OF THE DEBATES OF THE HOUSE OF COMMONS OP THE DOMINION OF CANADA FIRST SESSION-ELEVENTH PARLIAMENT 9 EDWARD VII., 1909 VOL XCI COMPRISING THE PERIOD P.ROM THE SIXTH DAT OF APRIL TO THE SIXTH EAT OF MAT, INCLUSIVE.


[Stage Direction]
House of Commons Hebates

[Stage Direction]
Tuesday, April 6, 1909.

[Stage Direction]
Bill (No. 123) respecting a certain Letter Patent of the American Barlock Company.-Mr. Macdonell.
Bill (No. 124) respecting the Hudson Bay and Western Railway Company.-Mr. Miller.
Bill (No. 125) respecting the Algoma Central and Hudson Bay Railway Company.-Mr. Miller.
Bill (No. 126) concernant le Chemin de fer de Colonisation de Joliette et du lac Manuan.-Mr. Dubeau.

[Stage Direction]
Rt. Hon. Sir WILFRID LAUR1ER (Prime Minister) moved that from and after this day, the 6th of April, to the end of the session, government Orders have precedence on Monday immediately after questions to be put by members.
Mr. FOSTER.: I suppose that does not cut out members' opportunity to get at private Bills?


Sir WILFRID LAURIER.: Private Bills 'remain first order.


[Stage Direction]
Motion agreed to.

Hon.   CHAS@: MURPHY (Secretary of State) presented the return to an order of the House, showing amount of money paid to the Logberg Printing Company. He said:	This return is the one that should
have been presented on March 26 last. The one then presented was styled ' supplementary.' The one now presented includes the amount of the return presented on March 26 last.



PRIVILEGE-PURCHASES IN MARINE AND FISHERIES DEPARTMENT.

Hon. L. P. BRODEUR (Minister of Marine and Fisheries).: Before the orders of 128
the day are called, I wish to raise a question of privilege. The hon. member for Leeds (Mr. Taylor), in speaking the other day, stated that the Prime Minister had allowed me to put my hand in the public chest and spend money for the purchase of one ladies' cloak, seven ladies' blouses and eight ladies' costumes. I was greatly surprised the other day when I heard my hon. friend the member for Leeds (Mr. Taylor) use the following language in a speech which he was then making in the House. I will quote from this speech and I will put before the House the evidence which I have before me in order that we may ascertain whether the charge which has been made against me is well founded or not. The hon. member, as reported at page 4019 of ' Hansard,' spoke as follows:-
I want to ask the minister how much mad this expenditure took out of the ship channel? The money is charged to the ship channel. He will find these accounts in the Auditor General's Report at page 0-163:
7 ladies blouses at $13.


Some hon. MEMBERS: Oh, oh.


Mr. GEO. TAYLOR.: I am surprised that the right hon. Prime Minister can laugh at that. He is the trustee of the people of this country, and yet he will allow one of his ministers to put his hand in the public chest and
spend money like this.,
1 ladies cloak	$25
8 ladies costumes, each	 30
The total of these accounts is $744. *#*###*


An hon. MEMBER.: Who were the ladies?


George Taylor: I do not know.
Then he goes on at page 4020:
The Prime Minister laughed so hard that he did not hear what I read to-night, but I ask why we bought eight ladies costumes at $30 each which are charged to the ship channel?
If I remember aright the hon. member was then quoting the list of seven ladies blouses, one ladies cloak and eight ladies costumes from the Auditor General's Report. There is an item in the Auditor General's Report amounting to $744.50 and corresponding exactly with the amount which was mentioned by the hon. gentleman in his speech. The item is a3 follows :



De Tonnancour, L. C., Monl: caps, 28; blouses, 6 at $13.
Not ladies' blouses but purely and simply.
1 cloak at $25.
Not one ladies cloak as he said.
Costumes,

Not ladies' costumes, but costumes.
-8 at $30; overcoats, 3 at $32, 9 at $25; pants and sweaters, 5 at $10.50.
There is no reference, as you see, to ladies costumes, to ladies blouses. I did not have the Auditor General's Report with me at the time. I suppose my hon. friend will apologize for me to the officers of my department whom I happened to meet the morning after the hon. gentleman made his remarks and with whom I remonstrated with regard to the purchase of these ladies' blouses. Of course, when I saw the hon. gentleman reading from a book I thought he was reading correctly, I took his word for it and I remonstrated with the officers. What did I find, as the officers immediately informed me, that this was absolutely erroneous. There were no ladies' costumes, no ladies' blouses, no anything purchased for ladies. It was all a part of the imagination of my hon. friend. In order to complete the record I will lay before the House the accounts themselves. They are in French and I -will read them in French.


Mr. J. D. REID.: Read them in English too.


Louis-Philippe Brodeur: They are as follows:
Montreal, 12 aofit 1907.


De L.   C.@: de Tonnancour.
1907.
Aoiit	12-9	pardessus a $25	$225	00"	12-8	costumes a $30	
240	00'	12-5 pants and sweaters a $10.50. 52 50"	casquettes	
24	50"	12-1	pardessus	
32	00"	12-1	pardessus	
32	00"	12-1	pardessus	
32	00"	12-1	manteau	
25	00"	12-1	coiffure	
3	50"	12-6	blouses	
78	00Total	$744 50
Again there is no reference at all in these accounts to ladies' costumes, or ladies' blouses or ladies dresses. The translation
which was made by the Auditor-General was not absolutely correct but I will not say that it was incorrect. At all events what I take exception to is the fact that my hon. friend has thought fit to charge me before the House with having purchased ladies' dresses, when, in the book from which he was then reading, these words were not included. I hope my hon. friend will take the first oportunity of withdraw-Mr. BRODEUR .
ing the charge which he has made against me and if he does so it will prevent him and some of his friends from going into the country and trying to state that the Minister of Marine and Fisheries has been purchasing ladies' dresses. I may say for the information of my hon. friend that these blouses, costumes, overcoats and cloaks were for the use of the sailors and that we have been in the habit of purchasing these articles for years. I hope my hon. friend will be kind enough! to withdraw what he said.


George Taylor: Mr. Speaker, I was somewhat surprised this morning when I received the following letter:
Office of the Minister of Marine and Fisheries, Ottawa, 6th April, 1909.
Geo. Taylor, Esq., M.P.,
House of Commons,
Ottawa.
Dear Mr. Taylor,-I beg to notify you that I intend to bring before the House to-day as a question of privilege, when the orders of the day are called, the charge that you made against me in your speech the other day to the effect that I had put my hand in the public chest for the purchase of a lady's cloak and ladies' costumes.
Believe me,
Yours sincerely,
(Sgd.) L. P. BRODEUR.
In speaking the other day I made use of the following language:
I want to ask the minister how much mud this expenditure took out of the ship channel? The money is charged to the ship channel. He will find these accounts in the Auditor General's Report at page O-163:
7 ladies blouses at $13.


Some hon. MEMBERS: Oh, oh.


George Taylor: I am surprised that the right hon. Prime Minister can laugh at that. He is the trustee of the people of this country, and yet he will allow one of his ministers to put his hand in the public chest and spend money like this.
I said nothing personal against the minister for spending money for his own use or for the country's use. I had been talking about the sailors being supplied with three dress suits at $40 apiece.


Some hon. MEMBERS: Oh, oh.


Mr. SPEAKER.: Order.


George Taylor: If the minister does not want this debate to be continued he will call off the bull dogs that set up a row every time I talk.


James Kirkpatrick Kerr: Order, the hon. gentleman will have to withdraw that expression.


George Taylor: I will withdraw the word 'bull dogs' and say their supporters. They are acting like that


James Kirkpatrick Kerr: Order.


George Taylor: I want to be courteous to the House and to the hon. gentlemen and I want to be treated that way, Mr. Speaker. If hon. gentlemen want to get up a row the same asi they got up on Friday night we can have it out.


Mr. FISHER.: I call the hon. gentleman to order. He is using threats towards members of the House.


Some hon. MEMBERS: Order.


James Kirkpatrick Kerr: No hon. gentleman has the right to use threatening language in any form whatever.


George Taylor: There is no threat about that.


Sydney Arthur Fisher: I ask your ruling, Mr. Speaker. The hon. gentleman has made a threat to this House.


James Kirkpatrick Kerr: Order.


George Taylor: I will withdraw it then. I always obey the Chair.
1 ladies' cloak	$25
8 ladies' costumes, each	 80
The total of these accounts-
I did not want to read all the items as I had given the page of the Auditor-General's Report

-is $744.
The first item is caps, and the item does not say whether they are ladies or gentlemen's caps, but any one would assume that they are caps for the sailors. The next item is seven ladies blouses


Some hon. MEMBERS: Oh, no.


George Taylor: The word ' ladies ' does not appear in the Auditor General's Report.


Some hon. MEMBERS: Hear, hear.


George Taylor: But, as everybody knows, the Auditor General condenses his report, and, as any one familiar with the trade knows, as every merchant in. this House knows-I have been in the mercantile trade 25 years and will make this statement-if the minister himself or any one will walk into Bryson and Graham's store or Ross', or Murphy's and ask to see blouses, he will be told to take the elevator and go to the first floor.


Sydney Arthur Fisher: Too thin.


George Taylor: The Minister of Agriculture knows nothing about it. He has never been in the mercantile trade. But I will leave it to any merchant on any side of the House, that if a person inquires for a blouse, he means a lady's blouse and nothing else. And when he inquires for a cloak, he means a lady's cloak, for that is a trade 128J
term. When he inquires for a costume, they will show him to the ladies' department. If these men gave theatrical performances and required costumes, they would have to specify actors' or actresses' costumes, but the term ' costume ' is taken in the trade to mean ladies' costume, so that I was justified in using the word ' ladies.' A couple of years ago when I was discussing the purchase of some dickeys for the sailors, my hon. friend came back the second time and explained what the French meaning of the word ' dickey ' is. He said:
My hon. friend found fault also with the cost of dickeys. Does he know exactly what a dickey is? I am afraid he does not. I may give him this definition: it is the correct term for the white flannel front that is part of the uniform of a sailor.
I tell the hon. minister that that is not correct.


Louis-Philippe Brodeur: I understood my hon. friend to have withdrawn the word ' ladies ' and to have said that it was not in the Auditor General's Report from which he read.


George Taylor: I do not think the minister is very anxious to expedite the proceedings of the session or he would not have brought up these trifles before the House, but as he has done so, I am entitled to give an explanation, and my explanation is the quotation I have read from the ' Hansard ' of 1908, page 1082. When the minister contradicted me then, I did not think it worth while to take up the time of the House by replying. A dickey is a false shirt front made of linen, yet the minister said it is part of a sailor's uniform. I do not know that his explanation to-day is any better, and I think the best thing we could do would be to have the accounts produced at the next meeting of the Public Accounts Committee and call witnesses and find out by whom these blouses were purchased. But so far as regards the use of the word ' ladies,' that does not appear in the Auditor General's Report.


Some hon. MEMBERS: Hear, hear.


George Taylor: But I used the word to show what the goods were according to the usage of the trade. Then my hon. friend said that he asked his officers and they told him that they never bought a dollar's worth for ladies. Well, I can go through the Public Accounts and find that any quantity of stuff was purchased for ladies and name the items.


An hon. MEMBER.: For the * Arctic '?


George Taylor: No, not ladies' hats on the ' Arctic,' but on the steamers and in the channel. In these are goods charged for the ladies. The hon. minister has laid down a challenge, and I will produce the items of ladies' goods from the Auditor General's Report. Then I will ask the hon. minister

to apologize to the House for challenging my accuracy with regard to items which I quote from the Auditor General's Report. He could have been much better employed than to bringing up this matter before the House.


Louis-Philippe Brodeur: I invite my hon. friend to make all the investigations he wants and he will find that the statement he made is not correct. He will find that all those goods were purchased for the sailors.


George Taylor: I say it is a waste of money. We might as well throw the money into the river as buy 8 blouses at $30 each for use of men working on the steamers and dredges in the ship canals. Then cloaks at $30. But cloaks are only worn by ladies. You do not buy cloaks for men working on dredges. I am surprised that the minister can get up and justify these items as a proper expenditure of the people's money.



CIVIL SERVICE EXAMINERS.

George Eulas Foster: After this grave and delicate matter has been disposed of, I would like to ask if the right hon. the Prime Minister has decided whether or not it is the duty of the government to bring down according to law, the report of the Civil Service examiners. I have asked three or four times for that report and it has not yet come down. In the meantime, I have inquiries from many sources as to the rules and regulations, which I cannot answer because nothing has yet been brought down.


Wilfrid Laurier: There has been some misapprehension between the Civil Service Commissioners and the Secretary of State. I shall try to give my hon. friend an answer to-morrow.



PORT STANLEY PIER.

Mr. T. W. CROTHERS (West Elgin).: I wish to call the attention of the government, and especially the Minister of Public Works, to information I have from a responsible citizen of the village of Port Stanley, to the effect that the wages of the labourers employed on the government pier there are three months in arrears. I had occasion to draw the attention of the Minister of Public Works earlier in the session to the condition of affairs there. I want to do him the justice to say that he very promptly saw that the wages then in arrears were paid. But if the information I have to-day is correct, the wages are again in arrears to the extent of three months, and I would ask the hon. Minister if it be the policy of his department that we should give him a reminder that these wages are due. If that be the policy of the department, I will Mr. G. TAYLOR.
make a note of it in my diary, and will see that he is reminded every month. If the information is correct-I have it from a responsible man living in the village-I would ask the Minister of Public Works if he would see that these men are paid. It is too bad that labouring men should have to go without their wages for three months especially in the winter season.


Mr. PUGSLEY.: I have received no information in regard to the wages of labourers being in arrears at Port Stanley, but I
will look into the matter.



SUPPLY-CONCURRENCE.

[Stage Direction]
House proceeded to consider resolutions reported from Committee of Supply.	_
Hon. J. HAGGART.: Mr. Speaker, I rise to a point of order. It is an innovation simply to read the number of each item and the amount. It is a rule of the House that the item itself must be read.


