1909-02-19

[Stage Direction]
Report of the Department of Railways and Canals for the year ending 31st of March, 1908-Mr. Graham.

[Stage Direction]
Bill (No. 66) respecting the Abitibi and Hudson Bay Railway Company.-Mr. Geo. Gordon.
Bill (No. 67) respecting the Alsek and Yukon Railway Company.-Mr. Wilbert McIntyre.
Bill (No. 68) respecting the Athabaska Railway Company.-Mr. Wilbert McIntyre.
Bill (No. 69) to incorporate the Fort Erie and Buffalo Bridge Company.-Mr. German.
Bill (No. 70) respecting the St. Mary's and Western Ontario Railway Company.- Mr. G. H. McIntyre.
Bill (No. 71) respecting a patent of Thomas L. Smith.-Mr. Bickerdike.

[Stage Direction]
Mr. RALPH SMITH (Nanaimo) moved for leave to introduce Bill (No. 72) to amend the Railway Act. He said: The object of this Bill is to reduce and fix the hours of labour for telegraphers and despatches on railways.
Mr. W. F. MACLEAN (South York).: In what way?


Mr. RALPH SMITH.: At eight hours a day.


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

Mr.  E. N.@: LEWIS (West Huron) moved for leave to introduce Bill (No. 73) to provide for the government inspection of vessels. He said:	This Bill is to apply
to vessels not now inspected under the Dominion Inspection Act. At present, all well found vessels are inspected, but barges, which have no motive power, are not inspected. Clauses 6 and 7 of this Bill provide that the present Inspection and Equipment Act shall apply to small steam vessels over five tons. The matter has been discussed by the divisional court of Ontario, as will be found in 120 Ontario Reports, page 154, Sturgeon vs. Port Bur-well Fishing Company. The representatives of a man who was drowned were not able to recover from the steamer notwithstanding the fact that there was no boat or axe on board. The life buoy was fastened too securely for quick use. Had this vessel been equipped as others must be under the law, the life of the man would have been saved. Clause 8 of the Bill is to provide that vessels towing shall carry a rocket gun. At present, steel boats cannot get within reach of their tows which have broken loose, where the sea is very high. The American Steel Trust require all their vessels to carry rocket guns, not because it is provided by law, but for the protection of the Trust's own interests. Ocean vessels are required by law to carry these appliances. The cost is very small.


Mr. DANIEL.: Would this apply everywhere?


Mr. LEWIS.: Yes, all over the Dominion.


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

Hon.  L. P.@: BRODEUR (Minister of Marine and Fisheries) moved that the House go into committee to consider the following proposed resolution:
That Rule No. 10, Chapter 2, of the Rules of the House of Commons, be amended by addins' after the words 'on Agriculture and Colonization' the words 'on Marine and Fisheries.'
He said: This resolution is1 designed to carry into effect the decision of the House reached some days ago on motion of my hon. friend from Guysborough (Mr. Sinclair). It simply gives legal form to the resolution proposed by the hon. gentleman.


William Findlay Maclean: 


Mr. R. L. BORDEN.: How will the rule read then?


Mr. BRODEUR.: Rule 10, chapter 2, provides :
At the commencement of each session a. special committee, consisting of five members, shall be appointed, whose duty it shall be to prepare and report, with all convenient speed, List of Members to compose the Select Standing Committees of the House, for the following purposes-
These, of course, include the Public Accounts, and others. It is proposed now that after ' Agriculture and Colonization,'
' Marine and Fisheries ' be added.


Rt.   H@: According to the understanding I had the other day on the motion made by my hon. friend the leader of the opposition, I shall move to amend the resolution by adding the following words: ' Mines and Minerals, Forests, Waterways and Water-powers.' That is, we shall have besides the committees already provided for, committees on Marine and Fisheries, on Mines and Minerals and on Forests, Waterways and Water-powers.


[Stage Direction]
Motion agreed to, and House went into committee on the resolution.
Resolution reported as amended and read the second time.
Mr. BRODEUR moved that the resolution be concurred in.
Robert Laird Borden: The committees will be appointed this session ?


Sir WILFRID LAURIER.: Yes.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Rt. Hon. Sir WILFRID LAURIER (Prime Minister) moved that when this House adjourns on Tuesday next it will stand adjourned till Thursday next.
Motion agreed to.

Mr. LENNOX.: Before the orders of the day are called, I wish to ask the Minister of Public Works when we may expect the return as to the expenditure in the riding of Bonaventure. The order of the House was passed on the 1st of February, and nineteen days have now elapsed since it was passed. We desire to get it as early as possible.


Mr. PUGSLEY.: In the ordinary course the return would be prepared, but I am not able to say at this moment when it will be ready. But I will make inquiry.


Haughton Lennox: I would also like to ask the Minister of Railways with reference to

a return to be made of the proceedings of the Railway Board, in reference to railway crossings, applications for improvements, alterations, and probable elimination. The order was made about the same time. The minister I think will appreciate the advisability of bringing it down soon.


Mr. GRAHAM.: About what date did it pass ?


Haughton Lennox: I have not looked up the date, but judging by the order of events, I think it would be about the 1st of February. I will look up the date and give it to the minister.


Mr. AMES.: Now that the Minister of Finance has returned, I would ask him if he will be good enough to hasten the production of a certain return asked for on the 26th of January last. The order was for a return showing to date the statement found on page 15 of the budget speech of 1898.


Mr. FIELDING.: I will be glad to draw the attention of the officials to it, and endeavour to expedite the presentation of the return.


Mr. GEO. TAYLOR.: I would ask the Minister of Railways when I may expect the return I moved for on the 1st of February, and which was put on the paper on the 28th of July. The minister said on the first occasion it would require a motion for a return, and the motion was passed on the 1st of February. It was in reference to wire fencing on the Intercolonial.


George Perry Graham: It takes longer to produce the return in that case than if we had the information in the department, because we have to send to Moncton to get a good deal of it. The order was sent the next day. I will make inquiry.



SUPPLY.


[Stage Direction]
Mr. FIELDING moved that the House go into Committee of Supply.
William Findlay Maclean: Before that motion is carried and in view of the orders in council that were brought down yesterday in connection with the issue of capital stock of the Canadian Pacific Railway Company, I must again trespass for a short time on the forbearance of the House. It is now apparent from those orders in council that the capital issued under the original charter of the Canadian Pacific Railway was $65,000,000; that in 1902 under the Act of parliament embodying an order in council, its capitalization was increased by $20,000,000; and in an Act of parliament, and in the order in council, provision was made, first, that the issue should not be for less than par; second, that
the money was not to be used for any purpose other than contained in the resolution of the shareholders; and third, that this issue was to be excluded from the operation of what is called the ten per cent clause in the original charter. In 1904 another order in council was passed, increasing the capital stock by $25,000,000; that order in council was put through council by the present Minister of Finance, but for some reason or other the order in council is somewhat different. It provides certainly that the stock shall not be issued for less than par, it also provides that the proceeds of that stock shall not be issued for works outside of Canada; but it does not provide that that stock shall be removed from the application of the ten per cent clause. So far as I know, no Act of parliament was passed confirming the issue. In 1906 the stock was increased by $40,000,000. A provision for its issue at not less than par is in the order in council, and that the money shall not be used outside of Canada is in the order in council, it is also in the order in council that the stock so authorized shall not come under the ten per cent clause. Now in 1908 another order in council has been issued for an increase of capital stock by $50,000,000, making the total issue by this company of capital stock of $200,000,000. In other words, within the last six years the capital stock has been increased by $135,000,000. I cannot say whether in that time any bonds have been issued. But the significant thing is that within the last six years after the road had practically been constructed, after its transcontinental character had been assured, and when that had been done on $65,000 000 of stock, they have in the last six years increased that capital stock by $135,000,000, an annual increase of about $15,000,000 a year. If this stock is issued at par, as it has been, and it would bring on the average, as it would have brought, 165, or 65 premium, we have allowed the shareholders of the Canadian Pacific Railway to distribute a bonus equal to $9,000,000 a year for the past six years, besides the dividends they have paid. If this is sound financing, this method will be continued, and year after year, we will have this great company issuing this stock, and ' cutting these melons,' as it is called, and distributing besides their dividends, over $9,000,000 a year among the shareholders.
Now let me explain to the House and to the country how these things work out, what follows on an order in council of this kind. The shareholders' capital was, until this last order in council passed, $150,000,r 000, and they were allowed to issue $50,000,000 of new stock. Now what takes place is this: As soon as they have this authority, this permission the Canadian Pacific Railway treasurer, or other official, sends a letter to every shareholder and says that in

view of the recent authorization the capital stock has been increased bv $50,000,000, and that the shareholder is entitled, has a right to one new share for every three old shares. So if a shareholder happens to own three hundred shares of old stock he has a right to take up an additional one hundred shares at par, and this document which he receives from the railway company is technically called a right. And what must the shareholder do who has this right ?
Does he go to the treasurer's office and say: I am entitled to this 100 additional shares and here is my cheque for $10,000? He hardly ever does that, he runs to his broker and says: Here is my right entitling me to 100 shares of Canadian Pacific; sell it for me to-morrow. The broker sells the piece of paper, entitling the shareholder to 100 shares for from $6,500 to $7,500; the shareholder puts that money in his pocket, he does not pay even the par value of the stock, but the man who buys the right, after paying the $6,500 for the benefit of the shareholder, has to go to the treasurer's office and pay the $10,000 par value of the shares. Thus these documents, these rights, secure what is called the cutting of the melon and that apparently is the new kind of railroad financing we are to have in Canada in connection with the Canadian Pacific Railway, that every year or at the most two years, there is to be this melon to be cut, this increase of capital stock, this dealing in rights; and apparently it has been so profitable to the shareholder of the Canadian Pacific Railway that now they have ceased issuing bonds when they require capital for the purposes of their railroad and issue stock in this way, sell the rights and reap enormous profit from the transaction. To whom is this distribution, this $35,000,000 free gift made? Does it go to Canadians? No, most of it goes to men outside of our country, and Canada presents a spectacle of every year making a free bonus gift of $9,000,000 to shareholders in one of our propositions, most of whom live out of our country. We this year have only $100,000 to give to the sufferers in Italy, but every year we have $9,000,000 of free cash bonus to give to the shareholders of the Canadian Pacific Railway. If this is good policy and can be justified, it will probably be continued. If there is nothing wrong about it we ought to continue it. No wonder the reputation of the Canadian Pacific Railway in the monetary centres of the world is very high. Any one's financial reputation can easily be maintained in that way if this kind of financing is allowed.
I wish now to go back to the original basis of the authorization of capital stock to railroads and see whether this practice, which has recently been introduced into Canada, is one that can be justified. My view of the position is that whenever and Mr. W. F. MACLEAN.
wherever parliament charters and grants a franchise to a railway company, it grants to that company certain powers for the purposes of the undertaking, either expressly or by implication. Among the powers so given is the right to issue securities such as stocks, bonds, debentures, &c. This power of issue is a trust that must be honestly and faithfully administered for the purposes of the undertaking and for all parties interested, including the public who are to be served by the railroad. In other words if we have created a railway company and given it power to issue certificates there is implied in the charter an understanding that these certificates shall be issued only for the purposes of the undertaking; these certificates are not to be used as a bonus for the people who happen to own the shares of the railroad. I say that is the underlying principle which should govern the incorporation of these companies, and I think parliament will still hold that view when it is brought clearly before them. Parliament undertook to regulate the amount and mode of issue of the stock of the Canadian Pacific Railway in the original charter granted in 1881. In 1892, while the Conservatives were in power, the company was empowered to issue further shares of capital stock for any purpose for which the company required new capital, such issue being first approved by order in council, and the fourth section of the Act of 1892 provides:
The proceeds of each issue of shares of capital stock shall he applied by the company exclusively to the purposes for which the shareholders authorized such issue.
In other words it is expressly provided in one of these Acts that the whole proceeds-and by proceeds I mean all that the security will bring-must he applied expressly to the object for which it was voted, for the furtherance of the undertaking, whatever it may happen to be. My contention is that the Governor in Council, as trustees for the people and for parliament, were bound before they approved of any issue of stock, to see that it would be issued to the best advantage of all parties concerned, the public included. That is to say, if the stock to be authorized would bring more than par, it should be so stipulated in the order in council. It was well known that these securities would bring more than par and that the underlying principle of parliament regulating and authorizing the issue of securities is that the proceeds of them must go to the undertaking. If that is so a mistake has been made, a wrong has been committed; this wrong ought to be righted and certainly it ought never to be allowed to occur again in this country.


Mr. E. M. MACDONALD.: Does my hon. friend say that there is any evidence that

the proceeds from the sales of these shares were not applied in the interest of the undertaking or the development of the enterprise?


William Findlay Maclean: Technically the hon. gentleman gets around my point, as the proceeds of the share may be really the $100 the man pays for it after the right has been melted and the $65 has been put in his pocket, and my hon. friend may have a nice point in arguing that the proceeds of the issue are only what goes into the treasury. I say the proceeds of the issue are everything that could be got out of it, and it ought all to be consecrated to the undertaking.


Edward Mortimer Macdonald: Does my hon. friend mean to say that he has any evidence that the proceeds of these shares were not applied for the regular purposes and in good faith in the interest of the organization?
cil, but so far I have not been able to get a copy of it.


Mr. J. HAGGART.: Is the last order in council not down?


William Findlay Maclean: Not the one passed in 1902. The orders in council increasing the capital have been brought down, but the order in council mentioned by the late Minister of the Interior providing for an immediate reference to some tribunal to ascertain the capital actually expended in the road has .not yet come down.


George Perry Graham: I did not understand my hon. friend to ask for that order in council. He asked me about it and I told him I would make inquiry of the Minister of Justice concerning the situation of the case referred to the Supreme Court. If such order in council exists it can be brought down quite easily.


William Findlay Maclean: Yes, I undertake to say that for every share of Canadian Pacific Railway that has been sold in, recent years, while $100 went into the treasury, anything from $60 to $70 went into the pockets of the then owners of shares.
Turning to the question of tolls and capital actually expended in the road, the original charter of the Canadian Pacific Railway provided for the regulation of the tolls on that road. It also provided for the regulation of the profit and net revenue of the road. Clearly parliament provided for the regulation of tolls and this was based on what is called the 10 per cent clause. In other words, in the original charter, while parliament theretofore had reserved to itself the right to say that no railway shall earn more than 15 per cent on the capital invested, they said; in view of many concessions to the Canadian Pacific Railway we shall make a, provision that its profits shall not exceed 10 per cent on its capital stock, and the moment it does exceed that somebody can step in, (then the Railway Committee of the Privy Council) and reduce the rates charged by the railway. And so parliament in the original Act expressly provided for the regulation of the rates and stipulated that in no case should the rates be such that the net profits of that road exceed 10 per cent on the money actually expended on the construction of the road.
The first great question to he determined in dealing with a railroad of this kind is whether the time has yet arrived for reducing the tolls which may be charged, and as far as I can gather nothing has yet been done although, according to the statement of the late Minister of the Interior, made in this House in 1902, an order in council was at that time passed for that purpose. I have asked the Minister of Railways to bring down that order in coun-


William Findlay Maclean: Then we may get it later on if the minister cares to give it. if the railway could show that it was not earning a fair return on the capital expended it could complain of any attempt to reduce its rates, and I am not arguing just now that the rates of the Canadian Pacific Railway ought to be reduced, but I do propose to assert that in view of that original provision we should know how much money has actually been expended by this road, notwithstanding the fact that the operation of that clause has been removed from a number of these recent orders in council. I go on the assumption, therefore, in order to secure the lowest possible tolls to the public who use the road, it is of prime importance that parliament or the Governor in Council who authorized or approved of the issue of capital (whether stock, bonds or other securities), should see that any and all ' capital actually expended in the construction of the road ' is raised in the least expensive manner, is raised in the most provident manner; that not an unnecessary dollar of debt is incurred or of high interestbearing obligation is issued as against a low interest-bearing obligation wherever possible, and that the highest possible value is obtained for any such security, and that the entire and highest possible proceeds of any such issue goes into the treasury of the road for the purposes for which it was authorized-that on no pretext whatever shall the best possible proceeds of these issues be diverted. To divert any of them is, I hold, criminal; it is to be guilty of malversation of funds, is a breach of trust and a violation of the sacred obligation on the part of the company to give the best possible and cheapest service in consideration of the many valuable things given it by the state, in the way of lands, money, exemption privileges, &c. If, therefore, $30,000,000 of stock issued at $165 would produce what it

will produce in the open market, namely, $50,000,000, and if the proceeds go into the treasury, the government was bound to authorize only that amount and to stipulate that it be sold at the highest amount it would bring. In other words the $50,000,000 could be got for $30,000,000 stock, the tolls charged on which could not exceed 10 per cent or $3,000,000 a year. Instead of this it will be on this last issue 10 per cent on $50,000,000 or $5,000,000 a year, or an unnecessary tax of $2,000,000 on the people of Canada. In other words $30,000,000 of stock issued at the market price would have produced $50,000,000, and as the dividend which would be allowed to the company would be 10 per cent on that $30,000,000, it would amount to only $3,000,000 a year, instead of which you have allowed them to issue $50,000,000 which is entitled to earn 10 per cent and which means $5,000,000 a year.


Wilfrid Laurier: Not at all.


George Perry Graham: Will the hon. gentleman allow me to ask him this question?


William Findlay Maclean: Yes.


George Perry Graham: In the face of the order in council which says absolutely that the 10 per cent shall not be calculated on this amount at all, how does the hon. gentleman argue that it is to be calculated on that amount?


William Findlay Maclean: I am coming to that. The tolls of the company are limited to 10 per cent on its capital, and as a matter of fact to-day the tolls of the company are 10 per cent;-the net earnings of the company to-day are 10 per cent on the capital stock and the company is going to see that it always will be 10 per cent on the capital stock as long as it has the right to do so.


George Perry Graham: On the original capital stock?


