken his seat will perhaps give us some figures as to what he estimates that road would cost if constructed by the government, and as to whether that system would be better and cheaper than the one which is being adopted, under which we waive the $30,000 limit and assuming the responsibility of guaranteeing three-fourt+is of the cost, no matter what that may be. There is the question. You are going to abandon the road or build it as a government. The latter is the proposition of the hon. gentleman. If you build it as a government, you will have to borrow the money, and if you borrow the money, it will cost you nearly $1,500,000 more per year. The obligation of the country, under our scheme ceases at the end of seven years. Under the scheme of hon. gentlemen opposite, the obligation would never cease until the debt was paid, because it would be money borrowed, and no one is leasing the road and paying for it. But these hon. gentlemen might say, we will iease the road and it will give enough to pay the interest. What guarantee have you that it will ? What guarantee can you gather that such will be the case from the figures given by the hon. member for West Toronto (Mr. Osier) as to the cost of the mountain section during the first few years after it is constructed ? Either these hon. gentlemen will have to pay the interest themselves during seven years-aye, more than seven years-or they will have to burden the

traffic of the company with rates that will not he in the people's interest.


Robert Laird Borden: My hon. friend the Minister of Customs has made a wonderful discovery. He has discovered that if the government should build the road, it would have to pay for it. I do not know after all, that that throws a great deal of light on the question. He might also have made the discovery that if the government should own the road, it will receive the revenues from it. It is1 news, however, that the government were obliged to accept this proposal of the Grand Trunk Railway. That is a very interesting piece of information which the hon. gentleman repeated over and over again. The government had no alternative.


William Paterson: I did not say that. I said that they had to accept or the contract would cease.


Robert Laird Borden: Under those circumstances we should be very much obliged indeed to the Grand Trunk Pacific for its moderation. It might have asked thg government to guarantee eighty per cent or ninety per cent of the bonds. It might have asked to be exempted for ten years, or fifteen years from any payment of interest. I think the thanks of the House and the country are due to the Grand Trunk Railway if the situation was as my hon. friend, the Minister of Customs, has described it. We have had it stated not only by gentlemen composing the Grand Trunk Railway, but by members of the government, and especially by the Minister of the Interior, that this proposal to build a railway to the Northwest of Canada is infinitely better as a business proposition than that of the Canadian Pacific Railway some years ago. Was it not pointed out by the Minister of the Interior that the net earnings of the Canadian Pacific Railway during 1903 were $15,000,000 ? Did not he as well as the Minister of Agriculture and other members of the cabinet, point out that the conditions and circumstances are much more favourable now in the west than they were twenty-five years ago, and that this proposal is infinitely better, as a business proposition, than was that of the Canadian Pacific Railway ? Under those circumstances one would not have thought, unless the Minister of Customs desired to absolutely repudiate these statements of the Grand Trunk Railway magnates who are described as the best railway men in the world, as well as the statements of his own colleagues-one would not have thought that he would have seen fit to put forward the argument he addressed us this afternoon. Here is a railway from Winnipeg to the Pacific coast, as to which we are incurring an obligation representing three-quarters of the cost of construction. When we complain that our obligations have been increased, so far as the mountain section is concerned, to a very large amount, the only reply which Mr. PATERSON.
comes from the government, comes from the Minister of Customs, and that is that if the government should build the railway itself it would have to pay for it. Does my hon. friend think he has really advanced the argument after all? He does not pretend to know how much in addition this change will cost the country. One would suppose that before the government undertook to accept this proposition of the Grand Trunk Railway, they would themselves have made some estimate as to the additional obligations it would entail. My iion. friend the Minister of Customes talks about this as if it were a matter that never came up before the government untif my hon. friend from Hamilton (Mr. Barker) introduced it. He says that he has not considered the figures and is prepared to accept for the present those of the hon. member for Hamilton. But according to liis own statement he could not consider the figures. The proposal was placed before the government and they had to accept it, and every one of the ministers did accept it, according to the Minister of Customs, without for one moment considering what additional obligations that supplemental agreement imposed on the country. So much was this the ease that when the Prime Minister came down to the House and introduced this agreement, what did we have from him ? We had remarks about roses growing 200 miles to tlie northeast of this railway, but no one word about the additional obligations imposed on the country by this change in the guarantee of the cost of the mountain section. Look at the remarks of the right hon. gentleman at page 720 of the revised Han-said, and you will find that not one word of explanation on that subject did he give the House or the country. Then the Minister of the Interior took the question up and he went one step further. He said :
We are prepared to meet these gentlemen- referring to the shareholders of the Grand Trunk Railway-who, for their part, are afraid, and show our confidence by releasing the old provision and inserting provisions which can only go into effect in case of default, which we do not anticipate.
If that means anything, it means that the provision with regard to the mountain section does not impose one dollar additional liability on the people. And my hon. friend from Hamilton (Mr. Barker) has presented figures which the Minister of Finance (Mr. Fielding) has not controverted-nor has the Minister of Customs (Mr. Paterson) nor has the Minister of the Interior (Mr. Sifton)

showing that a sum of not less than $1,260,000 of actual cash must be paid by this country by this supplemental agreement over and above the sum which the country would have to pay in respect of the mountain section under the original agreement. Now, I say that my hon. friend from Hamilton did not overstate the matter when he

said to the House that the remark of the Minister of the Interior, if it were intended to be taken seriously, was a most uncandid statement to put before this House and the country. It was heralded throughout the country as a defence of the contract, as showing that no additional liability, so far as the payment of cash was concerned, was imposed upon the country by its terms. My hon. friend the Minister of the Interior says that I may put my own interpretation upon his words.
I say that I put upon them the interpretation I have given, and I say also that no fair minded man reading these words can put any other interpretation upon them. But a step further was taken in this matter. We have the hon. member for Annapolis (Mr. Wade) who is now in the House stating in express terms that which the hon. Minister of the Interior stated by necessary implication. These were the words of the hon. member for Annapolis :
With regard to these concessions, I wish to place myself on record as saying that the agreement as amended will not cost the Dominion one extra dollar.
Now, the figures have been before the hon. member for Annapolis for the last ten days or two weeks, and though we have his reputation pledged for this statement, yet we have not yet heard from him a single word to contradict in any way, the figures placed before the House by the hon. member for Hamilton. It is not well that these misrepresentations should be made to the people about the effect of this contract. It would have been wise, I think, for tire Prime Minister (Sir Wilfrid Laurier) to do in the first place what the Minister of Finance was obliged to do on the 20th of April last when he said :
If the hon. gentleman will permit me-I have no recollection of hearing the hon. member for Annapolis make any such statement. I did hear him state, in general terms, that this enterprise would he profitable to the country, but I did not catch the observation to which the hon. member (Mr. Barker) refers. But if the hon. member for Annapolis stated what the hon. member for Hamilton attributes to him, I can only say that I do not agree with the hon. member for Annapolis on that point.
Well, of course, my bon. friend tbe Minister of Finance could not agree with the hon. member for Annapolis nor could be agree with tbe Minister of tbe Interior, because the statement of that gentlemen, if not in express w ords, necessarily implied the very same meaning as expressed by the bon. member (Mr. Wade). Would it not have been well for the Prime Minister, in the first place, instead of glossing over this amendment in a few vague words as lie did, to give to the country what I suppose must have been-certainly ought to have been- before tbe government, when this supplemental agreement was entered into, I mean a statement of what it wrould cost tbe country iu cash if the government entered into the agreement proposed. The figures have been before the House for some time, and they run to about four and a half to five and a half millions of dollars. And yet not a word have we heard from the government. When are we to have the promised statement from the Minister of Finance as to the additional obligations imposed upon tbe people by this supplemental agreement ? We are at the very clause of the agreement relating to this subject. And yet my hon. friend the Minister of Customs got up just now and made what seems to me a rather extraordinary argument for a member of tbe government. IJp to the time he spoke we had not had a single word from any member of the government on this subject, except the wonts of my hon. friend the Minister of Justice (Mr. Fitzpatrick)-who took the wisest course, for he said that, so far as any estimate of that kind was concerned, he for one would have to pass it on. He has passed it on to the Minister of Customs. But the Minister of Customs cannot throw any light on the subject. I would ask tbe Prime Minister whether or not be is in a position to deny, tbe accuracy of tlie tiguies put forward by tbe bon. member for Harm -ton. Those figures relate directly to the clause we are discussing. We have beard no word from any member of the government on this subject, and I think it right, before we are invited to pass tills clause that some member of the government and I suppose that the Prime Minister is the one to whom we should look as being in charge of tbe Bill-should state to the House exactly what additional expense this clause will impose upon the country in tbe payment of interest during the seven years mentioned in the contract.


William Paterson: I will not assume to answer for the Prime Minister, but I have just a word or two to say in reply to the bon. leader of the opposition (Mr. Borden).
I do not suppose that any one will claim that he knows the exact mileage of the mountain section, and so I suppose no one will say that he knows to a dollar what that part of the road will cost. But my argument is based upon the figures given by the hon. member for Hamilton (Mr. Barker). I point out simply that there is a road to be built through the mountains, and it is to be built either under this contract or, if hon. gentlemen opposite are true to their pledges, by the government direct. If it will cost $56,000 a mile under the Grand Trunk, I take it that it will cost no less if built by the government, because surely the company can build as economically as the government can. So, if it is built by the government, the public will have to pay interest on $56,000 a mile, instead of paying on $42,000 a mile Avhich is the sum on which interest will have to be paid under this contract. And then, at the end of seven years, under

our plan, the liability of the country ceases, whereas the liability will never cease under the plan of hon. gentlemen opposite, unless they can get some company to take over the road and pay the interest. The hon. gentleman asks for particulars and talks about what wise men would do. Well, there are wise men in this House. One of them is opposite me at this moment, and he has proposed an alternative plan to ours He tells us that the plan is. if the two companies .will not combine to build the road, then the government will build it and give both companies running rights, over it. Of course, we are told upon the best authority that no two companies would agree to run over a single road under the circumstances. Then the government would have to build the road and the country would lie saddled with these additional obligations. This is the point that has to be considered ; this is wliat has to be debated before the people of the country. If these gentlemen complain that we have increased the amount upon !^ich the guarantee is to be given by about $1,A>0,000, our reply is yes, if you take the opposition plan it will be $1,470,000 more. Then, at the end of seven years, under our plan, the country's liability would cease, whereas under their plan the payment of interest must go on for ever. lion, gentlemen opposite cannot shirk this question. The hon. gentleman (Mr. It. L. Borden) himself as leader of the party of lion, gentlemen opposite. introduced this as their alternative plan, and his followers all voted for it. He asks us if we have calculated to a dollar the liability of the country under our scheme I ask him, direct and straight : Tell me what your calculation is of the cost of building the mountain section under your scheme. The hon. gentleman is bound to tell us that. But. after that question is answered the question still remains what he is going to do with the road when it is built ? It ill he tell us whether he lias any reason to believe that any company would take that road and run it and pay enough rental to meet the interest-not upon three-quarters of the cost but upon the whole of it. Will either company consent to do that, or will they join and share the obligation ? If not. how is the hon. gentleman going to get the interest upon the money that would be laid out under his scheme ? Or. if he does not expect any company to guarantee the interest, will the receipts from the road be sufficient for that purpose ? What will the freight and passenger tolls be ? Let us know where you are in these matters and then the House can decide which scheme is the best for the people of this country.
At six o'clock, committee took recess.
After Recess.
Committee resumed at eight o'clock.


Mr. BARKER.: I regret, Mr. Chairman, that I was not present during the whole of Mr. PATERSON.
the speech of the hon. the Minister of Customs (Mr. Paterson). I arrived from Hamilton only at 5.30 o'clock and I was therefore deprived of much of the pleasure and enjoyment which his speech seemed to afford to my friends on this side of the House. However, I heard a considerable portion of what he had to say and made some notes upon which I shall make some observations, and if I have omitted anything which he considers of importance, I can only express my regret. One point the hon. gentleman seemed to dwell upon with some emphasis1, as if it were a very weighty matter indeed for the consideration of the committee. He again and again said : What were we to do *? What were the government to do V If we did not accept the alterations demanded by the Grand Trunk Company we should have had to go without the road. Well, Mr. Chairman, I have a recollection of seeing in the public press a report of a speech made by the Minister of Finance (Mr. Fielding) I think at Westmount, in which that hon. gentleman said that even if the Grand Trunk Company were to repudiate this agreement and refuse to carry it out. the road would be built. I think that that ought to have relieved the anxiety of the Minister of Customs who seems to have acted-as I must say most of the members of the government seem to have acted-upon the assumption that unless they agreed to everything the Grand Trunk Company asked, we would have no road. That certainly seems to have been the opinion of the Minister of Customs but he surely must have overlooked the speech of his colleague the Minister of Finance, who assured the country at a time when I think we were all looking forward to a general *election, that Grand Trunk agreement or nr. agreement, the road would be built. I would [DOT] give this to the hon. gentleman (Mr. Paterson) as, I think, a sufficient answer io the point he presses so strongly. I wish to put some points he has made in a slightly different manner from that in which he has placed them before the House. The hon. gentleman says that he takes what he calls the figures pf the hon. member for Hamilton (Mr. Barker), the $56,000 a mile as the cost of the mountain section. He does not by any means admit that figure, but taking the statement of the hon. member for Hamilton, he goes on to argue on that basis. Now, Mr. Chairman, the Minister of Customs knows that the $56,000 a mile is not an estimate by the member for Hamilton. I know as little about the cost of a railway through the mountain section as does the Minister of Customs, as does, I venture' to say, any member of the government. I know nothing at all about it, nor do they. But I think the opinion of gentlemen who are vitally interested in inquiring into the cost and who have had ample means of ascertaining the probable cost should be received