Mr. FIELDING.: My hon. friend is mistaken as respects recent years. In my experience the practice has been precisely as at present. The presumption is that if any hon. gentlemen wishes to speak on any particular item, he will take note of it, and deal with it when it comes.
Mr. ,7. D. REID. I have been trying to find in the estimates the different items, and I cannot tell what we are passing. I see no way of finding the items.


William Stevens Fielding: There is no real difficulty, although it involves a little trouble. If the hon. gentleman will consult the Votes and Proceedings for each day on which the committee sat he will find the items.


John Graham Haggart: The rule of the House is that the item shall be read, although that rule has not been adhered to.


James Kirkpatrick Kerr: I am informed by the two previous Speakers that the custom with them was to read the amount. If the hon. gentleman insists on having the item read he is entitled to it.


George Eulas Foster: The rule of the House is that in order to inform the House the subject matter shall be read out as well as the amount. That system, however, was found to entail great waste of time and in order to facilitate the transaction of business the practice has been adopted of simply reading the number of the resolution and the amounts of the several items. I would be disposed to adhere to that rule, and hon. members would understand what was under discussion by referring to the Votes and Proceedings.
Kingston Roy pi Military College, additional accommodation, $57,000.


William Pugsley: I move that this item of $57,000 be reduced to $37,000.


[Stage Direction]
Motion agreed to.
Mr. EDWARDS.: I beg to call the hon. gentleman's attention to the item of $15,000 for a veterinary hospital which, I understand, was to be struck out.


William Pugsley: I think that was struck out in the committee.


William Cameron Edwards: It was voted in the committee and the minister said he would strike it out on concurrence.


William Pugsley: I thank my hon. friend (Mr. Edwards) for calling my attention to it. My recollection was that it had been considered in committee and had been struck out. But I will move now that the item be struck out. *


[Stage Direction]
Motion agreed to, item as amended concurred in.
Bradbury,	Magrath,
Broder,	Marshall,
Burrell,	Middlebro,
Chisholm (Huron),	Nantel,
Clare,	Northrup,
Crothers,	Paquet,
Currie (Simcoe),	Reid (Grenville),
Daniel,	Russell,
Doherty,	Sohaffner,
Donnelly,	Sex smith,
Edwards,	Smyth,
Elson,	Sproule,
Foster,	Stanfield,
Goodeve,	Stewart,
Gordon (Nipissing),	Taylor (Leeds),
Haggart (Lanark),	Thoburn,
Henderson,	Thornton,
Herron,	White (Renfrew),
Hughes,	Wilson (Lennox and
Kidd,	Addington),
Lake,	Wright.-52.
Lalor,	
NAYS:
Messieurs
Public Works-Chargeable to income-Harbours and rivers-New Brunswick-Richibuc-to cape-Breakwater wharf, $10,000.
William Pugsley: I move that this item be reduced from $10,000 to $5,000. The reason is that $5,000 is all we shall be able to spend to advantage this year.


[Stage Direction]
Motion agreed to. Item as amended concurred in.
Department of Militia and Defence-Salaries, $111,690.
Hon.   S@: I move in amendment that the words lie added ' including the salary of C. L. Panet, $2,600.' There is no increase involved. The reason of the amendment is that the Auditor General will not pay the amount unless the name is mentioned. There is no provision under the new Civil Service law for private secretaries. This amount is precisely what has been paid, but it includes an amount of $500 for private secretary. I want these words added so that the salary can be paid.


[Stage Direction]
Amendment agreed to.
Trent canal-construction, $1,000,000.
Mr.  J. A.@: CURRIE moved that the item of $1,000,000 for Trent canal construction be reduced by whatever amount is contained therein for expenditure upon the Newmarket canal.
House divided on. amendment.
Beauparlant,
Belaud,
Bickerdike,
Black,
Borden (Sir Fred'k.), Boyer,
Brodeur,
Brown,
Calvert,
Carrier,
Carvell,
Cash,
Chisholm (Antigonish), Chisholm (Inverness), Conmee,
Currie (Prince Edw.), Demers,
Dubeau,
Ethier,
Fielding,
Fisher,
Fortier,
Fowke,
Gauvrean,
Girard,
Gladu,
Gordon (Kent), Hodgins,
Hunt,
Lanctot (Laprairie-Napierville), Lapointe,
Laurier (Sir Wilfrid), Lavergne,
Law,
Lemieux,
Loggie,
Lovell,
MaoNutt,
McCoig,
McCraney,
McIntyre (Perth), McIntyre (Strathcona), McLean (Huron), Major,
Maroile (Bagot), Martin (Montreal, St. Mary's),
Martin (Regina), Martin (Wellington), Meigs,
Michaud,
Miller,
Molloy,
Murphy,
Nesbitt,
Neely,
Parent,
Paterson,
Proulx,
Pugsley,
Rankin,
Rivet,
Ross,
Roy (Montmagny), Rutan,
Savoie,
Schell,
Sealey,
Seguin,
Smith (Middlesex), Stratton,
Sutherland,
Talbot,
Tobin,
Tolmie,
Turcotte (Nicolet), Turgeon,
Turriff,
Verville,
Warburton,
Wilson (Laval).-80.
YEAS:
Messieurs
Ames,
Barnard,
Barr,
Blain,
Boyce,
Lancaster,
Lortie,
Macdonell,
McCall,
McCarthy,
Ministerial.
McDonald,
Kyte,
McAllister, McLean (N.S.), Pickup, Geoflrion,
PAIRS:
Opposition.
Madden,
Lennox,
Sharpe (Lisgar), Rhodes,
J ameson,
Crosby,

McLean (Sunbury	Price,
and Queens),	
Prouse,	Staples,
White (Alt.),	Campbell,
Smith (B.C.),	Cowan,
German,	Arthurs,
Guthrie,	W allace,
Harty,	Fraser,
Templeman,	Taylor i(B.C.),
Pardee,	Sharpe (Ont.),
Aylesworth	Haggart (Winnipeg),
Smith (Stormont),	Blondin,
Knowles,	Meighen,
Graham,	R. L. Borden,
Emmerson,	Maclean (York),
Sifton,	Roche,
Oliver,	Osier,
Clark (Red Deer),	Monk
McColl (North-	Barker,
umherland),	
Clarke,	Porter,
McGiverin	Armstrong,
MoMillan,	I'erley,
LeBlanc,	Crocket,
Sinclair,	Worthington,
Harris, fi	Bristol,
Devlin,	Forget,
Chew,	Owen,
Low,	Lewis,
Allen,	Beattie,
Amendment (Mr. J. A. Currie) negatived and item concurred in.



SUPPLY BILL.

[Stage Direction]
On motion of Mr. Fielding, House went into Committee of Ways and Means.
['It is in print now, and I suppose the printing for members can be expedited.']
William Stevens Fielding: The officials of the House, in accordance with the usual practice, have collected all the items which have been passed through their various stages in Committee of Supply and in concurrence, and, having made the necessary additions, have prepared resolutions to give effect to the wish of the Committee of Supply. I therefore beg to move:
Resolved, that towards making good the Supply granted to His Majesty on account of certain expenses of the public service for the financial year ending the 31st of March, 1909, tie sum of $3,371,935.82 be granted out of the Consolidated Revenue Fund of Canada.


[Stage Direction]
Motion agreed to.
['The officials of the House, in accordance with the usual practice, have collected all the items which have been passed through their various stages in Committee of Supply and in concurrence, and, having made the necessary additions, have prepared resolutions to give effect to the wish of the Committee of Supply. I therefore beg to move:\nResolved, that towards making good the Supply granted to His Majesty on account of certain expenses of the public service for the financial year ending the 31st of March, 1909, tie sum of $3,371,935.82 be granted out of the Consolidated Revenue Fund of Canada.']
William Stevens Fielding: I beg to move further:
Resolved, that towards making good the Supply granted to His Majesty on account of certain expenses of the public service for the financial year ending the 31st of March, 1910, the sum of $15,772,253.17 be granted out of the Consolidated Revenue Fund of Canada.


[Stage Direction]
Motion agreed to.
Resolutions reported, read the first and second time, and agreed to.
Mr. FIELDING moved for leave to introduce Bill (No. 117), for granting to His Majesty certain sums of money for the public service for the financial years ending respectively March 31, 1909, and March 31, 1910. He said: This Bill has been prepared by the officials of the House, following Mr. J. A. CURRIE.
the usual course, and I think the House may fairly assume that it is correct, and pass it through the various stages.
Motion agreed to, Bill read the first time and the second time, considered in committee, reported, read the third time and passed.

[Stage Direction]
House resumed the adjourned debate on the proposed resolutions of Mr. Fielding, to authorize the Governor in Council to advance by way of loan to the Grand Trunk Pacific Railway Company a sum not exceeding $10,000,000.
Mr. H. B. AMES (St. Antoine, Montreal).: On Tuesday last the Finance Minister, on behalf of the government, presented to this House for consideration and discussion a resolution, the opening words of which are as follows:
That it is expedient to authorize the Governor in Council to advance by way of loan to the Grand Trunk Pacific Railway Company a sum not exceeding ten million dollars for the purpose of aiding the company in the completion of the construction of the prairie section of the western division of the National Transcontinental Railway,
It is not necessary that I should read the whole resolution inasmuch as it will form the substance of the discussion upon which we are again entering. Although it may be perhaps unnecessary still I desire very briefly to review the historical aspect of this case. In 1903 the government came to this House and to the country with a proposition for building a transcontinental railway from Moncton to Prince Rupert. This railroad was divided into two portions, the eastern and the western division. The eastern division was to be built by the government and leased; that proposition is not to-day under discussion although it would form an ample subject for discussion in this House and on some future occasion we will doubtless deal with it. The western section is the one which is especially dealt with by this resolution, and I intend to confine my remarks to that portion of this great undertaking. The western division, as is well known, is divided into two parts, the prairie section, extending from Winnipeg to Wolfe creek, 916 miles, and the mountain section, extending from Wolfe creek to Prince Rupert, 836 miles. The terms under which these two sections are to be constructed, although similar are not identical. The prairie section, which was considered to be the easier portion as regards construction was to be built by the railroad company, the Grand Trunk Pacific. They were in the original proposition to be given the proceeds of $13,000 worth of bonds pere mile. This, however, as we know, was altered in 1904 so that the company should receive in net cash $13,000 per mile towards the construe-

tion of this prairie section. Six years have passed away and matters have changed greatly; to-day we have a resolution affirming that it is expedient that this company which was to have constructed the prairie section without any further assistance than a guarantee to the extent of $13,000 per mile, is coming to us and asking for additional help to the extent of $10,000,000, and this resolution, instead of opening with the formula that it is expedient, should, I think, read that it has become a regrettable necessity to authorize the Governor in Council to advance by way of loan this $10,000,000 It has been incorrectly asserted by some speakers in the House that the opposition have assumed and maintain a position of unequivocal hostility to this loan. That is what the hon. member for West Lamb-ton (Mr. Pardee) endeavoured to put into the mouths of opposition members, and it was with those sentiments that he endeavoured to credit us. We must be permitted,
I think, to make our own expression of our position in this transaction. Our attitude is that we are not opposed to the loan of the $10,000,000 if the claim be placed upon the proper basis, but that we must, as His Majesty's loyal opposition, have the right, nay it is our duty before granting our consent to such an unexpected and unusual proposition that we should be furnished with the fullest possible information as to how this regrettable miscalculation occurred, that we should be assured that the company has done its utmost before coming to the government for assistance, that we should be satisfied that the security which is offered is the very best that is obtainable, and the best that the Finance Minister, the guardian of this country, has been able to secure from these borrowers. Finally, I think, it is our duty to suggest, when the proper stage arrives, some amendments by which the Bill can be improved, bearing in mind the fact that we desire to prevent a repetition of the experience we are at present going through. No evidence has yet been adduced that the government has been at all severe upon this company, that they have been holding back when sanction was asked for this loan. It therefore behooves the opposition to provide the safeguards necessary to protect the public interest.
Were the matter not so serious it would certainly appear almost ludicrous to make "a comparison between the promises that this government made in 1903 and the events as they have turned out. I venture to say that no body of men in Canada have ever made such an utterly hopeless miscalculation as has been made in respect of this national undertaking. In the ' Hansard ' of 1903, we find passage after passage in reference to the eastern and western divisions, in the speeches of the Finance Minister and the Prime Minister upon which parliament
granted assent to this proposition, and it was upon these promises that the country gave its concurrence. It is easy to prove that the promises that were then made have not been implemented in the slightest degree. Turn for example to a few of these extracts. Sir Wilfrid Laurier, on July 30, 1903, spoke as follows:
I need not dwell upon the importance of this covenant on the part of the company. It practically takes away from the guarantee cf the government all risk. There is not a dollar to be advanced by the government. We do give our credit and nothing else. And our guarantee of seventy-five per cent of the construction of the road is to be supplemented by the credit and all the backing of the Grand Trunk Company itself.
Mark you the Prime Minister says that not a dollar is to be advanced by this government. The Finance Minister, speaking with reference to the prairie section on August 12, 1903, said:
With respect to the western division, we guarantee three-quarters of the cost, not exceeding a certain sum. Our guarantee-not the cost of the road, but our guarantee-is limited to $13,000 per mile on the prairie section and $30,000 per mile on the mountain section. If the road costs less than the figures on which these guarantees are based, we only guarantee three-quarters of that cost, but if the road costs more-and some hon. gentlemen argue that it will be very expensive-we do not increase our proportion, but the company must provide the increased cost without limit so that the road may be finished. The Grand Trunk Pacific agrees to do these things.
Again, the Finance Minister in that same speech spoke as follows:
As respects the prairie section, we assume no obligation whatever, except the guaranteeing of the bonds, but my arguments are based upon the assumption that the Grand Trunk Pacific Company will carry out its undertaking, and I think that it has given a sufficient guarantee of its ability and good faith in the large sums it is putting into the enterprise. Assuming that the Grand Trunk Pacific Company fulfils its obligations under the contract, and that we shall only be called upon to do exactly -what we have agreed to, we assume no obligation in respect to the prairie section, because the Grand Trunk Pacific Company agree that, from beginning to the end, they will pay the interest on that section.
And so, as I say, it was upon representations such as these made in this House and before the country that consent was granted to enter into this contract with this Grand Trunk Pacific Railway Company. It was distinctly stated that the prairie section would not cost the country one dollar, but all that we were to do was to give a guarantee which we should never be called upon to make good, to the extent of the first $13,000 per mile which would go into the construction of that road. And now we find that there has come a letter to the government, a