William Findlay Maclean: Yes. Now I come to the minister in this: That the company is entitled to a fair return on its stock issue or on any money put into securities of tbe road, and if $50,000,000 is to be earned upon, when $30,000,000 would do, I say an injustice is done to the people who use the road. That is a point I make against the minister; not so much that he has that provision in the statute as that I shall show that the charges upon the traffic of the road would have been much less if that stock had not been sold at par. But, before the government authorized the issue of any further capital I contend it was bound to do two things: first, to scrutinize the reasons advanced and the objects given for the request for additional capital, and second, to examine the treasury of the company and its resources with a view of ascertaining whether it could not provide for the new undertaking out of any resources then in hand, and any unexhausted portions of the immense money and Mr. W. F. MACLEAN.
land grants given to the company by the state, or out of the bond-issuing powers of the company as provided or as might be provided by law. Before ever they should have allowed the issue of additional stock, I say it was the duty of the government to examine into the purposes for which the money was to be used, but still more important to examine the treasury of the company and to see whether it had any other resources which could be applied to the object in hand. And the land, and the money grants which were given to the Canadian Pacific Railway were given for the purposes of the undertaking and are so set out in the original documents and were so stated in parliament. They were not given to be used as a hoarding or as a great reserve fund for the road, and they were not given for the purpose of injuring another company. And when the company asked for these powers to issue additional capital they should have shown to the government that they had little or none of these grants in hand. The fact is, on the contrary, they had 13,000,000 acres of land worth at least $150,000,000, and they had bond-issuing powers for a large amount at low interest, or they could get them. I do not know that the government made any such examination. They passed the request of Sir Thomas Shaughnessy on the mere stipulation of a stock issue at par. Now the company at that time, as I have said, had these 13,000,000 acres of land; they had a full treasury, and before they were allowed to issue the stock the government should have said to them: Have you exhausted the resources that parliament has given you already; if you have what have you done with all that money; what have you done, especially with that land? But the Canadian Pacific ' Railway Company were not asked for that; they were allowed to issue this new stock and to-day they are cutting this melon and they are dividing these profits amongst themselves, when at this very moment they have 13,000,000 acres of land out of their original land grant which have not been used. What are they keeping this land for? First of all they are keeping it as a reserve fund, which is improper, and they are using it-


Edward Mortimer Macdonald: Before my hon. friend leaves that point-does he seriously intend to argue that the order in council should provide for the disposition of stock dependent upon the fluctuating value of the stock market which might be below par one day and above par the next?


William Findlay Maclean: Yes, I will come to that and I will give several specific instances. For instance, in the city of Toronto we have the so-called Consumer's Gas Company which undertook to be a partner with the city in the old days and gradually got away from that, but some time ago the city said to the legislature: Inasmuch as

the charges this Gas Company imposes upon the public are to be earned on the basis of 10 per cent on the stock issue, we want you to see that the stock is sold for the highest possible amount that it will bring in the open market. And legislation was passed to that effect, and it has worked out in this way, that whereas a few years ago the company used to sell its stock at $185 it is now selling it and sold it the other day in Toronto at over $200, which is a premium of $100 on every $100 share. That could be attained in Canada in the case of the Canadian Pacific Railway. 1 venture to say that if you put an advertisement in the financial papers of London to morrow that bids would be received for $50,000,000 ;of Canadian Pacific Railway stock you would get 160 for the whole $50,000,000.
The government were bound for other reasons to investigate the use or lack of use of the land grant. This great Canadian Northwest, which now has ten members from Saskatchewan, seven from Alberta and ten from Manitoba, has been coming to this House year after year and making complaint of two things. It has been complaining first of the exemption of the lands from municipal taxation for twenty years after the Crown grant unless the lands are sold. None of these Canadian Pacific Railway lands in the west have to pay municipal taxes unless they are sold or until the twenty years have expired. As a consequence, the municipalities all over the west complain of this harsh treatment as a great grievance of the people. Another complaint made in the west against the Canadian Pacific Railway is that it is to-day refusing to sell the lands which it owns alongside of the Grand Trunk Pacific and the Canadian Northern, in order that these two roads, which are intended to serve the country, shall have no local traffic to assist them in carrying out their undertakings. If that is true-and I leave it to the members from the Northwest to say whether it is true or not-that the Canadian Pacific Railway has still an immense amount of property under exemption and is refusing to sell its lands because these rival railroads might be benefited, it is the duty of somebody to see that that condition of affairs is removed. My contention is that not only should the company be compelled to sell these lands in order to raise money for its own needs, but that the government should have used that opportunity to compel it to sell them in order to do away with this exemption clause and prevent this refusal to sell lands because their sale might benefit the two rival roads. That is a question on which the people of the Northwest are the judges. So far as I can gather-I cannot quite gather it in this House-the people of the west believe that, before any power to increase the capital stock of the
Canadian Pacific Railway should have been given, the company should have been compelled to exhaust whatever resources it had in its treasury for the construction of new lines, and should also have been compelled to sell these lands because that would remove the exemption clause and promote settlement along the new lines of railway.
I am not going into the political issue further than to say that I have read within the last two or three days a summary of the history of the construction of the Canadian Pacific Railway, as narrated in a book written by Mr. Willison; and it is set out there that one of the greatest grievances of the people in the west was this exemption clause and the hardship it brought upon the poor settler, in the fact that he was for ever tied up not only to a monopoly but to an unjustifiable system of exemption.
I contend still further that the government was bound to have ascertained, if money must be got for securities to be issued, what kind of securities would bear least on the traffic-bonds or debentures. Bonds can be issued at 4 per cent; and my contention is that if the company had to get money after it had exhausted its resources, then it was bound to obtain that money on securities which would have the least possible incidence on the income of the company. In other words, if freight rates must be regulated by the fixed charges, then it is the duty of parliament to see that the fixed charges are of the lowest kind and the charges that are of the lowest kind in connection with railway construction, especially in the case of a successful railway like the Canadian Pacific Railway, are bonds or debenture stock, and not common stock. The Canadian Pacific Railway Company can get all the money it needs at 4 per cent. Instead of that, it is issuing stock that can bear 10 per cent, and at the same time it is distributing $9,000,000 a year as a bonus among its shareholders.
But, some gentlemen say, bonds must bear their interest, and this must be paid, whether the road succeeds or not. There is something in that in the case of a new road; but in the case of an old road like the Canadian Pacific Railway, which is paying its dividends and fixed charges every year, and which can pay 10 per cent on its common stock, surely it can pay 4 per cent on bonds. Fifty million dollars of bonds would have provided the money needed. These would have required $2,000,000 a year for interest, whereas $50,000,000 of stock at 10 per cent requires $5,000,000 a year. The difference is therefore $3,000,000 a year, an unnecessary and perpetual charge on the public, which,1 could be capitalized at $75,000,000. That is rather a serious loss to the people of this country who use the railroads. If this stock issue is justifiable, we

ought to continue it; and it is evidently the policy of the company to quit the issue of bonds, to withhold the sale of its lands, to cut a melon as often as the government or parliament will permit. If the government is right, it ought to have) no hesitation in not only justifying what it has done, but declaring that it will repeat the authorization to-morrow, without condition, examination or departure from the past. What company will issue bonds that can cut a melon on stock every year in addition to a 7 per cent dividend? In other words, there is now 7 per cent interest on the stock and $9,000,000 a year as a bonus distributed among the shareholders. If that is right, it should be continued, and there should never be another issue of bonds on the road, but only common stock. And the surprising thing is that when the company is allowed to issue common stock in this way, how much it wants to issue. For many years it got along with $65,000,000; but $135,000,000 of additional stock has now to be taken care of by the traffic which goes over the road.
Another thing I want to point out. It has been in the newspapers, and a great deal of dust has been tried to be thrown in the eyes of the public, in the attempt to show that there is some connection between this issue of stock and the 10 .per cent clause in the company's charter, and that therefore the exemption must be allowed to continue. There is no connection between the 10 per cent clause and the authorization of the issue of stock. The only stock that was authorized was the $65,000,000 in connection with the 10 per cent clause. That has long ago been exhausted, and the Act of parliament of 1892, under which this stock is issued by order in council, can be repealed to-morrow. It does not apply to the charter at all; and my question to-day is: Is that Act of 1892 to be repealed, and is this process of issuing stock in this way to be continued, or is it to be stopped; and is it to be laid down as the policy underlying the conduct of parliament hereafter, that the issue of all stock shall be a matter of trust and that it will be the duty of parliament or of somebody to see that the character of the security issued shall be such as will carry the lowest interest and therefore be the least burdensome on the traffic? If we can cut down the interest charges on the capital of railways to four or five per cent instead of ten per cent on a lot of it, can we not reduce their passenger and freight rates? If we tell the great Canadian Pacific Railway that they must sell all their land before they are allowed to issue new stock, they will have to sell those lands to the people and in this way we will get rid of these tax exemptions. If they are ordered to sell the lands they own, the Grand Trunk Pacific and the Canadian Northern will have settlers all along their lines in localities where there is at present not a settler for Mr. W. F. MACLEAN.
miles, but the Canadian Pacific Railway refuse to take $20 per acre for land alongside the Grand Trunk Pacific and the Canadian Northern. We must not forget that this Canadian Pacific Railway charter is not altogether a holy thing which cannot be touched. It has been changed a good many times in this House under conditions of one kind or another. The principle was laid down in this House some years ago and with good reasons, that if concessions are to be given the Canadian Pacific Railway, some concessions ought to be exacted from them in return. If they are to be allowed to increase their capital stock, why should they not be ordered to sell their land, and why should they not be compelled to give the people of Canada a two-cent per mile transportation rate, just as they give it to the people of the United States and to the traffic over their lines which originates in the United States? If they give that concession to Americans, why should they not not give it to Canadians as well? But there is to be no two-cent a mile rate for Canadians, who have to sweat in order that millions should go every year to the foreign shareholders, and that will continue just so long as the people of Canada are willing to submit to that kind of thing. Any one who wishes to get further history of the finances of the.Canadian Pacific Railway and how they were handled, had better read th s book to which I have referred ? Mr. Blake was able to point out in this very House, in one of the early discussions on the charter. that of the $65,000,000 of the capital stock issued, only $31,000,000 was realized by the company. And of their $31,000,000 $24,000,000 was paid back to the shareholders in dividends before a dollar had been earned bv the road. In other words, Mr. Blake describes how these original owners of the Canadian Pacific Railway got for many a year twenty-four per cent and then twenty per cent on their investment in that original stock.
That stock had to be sold at less than par. It was sold for fifty per cent less than its face value. Why then, in the name of all that is just and fair, when that stock has gone to a premium, when every $100 of it can be sold at $170, should not that premium go into the Canadian Pacific Railway treasury and be there used for the reduction of its tolls instead^ of being given to the shareholders for their own aggrandizement. If the original stock was sold at this sacrifice, surely it is fair, when the tide has turned and the road proved a great success, that the whole proceeds of any new stock issued should go into the Canadian Pacific Railway treasury for the benefit of the undertaking.
I am not prepared just now to say how much further I shall go into this matter until I see this order in council which has been referred to. In a certain sense, it

does not bear on the issue. We are under no obligation, by the original charter to continue this practice of allowing this great railway corporation to distribute these bonuses among its shareholders, but I would like to see it settled once for all what the money actually expended, under the original contract, amounted to. The day has come when we ought to reduce railway tariffs. The Canadian Pacific Railway can now afford to reduce them and ought to be compelled to do so. The day has come when the Canadian Pacific Railway ought to be compelled to give up these exemptions if it can be made to do so. The day has come when public policy ought no longer to tolerate this company holding its lands in the west and refusing to part with them or refusing to allow settlers to settle on them. Certainly no further privilege should be given it until it abandons that policy. My contention is that both these things are against the public interest and if new concessions are to be given, other concessions on behalf of the public ought to be exacted in return.
I have spoken already three times on this question and have tried to find out what is the feeling of the west with regard to it. So far I have not been able to ascertain that feeling from anybody in this House, but I have read the newspaper opinion in that country, and the oninlon, as voiced by the three newspapers in Winnipeg, is altogether against the Canadian Pacific Railway being allowed to issue its stock at par. The people of the west are of the opinion that as long as they are allowed to do this, the extra tariffs of the company entailed thereby must come out of the people who use the road. If money can be obtained by the company by the sale of low interest bearing securities instead of by the issue of new stock, the company should be compelled to take the former course; or if the company be allowed to issue new capital stock, the market price of that stock should go into its treasury, instead of the advanced price at which it may be sold above par going into the pockets of the shareholders. If that should be done, the amount of capital stock would be kept down, the fixed charges reduced, and that would enable the company to lower its tariff rates. The people of the west and also the people of Ontario and throughout Canada are of the opinion that this practice of issuing new stock at par to the shareholders should not be allowed to continue. If that, however, be not a good practice, let us do away with it. If it be a good pratcice, let us wipe out the right to issue bonds which we now give to railway corporations, and tell the great Canadian Pacific Railway that parliament has no interest in this issue of new stock, as we have been told in this House. That is not the opinion in the United States where the people have a great transportation problem on their hands. Wait until the
fourth of March and see if there will not be a deliverance from the new president of that country to the effect that the day has come when the regulation and control of the capitalization of railway companies is of great importance as bearing on the rates of traffic which these companies may charge. The two questions go together, if you keep down the capitalization and restrict the railway companies to the issue of securities bearing low interest instead of allowing them to issue new capital stock at par, you will be able to reduce their tariff charges in proportion. There is an intimate relation between the two, and therefore I contend that it is the duty of parliament to scrutinize every security issued in connection with our railways in order to see that they shall only issue them on such terms as will secure to the Canadian people, who have to pay the traffic rates, the best possible treatment. We hear a great deal about this company which raises money and does this, that and the other thing for our country. Well, I give it all the credit to which it is entitled. I have no antagonism to these great companies, but I do raise my voice against the man who uses these railways being charged a cent more for that use than he ought to pay. And you cannot keep the tariff rate down unless you keep the capitalization down for the benefit of those who use the road. I shall leave the companies here for the present. I have extended my argument somewhat further than I did on the two occasions I spoke before, and may have a little more to add when we get that other order in council to which I have already referred.
I think I am doing a public duty in standing up here, even if I stand alone, to say that the day has come when we must stop this practice of allowing the great Canadian Pacific Railway Company, at least, to issue securities at par when those securities can be sold on the open market for a premium of almost 75 per cent. It is not in the interest of the public, it is not in the interest of the great Canadian Pacific Railway itself. People say we are turning to socialism in this country, and they denounce socialism and the socialists. But these are the things that are producing this public calamity, if it be a public calamity. To use the words of President Roosevelt, the public ought to get a square deal. I stand here for the square deal for the people of the Canadian west and the Canadian east. I stand here to protest against this distribution of bonus stock amongst the shareholders that is about to take place, and such as has taken place in the past. I want to see this stopped once and for all. And, if I succeed in this, I shall have justified my presence in this House.


Mr. J. G. TURRIFF (Assiniboia).: The question brought up by the hon. member

for South York (Mr. W. F. Maclean) is, in my judgment, the most important question that will be discussed in this House during the present session. At all events, so far as the western prairie provinces are concerned, there will be nothing discussed here that will be of equal interest to the people. While we want lower duties when we can get them, the question of duties and tariffs fades into insignificance as compared with the question of freight rates, so far as the people of the west are concerned. Representing, as I do, a large, old-settled, well-populated district in the province of Saskatchewan, all clear, open prairie, where a great deal of wheat is produced and where many of the settlers are a long distance from a railway, I may be excused for taking up a small portion of the time of the House in discussing this matter. When the question was brought up some time ago and publicly discussed, different reasons were advanced why this order in council should have been passed authorizing the Canadian Pacific Eailway Company to increase their capital stock by the issue of $50,000,000. One reason given us was that it was the best managed railroad on the face of the earth. Another was that it was necessary to keep the credit of the railway company in good standing. Another was that if the company made a further issue of bonds it would have a bad effect, probably, on the stock that has already been issued, and holders of that stock might find that it was not worth so much. Let us look for a moment at these reasons to see whether they justify in any respect the course that is proposed. Nobody was objecting to the management of the Canadian Pacific Railway. I think it is a fairly well managed company, taking it all round. I do not think its management is ideal; in some respects, in my opinion, it is anything but well managed. If the other companies are all worse managed than the Canadian Pacific Railway, then I can only say God help the others. Take, for a moment, the question of building branch lines. I do not want to be understood as making any attack on the Canadian Pacific Railway in particular, for the Canadian Northern is just as bad, and the Grand Trunk Pacific, I expect, when they are a little older, will get on to the ropes and will do as the others have done. I am not saying that there is any choice in that respect. But what do the Canadian Pacific do about the building of branch lines? Do they consult the interests of the people of the country? No, they consult their own interest only, and that not in relation to the earning of dividends, but with a view to cutting out their opponents. While the people may be suffering fifty miles from a railway, they will build a line within five or ten miles of an existing road, where they think they can cut out traffic from the Canadian Northern Mr. TURRIFF.
or the Grand Trunk Pacific. In that respect, I say, the Canadian Pacific Railway is not a well-managed line. If, as has been said, we are, in a sense, partners in this great railway enterprise, then I think we ought to be given some consideration in deciding where these branch lines should be built. In my own constituency, as an example, we have the spectacle of two railroads paralleling each other for eighty miles at one end of my constituency, so that it is almost unsafe for a man to go in there so strong are the objections of the settlers to these railways having been allowed to do that sort of thing; and, in the other end of the district, the farmers are suffering through being forty or fifty miles from the railway and having to draw their wheat for that distance to point of shipment. And I want to tell you, Mr. Speaker, and to tell the members of this House, that no man can grow wheat at a profit and draw it with horses forty or fifty miles to a market. And there are dozens and hundreds of settlers in that country who, if some remedy is not found, if railways are not compelled to toe the mark better in the future than they have done in the past, will surely pull out of that country. Has this House no responsibility in this matter? I say there is no possibility of this government or this House of parliament divesting itself of its responsibility. In the future we may rail at the railway companies, but we shall not be able to say, if this sort of thing is allowed to go on, that the railway companies are to blame; the blame must be put where it belongs, on the shoulders of this House of Commons. The railway companies of the past have been doing simply what they liked to a very large extent. They have been walking over us. But when they come to this House and want consideration, they should be dealt with at arm's length and made to give concession for concession. The question of the land grant of the Canadian Pacific Railway has been discussed by my hon. friend (Mr. W. F. Maclean). Every word he has said on the subject is absolutely true. He could have gone further and still have been within the mark. We have in that country the spectacle of the Canadian Pacific Railway, with millions of acres of land that was given them for nothing as a bonus to build the original Canadian Pacific Railway, ready to sell that land at a moderate price where it is tributary to their own lines, but, where it is tributary to the Grand Trunk Pacific, assuming a wholly different attitude. And, remember, the Grand Trunk Pacific is being financed by this country, by this parliament-


William Findlay Maclean: And queered in London by the Canadian Pacific.