with respect. Sir Charles Rivers-Wilson tells us In his speech that the country through which the mountain section runs, was surveyed years ago by the government of Canada. I think he says that .$3,000,000 were spent upon those surveys. They gave him an amount of information that is not possessed as to any other portion of the route. lie had all these papers and figures and surveys before him as had Mr. Hays and the engineers and other officials of the Grand Trunk Company. They have had them before them for 18 months, carefully going into them as business men should, before they undertake a responsibility of such an amount as is involved in this mountain section. The government had precisely the same opportunity, and they have even a greater obligation to look into this ques-t.on because they were representing the people of this country who look to them to take every possible care in dealing with the public interests. Sir Charles Rivers-Wilson had Mr. Hays sitting by his side at the meeting in London, on March 8th. last. No one doubts, no body who reads the report of that meeting, can doubt, that Sir Charles Rivers-Wilson was exercising care in the endeavour to cut down every possible item adding to the liability of the Grand Trunk Company.
No one can doubt that Sir Charles Rivers-Wilson had a sincere desire to keep the figures down to the lowest possible allowance. He took care to tell his audience he was not exaggerating anything. He was quite/truthful in representing to them what lie believed at'tea eighteen months' investigation was the true estimate of the probable cost of the mountain section. He did not. as an honourable man, wish to exaggerate or mislead. He was addressing a hostile audience. Until after Mr. Hays had spoken the meeting was adverse to Sir Charles Rivers-Wilson. He was, therefore, particularly careful to be accurate in his statements. And Sir Charles Rivers-Wilson, with all the information that he had at his command, with his general manager sitting at his side, tells his shareholders that the cost of the mountain section will be $50,000 a mile. In making his calculation he does what every person would do in finding out what the actual cash cost of a structure of any kind would be ; he adds the cost of carrying or financing the transaction during the period of construction, and he makes that out to be $6,000 a mile-probably rather under than over what most men would put it at. Therefore, we have not the estimate of the hon. member for Hamilton that the cost of the road will fee $56,000 a mile, but the estimate of Mr. Hays, the expert general manager of the Grand Trunk Railway Company, and that of its president. So, Sir, I think upon that feature of the case, the hon. Minister of Customs can, without any qualms or difficulties, accept the $56,000 a mile as the probable cost of the mountain
section. There is another view of it, Sir. According to the government's own view of it in the first instance, they put the cost at $40,000 a mile, and that probably without allowing anything for interest during construction. Practical men would have made an allowance for interest, but I do not think we can regard hon. gentlemen opposite, in these negotiations, as practical men. I have no doubt they got the idea that the contractors' cost of the work would be $40,000 a mile, and such a trifle as $4,800 a mile for interest would not occur to them. But Sir Charles Rivers-Wilson and Mr. Plays, having had an opportunity of' receiving a guarantee of three-quarters of the $40,000 a mile, refused to enter into the agreement unless that guarantee was increased. What stronger evidence can you have that there is a greater cost, and when you add to that circumstance the fact that Sir Charles Rivers-Wilson,
,speaking to an audience that he wanted ,to placate, before whom he wished to minimize-fairly and honourably-but still to minimize, every item of expenditure, puts it at $50,000 plus $6,000, or $56,000 a mile : would it be reasonable, from the point of view that we are acting here for the whole people of Canada, to doubt that that is the probable cost ? Well, the other item has reference to the mileage. The remarks which I have made as to tilt cost per mile apply equally to the mileage. (Some hon. gentlemen here, estimating the distance from Edmonton, or whatever point they choose to call the end of the prairie ^section, to the Pacific ocean, put it at 400 miles. Is it to be supposed that hon. gentlemen opposite, who have taken very little care in regard to the details of this arrangement, can possibly be as near the proper figure as the officials of the Grand Trunk, who were immediately concerned and wished to be accurate in every particular ? When Sir Charles Rivers-Wilson puts the distance at 500 miles and the cost at $56.000 a mile, or $28,000,000 in all, I think we, acting as we are on behalf of the people of Canada, may assume that that is not an unreasonable estimate. Now, Sir, so much as to the hon. gentleman's speaking of the $56,000 as being the estimate of the hon. member for Hamilton and as to the mileage. Then the hon. Minister of Customs, in the easy way in which lie addresses this House, and which has become somewhat habitual with him, from his well-known ability on the stump, says that we guarantee three-quarters of that cost or $21,000,000; the hon. gentleman, in speaking of the $21,000,000, overlooked the fact that his leader does not dispute that the country, under the supplemental agreement, has undertaken, hot to supply a guarantee of $21,000,000, but to do [DOT] that which will produce $21,000,000. The right hon. leader of the government (Sir Wilfrid Laurier) has, in Ids speech, admitted that there will nece j-

sarily be a very serious discount upon the bonds. Now, as I said before when speakiu? upon this matter, if that very serious discount is not more than 5 per cent, that involves, on the $21,000,000 for the mountain section and $13,000,000 for the prairie section, a cash payment on the principal upon which the right hon. gentleman proposes to deal with his implement of $1,700,000. The hon. Minister of Customs passes that over. He forgot that probably, or he would have mentioned it. But that is a trifling item that the hon. Minister of Customs in tin- whole course of his remarks never referred to. Then he puts it in this way ; he says Why, on that $21,000,000 we have increased our guarantee to what extent ? The increase that we have put on the liabilities of the country for seven years is $1,260,000 ; and he immediately jumps from that item to the total cost which would be imposed on this country if we built the whole road. He is contrasting the $1,260,000 to be paid by this country with the amount of obligation the country would assume if we took the whole road and built it ourselves. Well, I do not know what the hon. gentleman meant by that sort of argument. The $1,260,000 is only the difference between the old agreement and the new. The interest for seven years amounts to $4,610,000, but the hon. gentleman did not seem to know it, careful as he was, and no doubt prepared as he was to speak upon this subject after five or six weeks' cogitation. Most of us on this side of the House have been wondering why hon. gentlemen ou the treasury benches have not spoken. I can only say that, judging by the speech of the hon. Minister of Customs, the right hon. leader of the government lias been very wise indeed, because, if the specimen of argument we have had from the hon. Minister of Customs on that point is a criterion of what we might have got from others, the less said on the part of the government the better. The hon. gentleman took $1,260,000 instead of $4,610,000 as the liability of the government if they built the whole road, which is an absurd proposition, because the cash we pay in the one case without owning the property is an absurd contrast with what we would incur as a liability and own the property.
But, the hon. gentleman not only overlooked the fact that the interest liability is $4,610,000 for the seven years, but he entirely overlooked the fact that we have to capitalize the next three years, if the money is not earned. After what we have heard about the prospects of this road from gentlemen opposite, we may fairly assume that the mountain section will not earn the interest in the eighth, ninth and tenth years ; so that he has three years to add to his seven years, and these three years capitalized, this country has to wait forty years to get a return. That is a little item that the hon. gentleman also overlooked. There is the further proposition brought in by the Mr. BARKER.
supplemental agreement which prevents the country collecting interest on these bonds, it may be, under this guarantee, for four and a half years ; because unless there is more than five years default we can take no action. We have the seven years, and the three years, and the four and a half years ; and the Minister of Customs who jias been addressing the House so wisely and so luminously does not seem to know anything at all about this circumstance. The Minister of Customs, in his usual forcible manner explained that the whole extent of our liability was the seven years interest. But he has forgotten the fact, that we guarantee the principal of $21,000,000, and the interest for fifty years. He seems to jump at his conclusion ; he does not seem to have given the matter any more thought than the hon. member for Annapolis (Mr. Wade) when he said :	It is
not going to cost the country a dollar. The Minister of Customs does admit that it is going to cost us $1,260,000. but he thinks that is the end of our liability. He forgets that on seventy-five per cent of the whole cost, we assume liability for the whole fifty years, both for principal and interest: and therefore it is. that the leader of the opposition says :	As we have undertaken
a liability of fifty years for both principal and interest ou seventy-five per cent of the cost, why not go to the whole extent, and instead of being liable for that without owning one dollar's worth of the property, let ne, own it all. Who would have supposed from the remarks of the Minister of Customs that that was the contrast he ought have presented to this House. He has not attempted to answer a single proposition that was advanced from this side of the House. He seemed to think that he was putting a poser to the leader of the opposition when he said :	Does the leader
of the opposition expect to get the interest out of this, if he leases that mountain section to the Grand Trunk Pacific and the Canadian Northern ? And his hair almost bristled at the thought, that the leader of the opposition could by any possibility expect that if the country constructed that road, that the two companies, the Grand Trunk Pacific and the Canadian Northern, would pav the interest on the cost. And vet, tlie| ' Minister of Customs seems to think that one of these two companies is going to pay the interest on the cost : the Grand Trunk Pacific :	the one that
has not got the proverbial breeks of the Highlander is going to pay the whole thing, when according to the Minister of Customs the Canadian Northern and the Grand Trunk Pacific together could not pay it. That is another of the serious arguments he presents to this House. Suppose that after the seven years present to the Grand Trunk Pacific has passed, it will pay year after year out of the earnings the three

per cent interest ; why cannot that company and the Canadian Northern together pay it, both of them using the same line. That was the proposition made from this side of the House, but it seems beyond the comprehension of the Minister of Customs. The Minister of Customs evades the question, that we guarantee the $42,000 per mile. He tries in every way he can, to speak of the guarantee as if we were only going to pay seven 3-ears, and there was no more about it. But, if we do guarantee that $42,000 per mile and the Grand Trunk Railway guarantees the $14,000 per mile of bonds, who is going to pay the interest on both? I wonder what the Minister of Customs would say to that? The interest has to be paid. Does he suppose that the Grand Trunk Railway is not going to take rates out of the people of this country to pay the interest on the whole $56,000 per mile. And if the country has to pay interest on the whole, what difference does it make whether the country increases its obligation direct and owns the property, or, guarantees $42,000, and the people have to pay interest on the other $14,000 anyhow. Surely, as between the two, the preference is to own the property, and to take any benefit there is in it. At all events wc would not have to give seven years for nothing; any earnings during the seven years would go to the people. But the Minister of Customs seems to prefer, that we should give away seven years interest to the Grand Trunk Pacific ; guarantee $42,000, the people to provide the money for the other $14,000-and then he thinks it costs no person anything. The hon. gentleman, oblivious as he is to every clause of the agreement except the one he is immediately talking about ; he forgets that in addition to the $56,000 a mile of bonds, under this contract there is imposed upon the people $45,000,000 of capital stock. That will have to bear dividends, and that liability would not exist if the proposition of the leader of the opposition were adopted. If the country builds the road there will be no capital stock to earn dividends upon; it will be owned by the people. Like the hon. gentleman from Annapolis (Mr. Wade) who believes that stock will be created and bear no dividends :	the
Minister of Customs has the same delusion. One of the strong arguments we have heard during this debate was. that the government had cut down that stock of the Grand Trunk Pacific from $75,000,000 to $45,000,000. What difference is it going to make if there is going to be no dividend paid on it ? What merit is there in the government putting it down if no dividends are to be paid ? On that theory, it would make no difference if you multiply it by three, and took $225.000.000 capital. Hon. gentlemen opposite want credit for cutting down the offer proposed by the Grand Trunk from $75,000.-
0CC to $45,000,000, and they then turn around and tell us that it does not make any difference anyway, because it will not have to bear dividends. I would have thought, upon the theory of the hon. gentlemen opposite, that their only object was, by creating stock, to give the Grand Trunk Railway control of this company by means of a voting power, and if so. they might have made it $45,000 just as well as $45,000,000, because if you make the total capital $45,000 and give the Grand Trunk Railway one half of that, they can control the company just as well as with $45,000,000. But, ihe fact that it is $45,000,000 shows that the Grand Trunk Railway is going to make money out of it, and the people of Canada will pay it. That is the truth of it. And when the Minister of Customs talks about $14,000,000 that the Grand Trunk Company are going to guarantee, as if this country had nothing to do with it; he is just as much mistaken as when he ignores the existence of the $45,000,000 of capital stock.
These are the strong features of contrast between the two schemes. In the one case we have $56,000,000 of bonds, on every dollar of which this country must pay the interest, and we have in addition $45,000,000 of capital stock. I11 the other case, assuming that the railway will cost the same amount of money, we have simply $56,000,000 and no capital stock. Can there be any doubt that it is 'better for the country that there should be only $56,000,000 rather than $56,000,000 plus $45,000,000, when you add that in the one case the government owns and controls the property, while in the other case it does not own a dollar of it ? Surely there cannot be any question in the mind of any man of common sense which is the better for the country. Now, there have been two alternative propositions to the government proposition. There was the alternative proposition made by the leader of the opposition. I do not know that he intended to lay down a definite and final proposition. He probably gave a little more consideration to the subject than one would imagine has been given to the scheme of the government embodied in these two agreements ; but after stating it, he distinctly suggested that it should be submitted to a commission of experts. If that had been done with both schemes, there can be ver.v little doubt what the commission of experts would have said of the two. But we had another alternative proposition which has been crushed by the government. That was the alternative proposition of the Grand Trunk Pacific Company to construct a railway from the Pacific to North Bay, and there connect with their Ontario and Quebec systems. Can anybody doubt that if that scheme had been taken up, and a reasonably liberal guarantee or subsidy had been granted to assist it, with proper conditions to prevent the diversion of the traffic

from Canadian ports to United States ports, it would have been an infinitely better scheme than the one we are now considering V Nobody can doubt it. It would have been far better for the country in every respect. But, Sir. if either of these schemes had been adopted-if the Intercolonial had been carried, as I understand some lion, gentlemen opposite advocated before the government brought in this scheme, to the Georgian Bay, and extended into the prairies, we should then have had under government control the greater part of the traffic of the Northwest, and, being under government control, that traffic would have been carried to maritime ports of Canada and not to United States ports. If the proposition of the Grand Trunk had been carried out, with proper conditions, which could have been made far stronger in effect than the conditions imposed in this agreement, we should have had at a comparatively limited cost to this country a line of railway from the Pacific to the Atlantic practically in close connection with the Intercolonial Railway ; we should have had a system which would have protected our own ports ; and we should have saved-and this is the important point-all the cost of the railway from North Bay to Moncton. If either of these schemes had been adopted, it would have been absolutely unnecessary to expend that money, and with the money saved this country could have so improved its canals, the St. Lawrence, the ports of Montreal, Quebec. Halifax and St. John, that Canada, without adding one dollar to the cost proposed by the government, would have had not only a great transcontinental railway system, but the finest inland navigation on the continent of America or perhaps in the world. There is the great difference between the scheme of the Grand Trunk Railway Company or that of the hon. leader of the opposition and this wonderful proposition advanced by the government, in which they have been led on from day to day and from month to month until, through fear on political grounds that the agreement might go to tlie wall, they have been obliged to accept every suggestion made to them by the Grand Trunk Company. The bon. Minister of Customs took up one or two features of the agreement and omitted the most material one. He omitted entirely the question of the cost of implementing the bonds. He overlooked entirely the cost of the seven years' interest upon tlie whole amount of the guarantee. He simply dealt with the difference between the guarantee of last year and the guarantee of this year. The hon. gentleman had apparently given about as much consideration to that subject, if I understood him aright, as appears to have been given to many other points in this agreement. After the discussions we have had, it must be patent to everybody that the hon. gentlemen opposite have made altera-Mr. BARKER.
tions in the original agreement by the clauses of this supplemental agreement which vitally alter the whole bargain in ways of which they had no idea. I do not believe that the hon. gentlemen, in giving powers to the commissioners to lease sections of the road pending the construction of the whole line, ever thought what the effect of that would be. I do not believe that the hon. gentlemen, in removing the limit of the guarantee for the mountain section, ever thought the effect would be that they would have to pay seven years' interest on the increase. The whole line of argument pursued by the Minister of the Interior and by the hon. member for Annapolis (Mr. Wade), in the hearing of horn gentlemen opposite and without contradiction- with their applause, in fact-showed that they never thought that these alterations in the supplemental agreement affected in any degree the cash liability under this contract. I think therefore I may say 'that the hon. Minister of Customs has not added anything to the information already possessed, and his speech has only shown how wise the right hon. the First Minister was in keeping his colleagues and those behind him from speaking on this question.


Mr. WADE.: As my name, Mr. Chairman, has been made use of some few times during the debate-for which I feel very grateful to hon. gentlemen opposite-I deem it necessary to make a few remarks. I did not consider it necessa ry to reply to the statements made by hon. gentlemen opposite regarding the opinions I have expressed until a turn was given to the discussion just before recess by my bon. friend, the leader of the opposition, which put a different phase on the matter entirely. My hon. friend, referred to the speech of the Minister of the Interior (Mr. Sifton) some few days ago, and stated that the Minister of the Interior had in effect declared that the alterations in the contract would not cost the country anything more, and said that in making that statement, the hon. .minister had not been frank or fair. In other words, that he had been dishonest with the House and the country. Then my hon. friend went on to say that I had followed in the minister's footsteps and had made a similar statement. Now, Mr. Chairman, there are occasions when men in the heat of debate may make statements that are not strictly correct ; but I want to say this, that when I make a statement in this House, I try to make it fair and straightforward and one I am not afraid to meet in the country afterwards. In making the statement I did in this connection, I submit that I made one which was perfectly correct in every respect. True, I expressed, and strongly expressed, the opinion that the alterations in the contract would not cost the country anything more, but I went on to show the conditions under which

the contrary result might follow. Upon the very page from which my hon. friend quoted, I made this very statement, which I will read to the House. It is most unfair to single out isolated statements, take them from their context, and then say, those are the statements of the party who made them. That is unfair because the context may show qualifying words which give an entirely different meaning to those quoted. On the page referred to, from which my hon. friend took his statement, I go on to say
Tile next provision j spoken of is the fourth paragraph, which amends the 28th section of the contract. Well, the only difference between the fourth paragraph and the 28th section is this, that under the contract as it stands, the government is required to guarantee bonds to the i extent of three-quarters of the cost of the prairie section, not to exceed $13,000 per mile, and to the extent of three-quarters of the cost of the mountain isection, not to exceed $30,000 per mile. The limit is removed from the laD ter. That is if the mountain section costs over $40,000 per mile, then the government is obliged to guarantee more that amount.