letter which appeared shortly after the last general election, which tells what the truth is in 1908-a truth very different from the predictions made in 1903. I cannot but wonder whether that letter came forth spontaneously on the date on which it was written, I cannot but wonder whether the government had any previous inkling as to the demand that was about to be made upon them-and I cannot but wonder whether there was any agreement between the government and the writer of that letter prior to the last general election which might account for the excessive activity of the Grand Trunk, activity directed all in favour of one of two great political parties in this country. That is something that we would like to know about before this discussion is over-just when it was that the Finance Minister and his colleagues first had word to the effect that additional assistance would be necessary to this company, that the company would ask something far and beyond what was ever expected under the original contract. Well, we remember the original contract. We remember the estimated cost of the prairie section was from $18,000 to $20,000 per mile. But what does_ the letter of Mr. Hays disclose? It admits that, according to the claim of the company, that road has cost $35,000 per mile. Thirty-five thousand per mile for a road built over the prairie portions of Manitoba, Saskatchewan and Alberta. Instead of having, as was expected, a capital expenditure under $20,000,000, we have a capital expenditure of over $32,000,000; and that represents merely the cost of the road and does not include anything for equipment of rolling stock-a road that is not prepared to carry traffic.
Now, our first inquiry should be as to what has actually gone into that road. Here is what we are told has gone into it: The proceeds of the three per cent government guarantee bonds, $11,908,000, representing cash to the extent of $13,000 per mile, has first gone into that construction. We have been told that a second issue of bonds took place on the undertaking of the Grand Trunk Pacific, with the guarantee of the Grand Trunk Railway, and that this second issue of bonds resulted in putting $9,602,000 into that prairie section. We have heard that the Grand Trunk themselves claim to have advanced $7,094,000. And, last of all, we are informed that it will require $3,594,000 in addition to complete the construction of the prairie section. So that, all told, $32,197,351 has gone into, or will go into, that road, including interest up to January 1, 1910, if the estimate of the company is to be accepted as reliable. That, you will see, is $35,000 per mile-$35,000 per mile for the road without one locomotive, one car, or any attempt at rolling stock Mr. AMES.
equipment. Other prairie roads, the history of which is easily obtainable, have been built for $15,000 to $20,000 a mile- so that this road has cost, or will cost, double the price of these others.
Now, this road has not been under any special disadvantage. It is impossible to claim for it the consideration that might have been claimed for the first transcontinental railroad. The country to-day is a very different country from what it was in 1881. This railroad, in its prairie section, does not pass through a wild and uninhabited wilderness. All the way from Winnipeg to Edmonton it goes over fertile and inhabited country. There is not a single point on the line between these divisional places where the construction work has not been readily accessible. To bring in materials, to bring in supplies, has been a very simple matter for this company in constructing the prairie section. Supplies in the way of food for the men working on the road, of oats and hay for the horses, and all that is required can, to a very considerable extent, be obtained to-day along the line as it is being built. And, when you think also of the great increase in population, the large amount of labour that is made available, you cannot but conclude, if you compare the conditions under which this prairie road has been byilt -with the conditions under which the pioneer prairie roads were built-that this road had every advantage which would make towards economy, while the early roads had every disadvantage which would make toward high expense. And yet the early roads have been built for a far smaller figure than the amount, which, it is claimed, has gone into the prairie section of the Grand Trunk Pacific Railroad.
But it is claimed that this is a superior road. Mr. Hays, in his letter, gives by way of excuse that the government has forced him to build a superior road. Well, that was in the original contract; it was perfectly well understood in advance. It was thoroughly understood, when the estimates were given of this road, that a superior road was demanded, was expected, was intended. But I do not think we have as yet had submitted to this House any proof of the fact that this is a superior road. Have we been shown as to grades, for example, how much of that road is comparatively level? Have we been shown what is the ruling grade or the maximum grade? And, as to the curves of the read, have we been shown how much of the road is straight, what are the degrees of curvature and what are the sharpest curves? All these factors of railroad building can be reduced to mathematical statements, and can be submitted; and it should be possible for the government, in making this claim, to be able to demonstrate, by facts, figures and profiles, that this road is really super-

ior. I venture to say that it to-day that road were in full running order, a load of forty cars could not be hauled over it from Edmonton to Winnipeg any more cheaply per mile than a similar train can be hauled from Calgary to Winnipeg over the Canadian Pacific Railway, or down from Prince Albert by the Canadian Northern. And until that statement can be disproved I think it will have to stand; and it devolves upon the government, first of all, before they ask us to assist in paying the debts of a road costing $35,000 per mile, to show that we really have a superior road for our money. It is hard to believe that $35,000 per mile has really gone into that railway. It is hard to believe it for more reasons than one. It is hard to believe it when we think of the experience that we ourselves had in this House only two years ago.
I wish to say, Mr. Speaker, that in my opinion it is a necessary prequisite to any consideration of this demand for assistance that there should be prepared and submitted to this House a statement in detail of every item of expenditure which it is claimed has gone into the road, or will be required to complete the road, and that such a statement should be so prepared that it may be subject to audit, that it may be subject to examination, that it may be subject to study and criticism by one of the committees of this House. A few years ago we purchased from the Grand Trunk Pacific Company their surveys north of Lake Superior. How was it done? We appointed a board of three auditors, outside, independent men; they went down to Montreal, they went through every account, checked every statement of expense, and they satisfied themselves that the $350,000 we were called upon to pay for these surveys, did represent money that had actually been expended and for which we had value received. Is that going to be done in this case? Are we to have a similar audit before we are called upon to pay off the debts of this company on the prairie section of the road?
Now, among the papers that were subsequently brought down when we asked for details in connection with these proposals, are two important letters. These letters were produced on the demand that was made by the leader of the opposition, who wished to have a detailed statement of the amounts that had gone into the construction of this road. We find that the assistant deputy Minister of Finance, on the 26th of March, 1909, writes to the departmental auditor of the Department of Railways and Canals, and states among other things:
Mr. Borden also asked for detailed statements of the prairie and mountain sections expenditures. Please give such details as are available.
In reply to that Mr. Bell writes a letter, from which I will quote the major portion:
For yofir information 1 may state that the Grand Trunk Pacific Railway Company have submitted monthly, statements in detail, under the different headings, as laid down in the standard classification, showing total cost to them of the mountain and prairie sections. From time to time, as these statements were received, I went to Montreal and by personal examination of each voucher and of the books of the company, have satisfied myself as to their correctness. Bearing in mind the interpretation of the words ' construction work' as defined by article 1, section 5 of the mortgage and schedule (A) to the Acts 4 & 5 Edward VII., chapter 98, certain vouchers have been disallowed by me as not coming within the meaning of * construction work.' Certain other vouchers have been disallowed, not because they did not come within the meaning of * construction work,' as defined by the mortgage, but because the company failed tc produce sufficient detailed proof, to justify me, in my opinion, in passing these vouchers, as I have always taken the stand that burden of proof lies with the company. It is probable that when further promised details are obtained these items wall be passed, some of these are of considerable amount. I have tried to make it clear, in the above, that while the cost of construction as arrived at from results of my audit, is considerably lower than that submitted by the company, this is the result of the company having to include in the cost of the railroad, certain charges which are legitimate from their standpoint, but which are not, in my opinion, so far properly vouched or are not permissible, under the definition of ' construction work ' referred to.
So we see that in the company's estimate of the cost of construction there are a number of items which are not properly vouched for, and which are not properly chargeable to construction work. When we read the statement that is attached by Mr. Bell to that letter, we find that the cost as submitted by the company up to the 31st of December, 1908, on the prairie section, is $27,031,453; but that the amount allowed to December 31, 1908, is $28,255,445, a difference of $775,000 between the amount which the Grand Trunk Pacific claim as having been spent on that prairie section, and the amount which the auditor of the department feels he can, under the law, pass as legitimate accounts. Now remember that is pro rated for the prairie section, and does not include that which is chargeable on the mountain section. In that $775,000 we find preliminary and legal expenses, $303,000, which the auditor cannot pass; and in the mountain section $112,000 which the auditor cannot pass. Now we have had some experience in parliament with items that could not be accepted and passed by the auditor, for it will be remembered that two years ago we had a discussion in this House along those

lines. When the Grand Trunk Pacific came in with their first series of vouchers and their first demand for release of funds that had been raised under the three per cent loan, it will be remembered that the first statement they presented contained $162,000 of accounts which the auditor would not pass. We remember too that this had been passed through several departments before it was finally blocked by the Finance Minister and his department, and that statement was given back to the company and was destroyed, and a revised statement was presented leaving some $80,000 of the original statement out of the second statement. Now when the second statement came back we inadvertently obtained a copy of it, and we found in that second statement many items which it would be very difficult to classify as properly belonging to the cost of construction. We found charges by Mr. Wainwright for coming to Ottawa, very heavy charges for very short trips; we found money paid to Sir Adolphe Caron for services which it is difficult to appreciate, we found frequent sums paid to H. B. McGiverin, and we have never yet learned what services he rendered to entitle him thereto. There were items, mind you, that were presented a second time, and a second time rejected. Who can tell what were the items that were rejected in the first place which the company did not have the face to ask payment for a second time?
We undertook to follow that up in the Public Accounts Committee, and what was the result? Our chief witness, after being subpoenaed hurriedly left for the Mediterranean; parts of the statements were found to have been burned; the result was that the committee finally decided-and I may say that I think they decided rightly-that inasmuch as no money had been actually paid on that $162,000, therefore the Public Accounts Committee could not investigate any further. That may be outside the functions of the Public Accounts Committee, but we asked that a special committee of this House should be permitted to look into it, and that request of ours was refused in the House.
Now, what did Mr. Power say, who appeared as representing the accounting department of the Grand Trunk? He said that every item of that $162,000 still remained on the books of the Grand Trunk as a claim against the Grand Trunk Pacific, which they regarded as valid, and payment of which they some day expected to obtain. Is it any wonder that we are suspicious when we come to look over the statement as the company makes it and compare it with the statement as the auditor passed it, and we find a difference of $992,000, a difference of $775,000 on the prairie section, a large Mr. AMES.
difference on the mountain section as well, and that the preliminary and general expenditures, which were $162,000 in 1905, have now grown to $303,000 on the prairie section alone? Now, Mr. Speaker, in view of the fact that we are being asked to reimburse to the Grand Trunk $7,094,000 which they are allowed to have advanced, which sum avowedly contains every claim that they have against the Grand Trunk Pacific, how can we be asked in this House to borrow money to loan to them to pay accounts which we have refused repeatedly to pay out of the guarantee funds that have been raised?


William Stevens Fielding: My hon. friend is surely mistaken. Not one dollar can be paid out of this fund except upon the certificate of the 'engineer that the amounts are properly chargeable to the construction account.


Herbert Brown Ames: Very well, then we must look elsewhere. Where is that claim of $162,000 found on the books of the Grand Trunk Railway Company still against the Grand Trunk Pacific and how will that claim be satisfied?


William Stevens Fielding: It will not be satisfied out of these moneys.


Herbert Brown Ames: It is to prevent this that I want the minister to lay upon the table of the House a statement of all the items and vouchers that have gone into this $35,000 a mile.


William Stevens Fielding: My hon. friends have asked for heaps of information and it has all been brought down. Every request that they have made has been complied with.


Herbert Brown Ames: The minister has not yet submitted to the House a statement of the items which bring the cost of the prairie section up to $35,000 a mile.


William Stevens Fielding: We have placed on the table of the House the report of the engineer of the government, stating that he had examined the returns and that he had found that this is a correct valuation.


Herbert Brown Ames: It must not be forgotten that that same engineer found no difficulty in passing the amounts given as composing that item of $162,000.


William Stevens Fielding: Well, he is rather a reputable engineer.


Herbert Brown Ames: I think that the demand we are making is a perfectly legitimate demand, and a demand which is a necessary prerequisite to any consideration of this transaction. We know there are claims on the books of the Grand Trunk against the Grand Trunk Pacific which we have refused to pay. We now ask an assurance that there will be placed upon the table of the House a statement that will show the moneys that have gone into that road upon which we are asked to take a fourth mort-

gage. We want to know how much of real value has gone into that road. We want to know how much of the $7,094,000 represent labour, material and actual service. We want to know how much was spent in lobbying the Bill through this parliament. That is altogether a different matter and that is why, when we are taking a fourth mortgage on this road, we want to be satisfied that the property has the valuation that the company claims for it and that it represents dollar for dollar actual service rendered properly chargeable to construction.


William Stevens Fielding: That will have to be properly certified or not one dollar can be paid.


Herbert Brown Ames: Well, let us have the statement. There is no difficulty about that. The vouchers are all in the vaults of the Grand Trunk Railway Company. There should be no difficulty about having a statement prepared showing how this $27,031,453, spent up to December 31, has been made up and how this $32,197,351 which it is expected will be spent by the time the prairie section is completed is arrived at. Can we have that statement? Now, there is some further information that I think we are entitled to. We find that 10,000 shares of the common stock of the company have passed into the hands of certain individuals. These individuals are alleged to have paid for that stock about $20 per share and it is said that $205,200 has thus been paid in and that this money has been used for the general purpose of the company. Can we have a statement of what general purposes of the company have been served by that? Are we not entitled to know also whether that money has gone into the road? Are we not entitled to know whether it has added value to the property upon which we are asked to take a fourth mortgage? We want to know if there is anything tangible to show for it. Has it gone into the property upon which we are asked to lend money? I think that is something we have a right to know. So. long as important information of this character is not forthcoming, so long


William Stevens Fielding: Is my hon. friend quite fair in suggesting that important information is not forthcoming? Hon. gentlemen have asked many questions bearing upon this whole matter, and, to the best of my knowledge and belief, every question that they have put before the House has been answered. Why does my hon. friend now say that there is any effort to prevent the information from being brought down?