John Gillanders Turriff: We are helping all the way through, and the Canadian Pacific

Railway is holding them up, playing the dog in the manger, retarding the development of the western country and injuring the credit of Canada just as much as if the country owned the Grand Trunk. Have they any right to do that? I say that it is the duty of the government and of this House, when the Canadian Pacific Railway come here for special permission legislation, as they have done in this case, to say to them:	If we grant you the privilege you
are asking, you must give us privileges in return. And what better opportunity could there be to say to the Canadian Pacific Railway:	'Give up your right to
exemption for twenty years.' If it were not for that right of exemption do you think the Canadian Pacific Railway would put a flat price of $25 an acre on their lands, or, in some cases, withdraw it altogether from the market?-simply because by settling that land it would give trade to the Grand Trunk Pacific or the Canadian Northern. Do you think they would dare to do that? Do you think they could afford to do that? If the school districts and municipalities were able to get at them and tax their land at the same value and at the same rate as the farmers tax themselves, that land would be put on the market, to come under cultivation; the Grand Trunk Pacific and the Canadian Northern would get traffic, and the people would go in and settle on these lands. They do not do it. Not only do they hold that land up, but they also hold the homestead lands up, because men will not go into a part of a country where the odd sections cannot be brought under cultivation and settled on, for the simple reason that they cannot have as good facilities for organizing school districts and giving their children an education as they can in other parts of the country where the odd sections are available for purchase, as they ought to be, and at a fair price. So this is a golden opportunity to say to them: Put that land on the market at a fair price, or at all events, give back your right of exemption from taxation for the balance of the twenty years. If they do that, the rest will follow.
Now as to the argument that their credit would suffer if they sold some additional bonds. Well, I think that any one who advances that argument has not looked very closely into what the Canadian Pacific Railway has been doing of late. Why, only last week I saw an advertisement in the paper that they were paying half yearly dividends of per cent, 7 per cent per annum. They were paying all the fixed charges, paying everything that should be paid, paying a dividend at the rate of 7 per cent per annum, and in addition they would put to the credit of their rest account, for the six months only, over $4,880,000-enough money to have paid dividends at the rate of 12 per cent. The
Canadian Pacific Railway could to-day, out of their earnings, pay 10 per cent per annum on their stock, pay 12 per cent on their common stock, after paying all fixed charges, and still have a reasonable sum to augment their account. Is that not doing well enough? But it is said that by issuing bonds they would reduce the value of the present stock. _ Carry that argument to its logical conclusion, and what does it mean? It means that the Canadian Pacific Railway, who can borrow its money at 4 per cent at the highest, cannot put that money into branch lines in the prairie country- because the reason is given that this stock is issued more particularly to build branch lines in the western country-it means that they could not put that money into branch lines in the west and earn 4 per cent on the cost of these lines. A more absurd statement could not be made. They can earn 4 per cent, and double 4 per cent by building branch lines, if they would build them where they ought to go in reference to the needs of the country and where they would _ get the most traffic, if they chose to eliminate from their ideas the building of branch lines to cut out opposing railways. Sir, I do not think that the reasons given for allowing them to sell this stock at par are good reasons.
It might be well for a moment to consider what the Canadian Pacific Railway got originally. They got $37,000,000 worth of completed road handed over to them; they got 25,000,000 acres of land handed over to them; they got no less than six or seven million acres of land in connection with the charters for the branch lines that they purchased; and they got $25,000,000 in cash as well. So when you come to consider the capital on which they had to earn, you must bear in mind that they did not put all the money into that railway that built it; this country put in a great part of it. Therefore, why, on an occasion of this kind, when they are coming for special favours that they cannot get without the authority of this parliament, why should they not be made to toe the mark and do the decent thing for once? When the original orders in council that my hon. friend read to-day were passed, and it was stipulated that they should not sell their stock at less than par, stock was not selling at 175 to 200 in those days. Why should they be allowed to sell that stock at par to-day to their shareholders? Here is one thing that follows, to my mind: The Canadian Pacific Railway do not want to pay over in cash the immense dividends that they are earning to their subscribers. Why? Because the moment they do that, the people of this country would understand the question a great deal better than they understand it now, and there would be such a howl and a kick put up from the Atlantic to the Pacific, that they

would be forced to reduce their freight rates and their passenger rates. Therefore they take this method, as my hon. friend has pointed out, to divide up $9,000,000 a year in an extra bonus over and above the 7 per cent per annum that is paid on their stock. And remember, Mr. Speaker, that a great deal of that stock on which the 7 per cent is paid, was sold to the men originally connected with it, at. 25 cents on the dollar; so that in the years past they have been drawing 24 per cent to 28 per cent on their money not 7 per cent; and their stock to-day is worth several hundred per cent higher than when it was when they bought it.
Now, Mr. Speaker, don't you think that is doing well enough? Don't you think that is fair enough? Don't you think they have got enough. Why should we turn to now and hand them over between $25,000,000 and $30,000,000 to be divided up among their shareholders? Because, though you may argue it this way and argue it that way, the fact remains that you cannot argue away, that when you issue that stock the people of this country who pay passenger rates and freight rates, one way or another, have to pay and provide the dividends to pay for that stock, the proceeds of which do not go into the coffers of the company, but go directly into the pockets of the shareholders, and the 'people of this country will be compelled to pay extortionate rates to pay these extra dividends that should not be paid at all, and do not need to be paid. Why should this $25,000,000 or $30,000,000 be taken out of the funds of the company? Why should it not go into the treasury of the company? Think what this extra $25,000,000 or $30,000,000 would do. It would build 1,250 to 1,500 miles of railway in those prairie provinces; it would equip those lines thoroughly well, and at the same time would earn dividends to a legitimate extent for the shareholders. Therefore, why should the money be surreptitiously taken out of the funds of the company and put directly into the pockets of the shareholders?
We have heard a good deal in the past about the Jim Hill system. It is very close to us up there in my constituency. The Hill system comes up to within a couple of miles of the boundary. What is the result, Mr. Speaker? Thousands and hundreds of thousands of bushels of wheat every year are drawn across the boundary line and sold in the American cities. Do you imagine, or does any one in this House imagine, for a moment that when a farmer goes across into the United States and sells his wheat and gets the money for it, he does not buy his goods there to a large extent? If you imagine that, you are mistaken. They do it every day of the week. From one little town of "Mr. TURRIFF.
700 or 800 inhabitants in my constituency, last fall 150,000 bushels of wheat tributary to that town went down into the United States; and the merchants lost the traffic, the Canadian Pacific Railway Company lost the freight hauling, and the country lost the business. Why? Because the Canadian Pacific . Railway has another charter there that they have held the last seven or eight years; and when I tried my utmost two or three years ago to have a clause put in their charter compelling them to build 25 miles each year, I was not listened to.
They have not built the road, and I do not believe they will until it suits them unless they are compelled to. In the meantime the country is losing the traffic and the business, which is going down into the United States. If this sort of thing continues every man in the country will welcome an extension of the Hill system all through the country, even if it involves the diversion of traffic through the United States rather than longer tolerate the existing conditions. I do not agree with the hon. mem ber for South York (Mr. W. F. Maclean) in his advocacy of government ownership and operation of railroads. I have never agreed with that; I believe that any company that is running a road in Canada can do it better than this or any other government. I believe the railroads of this country should be built and operated by com panies. But I want to warn the Canadian Pacific Railway and other railway companies and the government and this House that if there is no better control over the railroad companies in future than we now have the people of Canada will be driven to government ownership and operation.


William Findlay Maclean: Hear, hear.


John Gillanders Turriff: I think it would be a mistake, but something has got to be done, and here is an opportunity such as we may not have again. It would be well worth the while of my hon. friend the Minister of Railways to go over this matter again, to look into it very closely and to find out what the people of the country think about it. If the people of Canada understood this question, no parliament would dare to give the Canadian Pacific Railway authority to issue that stock at par. The trouble is the people do not understand it, they do not understand what bonuses, what dividends are being drawn by the holders of the Canadian Pacific Railway stock. If they did there would be a change. The minister should thoroughly examine the whole situation and see if something cannot be done to improve the existing conditions.
Let us consider what we might get if the $25,000,000 or $30,000,000 did not go directly into the shareholders' pockets, but

went where they should go, directly into the funds of the company.
First, we might get a lower rate of freight all around.


William Findlay Maclean: Hear, hear.


John Gillanders Turriff: The railroads could cut their freight rates 25 per cent all round if they had this $25,000,000 to use for the benefit and interests of the country.
Second, we might get a lower passenger rate. I had some little part, some two or three years ago, in securing a reduction in railway passenger rates; we succeeded in having the rates reduced from 4 cents and 3i cents to a flat rate of 3 cents per mile on every mile of railroad from the Rockies east to the Atlantic. What was the argument of the Railway Commission? That in some cases higher rates possibly were necessary. We have a Railway Commission who deal with these matters; they are doing first-rate work, and we are giving them plenty of work to do, but there is one point we should not forget, that we cannot shelve all our responsibility on that Railway Commission. This Commission will not take into consideration many subjects that we have to deal with in this parliament, they will take matters as they come before them, and, as a rule, they do not go over the country and order this or that railway to lower its rates. What they do is to take up any matter of complaint that comes before them. There may be one hundred cases of overcharging of freight rates for one that is brought to the notice of the Railway Commission. We have a good commission; it has its work to do; it is doing its work and doing it well, but we cannot divest ourselves of our authority and our responsibility in this matter.
Third, we might obtain the abolition of the exemption from taxation of lands held by the railway. If their lands were not exempted it would not matter what price they put upon them, they would have to sell them, because the higher price they put on the land the more they would be taxed by municipalities or school districts.
Fourth, we might secure the right to say where they will build roads instead of leaving them the discretion they now have.
Fifth, the $25,000,000 or $30,000,000 would rid the country from one end to the other of the deadly level-crossings of which we have heard a great deal.


William Findlay Maclean: Hear, hear.


John Gillanders Turriff: Why should we not make them do it? I say it is up to the House to make these railway companies treat the public fairly.	The Canadian
Pacific Railway is not the only sinner; in many respects the Canadian Northern is a great deal worse, and I intend to take a turn at them later on, but
at present we are dealing with this company, which is no worse than others. I do not think that under any circumstances a company situated like the Canadian Pacific Railway should be allowed to issue stock at par. Would any railway company in the old country situated as this sell their stock at par?


Mr. LANCASTER.: The directors would go to jail if they did.


John Gillanders Turriff: They would not dare. Look at our banks. They sell their stock at market value and put all the money into the treasury. That is all we ask these people to do. Is it any hardship to compel them to put their money into their own treasury and expend it in building their roads ?_ It must be remembered that while Canadian Pacific Railway is to-day selling at from $173 to $175 it is intrinsically worth at least $200, and the man who has 300 shares and is awarded 100 shares of new stock is in reality getting 100 per cent of a bonus on the stock he holds-and we are the people who are allowing this to be done.
These are some of the reasons why I agree absolutely with what the hon. member for York (Mr. W. F. Maclean) has said- and in voicing these sentiments I have the absolute certainty that I voice exactly the sentiments of 100 per cent of the 40,000 people whom I represent in this House- there is no exception. So I say it is up to this government and parliament to do something to bring about a better state of affairs. If they do not take some action they will be taking the very best course in the world to force the people of this country to go in for government ownership and operation of railways.


Hon. A. B. AYLESWORTH (Minister of Justice).: As some of the questions which have been under discussion are matters with which I have some acquaintance, I may be permitted to make some explanations in respect to them in the hope that those who are interested in these questions, at all events in this House, will have an opportunity of knowing more accurately what the facts are.
I ought to premise, I suppose, that I do not consider myself any defender of the Canadian Pacific Railway Company; I do not speak in that capacity at all. I am not financially interested in any way in the undertakings of the Canadian Pacific Railway Company; I do not consider that I or my political friends owe that company anything politically. I am one of those who think that the bargain which was made with that company, as contained in our statute-books, was a bargain so advantageous to the company and so disadvantageous to the Dominion of Canada that it ought not to have been entered into. But while I say that, I think none the less that

a contract is so sacred a thing that those who have the advantage of a good bargain are entitled to that advantage and entitled to have that contract carried out in its entirety and according to its true intent and meaning.
The question of authorizing an increase of the capital stock of this company is presented for consideration. Now, the question whether that increase ought to be sanctioned, whether the increase of money which the company is hoping to raise by this means is money that the company needs; and the question of what disposition is to be made by the company of the new stock in order to raise the funds they want, are two entirely different questions, and ought not to be confused. With regard to the first question, which was presented to the Governor in Council for consideration when the company came applying for sanction to its proposed increase of stock, I suppose the hon. gentleman (Mr. Maclean) who opened this discussion would not contend that there was anything wrong, illegitimate, against honesty or good morals, in the company if it needed $50,000,000 more of money for its lawful undertakings and for carrying on its operations in this country, proceeding to obtain that money by means of increasing its capital stock and disposing of that capital stock in open market. That is a fair, a proper, a legitimate way by which any company may raise additional capital if it needs additional capital. And in this case, although the capital which the company already had reached the enormous amount of $150,000,000, the very needs of the country which the hon. gentleman (Mr. Turriff) who has just taken his seat has so eloquently discussed, demonstrate the propriety of putting that company into a position where if by an increase of its capital stock it can obtain the necessary additional funds it needs, it certainly should not be prevented from doing so by tjhe government of the country refusing its sanction to the desired increase. The increase of the capital stock which was asked seemed to be needed in the interest of the country quite as much as in the interest of the company, and the purpose for which the money to be raised by this increase of capital was to be required was a legitimate and laudable pur-puose, viz., the extension of the company's lines, the constructing of new branches and of new works, betterments in every way, to increase the facility with which the company can do its work of transportation. Every object for which this additional capital was needed was a legitimate and a laudable object in regard to which if there had been obstruction thrown in the way of the company it would have been a step which the parliament of this country would have condemned rather than have approved. If I understand correctly the newspaper discussions which are taking place in certain parts of the country on this question and Mr. AYLESWORTH.
the objection which is being brought forward by the hon. member for South York (Mr. Maclean), the only thing of which complaint is made in regard to the increase of the capital is the disposition which the company proposes to make of the additional number of shares by distributing those shares among their shareholders at a figure less than the present market price of Canadian Pacific Railway stock as bought or sold by the public. Now, that is a question in regard to which it seems to me unnecessary that I should express any opinion one way or the other. I shall not discuss it beyond stating this:	That no device of this
nature which a company can apply to its financial affairs will enable that company to increase the amount of its wealth. It has a certain amount _ of property before the increase of the capital stock, and it has that same property in specie, in railway real estate, or in whatever shape you please after the increase of its capital stock. Before the last increase the capital stock of the company amounted to $150,000,000; there were so many shareholders of the company, each holding his share of $100 par value, and the proposition is to increase the capital stock of the company to $200,000,000 and to increase correspondingly the number of shares. _ It is the property of the company which it had before the increase that_ is represented by the number of shares which existed before the increase, and it is that same property plus whatever is paid for the new shares which the company has after the increase, and the company is neither richer nor poorer after the increase except by _ the amount which it receives for the additional number of shares. Now, take the position of any individual shareholder; he receives of course a benefit if he is permitted to purchase for every three shares which he held before the increase one share of the new issue at any figure less than the market price. Assuming that the value in the market of Canadian Pacific Railway shares before the increase was $170, every three shares would be worth, to buy or sell, $510. If a man bought three shares, paying out $510 for his three shares and then being entitled to one new share for $100 paid his $100, he would have become possessed of four shares for $610, and the four shares would have cost him $152.50 each. That measures exactly the extent of any benefit which this proposition of issuing one new share at par to each holder of three shares, gives to that shareholder; he makes $52.50 on the purchase of his new shares if the market price before the increase was $170. The shares of the company decrease in value immediately upon the issue of new stock being put upon the market and decrease in value exactly in proportion to the number of new shares which it issues, and the property which