Mr. K. L. BORDEN.: From what page is the hon. gentleman quoting V	,


Fletcher Bath Wade: Page 875.
I think that this is reasonable ; I think it is fair that the government should guarantee the full three-quarters of the cost, and it was scarcely necessary that any discrimination should be made. in this connection. The next clause provides that the government may implement the amount of their guarantee to offset the uncertainty of /the money market at the time the bonds are placed upon it. That is to say, if when the bonds are placed Ion the market, they are worth only 90 cents on the dollar, the government undertakes to guarantee bonds to a sufficient amount to produce three-fourths of the cost of the road.
And on page 887 I go on further to make clear what I mean :-
The government does not give, as has been stated here, three-fourths of the cost of the western division. What the government does is to guarantee a sufficient number of the bonds to produce three-fourths of the cost. The government does agree to pay seven years' interest upon these bonds, so far as the mountain division is concerned.
That Is what I stated in the House. 1 ask any hon. gentleman if there is anything wrong or improper in that, and if I have not placed the matter fairly and squarely before the House and the country. I submit that what I have said is absolutely correct.
I submit that the effect of these two clauses -the one under discussion and the one which follows it-is exactly what I have said. The limitation is removed from the mountain section-that is the $30,000 limitation ; and the government is obliged to guarantee three-quarters of the cost, whatever it may be. If the cost should be greater than
$40,000 per mile, then the amount of interest which the government will have to pay will be correspondingly greater. If the" cost should be less, then the amount of interest will be less. As regards the bonds, if they do not sell at par, then the government will have to guarantee a sufficient quantity to bring' the proceeds up to the amount agreed on. The question as to whether the government will he obliged to implement this amount or not is one entirely of opinion. We have to look into the future and see what these bonds will sell at seven years' hence. AA'ho can tell us to-day what those bonds will bring them ? In my judgment-and I have as good a right to my judgment as any gentleman in the House-looking to the prosperity and development of the country, with the full certainty and assurance that the present government will retain power in seven years time, I have the right to assume that our three per cent bonds will sell at par. I believe they will, I have a right to my belief, and will hold to it until it is proved unfounded. With regard to the cost of the mountain section, it was almost generally taken for granted last year that it would cost $40,000 a mile. As the hon. member for Hamilton (Air. Barker) has said, there is no man who can make an accurate estimate of the cost. AVhy ? Simply because he has not the material at hand. To that extent the government was obliged, in making the contract, to make it without the definite knowledge which can only he obtained some years from this. I see no reason for changing the opinion I had last year as to what the mountain section will cost per mile. I have some information on the subject, which I have been gathering from all sources. I am informed, correctly or not, that many miles of that section will be easily constructed, that for some miles it will be very difficult to construct, and that there are some about which we cannot form any idea at all. Therefore, I have a perfect right to depend on my judgment that the mountain section will not cost more than $40,000 per mile. No man in this House can dispute it, because he has not the material on which to do so. My hon. friend from Hamilton may believe that it will cost $50,000, so may Sir Charles Rivers-Wilson, but until we have a survey and an engineer's estimate, we will be in the dark as to how much that section will really cost. That is the position of the matter at present. What is it we are discussing now and have to decide ? AA'e have to decide as to whether we will pass this section of the contract which removes the limitation of $30,000 per mile on the mountain section. That is one of the matters which was before the government, and as has been properly stated by my hon. friend the Minister of Customs, the question for the government to decide, when these amendments were put before them, was whether they would yield this point or

not, and if they did not, thereby lose the contract. They were up against this proposition-either to yield to the extent to which they have yielded, or to lose the contract, which would mean, as the hon. Minister of Customs has said, the adoption of the alternative policy of hon. gentlemen opposite. Now, suppose the result of this change is all that is claimed. The hon. leader of the opposition says that nobody has questioned the figures of the hon. member for Hamilton. I certainly question those figures. The hon. member has not the data on which to found correct figures, for there are two unknown quantities in the case, one the cost of the mountain section, and the other the price of three per cent bonds seven years from to-day.


Mr. HAG  GART@: How are you to build a road to-day if bonds are not to he issued for seven years?


Fletcher Bath Wade: The contract provides for that. The government may give interim bonds, if they see fit, to help the company in financing the scheme. Of course, there is no obligation upon them to do so. There is another element of uncertainty, which I omitted to mention, and that is that nobody knows when the road will be completed-whether it will be three years or whether it will be seven years after construction has begun. With these unknown quantities in the calculation, I certainly question the figures of the hon. member for Hamilton. It can hardy have been supposed that anybody on this side accepted his figures. Now with regard to the proposition of the government, I say they would have been liable to the strongest denunciation if they had allowed a matter of this character to stand in the way of this contract, Suppose that you take the very worst that can be said about it, the very worst that these hon. gentlemen can imagine, still it is a trifling matter after all. They talk about selling bonds at ninety and selling them at par and the difference that this will make at the end of seven years in the payment of interest. How much will it amount to ? I think that one hon. gentleman said that it would be $300,000. It seems to me that it is more than that

it will probably be nearer $400,000, if we assume that the road is to cost $50,000 a mile. They say that the difference in interest in connection with the mountain section would be $1,250,000. Suppose these amounts were absolutely correct, do the hon. gentlemen opposite think that the country would approve of the government turning away this contract, a contract so favourable to the country in every other respect, because of matters so trifling ? As to the statement made by Sir Charles Rivers-Wilson as to the cost of the road, I do not know that that gentleman is in a better position to judge as to what the road will cost than hon. meniDers of this House.


Fletcher Bath Wade: More than that, I do not know the motives of Sir Charles Rivers-Wilson-the hon. member (Mr. Barker) seems to think he does- nor do I know what he was trying to convince his shareholders of. It may be that he wanted to show them that the government had taken such vast interest in this project that they had assumed this tremendous obligation thus showing their faith in the scheme. 1 know nothing about these matters, therefore, it is not worth while foi us to attempt to argue them. We have been told a great deal of what transpired before the shareholders of the Grand Trunk Railway Company. I submit that we are not bound by that or by anything that was said by that body or by any member of it. We are bound by the facts before us and by these only ; and upon these we must base our decision. I submit that the modification of the contract as contained in this section is a reasonable one, and one that the government was perfectly justified in making.


Robert Laird Borden: My hon. friend from Annapolis (Mr. Wade) seems to think that some of us on this side of the House have done him an injustice. No one has done him an injustice, unless quoting his own words is to be so considered. Bet me point out to the hon. gentleman exactly what he did say, because I did not read the whole of it before.
With regard to these concessions, I wish to place myself upon , record as saying that the agreement as amended will not cost the Dominion one extra dollar. It will relieve the situation so far as the railway company is concerned. It will enable the company to finance the project ; but will not impose an extra dollar on ithe people of Canada, as I propose to demonstrate.
If my hon. friend thinks he has demonstrated that, I am sure he is welcome to the opinion. How has he attempted to demonstrate it ? He has demonstrated it by placing his own opinion and authority against that of the president of the Gtand Trunk. One would suppose that, having under his control a staff of trained men v ho have spent their lives in railway construction and operation, the president of the Grand Trunk would know a little more about these matters than the hon. member for Annapolis. But that hon. gentleman, apparently, is willing to place his opinion in the balance against that of Sir Charles Rivers-Wilson and to say that this road will not cost more than $40,000 a mile for the mountain section. May I suggest to my hon. friend (Mr. Wade) that these gentlemen of the Grand Trunk have given the very best proof of their sincerity by asking the government to make this change because if the road through the mountain section would cost only $40,000 a mile, there was no necessity for them to ask that the guarantee should be increased beyond $30,000.

Do^s not he see that at once ? And, if the government were of the same opinion as himself, they should not have increased the guarantee beyond $30,000 a mile, if the government takes the position that he does, they were not justified for a moment in changing the guarantee. But the government did not take the view, but took the view expressed by the Minister of Finance (Mr. Fielding) that there will be additional obligations thrown upon the country by this amendment, but they are not prepared to tell us what the increase will be. Now, the hon. member for Annapolis says that the road through the mountains will cost only $40,000 a mile-


Fletcher Bath Wade: I did not say the road would cost only $40,000. I say that Is my judgment.


Mr.   I@: Then it really comes to a question between my hon. friend from Annapolis and Sir Charles Rivers-Wilson. As I understand it my hon. friend from Annapolis has not given any very special study to the question, and does not know more about the mountain section than any other hon. gentleman in this House. I say that with all deference and subject to correction by my hon. friend. If he can say that he has made a special study of the matter, and has any information in his possession which is not before the committee I will be prepared to make any amende that may be necessary under the circumstances. But, until he discloses that special information, I am prepared to believe that the president of the Grand Trunk acting not upon his own opinion, but upon the opinion of engineers and other experts after special examination of surveys and after exhausting all available sources of information, must know more about it than my hon. friend. And I would be additionally of that opinion, seeing that the Grand Trunk Railway Company has attached so much importance to the alteration of the conditions of the guarantee. The hon. member for Annapolis suggests that the road through the mountains would cost on'y $40,000 a mile. Does not he know that i he Postmaster General (Sir William Mulock) last year estimated the cost of a road through a not difficult part of Ontario-a road from Scotia Junction to Sudbury-at $40,000 a mile ? And does he then suppose ttat this road through the mountains can be constructed for less than $50,000 ? The figures of the Postmaster General on that occasion, if I mistake not, were loudly applauded by the hon. member for Annapolis. Under these circumstances, how does he demonstrate to the House that his figures were correct. Because, the language he used was beyond peradventure Let me read his words again :
With regard to these concessions, I wish to place myself upon record as saying that the
agreement as amended will not cost the Dominion one extra dollar. It will relieve the situation so far as the railway company is concerned

It is difficult to understand how it would lelieve the situation so far as the railway company is concerned and yet not impose some additional obligation upon the country. My hon. friend has satisfied himself that that is the case.
It would be interesting for us to know, and I think it is not unreasonable for us to ask, what figures were before the government when this proposition was made to them by the Grand Trunk and accepted. Were there any figures before them at all ? Did they stop in their career to consider what obligations in the way of money payments this amendment imposed on the government ? I have asked this question three or four times and cannot get any reply from the right hon. gentleman in charge of this Bill (Sir Wilfrid Laurier). No one is prepared to say that this government ever paused long enough to inquire of the Grand Trunk or of their own experts what additional obligations in cash, bonds or otherwise, this amendment would place on the country in respect to the mountain section. The hon. member for Annapolis (Mr. Wade) is prepared to stake his reputation on the proposition that it will not cost one extra dollar and he is under the impression that he has demonstrated that to the House. The Minister of Finance (Mr. Fielding) does not agree with the hon. member for Annapolis (Mr. Wade) and regards the contrary as perfectly clear. Was there any statement or any estimate before the government and if so, what was it ? Are the government prepared to challenge, and if so in what respect, the conservative estimate, and I believe, which was placed before the House on this question in April last. Let me remind the hon. member for Annapolis (Mr, Wade) that these figures and these references to his own speech have been before the country since April 20, because it was on that day that the hon. member for Hamilton spoke, and it almost seemed to me that after an interval of 12 days the hon. member for Annapolis (Mr. Wade) might have made a better and more lucid statement than that with which he has favoured us to-night.


Fletcher Bath Wade: I assure my hon. friend the leader of the opposition (Mr. R. L. Borden) that so long as it was a mere matter of difference of opinion between hon. gentlemen opposite and myself, I did not think it worth while to make any reference to this matter. I do not conceive that it will make any difference one way or the other if I believe it will cost $40,000 and some one else believes it will cost $50,000. I rose because the hon. gentleman made an insinuation that I had not made a fair and honest statement before the House. That is the reason I rose and that is the only reason why I wish to


Mr.  R. T.. BORDEN@: It is not a question between the opinion of the hon. member for Annapolis (Mr. Wade) and the opinion of Aron, gentlemen on this side of the House ; it is a question of his opinion on the one hand and that of the Grand Trunk managers on the other, men who have been described by ministers of the Grown as the ablest railway men in the world. It is not a question between Mr. Wade and myself. I did not pretend to know whether the road will cost $20,000 or $30,000 or $50,000 a mile, but I do know that gentlemen described by his leaders as the ablest railway men in the world have said it would cost $50,000, and I am inclined to think they have had more experience in such matters than the hon. member for Annapolis (Mr. Wade). I did not impute any dishonesty to .the hon. member for Annapolis (Mr. Wade), I used no language in regard to his statement that was not used on April 20 by the hon. member for Hamilton i(Mr. Barker). I simply took the position that I did not think the hon. member for Annapolis (Mr. Wade) gave any justification of his contention that this road would cost only $40,000 a mile, because that is the way he puts it now. I was demonstrating to the House that my hon. friend could not sustain the position that this amended contract did not impose a dollar of additional obligation upon the country. It is only in that way that I placed the matter before the House and I placed it exactly as it was placed by the hon. member for Hamilton (Mr. Barker) on April 20.


Fletcher Bath Wade: The hon. gentleman says Sir Rivers-Wilson stated that it would cost $50,000 a mile. According to the report I have before me, Sir Rivers-Wilson did not say that. His words were :


Fletcher Bath Wade: Assuming that the cost of building 500 miles of the mountain section will be $50,000 a mile.
Assuming as a matter of argument. That is all there is in it. I would not pretend to oppose my judgment to Mr. Hays in a matter of this kind or against the judgment of an engineer when they have the information upon which to base a judgment. Not for one moment would I do that, but I have a perfect right to my opinion, having the same information as they have, until we have before us the data on which a definite and correct judgment can be formed. That is all I am claiming, and I say to the hon. leader of the opposition (Mr. R. L. Borden) that when he comes to read his words to-morrow he will find that he did impute improper conduct to me as well as to the Minister of the Interior (Mr. Sifton).


Robert Laird Borden: My hon. friend does not seem to attach much importance to the mountains of information.


Fletcher Bath Wade: That is too old.


Robert Laird Borden: That is pretty old, and that is perhaps why we have heard so little of it lately from hon. gentlemen opposite. The Grand Trunk people evidently went to the government on the assumption that this road would cost $50,000 a mile, because that is the assumption they placed before their shareholders, and I am sure that the hon. member for Annapolis (Mr. Wade) realizes that the president of the Grand Trunk was trying to minimize, as far as possible, the obligations to be imposed upon the Grand Trunk by the terms of. this amended contract. Any one, I would suppose, would realize this at once. I have not the exact words used at that meeting, but I shall look them up later. The president of the Grand Trunk said :
We will assume that the mountain


Fletcher Bath Wade: He says assuming.