Herbert Brown Ames: I never spoke of preventing the information from being brought down. But I think the fact that the minister has brought down certain information does not necessarily close the door to a demand for
further information, and in this particular case we are indicating additional information that we want before the Bill comes up for final discussion. The minister does not expect to pass this Bill to-day or to-morrow.


William Stevens Fielding: Certainly not.


Herbert Brown Ames: 
Herbert Brown Ames: There is another consideration. The Finance Minister says that we buy their bonds. Of course we do. Now the buying of bonds is a perfectly legitimate banking transaction. Banks are accustomed to do it, but they are careful only to buy them at the market price. We, however, are buying them at par. We are paying $100 cash for a $100 bond.


William Stevens Fielding: I did not use the word ' buying,' it would not be correct.


Herbert Brown Ames: I think it occurs in my hon. friend's remarks, or in Mr. Hay's letter


William Stevens Fielding: We do not buy. We take them as collateral.


Herbert Brown Ames: Our collateral security is the mortgage on the Grand Trunk Pacific and the guarantee of the Grand Trunk Railway. The bonds are what we take.


William Stevens Fielding: We do not buy them.


Herbert Brown Ames: 
William Stevens Fielding: Yes, we can take the bonds at any time and sell them. They can be sold on the market. My hon. friend has admitted they can be sold at 90.


Herbert Brown Ames: I said that the third mortgage could be sold at 90.


William Stevens Fielding: It is the guarantee of the Grand Trunk Railway which gives them value. It is not the mortgage which gives them value. The guarantee of the Grand Trunk Railway is worth more than the immediate mortgage.


Herbert Brown Ames: 
William Stevens Fielding: The sums I mentioned were available after the company had met its obligations as respects those guarantees to which my hon. friend now refers.


Herbert Brown Ames: 
William Stevens Fielding: No, but others of like rank might have a claim with us. My hon. friend, I think, so understood it, because he asked who would be partners with us in that rank.


Herbert Brown Ames: The hon. Minister of Finance gave me to understand that this loan would rank first, after the satisfaction of all guarantees.


William Stevens Fielding: If my hon. friend so understood it, how did he come to ask me who would be our partners of equal rank in our guarantees?


Herbert Brown Ames: So that, all told, the guarantees will amount to about $60,000,000, and _we rank pari passu with the others, that is to say, if there is not enough in this surplus to satisfy all these guarantees, we get one-sixth of what there is. So that it seems to me quite possible that our guarantee may not be equal to the occasion, even for interest, and I am quite certain^ that the guarantee of the Grand Trunk will be of very little value to us in the matter of repayment of principal.
The minister's resolution speaks of the right of foreclosure-we are to be entitled to all the rights and remedies available to bondholders. I confess that I find it difficult to ascertain what are our rights by way of foreclosure, and I would be glad if the hon. minister would indicate what steps would have to be taken by us to foreclose if this $10,000,000 claim were not paid. It seems to me that we would have to pay off the second and third mortgages, not on the prairie section alone, but on the whole "western division, because the prarie and mountain sections are inseparable, as I Tead the Act; and it is doubtful, if we paid them off, whether we could do more than put in a receiver and divide the proceeds. I fail to find that we could by foreclosure make that right as enacted here, of any considerable value.	.
To review this transaction as a banking proposition, let me again enumerate the points which I made. In the first place, we must borrow in order that we may lend this money. In the second place, we propose to lend it at a rate of interest less than we can borrow it for. In the third place, we agree to take bonds at 100 cents on the dollar which the company would be glad to get rid of at 874 cents. In the fourth place, the security on which we advance the money is but a fourth mortgage. In the fifth place, the guarantee of the Grand Trunk is practically worthless so far as principal is concerned, and in the matter of interest we are only to participate as a one-sixth interest; and the right of foreclosure I have as yet been unable to find to be of any real value to us. So that as a banking proposition this transaction can hardly be commended. I cannot think that if the Minister of Finance were the manager of a bank he would on these grounds present a $10,000,000 loan to his directors and ask their concurrence.
At six o'clock, House took recess.
After Recess.
House resumed at eight o'clock.


SECOND READING.
[Stage Direction]
Bill (No. 122) to incorporate the Cabano Railway Company.-Mr. Gauvreau.
Herbert Brown Ames: 


GRAND TRUNK PACIFIC LOAN.
[Stage Direction]
House resumed consideration of the proposed motion of Mr. Fielding with reference to a loan to the Grand Trunk Pacific Railway Company.
Herbert Brown Ames: 1 do not see why this company should come in for any special consideration on the part of the government or on the part of this House. I do not see that this company has fulfilled the glowing promises which were made in its behalf in 1903-4 when the Bill was being put through the House. What were we then told? We were told that through the provinces of the west Manitoba, Saskatchewan, and Alberta, this road was to open up new territory, fields where man had never trod; that it was to make Canada a hundred miles wider. Why, that was shown by the plan laid before this House. The plan showed the line passing north of Lake Winnipeg, and on to a pass in the mountains several hundred miles north of Edmonton. It was a splendid thing to talk about, this opening up of regions not yet even fully explored. But when they came to build the road, what did they do? From Winnipeg to Edmonton, they pass through the most fertile and most thickly-populated part of the three provinces and always within a few miles of existing railways. There is hardly a point of the whole distance between Winnipeg and Edmonton, where thi3 line will be more than ten miles from an existing and operating railway. It opens up no new country any more than do a dozen railways that are branching out through these different provinces. It has entirely disappointed us in that respect.
Another claim was made for the line. This particular section, this prairie section, was going to reduce the rates on the farmers' grain, so that that grain would be brought down to the seaboard at unheard-of prices. Is there a chance of that prophecy being fulfilled?
I cannot see it. When the Grand Trunk Pacific has to compete with railroads built at half its cost and with fixed charges not more than half what it must pay, will there be any reduction in rates? This railroad from Winnipeg to the foot of the Rocky mountains will cost, with its equipment and rolling stock. upwards of $50,000 a mile. If that be borrowed at 4 per cent, which is the lowest rate at whch they can hope to borrow, it means $2,000 a mile or $1,830,000 of interest yearly on the prairie section alone. Do you suppose that company can afford to reduce rates with its fixed charges double those of its competitors? Not at all. I tell you, you are introducing an influence in the west not for the reduction of rates, but for the upholding and advancing of rates on the transportation business of the country. When there is a conference amongst the railway companies. do you think the Grand Trunk Pacific will be in favour of the reduction of rates? Not at


Herbert Brown Ames: 
[Stage Direction]
Motion agreed to, and House went into committee on the resolutions.
Mr. W. S. MIDDLEBRO (North Grey).: Mr. Chairman, I desire to say a few words before this resolution is carried especially in view of the fact that some remarks were made the other night by the hon. member for West Lambton (Mr. Pardee) in comparing this loan with the loan that was made by the Conservative administration when we were in power in 1884. Some idea seems to have gone abroad that the Conservative party are not in favour of the completion of the transcontinental railway. I desire to state most emphatically that as far as I am concerned, and as far, I believe, as all the members on this side of the House are concerned, that is an entirely erroneous impression, we are as much in favour to-day of completing the transcontinental railway as we were of completing the Canadian Pacific Railway in 1884 and I think if you compare the records of the two great parties as to which of these parties is entitled to the credit for completing transcontinental railways the comparison would redound very much in favour of the great Conservative party. There was a time when the hon. gentleman now ocupying the treasury benches were not singing the same song as they are singing to-day:	'We cannot wait
as time will not wait; we cannot wait because time lost is doubly lost,.' There was a time many years ago in the pioneer days of this country when the great northwest was an almost trackless wilderness, when the virgin soil was yearning for the hand of man, and when at that time the Conservative administration proposed to build the Canadian Pacific Railway for the purpose of opening- up that country we found hon. gentlemen opposite opposing that transaction from beginning to end. Therefore, I say it is not fair and right to allow the impression to be created to-day that we are not in favour of completing this great transcontinental railway. The whole matter with us may be summed up in these words ' better terms.' It is a question of better terms and if we had a satisfactory assurance upon that point we would be quite willing to give our votes in favour of this loan. In 1884 the gentlemen who now occupy the treasury benches in parliament opposed the proposed loan to the Canadian Pacific Railway. Because the hon. member for West Lambton the other day made a number of quotations for the purpose of proving the stand that those now in opposition took in 1884 I purpose quoting from a few speeches made by prominent members of the then opposition. I will take first of all a statement which was made by the then Liberal leader, the Hon. Edward Blake, first upon the question of the building of a road in its inception and subsequently on the question of Mr. AMES
giving them this loan. Speaking in 1884, as will be found at page 131 of 'Hansard' of that year, Mr. Blake said:
Even those friendly ito the proposal must see that it is unadvisajble to accept it. We are face to face with a condition of things, financially, which will be the subject of discussion in a few days, and it behooves us to be prudent-ito pause before imposing additional engagements at this time on the country. Pace to face with this state of things, we are asked to enter into those large engagements for which no reason has been given, and for which I pretend no countervailing advantages are offered. I, therefore, cannot give my assent to this proposal.
And he voted against the resolution for the purpose of enabling us to grant a loan of $30,000,030 to the Canadian Pacific Railway. Then I take the Hon. Mr. Fisher and I will quote his remarks then. I want to point out that this whole transaction is being discussed to-day as a business proposition. It is placed before us as a banker's proposition and if the hon. Minister of Finance (Mr. Fielding) will excuse me I will this evening discuss it from the banker's financial standpoint, The hon. Minister of Agriculture, speaking of the proposition before the House in 1884 said:
I think, however, that this, instead of being an occasion when we may be asked to deal generously with the company, is really a business transaction. We have a company, who are under an obligation to this government to fulfil a certain contract, coming to ask from the government-what? They ask, first a loan of $22,500,000, this loan to be repaid at the end of seven years. They ask, secondly, an advance of $7,500,000, which i9 to be repaid at the end of five years. Now, what are we to obtain in return for this advance? As far as I can make out from the speeches of hon. gentleman opposite, as far as I can make out from the statement of the Minister of Railways, all that we, all that the country of Canada, are to obtain in return for this advance is that the Pacific railroad is to be finished in two years instead of in six years.
We see that it was then no consideration whatever in the eyes of that hon. gentleman that the completion of the road was to be accelerated by five or six years, while to-day the cry is:	'We cannot wait; time
lost is a doubly lost.' In 1884 the effect of the loan would be to accelerate the completion of the Canadian Pacific Railway by five or six years while to-day there is no acceleration, but we have granted the Grand Trunk Pacific Railway Company an extension of three years. Then the hon. gentleman proceeds:
But perhaps hon. gentlemen opposite may think that this difficulty of meeting obligations is a reason why we should deal generously with the company. On the contrary, I think it is a reason why we should not deal at all with thorn, a reason why we should not

outer into this liability towards this company. If, Sir, it is answered, as seems to be implied by bon. gentlemen opposite, that in default of this arrangement, the company will be obliged to rest for four or five years, and not go on with the work of construction, what will be the great loss to the country? The state of affairs which would result from that fact would be but the condition of things which the party on this side of the House, at the time of the original contract, argued, would be most beneficial to the country.
In other words the minister says that far from waiting five or six years being any detriment to the country it would be just such a condition of things as he and his friends argued ought to take place at the time of the original contract for the purpose of building the Canadian Pacific Railway. Then he says:
But, Sir, if the present state of affairs were to continue for three or four years, if, instead of giving tljis advance to the company, we were to allow the company to rest during that period-supposing always that this is the alternative-would it be such an unmixed evil to the country 'as hon. gentlemen opposite have said.
Then I take Sir Louis Davies as reported at page 238 of 'Hansard' 1884:
Is it such a great advantage to have that road built, or to have the promise that it shall be built within two years. ' I think not.' I oppose the present scheme, therefore, because of the want of information justifying the House in voting $30,000,000.
I oppose it because to my mind it has been proved demonstratively by my leader that a prudent expenditure of the means within their grasp would have enabled them to carry out this contract without asking Canada to expend another dollar. I oppose it because it presents no elements of finality and because I believe that before another ten years have passed over our heads we will be asked to add to our present endowment another $30,000,000.
Then I come to Sir Richard Cartwright, page 180. That hon. gentleman spoke as follows:
I have always held and I now repeat, although a great continental railway was a very desirable thing in itself, although I agree with the hon. Minister of Railways that we require a railway that is worth considerable sacrifice for-still I say that the terms of the original bargain with British Columbia, which was opposed by me, opposed by hon. gentlemen here present and others who are not now here, was an act of such indiscretion and folly that it has hung like a millstone ever since around the necks of the people, that it has led to national disgrace in one or two instances and that the present moment it is likely to entangle us in embarrassments of which no man can reasonably expect to see the end.
Then we come to the right hon. the Prime Minister, who, of course, was eloquent as usual; but I am sure, he will agree with me this evening, that the words 1294	!
he then uttered have not been justified by time:
I repeat, is this change to be the last? There is at present through this country a feeling of uneasiness, and I believe that a feeling is also pervading this House that this is not the last change