these shares represent has not been made either more or less by the transaction. So that what we have as a result of this transaction to the individual shareholder comes simply down to this: that each owner of three shares, if the capital stock was worth $170 in the market, has made on his three shares $52.50 by the transaction, or in other words, he has got a special dividend of seventeen and a half per cent. Well now, if the Canadian Pacific Railway Company, or if any company, instead of adopting that means of giving to each one of its shareholders a special dividend of seventeen and a half per cent had had the funds to distribute among its shareholders, had had the property in money or in money's worth, and had chosen to declare a special dividend to that amount, I do not suppose the newspaper editors of the country would have thought there was any such highly immoral or improper transaction as that which in this other shape the railway company is proposing to enter into and which is now being so vigorously denounced. If any company is in a position, if it has made money so that it is able by its operations to pay a special dividend of seventeen and a half per cent and it does it, it is simply a distribution of the assets of the company in which the public as a whole is in no manner or way concerned.
Now, that is as I understand it the position of any ordinary trading company, any company incorporated for the purpose of gain. If the Canadian Pacific Railway Company or any other company operating or enjoying a public franchise is by that circumstance under an obligation to the public which precludes it from taking a course it otherwise might wish to take with regard to its shareholders, that is an entirely different story. If the bargain which this company made with the country, when it undertook to build this railway, has so bound its hands that by reason of the privileges which it then obtained and which it still enjoys from the people of Canada, it is not in a position to deal with its shareholders as a company which was free from such obligations might see fit to deal with them, that is an entirely different story, and the whole question of the morality or the immorality from a business point of view of what is proposed seems to me to bring itself down simply to the question whether or not the Canadian Pacific Railway Company is living up to its contract. If it is, then I cannot see how any man in this country has any right whatever to complain of the course the company is taking. If it is not, then it ought to be compelled to do so. I fully agree with any view which my hon. friend may express or which any other member of this House may hold, that if the company is not carrying out its obligations to Canada it ought/ to be made to do so In this regard let us remember for a moment just what the measure of its obli-43
gation is. It is a bargain; it is a contract which parliament in 1881 sanctioned. It was debated enough at that time, it was entered into by the country with the eyes of the country wide open, and this is the letter of its terms-the general Railway Act at that time provided that no railway company might earn, one might say, more than 15 per cent upon its capital cost of construction without being liable to have its rates reduced by the parliament of the country. When the Canadian Pacific Railway presented its contract to parliament that 15 per cent limitation was lowered to 10 per cent and the obligation of the Canadian Pacific Railway Company was to that extent so much the more burdensome upon the company. The limit which the parliament of Canada provided by the general Railway Act was altered to such extent that the tolls of the Canadian Pacific Railway should not produce more than 10 per cent per annum profit on the capital actually expended in the construction of the railway, instead of not less than 15 per cent, as generally provided.
The question, then, which fell to be considered when the company was proposing to increase its capital stock in 1902, was whether or not its revenue produced 10 per cent per annum profit on the capital actually expended in the construction of the railway. An OTder in council was passed in January, 1902, authorizing the increase oi the company's capital from $65,000,000 to $85,000,000. It was an express stipulation in that order in council that the $20,000,000 extra stock which was then being sanctioned was not to affect the cost of construction of the railway upon which the 10 per cent was to be calculated under the terms of the contract. The interests of the people of this country were safeguarded by the presence in the order in council of that provision, and the $20,000,000 of increase which was then authorized was not to be taken into account one way or the other in fixing the actual amount expended in the construction of the railway for the purpose of calculating the 10 per cent. In the discussion which then took place, the desire was expressed in many quarters that the opinion of the Supreme Court of Canada should be taken on the question whether or not the amount of capital actually expended in the construction of the railway had yet reached such a figure as had made the time arrive when the rates of the company were liable to be reduced, and it was thought better that that should be referred to the court. In the January and February of 1904, the matter was placed by the then Minister of Justice in my hands on behalf of the government, and I was engaged for some two or three months in almost daily conference with the late Mr. Christopher Robinson, who was counsel in that matter for the Canadian Pacific Railway Company,



in the effort, which ultimately was successful, to arrange the terms of this reference to the Supreme Court. It was a very troublesome, difficult piece of work. There were a great many considerations to be taken into account, and the outcome was satisfactorily reached only after many propositions and counter propositions; hut ultimately we succeeded in getting to an agreement as to the terms of the reference which was to be made to the| Supreme Court of Canada. The case was entered for hearing at the May, 1904, term of the Supreme Court, and it was ready for argument, and no doubt would have been argued but for an arrangement which as counsel for the government I at that time understood had been entered into with the railway company. This was a piece of litigation upon which, if one were going to enter, it would behoove him to count the time and the cost. It was a case of such magnitude and importance, and such difficulty as well, that certainly it was not to be expected that either party would be content without an appeal to the Judicial Committee. After the principles upon which the accounts between the company and the public were to be taken had been settled by the decisions of the courts, the trouble would begin-the actual taking of the accounts, the actual going to work and determining, before some officer of the court, in the light of the decisions which the courts might have pronounced upon- I was going to say the almost innumerable points involved-upon the dozens of questions which were raised to be considered, what had been up to that time the actual amount expended in the construction of the railway. This would certainly have been the work of years. From the standpoint of the practising lawyer the prospect was certainly a charming one. Here was the Canadian Pacific Railway Company on the one side and the Dominion of Canada on the other, engaged upon an inquiry to ascertain what amount of money had actually been expended in the construction of the railway during what was then 25 years or thereabout. That would have been, as I say, undoubtedly the work of years, and it would have been undoubtedly a very expensive operation. The late Mr. Christopher Robinson, the Hon. Edward Blake, and other counsel of distinction in this country were representing the railway company. It would have been something in regard to which there would have required to be a very substantial expenditure of money on the part of the company as well as on the part of the government. Next there is to be considered what would have been the position if the government had succeeded to the full in its contention at the end of a long taking of accounts. If the government, at the end of a long litigation, had succeeded in demonstrating that the revenue of the company amounted to more than 10 per cent on Mr. AYLESWORTH.
the capital actually expended on the construction of the railway, what then? Why, then, the rates would fall to be reduced. If the government failed, if the company showed that it was not making 10 per cent, then of course the government would have lost its case, and would have been out of pocket whatever it had invested in the inquiry. If it succeeded, the full extent of its success would have been to show that it was entitled to have the rates brought down to a figure which would make the income of the company not exceed 10 per cent on the amount actually expended in construction; and if that were the case, how would the actual amount of those rates fall to be settled? We had then not long before established the Board of Railway Commissioners, a board charged with the duty of deciding just such questions of rates in regard to other railway companies, but not having that control over the Canadian Pacific Railway Company which it would have secured if at the end of the litigation I have described the government had succeeded in demonstrating .that the 10 per cent limit was being exceeded, and that the rates of the company would therefore have to be considered by this tribunal. In that position of matters the company came forward to the Minister of Justice of that day, saying: This prospect of litigation is terrifying, and rather than go on with that reference, we propose to leave the case standing entered for argument before the Supreme Court, in a position where it can be resumed at the wish of either party any day; and leaving it standing there as it is, we propose to submit ourselves, for the present at any rate, to the jurisdiction of the Board of Railway Commissioners, and leave them free to control our rates. That was done. The company has from that day to this gone on allowing its rates to be controlled by the Board of Railway Commissioners, submitting itself to their jurisdiction in regard to its rates in exactly the same way that any other railway company in this country is obliged to submit itself. In the meantime the interests of the country have not suffered in any respect, so far as the litigation in question is concerned. It stands exactly where it did in the month of May five years ago. It is entered for bearing before the Supreme Court. Either party can take it up at any term of that court; and if it be the will of this House that that litigation should be entered upon, it is in no worse position than it was when it stood over in May, 1904. It can be taken up at once exactly where it was dropped and can be pursued to the end. But when it is at an end, when ultimately,, after the expenditure of thousands of dollars and of years of time, the litigation is decided, and if the government prevail in its contention, the position, so far as the company is concerned, will be identical with that

which it occupies now. What object there can be, in those circumstances, in pursuing that litigation, so long as the company continues to submit its operations and tariff to the decision of the Board of Railway Commissioners, I am entirely unable to understand.
But one word more with reference to the different increases which have taken place in the capital stock of the company since 1992. Starting with the capital stock of $65,000,000, that was increased by $20,000,000 and then there was another increase of $25,000,000 in 1904. In 1906 there was a further increase of $40,000,000, and in 1908 a final increase of $50,000,000. In each of these three cases an order in council was passed. In the latter two cases 1906 and 1908, the order in council contains exactly, in each instance, the same protecting provision as the order in council of 1902, namely, that the increased capital which the company w as being authorized to expend in the way of construction should not be taken into account, either in favour of the company or against it, in computing the cost of construction upon which the ten per cent profit was to be based. The order of 1904 did not contain that provision, through some inadvertence or lack of attention apparently in the preparation of it. There was at all events the assurance given by the solicitors of the company, that the omission, so far as they were concerned, was entirely due to inadvertence; and I have in my hand a letter from the solicitor of the company, written with authority, he says, in which the company's solicitor undertakes, as he had previously stated to me by word of mouth, that that order in council of July, 1904, should, for all purposes and at all times, be considered as though it did contain the ten per cent clause in the same language as the other three orders.


William Findlay Maclean: What is the date of that ?


Allen Bristol Aylesworth: It is of recent date, but the conversations which preceded it stated exactly the same thing as the letter does. I asked that the assurance should be put in writing and the letter is dated the 15th February inst. There never has been any other position taken by the Canadian Pacific Railway from first to last; and so far as the disposition of the proceeds is concerned, so far as regards what has been done with the various increases of capital from time to time-this statement is given by the president of the company, the accuracy of which we have no reason to doubt-not one penny of the capital authorized in excess of the $65,000,000 is to be taken into question in estimating the cost of construction under the terms of clause 20 of the company's contract with the Dominion government. And although 43!
it goes without saying, (Sir Thomas Shaughnessy adds) that these vast expenditures for increased facilities and greater developments are very great factors in the growth of the company's net revenue.


Mr. WILBERT McINTYRE.: I have been very much interested in the discussion and particularly in the speech made by the hon. the Minister of Justice. In that speech the minister says that the original bargain between the Canadian Pacific Railway and the Canadian government, which has entailed so many hardships on the people of the west, is sacred and that so long as the company carries out faithfully its side of the compact, we have no right to interfere with it. He also assures the House that the ten per cent on the stock is not a hard and fast rule to day, but that the company, in the revision of its rates, has to take the ruling of the Board of Railway Commissioners. That is an assurance which will be very well received by the House and the country at large. But there is one thing on which I would like to have a little light and that is what the Board of Railway Commissioners would consider a fair basis on which to reckon the contract rate. In other words would they not take into consideration the fact that in the extra issues of stock the rate of interest has been materially reduced. I am not saying that it binds them down, as in the original bargain, to ten per cent interest on the stock, but I ask whether, in all fairness, it would not be reasonable to suppose that they would take into consideration tne amount of stock issued and the interest thereon.


William Findlay Maclean: Hear, hear.


Wilbert McIntyre: But if we must leave that out of the question, if the issuance of the extra stock does not interfere in any way with the rates of the company, if competition and the control of the Railway Commissioners are to bring about a better state of affairs, there is one thing which must be evident to everybody. When the Canadian Pacific Railway come to this House, they must be coming for favours; and when they are coming for extra favours, it ought to be the duty of this House, in view of certain hardships that are entailed on the country by the original bargain, to see that these hardships are in some way relieved.


William Findlay Maclean: Hear, hear.


Wilbert McIntyre: If they ask us for one favour and another, if they want us to put them in the position of watering stock to some extent or issuing it at par, then let us curtail some of the enormous advantages they have secured over the public in western Canada. Of all the questions that give rise to the most irritation concerning the Canadian Pacific Railway and its operation to-day-and I have no fault

to find with the Canadian Pacific Railway and its operations, I will go as far in my admiration of the operations of the Canadian Pacific Railway as the Minister of -Railways, and admit that it operates as well as and perhaps better than any railway in the world-there are certain conditions in that original contract which our people most resent and which it is the duty of parliament to use every legitimate means to have done away with, and of those things the main one is that the lands of the company may be held by them exempt from taxation.
If I may be pardoned, I will go briefly [DOT]over the history of this arrangement. In 1881, the bargain was made that the lands *of the Canadian Pacific Railway should be selected from a twenty mile belt and should be exempt from taxation for twenty years. But the railway company came back here and asked for additional favours. They did not like the land within the twenty-mile belt and they were given free selection throughout that western country. In my constituency, whose extreme southern boundary is a hundred miles north of the Canadian Pacific Railway, for all practical purposes every odd section was selected by the company. The twenty years of exemption would have expired in 1901. But the Canadian Pacific Railway patented its land only as it was sold. And, in 1901, when the provinces said: Now your exemption has expired, their answer was:	Our
exemption extends from the patenting of the lands twenty years. And they were asked to select their lands. A great portion of that land was not selected until
1906.	Twenty-five years from 1881 and twenty years from 1906 make forty-five years' exemption for which these settlers in the west must pay. I ask any man in this House who is fair-thinking how the people in the older provinces would like it if they had to pay taxes not only every man on his own farm, but on the farm adjoining.


William Findlay Maclean: And the Canadian Pacific Railway cutting up melons of nine millions a year.


Wilbert McIntyre: Apart from that argument, I would ask any hon. member: How would your constituency behave if your people had twice the taxes to pay that they should pay? How would they like it if no improvement was going on on the land adjoining theirs? But that is not all. We have a provincial law in that country that the maximum taxation per acre for school purposes is ten cents. Schools sections are formed, and, though the settlers are struggling with the difficulties of pioneer life, they want their children educated. They form their school section, but the odd sections of land are in The hands of the Canadian Pacific Railway.


Wilbert McIntyre: Placing on the maximum of taxation they attempt to build the school. They issue debentures, they make short loans for furniture, and they pay their teacher. But the second year comes. Now, their short loans come due, the payment of interest on the debentures comes due, and the teacher's salary is no less than before. I have two instances in my constituency where these people found that, even with the maximum of taxation, they could not possibly support their schools in the second year. I ask any hon. member here: What would your constituency say if they had to close up their school when paying maximum of taxation, leave the building standing idle and no opportunity afforded for the education of their children? Don't you think that this would become a burning question. Don't you think you would make such a noise in this House that the government would have to act? And if the Canadian Pacific Railway came here for a favour, don't you think the first question would be: What are you going to do about that exemption? This question is, in my constituency, a burning question. These lands bear no taxation for roads, but the expense of improvements must be borne in its entirety by the owner of the adjoining land. The settler goes in there. He has no money to buy the land. He tries the best he can to improve the roads, but he gets no help from half the land there. He is increasing the value of the Canadian Pacific Railway land with every improvement he makes, and with his efforts improving the productiveness of the country. Yet he gets no help from the Canadian Pacific Railway.


William Findlay Maclean: And they cutting a melon every year.


Wilbert McIntyre: I say that, when this matter comes up for consideration before the government, it is the duty of the government to ask favour for favour; when the Canadian Pacific Railway ask for one favour, the government should demand a favour in return. If you will take away the exemption, and compel the Canadian Pacific Railway to sell their lands, you will settle one of the most vexing questions with which we have to do. It is said, this bargain is a sacred one, that we cannot set aside the bargain for the company have carried out their side of it. I do not know anything about law, but I will leave it to the judgment of any man here, if, when that bargain was made in 1881, it was not the intention of parliament that that bargain should expire in 1901? I say we are paying taxes for twenty-five years beyond that bargain, and, dear only knows, the bargain was bad enough in the first instance. This bargain is a sacred one; but the duty that we have to perform is also a sacred one. We are here to represent

the people. The company have vested rights, but so have the people. If the Canadian Pacific Railway Company wishes to go^ through certain territory, the laws of this country are such that they can take the land from the man who has the patent for it on giving him a fair price. It seems to me that if this bargain is sacred, we should use every possible endeavour to do away with what is one of the greatest evils of our country, and one that is retarding the settlement of western Canada to-day.


William Findlay Maclean: Did I understand the hon. gentleman (Mr. Wilbert McIntyre) to say that the bargain was a sacred one, and that the government were compelled by that bargain to authorize all these issues of stock at par when the stock is selling at a higher rate?


Wilbert McIntyre: I will put my point in one sentence: When the Canadian Pacific Railway comes to us to ask for favours, we should try to relieve the friction points by asking them to grant us the favour of doing away with these restrictions.


INTERNATIONAL WATERWAYS TREATY.
Mr. A. C. BOYCE (West Algoma).: Before you leave the chair, Mr. Speaker, 1 desire to ask the attention of the House for a few moments to certain reports which have come to hand of statements made in the Senate of the United States with regard to the ratification of the Waterways Treaty now under consideration between the two countries. I refer particularly to despatch in the ' Montreal Star ' of 17th instant:
New York, Feb. 17th.-A Washington despatch to the 'Tribune' says: The prospects for the ratification of the Canadian Boundary Waters Treaty at this session of Congress are growing constantly less, and it now seems inevitable that the convention will have to go over until next session. Even then it may be amended.
And further on:
At the hearing which the Committee on Foreign Relations gave to Senator Smith, of Michigan, yesterday, he made a clear-cut argument in support of his contention that the treaty ought to be amended so as to ensure to his state as large a portion of the waters of St. Mary's river as it now enjoys, while his presentation of his contention that the treaty would deprive his state and this country of a part of those waters made considerable impression on the members of the committee.
iSenator Smith maintained that the treaties of Ghent and Paris and the Webster-Ashbur-ton treaty all defined the boundary, and that during all the intervening years it had remained undisputed. He maintained therefore, that the argument made against his contention-that the committee provided for in the pending convention would have power to fix. the boundary-fell to the ground.
He argued further, that the treaty ratified last year did not alter the boundaries, but merely authorized a commission to erect the proper physical monuments. He said that at present two-thirds of the water of the St. Mary's river ran on the Michigan side of the liver, while under the treaty pending the commission would unquestionably divide these waters equally between the United States and Canada. This, he maintained, would be a serious injustice to his state and to the United States.
Following that, we read in the newspapers to-day^ that it is impossible, on account of objections that have been raised by Senator Smith, of Michigan, on these grounds, that the convention treaty can be ratified during this session of Congress, the consequence of which will be that it will have'to go over to another year. Now, I do not desire to enter upon a discussion of the terms of that treaty. Unfortunately, by a mysterious procedure, and one which does not commend* itself either to the Prime Minister or the leader of the opposition, we are practically in the dark in this House with regard to-the terms of the treaty. But this we do. know, that we had an International Waterways Commission, which commission was constituted and endowed with certain functions and powers. It went to work at considerable expense to investigate our water supply and our waterways, the commission being composed of representative gentlemen appointed by both governments. The report of that Waterways Commission was, with regard to the St. Mary's river, that the power from those falls should be divided equally between the two countries. That report has been adopted so far as it could be adopted by this House. That report is fair in every respect, and has been made after examination by the commissioners of all the water supply and the water sheds on both sides of the river.
Now, I desire to urge upon the right hon. gentleman who leads this House that there should be no disturbance of the conditions on the boundary between Canada and the United States, as found to exist by that independent report of a joint commission appointed by both countries, and that the efforts of the hon. senator for Michigan to block the treaty in order to get better terms, to get encroachments on the boundary, to get water franchises of a very valuable nature properly belonging to Canada, found to belong to Canada, known to belong to Canada, conceded to belong to Canada, and vested in Canada by treaty rights for many years, enjoyed and possessed by Canada today-that that hon. gentleman shall not be permitted, by holding up the ratification of that treaty in the United States Senate, to wrest from Canada something which Canada has a right to keep, and which I pro-

test, as a Canadian representative against Canada giving up at all. What is to be the result, I leave it to the right hon. gentleman who leads this House_ to say. I do not know what negotiations, if any, are taking place. But I now rise for the purpose of setting forth the situation and placing it before the government, namely, that the people of Canada, and especially the people who are immediately benefiting by the water supply from the St. Mary's river as well as those benefiting by the supply of the Niagara river, shall not be deprived of their rights, and that the right hon. gentleman shall see to it, in further negotiations, that there is no leverage made by the blocking of that commission to take away from Canada that which belongs to Canada. There was a lamentable incident in connection with one of our treaties with the United States, so far as territorial boundaries were concerned, there was an arrangement whereby, at the last moment, by a lamentable circumstance or coincidence, a portion of that territory which we honestly belived to belong to Canada, was taken away from Canada by measures which we did not approve, and which the people of this country did not approve. I therefore urge upon the right hon. gentleman to keep a watchful eye on the proceedings of the United States, and to see that no leverage, no holdup, is made by any one on the other side of the line in order to wrest from Canada any part of our waterways, or any part of our territory which has been agreed upon and found to be Canada's by right, and that the treaty shall not be varied or changed to our disadvantage by gentlemen in the United States Senate.