Robert Laird Borden: Well,
Assuming that the mountain section will cost $50,000 a mile.
Would he even use the language of that kind, desiring as he did to minimize the obligations to the shareholders to whom he was speaking, unless he believes the road would cost at least $50,000 a mile ? Why the Postmaster General (Sir William Mu'lock)-told us last year that a road in Ontario, not through a mountainous country at all, would cost $40,000 a mile, and can one doubt for a moment that $50,000 a mile is a reasonable amount for a mountain section ? We were told last year that the road north of Hake Superior cost $60,000, yet the hon. member for Annapolis (Mr. Wade) would have us believe that this road through the Rocky mountains for 500 miles can lie built for $40,000 a mile. The important thing after

all is to learn on -what estimate or basis the government proceeded, when they entered into the amended contract. We have had no information on this, and I think it but right that the government should, before this clause passes, give us the infornfation they had when they undertook to modify the original agreement.


Sir WILFRID LAURIER.: The hon. gentleman (Mr. R. L. Borden) has put that question three or four times, and the answer is an easy one. The government in making this amended contract had no more information and no less than we had when we made the original contract, but the Grand Trunk Railway naturally, on account of the financial changes, which have taken place in the market are a little more timid this year than last. We placed before the House last year all the information we had and the reasons which impelled us to enter into this contract. We thought last year that it was proper to estimate that $40,000 would build the mountain section. WTe came to this conclusion after the best consideration we could give to the matter. I do not know that at that time our figures were seriously challenged, but we were bound to assume that the Grand Trunk estimate, as stated by the president, would be some $50,000. That was the information we had put before us. If it were $40,000, as we anticipated, then our liability would remain at $30,000 per mile. If it were more, as was the estimate of the president of the Grand Trunk Company at the meeting of the shareholders when he said that it would be $50,000 a mile, then our liability would increase according to ratio to $37,000 a mile. But, how much it will be is a contingent question which cannot be decided at this moment. It is not easy to speculate upon this ; it is not easy to enter into an argument upon it. We assume that it must be between these two figures and we think it will remain at $40,000 a mile. There are some portions of the mountain section which are very difficult of construction, but we know that in the lower portion of the Pine River valley it is not difficult work. It will be very much like the prairie section, but taking it all in all, we have no reason to change our estimate of last year that it will not go beyond $40,000 a mile. But, since I am upon this question I would like to call the attention of my hon. friend from Hamilton to a speech which he has made and repeated several times as to what would be the cost of this road which he has estimated at $56,000 a mile. I may perhaps read his remarks. Speaking of the president of the Grand Trunk Railway Company he said :
Well, that gentleman told his shareholders that the cost of the mountain section would be $50,000 per mile, to which he added, as an item of cost, three years' Interest at four per cent, making up the ieost of construction of the mountain section to $56,000 per mile.
That is a matter that I understand always goes with the construction of the road. You do not charge for interest on $40,000, $50,000 or $60,000 per mile but you Include everything in the cost, including interest. If he has put the cost at $50,000 a mile I imagine that $50,000 would include also the interest.


Samuel Barker: Sir Charles Rivers-Wilson expressly adds interest to the $50,000 a mile.


Charles Fitzpatrick: It does not make $56,000 a mile.


Wilfrid Laurier: If Mr. Hays has the right to charge interest on the cost of construction I do not anticipate and I never understood that he would charge in addition to the $50,000 per mile. But, Mr. Hays has no right to calculate it at four per cent. The contract says that he may pay four per cent or ten per cent for his money but all he can charge against the road is three per cent and no more on account of the cost of construction. Whereas my hon. friend in his speech calculated it at four per cent. I think my hon. friend made a mistake and that on careful consideration he would be bound to revise his figures.


Samuel Barker: If I understood the right hon. gentleman correctly he says that he understands that Sir Charles Rivers-Wilson is not adding interest during construction to the $50,000.


Wilfrid Laurier: He may. But, for my part, as I understand these questions, in calculating the cost of construction, whether it be $40,000, or $50,000, or $60,000 per mile, or any amount, the interest always goes into the total. Interest may go on from time to time and whoever constructs the road has to charge interest from year to year, and certainly when we calculated that $40,000 a mile would be the cost of construction we included interest at three per cent per annum.


Samuel Barker: There is no doubt about what the right hon. gentleman says that when you find out first of all precisely the number of dollars per mile you pay your contractor, say, $50,000 a mile, you then, in order to ascertain the cost of construction, have to add to that $50,000 a mile what you have to pay your banker for the loan of the money you pay out to your contractor before the line begins to earn anything. On a line taking six years to construct the average interest period would be about three years, and whatever interest you would have to pay to your banker in addition to what you pay your contractor is properly chargeable to construction. So that. Sir Charles Rivers-Wilson in stating to his shareholders what the line is going to cost them puts the construction cost at $50,000 and then he adds interest during construction.


Charles Fitzpatrick: Will the hon. gentleman be good enough to tell me what amount he adds for interest ?


John Graham Haggart: 
Charles Fitzpatrick: That amounts to $750,000 does it not ? Divide that by 500 and what does that give you ? That does not give you anything like $56,000 a mile.


John Graham Haggart: 
Mr. FIELDING.: 
John Graham Haggart: You do not add in the amount that the Grand Trunk Railway Company have to pay.


William Stevens Fielding: I am not dealing with what the Grand Trunk Railway Company have to pay ; I am dealing with what we have to pay.


John Graham Haggart: The total cost includes what the Grand Trunk will have to pay-the whole of it.


Samuel Barker: Mr. Chairman


William Stevens Fielding: Does the hon. member for Hamilton wish to say anything ?


Samuel Barker: Yes.


John Graham Haggart: Let the hon. gentleman (Mr. Fielding) go on.


William Stevens Fielding: I understand that the hon. member for Hamilton wishes to speak.


Samuel Barker: 
William Stevens Fielding: 
Samuel Barker: Now, then, if we have to bear four hundred and fifty thousand pounds, and the Grand Trunk Railway one hundred and fifty thousand pounds, my way of adding things means six hundred thousand pounds for the whole.


William Stevens Fielding: That is right; we agree.


Samuel Barker: That gives you three million dollars, and how much is that per mile on 500 miles ?


William Stevens Fielding: Yes, but my hon. friend is charging us with the whole of it and not the three-fourths-will my hon. friend take a pencil


Samuel Barker: I can follow you without a pencil.


William Stevens Fielding: Not for the purpose of finding out whether Sir Rivers-Wilson said, but just for the purpose of making this simple calculation. Assuming that it will cost fifty thousand dollars per mile, he converts it into sterling, and then he says that the Grand Trunk Company's portion is one hundred and fifty thousand pounds, or one-fourth of it, and as we pay three-fourtlis, therefore our three-fourths is just three times what the one-fourth would be.


Mr. CLARKE.: That is quite clear.


William Stevens Fielding: So far I have my hon. friend from Toronto (Mr. Clarke) with me in the calculation.


Edward Frederick Clarke: What do the three-fourths and the one-fourth amount to ?


William Stevens Fielding: They amount to six hundred thousand pounds, but we do not pay all that.


Edward Frederick Clarke: Then what does the road cost per mile according to the calculation which you are making ?


William Stevens Fielding: We are not dealing at this moment witli that ; we are dealing with our portion of it.


Samuel Barker: You must take that back.


William Stevens Fielding: Yes ; I see the point now.


Robert Laird Borden: The Minister of Justice has got the Minister of Finance into trouble by going into figures.
build a line from that point to join the Canadian Pacific Railway at or near Sudbury.
And the hon. gentleman says that the mileage would be 120 miles. I think my hon. friend from Bothwell figured it at a higher mileage, but I will be content to put the figures at 120 miles, and then the cost would be $3,600,000.
I stated here that the cost would be $3,000,000, and that would be an average of $30,000 a mile.


William Stevens Fielding: I must say that on reflection, I think my hon. friend (Mr. Barker) is right.


Some hon. MEMBERS: Hear, hear.


William Stevens Fielding: In making a hasty calculation, I thought we were dealing only with our portion of it, and of course when we come to divide it up we would only pay interest on three-fourths.


Robert Laird Borden: The Finance Minister has made a very frank admission that he was wrong. If you look at page 1576 of ' Hansard,' you will find that the hon. member (Mr. Barker) calculated the cost of the mountain section at $28,000,000, of which the government guarantee seventy-five per , .cent, and my hon. friend (Mr. Barker) was ' ,quite right.


Sir WILLIAM MTJLOCK.: The hon. leader of the opposition stated a moment ago that in the debate last session I stated that the cost of building his proposed line from Depot Harbour to Sudbu*y, would be $40,000 per mile.


Robert Laird Borden: That was my recollection.


William Mulock: I have no doubt that the hort, gentleman thought that, but I wish to point out that he is in error. The speaker who proceeded me was the member for Bothwell, and speaking of the cost of building from Scotia Junction to Sudbury, he said. (' Hansard,' page 9690) :
Taking the next,section of the proposed line, from Scotia Junction to Sudbury a distance of 104 miles, our knowledge as to the character of the (country or the cost of that road, is no surmise. There are actual plans made from surveys, under which contractors could put in their tenders to-morrow if they I choose to do so ; and the cost of that section of 104 miles is put down at $40,000 a mile.
The hon. gentlhman (Mr. Clancy) estimated the cost, rightly or wrongly, at $40,-00C a mile ; and speaking after him, and referring to the proposal of the leader of the opposition, I said. (' Hansard,' page 9763) :
Again the hon. gentleman (Mr. R. L. Borden) proposes to build a railway from Sudbury to the Georgian Bay, and on this point he says :
I have referred to the extension of the Intercolonial Railway to the Georgian Bay. If we acquit the Canada Atlantic Railway, we could 77*


Robert Laird Borden: I did not intend to misquote my hon. friend, but if you will hand me over that volume of ' Hansard,' I think I will find that the hon. gentleman made some calculation at $40,000 a mile.


Edward Frederick Clarke: Might I ask some of the hon. gentlemen opposite-probably the Minister of Labour can tell-upon what information have the government relied in presenting this amended contract to the House, as to the cost of the prairie section, and the mountain section ? Who laid before the government data as to that ? Have the government any information that justifies them in assuming any definite sum as the probable cost of these sections ?


William Mulock: I suppose the hon. gentleman (Mr. Clarke) is aware that it is the premier who is in charge of this Bill.


Edward Frederick Clarke: Then I would ask the Prime Minister. The right hon. gentleman will remember that last year, when the government were asking parliament to assist Mackenzie & Mann in the construction of their prairie road, detailed estimates of the cost were laid on the table of the House and were printed. Was any such data submitted to the government, or by the Grand Trunk, or by any one else in the present case ?
Sir WILFRID LAURIER, WTe have no more information now than we had last year, and when we brought the contract before parliament last year we had no more information than when we asked parliament to ratify the agreement with Mackenzie & Mann.


Edward Frederick Clarke: Before parliament ratified the agreement with Mackenzie & Mann, wc had on the table of the House, the engineers' estimates of the cost, verified, I think, by the officers of the Railway Department.


Wilfrid Laurier: We treated the prairie section on both occasions in the same way ; assuming that it would cost $20,000 per mile.


Edward Frederick Clarke: On what is that cost based ? Last year the estimate of the officers of the department was that the prairie section would cost $15,000 or $15,500 per mile.


Wilfrid Laurier: All I can say to my hon. friend is, that we calculated for this contract upon the same information as we did in regard to the contract with Mackenzie & Mann.


Edward Frederick Clarke: A reference to ' Hansard ' will show, I think, that last year the estimates were printed by order of the House, and I think those estimates show that the prairie section would cost in the neighbourhood of $15,000 or $15,500 per mile.


Wilfrid Laurier: I do not think so.


Robert Laird Borden: I find that the Postmaster General did estimate the cost of the road from Scotia Junction to Sudbury at $30,000 a mile, and not $40,000 ; I apologize to him for misquoting him.


Fletcher Bath Wade: That just makes up my $10,000 a mile.


Robert Laird Borden: My bon. friend from Annapolis should not laugh. The time has not yet come for him to laugh, because I find that the hon. Postmaster General made an estimate of this mountain section, and let me commend to my hon. friend from Annapolis Wliat he said with regard to it:
Then. Sir, he is prepared, unless the two railways will build, to build a railway and to give running powers over it. The length of that railway will he 600 miles and no one will estimate the cost of the mountain section at less than $50,000 a mile.
My hon. friend the Postmaster General evidently did not take into consideration the existence of the hon. member for Annapolis when he made that statement. Further on he says :
Taking the length of the line from Edmonton to the coast at 600 miles, and estimating the cost at $50,000 a mile, we will have $30,000,000.
That will advance the estimate of my hon. friend from Hamilton (Mr. Barker) of the additional cost by a good many thousands of dollars, and put the hon. member for Annapolis and the hon. Minister of the Interior correspondingly wrong.


Mr. WILSON.: The right hon. the Prime Minister at the last session asked for a vote of ha'lf a million dollars at least for explorations and surveys, and I would like to know why they have not been made. He certainly knew that we would have another session, and I think it was his duty to lay that ininformation on the table of the House. I would like to know why he has not done so.


Wilfrid Laurier: The surveys will be commenced as soon as this contract is ratified.


Uriah Wilson: That is no reason why there is no information.


Wilfrid Laurier: That is all I can give.


Edward Frederick Clarke: ' Mr. CLARKE. It is understood, then, from statements made by hon. gentlemen opposite, that the government have absolutely no professional information from their engineers as to the cost of these respective sections ?


Wilfrid Laurier: We have nomore information than we had last year.


Edward Frederick Clarke: Last year the right hon. gentleman had none at all.


Wilfrid Laurier: This year the
same.


John Graham Haggart: The important section to the country is the mountain section. I understand that there are detailed surveys of that section in the Railway Department, and Why does the government not get a report from that department in reference to it V The Grand Trunk Railway authorities are evidently in possession of that information, because the president spoke from accurate surveys made by the Department of Railways in estimating what the cost would be.


Charles Fitzpatrick: I may say that when this question came up last year, and it became necessary to draw up the contract, I made inquiry for those surveys, and I was told in the Department of Railways and Canals that they had disappeared and could not be got at. The Grand Trunk Railway Company have not had access to them either.


John Graham Haggart: Then what does Sir Charles Rivers-Wilson, the president of the Grand Trunk Railway Company, base his statement upon, that he has seen the surveys ?


Charles Fitzpatrick: He does not say so.


John Graham Haggart: He says they are in the possession of the Grand Trunk Railway Company.


Charles Fitzpatrick: He does not say anything of the sort.


Samuel Barker: I would like to read a few words from Sir Rivers-Wilsou's speech. He says :
The mountain section, as its names implies, naturally presents features of greater difficulty and cost, but here again, although the survey parties have not completed their work, the country has been quite sufficiently explored to enable us to say that its general features are well known, and our advisers are satisfied that the cost of laying the road will be considerably less than that of other roads traversing these mountains, and notably the Canadian Pacifiq, which passes through the same range of mountains under conditions of far greater difficulty than are presented by the more northern route. The government surveys which were made prior to the construction of the Canadian Pacific Raiiwav under the auspices of the government, and conducted by their distinguished en-

.gineer Sir Sandford Fleming, afford conclusive evidence to this effect.
Sir Rivers-Wilson must have had possession of those surveys.


Charles Fitzpatrick: Is that a statement or an inference ?


Wilfrid Laurier: All these reports have been imblished long ago.


Samuel Barker: He says they afford conclusive evidence that this line which they are going to build will be more favourable for construction than the Canadian Pacific Railway.