There seems to be some such feeling today.
-but that the next change will be, that what is to-day before the House as an advance will will turn out to be a gift. For my own part, looking at the power already wielded by the company, looking at the appetite displayed by them and their capacity for engulphing public money, I would as soon believe that the waters would flow back from the sea to the lakes as that one cent of that money will ever oome back from the Pacific Railway Exchequer to the Dominion exchequer.
Yet inside of two years the whole $30,000,000 was paid back to the Dominion treasury, and the laws of gravitation remained exactly the same and the waters of the sea did not flow back to the lakes, and the $30,000,000 assisted in the development of what is to-day the greatest transcontinental line in America.
What I want to point out is this, that the hon. member for West Lambton (Mr. Pardee) quoted the words he did for the purpose of proving that the loan we aTe making to-day is to use his own expression, upon all fours with the loan we made to the Canadian Pacific Railway in 1884. He thought it necessary to do that in order to justify the government in the action they are taking. Well, I propose now to show the distinctions and the different surroundings attending the loan made in 1884 as compared with the conditions and circumstances of the present loan.
In 1884, we were given a first mortgage upon all the property of the Canadian Pacific Railway-a first mortgage on the entire property of the company, real and personal, now owned or hereafter to be acquired by them, including their main line of railway, their extension, their branch lines, the whole of their equipment, rolling stock and plant, all their steamers and vessels, also land grants earned and to be earned except the mortgages on such extension and mortgages on the land grants and secured by land grant mortgages.
What did that mean ? It meant that we were lending the Canadian Pacific Railway sufficient money to complete its line, and we had a provision in our contract under which, for every dollaT we paid out we required a certificate to show that the money went into the railway. The money we granted was sufficient to complete the road, so that we had the security of a completed railway foT our advance of $30,000,000. That is to say, we had the security of 3,393 miles of completed railway, and I put the value of that at $50,000 ptr mile. In doing

so, I think I am fair, because the mountain section of the Grand Trunk Pacific is estimated to cost $80,000 per mile, its eastern section $63,000 per mile, and its prairie section $35,000 to $36,000 per mile. So that I think an estimate of $50,000 per mile for the Canadian Pacific Kailway is very moderate. We were given a first mortgage on that completed railway, subject only to a mortgage of $5,333,000 due by the Canadian Pacific Railway to those companies from which it had purchased some branch lines-the Canadian Central, I think, among others. This amount of $5,333,000 was the only actual first mortgage against the Canadian Pacific Railway when we made the loan. We further got a mortgage on the 21,000,000 acres which the Canadian Pacific Kailway owned and which was supposed to be worth $2 per acre. But I want to be very moderate and put the price at the figure at which we afterwards took it back, namely, $1.50 per acre, so that we got their 21,000,000 acres of land at $1.50 per acre. Then we got a first mortgage on all their steamships. Compare that with-our agreement with the Grand Trunk Pacific. In that agreement, there is an express provision excepting the steamships from our mortgage, so that they are not included. In our present mortgage agreement with the Grand Trunk Pacific there is an express exception of all lands granted that company by way of bonus, municipal, provincial or otherwise. There is also an express exception of all branch lines over six miles in length. But in the loan we made the Canadian Pacific Railway in 1884, we got a mortgage, not only on its main line, but on its branch lines. In that loan, we also got a tranfer of the $35,000,000 of common stock, whereas in the case of the Grand Trunk Pacific, legislation has been passed permitting a transfer of the common stock to the Grand Trunk Railway, and that transfer has actually been made.
Let me just point out what security of the branch lines would mean in this instance. In our present loan to the Grand Trunk Pacific, the branch lines are excluded. Take the Lake Superior branch line; if the present contract had been on all fours with that of the Canadian Pacific Railway, that branch line would have been included and we would have the benefit of that security. What would that amount to? The Lake Superior branch line got a subsidy from the Dominion government of $6,400 per mile, amounting to $1,209,600. It also got a cash subsidy from the provincial government of $378,000. It also got a subsidy of 675,000 acres from the provincial government. We have no lien on any of these under our contract with the Grand Trunk Pacific. The Lake Superior branch line also got a subsidy from the towns of Fort William and Port Arthur of $350,000, but Mr. MIDDLEBRO
no part either of that is security for our proposed loan, whereas under our loan to the Canadian Pacific Railway, all these items would have been covered by the mortgage given us by that company.
Take another aspect of the case. Under our agreement with the Canadian Pacific Railway it was a condition of the loan that the completion of the road was to be accelerated by five years, whereas in the present case, not only is there no acceleration but we have extended the time for completion by three years. Further we got an assignment from the Canadian Pacific Railway of the subsidy given it to carry the mails, but we have no security of that kind in the present contract.
Then in the case of the loan to the Canadian Pacific Railway, that company was prohibited from selling its bonds, but in our agreement with the Grand Trunk Pacific, it has been allowed to sell its common stock for $203,000. Practically $25,000,000 of common stock has been transferred from the Grand Trunk Pacific and handed over to the Grand Trunk Railway for $203,000.
Then we come to the question of the power to sell. In the Canadian Pacific contract what did we have ? We had a first mortgage on all the property I have mentioned. We had a first mortgage on all these properties that I have mentioned-a complete road of 3,392 miles, of three steamships, of their postal subsidy, the provincial subsidies, the land grant, and all other properties the company then owned; and in case they made default for twelve months, we were empowered by the contract to enter into immediate possession and become absolute owner of the whole road and everything the company owned, without any notice or any process of law. How- different from that is the Grand Trunk Pacific contract, under which, first of all, we give the company seven years interest free, and if in the next three years they are not able to pay the three per cent, we allow them to capitalize that, and then allow them to go on for five years longer without paying a cent before we can move hand or foot. Fifteen years may elapse, and then we have not even the power to do that which we had within twelve months in the case of the Canadian Pacific Railway contract. We must then enter into possession and do what we can to make the road prosperous, and of the earnings hand over 75 per cent to the government and 25 per cent to the Grand Trunk Company, pari passu, without any preference. If the road gets on a paying basis, instead of our becoming its owner, as in the case of the Canadian Pacific Railway contract, we hand it back to the Grand Trunk Pacific Company again; but if it is a failure, if it is bankrupt, if the earnings are not sufficient to

pay expenses, then it is saddled on this country until it again becomes prosperous, when it is again handed over to the Grand Trunk Pacific. If that is not a one-sided contract, I do not know what is. What is the result? In the case of the Canadian Pacific Railway contract, we had a first mortgage on 3,393 miles of railway, at $50,000 a mile, equal to $170,000,000; we had 21,000,000 acres of land, at $1.50 an acre, $31,500,00; a total of $201,500,000. Against that there was only a mortgage in respect of the Canada Central and other branch lines of $5,333,000; and land bonds outstanding to the net amount of $1,123,000; making a total encumbrance of $6,456,000. Deducting this from the total value of the security received, leaves $195,044,000 of clear absolute security for the loan of $30,000,000. In addition to that, we had a first lien on the company's postal subsidies, on their steamships, on their afteracquired land, on the branch lines that they might thereafter build, and Dominion, provincial, or municipal subsidies, and upon all the property that they owned. So I think I am safe in saying that we had a security valued at $200,000,000 on which we proposed to lend $30,000,000.
The proof of the pudding is in the eating; and, as the hon. member for St. Antoine justly said, this loan should be made on such a basis that it would be in the interest of the company to pay it back as rapidly as possible. The Canadian Pacific Railway loan was such that within two years or so the Canadian Pacific Railway Company paid back the $30,000,000 and every cent of interest. In the present case we have the Grand Trunk Pacific Company asking this country for a loan of $10,000,000 on what security? The hon. the Finance Minister from his place in the House the other day said: 'That mortgage is not one of high rank. There are several other mortgages before it, and I do not attach the greatest importance to the mortgage itself as a security, though it has some value.' And yet the hon. member for West Lambton (Mr. Pardee) says this loan stands on 'all fours' with the loan we made to the Canadian Pacific Railway Company in 1884, when in that case we had a security of $200,000,000 for a $30,000,000 loan, while to-dav the hon. Minister of Finance says that we have practically no direct security for the loan of $10,000,000. This disposes of the last leg of the hon. member's 'all fours.'
Upon the admissions, then, of hon. gentlemen opposite-and I am speaking from a banker's standpoint-assuming that the fourth mortgage which we have is practically valueless as direct security, we come down to the fact that this loan is going to be made solely and exclusively on the guarantee of the Grand Trunk Railway; and what is that worth? A guarantee is onlv valuable in proportion to the financial
ability of the guarantor to pay, and I purpose now to prove the financial position of the Grand Trunk Railway. The hon. Finance Minister, in introducing this resolution, said that there was a prior lien or charge of $121,568,000 against the Grand Trunk Railway, and that this consisted of debenture bonds. That is quite true. As I understand, these debenture bonds are a first mortgage under the Act against the railway company. The Finance Minister said next that there was said to be a lien or claim for rent against the Grand Trunk Pacific Railway; but he said he did not think that this rent had any preference over the proposed guarantee that we were getting from the Grand Trunk Railway. Well, I take issue with the Finance Minister on that point. The hon. Minister of Finance said that the rentals which the Grand Trunk Company was paying in respect of certain leased lines did not form a prior lien or charge to this proposed guarantee. I make the statement that not only those rentals, but all the $121,000,000 of bonds against the Grand Trunk Railway, form a prior lien or charge to this proposed guarantee. By chapter 56 of the Statutes of 1862, section 20, I find that the expression 'working expenses' is defined as follows:
The expression ' working expenses,' when used in this Act, shall mean and include all expenses of maintenance, &o., and also all such rents or annual sums as may be paid in respect of railways, warehouses, wharfs or other property leased to or held by the company, rent charges or interest on lands belonging to the company, purchased but not paid for or not fully paid for.
Now, we come to the Act of 1874, which created the consolidated debenture bonds referred to by the hon. Finance Minister. By chapter 65 of that year, sections 4 and 5, it is enacted as follows:
4.	The company may, for the purposes of this Act, create and issue debenture stock to the nominal amount of eight millions of pounds sterling, &c.
5.	The debenture stock as and when created shall subject to the priorities of all other preferential charges then existing, be and become the first oharge upon and over all the company's railways, works, rolling stock, plant, property and effects whatsoever at the time being, including therein the interest of the company in the said International Bridge, and in lines leased, worked, or otherwise held by the company, and for that purpose shall rank immediately after the Equipment Mortgage Bonds (No. 2) of the class defined by section three of the Grand Trunk Railway Act, 1867, and also subject to the provisions of the Grand Trunk Arrangement Act, 1862, as regards the working expenses. Therefore, these bonds which the Finance Minister has referred to are subject to working expenses, as defined by the Grand Trunk Arrangement Act, 1862. That Act says that they are a prior charge to the bonds referred to. Therefore I say that


Wilfrid Laurier: I think my hon. friend had better make his speech.


George Eulas Foster: This is in committee.


William Sora Middlebro: 
George Eulas Foster: What acreage?


William Sora Middlebro: The acreage is 78,640 acres. There we have that acreage, cornnosed chiefly of town sites made valuable bv the construction of the Grand Trunk Pacific, which we are financing, and these gentlemen who have only invested $1,000 are controlling the whole company. In ad-

dition to that, they own a three-quarters interest in the whole town site of Prince Rupert.


George Eulas Foster: The same company?


William Sora Middlebro: The same company. Therefore, look at this question from whatever point you choose, and you find some private individual making more money out of this institution than the Grand Trunk Pacific itself, which is being made to act merely as a buffer and blind.


George Eulas Foster: Where did they get this land?


William Sora Middlebro: I do not know where they got it, hut they have it. Now, the hon. member for St. Antoine has given a very lucid and concise account of the position in which we stand under this proposed legislation. But I may summarize the matter in this way. As 1 have said, we are relying now entirely on the guarantee of the Grand Trunk Railway Company. We have the Finance Minister admitting first the prior lien of $121,000,000 in respect of the debenture stock; second, I think I have proved that rentals capitalized are a prior lien amounting to $19,000,000; third, the debenture stock authorized to be issued this session amounts to $12,000,000 and will be a prior lien. This makes a total of $152,000,000 of undoubted prior incumbrance. Then, if I am right in my assumption, according to Poor's Railway Manual, the Grand Trunk have the right to buy in with their debenture bonds these outlying railway stocks of railways purchased by them, and pay for them with debenture bonds of the Grand Trunk Railway. That would place another $75,000,000 of a prior incumbrance over our guarantee-total $227,568,000. Now, I want to ask the Finance Minister one more question. I notice that in the Act of 1862 and subsequent Acts, there are what are called equipment mortgage bonds, which are also said to be a prior incumbrance against the Grand Trunk Railway. I refer to page 783 of Poor's Manual, 1908, which says:
Perpetual 5 per cent, debenture stock (Grand Trunk section).-Created under powers of the company's Consolidated Debenture Stoolc Act, 1874, passed May 26, 1874. Secured by first mortgage on all the company's property, as also upon the company's interest in the International Bridge and in leased and operated lines, subject, however, to the priorities of all other preferential charges existing at date of issue; ranks immediately after the equipment mortgage bonds; interest 5 per cent, per annum, in perpetuity, payable January and July.
Either that authority is entirely wrong, cr the Finance Minister is wrong. I would like the hon. minister (Mr Fielding) to tell ns, whether in addition to the items I have mentioned, there is not also what is known ss the equipment mortgage bonds of some $6,000,000 outstanding as a preferential


William Sora Middlebro: claim, not merely to our guarantee but to the debenture stock referred to by the Finance Minister. If some of these bonds are not a prior lien, then Poor's Manual is wrong. The items I have mentioned amount to $233,000,000. As the hon. member for St. Antoine has pointed out, the Grand Trunk Railway have also guaranteed something like $50,000,000. We stand in the same position vith respect to our $10,000,000 as the other guarantors do with reference to the other $50,000,000-that is, we are in no better position than they are, and all stand subsequent to the above prior lien. Not only that, but the Grand Trunk may hereafter mortgage their property and make another prior lien and they may contract other obligations, and these will also rank pari passu with our own. I would like to know whether, under these circumstances, the Finance Minister thinks the loan that is being made is sufficiently secured by the guarantee of the Grand Trunk? You can judge what the company will do by what it has done. And what is our position? At confederation, according to the information brought down, the Grand Trunk owed us over $15,000,000 of principal and $10,000,000 of interest, a total of $25,000,000 and over, That amount has been owing for forty-two years. Forty-two years' interest at 4 per cent would amount to $43,000,000, which added to the amount already stated makes a total of $68,000,000 which the Grand Trunk owes us to-day. Have we any reason to suppose that they will repay us the present loan any more rapidly than they paid the old loan, unless we force from them further and other security than that which the government are getting from the company? That remained from confederation down to 1884, and in that year an Act was passed to the following effect, chapter 52, section 19, whereby it was enacted:
That the claim of the Dominion of Canada as it now1 exists. . . . shall rank after the common stock, and securities heretofore issued and authorized to be issued, and after the securities and common stock hereby authorized to be created.
Now where do we stand with respect to that? The consolidated debenture stock is $121,000,000; rentals capitalized, $19,000,000;
4 per cent guaranteed stock, $49,000,000; first preferred stock, $17,000,000; second preferred stock, $12,000,000; third preferred stock, $35,000,000; ordinary stock, $112,000,000. That makes $257,000,000 that is ahead of the debt of Canada to-day with respect to this $68,000,000. Then add to that the $75,000,000 of other stocks of this railway which the country has a right to purchase, add to that the debenture stock authorized this session but not issued, $12,003,000, and you have $344,000,000 standing ahead of this $68,000,000 which this company has owed the Dominion of Canada since 1867.