Rt.   H@: I do not think that there is any cause for misapprehension on the part of my hon. friend (Mr. Boyce) by reason of what has transpired, so far as we know, in the Senate of the United States. The newspaper reports which I have Been, I believe, are not very accurate, and in those reports two treaties are confounded the one with the other. The treaty which is now before the Senate, the Waterways Treaty, is eminently fair to both countries. The fact that objection is taken to its terms by a senator in the United States Congress, a gentleman interested on the other side of the line, is perhaps evidence that after all the treaty cannot be objectionable to the people of this country. I would not prejudge it at all. There is another treaty which was passed last year, and which referred to the international boundaries, as to which a commission has been appointed to fix, not new boundaries, not to determine new boundaries, but simply to fix the boundaries already existing by treaty, which has now been in existence for forty or fifty years. The commissioners have no power to depart in any way, under that treaty, from what Mr. BOYCE.
has been in existence, and is now in existence; their task is merely to confirm metes and bounds, marking present boundaries, and nothing else. It is premature, I think, to discuss that treaty, or the treaty which is now before the Senate committee. As I understand, it has now been put over to another session. I may say that I have the authority of His Excellency the Governor General 'to state that we are endeavouring to get authority from Great Britain to lay the treaty before parliament as soon as possible.


[Stage Direction]
Motion agreed to, and House went into Committee of Supply.
Public Works-Ontario-Belleville Armoury $60,000.
William Pugsley: In the Ontario buildings there are no new items. These votes are simply to carry on to completion buildings regarding which provisions were made in the last parliament. I spoke to the chief Conservative whip and he was good enough to say that he would be able to arrange to save the necessity of giving details as to these different buildings because the officer who prepared the estimates was not quite ready with the details. He asked to have the Toronto buildings stand. I undertake that if any hon. member wants specific information in regard to any building I shall furnish it.


John Graham Haggart: The minister promised to bring down an order in council yesterday.


William Pugsley: Yes, I have it here.


Mr J HAGGART.: If the minister would just read the part setting forth the urgency.


William Pugsley: This Is with reference to the fence around the Mint. The clause in question reads:
That the Deputy Master of the Mint has on behalf of the Imperial authorities, called the attention of the Department of Public Works to the absolute necessity for the erection ot a fence around the iMint building, before minting operations are proceeded with. That this was a matter quite unforeseen by the Department of Public Works until the demand of the Imperial authorities was made. It is submitted therefore, that this is a case which may quite reasonably come within the exceptions provided for in the Revised Statutes, chapter 39, section 36 (a) of pressing emergency in which delay would he1 injurious to the public interests, and that the Minister of Public Works may properly dispense with the calling for public tenders.
That the Chief Architect of the Department of Public Works has prepared plans and a specification which were submitted to, and approved by Dr. Bonar, Deputy Master of the Mint, upon which, the contractors for the Mint building, Messrs. Sullivan and Langdon, were asked to give a price.


John Graham Haggart: That is not the one.


William Pugsley: Yes, that is the one.


John Graham Haggart: In connection with the addition to the House of Commons the minister spoke of an order in council setting forth some urgency.


William Pugsley: Does my hon. friend not remember that he was speaking of the contract given to Contractors Sullivan & Langdon for the fence and guard-house at the Mint. I promised the hon. member for North Toronto to give the order in council.


John Graham Haggart: Was there an order in council for the expenditure in connection with this wing setting forth an emergency?


William Pugsley: Only as to one of the elevators in regard to this building. The $44,000 paid to the contractors in that case is made up of different items of work done without an order in council.


Mr. BLAIN.: Could the minister furnish the committee with a list of Ontario public buildings for which estimates were passed last year, but which do not appear in the present estimate ?


William Pugsley: I stated yesterday that by comparing the estimates of this year with the Appropriation Act of last year it will be seen what has been omitted. Then I was asked if I would prepare a statement of the buildings or works in regard to which tenders had been called, but which had also been omitted, and I said I would do that. I have that list here. It is as follows:
Works for which tenders were called and received but on which no action was taken, it having been decided to defer their construction for the present. Three Rivers Coal Dock; Ste. Emilie, P.Q., wharf; West Advocate, N.S., wharf; Devil's Island, N.S., wharf extension; Vancouver, dredging; St. AndrS, P. Q., wharf extension; Long Point, P.E.I., breakwater; Providence Bay, wharf; St. Alexis, Ha! Ha! Bay, wharf; Michipicoten, wharf; Vernon, B.C., public building; Tene-cape, N.S., wharf extension.


Richard Blain: In the general election held in October the estimates passed at the last session of parliament were used on behalf of government candidates in many counties in Ontario. It was pointed out to the electors that if they supported certain candidates these buildings would be erected and large amounts of money expended in certain counties.


William Pugsley: Did I understand my hon. friend to say it was pointed out that if the electors elected certain candidates this would be done?


Richard Blain: Yes.


William Pugsley: Would the hon. gentleman be good enough to give the name of the gentleman who referring to what had been placed in the estimates made it a
condition that the candidate would be supported?


Richard Blain: I do not propose to be put in the witness box by my hon. friend on details, because I could very well put my hon. friend in the witness box and refer to special cases in his own constituency.


William Pugsley: In my own constituency there was no promise of any kind or description which was contingent upon the government candidates being supported.


Richard Blain: If we wish to broaden out this discussion there is a gentleman sitting within my hearing whose opponent published a list of the amounts of money that were expended in his county and because of that argued that they should return him again to support the government.


William Pugsley: That is another matter. My hon. friend said that the promise was made by candidates that if they were returned these works which were provided for in the Appropriation Act would be undertaken, but making it a condition that such and such candidates would be returned. I asked my hon. friend to point to a single instance in which that was done. Then he referred to St. John, and I told him that in no case was any promise or assurance in regard to the carrying on of a public work made contingent on the election of a particular candidate.


Richard Blain: My hon. friend will not venture to say that his government did not adopt the policy of using the promise of public works with the electors to induce them to support their candidates. I could give specific instances, if I chose but I shall not. Perhaps the minister would like me to, so that he could instance some county and point out some member of the opposition who objected to it and was anxious to bring the case before parliament. In last year's estimates were found a great number of items for the construction of public buildings and public works; on these no money was expended last year and they have disappeared from the estimates this year. What I want to know from the minister is the cause. Last year the minister told us there was no fear that the revenue of the country would continue to increase, but he now tells us our revenue has decreased and that the government is short of money. I want from the minister a list of the public buildings in Ontario which were provided for in the estimates last year and on which no money was spent and which are not to be proceeded with under thesg estimates.


William Pugsley: That will entail some clerical work which I will have done and I will submit the result to the hon. gentleman later. As I have already explained we cannot save eight million dollars unless

we cut off public works here and there and we have done so all over the country without distinguishing between constituencies represented by supporters or opponents of the government. I do not expect that this postponement of public works will last long. The works were provided for last session in good faith and as we deemed they were necessary in the public interest, I shall consider it my duty at the earliest possible moment to have these works reinstated in the Appropriation Act so that they may be proceeded with.
Cornwall Public Building-Alterations to fittings, $1,400.


Mr. SAMUEL SHARPE.: What are these alterations and who has the contract?


William Pugsley: These are for ordinary post office fittings, new steps to the building, &c. The Berlin, Ontario, Hardware Company has the contract.


Samuel Simpson Sharpe: Is there pressing public necessity for these alterations ?


William Pugsley: I would not have undertaken them were it not that the Post Office Department made an urgent request.


Mr. DONNELLY.: In the estimates of iast year there was an item of $5,000 for the erection of a post office at the town of Chesley. I suppose that the same reason that the hon. minister has given for striking out the other items would apply to the striking out of that item.


William Pugsley: The same reason would apply, but I may say that we have decided to purchase the site, so that we shall be ready to proceed with the construction of the building as soon as the necessary provision is made.


James J. Donnelly: Did the hon. minister or his department send any official or agent to Chesley during October last for the purpose of purchasing or arranging for the purchase of a site for the proposed post office building?


William Pugsley: I gave instructions to the inspector to go there for the purpose qf looking into the question of the site, but just when he went there I do not know.


James J. Donnelly: Then the hon. minister did send an inspector just previous to the election?


George Taylor: That looks suspicious.


William Pugsley: A little bit, but things are not always what they seem.


James J. Donnelly: I may say that during the recent election campaign considerable capital was endeavoured to be made for the government candidate out of the fact that the people of the town of Chesley were to receive a new post office building, and the argument was freely used that it would be Mr. PUGSLEY.
suicidal policy on the part of the electors not to elect a supporter of this government, as the result might be that no post office would be built. Now, the result appears to me to show that the parties who advanced that argument must have had good ground for it. I would like to have the assurance of the hon. minister that in striking out the item for the building of a post office at Chesley, he was not influenced in any way by the fact that the riding did not return a supporter of the government?


William Pugsley: I can give my hon. friend that assurance in the most positive terms. I may say that in leaving out the public buildings in regard to which tenders had not been called, we drew the line irrespective of whether a supporter of the government or an opponent of the government had been returned.


James J. Donnelly: I would like to call the attention of the minister in a general way to the fact that the people of the inland constituencies of western Ontario, being large purchasers and consumers of imported goods, contribute largely to the revenue of this country, while they receive a very small return in the way of the erection of public buildings. I wish to say to the hon. minister that the town of Chesley is a thriving and progressive town, fast becoming quite a manufacturing centre, and I would like to have his assurance that, as soon as the finances of the country will be in such shape that he can go on and erect public buildings, he will then take up the matter of the Chesley post office, and have it provided for in the estimates at an early date.


William Pugsley: I can hardly be expected to give that assurance in respect to individual buildings; but I give it to my hon. friend in general terms, which ought to be satisfactory. I may say that when the gentleman who formerly represented the constituency in which Chesley is situated, urged its claim for a public building, he used the same argument that my hon. friend does now, in regard to its being a thriving and progressive town and it was in consequence of his very strong representations that provision was made for a building in the town of Chesley. The item was put in the estimates in good faith, and it is in exactly the same position as other items which have been held over. But I can assure my hon. friend that as early as possible the buildings provided last year will be proceeded with, including the building in the town of Chesley.


George Taylor: Was the site purchased?


William Pugsley: The site has been purchased.


Mr. J. A. CURRIE.: I would like to ask the minister if this work will be gone on with before the next election?


William Pugsley: That depends on when the election will take place.
Glencoe-Public Building, $26,000.


Mr. BARR.: Is this a post office?


William Pugsley: A public building, including a post office and custom house.


John Barr: What is the size of Glencoe?


William Pugsley: In 1901 the population was betwen 1,000 and 1,100.


John Barr: It is not any more now; it is going back; and yet we find $26,000 voted for a public building there. Was the promise of this building the reason it gave the government the big majority it did? It looks very much like it. We find that $1,250 was paid for the site, although land is very cheap there. Were any other sites offered?


William Pugsley: Yes, there was an opportunity to purchase several others, but this was regarded as the best and the cheapest.


John Barr: What is the size of the lot?


William Pugsley: 100 feet by 165. It is a corner lot.


John Barr: I find that the legal expenses in connection with the purchase amounted to $33.02. Will this finish the building?


William Pugsley: This is to finish the building.


John Barr: Has the contract been let?


William Pugsley: Yes.


John Barr: Is there a tower and a clock to be put on that building? I have it on good authority that these were promised before the election.


William Pugsley: Yes, there is to be a small and somewhat pretty tower on the building.


Samuel Simpson Sharpe: When were the tenders advertised for?


William Pugsley: Some time last fell.


Samuel Simpson Sharpe: In what month?


William Pugsley: That is one of the particulars I have not got. The contract was let on the 11th of September. Tenders were called probably a month before that.


John Barr: Can the minister tell us how many tenders there were?


William Pugsley: No, I have not that with me.


John Barr: Was this the lowest?


William Pugsley: This was the lowest.


John Barr: I would like to know who were the parties who tendered?


William Pugsley: I will have that this evening.


Mr. GEO. GORDON.: In the list of tenders asked for and given by the minister, I did not hear that tenders were invited for the dam at Montreal river. Is it not a fact that tenders were asked for the construction of a dam at Montreal river last fall previous to the election?


William Pugsley: That will come _ up on harbours and rivers, when I shall give full details.


George Gordon: Was there a tender for the dam at Latchford?


William Pugsley: My hon. friend will find a sum in the estimates for the dam at Latchford.
At six o'clock, House took recess.
After Recess.
House resumed at eight o clock.


EDMONTON AND SLAVE LAKE RAILWAY COMPANY.
[Stage Direction]
Mr. WILBERT McINTYRE (Strathcona) moved that the House go into Committee on Private Bills.
Haughton Lennox: Mr. Speaker, before you leave the Chair, I wish to say a word about this first-Bill, respecting the Edmonton and Slave Lake Railway Company. I recognize that it will not result in any immediate action being taken; at the same time I want to put distinctly on record the position taken by some of us with respect to Bills of this character. This is a Bill for the renewal of a charter granted many years ago. The first clause provides that it shall have five years for the completion of the railway. I have no objection to their having five years for the completion of the railway, but, in the Railway Committee, I objected to having it so put that they shall have five years in which they may actually do nothing We have a pretty well recognized rule that whenever a company applies for a renewal of a charter, there should be a provision that they shall commence and, within two years, spend at least 15 per cent of the capitalization, and shall complete the road within five years. It was alleged that, in the case of this particular company, something had been expended upon the railway-


Wilbert McIntyre: Over 15 per cent.
Mr. LENNOX-but nothing had been expended for as much as two years. I submit that the fact of expenditure having been made two years ago has no great bearing upon the matter of a renewal of charter, and that we should at least insist upon the ordinary condition that they would expend not less than 15 per cent within two years.

As I say, I recognize that I cannot make this effective at the present time. But 1 enter this as a protest against this measure, and the same step will be taken as to the renewal of a charter considered in this House the other day. The difficulty is that these things are quoted as precedents, and we are compelled very often to abandon the salutary rule which we adopted some time ago.
. Motion agreed to, and the House went into Committee on Private Bills.
Bill (No. 24) respecting the Edmonton and Slave Lake Railway Company.-Mr. Wilbert McIntyre-reported, read the third time and passed.


SALISBURY AND HARVEY RAILROAD COMPANY.
[Stage Direction]
House in committee on Bill (No. 35) to incorporate the Salisbury and Harvey Railroad Company.-Mr. Emmerson.
Edward Arthur Lancaster: I would ask the hon. gentleman (Mr. Emmerson) in charge of the Bill to change the name of it. I understood well why this is called ' Railroad ' company instead of ' Railway ' company, because, they are using the franchise of a company which is extinct by insolvency, and they want to have a difference between the two institutions. But I would point out to the non. gentleman that the word * Railway' in the Railway Act has a special construction put upon it by the interpretation clause, and it is very bad legislation for us to use the word 3 Railroad 3 and expect the courts to determine that it means the same as ' Railway ', when this latter word is given an interpretation which, in certain cases, manifestly, ' Railroad ' does not have I would suggest that it be called the ' Great Salisbury and Harvey Railway Company,' or the ' Eastern Salisbury and Harvey Railway Company,' or anything else you like. The word ' Harvey ' might be omitted, and some other name used. It is important that we should not have the word ' Railroad ' in the Bill.


Mr. EMMERSON.: There is much force in the point taken by my hon. friend (Mr. Lancaster) and I concur in his views. So strong has been my feeling with respect to the matter that I wrote to the parties in the city of St. John who are interested, and made a suggestion as to a change in the name. I think, under the rules of the House, the title of a Bill can be changed on its third reading. Therefore, I would suggest that we might put the Bill through the committee leaving the question of the name open.


Edward Arthur Lancaster: I thought this,was the time to mention it.


Henry Robert Emmerson: Of course, the use of the term ' railway ' is uniform in the stat-Mr. LENNOX.
ute, and the Railway Act is framed and phrased with the idea that all companies of that nature shall be termed ' railway ' companies, and not ' railroad ' companies. It would not be well to have an exception.


Edward Arthur Lancaster: I would suggest the striking out of the word ' and ' and the inserting of a hyphen. Make it ' Salisbury-Harvey Railway Company.' That will distinguish it from the old company.


Henry Robert Emmerson: Having submitted the matter to the parties interested, I feel that we ought to give them an opportunity to select the name. From my knowledge of the geography, I would say that a better name would be the ' Salisbury and Hopewell Railway Company,' for these are the two points connected. As a matter of fact, Harvey is not connected with Salisbury by this railway.


Edward Arthur Lancaster: There is no object in keeping it in then.


Henry Robert Emmerson: No material object, but the railway as first operated, under legislation of this parliament, went by the name of the ' Salisbury and Harvey Railway.' I think they wish to retain the word ' Salisbury,' and perhaps it would be more agreeable to them to retain the name ' Harvey ' also.
. Mr. LANCASTER. You might call it the ' Great Salisbury and Harvey.'
Mr, EMMERSON. But it is no greater than it was. You could not impress the public with that.


Haughton Lennox: Let it go through committee except as to that point, and remain in the committee for further consideration.
Mr. EMMERSON, I think that would be better.
Progress reported.