Wilfrid Laurier: Certainly, and all these reports are public property and .have been public property for years.


Samuel Barker: They are government surveys.


Wilfrid Laurier: Yes, and they liave all been accessible to the public for twenty years. They are reports of Sir Sandford Fleming, Mr. Horetsky and other engineers, which were published in 1878, 1S79, 1880 and so on.


Samuel Barker: How is it that Sir Rivers-Wilson, speaking to his shareholders, can .give them information about these government surveys and we cannot get that information from the government ?


Wilfrid Laurier: I beg the hon. gentleman's pardon. Sir Charles Rivers-Wilson speaks of the surveys made by Sir Sandford Fleming and other government engineers and published at that time. I may say that there are no more surveys in the jofflces of the government than those which have already been brought down. If there were, we would be only too glad to bring them down.


Mr. OSLER.: The Prime Minister has made a very interesting announcement. He says there are no more surveys of a later date than those of Sir Sandford Fleming, or he would bring them down. But in all this discussion the only information which the Prime Minister vouchsafed to us was a report of a Jesuit missionary of 200 years ago.


Wilfrid Laurier: With regard to the mountain section ?


Edmund Boyd Osler: If the Prime Minister has no more information in regard to the mountain section than he has with regard to the eastern section, I can understand it.


Wilfrid Laurier: There is a
difference between 200 years and 20 years.


Edmund Boyd Osler: / Surely no body of men would go into a business transaction on surveys that were made twenty years ago. That, I think, goes without saying. The Minister of Customs tried to make an argument
to-day, and it was like all the arguments made on the other side of the House-an attack on what has been suggested on this side, but not a refutation of any argument we offered and not an argument for the government plan. The Grand Trunk people, at the meeting of their shareholders, said that there could not be the slightest doubt as to what the return would be from the prairie section. But according tO' the argument of the Minister of Customs, if the government were to undertake to build this section, we would be out of interest on the whole cost for all time. There can be only one conclusion from his) remarks, and that is that the government do not believe that that section can pay. But if that section should pay, the argument of the Minister of Customs falls to the ground. If the government were to build that road, and if the road should be as valuable as the general manager of the Grand Trunk Railway says no doubt it will, the government could get other people to lease it on a three per cent basis. We have conclusive evidence, so far as the prairie section is concerned, that keen business men believe it will pay, because we have Mackenzie & Mann building a section across the prairie on a guaranty of three per cent on a^ sum very much less than what the government now propose to give the Grand Trunk Pacific ; and I venture to say that the Mackenzie & Mann road will be at the foot of the mountains long before this road which the government is now prepared to hand over to the Grand Trunk Railway after paying the whole cost of it.


Thomas Walter Scott: Mackenzie & Mann are under contract to be at Edmonton this year.


Edmund Boyd Osler: That is what I say. There is no difficulty at all iu getting any business man to build that road across the prairies. Even under the present conditions in the money market, you can raise the money and build it to Edmonton nest year.


Thomas Walter Scott: My hon. friend is contemplating a greater mileage than the Canadian Pacific Railway will undertake to build this year.


Edmund Boyd Osler: I am not talking about the Canadian Pacific Railway. The Canadian Pacific Railway has got its roads in the country, pioneer roads, built by men who risked their own money, and who deserve to be ranked amongst the best Canadians we have ever had. The Grand Trunk Railway are not going to build out of their own individual money, but are proposing to get credit through the government and a corporation which has no backing whatever. My hon. friend the Minister of Customs tried to make the point that if this government were to build the road, the government would be liable to pay the interest on it for seven times seven years and more. Let

242S
me say this. One of the greatest objections I have to this scheme is that, if this road should not pay, the government has absolutely no security that they will be reimbursed the interest. Not one dollar of security have the government in the bargain that they will be paid the interest on the capital expenditure. They have provided, it is true, that if the road goes into default, it shall be managed by a receiver, and, that three-quarters of the earnings shall go to the government and one-quarter to the Grand Trunk Pacific. But the Grand Trunk Pacific have no status, no capital, no credit, no assets upon which this government can fall back in case of default. The bargain gives the Grand Trunk Railway directors absolute control of this railway company. It provides that the Grand Trunk Railway shall hold control for all time. In other words, no matter how great may be the default or how long, the Grand Trunk Railway will nominate the directors and control the road. I thinkj that that, apart from the financial features of this scheme, is the weakest part of the whole thing. The Grand Trunk Railway, under this agreement, own absolutely the Grand Trunk Pacific. In case of default by the Grand Trunk Pacific, the Grand Trunk Railway will still have absolute control of the directors of the defaulting company. They will elect them all, without the government having any voice or say in the matter ; and assuming default, what is more likely than that the court will say that the Grand Trunk Railway, having control of the directors, shall have the nomination of their receiver. That goes without saying. I should hope that before we get through this Bill, the government will put in a clause providing that, in case of default, the whole Grand Trunk Pacific shall be handed over to the government to be controlled by the government, so that the government may elect the directors of the Grand Trunk Pacific so long as that company is in default one dollar. If you do that, you would practically control the company ; but if the company gets into default, and the Grand Trunk Pacific have control, then the Grand Trunk Railway dominates the policy of that company. It will dominate the appointment of a receiver.


William Mulock: Not at all.


Edmund Boyd Osler: The Postmaster General says not at all.


William Mulock: Of course not.


Edmund Boyd Osler: I have been a long time in business and have never seen a case yet where the general stockholders of a company, who had the appointment of the directors. had not control. The Postmaster General cannot point to one large business corporation in which that is not the case.


Charles Fitzpatrick: The hon. gentleman has had a large business experience, and


Edmund Boyd Osler: therefor his opinion is, in that respect, of some value. Will he say that in the ordinary trust mortgage deeds, passed in connection with transactions of this nature, there is no such provision as this namely, that in case of default, the bondholders take the place and rank of shareholders ? Has the hon. gentleman ever seen a mortgage deed in which that was not done ?


Edmund Boyd Osler: Let me ask my hon. friend-


Charles Fitzpatrick: Answer that question.


Edmund Boyd Osler: In this case.


Charles Fitzpatrick: Never mind this case-a general mortgage trust deed.
Mr. OSLER, In this case we will assume, because I cannot begin to argue with a lawyer.


Charles Fitzpatrick: But you are giving us a lot of law in the meantime.


Edmund Boyd Osler: In case this company goes into default, have the government provided to elect directors of the Grand Trunk Pacific ?


Charles Fitzpatrick: That will be provided for in the mortgage deed. It is invariably done in all mortgage deeds.


Edmund Boyd Osler: In this mortgage deed, there is no clause under which you could have a foreclosure.


Charles Fitzpatrick: Yes, that will be in
the mortgage deed.


Edmund Boyd Osler: But this contract, I take it, covers the whole transaction. The property is to be administered for the benefit of the, two parties interested. There must be a receiver, or what ever you call him, appointed to administer the property and dispose of the revenues


The PRIME MINISTER.: Would my hon. ' friend (Mr. Osier) pardon me for interrupting ? He is discussing a point which we-have not yet reached.


Edmund Boyd Osler: I am quite willing to leave this point over for discussion until a little later, if the Prime Minister desires it.
Section 4 of the schedule agreed to.
On section 5 of the schedule.
5. Notwithstanding anything in the said contract contained the government may and shall, preserving always the proportions in the said contract provided as between the prairie and mountain sections of the western division, implement for the purposes and subject otherwise to the provisions of the said contract, is guarantee of the bonds of the said company to be issued for the cost of construction of the said western division, in such manner as may be agreed upon, so as to make the proceeds of the said bonds so as to be guaranteed a sum equal' to seventy-five per centum of the cost of construction of the western division ascertained

as provided in the said contract, but not exceeding in respect of the prairie section, thirteen thousand dollars ($13,000) per mile.


Samuel Barker: Explain.


Charles Fitzpatrick: I think hon. gentlemen realize what this clause is intended for. The language is simple and the meaning clear. Under the contract the obligation of the government is to guarantee the bonds for the mountain section to an amount equal to 75 per cent of the cost of construction, and the same for the prairie section, not to exceed .for that section $13,000 a mile. The endorsation of the government put an end to the obligation of the government irrespective of what the bonds might be sold at. This amendment is to provide for a contingency which might occur, but which nobody can say will occur. When the bonds are sold-and I may say there is a clause in the Bill which provides that the bonds are to be sold only at such time and upon such conditions as are satisfactory to the government- if they realize less than one hundred cents on the dollar, the government is to make provision to enable the company to realize the full face value.


Samuel Barker: When the right hon. Prime Minister (Sir Wilfrid Laurier) was explaining the conditions of this supplemental agreement, and especially the section low under consideration, I understood him to put it in this way, that there would probably be a serious discount on these bonds bearing 3 per cent, and he said that that would involve the payment of a sum of money on the part of the government to implement it or make up the proceeds to the 15 per cent guaranteed.


Wilfrid Laurier: No ; I think I said it might be done in one of several ways to be agreed upon later. I said that the change involved a greater liability on the part of the government.


Samuel Barker: I think the hon. gentleman put it in the way I. have said. Afterwards, in commenting upon his speech, I said that it might be done in any one of three ways. But I think the right hon. gentleman was quite clear in his remarks, that it would require a payment of money. Perhaps the right hon. gentleman will correct me if I am wrong.


Wilfrid Laurier: If my hon. friend (Mr. Barker) will look at page 760 of ' Hansard '


Robert Laird Borden: The revised or the unrevised edition ?


Wilfrid Laurier: The unrevised. I stand by the unrevised, because I did not revise it at all. I said :
Then we undertake also to implement the proceeds of the sales of the bonds, so as to make the amount actually going into the construction, 75 per cent of the total cost of construction. This is to be done on conditions to be further agreed upon between the government and the company.


Samuel Barker: The right hon. gentleman goes on :
It is notorious that even with the endorsation of the Canadian government, whose credit is as high as that of any government in the world to-day, these bonds could not be sold except at a heavy discount, and the government therefore has undertaken to implement the difference which may exist between the price realized by the bonds and their face value.
That I take to mean that, if the bonds sell at a discount, the government would have to advance a sum of money to take up the difference between the face value and the amount realized.


Wilfrid Laurier: That is qualified


Samuel Barker: Possibly so. But I think the right hon. gentleman rather led the House to the opinion that the government contemplated paying the difference in cash. I would like to point out that, if that is the intention, it means that instead of a guarantee of bonds to produce a certain amount, we should be paying out hard cash. It is the difference between paying money and guaranteeing the payment of money, and I should say that it is clearly in the interest of the country that the amount of the bonds should be increased so as to provide the money. We should then be guarantors only. That is the way it has been put in the statement of the leader of the opposition, and that is the basis on which I calculated the obligations of the country under this contract.


William Stevens Fielding: In the view that my hon. friend (Mr. Barker) takes as respects the preference to be given to the plan of an increased issue of bonds, I am disposed to agree cordially. The Prime Minister did point out that no plan was fixed in the agreement, and that it might be done in one of several ways. The payment of an amount of cash is a possible way, but, as a matter of fact, it is not in our minds as a probable way. We have strong hope that it may not be necessary to use this clause at all. It is inserted to meet a possible contingency. The money market of late has unquestionably been unfavourable ; and, if we had to issue bonds at once, or if we had had to issue them at any time within the last few months, they would have sold at a discount. In that case an increased issue of bonds would have been necessary to carry out this implementing clause. While that is a better way, it could be done either by paying cash or increasing the rate of interest. Neither of these forms appears desirable, and I agree with the hon. member for Hamilton that the more convenient way would probably be to, have an increased issue of bonds.

But we would entertaiu a strong liopa tliat by the time these bonds would have to be issued the money market would come back to its normal position, and that we would not have to increase the issue at all. However, this is quite problematical and would depend on the condition of the money market. Several hon. gentlemen opposite, in dealing with that part of the contract, l ave allowed for a discount of 10 per cent on these bonds. I think that would be a mistake ; I do not think we -would be justified in making so wide a margin. In the worst condition of the money market of late, an issue of bonds, as was cited by the Minister of the Interior (Mr. Slfton) was placed on the London market at 90. The hon. member for West Toronto (Mr. Osier) corrected that statement and said it was wrong. I do not know if he has obtained any later information. I have, and I think he is probably aware now that he was mistaken and that an issue of bonds was made at a price not below 90 when the market was in the very worst state. The market is already a little better and wt may reasonably hope that after a while, when the war is over and normal conditions are restored, it would not be too much to hope that an issue of bonds bearing 3 per cent would be floated at par or very close to it. Therefore, I think that 10 per cent would be a very large discount. However, it is a matter on which we have to take our chances.


Edmund Boyd Osler: The Finance Minister (Mr. Fielding) gives the impression that I stated that these bonds were not placed at 90.


William Stevens Fielding: I said the hon gentleman said they were not placed at all.


Edmund Boyd Osler: If the hon. minister looks if up he will see that I said I did not think they were placed at 90, and that if they had been placed at 90 it would be an exceedingly favourable transaction. I did not make a positive statement; I said I understood and had been informed that was the case. The bonds had been placed at 90. 1 have been informed since, although I have r.ot been officially told, that they were placed at 90. But that 90 means that they are placed with a very serious commission on the transaction ; at least 2| per cent.


William Stevens Fielding: Does my hon. friend know that ?


Edmund Boyd Osler: I know that will be the result of the transaction and I say if the bends had been placed at the date we were discussing the matter, 90 would be an exceedingly favourable sale. If the Finance Minister looks at my remarks he will find that I stated and I still think that if the bonds were placed at 90 with the commission it was an exceedingly favourable transaction, as an ordinary business transaction.


William Stevens Fielding: 


William Stevens Fielding: My information is that the bonds were placed at not less than 90.


Edmund Boyd Osler: That is less commission.


William Stevens Fielding: I do not know about any commission. However, we were dealing not with bonds to be issued, but with an issue to be placed at some future time, just when we could scarcely say, as it would depend on the time when the work was completed. I do not think that a transaction of this kind, a transaction placed at the most unfavourable time would be a fair basis on which to judge future transactions. [DOT]


Edmund Boyd Osler: Much as I hope, the money market will take a favourable turn, I do not think that the Finance Minister or anyone else can go into a transaction of this magnitude and base his calculations on the money market getting back to the old three per cent basis for a long time to come.


William Stevens Fielding: It will be seven years j'ou know.


Edmund Boyd Osler: Perhaps a great deal more than seven years. Just now money is working to a very much higher minimum. The outlook is not for cheaper money for transactions of this character.


Samuel Barker: I would like to ask the Minister of Finance (Mr. Fielding) whether it is not quite clear that the $50,000 covers not only the mountain section, but the prairie section.


William Stevens Fielding: Yes.


Samuel Barker: Then upon our estimate the amount to be implemented is $34,000,-
000.


William Stevens Fielding: It covers the western division.