Now with respect to the loan of 1885, we are in the proud position of saying that every statement which we made then has been verified. Time has amply justified the assertions which we made, because we took precautions to take sufficient direct security from the Canadian Pacific Railway, and it was to their interest to pay it back again. With respect .to the contract of 1903 and 1904, on the contrary, every statement which the government made at that time has turned out to be false. They told us, for instance, that the eastern section would cost $71,000,000, they said they had mountains of information on which to base that calculation. But we find that section now is costing $124,000,000. They told us the mountain section would cost $26,000,000; we find that to-day, because oE the extra mileage and extra cost of construction, it is estimated to cost $67,000,000. With respect to the prairie section we find that they are coming back and asking for $10,003,000 more to complete that. So practically every statement	which they
made in 1904 has turned out to be absolutely falsified by the facts, and practically every statement made by the Conservatives at that time h s turned out to be true. As for the mountain section and the eastern section we have so far only estimates, and there is no prospect that these estimates will fully cover the amount required to be expended. Under these circumstances we of the opposition feel that we are entitled to the fullest information with regard to these stocks I have mentioned, and I would like the Finance Minister to tell the House whether these extra securities are a preferential claim over the whole guarantee. The members on this side of the House, I understand, do not propose to move any specific amendment to this resolution at this stage, but they propose to reserve their ammunition, and their judgment as to what step they will take when the Bill has been introduced and is being discussed on the second reading. We have done sufficiently tonight to show that practically every prediction the government has made has turned out to be untrue, ana therefore we are justified in proceeding with the utmost caution in granting this loan to the Grand Trunk Pacific.


Mr. DONNELLY.: Hon. gentlemen on the government side who have spoken in favour of the proposed loan of $10,000,000 to the Grand Trunk Pacific Railway Company, have dwelt at length upon the resources and importance of our west, and of the necessity of affording that country ample railway facilities. The hon. member for West Lambton (Mr. Pardee) read to the House a long list of figures showing the amount of gra:n produced in the west,
and he endeavoured to leave the impression on the House that the members of the opposition were opposed to giving the necessary railway facilities to the west to enable them to take their produce to market. Permit me to say that in my opinion the hon. members on this side of the House have quite as much faith in the future of the west as have hon. members supporting the government. We are ready to assist any effort to give the necessary railway facilities for handling the increasing products of that portion of our country. It would not be in keeping with the traditions of the Conservative party, the party that laid the foundation of the present transportation system in the west by building the Canadian Pacific Railway, were we to place any obstruction in the way of the further development of the west by the buildings of more railways. True, the Conservative party did oppose, and strongly oppose, in 1903 and 1904, the policy of the government in connection with the Grand Trunk Pacific Railway Company, and I think that subsequent events have justified the Conservative party in taking the position they did at that time. While some arguments may be advanced in support of that portion of the line from Winnipeg to Quebec, if we consider the nature of the country through which that road passes, the great expenditure that will be necessary for maintenance and keeping up the staff on that part of the road during the winter season, also the fact that during the summer season that road will have to compete with navigation, I fail to see how that portion of the road can be made to pay. As for that part of the road which runs from Quebec to. Moncton, I have never yet heard a reasonable argument advanced in support of its construction. It practically parallels the Intercolonial, with which it will have to compete. The Intercolonial at present does not pay running expenses, without taking into account any charge for interest on the capital invested. The Grand Trunk Railway Company, in 1903, being anxious to extend their system into the west, approached this government and sought to obtain a charter authorizing them to build a line of railway from North Bay west. Had that proposition been taken up we have reason to believe that at the present time the Grand Trunk Railway Company would be in a very good position to handle its share of the western trade. The government did not look favourably upon that proposal, and they substituted the present Grand Trunk Pacific Railway scheme. That scheme was strongly opposed by the then Minister of Railways, a very able gentleman, the one man in the cabinet who was in the best position to judge of the meT-

its of the proposition. The hon. leader of the opposition "when this resolution was before the House a week ago, submitted a statement showing that under the terms of the contract this country will be called upon to pay at least $40,000,000 for interest alone, before the Grand Trunk Railway Company, under their contract, will be called upon to pay rent for the eastern section of the road. That is an amount about three times as much as the total cost of the road was estimated by the First Minister when this proposition was first placed before the House. We were told by the present hon. Minister of the Interior (Mr.- Oliver) in 1904 that the Domiinon of Canada was bonus-ing this railway to the extent of from $12,000,000 to $20,000,000. In view of the information now before the House, it appears to me that the minister will require to revise his estimate. Although the Grand Trunk Pacific scheme may have been a mistake we are in this position at the present time; the country by the contract it has entered into and in consequence of having given its credit, is bound to see that road completed even although it may have been a mistake in the first place. So, the question for us to consider at the present time is what is the best course to pursue to secure the completion of the road. The Grand Trunk Railway Company have approached the government and have asked that the terms of the contract be varied by this government loaning them $10,000,000. During this present session of parliament we have heard the hon. member for Strath-cona (Mr. McIntyre) and, I think also, the hon. member for Assiniboia (Mr. Turriff) advance the argument that when a great Tailway corporation comes to this government and seeks special legislation this government should avail itself of the opportunity to secure better terms from that company. That was the argument advanced by these hon. members when the question of authorizing the issue of $50,000,000 of additional stock in connection with the Canadian Pacific Railway was before the House. It does appear to me that this would be an opportune time for this government to put that policy into effect and to say to the Grand Trunk Pacific Railway Company:	'If
you are prepared, under the terms of the contract to go on and complete the road, all well and good; if you are not prepared under the contract to go on and complete the road, then we will take over the road, we will reimburse you your expenditure so far and complete the road, and own, not only the lean eastern section but also the western section which, it is expected, will prove profitable.'


Mr. PERLEY.: There is no question but that it is absolutely necessary for ue to go on and complete this Grand Trunk Pacific Railway. That rvas settled in 1903 and 1904.


James J. Donnelly: 
Mr. T. CHISHOLM.: I did not intend saying anything this evening, and in what I shall say, I shall speak unly for myself. I have listened with great -attention to the speeches delivered from this side, and have been thoroughly convinced, from the evidence and arguments presented to us, that this resolution is very defective, and that, if it is to become the basis of a Bill, which will involve this country in an expenditure of $10,000,000, it should be greatly re-arranged and remodelled. In its present shape, I cannot see my way to support it. In common with other hon. members on this side

I am quite in favour of our finishing the road. Canada is committed to the building of the Grand Trunk Pacific and that road must be completed. But if we continue to waste our money and misappropriate the funds of the country, as we appear to be doing under this resolution, the road will never be finished. Why, that part of the line between Winnipeg and Edmonton, is simply to be built over the prairie. There are no very high grades in all that distance! and very few curves. There is not timber to get out of the way and the right of way can be very cheaply obtained, so that the line should not cost more than $15,000 a mile. Other railways in the United States and Canada have been built for that price through very similar sections. Now we provided the Grand Trunk Pacific with $13,000 a mile to begin with and they are coming back to us for $10,000,000 more or nearly $10,000 per mile in addition. Certainly any one could build a railway if he had such backing. There is not a man in this House who could not build the whole railway between Winnipeg and Edmonton, if he had such backing that he did not require himself to put a dollar into it. But if we are to have this trouble with the prairie section, where will the money come from to finish the mountain and the eastern section ? If it costs that much to build over the level prairie, what will it cost when we have to cut through miles of solid rock in the mountains of British Columbia ? The country, at this rate, will not only be ruined, but will never get the road. It is not too late for the government to reconsider the matter and make some change in this resolution. We wish to see the resolution get through and the road built, but we want to have some security for our money; and after the evidence presented to this House to-night by the hon. member for St. Antoine division (Mr. Ames) the hon. member from North Grey (Mr. Middlebro) and the hon. member for South Bruce (Mr. Donnelly), I must say that it seems to me we are getting no security at all for our $10,000,000.
If we are to become bankers for this company, we ought to act as bankers would. When I go to a bank for a loan, they look very carefully into the security I offer. They expect me to be able to show that I am worth the money I am asking for and a good deal more. Well, if we are to be bankers in one sense, we ought to act as bankers in another sense. When I go to a bank for a loan, the banker has the money and does not need to go and borrow it. In this case Canada has not the money herself. She must go to Europe to borrow before she can loan it. Any one could set up as a banker if he had credit. He could loan money to all his neighbours and make hosts of friends if he had the privilege of borrowing the money Mb. THOS. CHISHOLM.
and the credit of the country to back him. It would have been quite time enough for the _ government to go into the banking business when able to pay their own debts. I am sorry, under the circumstances, that I have to express myself in this manner; but unless this resolution be changed very much I shall have to vote against it.


George Halsey Perley: I would like to put a question to the hon. the Minister of Finance. I find that in his speech the other day he said-page 3676 of ' Hansard ':
Therefore we admit that in giving the company the benefit of this loan, we are taking at par a security which they could not float at par, and giving them the benefit of 4 per cent though they themselves could not borrow at that rate, and the government has recently had to pay over 4 per cent.
I would like to ask the hon. minister what earthly reason there is why we should lend this money to the Grand Trunk Pacific at a less rate of interest than we have to pay?


William Stevens Fielding: It does not follow that we are lending at a less rate of interest than we have to pay, because if the money has to be borrowed, it is possible that it will he borrowed at less than 4 per cent, and if so, we would make a profit. However, even if we were giving them an advantage to that extent it would be a relief to the company. A number of questions of a legal character have been asked this evening which I would not undertake to answer off hand. They are worthy of consideration, and if they justify further inquiry, we must take them into account. But what Impresses my mind is that these securities which we propose to take, whatever their rank and standing may be, have at this moment a money value in the markets of the world to the extent of 90 per cent. Some of the securities were recently issued at 90 per cent.


Herbert Brown Ames: With 70 per cent of them left on the hands of the underwriters.


William Stevens Fielding: Some of the best loans are left in the hands of the underwriters. But I say that the risk we take in this matter is the risk of the margin, which is roughly speaking about 10 per cent. We could put these securities on the money market to-day, and realize 90 per cent of their face value, probably with some charges for financing.


Herbert Brown Ames: Could the company float the loan at 90 per cent?


William Stevens Fielding: I think probably they could not have done so a month ago, but there has since been an improvement in the condition of the money market. It is not worth while arguing as to the rank and priority of these securities. All

these matters have been known and taken into consideration by the financiers who have fixed the value of the property, and that is roughly to-day 90 per cent.


Herbert Brown Ames: The hon. minister's argument has put a completely different face on the question. We have been asked to grant this loan as a measure of relief to the company. That is the whole burden of the final portion of Mr. Hays' letter. As a banking transaction, it has not very much to commend it. But if the company could float these bonds with only 10 per cent reduction, we do not need to come to their help.


William Stevens Fielding: I think we do. I think the flotation of these securities at a very low price would affect the character of the enterprise and the character and standing of the company generally. The measure of risk we are taking is roughly speaking about 10 per cent. I do not hesitate to say that the value of these securities is to be found chiefly in the guarantee of the Grand Trunk Railway Company of Canada. The mortgage security will have some value in the future. To my mind it is not of great value to-day, though as the years roll on, it will be more valuable. But with the guarantee of the Grand Trunk Railway Company of Canada, while the money market to-day would not have faith enough in these securities to take them at par, the improving conditions of the whole enterprise as the work goes on, as the road is put into operation through the prairie and other sections, as the country improves, as business improves, as money becomes easier, we have faith that these securities will be worth one hundred cents on the dollar, and on that faith we accept them. The amount at risk is simply the margin between the par value of the securities and what they might be sold for in the money market to-day. I admit that if they were sold to-day, they would have to be sold at a sacrifice, but we ask the House to adopt this measure on the faith that when the loan falls due they will be worth one hundred cents on the dollar, and therefore we are risking nothing.


George Halsey Perley: Do I understand the hon. minister to say that the bonds to be given to the government for the loan will be the same as those placed on the market at 90 a little while ago by the underwriters and not taken up by the public?


William Stevens Fielding: I do not attach much importance to the question whether they were taken up by the public or not; but I said they are substantially of the same character, inasmuch as they are bonds of the Grand Trunk Pacific Railway Company guaranteed by the Grand Trunk Railway Company of Canada. The man who promises to pay and the man who endorses are practically the same in both cases. As to their precise rank and standing, I do not see that it is important.


George Halsey Perley: The bond that.was placed on the London market was a second mortgage bond, while the bond the government is now taking is a fourth mortgage bond. The mortgage given to secure the second mortgage bond has a substantial value- although it was not taken up by the public at 90-because it is not only a second mortgage immediately after the government guarantee, but it has special privileges in case there is default. It ranks largely in the same category as the first mortgage bonds. Therefore I ask the hon. minister whether it is not true that the mortgage securing the second mortgage bonds has a substantial value far and away in excess of any possible value of the mortgage securing this loan?


William Stevens Fielding: I do not attach as much importance to the point as my hon. friend seems to do. I think that in all these securities, the real thing to the investor is the guarantee of the Grand Trunk Railway Company of Canada. As to the other securities, my hon. friend is wrong. The securities I referred to were not second mortgage bonds, but the equipment lien established by statute. If you call that a mortgage, it was a third and not a second. But for all present purposes the valuable security is the guarantee of the Grand Trunk Company. The other securities will have value in the future.


George Halsey Perley: However, according to what the minister has said they are putting a first mortgage on the rolling stock.


William Stevens Fielding: No, the rolling stock is really included in the first mortgage.


George Halsey Perley: No, I think the minister is mistaken, the Act distinctly stated that the first mortgage did not cover the rolling stock.


William Stevens Fielding: I think it does although a special security was created to raise the money; I think it was all included in fire first mortgage.
Mr. PERLEY I think the hon. minister is mistaken.


William Stevens Fielding: I find that the equipment is included in the first mortgage.


Herbert Brown Ames: The equipment and the rolling stock are different propositions altogether.