CONSIDERED IN COMMITTEE-THIRD READINGS.
[Stage Direction]
Bill (No. 13) respecting the Grand Trunk Railway Company of Canada.-Mr. Pardee.
Bill (No. 26) respecting the Kootenay Central Railway Company.-Mr. Geo. Taylor.

[Stage Direction]
House resumed adjourned debate on proposed motion of Mr. Turriff for the second reading of Bill (No. 30) respecting the subsidy from the Ontario government to the Lake Superior branch of the Grand Trunk Pacific Railway.
George Perry Graham: Possibly we might let this Bill go to committee. I notice that there has been a good deal of comment on it. Hon. gentlemen who have looked

through it will see that it contains several clauses which I think will need a great deal of discussion, possibly we will not be able to pass them. It strikes me from reading the Bill over that they will interfere with our control of Dominion railways. It was an Act passed by the Ontario legislature giving this company some aid, to which certain conditions were put in, and one of the conditions was that the company should endeavour to get a Bill passed by this House confirming the agreement which forms part of the Act. The agreement contains one or two clauses as to rates and another clause as to amalgamation. I am afraid that these clauses of the agreement would conflict with the jurisdiction that we ought to have over our own roads. However, I think it will be well to send it on to the Railway Committee, because there may be some parts of the Bill that we ought to confirm. It is with no desire at all to do anything that would permit the railway company to get out of keeping its agreement, but it is with the sole object that we do nothing in this House to pass any railway that is chartered by ourselves out of our own jurisdiction by confirming an agreement with any other body. I have no objection to its going to the committee. We will prune it down, and if there is anything in it that we can confirm, we will be glad to do so.


Haughton Lennox: I think the minister is right in allowing it to go to the committee. But it appears to me that this Bill will have to be confirmed or passed in its entirety, or not at all. It is simply an agreement between the provincial government and the railway company, and there will not arise any question about it on the part of the railway company, because they do not get any money unless they obtain the sanction of this House to this agreement. However, we can discuss all that. There are some advisable provisions in this Bill regarding the carriage of road material for municipalities on certain favourable terms.


George Perry Graham: Discriminating against other townships, which is against the law.


Haughton Lennox: I do not think so, for the reason that they must carry for all municipalities fhat are upon the line of railway. Of course they can carry it beyond the line of railway. I do not suppose the local legislatures are very particular. They have their money yet and must either have this agreement or retain their money.


George Perry Graham: The situation is that they have not their money.


Haughton Lennox: They ought to have.


George Perry Graham: The other people have most of the money. They have a portion of their money which has not been paid over, but the neglect of this House to pass
such an Act does not prevent the company from keeping its agreement.


Haughton Lennox: I would like to have them bound.


William Findlay Maclean: The per contra of the minister's argument might be that there are companies chartered in Ontario who have obligations with municipalities there; these companies come here under the jurisdiction of the federal authorities and try to evade these obligations and if something can be done to define the spheres of the federal and provincial governments so that these obligations whatever they may be could be preserved, it would be "a good thing. Perhaps that will come up in this case.


Mr. GEAHAM.: This is our railway. Motion agreed to and Bill read the second time.


SECOND READINGS.
[Stage Direction]
Bill (No. 40) to incorporate the Great West Permanent Loan Company-Mr. A. Haggart.
Bill (No. 48) respecting the Montreal Terminal Railway Company-Mr. Geoffrion. ^ Bill (No. 50) to incorporate La Compagnie du Chemin de fer International de Rim-ouski.-Mr. Ross.	#
Bill (No. 55) to incorporate the British Columbia Life Insurance Company.-Mr. Cowan.	i
Bill (No. 56) respecting the Canada Life Assurance Company.-Mr. A. H. Clarke.
Bill (No. 59) to incorporate the Victoria and Barkley Sound Railway Company.-Mr. Ralph Smith.	_
Bill (No. 61) respecting the Burrard, Westminster Boundary Railway and Navigation Company.-Mr. Ralph Smith.
Bill (No 62) to incorporate the Prince Albert and Hudson Bay Railway Company. -Mr. Neely.
Bill (No. 63) to incorporate the Royal Canadian Accident Insurance Company.- Mr. Ames.

[Stage Direction]
House again in Committee of Supply. Glencoe Public Building, $26,000.
['I will leave that for you to judge.\nSome resolutions reported.']
Samuel Simpson Sharpe: In making the purchase of the site for this building was an agent of the department sent to get options on lots or how was the site purchased .


William Pugsley: I cannot tell exactly, but if my hon. friend desires I will get the information. My recollection is that the usual course was pursued, that is we send our representative, a very experienced man, to the town, he looks over the different available sites, gets the prices, makes an

examination of the lots, endeavours to ascertain at what prices they changed hands in recent years, according to his instructions from the department, and makes his report to the department. I think I can assure my hon. friend that that was done in this case.


Richard Blain: The minister states that he has abolished the patronage system in his department. Does this apply to advertising for tenders for public works ? I mentioned last year that in calling for tenders for the construction of a post office at St. Marys, Ontario, the department advertised in 33 papers in that section of the province at a cost of $607.35. I pointed out then that the department advertisement was not inserted in the leading newspapers in that section of the province.


William Pugsley: No change has been made so far as advertising is concerned. As I said to my hon. friend last year, we are careful to see that ample notice is given so that all likely contractors would have the opportunity of tendering for public works. In asking tenders for smaller contracts, such as furnishing supplies, or erecting buildings costing $2,000 or $3,000, we do not advertise as widely as with respect to important public buildings. We would not go to as much expense as for a more expensive work. We endeavour to select newspapers that have considerable circulation, but I have not yet felt bound to ignore the rule which has prevailed that we give a preference to papers which are friendly to the administration.


Richard Blain: The hon. gentleman continues to advertise in newspapers supporting the government and in no others.


William Pugsley: Not exactly, there are some exceptions.
. Mr. BLAIN. I have here 33 newspapers containing advertisements for tenders for the work at St. Marys, and I would like my hon. friend to say if any of these are not supporters of the present administration?


William Pugsley: You are pretty nearly corect.


Arthur Cyril Boyce: You have abolished the patronage system?


William Pugsley: Not as to newspapers.


Richard Blain: In western Ontario an advertisement goes into 33 different newspapers for tenders for a small work to be done at St. Marys, and the newspaper with altogether the largest circulation in that section of the province, the London ' Free Press,' is not included.


William Pugsley: I think the ' Advertiser ' of that city had it.


Richard Blain: It has a much less circulation than the London ' Free Press.'


William Pugsley: 


William Pugsley: I think the Toronto ' Globe ' had it also.


Richard Blain: I think the Toronto * Globe ' would be on the list. A little change in that particular would be in the interest of the public, and I am sure it would be along the line of diminishing the patronage list. Does not the minister think that in this case too much money was spent in advertising for tenders.


William Pugsley: The work was not so very small. The cost wss between $25,000 and $30,000. The amount for advertising was considerable, but if we were obliged to insert the advertisement in the opposition papers as well the cost might be double.


Arthur Cyril Boyce: What is the need of so large an expenditure for a public building in such a small place as Glencoe, which, I believe, has a population of about one thousand souls? There is equal necessity for the establishment of public buildings in other towns of larger population and of more commercial importance where there are less facilities than in this interesting and no doubt progressive town of Glencoe. For instance, there is the town of Steelton, near Sault Ste. Marie, where there are very many important industrial works, and where the population are now suffering for the want of those public facilities which it is the duty of the minister to supply. The minister said to a representative deputation from Sault Ste. Marie, Steelton and that district that the strongest possible representations had been made in regard to the interests of that place and that it must be taken into the serious consideration of the government. That place has no postal facilities commensurate with the needs of the population. I would therefore ask the minister why he discriminates in this manner and establishes a public building at an expense of $26,000 to serve a small population like this, and leaves a town of wider commercial importance with practically no facility at all notwithstanding the fact that he has admitted publicly that the strongest possible representations have been made as to the necessity for increased accommodation.


Mr. D. A. GORDON.: After hearing the numerous complaints from the other side of the House, one would suppose that they have all the grievances upon their side. In that regard I think they are entirely wrong.
The minister in his wisdom has seen fit to deny us one or two buildings that are very important and on the whole we are inclined to give the government credit for using good judgment in this matter and trying to keep house within their resources. The town of Dresden has not adequate postal facilities and although an appropriation was made for a post office in that town it was deemed wise to not build one there for the present. The hon. gentleman from

North Lanark (Mr. Thoburn) referred to a town in his locality that wants a public building, but I may say that there is a town in my district that has probably contributed more revenue to the Dominion exchequer during the past two years than his little town has contributed since confederation, and we have absolutely no adequate postal accommodation there. I, however, shall feel disposed to press the minister quite as strongly as some of the other hon. gentlemen a little later on, and I hope with success. I express myself as being more than delighted to see that the government are practising a policy of retrenchment, and I hope that when they feel they can spend money generously again, a policy will be pursued that will make appropriations something in keeping with the needs of the various communities, and that the small communities will not get double what they ought to have and the larger ones much more than is necessary.


Mr. MEIGHEN.: Did the hon. gentleman plead with the government for retrenchment when he sat in the House last July, as he pleaded to-night ?


David Alexander Gordon: Yes.


Mr. HENDERSON.: I am delighted at the remarks of the hon. gentleman from East Kent (Mr. Gordon). Did he not come from a town where they manufacture sugar to such a large extent I would scarcely have expected such a very sweet speech. He has been able to congratulate the minister and to find fault with him at the same time, and he has sat down fully satisfied that he has done justice to his constituency. There is no doubt a very large revenue derived from the town the hon. gentleman lives in [DOT] and when the minister comes to know of that he will no doubt meet the wishes of the hon. gentleman and do it with as much grace as my hon. friend (Mr. Gordon) has shown in the manner of his asking.


Arthur Cyril Boyce: I was not speaking jocularly and I would be obliged to the minister if he would give me an answer to my question.
. Mr. PTJGSLEY. We were pressed very strongly to provide a public building for Glencoe. It was represented to us that Glencoe was the centre of a very rich agricultural district, an important railway centre that several industrial concerns have recently located in the town, that the population was increasing, that the post office and customs office was inconvenient and entirely inadequate, and that Glencoe was the headquarters of a company of the Middlesex Light Infantry which had no place to store its arms and accoutrements, and that a room should be provided in the public building for that purpose. We yielded to these representations. The plan's were
prepared shortly after parliament rose last summer, tenders w'ere called for and the contract entered into before we arrived at the conclusion we would have to cut off a great many of these items.


Arthur Cyril Boyce: The comract was let just before the election.


William Pugsley: It had to be let before the election if it was to be done at all last summer. Just one other word, and I say this for the information of our friends on this side of the House whose feeling has been so well expressed by the hon. gentleman from East Kent (Mr. Gordon). There was an appropriation for a building in the town of Grand Falls in my own province put in the estimates last year on the strong representation of the hon. gentleman who represents that constituency and we have omitted it this year although the constituency of Madawaska and Victoria gave to the government candidate a majority of 1,500. Fairville, in my own constituency, is a very thriving and prosperous town adjoining the city of St. John, and it gave me a splendid majority, but I have dropped the appropriation for it from the estimates also. In the city of St. John I have postponed the building of a drill hall which has been promised for years.


George Taylor: They wont give you a majority next time.


William Pugsley: Yes they will, because the people of St. John appreciate our efforts to curtail at the present time and they know we are doing the right thing in the public interest. In Kings and Albert where a victory was won by my hon. friend (Mr. McAlister) which was surprising to a great many of our friends opposite we had an appropriation for the thriving .town of Hillsborough and that has been stricken from this year's estimates also. I mention this to show that we are treating constituencies which returned government supporters in the same way as we are treating those constituencies which returned Conservatives. Last session we provided for a good many public buildings and wharfs throughout the country which we thought were necessary, and for that policy we were criticised by hon. gentlemen opposite very strongly. The lieutenant of the leader of the opposition in the province of Quebec took the ground last year, as he took it only yesterday, that many hon. members apparently come here with the sole idea that they must get a public building for their constituents. I hope that remark will not apply to my hon. friend (Mr. Boyce). The same gentleman told us also that those gentlemen who are asking for public buildings are never found in the committee rooms doing the work which devolves properly on members of this parliament, but that their sole object appeared to be to get

a public building. I trust that remark does not apply to my hon. friend (Mr. Boyce). I take a different view altogether; I believe that gentlemen who represent the great cities of Canada ought to look with a favourable eye upon the efforts of the government to give public buildings costing reasonable sums of money and affording ordinary accommodation to the smaller cities and towns throughout the Dominion. That was the policy which the government recognized in submitting the estimates last session. I can tell my hon. friend from Halton (Mr. Henderson) that if I remain Minister of Public Works I shall regard the claims of Milton favourably, as I shall regard also the claims of other cities and towns to which my attention has been called. But we cannot do everything at once. We find our revenue is limited this year and we have been forced with great reluctance to curtail expenditure. I have been constrained at the instance of the Minister of Finance to cut off the very large sum of $8,000,000 which I had hoped would be placed in the estimates for the purpose of carrying out the obligations entered into last session of parliament when these appropriations were made. I trust this declaration will be sufficient for our hon. friends and that they will recognize the sincerity of the statement I make again, that so far as I know not one of these items was placed in the estimates last year for the purpose of influencing the electors.


Mr. CROSBY.: No one would not think of charging that.


William Pugsley: We placed the appropriations in the estimates because we believed these works were necessary in the public interest. Will any one of these hon. gentlemen rise in his place and say that any one 'of these public buildings is not reasonably required in the public interest? The most hon. gentlemen opposite do is to say: If you are erecting a building in that town give it to the town I represent. My hon. friend from Halton (Mr. Henderson) whom I am always glad to hear, pleads for a public building in Milton and properly so, and when the time comes, as no doubt it will come, when we can give a public building to Milton my hon. friend will be able to say to his constituents: See what I obtained for you as your representative, send me back again to Ottawa in order that I may get further favours for my town.


David Henderson: I cannot allow these pleasant remarks of the Minister of Public Works to pass without notice. I must congratulate him on the admirable statement he has made with regard to his general policy. It is extremely plausible on its face; it certainly seems to be extremely fair and unbiassed. The difficulty is that when the hon. gentleman comes down to Mr. PUGSLEY.
particulars, he departs entirely from his genera] policy. I agree with him very largely on his general policy; but when he tells this committee that the village of Glencoe, of which I have some knowledge, having been there time and again, is entitled to a public building because it is in the midst of a rich agricultural country,
I ask, what better agricultural country can you find than that surrounding the town of Milton? He says Glencoe is a railway centre. I believe there is one line of railway passing through it, with a spur to another village. But both the Grand Trunk and the Canadian Pacific pass through the town of Milton. He says Glencoe has some industries. So has Milton, some very important industries, and it has recently added others. In the village in which I live, in the same county, there is one industry employing 300 men, and another employing from 100 to 150 persons, and it has a population nearly double that of Glencoe. But these minor considerations, to which the hon. gentleman made reference, do not seem to weigh with him in deciding the location of a public building. The special reasons assigned on behalf of Glencoe are applicable to very many towns throughout the province of Ontario, and I have no doubt to very many towns in other provinces which have received no consideration from the minister. However, in this instance I suppose we shall have to allow the general policy to prevail, because we know that the majority in west Middlesex on the 26th of October was very small indeed.


Mr. COWAN.: I have listened in vain for an answer from the minister to the question put by the hon. member for Algo-ma (Mr. Boyce); but while I was listening I was delighted to a certain extent to hear from the minister what we may consider to be a specimen brick of the political virtue of himself and his party. I am learning the business of politics. I find that the proper policy is to make an appropriation immediately before an election ; and when the minister gets a large majority, as he did in certin constituencies in New Brunswick, he tells us with unctuous declamation that he withdraws that appropriation, intending of course to use it again at the next election. I have picked up this little piece of general information as to the political policy of himself and his party, but I have waited in vain for an answer to the very reasonable question put by the hon. member for Algoma : why is Glencoe to be accorded a building at the cost stated, although it has a population of only 1,000, while a place like Steelton, with a population of 3,000, whose claims the minister recognized before the election, is discriminated against? Steelton is entitled to say that the minister is bound to recognize its claim if he

is not distributing the public moneys for the purpose of doing favours instead of advancing the interests of Canada. Why is Algoma not treated as it is entitled to be treated because of the solemn promises and representations made by the minister?


William Pugsley: There were no promises.


George Henry Cowan: Strong representations he has made here to-night. I heard him say that he led that delegation to suppose that they had made a good claim. Another place without nearly so good a claim is given a public building. I have heard no answer justifying this discrimination. I have only heard that the public moneys of Canada are being played with by the party opposite for the purpose of its political advancement in the constituencies.


John Allister Currie: How often has this public building been promised to Glencoe before the election? Is this the third or fourth time? In how many elections before has it been promised?
lie buildings is as follows: Renfrew, $6,919; Parkhill, $3,364; Glencoe, $2,871; Leamington-	Markham, $2,143; Simcoe, $7,-
908; Whitby, 4,320; whereas the town of Parry Sound had a revenue of almost $9,000. Then in the matter of post office orders, I find that the total amount issued by these seven towns, which have been so favoured is $132,000 while those issued by the town of Parry Sound alone amounted to $290,000. I find also that the customs revenue for Parry Sound amounted last year to $53,567, which is much larger than that in any other of the towns for which we have been asked to vote an appropriation. And when this matter is brought before the minister, I would ask him to consider very carefully the claims of this town- a town which has three railways connecting with it and the finest harbour on Georgian bay, and which has been neglected to the present in this respect.


Mr. ARMSTRONG.: What was the cost of the land?


William Pugsley: I am not aware of any.


John Allister Currie: There is another question. The question of advertising which has been raised by my hon. friend from Peel (Mr. Plain) is a very serious one. When this matter of advertising arose and the question was asked the minister, why he did not distribute his advertising amongst the papers of both parties, he said with a great show of rectitude that he had abolished the pernicious patronage list. Why does he not follow the example of the Tory government in Toronto, and distribute the advertising among both the Reform and Conservative papers? How can he expect the people of this country to believe his solemn assurance that the patronage list is abolished when any one who picks up a Reform paper and a Conservative paper will see a government advertisement in the one and not in the other? He must necessarily come to the conclusion, if he has any eyes or judgment at all, that this story of the abolition of the patronage list is mere moonshine.