Samuel Barker: The amount to be implemented then is in round figures estimated at about $34,000,000. Supposing you do not say 90 at all, but take 95 as the price or 5 per cent as the discount. Then the hon. gentleman will see that involves $1,700,000 and if we deal with it as a cash item it is a very important change in the agreement. It adds to the amount of our guarantee and involves the payment of seven years' interest without . recourse if we issue a larger amount of bonds so far as the mountain section is concerned, while if we deal with it as a cash implement, it involves at 95, a cash gift of $1,700, 000 on the two sections. I refer to this a3 another instance where it would be hardly possible to contend that the change in this agreement did not mean one dollar additional expense to the country. The amounts are so very large that even a very small discount amounts to a large sum of money, and as I pointed out before, there is not only the increased cost of the road itself and
2433	MAY 2, 1904	2434
the interest during construction, but this discount also added to our obligations by the changes made in the agreement; every (>ne of them involving very large additional sums to the country. X do not think it is preposterous for any gentleman, I may sa.v it with all respect to the hon. member for Annapolis (Mr. Wade), to stand up in this House and declare that he will stake his reputation on the statement that this supplementary agreement is not to cost the country one dollar. Surely it is misleading. There is not a gentleman on this side of the House who believes the hon. gentleman was stating a mere matter of opinion as to prices and cost of construction ; he was speaking broadly as a man of business, a member of the legal profession. I believe a railway solicitor, who had considered this agreement and was giving its effect, and he stated bravely and seriously after hearing the agreement discussed, after hearing the statement of what Sir Rivers-Wilson said would be the cost per mile, after hearing what has been said about discount upon bonds, that he was prepared to say that the change in this transaction was not to cost the country one dollar. That is the view which we on this side of the House took of his speech and I would like to recall to the bon. member for Annapolis (Mr. Wade) that when he made that first statement of his, that it was not to cost the country one dollar he met with applause from all the gentlemen opposite, including the Prime Minister. They did not wait for any qualification of his remarks. Even the Postmaster General applauded him.


William Mulock: I was not in the House.


Samuel Barker: I think he was.


William Mulock: I was not in the city at the time, and not in the House.


Samuel Barker: Of course I know the hon. gentleman says what he thinks is correct.


William Mulock: I know what I am speaking about ; the hon. gentleman does not.


Samuel Barker: I think I do, and I remember at any rate the right hon. gentleman applauded. The only one of whom I have any doubt is the Minister of Finance (Mr. Fielding).


William Stevens Fielding: If he had doubt about me, he did not give me the benefit of the doubt, for in the first case he stated positively that I did applaud.


Samuel Barker: I did not say that very positively as the Hon. Finance Minister assured me he did not applaud, but I am willing to take the remarks as I made them and I think they were correct at the time.


Fletcher Bath Wade: If the hon. gentleman finds that I am entirely correct, will he applaud then ?


Samuel Barker: Yes, we will then. There is another feature about the placing of these bonds which is very serious. Supposing to-morrow the government are called upon to decide whether the bonds are to be placed at 95 ; the gentlemen of the Grand Trunk come and say:	We have
brokers in Toronto, Montreal, or London, England, willing to take these bonds at 95. The government think they ought to do better than that. What position will the government be in if they refuse to consent to allow that transaction to be carried out ? Surely, in fair play, if afterwards the company applied to sell at ninety, the government would think they were bound in honour to implement that loss too. One of the most serious things that a guarantor can do is to interfere with the principle in the selling of securities. This transaction may involve the country in a very large sum of money. I do not thing that there is any question but that there must be a very serious loss in the selling of these bonds at the time they have to be sold, but if the government begin to interfere (\ ith the discretion of the Grand Trunk Pacific Railway Company in placing these bonds, I should say that they will put themselves in the position of having to take the risk of refusing a fair offer. I would like to call the attention of the hon. Minister of Justice to the word 'as' in the last line of page 4. I do not see what the word is there for.


Charles Fitzpatrick: The word ' as ' ought not to be there.


William Stevens Fielding: My objection to the position taken by my hon. friend from Hamilton (Mr. Barker) is that he takes it for granted that these bonds must be sold at some loss. The whole of his argument is based on that assumption.


Samuel Barker: I did not take it for gi anted ; I said that it was highly probable.


William Stevens Fielding: I think my friend's argument was put much more strongly than that. He wound up by saying that there must be a loss on these bonds. I do not thing that follows at all. I think it is a purely problematical matter. I grant that in the early future we cannot expect any great change in the money market as regards a transaction of this character. The money market is beginning to get easier for small transactions, but I grant that, as regards large transactions of this kind, we cannot look forward in the early future for very much change. But as the construction qf this road will extend over a period of years it will not be too much to expect that by the time we are called upon to issue these bonds, on the completion of the road,

the money market will have got to a condition that will enable us to sell Canadian guaranteed three per cent bonds at par. I do not think there is anything unreasonable in that expectation at all. If the condition of the money market remains as bad as it is now for a long period of years, and if there be some discount on these bonds, to that extent we will have to issue additional bonds and pay seven years interest upon them. What that amount Will be we cannot definitely estimate today. But the point to which my hon. friend referred a moment ago as to our dealing with the Grand Trunk and as to the principle upon which these bonds might be sold, I think I could best answer him by asking another question : What would be our position if we did not have the power which we take under this Bill of placing a limitation on the action of the Grand Trunk Pacific Company in selling these debentures ? If we are to implement the amount by making up the difference in one form or another we must have an assurance that these bonds are to be sold for a fair and reasonable price. If they were placed at a low price, then we would have an additional sum to make up in Out form or another over and above that which we might fairly expect, and if we did not have some such provision in regard to these bonds, I think my hon. friend would be the first to say that there would be danger in a business transaction like this. We are bound to look on all sides of it. It would be quite possible for the company to enter into arrangements for the floating of these bonds, which might not be wise or prudent. The flotation might be made upon extravagant terms which might involve large commissions and profits, and viewed in this light, we think that there should be some method by which it can be determined whether the bonds that (he company are issuing, are realizing a fair price or not. That is the object of the clause.


Edmund Boyd Osler: The clause reads in this way :
The terms and conditions upon which the bonds to be guaranteed by the government pursuant to the said agreement in aid of the construction of the western division of the railway referred to therein or any portion of them, may he sold, pledged or otherwise disposed of by the Grand Trunk Pacific Railway Company, shall be subject to the approval of the Minister of Finance and Receiver General and of the Governor in Council.
Now the weakness of this, as it strikes me, is that during the construction of the railway, which will extend over a considerable period of time, the Grand Trunk people may say : We have an offer for $10.-(*'<'0,000 of these bonds at ninety cents on the dollar. The government are then face to face with the proposition whether they will accept the offer or whether they will say : No, we will not accept it. If the government Mr. FIELDING.
do not accept the offer and the bonds are subsequently sold at a lesser price, the Grand Trunk Railway will naturally say to the government : We offered you ninety cents for these bonds and you would not accept it. You must therefore take the risk. I think that in dealing with these bonds the government should have absolute power without reference to the Grand Trunk Railway Company at all to sell them ; in other words, the proper method, to my mind, would be, assuming that this is carried, for the government to p*ay the Grand Trunk Railway Company the money as the work progresses, and then let the government take their own way of selling the bonds. If the government do not do that, they are open to complications all the time. A syndicate is formed and offers a price for these bonds, the government do not agree to it, and afterwards, when the price goes down, the company will come and say : We offered you this price and you must make up the difference.


Mr. HEYD.: I would like to ask in what position we would be if, owing to the action of the government, delay was brought about whereby these bonds sold at par or more than par. Would the Grand Trunk give us the difference ?


Edmund Boyd Osler: Under this clause the Grand Trunk Pacific Railway Company have it all their own way. If the Grand Trunk Pacific Railway Company submitted to the government an offer of ninety cents on the dollar for these bonds and the government did not take it and afterwards the bonds had to be sold at eighty cents, the government would lose the money and not the Grand Trunk Pacific Railway Company.


Charles Bernhard Heyd: What would be the position if they sold at 110 ?


Edmund Boyd Osler: The Grand Trunk Pacific Railway Company would make the money, not the government.


William Stevens Fielding: 
John Graham Haggart: The boil. Minister of Finance stated some time ago that there would be no issue of bonds in all probability for seven years. The road is to be completed in eight years. There is a provision in the Act for the issue of the interim bonds. In what form could they be issued ?


William Stevens Fielding: That is a part of the option of the government. We have a right to issue them.


John Graham Haggart: Under what conditions would you issue them ? You do not expect to sell interim bonds. They can only be pledged for a loan of money. What is the object of having that right ? The Grand Trunk Railway have seven-eighths of the road, or nearly the whole of the road completed in seven years ; they come to you and ask for an endorsation which they are entitled to. Why do you refuse it ?


Charles Fitzpatrick: They are not entitled to it.


John Graham Haggart: Not entitled to it, when they have earned it ?	*


Charles Fitzpatrick: No, until the whole read is completed.


John Graham Haggart: There is no condition attached to the issue of the bonds, except that it limits them to make the best sale they can. What is the object of the issue of the interim bonds ?


William Stevens Fielding: There is nothing which obligates the government to issue interim bonds, but the government may if they* wish, under section 36, issue these interim bonds.


John Graham Haggart: Do I understand that you undertake no liability at all to the Grand Trunk Pacific until the road is completed ?


Charles Fitzpatrick: No legal liability.


John Graham Haggart: The issue of the interim' bonds is optional with you ?


Charles Fitzpatrick: Yes.


John Graham Haggart: And no interest accrues until the completion of the road V That is a, new thing, that I did not understand in the Bill before.


Samuel Barker: I doubt very much if that would be an honourable way of reading this
contract. Taking the whole of this contract together, it is a question whether it would be businesslike or honourable on the part of the government to refuse these interim bonds under section 36. I have no doubt the government contemplate issuing interim bonds, because they must know very well that the company will not be able to raise $1,000 without the government giving effect to that clause, if the government should refuse the whole thing would fall to the ground.


Edward Frederick Clarke: The estimate of the President of the Grand Trunk, is that the prairie section shall cost $20,000 a mile. Why, then limit the guarantee of the government to $13,000.


Charles Fitzpatrick: Does my hon. friend think it -necessary to press on the Grand Trunk more than they required ?


Edward Frederick Clarke: What I want to get at is, how the estimate of cost was arrived at.


William Stevens Fielding: We have adopted the same policy as in regard to the Mackenzie and Mann road, which was based on an estimated cost of $20,000 a mile I think.


Charles Fitzpatrick: 


Edward Frederick Clarke: The estimate was $15,500.


Charles Fitzpatrick: It was close to


William Stevens Fielding: Mr. Tait resident engineer of the Canadian Northern estimates one section of 100 miles at $19,807.


John Graham Haggart: What does the government engineer say ?


Charles Fitzpatrick: The government engineer endorses it.


Edward Frederick Clarke: Mr. Collingwood Schreiber submits a report made by the departmental engineer Mr. Simmonds, and including right of way, ballast and everything he estimates 620 miles at $15,321 per mile, and the 100 miles east of Prince Albert at $15,868.83 per mile. On what information has the government based the cost of this Grand Trunk Pacific prairie road at $20,000 a mile ?


Charles Fitzpatrick: At page 4 of that return the Prince Albert extension, including of course the equipment as is the case here, is estimated at $19,807.71.


Edward Frederick Clarke: But that includes $3,000 a mile for rolling stock.


Charles Fitzpatrick: Yes, that is equipment.


Edward Frederick Clarke: We understood there was no equipment provided for in this estimate. If it is included then we are all at sea.


Charles Fitzpatrick: The Grand Trunk Pacific is estimated to cost $20,000 a mile in this section. There is no comparison between it and the Canadian Northern, be-

*cause of the higher standard of the Grand Trunk Pacific road ?


Edward Frederick Clarke: Will the Minister of Justice look at the discussion of last year '*


Charles Fitzpatrick: I prefer to look at the estimate.	/


Edward Frederick Clarke: Well, look at the estimate. Here is sessional paper 113A 1903, approximate estimate of the cost of construction of certain sections of the Canadian Northern. There is a letter to the lion. A. G. Blair, signed by Mr. Collingwood Schreiber, and on page 2 the approximate cost for 620 miles is $11,341,284 including $1,860,000 for rolling stock equipment, which would give $3,000 per mile for equipment. The total cost per mile is $15,301, but adding the cost for equipment it makes it $18,301 per mile.


Charles Fitzpatrick: That varies according to each section. On the next page you will find it estimated at $18,856 per mile.


Edward Frederick Clarke: Yes, but that includes $3,000 per mile for equipment.


Charles Fitzpatrick: Exactly.


Edward Frederick Clarke: Therefore, deducting the equipment the cost would be $15,856 per mile. If you turn to the discussion last year you will find that the Minister of Railways stated that this was an estimate for a standard railway ; a railway of the very highest character. Now, what I want to know is what further information has the government obtained, which justifies them in basing the cost of this prairie section at $20,000 per mile, and guaranteeing the cost up to $13,000 ?


Charles Fitzpatrick: The position taken by the Prime Minister is :	We are constructing a line through the same country within a very short distance of the line constructed by Mackenzie & Mann. In connection with that road we had estimates. We considered the estimates we had obtained, and had them examined by the government engineers, to justify us in giving the aid to Mackenzie <& Mann. What necessity was there for us to get another estimate made for this line, which I understand goes through the same country ? My hon. friend says that this road is estimated to cost more. It is, because the railway is expected to be of a higher standard. The contract provides that it is to be of the standard of the Grand Trunk Railway between Toronto and Montreal, which I believe is the highest standard in the country. It does not seem to me that it is important for us to fix the price at $20,000 a mile, because no matter what the cost is we are only to endorse the bonds to the extent of three-fourths of it. If it is to cost only $18,000 a mile, so much the better for the government and the country, because our liability will be less. Nothing turns on the question of cost, because our liability is limited to $13,000 a mile.


Charles Fitzpatrick: 


Edward Frederick Clarke: What I was trying to ascertain wras, if the government is to guarantee three-fourths of the cost, and if the road is to cost $20,000 a mile, why fix the limit at $13,000 ?


Charles Fitzpatrick: Because the Grand Trunk people say they are satisfied with that assistance. Why thrust more on them ?


Edward Frederick Clarke: The government have no more information than the estimate last year of the cost of the Canadian Northern ?


Charles Fitzpatrick: That is all.


Robert Laird Borden: Does the Minister of Justice say that clause 5 refers only to the permanent bonds, or does it refer also to the interim bonds provided for in clause 36 of the original contract ?


Charles Fitzpatrick: I entertain no doubt that it applies exclusively to the permanent bonds issued under section 28. Under section 36, which provides for the issue of interim bonds, these bonds have to be issued by the company and endorsed by the government, subject to limitations and conditions imposed by the agreements ; and they are to be issued only on such conditions as the government choose to fix, and only if the government agree to any issue at all. I should imagine that it would be clearly applicable only to the permanent bonds.


Robert Laird Borden: The Minister of [DOT]Justice may be right, but I would not be quite so clear about it as he is. I think clause 36 may impose more of an obligation on the government than has been suggested by the Minister of Justice. I assume that he realizes that the use of the word ' may ' sometimes imposes a legal obligation. Certainly in many statutes it imposes an obligation of some kind. If you take chapter T of 1903, which provides for certain aid for the extension of the Canadian Northern Railway, you will observe that there is no stronger language used in that statute than is used in clause 36. It provides that ' the government of Canada may aid and assist the extension of the railway of the Canadian Northern Railway Company,' &c.; and clause 36 of the original agreement says :
Notwithstanding any of the provisions of this agreement, interim bonds of the company secured by first mortgage may, from time to time, during, and for the purposes of the work of constructing the said western division, be issued by the company and guaranteed by the government.
Section 2 of chapter 7 of 1903 says :
The said bonds, debentures, or other securities so guaranteed shall be secured by mortgage.
Section 36 of the contract goes on to say :
All such interim bonds shall he issued upon such terms that, upon the completion of the said western division, the same or so much

thereof (principal and Interest) as may be then outstanding, shall be convertible.
I -would, think there was an obligation there from which the government could not very well depart unless the Minister of Justice would also conclude that the government of Canada could depart from the obligation contained in the statute to which I have referred with reference to the granting of aid to the Canadian Northern Railway.