William Stevens Fielding: I do not know about that.


Herbert Brown Ames: Certainly they are.
4(190


Mr. HUGHES.: The rolling stock is a separate account.


William Stevens Fielding: What is the difference between the equipment and the rolling stock?


Herbert Brown Ames: I think you will find that when the terms of these mortgages are studied in the schedules of the Act the equipment is always quite distinct from the rolling stock.


William Stevens Fielding: I think not; equipment means rolling stock.


Herbert Brown Ames: As I understand it this third mortgage, that is the loan of the 25th of February, 1909, which was issued in London, and of which 77i per cent was left on the hands of the underwriters, had by way of security the rolling stock, and after that came what equity was left after previous liens on the property of the Grand Trunk Pacific beside the guarantee of the Grand Trunk and that loan we know was a drug on the market. It was in a better position than this because it included the rolling stock.


William Stevens Fielding: My hon. friend will find that equipment, meaning rolling stock, is embraced in the first mortgage and that their success in the market was due to the guarantee of the Grand Trunk; practically that money was raised on the security of the Grand Trunk. Any security on the equipment itself was a very inferior security.


Mr. SPEOULE.: Am I correct in understanding that if we grant this $10,000,000 loan, $7,000,000 of it will be used in paying moneys advanced by the Grand Trunk and that therefore there will only be $3,000,000 left for the purpose of pushing on the work?


William Stevens Fielding: In a sense that is correct. We, of course, will not pay it to the Grand Trunk; it must be paid out to the Grand Trunk Pacific Eailway Company, upon the certificates of the engineer; but we do know as a matter of fact that the Grand Trunk Eailway has advanced out of its treasury a considerable sum of money and that the $7,000,000 which they have used to assist this work will be returned to them indirectly. We will not pay it to them, but we will pay it upon certificates showing that this money has gone into the work. No doubt the Grand Trunk Pacific will pay that back into the treasury of the Grand Trunk Eailway, to which it properly belongs. [DOT]


Thomas Simpson Sproule: Will that be paid on certificates for work already done or for work which is yet to be done?


William Stevens Fielding: Of course we cannot pay out money upon any future work to be done; we can only pay it upon certificates for work already actually done.
Mr. AMES


George Eulas Foster: At the time you paid?


William Stevens Fielding: Yes, and if they have already done that work and can furnish certificates to show that amount of money has in all good faith gone into the work, we can pay the amount. We will pay it to the Grand Trunk Pacific in the usual way dnd they having got money to do this work from the treasury of the Grand Trunk of Canada will, I presume, pay it back to that company. That is a transaction between the two companies. We will only pay upon the certificate of the engineer that the work has been done and the money expended according to the representations made.


Thomas Simpson Sproule: Has the minister reason to believe that $3,000,000 will relieve their present financial embarrassment and enable them to push on the work rapidly until completion? It would seem to me such a small amount, having regard to the mileage yet to be built, that I would expect to find them in financial difficulties again before the summer is out and another application made for aid. What have the government done to satisfy themselves that they will be able, when this is advanced, to go on and complete the work within a reasonable time?


William Stevens Fielding: The government engineer certifies that this $10,000,000-there is a slight difference between the estimates of the railway and the government engineers-will complete the prairie section.


Herbert Brown Ames: Have you any guarantee that the builders of the mountain section will not be back for aid?


William Stevens Fielding: I do not know. Sufficient unto the day is the good thereof.


Thomas Simpson Sproule: What government engineers have given this estimate and certificate?


William Stevens Fielding: The estimates were prepared naturally by the engineers of the Grand Trunk Pacific when they made their application. Their estimates were referred to Mr. Schreiber, the government engineer, and he has made a report which will be found among the papers brought down.


Thomas Simpson Sproule: I have looked over a few of his estimates and have had occasion to inquire into some certificates before and I must confess from my experience in regard to these, that I would not attach the very highest values to a certificate from that source.


William Stevens Fielding: I would say in that respect that all engineers are human and imperfect and the best of them will make mistakes. It must be remembered that the Grand Trunk Pacific Co. are constructing the prairie section of the road and not the government. Hon. members speak of the excessive cost of the eastern division as some

thing for which the government are to be blamed, but the prairie section is being constructed by the Grand Trunk Pacific, with the aid of the Grand Trunk, with all the paraphernalia of the Grand Trunk engineers, and we are told that the Grand Trunk and the Grand Trunk Pacific are rather severe in their dealings with contractors and employees, so there is no reason to doubt that every effort has been made to make the cost of the prairie section as reasonable as possible. Thus when we find that this road is being constructed by the railway company without any interference by the government, except supervision, and that this largely increased cost is rendered necessary, it should show my hon. friends that the increase must be for good and sufficient reasons. With regard to Mr. Schreiber's renorts all engineers are human, and it is only fair to Mr. Schreiber, an old engineer who has been in the service of the country for a very long time, to say that although he may make mistakes, all who know him will feel that any estimate and report which he makes is made in the light of a long experience, in the light of the knowledge of a trained and very able engineer, and of an experience which I am sure we all recognize as the experience of a man who has, in the fullest degree, the confidence and respect of all who know him.


Thomas Simpson Sproule: I would like very much to share in that opinion, but I frankly confess I do not and I think we have had sufficient evidence to justify a different opinion altogether. But if there was nothing else in the situation beyond the fact that the first estimates of the cost of this road and the second are so different, it would be quite sufficient to justify us in having very serious doubts as to whether the same thing would not occur with subsequent estimates. The experience of the past does not justify any strong ground for the belief that the present estimate is not likely to prove'inaccurate just as well as the estimates which have been made up to the present.


William Stevens Fielding: It is our only means of judging, the estimate of a reputable engineer.


Thomas Simpson Sproule: Talking about reputable engineers, I do not wish to do Mr. Schreiber any injustice in the world, but I frankly confess that I believe the government could get him to give an estimate to suit their own purposes on any subject.


William Stevens Fielding: My hon. friend must be speaking of former times and other governments. I can only say that I have ever found Mr. Schreiber a most faithful and efficient public servant, and I never knew a man who would dare to suggest to him an estimate -which did not respond
in every way to his own conviction of what was right.


Thomas Simpson Sproule: Do we require any better evidence than the contract of M. P. Davis, on the Cornwall canal? Under his own hand, Mr. Schreiber said that the amount was a proper one, that it was reasonable, and recommended to the Minister of Railways that it be paid. And the Minister of Railways did the same. But the Auditor General stood out, declaring that he would not pay it, because it was rank robbery. And the amount was reduced from $52,000 to $29,000-and this the Auditor General said was- $10,000 too much-and it was accepted as payment in full.


William Stevens Fielding: I do not remember the details of the Davis case. But any man who knows Mr. Schreiber will believe that any estimate he ever gave was given in the most perfect good faith and that it was an estimate the government would have a right to accept as being that of an engineer of high reputation and ripe experience.


Herbert Brown Ames: What was his estimate of the cost of the mountain division?


William Stevens Fielding: I do not recollect.


Herbert Brown Ames: Thirty thousand dollars a mile, was it not?	.


William Stevens Fielding: I cannot recall it.


Herbert Brown Ames: And now it is estimated at $80,000. That is very accurate for an engineer, is it not?


William Stevens Fielding: The conditions governing the cost of public works have changed enormously since that time. The very fact that the prairie section has proven so much more costly than was estimated-


Samuel Hughes: Why?


William Stevens Fielding: For fifty reasons.


Samuel Hughes: Give us forty-nine of them.


William Stevens Fielding: If time permits, I will give, later on, not only forty-nine but the whole fifty. Does not the hon. gentleman (Mr. Hughes) know that labour costs more than it did?


Samuel Hughes: No.


William Stevens Fielding: I know it.


Samuel Hughes: No, the hon. minister will pardon me-he does not know it.


William Stevens Fielding: I did not go out to pay the bills, but I have the reports of men who did, and I am satisfied and believe


Samuel Hughes: I know all about it.


William Stevens Fielding: The hon. gentleman cannot know much more about it than I do. He gets his knowledge from other people, just as I do. But I state, from the best information I have been able to obtain, that the cost of labour is very much in excess of what it was.


Samuel Hughes: And what else?


William Stevens Fielding: The rates paid for ties have doubled.


Samuel Hughes: Why?


William Stevens Fielding: Because the men who cut the ties are getting higher wages. Go into the steel mills and ask in the office there why the road is costing more and they will tell you-it is because their men are getting better wages.


Some hon. MEMBERS: Oh, oh.


Samuel Hughes: What are the rails today?


William Stevens Fielding: I have the floor.


Samuel Hughes: I would like to ask


Mr. DEPUTY SPEAKER.: Order.


Samuel Hughes: I have the right to ask a question, with the permission of the hon. gentleman who has the floor.


William Stevens Fielding: I say, go into the steel mills, and they will tell you


Samuel Hughes: Will the minister allow me a question?


William Stevens Fielding: I am speaking just now.


Samuel Hughes: All right.
Mr. FIELDING

they will tell you
that their men are getting higher wages. The workmen who cut the ties are getting higher wages. Go into the contractor's office, and he will tell you that he is getting two prices where he got one before.


George Eulas Foster: Oh, oh.


William Stevens Fielding: Yes. And the consequence is that the cost of these works has increased, almost double. Go through the list of all the items that enter into railway construction, and you will find that every great enterprise that has nad to be constructed of recent years has proved much more expensive than the estimates of 1903. Now, Colonel, what is it ?


Samuel Hughes: In the first place, Mr. Chairman, I would ask you to call the minister to order for not addressing the chair ?


William Stevens Fielding: That is right, I apologize.


Samuel Hughes: Let me tell the Finance Minister that it is true that ties to-day are deareT when placed on the track, but they are not dearer in the woods. There is Mr. HUGHES.
what we want to get at. Why should there be this increased cost between, the woods and the placing in the track. Rails are about as cheap as they were in 1904-I do not know but what they are a little cheaper.


George Taylor: They are cheaper.


Samuel Hughes: I believe that they are cheaper than when this contract was made. The wages paid in this country are lower than they were when this contract was made. Why, the minister has only to take the case of the public works in the town of Lindsay. The contract there is not being carried out on the fair wage scale; the-prices paid by the contractor there are considerably lower than in any other industry in the town. If the Minister of Finance is going into these details, we want to get the facts, for, with the facts, we can prove him to be wrong ? Let him give the fifty reasons of which he has spoken.


William Stevens Fielding: I think that forty-nine will be quite enough to prove the hon. gentleman (Mr. Hughes) wrong.


Samuel Hughes: On the National Transcontinental, where they pay foT ties from 60 cents to 75 cents, the man who cut the ties, perhaps only a hundred yards away, from where this price is given did not get more than one-quarter of that for them.


William Stevens Fielding: The men who buy the ties get them at the best price they can.
MQr. FOSTER. It would help us if we could get down to the facts with regard to even part of these fifty reasons, and the minister has an easy method of getting at the facts.


William Stevens Fielding: Certainly.


George Eulas Foster: If he will institute a little inquiry, he will find out the exact wages paid to the different grades of men in 1904, and he can find the scale ox wages paid to the same grades of men in 1907 and 1908. This would be something authentic. If we had also an authoritative statement of the cost of supplies in the different years, we could make a fair estimate of what was due to the increased cost in that regard. Then, as to rails, it would be easy for the Finance Minister to have the information for us as to what rails were sold at in 1904 and in 1908. These are stock articles, and the price can easily be ascertained. One thing, I think, is quite certain, that it was much easier and cheaper to get the rails in 1908 than in 1903-4, because the facilities for carriage up along the line under construction are very much greater than they were at that time. So, there aTe two elements of expense-labour and steel-concerning which we could easily have the information.


William Stevens Fielding: That is a fair request. I agree.


George Eulas Foster: Information could be given us also as to the cost of ties. With these facts, we could get somewhere near the added cost. But has the Finance Minister looked into the particulars sufficiently to satisfy himself that $35,000 a mile could have been economically put into that road under its present construction? I have talked to men who have built railways through that country as well as through other sections, and the Minister of Finance ought to have had curiosity enough to make inquiries also. Other roads have been built in this prairie country-the Canadian Pacific Railway and the Canadian Northern are constantly building there. Has the minister made inquiry to find out what these other companies are paying per mile for the building of their roads? Has he that information on file? Before we come to the rescue by a ten-million dollar loan, ought we not to satisfy ourselves that there has not been rank extravagance-to speak of nothing else -in building that prairie section at a cost of $35,000 per mile? This amount, as I understand it, does not include equipment of rolling stock. Am I right in that ?