Mr. ARTHURS.: I would like to call the attention of the minister to the necessity of providing at the earliest possible moment a public building for the town of Parry Sound. I heard him announce that the policy of the government was to provide for those towns which had a certain population and whose necessities were most pressing. The town of Parry Sound has a population of between 3,000 and 4,000. It is one of the principal ports on the Georgian bay, is a large manufacturing centre, is the county town of the county, and has a large postal revenue. According to last year's returns, the postal revenue of those towns in Ontario which have been favoured with pub-


William Pugsley: 


Joseph Elijah Armstrong: What was the total of the successful tender?


William Pugsley: Geo. A. Proctor, of Sarnia, tendered for $16,228, which was the lowest tender and he was given the contract.


Joseph Elijah Armstrong: When did the work begin and when is it likely to be completed?


William Pugsley: The contractor has to begin in the spring. The contract has been let and the building must be completed the first of October next.


Joseph Elijah Armstrong: Will the amount of the contract cover the total cost?


William Pugsley: There will be fittings and heating and lighting in addition.


Joseph Elijah Armstrong: What is the estimated total cost of the building and the fittings ?


William Pugsley: 


Arthur Cyril Boyce: I have no desire to obstruct the hon. gentleman's estimates, but when questions are asked him which are reasonable we are entitled to a satisfactory reply and consideration. The answer he gave the proposition I submitted was most pathetic and unctuous but not all satisfactory. In it he deprecated the lavish expenditure of public money on public buildings, especially just before the elections, and desired that his followers should be more moderate in their aggressive demands on his department. What a contrast to one of his predecessors who, when criticised for his very lavish expenditure replied : ' Wait until you see what we will do next

year.' But after the pathetic appeal of the present minister, one cannot help concluding that it must indicate a decline in the power of this government, since it admits that the means by which it has held power is shrinking in its hands. The minister stated that as our revenue began to decline. so should our expenditure on public works. But he knew that last session. Why did he not then practice that policy? Of course the elections were then at hand. And how is he expending the money he asks us to vote? As a Minister of Public Works, he is bound to see that the expenditures are made where they will do the greatest good to the greatest number; and if any cutting down be necessary, it should be done at the expense of the least important and not of the most important centers. But he has followed the opposite policy. He has starved the important centers and expended immense sums on public works where he thought they would most benefit his party, regardless of the principle I have just expressed and which no one can controvert. He has been extravagant in the smaller places and starved the more important ones. Take for instance the town of Steelton, which is of much greater importance than the town of Glencoe. It has a population three times as large. The capital employed there is 25 to 50 times that invested in Glencoe, and representations were made to the government as to the urgent necessity of a post office in Steelton long before there was any question of building one in Glencoe. Yet we have the minister telling us that although he found it necessary to cut down expenditure because of our declining revenue, and although there was not enough money to go around, he has decided that there must be an appropriation for the town of Glencoe, small as it is, and the claims of Steelton are to be utterly disregarded. What can be the reason? How is it that we find this utterly unjustifiable discrimination made by a minister who tells us he has abolished the patronage list? The reason is no doubt that the county of West Middlesex has elected a supporter of the government for two or three _ parliaments and is expected by the minister to do so for still another parliamentary term. What the minister was looking to was political expediency and his object was to expend the public money where it would benefit his party most, regardless of public necessity. Consequently what the hon. minister thought was a reasonable demand on the part of the town of Steelton before the 8th of June last, he now utterly ignores, and finds it necessary instead to benefit the town of Glencoe, and in this way help his supporter, the hon. member for West Middlesex, to keep his seat.	.
Now, I wish to say to the Minister of Public Works that his unctuous utterances Mr. BOYCE.
with regard to retrenchment will not satisfy the people of Canada that he has done, or is endeavouring to do, that which is absolutely square in the expenditure of these appropriations. Where he does see the necessity for retrenchment-where he finds his government crippled by a falling revenue-he must see that the only way to win the public confidence is to show the people that he is capable of presiding oyer his great department with fairness^ and impartiality, which he should exercise absolutely without regard to political exigencies, and taking account only of the public demands and necessities. In that case, the town, irrespective of the political complexion of the member from the district, should receive the expenditure of public money according to the needs of the public service. At the risk of taking up the time of the committee, I think I am entitled to more reasonable and fair answers than the hon. gentleman has so far given. I would like the hon. gentleman to say whether or not he subscribes to the proposition I put. that, when he finds himself in the pathetic position in which he is, and in which he has asked for the sympathy of the House and of the whole country-the position of not being able to supply all the public works he led the people to expect-does he not think that he should supply first those of greater necessity? And let him then say, if he can, having regard not only to his utterances, but to his correspondence, that he would prefer, from the point of view of the public convenience, public interest a.nd public demand, to give that appropriation to the village of Glencoe instead of to the town of Steelton.


William Pugsley: Stripping his question of verbiage, will the hon. gentleman be good enough to repeat it?


Arthur Cyril Boyce: Apparently, from being unctuous, the hon. gentleman (Mr. Pugs-ley) thinks he can get over the question by being jocular. I have stated my proposition three times. But perhaps he wants time to think over his answer. I ask the hon. gentleman this: Whether, when, as he has stated, he is called upon to retrench and as he calls upon the members who follow him to accept retrenchment, he does not think he should make curtailments where expenditures are less needed in the public interest rather than where they are more needed in the public interest?


William Pugsley: I am glad to answer the hon. gentleman's question. I think he refers to certain representations which were made to me with regard to the town of Steelton. First, I made no promise to the representatives of the town of Steelton that I would place in the estimates, an amount for a public building there. They made very strong' representations to me.


Arthur Cyril Boyce: That is not answering my question.


William Pugsley: I wish to explain this before proceeding further.


Arthur Cyril Boyce: Would my hon. friend (Mr. Pugsley) pardon me if I interrupt? Does he mean to say that he never made representations that there would be an amount in the estimates for the construction of a public building at Steelton?


William Pugsley: If the hon. gentleman says I made such representations, no doubt he is correct. I would like him to produce the letter-does he say they were made in a letter?


Arthur Cyril Boyce: I have asked the hon. gentleman a question.


William Pugsley: I do not recall at present having made such representations. If my hon. friend (Mr. Boyce) says I did make them, I should feel bound to accept his statement as a member of this House. All that I can recall to mind with regard to Steelton is that I was waited upon by certain gentlemen who urged very strongly the claims of the town in regard to better postal accommodation in the erection of a public building. I was much impressed with their claims, and my recollection is that I told these gentlemen that I would take the matter into my careful consideration. I think that is as far as I went. If the hon. gentleman has a letter containing anything stronger I should be obliged if he will produce it. In the last session of parliament a large number of buildings were provided for. The claims of various towns and cities were pressed upon my attention. No doubt Steelton was not provided for because it was felt that we could not ask for further appropriations. No doubt its claim stood over for full consideration later on. I have no doubt that such is the case. Last session we all hoped that the falling off in the public revenues would be but temporary. For my part, I did not dream that there would be such a falling off during the present fiscal year as there has been, that during the eleven months of the present fiscal year there would be a falling off of $10,000,000 or $12,000,000. When, in December last, we were called upon to determine what retrenchments we would bring into effect, as I stated yesterday, and, I think, repeated to-day, we drew the line sharply between those public works in regard to which tenders had not been called for and those in regard to which tenders had been called for before this decision was arrived at. Glencoe was one of those in which tenders had been called for. Parliament had voted the money, and it was up to me to proceed according to the authority of parliament and engage in the work. I could not, in December last, choose 44
as between Steelton and Glencoe, because there was no appropriation for a public building at Steelton. I think that is the best answer I can give my hon. friend, further than to say that, as a general rule, there is no doubt that the cities and towns having a larger population are more entitled to public buildings than those of a small population. But that rule cannot always prevail. In some towns and cities considerable federal expenditures have been made for other purposes than public buildings. It may be that wharfs have been constructed, or harbours have been dredged. In others the construction of a public building would involve the only federal expenditure likely to be made there. As a general proposition, the larger towns are entitled to the first consideration. But it must be borne in mind also that the places in regard to which appropriations were made were pressed very strongly upon my attention by the members of parliament. They came to confer with me and to present the claims of the towns situated in their constituencies. I cannot recall that the hon. gentleman (Mr. Boyce) pressed the claims of Steelton on my attention on more than one occasion. He may have done so, but I do not recollect it. And hon. members on the other side were rather disposed to resent an appropriation for public buildings in different constituencies and to suggest that the construction of a public building was an attempt to bribe the constituency. It may have been-I do not say that I recall that it was-my tender solicitude for my hon. friend (Mr. Boyce) that prevented me looking towards his constituency, fearing that it would be represented as an unworthy attempt to bribe his constituency and prevent his election as a member of this House.


Joseph Elijah Armstrong: Is it the intention of the Minister of Public Works to devote this $8,000,000, which he is retrenching this year from the public expenditure, to the erection of new buildings and new wharfs instead of those that were promised last year?


William Pugsley: I made a statement on this subject last evening, perhaps the hon. member was not present. I said that when these estimates were submitted to parliament they were submitted in good faith, and in the belief that these various works which were provided for were necessary in the public interest. In leaving the amounts out of the estimates this year we had not the slightest idea of abandoning those works, but simply of postponing them for a short period. Speaking as a general rule, I would say that the works which were provided for by parliament last session, should I be the Minister of Public Works next session and the revenues are in a good condition, as we expect them to be, I would



regard it as my duty to propose that provision should be made for the various works which were provided for at the last session, but which are not provided for in the estimates of the present session.


Joseph Elijah Armstrong: Is it the policy of the minister to grant post offices costing about $27,000 to places where the population is only 1,000 or so, as he did in Glencoe?


William Pugsley: I hope to get the expenses for public buildings in small towns cut down to a sum considerably below that.


Arthur Meighen: The minister has stated that last December he came to the conclusion that it would be necessary to retrench the expenditure to the extent of some $8,000,000. To-night he has gone a little further and says that it was by reason of certain representations made to him by the Minister of Finance. Now, the Minister of Finance, speaking in July last, said that he expected a continuous fall in the revenue for some time to come, and that for the following year the people would have to face a falling revenue. Therefore, the conditions existed in July, and even prior to July, which would necessitate retrenchment. Now I want to ask the Minister of Public Works whether anything in the nature of a collapse or an accident happened to the finances of this country in the fall or immediately prior to that date in December when this government decided on this retrenchment, or was it simply a continuous fall in the revenue such as was predicted by the Minister of Finance?


William Pugsley: I can say to my hon. friend that so far as I am concerned, speaking as the Minister of Public Works, I did not expect so large a falling off in the revenue as has taken place. I hope that the turn has come now.


Arthur Meighen: I asked if anything had taken place in the nature of a collapse or an accident?


William Pugsley: I am not aware of it.


Arthur Meighen: The minister will remember that when asked in this House last July where he would procure the money with which to erect all these public buildings that he was dangling before the electors, he made reply that there was no need for concern on that point; his information was to the effect that there was no need at all for concern. In volume 7 of last year's ' Hansard,' page 13330, my hon. friend from Peel (Mr. Blain) asked this question:
How does the hon. gentleman propose to get all the money to pay for these public buildings? I notice that the revenue is falling off at the rate of a million a month.
Mr. PUGSLEY-My information is that we need not have any fear on that score; but if Mr. PUGSLEY.
by any accident the money is not available, the work will not go on.
Now the minister assures us that there Ms been no accident, simply the falling off in revenue that was anticipated. In July that same condition of affairs existed, and was pronounced by the Finance Minister as likely to continue for many months to come, so that the country has no reasonable explanation why the retrenchmet was made in December. Now, the attack of the opposition is directed, not so much against the fact that appropriations have been made, or that retrenchment has been adopted, it is against this state of affairs, that two or three months before the elections last year the minister proposed various appropriations of money throughout the country, and led the country to believe that these buildings would actually be erected, and by reason of those appropriations which he dangled before the electors, the government was able to carry the country. The minister assures us now that no intent existed in his mind, or on the part of the government, of carrying constituencies by those means. I wonder with what anguish of soul the minister must have witnessed his own candidates in the last election so utterly and so basely misrepresenting the motives of the government throughout this country when they appealed to the electors to vote for the candidates of the government because of these very appropriations that had been promised. Will the minister deny that either he or other ministers of the crown stood on platforms in this country and faced wide streamers requesting electors to vote for the Liberal candidate and a post office?


William Pugsley: I never heard of such a thing.


Arthur Meighen: The minister could not hear the streamers but he might see them.


William Pugsley: I never saw them.


Arthur Meighen: Will the minister deny that some of his colleagues in the cabinet did not speak in the presence of streamers of that kind, without protest and without correction and without any effort on their part to represent those pure motives of the government so innocently portrayed by the Minister of Public Works to-night. It may possibly be that the government has acted fairly between the parties in the matter of appropriations for buildings that have been gone on with and those which have not, but the minister knows and the country knows that the government very discretely allowed two months to elapse between the date of the elections and the date of this determination, so that they had two whole months within which to adjust the bounty of the government to met the exigencies arising from the vote of October

26. In the third place, I would ask the minister to submit to the committee a list of the advertisements that were published for the first time between the 26th of October and the present date.


William Pugsley: I shall be very glad to do so.


Arthur Meighen: Do I understand that the minister will not answer my other two propositions ?


William Pugsley: I have answered them.


Arthur Meighen: If the minister thinks that he has said anything which would lead one who desires frankness, to think that he has reconciled his reply to the hon. member for Peel on July 16, 1908, with his statement to the House to-night, I am afraid he is greatly mistaken. It will not satisfy me.


William Pugsley: I am very sorry.


Arthur Meighen: If the minister would be kind enough to come to my constituency next election I will show him it will not satisfy the people there.


William Pugsley: We have heard something similar to that before.


Arthur Meighen: The minister declines to answer my first two propositions.


William Pugsley: I don't want to be discourteous to the hon. gentleman but I have answered them.


Arthur Meighen: No one on this side of the House complains of the discourtesy of the minister.


William Pugsley: Do you mean to complain of my want of courtesy.


Arthur Meighen: Not at all, but we are
gradually coming to the conclusion that the minister is a very astute politician.


William Pugsley: Is that a compliment or otherwise.


Arthur Meighen: I understand that the minister will bring down a list of all the advertisements that were actually published after the 26th of October, with the amount opposite each one of the appropriations for this year.


William Pugsley: I shall be very glad to do so.
Kingston-Royal Military College-Additional accommodation, $57,000.


John Allister Currie: What is that for ?


William Pugsley: Quarters for the subordinate staff.


John Allister Currie: The departmental report of the minister says " Servants Quarters." Here, the government has built sixteen, five room cottages at a cost of $77,000. Is not that extravagant P 441


William Pugsley: Public tenders were called and the work was awarded to the lowest tender. I cannot believe that the price was excessive because the competition was quite keen. I think there are more than five rooms in each dwelling.


John Allister Currie: Your own departmental report says there are five rooms in each dwelling. These servants who are drawing from seventy-five cents to $1.25 per day are supplied with houses worth $5,000 or $6,000. There are a great many workingmen in this country who would like to be treated as well as that.


William Pugsley: I am free to say that I never was thoroughly satisfied that the expenditure for these buildings ought to have been so large as it is, but the plans and specifications were prepared before I became Minister of Public Works. The requisition was made upon us by the Militia Department for these quarters. They are not for what might be called servants but for the subordinate staff; the instructors and teachers in connection with the military college and school. The plans do provide for quite nice dwelling houses, and I am rather inclined to think that it would have been better had plans of a more simple design been prepared. I cannot but believe that the cost of these buildings built as they are is reasonable. I remember I had some hesitation in regard to the matter and I provided that half of them should be erected last year and half during the present (year. There is no way to get out of it; the buildings are completed and this amount is to pay the balance. It may be, as I have said, that if the design of the buildings had been more simple, a few thousand dollars might have been saved; but we have good apartments for the staff, the buildings are substantially constructed, and we have received good value for what we have paid.


John Allister Currie: If my hon. friend will allow me, I will read the description of these buildings in the report of the Department of Public Works, at page 22:
On January 15, 1908, a contract was entered into for the construction of two buildings, each 167 feet long by 33 feet broad, placed on two opposite sides of a square, facing outwards, with yards in rear; each series separated by a lane which bisects the square.
Each block consists of eight dwellings of two stories in brick with stone dressings and on a stone basement.
The division walls, the partitions in basement, the lining of basement walls and the chimneys are of brick; the partitions, floors and stairs of first and second stories and the roof are of wood; the floor of basement and verandahs in rear are of concrete, and the front entrance steps are of stone.
Each dwelling has, in basement, a cellar, a laundry and a store-room; on the ground floor a living room, a kitchen, an entrance hall, a vestibule, a stairway hall and a verandah,

and, on the first floor, two bed-rooms and bath-room.
These are the rooms of an ordinary everyday ,five-roomed or six-roomed cottage, which could have been built, I should judge, from my knowledge of building, for about $1,500 apiece; and yet we find that the minister has paid the sum of $55,000 last year and $57,000 this year for these paltry terraces' If there were modern fortifications hidden away in the basement, or something of that kind, we could understand the item; but no one who knows anything about the ordinary building trade would justify such an enormous expenditure for two small blocks of five-roomed cottages. I would like to have some more satisfactory explanation of this.


William Pugsley: All I can say to my hon. friend is that the requisition was made by the Militia Department and that plans were prepared by the chief architect's department. When my hon. friend says that these buildings could be erected at a cost of $1,500 for each dwelling, my answer is a perfect answer-that tenders were called for by public advertisement widely circulated in the various newspapers, that four tenders were received, and that the lowest was $77,939 and the highest $85,000, for sixteen dwellings in two terraces, eight dwellings in each.


Mr.   G.@: TxiYLOR. Why do you ask for $112,000 if the building^ cost only $77,000?


William Pugsley: That is for the buildings alone. Heating, boilers, electric wiring, fixtures, furnishings, sidewalks, &c., are in addition.