Charles Fitzpatrick: If section 30 were the only one in the contract which referred to the issue of bonds, I would quite understand the opinion expressed by the hon. leader of the opposition ; but it must be read in conjunction with section 28, which makes provision for the permanent issue, and which provides for an obligation on the part of the government of Canada to endorse for the principal and interest on these bonds when the road is completed. Then the contract goes on to say in section 36 that notwithstanding that provision the. government may issue. In one case it is obligatory ; in the other case it is permissive. Of course, I do not wish to assume that it would not be in the interest of the Government as well as in the interest of the company, for the government to assist in the successful financing of this enterprise, so that the company would get the money on the best terms ; because anything done to assist the company in that respect would add to the value of the permanent bonds guaranteed by the govern-men when the road is completed. So that if this enterprise is successful and the work progresses, as it is expected to do, the government will come to the assistance of the company and give them that aid to which they are entitled under this provision.


Robert Laird Borden: Of course, the word 4 shall ' is used very often in the original contract not only for the purpose of enabling the government, but also for the purpose of imposing an obligation upon the government. Then the word ' may ' is used in section 36. Curiously enough, in this section 5 of the supplemental agreement both words are used. As the agreement was carefully prepared, the Minister of Justice might inform us of the reason of both words being used in this section, whereas they have been distinguished very clearly in the original agreement.


Charles Fitzpatrick: That occurred to me when I saw the clause in the form in which it is drafted, and I asked the draughtsman the reason for it. He said this was a modern form now adopted, and he referred to Maxwell on Statutes.


John Graham Haggart: The Minister of Justice stated some time ago that in the mortgage taken for tile security of the bonds, there is always the provision that in case of default the bonds shall have at least pari
passu rights of voting with the stock. Sometimes they supplant them. Sometimes they have not that right at all. The hon. gentleman says that in all cases they have. Even presuming they have, what advantage is it to the bondholders in this case to have the right of voting equally with the shareholders in case of default ?


Charles Fitzpatrick: I think I had better refer my hon. friend (Mr. Haggart) to my hon. friend from Toronto (Mr. Osier).


John Graham Haggart: No, I want an answer from the Minister of Justice (Mr. Fitzpatrick). He says they have that remedy. What benefit would it be ?


Charles Fitzpatrick: I agree with the hon. member for West Toronto that it is a distinct advantage, in case of insolvency, for the bondholders to elect the directors and take possession of the road, in the event of the road being operated, instead of foreclosing and sale. Take, for instance, the case of the Temiscouata Railway


John Graham Haggart: But that is a different road. I am talking about this case, where we have special powers, and can only exercise certain rights. "What use will it be in this case ?


Charles Fitzpatrick: All the use in the world. It will satisfy the demand of my hon. friend (Mr. Haggart) for government ownership.


Edmund Boyd Osler: In paragraph 3G it is provided that interim bonds may issue, we will say, on progress certificates. That is, the company must raise money from time to time as the work progresses ; they come to the government and ask for the guarantee of limited bonds. Suppose that, during the first two or three years, .$10,000,000 of temporary bonds are issued at ten years, and suppose that the condition of the money market is such that four per cent must be paid. Then in five years the government are going to make an issue of three per cents. In that case, are these four per cent bonds to be convertible at par, or will they be convertible at the relative value of the four per cent bonds for the term they have to run as against the three per cents ? It is really a matter of legal interpretation, I suppose.


Charles Fitzpatrick: It depends upon the agreement.


Edmund Boyd Osler: I ask the Minister of Justice how that agreement runs, because looking over it here, it seems to me that it is open to another interpretation ?


Charles Fitzpatrick: The hon. gentleman does not mean, I presume, that we shall have to take the four per cents at their value at the time ?


Edmund Boyd Osler: It strikes me that that is what you will have to do. But I am asking for information.


Charles Fitzpatrick: The information is in the contract-in this section. If the interim bond is issued at four per cent, thai can only be done with the consent of the government.


Edmund Boyd Osler: Why so ?


Charles Fitzpatrick: It is provided that when the bonds are issued the consent of the government must be obtained to the time of issue, the rate of interest and the period it will have to run. Suppose the bond is called in. When it is called in it represents a certain amount of money that was paid for it, and I take it that the amount was the then value of the bond, and that face value of the bond, with the interest on it, would be the liability that must be assumed with respect to the new issue of permanent bonds at three per cent. I think there can be no question about that.


Edmund Boyd Osler: 
William Stevens Fielding: The government would not issue a bond for as long as ten years.


Edmund Boyd Osler: You would have to issue a bond to suit the market. You cannot get over that.
Mr.' FIELDING. But my hon. friend (Mr Osier) will see that we would not issue temporary bonds to terminate at a date w.h'?h would be beyond the completion of the road. It would have to be on the completion of the road that the new bonds were issued.
Mr. OSiLER. Well, say seven years then, or any other period. A four per cent bond is issued, and it is convertible into the permanent bonds. Is it convertible at par or at the relative value of the four per cent and the three per cent for the time the four has to run ?


Edmund Boyd Osler: 


Robert Laird Borden: No doubt that is a little difficult to work out. There is another point. Are you going to issue" the bonds so that they shall be convertible only at the expiration of a term mentioned in the bond or subject to a proviso that they can be called in at any time and exchanged for a permanent bond ?


William Stevens Fielding: The clause leaves it open to the government. All these details will have to be set forth in the agreement for the issue of the bonds. But I cannot conceive that a bond would be issued at ten years


Edmund Boyd Osler: Say five years.


William Stevens Fielding: If they are issued for a period shorter than the time required for the completion of the work, they will fall dale and will have to be replaced by others. If they were issued at five years and the road was not then completed, they would probably be replaced with bonds issued at a year or two years, or for whatever period construction was expected to go on. And on the completion of the road the new bonds would be issued. Undoubtedly, if we sold four percents for a fixed term, they must be taken up at their face value-


Edmund Boyd Osler: The interim bonds are payable on the completion of the road ?


William Stevens Fielding: They may be.


Edmund Boyd Osler: That is one of the conditions. They are convertible then.


John Graham Haggart: One thing is puzzling me. The chairman of the Grand Truitk Company, addressing the stockholders, said there was no possible liability on the Grand Trunk for eighteen years. I cannot understand on what he based that statement. The Act seems to be clear. The interim bonds fall due on the completion of the road.


William Stevens Fielding: Or perhaps earlier.


John Graham Haggart: Yes, or they may fall due earlier. Surely if the road is completed in eight years, there will be a new issue-of bonds, on which the Grand Trunk Railway and the government will be liable, each in its proportion. How no liability will occur to the Grand Trunk Railway for eighteen years I cannot possibly understand.


Charles Fitzpatrick: My hon. friend makes a mistake. Did Sir Charles Rivers-Wilson, according to him, say that the Grand Trunk Railway are not responsible for a period of eighteen years ?


John Graham Haggart: Eight years from the completion of the road and possibly ten on the mountain section.


Charles Fitzpatrick: Sir Charles Rivers-Wilson does not say that. He says that the liability of the company, comparatively small as it is. need not arise until the expiration of eight years.

Mr. HAG6AKT. Eight years after construction.


Charles Fitzpatrick: No, during the period allowed for construction. He does not say eight years after.


Edmund Boyd Osler: It has been stated a good many times with a great deal of emphasis, that this road is to be of the standard of the Grand Trunk Railway. That is simply an impossibility. The Grand Trunk Railway road has only reached its present standard after many years of work on the roadbed.


Sir WILLIAM MU LOCK.: But it will he such a road that, in the course of time, it will arrive at the standard of the Grand Trunk Railway. You may buy an extra fine brand of port wine, but it will take time to mellow.


Edmund Boyd Osler: The contrast was drawn in favour of this against other contracts, That the standard of the Grand Trunk, which is to be the standard of this road, is so much higher than that of other companies, that have been aided by the government. But the Canadian Northern was to be a high class road, and we cannot build a road higher than a high class road in a new country. Before you can get this Grand Trunk Pacific or any road over the prairie or any where in this country up to the standard of the Grand Trunk Railway, you will have to expend ten or fifteen or twenty years perhaps in constant renewals and expenditure on the track and road-bed. It will cost $10,000 a mile at the very least, during the ten years after this road is constructed, to keep it in first-class condition and repair. That $10,000 will come out of the earnings of the company. The Grand Trunk Railway may spend any sum they please out of the earnings on that road, so that it will not pay. Then if there is any default in the payment of interest, it goes into the hands of a receiver, and the Grand Trunk Railway will have the control of the directors who will appoint the receiver.


Charles Fitzpatrick: Under section 114 of the Railway Act, the bondholders will control the directors.


Edmund Boyd Osler: In any event, no matter what may be earned, the Grand Trunk Railway, if they like may spend all the earnings on the main line to bring it to the standard of the Grand Trunk Railway.
Section 5 of the schedule agreed to.
On sections 6 and 7 of the schedule,
6. Notwithstanding anything in the said contract contained, the government shall not exercise any rights in respect of possession, foreclosure or sale, by reason of non-payment of interest by the company under the thirty-first, thirty-second or thirty-third paragraphs of the said contract, or under all or any of them, unless and until there shall be such default to the
extent in the whole of a sum equal to five years of such interest, as the company is not relieved from payment of or permitted to defer or capitalize by the provisions of the said paragraphs.
7. In case of such default being made by the company in respect of the interest of the said bonds so guaranteed by the government as would, under the provisions of the said contract as amended hereby, entitle the government to take possession of the said western division or to foreclose or sell the same, the remedy of the government shall, notwithstanding anything in the said contract contained, be the taking possession thereof by and through an agent or manager to be appointed as hereinafter provided whose powers and duties shall be to manage and operate the said western division, to receive all the tolls and revenues thereoi, to pay thereout working expenditure as defined by ' the Railway Aqt, 1903,' including the expenses of such management or agency, and to distribute the surplus tolls and revenue, after payment of such working expenditure, ' pari passu ' between the government or other holders of the bonds secured as provided by paragraph 35 (a) of the said contract and guaranteed by the government and the holders of the bonds secured as provided by paragraph 35 (b) of the said contract and guaranteed by the Grand Trunk Railway Company, in the proportion of seventy-five per centum of such surplus tolls or revenues to the holders of the former issue of the bonds and twenty-five per centum to the holders of the latter issue, and the mortgage to be prepared under the said paragraph 35 (a) shall contain appropriate provisions in that behalf. The said manager or agent is to be appointed by the government, with the' concurrence of the company, or, if they are unable to agree by a majority of the Supreme Court of Canada.


Robert Laird Borden: Will my hon. friend the Minister of Justice explain the effect of these sections ?


Charles Fitzpatrick: Under the original agreement, in the event of default on the part of the company, the power of foreclosure and sale would be vested, under ordinary circumstances, in the government. This provides that, in the event of default, before any proceeding by way of foreclosure and sale can take place, the default must continue for a period of five years. I should say there instead of the ordinary proceeding by way of foreclosure, a manager or receiver will be appointed, who will take charge of the road and oper-it, and he shall account for the proceeds in the proportion of three-fourths to the government and one-fourth to the bondholder. The effect, in so far as the bondholders are concerned, is that instead of putting the holders of the second issue of bonds, that is, the issue guaranteed by the Grand Trunk, in the position of losing the whole of their investment in the Grand Trunk Pacific in case of default and| the road passing into the hands of the govern^ ment, the holders of the second issue of bonds will be in the same position in effect as the holders of the first issue with respect to the revenue of the road, in case of the

default of the Grand Trunk Pacific. There are three departures from the original contract. The first is that a foreclosure and sale cannot take place ; the road is to be operated for five years before proceedings by way of foreclosure can be taken at all. Then after that the foreclosure proceedings are not the ordinary ones of our own statute, but are of a modified form, an entry into possession by the government through a manager, which manager will operate the road for the joint benefit of all the bondholders. That is to say the government will get 75 per cent of the profits of the road and the holders of the second issue of bonds will get 25 per cent.


Robert Laird Borden: The position of a mortgagee in possession is not a very desirable one. I think a mortgagee in possession is almost the only individual against whom accounts are taken in the first instance on the footing of wilful default, and it does not seem to me to be very much in the public interest that the country should be placed in that position. The Minister of Justice says there is a change in the method of foreclosure ; I do not see there is any foreclosure at all.


Charles Fitzpatrick: As a matter of fact there is not; it is a modified form of entering into possession.


Robert Laird Borden: Simply a form of entering into possession, and as I said the position of a mortgagee in possession is not a desirable one because unless it is modified by the terms of this contract-


Charles Fitzpatrick: By the very last paragraph of clause 7.


Mr.  R. L.@: BORDEN (reading)
The said manager or agent is to be appointed by the government, with the concurrence of the company, or, if they are unable to agree, by a majority of the Supreme Court of Canada.
I have not considered the matter carefully from this standpoint because the suggestion I have made only entered my mind at the moment.


Charles Fitzpatrick: That was a suggestion that entered our minds at the time.


Robert Laird Borden: What is the reason that the title of this road is to be kept in the company for ever, although they may be in default for ever ? Why should you so greatly modify the terms of a mortgage of this character ? For example we have had placed on the table of the House the mortgage by which the government is indemnified in respect of its bond guarantee for the Canadian Northern Railway Company and I find that that mortgage is enforceable under certain conditions. One of these conditions is that if the company make default for a period of six calendar months in the Mr. FITZPATRICK.
payment of interest the government can enter, can sell, and convey and give title. If it does not desire to exercise the powers of sale conferred on it, it can under section 3 of the mortgage, proceed by way of ordinary foreclosure and obtain title in the same way. Here, you have an absolutely different scheme. A scheme such as that contained in the Canadian Northern mortgage, is infinitely more in the interests of the country and why is the country asked to submit to a scheme under which the government cannot take possession unless the interest is in arrears for five years and even if that default arises the government cannot foreclose or obtain a title. The differences are very marked between this mortgage and that of the Canadian Northern which I am using as an illustration because that mortgage is in the ordinary form. Under the ordinary mortgage you can proceed upon default of six month's interest. As soon as ti months' interest are in default you can proceed with all your remedies under the mortgage. Then there is the further marked difference that whereas under the ordinary mortgage you can proceed to foreclose to make title and to acquire the interest of the mortgagor in the railway, you cannot under this do anything of the kind so far as I understand. These are changes of the most extreme, radical type and I would ask some explanation of the government as to why what seem to me to be most remarkable, most unusual and unheard of provisions should be contained in the supplementary agreement, especially when every line of the original agreement had been assented to by the gentlemen concerned.


Charles Fitzpatrick: The conditions in the Canadian Northern mortgage are the usual ones. My hon. friend would understand that there is a broad line of demarcation between the Canadian Northern securities and .these now being considered. In the case of the Canadian Northern, we are dealing with a company the bonds of which we guaranteed purely and simply. We take such mortgages as a creditor under similar conditions would take as security. In the present ease we are dealing with the Grand Trunk Pacific Company and also with the Grand Trunk Railway Company. It must be borne in mind that the first issue of bonds is by the Grand Trunk Pacific Company. That issue is guaranteed by the government, and that issue, in so far as the contract applies, will only procure three-fourths of the cost of the construction of the road. It is therefore necessary to have in addition to that provision for the other one quarter. Parliament has chosen to approve the action of the government in saying that the Grand Trunk Railway Company should guarantee the second issue. In the event of foreclosure, under ordinary cir-

cum stances and. under the original contract, the second issue of bonds would be wiped out, and the Grand Trunk Railway Company as endorsers would become liable to the bondholders but would have no claim whatever upon the road. The Grand Trunk Company endorse the second issue, and thus became liable to the holders of the bonds. Then being simply the holders of the second mortgage they would be absolutely without any recourse except against the Grand Trunk. Under these circumstances we suggested that the Grand Trunk Company should guarantee the second issue of bonds in the same way as the government guaranteed the first issue as it is their credit that will enable the Grand Trunk Pacific Company to float the second issue of bonds just as it was the credit of the government that enabled the company to float the first issue of bonds. There was no reason why, in case of default, the road should pass from their hands and not be administered for the benefit of both endorsers. That was the position they took and there is something in it. The change is made to put the endorsers, the Grand Trunk Railway Company in the same position as the guarantors of the first issue. We hear a good deal about the prairie section and the mountain section. W e have been told that the prairie section is to pay and if there is any doubt as to the western section not all paying it is m regard to the mountain section If there is any default the whole road goes, the prairie section as well as the mountain section.


Edmund Boyd Osler: Goes where ?


Charles Fitzpatrick: Into the hands of the manager. It must be borne in mind that the company will take care of the fat section. We are here making provision for a contingency which can never possiblv occur. The company will never allow the' prairie section to pass out of their hands. They will make their arrangements and they will see to it that the road is managed in such a way that we will never be called upon to enter into possession. A fact which is not to be lost sight of, is that the prairie section is bound up with the mountain section in such a way that if they default on the mountain section the prairie section goes u ith it. The position that the government took was a fair one. We have confidence in this country and we have confidence in the country that will be served by this road. All that we are doing is to facilitate the financing of this enterprise by giving to these people the means necessary to enable them to build this road at a cheap figure: Instead of being obliged to go out into the money market and offer their bonds, taking what they can get for them, the government are lending their credit to the companv so that they will get their money at the lowest possible rate and get the road constructed as 78
cheaply as possible. We know the resources of that country, and we feel that we are absolutely safe in that respect. We know that the prairie section is possessed of an enormous amount of earning power and that section will be sufficient to make up any short-comings with respect to the mountain section. We know that the earning power of the prairie section must contribute to the maintenance of the mountain section. We are satisfied that all we are doing is to lend our credit to this company and that we will not be called upon to pay a farthing except our contribution in respect to interest. In doing that we give confidence to those timid English shareholders of the Grand Trunk Railway Company who appear not to know very much about this country. We say : we know this country is safe, we know that the people of this country have confidence in this enterprise and we will guarantee three-quarters of the c-ost-


James Clancy: Why not guarantee it all!


Charles Fitzpatrick: I gave that answer to the hon. member for Toronto (Mr. Osier) a little while ago. We know that eventually this country will be prosperous, that its resources are of such a magnitude that this enterprise will not involve anything as far as the country is concerned. We have said to these English shareholders : We do not hesitate to give you an assurance that these are our convictions and as a result some of the timidity of the English shareholders has been brushed aside and they now; see it in a different light. Not only have we told them that we are prepared to guarantee three-quarters of the cost of the construction, knowing that it involves no liability, but we say that we believe that the earning power will be such as to enable them to receive their interest upon their investment. But, in case our expectations are not realized and if, as a matter of fact, the predictions that have been made in other quarters are realized and under this clause the road should pass into the hands of a receiver we will put ourselves on the same footing as you are and we will agree to take three-quarters of the earning power of the road over and above the running expenses giving * you the other one quarter.


Edmund Boyd Osler: We are not on the same plane as the Grand Trunk Railway Company. Under this contract the government are not getting their fair share. You are giving the Grand Trunk Pacific not only their full share but you are giving them absolute control.


Charles Fitzpatrick: The hon. gentleman is entirely mistaken about that.


Edmund Boyd Osler: The government are giving the Grand Trunk Pacific Railway Company the right to build branches from this, the backbone of the road, to Lake Superior and they virtually have no control over them. If
JiEVISED EDITION

they go Into default the government are dealing with the road for the benefit of themselves and the Grand Trunk Pacific Railway, but the Grand Trunk Pacific shareholders. as representing the dominant partner, will operate the road for their own benefit. They will have the nomination of the manager. The Grand Trunk Pacific Railway Company will own the out}et. if you owned the outlet it would be a difteient thing but you are putting aside one point that might give you strength. The Grand Trunk Pacific Railway Company get the whole benefit because they control the outlet to Lake Superior.


Charles Fitzpatrick: Is the hon. gentleman serious when he argues that .
It does not say that they can exercise the right of foreclosue or sale in the event of interest being in arrear for five years. It is very different from that and it makes possible a much more awkward position for the country- It says in effect that until there shall be ten half y.early payments sin-paid you cannot exercise that right.


Charles Fitzpatrick: Ten half years are five whole years.


Samuel Barker: Until ten coupons are in default the government cannot stir. If nine coupons are in default for twenty years, the government cannot stir. Is that not the legal effect of this contract?


Charles Fitzpatrick: Yes.


Edmund Boyd Osler: Yes.


Charles Fitzpatrick: Where does the outlet start from that he speaks of now .


Edmund Boyd Osler: Any point you like on the main line.


Charles Fitzpatrick: From the eastern branch ?


Edmund Boyd Osler: Yes.


Charles Fitzpatrick: And that belongs to
us ?


Edmund Boyd Osler: Precisely.


Charles Fitzpatrick: We are talking about the western section now.


Edmund Boyd Osler: Take the western section- if they go into default they own all the branches. Their profit is in sending all the freight to Lake Superior. If they go into default there is no provision in this contract that would prevent the Grand Trunk Railway company controlling the business and sending it through from the western division via Lake Superior and over the eastern division to Portland.


Mr BARKER.: I would like to ask the hon. Minister of Justice a question I understand the hon. minister to say that the obiect of this clause is to postpone the right of foreclosure and sale until there has been five years default.


Charles Fitzpatrick: Yes.


Samuel Barker: 
Edmund Boyd Osler: 


Samuel Barker: That is a very different thing from what the hon. Minister of Justice said. He said that it was postponing it only for five years.


Charles Fitzpatrick: If they are in default in respect to five years interest we can enter into possession.


Samuel Barker: The ordinary provision is that if there is one coupon in arrear for five years or any period you can proceed.


Charles Fitzpatrick: If there is one coupon in arrear for six months you can proceed.


Samuel Barker: The hon. gentleman says that this clause has been put in to'Prevent hardship. This provides that until they shall be five whole years in default, ten coupons in effect, you cannot take any steps. L there are nine coupons in arrear the government cannot stir.


Charles Fitzpatrick: That is right.


Mr BARKER.: That is a very different thing from the ordinary procedure when there is default. It means that at any time during the forty years the Grand Trunk Pacific Railway Company can allow eight or-nine coupons to remain in default and if these coupons remain outstanding or rather have been paid by the government and the o-overnment hold them for forty years they cannot collect them. That is the position of this extraordinary contract.


Charles Fitzpatrick: They will be charged against the property.	v


Samuel Barker: But you cannot recover them.


Charles Fitzpatrick: Cannot you sue and collect ?


Samuel Barker: You could sue the Grand Trunk Pacific Railway Company which has nothing. Everything they have in the world is mortgaged.


Charles Fitzpatrick: What about that valuable connection with Lake Superior V


Samuel Barker: That would be mortgaged also, and the hon. gentleman knows that you cannot recover anything by suit from a railway company when it is all mortgaged up to the handle.


Charles Fitzpatrick: I have collected dozens of times from railway companies.


Samuel Barker: I never heard of any such provision in a contract before. In case of default the Grand Trunk on its guarantee can take any proceeding it likes, but the government can take no step.


Charles Fitzpatrick: What effect would that have with respect to us ?


Samuel Barker: I will tell you in a moment.


Charles Fitzpatrick: Oh, tell it no\y.


Samuel Barker: I am asking questions at present.


Charles Fitzpatrick: And you are evading mine. My hon. friend must not imagine that none of us have read a word of law If he reads section 114 of the Railway Act he will find his answer.


Samuel Barker: You have forced the Grand Trunk to control the Grand Trunk Pacific, and handling the cash from day to day, it can pay the interest upon the Grand Trunk guarantee, and leave the government guarantee in default.


Charles Fitzpatrick: In case the second bondholders take proceedings what becomes op the first bondholders ?


Samuel Barker: The government will take proceedings specified by this contract, and get an agent, but the Grand Trunk Railway will have a receiver who will be the Grand Trunk under another name.


Charles Fitzpatrick: I know my hon. friend's capacity in railway affairs, and he must know that under section 114 of the Railway Act the first bondholders become co-ad the company's shareholders, for the purpose of electing directors, and as we have three-fourths of the bonds, what becomes of the other one-fourth ?


Samuel Barker: In this contract the Minister of Justice has tied the country up, leaving the other bondholders free td every remedy the law gives them.


Charles Fitzpatrick: Not at all.


Samuel Barker: I doubt very much whether the hon. gentleman has ever seen a case where the first mortgage bondholders were precluded from their remedy, and the second mortgage bondholders were allowed to go on and get a receiver.


Charles Fitzpatrick: The first mortgage bondholders are not precluded. The law protects them.
78J


Samuel Barker: Supposing the Grand Trunk Pacific under the dictation of the Grand Trunk Railway used the cash receipts they have in hand to pay the CQupons that the Grand Trunk Company guarantee; there is nothing here to prevent that. The result would be that there would be three years' default on the bonds guaranteed by the government and the government will have to pay the interest and capitalize it.


Charles Bernhard Heyd: Before the hon. gentleman (Mr. Barker) sits down, probably he will answer a question I will put to him. Assuming that all the prognostications that have been made should turn out to be correct, and this road prove to be an absolute failure from beginning to end; in what worse position would we be, than if the views of our friends on the other side prevailed and we were to build the road as a government undertaking.


Edmund Boyd Osler: That is very fine reasoning.


Charles Bernhard Heyd: Probably my hon. friend will answer that question.


Robert Laird Borden: I will answer the hon. gentleman. In a matter of this kind, we have to look at the possibilities both in the case of success and in the case of failure. We all hope that this enterprise will be a success. If it is a success, and if the views expressed from this side of the House should be given effect to, then we would have a road which would be a magnificent asset for the country, and we would be a great deal better off than we will be under this contract. If on the other hand, there is a failure, then we will be practically as badly off as we would be if we were to build the road ourselves. Let me point out that the Minister of Justice has given a very effective answer to the remarks made by the Minister of Customs this afternoon. The Minister of Justice says that the prairie section is so valuable an asset that it will more than offset any disadvantage in building the mountain section, and therefore the proposition as a whole will be a good one for this country to undertake.


Charles Fitzpatrick: Except, that I do not believe in government ownership.


Robert Laird Borden: My hon. friend the Minister of Customs evidently does.


Charles Fitzpatrick: Chacun son gofit.


Robert Laird Borden: If the Minister of Customs were present, I would refer him to the Minister of Justice for an answer to everything he urged this afternoon. Now, the Minister of Justice has introduced a matter which I proposed to introduce later, namely, the placing of the bonds guaranteed by the Grand Trunk upon equality with those guaranteed by the govern-

ment. That is a very good thing for the Grand Trunk and for the holders of the bonds guaranteed by the Grand Trunk ; but the very' fact that the government have put those bonds in that position is the best possible argument against introducing these other stipulations in the contract. When you have these bonds, there ought be no reason for postponing entry and foreclosure until five years' default has taken place. Why should there be any stipulation in the contract absolutely abolishing any foreclosure at all? The hon. gentleman refers by illustration to the mortgage given by the Canadian Northern for similar bonds guaranteed by the government. Well, ought the Canadian Northern be in any better position if it had created another company called the Canadian Northern Pacific Railway Company, obtained a government guarantee for the bonds of that company, and guaranteed one-fourth of the bonds itself. That is all the Grand Trunk has done. Why should the Grand Trunk be in any better position because, as was frankly stated at a meeting of its shareholders, it has created another corporation called the Grand Trunk Pacific for the purpose of carrying this enterprise out. The Minister of Justice says that that alters the situation, but it ought not to alter the situation. After all, the main feature of this is that the government undertake to guarantee bonds representing three-quarters of the cost of the road and the government did practically the same thing as far as the prairie section of the Canadian Northern is concerned.
In the one case the trustee acting for the government has the right to enter upon default in payment of one coupon representing interest for six months. In this case the Grand Trunk Railway Company can do what my hon. friend from Hamilton has said, and it can do more. It can designedly permit the first nine coupons to be defaulted, and to be paid by the government, and it can let these stand for the remaining period of fifty years ; and unless it has money to burn, to use a common expression, it will do that. Why is the government called upon to put the country in that position ? If six months' default is sufficient in the case of the Canadian Northern Railway mortgage, why is it not sufficient in the case of this mortgage ? The Minister of Justice suggests that to permit this default to continue makes the position of the government better, because it gives the company a better opportunity of carrying on its railway. Exactly the same considerations would apply in the case of the Canadian Northern or any other company whose bonds are guaranteed. You would put them in a better position the more you gave away to them. That is very plain ; but is it necessary for the country to give so much away simply fm the purpose of putting the company in Mr. R. L. BORDEN.
a better position ? As my hon. friend from Hamilton suggests, the four and a half years is in addition to the ten years. In the first place, you have the eight years during which the road is being constructed ; after that, so far as the mountain section is concerned, you have seven years during which the government assumes the interest ; after that you have the three years during which the interest cannot be enforced, but may be capitalized under certain conditions ; and after that you have the four and a half years during which the Grand Trunk Pacific may make default in payment of interest, and for the payment of that interest the government has no remedy whatever during the entire period of fifty years providing the remaining interest is paid as it becomes due.


Charles Fitzpatrick: I do not think the hon. gentleman makes an exact statement when he says that we are without any remedy.


Robert Laird Borden: I admit that the mortgage may be so drawn as to give the government a right of action. It may enter up a judgment, but when it does, what can it do afterwards ? Can it take any effective proceedings ? It may issue an execution only to find every available asset of the Grand Trunk Pacific covered by some prior charge. Tt may sell subject to this prior charge ; but will that be an effective remedy ? Will the Minister of Justice say that you can get title under that ? It seems to me you could not. because you would have to face the prior charges of the bonds guaranteed by the government and those guaranteed by the Grand Trunk Railway Company. Therefore, after all. it is a mere visionary remedy, and will not result, so far as we can see. in any actual payment under the judgment. These are remarkable provisions, and I do not see why the government should be driven to make conditions of this kind when they were not considered necessary in a similar case last year. Why is it that the usual default should not give the government any remedy under this contract ? Why is it that what you call a mortgage is legislated out of being a mortgage and is constituted a mere charge under which the government can enter into possession and may be placed in a very unfortunate position by being called upon at some time to render an account of the receipts and profits of this road .' I must confess that the explanation of the Minister of Justice seems to me insufficient and inadequate. I cannot conceive of any possible ground which could have induced the government to enter into a contract of this kind. Section 7 of schedule agreed to.
On section 8 of schedule,
8. Should possession be taken as aforesaid, the right of the government to such possession shall terminate if and when the application of the proportion herein provided of the said

surplus tolls and revenues shall have paid off all arrears of such Interest.


Charles Fitzpatrick: This is not of very great importance. It merely provides for re-entry on the part of the company in the event of the amount of interest in arrears being paid.
Section 8 of schedule agreed to.
Progress reported.
On motion of Sir Wilfrid Laurier, House adjourned at 11.40 p.m.

Tuesday, May 3, 1904.