John Allister Currie: I think the hon. minister might gracefully accede to our request to let the item stand, and bring down the plans and tenders. I supposed, from the statement of the minister as to the cost of these buildings, that they must have been trimmed inside with marble, the walls frescoed, and supplied with electric chandeliers and all modern improvements; but now I find that the improvements are extra.


William Pugsley: I have no objection at all to bringing down the plans and specifications and the tenders for the information of the committee. The item may stand.


Mr. PRICE.: May I ask where these sixteen servants were housed before?


William Pugsley: They are members of the subordinate staff, part of the permanent force. They were in Toronto, and were brought from there to Kingston, as I am informed.


John Allister Currie: I live in Toronto and have a knowledge of military matters there, and I never heard anything of that kind in regard to the Toronto garrison.


John Allister Currie: 


William Pugsley: I think that was the statement of the Minister of Militia last year.


Robert Laird Borden: Why should the servants be in Toronto while those they were serving were in Kingston?


William Pugsley: I presume they must have been doing the work in Toronto.


George Gordon: I am glad to find the hon. minister so candid and frank in stating his policy, and I am glad that that policy is that public buildings should only be erected in places where the revenue is overflowing and where such facilities are most urgently required. The reason I say that is because in the district of Nipissing foundations have been laid for five of the greatest cities that we shall perhaps have in the Dominion of Canada and they conform in every respect to the condition stated by the minister in regard to both population and revenue. The first of these young cities is Sudbury. I need not mention its population, because it is increasing every day; but I might mention that it has a suburb with a population of over 3,000 inhabitants and one of the greatest nickel works in the world. Yet Sudbury has not a public building fit for any person to go into. A friend of mine remarked not long ago that he had gone into the post office and could not turn around to come out, but had to back out. The next-young city is Sturgeon Falls, the population of which is probably greater than that of any of the towns to which public buildings have been given to-night, with the exception of the cities. It has a very large water-power and immense paper mills and a fine agricultural country around it. Then, going up to Cobalt, we have there the foundation of one of the largest cities that Canada will perhaps ever see. If the hon. minister has not already been there, and would go up with me and see silver being practically shovelled into cars, he would I am sure come to the conclusion that a place which possesses such wealth should not be left with the insignificant little shanty it has for the people to do their public business in. Going north a little further, we have another young city called Haileybury, which is in the mining country and is doing an immense business, and where the revenue and population are up to the requirements of the minister. Right within three miles, we have the town of New Liskeard, which is also in the same class and in the midst of a very important agricultural country; and I should judge, from the policy the minister tells us he intends following with regard to public buildings, that he will see the propriety of giving to each of these places a suitable public building.


William Price: I understand the Minister of Public Works has stated that these

houses will cost $87,000. I notice that a vote was asked last year for $55,000 and that we are now asked to vote another $57,000, making $112,000 for these 16 houses or $7,000 a piece. Is that correct?


William Pugsley: That is the estimate now.


William Price: Who are to occupy them?


William Pugsley: The subordinate staff.


William Price: I presume that means the sergeants and officers' servants?


William Pugsley: Principally the instructors.


William Price: The sergeant-major and sergeants-how many?


William Pugsley: Sixteen.


William Price: And these subordinate instructors are to have houses built for them at a cost of $7,000 a piece. I call that disgraceful and ridiculous. I am surprised that the Minister of Public Works, after protesting this evening his desire to take the greatest care in expending the public money, should sanction an expenditure of this sort. I am a new member, this is my first session in parliament, and possibly I am more surprised than I will be later on that such utterly absurd and extravagant expenditure should be allowed by any minister of this government.
Kingston-Royal Military College-Barrack accommodation for stables, $15,600.


John Allister Currie: I would like to point out to the minister that Kingston is a fortress which has existed for years and has accommodation for these men. When the fortress was first built, accommodation was provided for some 3,000 or 4,000 men, and I cannot understand why we should require to spend $15,000 for stables. How many horses will have to be lodged in these stables?


William Pugsley: The building is 35 feet by 41 feet and two and a half stories high.


John Allister Currie: What is the one and a half story on the top floor for?


William Pugsley: I cannot say at present. Public tenders were invited and it is expected that $15,000 will be required to pay the balance due on the contract and also for the necessary fittings and furnishings.


John Allister Currie: How many horses will the stable accommodate?


William Pugsley: In the absence of the Minister of Militia, I cannot give the information.


John Allister Currie: The minister has had the plans and his staff should know. It is he who is asking for the money and not the Minister of Militia.


William Pugsley: As I said before recess, I am taking up the Ontario items without having the full details, as the gentleman who prepares them is not quite ready. By the indulgence of the committee I was allowed to go on. I am willing to allow this item to stand and the Kingston veterinary hospital and will later give all the information.	,
Leamington-Public Building, $23,000.


Arthur Cyril Boyce: When were representations made as to the necessity for this building?


William Pugsley: There was a petition in 1907 urging that there should be a public building there.
Markham-Public Building, $10,000.


Mr. WALLACE.: When were tenders called for?


William Pugsley: The date of the contract is May 20, 1908.


Thomas George Wallace: What was the cost of advertising? I see that $633 was the amount voted for advertising in the case at Glencoe.


William Pugsley: The total amount of legal expenditure, printing and advertising was $133.21.


Mr. WRIGHT.: What is the population of Markham?


William Pugsley: 5,000.


William Wright: Not at all, it is only about 1,000.


William Pugsley: The statement given me says 5,000. It is probably an error of the typewriter.


Thomas George Wallace: When were the plans prepared? And is the minister aware that in December, 1907, the plans for that public building were exhibited throughout that constituency by Mr. Archie Campbell, who then represented it? Did he do this by the authority of the Minister of Public Works or on his own responsibility? He had the plans of the post office in 1907.


William Pugsley: That might be.


Thomas George Wallace: Was that done as a bribe by Mr. Campbell and with the authority of the Minister of Public Works?


William Pugsley: I know nothing about it.


Thomas George Wallace: What is the total cost of this building?


William Pugsley: The original contract for the building was $6,900. Taking the cost of the site, the heating, fittings, including letter-boxes, sidewalks, &c., the total cost was between $15,000 and $16,000.


Thomas George Wallace: I have no objection to the expenditure, but only to the way it was

brought about, by Mr. Archie Campbell going into the constituency after he had resigned from this House.


William Pugsley: He may have been consulting some of the people


Thomas George Wallace: Was he authorized by the minister to go there in December, 1907, with a plan of the building?


William Pugsley: Never heard of it.


Richard Blain: Is there to be a clock in this post office?


William Pugsley: No.


Richard Blain: While we are on that question, I would direct the minister's attention to the fact that special men are employed to look after these clocks where they have been put in. For example, at Ingersoll we paid for the care of the clock for one year $25. In London, we pay $50. And it appears that we paid for the same gentleman who takes care of the clock, for cleaning and repairing, $100, besides the year's salary. In Hamilton, Thomas Lee is paid $65 per annum for the care of clock. Each of these buildings has a caretaker at a reasonable salary. As these are eight-day clocks, could not the caretaker wind them up without employing a special man at $50 or $60 a year?


William Pugsley: I think the hon. gentleman is misinformed as to the salaries of the caretakers. The salaries paid those who take care of these small buildings amount to $300 or $400, and nobody would say that was a large salary. We have found it necessary to make payments to persons to look after the clocks in these buildings, and the salaries range from $25 to $50, as a rule. The clocks require careful looking after.


John Allister Currie: Would it not be better to increase the salary of the caretaker and have him spend ten minutes every week in winding the clock?


William Pugsley: In some cases we do allow the caretaker an extra amount for his services. I have in mind now such a case. No doubt, it is desirable, where the caretaker is able to do it.


William Wright: Where a public building has been erected, I do not think it is asking too much of the municipality to bear the expense of taking care of it.


Mr. BEATTIE.: The minister is right. The earetaker, as a rule, is not competent to wind the clock. The clock has to be wound and cared for by a practical clockmaker. In London, since the man who had it in charge refused to wind it, the clock has been allowed to stop. There is no use in the government putting in good clocks and not looking after them, and to pay a man $50 is not too much for that service. I have listened to a good deal of talk on this Mr. WALLACE.
side of the House this evening. Part of it was with regard to Glencoe. Glencoe is in Middlesex county, which is one of the very best counties in this country, and it is the one I have the honour to live in. One hon. member said that Glencoe had only one railway. I did not want to contradict him, but, as a matter of fact, they have the Grand Trunk, the Wabash and also the Canadian Pacific Railway. Glencoe is a smart little town in one of the best districts in Ontario. Glencoe is deserving of a post office. And I understand it is to have the military building also in connection?


William Pugsley: Yes.


Richard Blain: The hon. member who made reference to Glencoe is not in his seat. But the hon. member for London (Mr. Beattie) must not forget that the minister has already stated that the policy of the government is, in many towns, to employ the caretaker and increase his salary by a few dollars.


William Pugsley: I said that was done in a few cases ^rhere the caretaker was competent.


Richard Blain: The hon. gentleman said it required a competent clockmaker.


William Pugsley: That is the kind of man we do employ.


Richard Blain: As to the salaries of caretakers, I do not wish to say they are excessive, but, in the average town of 3,000 or
4,000	population, the caretaker of the public building is paid $500 a year. In my own town, for instance, the salary is $500, with free house, free heating, free lighting and some other things I could mention. And the caretaker took an active part in the ejections.


William Pugsley: How large a town is it?


Richard Blain: About 4,000 people.


William Pugsley: In the smaller towns, the salary is from $300 to $400.


Richard Blain: I have a list before me, and if the hon. gentleman will look at it, he will see that the figures are correct. I am directing attention to this one case. The caretaker of this place is an active politician, so active that he drove around and collected the ballot-boxes in my county after the election was over.


Mr. A. H. CLARKE.: Did not they store the boxes in. the post office?


Richard Blain: They occupied a room in the post office-that is correct. But that has nothing to do with the caretaker. I did not assume that his duties were to drive to every polling subdivision in the county to gather up the ballot-boxes. If it is so, we would all like to know it. The policy of the government has been stated to be, in accordance with the resolution of this

House, that these employees may vote, but are not to take an active part in the elections. May I ask the minister, on the clock question, whether it is the policy of the government to engage competent watchmakers to wind up these clocks?


William Pugsley: Yes, that is the policy.
I had in my mind the case of Moncton, where the caretaker has been engaged to do that work. I think there are other places where the same thing is done. But the general rule is to employ practical jewellers.
Ottawa-Building for testing of fuel by Department of Mines, $15,000.


William Pugsley: This building is for the purpose of testing the commercial value of peat for producing gas. The machinery is being brought from the old country, and is being installed under the direction of Dr. Haanel. A requisition has been made upon my department by the Minister of Mines for the erection of this building. We have purchased a site, and we now ask for $15,000 for the purpose of completing the building. Of this $15,000, $8,000 is a revote.


Mr. PERLEY.: Where is the building to be put?


William Pugsley: We have bought a lot of land, about half an acre, on Concession street, in the southwestern part of the city.


George Halsey Perley: I suppose that when a demand is made on the Department of Public Works by another department the minister has nothing to say, but he must grant the request.


William Pugsley: I could refuse, as Minister of Public Works, but the hon. gentleman will see that it is my duty to pay the greatest respect to a requisition from another department. I wish to reply to the hon. member for Peel (Mr. Blain) with regard to these caretakers. In Amherst we pay $400, in Antigonish $400, in Annapolis 400, in Arichat $150, in Baddeck $250, in Canso, $350, in Dartmouth, $250. Another is $400, another $50.


Richard Blain: Are there any higher than $400?


William Pugsley: Some are as high as $500, in two or three instances they run up to $700.


Richard Blain: Where a salary of $400 is paid, does that include a house, heating and lighting?


William Pugsley: Yes.


George Halsey Perley: How much does the minister expect this new building for testing peat will cost, including everything?


William Pugsley: We expect $15,000 will cover the entire expense, not including machinery.


John Allister Currie: I was going to suggest to the minister to let this item stand.
I would like to discuss it at some length, but the hour is getting late, and I have to leave at 11 o'clock. I wanted to enter my protest against this expenditure being made at all, because it is a well known fact that in Europe people have been using peat successfully as fuel, and to produce gas, for the last twenty years. There is nothing new at all in this suggestion of the director of the Bureau of Mines. There is no need for this government to be paying out good money to repeat experiments that have been going on in Europe for years.
I would like to have information as to what the government wishes to do in this matter, how they are going to expend the money; I would like full details.


William Pugsley: This question could more properly be discussed when we come to the estimates of the Minister of Mines The hon. gentleman will then be afforded full opportunity.


John Allister Currie: There are 500 gas producing plants now at work in Canada.
I do not wish to let the item go through without full discussion. I think the government should strike that item out.


Mr PUGSLEY.: We are committed to this.' We have bought the property, and we must ask the item to pass.


Mr PERLEY.: It seems to me my hon. friend from Simcoe (Mr. Currie) has a perfect right to ask that this item be allowed to stand if he objects to it, and wishes to discuss it later. Surely that is what this committee is for.


William Pugsley: The hon. gentleman can go right on and discuss it now if he wishes.


John Allister Currie: I am asking for some information.


George Halsey Perley: If the hon. gentleman requires information about this matter, surely he is entitled to it.


William Pugsley: Parliament has already expressed its approval of this enterprise last session, without a dissenting voice. The land has actually been purchased, the machinery has actually been purchased, and I presume it is now in Ottawa ready to be placed in the building. Therefore my hon. friend must see that no matter what might be his persuasive powers, I would have to ask this committee to pass the vote because we are already committed to it. I would again suggest to my hon. friend that he can discuss this question when the estimates of the Minister of Mines are taken up, or he can discuss it this evening.


Richard Blain: My hon. friend from North Simcoe (Mr. Currie) asks for some information that the minister has not in his possession at the moment. I would like to know who is responsible for that.


William Pugsley: I do not want to he unreasonable about it. How long would my hon. friend like the item to stand?


John Allister Currie: Until Monday.


William Pugsley: I am willing.


John Allister Currie: I intended asking many questions about gas producer tanks and other things that the minister might not understand and it would be an advantage if he had all the information.


Mr. TODD.: This $15,000 is for use in the testing of a system of gas peat production. The question of obtaining a cheap fuel has been a live issue in this country, especially in Ontario, for many years. Many attempts have been made to manufacture peat into fuel, and it was discovered that a German inventor has the best producer gas plant for using peat known. This government, I am glad to say, has already purchased one of these producers and this $15,000 is to erect a building for it._ The machinery is all ready, and I think this will be one of the best investments that Canada has made in many years. I feel that in a year or two through these experiments we will find the means of obtaining cheap power and fuel in this northern country where we have no coal.


Joseph Elijah Armstrong: 
William Pugsley: This is for fittings for the departmental oflices. It is about the same as for other years. Latterly we are endeavouring to put in steel fittings which are fire proof and very much safer. This appropriation is likely to be continued until the last trumpet shall sound.


George Halsey Perley: The fittings appear to be nearly all supplied by one or two companies. Are tenders called?


William Pugsley: 


William Pugsley: Only two firms in Canada manufacture these goods. The chief architect made inquiry at Washington, where they have adopted these very generally, and acquainted himself with the price there, and from time to time tenders have been invited from these two companies for the different fittings. Prices have been got from them and they have been accepted where the chief architect from his experience thought they were fair and reasonable.
-Ottawa-Lepartmental Buildings-Improvements in lavatories, plumbing, &c., $10,000.


George Halsey Perley: Why is not. this in item 138?


William Pugsley: This is rather special work.
Simcoe-Public Buildings, $20,000.


Mr. CROTHERS.: The hon. member for Norfolk (Mr. A. McCall )has asked me to inquire as to the cost of the site and building here.


William Pugsley: The site cost $2,050. The whole lot is 80.3 feet by 102. It seems very moderate. The estimated total cost is about $38,000.


Thomas Wilson Crothers: Is it intended to erect a tower and put a clock in it?


William Pugsley: I think not; it is not intended to do so.


Thomas Wilson Crothers: Why is it that the people in Nova Scotia in these little places, Amherst, Bridgewater, Guysborough and New Glasgow, all require towers and clocks, and in Ontario they do not seem to require any?


William Pugsley: In some towns they want one class of buildings, in others a different class. The people of Simcoe desired a-building of a classic design; it is one story building with cut stone trimmings, and they did not ask for a tower.


Thomas Wilson Crothers: Is it the policy of the minister to erect these buildings in whatever style some people in a town suggest.


William Pugsley: As a rule we confer with the member representing the constituency and with the leading men who take sufficient interest to come to Ottawa to make representations. We are glad to receive suggestions from any respectable citizen. Of course where we have a large lot and the building can be set back from the street it may be desirable to adopt a different design from that which would be adopted if the building were built close up to the sidewalk. All these things must be taken into consideration.


Thomas Wilson Crothers: I dont see why you require a clock and a tower in one place and why you do not in another


William Pugsley: Do you ask for a clock on this building ?


Thomas Wilson Crothers: Can you tell me what person in Simcoe suggested there should not be a tower and clock on this building?


William Pugsley: Do you complain there is no clock ?


Thomas Wilson Crothers: I am asking you the question.


William Pugsley: I don't know.
Whitby-Public Buildings, $28,000.


Richard Blain: How much did the site cost ?


William Pugsley: 


Richard Blain: Is not that a high price for a lot in a small town like Whitby ?


William Pugsley: The lot is exceedingly well situated with a frontage on one street of sixty-five feet and on another of 150 feet. The inspector made a very careful inquiry and interviewed citizens on both sides of politics and his information was that $5,000 was a fair and reasonable price.


William Wright: What will be the total cost of the Whitby building?


William Pugsley: $33,000 estimated.


Richard Blain: Will the minister bring down a list of the newspapers in which an advertisement was inserted for the buildings in the towns of Welland, Whitby, and Simcoe, with the amount paid to each paper ?


William Pugsley: I shall.


Richard Blain: Would he also state what are the politics of each paper.


William Pugsley: I will leave that for you to judge.
Some resolutions reported.



[Stage Direction]
Part O of the Auditor General's Report. -Mr. Fielding.	.
On motion of Mr. Fielding, House adjourned at 10.45 p.m.
[Stage Direction]
Monday, February 22, 1909.