William Stevens Fielding: The figures given for the mileage estimate do not include equipment.	*


George Eulas Foster: 

Grand Trunk Pacific. Are these things true? if they are, it is sufficient to make us sit up and think. You talk about the weary Titan, the old mother, but there is young Titan here whose back is being bent by the financial burdens that she is obliged to carry, and that young Titan is Canada itself. When we have to strain every nerve to get what wo want for our own purposes, we allow these men to skim all the cream off the Grand Trunk Pacific, perquisites, town sites, lumber business and a dozen others, and we patiently bend our backs and add to the financial burden that we find already more than we can carry. It is time we become sober with reference to the debt and the obligations which are being rolled' in upon this country. The Finance Minister comes to us and asks us for a loan. He is the man to give us the information. When we made a loan to the Canadian Pacific Railway we took a lien on their $35,000,000 of stock; the lien was a good lien and a strong lien for the $35,000,000. But we said: ' You come here to ask us for money to finish the contract; we will let you have the money, but we wont give it to you at any less per cent that we have to pay for it, and we will take all the liens you have. There is $35,000,000 of your stock, we want that as well/ and we took the loan upon that. But here, the company cannot offer us a security that is worth sixpence to this government. As the hon. Minister of Finance has said the Grand Trunk Pacific Railway gives its bond, but, as he says, its bond is not presently worth anything. We go to the Grand Trunk Railway Company which guarantees the bonds. That is really what we get. Now, when the company come with their $25,000,000 of stock, which, at some time, may be worth as much as the Canadian Pacific Railway stock to-day, why in the name of all that is reasonable should not we have the security of that stock as well; all the more so that it does not appear to me that any adequate product of that stock has gone into the financing of the Grand Trunk Pacific? The Minister of Finance knows how much. He can tell us. These are some questions which the Minister of Finance should undertake to answer, and to answer, I think, before we get through with this measure. We are now approaching the Easter holidays-days of peace and calm after some little excitement of the past. We do not want to get into another exciting time before that gracious season comes on and so we cannot carry out all our wishes to-night with reference to this resolution. We are going to allow this resolution to pass through committee with the reservation that every line and sentence of it stands yet to be approved, or amended or approved with such emendation as we can get; but when the Bill, which is founded upon the resolution, comes down in de-Mr. FOSTER.
tail it can be taken up, acted upon and be amended much more easily than in the case of the resolution. But the Minister of Finance has to get more than forty-nine out of these fifty little reasons that he offered to the committee, and I am sure he will. There is another question that we want to get a little information on. How much money of the Grand Trunk Pacific Railway Company has gone into rolling stock? When did it go into that rolling stock ? Who has been using the rolling stock from that day to this? Is the rolling stock new or is it largely made up of repaired stock from another company and then taken as rolling stock into the Grand Trunk Pacific? We want to know why this new company, which has nothing to roll on, goes to work and spends, I do not know how many millions-the Minister of Finance knows-five, six, seven or eight millions-ton rolling stock long before it has anything upon which the stock can roll. The company may say that they must make some provision or else when they got the road they would have to wait some time longer, but there are two questions that suggest themselves: How long have they had that rolling stock? What has it been doing in the meantime. Has it simply been used as a convenience for the Grand Trunk Railway, or has it been fairly and squarely built and bought as the necessities of the Grand Trunk Pacific called for it? There is another question. Who constitutes the company that builds the rolling stock? We would like to know something about that part of the matter. It would be interesting to us and altogether germane because the Finance Minister himself does not want to ask that Canadian credit be strained to the amount of $10,000,000 unless everything is square and fair. We do not want to have it go unless it is square and fair and if it is not square and fair we would like to know it. We would all feel better if we did know it. Looking at the cream skimming propensity which has shown itself upon everything in sight along that Grand Trunk Pacific without one drop of that going into the parched and hungry mouth of the Grand Trunk Pacific Corporation itself, we are also anxious to know whether that is going on in the car building process. We would like to know something about the constitution of the car building company that is furnishing this stock. These are some of the questions which come to the surface. The Minister of Finance, I think, has not quite properly settled another. He pretty nearly cut the whole ground from under his feet when he declared that they could go into the market to-day and get 90 per cent, of these securities. Why in the world, under these circumstances and under our circumstances at the present time, should we not

41X0
allow this great company to take this discount of ten per cent and go on with this road? Other companies have to do it. There is not a railway company in this country of any size at all which has not had to submit to heavy discounts upon its stock and bonds. Here is an admission by the minister himself that they can go into the market and that the margin is only ten per cent against them. I had the idea that the plea of Mr. Hayes was that they could not float their certificates, but if they can be floated at a discount of ten per cent, there are lots of commercial companies today who would be glad to get their capital on that basis, there are lots of companies who are getting their capital at that discount, and they are glad to be able . to do it. If what the Minister of Finance says is true it does not seem to me that there is any great necessity for us to put out neck under the yoke when we have already taken the heavy burden to draw and which we will have to draw. I do not know that it is necessary for me to make any other remarks at the present time but these are some of the things that I desire to bring to the attention of the minister. If this loan is necessary I say that the Minister of Finance has no business in a matter like this, after the regal support that we have given to this measure, when there is an emergency with reference to $10,000,000 of stock, to make another gift. Let them pay exactly the interest that we pay. I do not ask that they should pay more, but let him make his proposition so that he will exact in interest what the $10,000,000 costs us. At least I think that ought to be done. Why should we act the part of the beneficent mother to any greater extent than we have, for no man will deny that so far Canada, forced through it and into it by the government, has lifted and is to-day lifting nearly 90 per cent of the whole load. We will take other times to discuss this question and when the Bill comes on, founded upon this resolution, we will have something further to say, but these are some of the things that we were anxious to know about and things which, before the Bill gets through, we must know about. I am not satisfied at all as to the evidence we have of the $35,000 a mile that went into the road. I am not at all satisfied, and I think there ought to be some further research into that before we let it pass; my hon. friend the Finance Minister can get at that much better than any one else because he has all the sources at his command.


William Stevens Fielding: My hon. friends opposite are rather hard to please. At the beginning of this matter, my hon. friend the leader of the opposition, framed a series of questions for the purpose of eliciting all 1301
the information he thought was necessary to enable the House to enter upon an intelligent study of this transaction. I thought that many of his questions did not have much bearing on the resolution; but as nevertheless they did have some_ relation to the Grand Trunk Pacific project generally, we brought down all the information desired. I think that in almost every instance everything my hon. friend sought was granted. But now we find my hon. friend from North Toronto speaking as if there were some dreadful neglect in supply ing information.


George Eulas Foster: I would not say neglect. So. faT I think my hon. friend has come up to the requirements very well indeed, but what I am now making is not a charge of neglect,, but a modest request for some further information, because as the discussion proceeds other points arise which require elucidation.


William Stevens Fielding: Very much of the information the hon. gentleman desires is ' asked for in so indefinite and hazy a way that it may be difficult to give it precise form. If my hon. friends had framed their questions in a precise form as did the leader of the opposition, I should make every effort to comply, but it is rather difficult to know exactly what it is they do require. My hon. friend from North Tor-on (Mr. Foster) is very prolific in 'ifs'. It is very easy to found an argument on 'ifs.' If this is the fact and that is the case, and if something else occurs, then something else is bound to result. One can build a monument of arguments on an 'if.' I would be glad to understand what the hon. gentleman means by this cream skimming operation which he says, is to be found everywhere. The only allusion he made to anything specific was in relation to the town sites. I have not the information desired at hand, and I fail to see what bearing it can have on the cost of the prairie section, which was the subject under discussion, but if further information be desired on the town sites, no doubt my hon. colleague, the Minister of the Interior, will be able to give all the information necessary, which will show that whatever was done in that connection as between the-government and the company was entirely justified. My hon. friend said, and it has been repeatedly said in the debate, that the government are lifting-to use his expression-90 per cent of the load in this matter. That is an entire misapprehension of the situation, but we will come to that later on, and I shall not take up time by dwelling on it now. The conversations we had with respect to the cost of labour and railway ties and materials generally were not confined to any particular section, but had reference to the increased cost of the-road generally. I shall bring down information later, and in that respect I think

the request of my hon. friend was fair and reasonable. But I do not agree that it is of the utmost importance, though it may be of interest, to us to know what sums other roads have cost. I do not think there is any prairie road which pretends to be of the same character as the Grand Trunk Pacific. If some other company has built for less money, that will be no evidence whatever that this road is too expensive. If the claim is made that it is too expensive, that must be established by other reasons than by what some other road of a different character may have cost. My hon. friend asks, am I satisfied this road has cost $34,000 or $35,000 per mile. I know only one way of being satisfied that the road has cost that much, and that is by our engineer's report. Every statement of cost by the company is referred to the government engineer, Mr. Schreiber. Mr. Schreiber cannot watch the construction of the line everywhere, but he has his own officers supervising it, and they report to him. And if they tell him, and if he tells us, that these figures, supplied by the company, represent fairly the cost of that road, I-being an innocent sort of a person-would be satisfied that the statement is a fair and proper one. If any other information be obtained, depend on it, I shall be very glad to lay it before the House, but I should think that information of the character I have mentioned might be accepted by the House as evidence that this road is costing that money and costing it intelligently and honestly. And if hon. gentlemen can be satisfied on that point, I do not think it matters what some other road of some other-kind, built at a different time, actually cost.


George Eulas Foster: What is it that Mr. Schreiber certifies to? Mr. Schreiber is an engineer. I do not know the modus operands but there aie different ways of getting at the cost. Mr. Schreiber makes his annual or semi-annual or quarterly journeys over the road. He looks particularly after its engineering features as an engineer naturally would. But does he examine the accounts? Does he in any way look into the contracts and sub-contracts and contracts under these again? Does he look into the cost of material? Does he look into what is paid and compare the cost with the current prices? These are things that a business man, detailed to look into the question of cost, would do, but I do not take it that such is Mr. Schreiber's duty. He has certain figures placed before him. He finds that so much has been spent on labour, so much on material, so much on something else. He sees the vouchers, but does he get underneath all that in a business sense to find out whether there have been extravagant sums paid or not. The mere fact of a man look-Mr. FIELDING.
ing as an engineer, after the engineering features of a road, its curves, its masonry, ',its culverts, and things of that kind, does not enable him to give an opinion as to the reasonableness of its cost. Does he do anything more than simply look at the vouchers placed in his hands and take the amounts there given as having gone into the different kinds of work, sum up the tctal, and then spread it over the mileage at so much per mile. Yet underneath all that there may be all sorts of extravagance, double payments, sub-contracts and the like, and the engineer would know nothing about them. It does not seem to me that it is his business to know because he is not sent there for that purpose. If he does not do what I have indicated he does not, then we have no certainty at all, even with Mr. Schreiber's certificate, that $35,000 peT mile have gone into the work. I notice a letter from Mr. Bell. I think Mr. Bell is an auditor. I know nothing to his discredit, what I do know of him i3 .entirely to his credit, and I have no desire to pass any reflection on him, but Mr. Schreiber says to Mr. Bell: ' What about these accounts? ' And Mr. Bell says: ' I have gone through the accounts and examined the vouchers.' What does that show? It shows that bills have been paid and the vouchers produced. But does Mr. Bell go into the question of proper cost and all these other questions which would establish extravagance or otherwise in the construction of the road? Possibly he may, but I imagine that what he does is to examine the accounts and see whether they have been paid and whether the vouchers are all right. If that is Mr. Bell's work, there is something underneath it all that may not have come out, and what makes me suspicious is the extraordinary high cost. The Finance Minister says you cannot compare one road with another unless you have similar conditions. That is true; 'out I am bound to suppose that neither the Canadian Pacific or the Canadian Northern are running sheep paths up through that country. I think they are building good roads, and I am told that their grades and curves and road-beds, if not equal, are very nearly equal to those of this road. Of course, roads are always getting better where properly cared for; but when you come to compare $18,000 with $35,000 a mile, you have a very large margin for extra ballasting and improving curves and grades. I am told that the hauling capacity of the Canadian Pacific Railway and Canadian Northern is just about as great as that of this road.


William Stevens Fielding: Mr. Schreiber was here until a short time ago, when I released him from attendance, not supposing that he would be required. All the matters men-

tioned by my hon. friend are part of the engineering, because it is the duty of an engineer to report that a certain work is going to cost a certain sum, which necessarily implies that he must pass judgment on the reasonableness of the charges for labour, rails, ties, &c. Therefore I think it is reasonable to suppose that Mr. Sehrei-ber, in making his certificates and estimates, assisted by Mr. Bell, a very expert auditor, who examines all the vouchers, does look into all these matters, and the certificate he gives is to be accepted as reasonable evidence that the road will actually cost the sum he mentions in his report, and we are disposed to accept it in that light. But before the matter comes up again, I will discuss these points with him.


George Eulas Foster: Who is Mr. Bell ?


William Stevens Fielding: The auditor of the government Railway Department.


Samuel Hughes: Would the minister also bring down a statement as to the cuts and valleys ?


William Stevens Fielding: I couid not answer as to that.


Mr SPROULE.: Would the minister tell us when the first conference took place which led up to the negotiations for this loan between the government and the company ?


William Stevens Fielding: I think I would not know.


Thomas Simpson Sproule: I think the Finance Minister must know; if not, the Prime Minister would know. I think the House would be pleased to have xurther information about it, in view of the circumstances surrounding this whole transaction.


William Stevens Fielding: My hon. friend should not trust his imagination so lar.


Thomas Simpson Sproule: There is a good deal more than imagination in it. The very fact that $7,000,000 of this money is going to the Grand Trunk Railway Company, and that it took such an active part in the election, and that a government running an election generally wants funds, and that within fifteen or twenty days after the election we have this letter from Mr. Hays stating that unless this is done the work is going to stop and financial ruin is going to stare us in the face and injure the financial status of Canada, causes suspicion that all the preliminary arrangements were made before the election, with the understanding that the scheme would be carried out after the elections in the event of the government being returned to power. Therefore we are interested in getting what information the government can give us about it, and I am quite sure that if they are willing to give it they are in a position to give it.


Mr. TALBOT.: The hon. gentleman says something about the activity of the Grand Trunk during the last election. Let him tell us something about the activity of the officials of the Grand Trunk Pacific in the west.


Thomas Simpson Sproule: I am talking to the Minister of Finance, who can give us the information we Tequire.


William Stevens Fielding: The only information I can give as to the activity of the Grand Trunk Pacific in support of the government, is that I heard very much the other way. But these things are not business.


George Eulas Foster: Will the hon. minister tell us where he got his contributions ?


William Stevens Fielding: My hon. friend has neglected his opportunities of testing all these things in the election courts, which is the proper place, and not here.


Herbert Brown Ames: I understand the hon. minister to say that Mr. Schreiber has had resident engineers traversing this work, who are expected to know every thing that has been done.


William Stevens Fielding: I understand that Mr. Schreiber has had some inspection of the work; I have the impression that Mr. Schreiber had some officials acting for him in his absence.


Herbert Brown Ames: I have no doubt that that is the case, and if so, these officials must have reported from time to time that the amount of money expended on wie road was very much in excess of the estimate, and the minister has been for some time in possession of that information.


William Stevens Fielding: Yes, we have known it for some time.


Herbert Brown Ames: Then the hon. gentleman has had for some time the means for coming to the conclusion to come to the assistance of the company ?


William Stevens Fielding: We had that only a
short time ago.


Herbert Brown Ames: How long ago was the minister asked formally to come to the relief of the company ?


William Stevens Fielding: I do not remember.


Herbert Brown Ames: It is a strange thing about the letter of November 16 that it drops, so to speak, from the clouds, an absolutely finished document and never since then does there seem to have been exchanged a single word altering its tenor.


William Stevens Fielding: Why should it be altered?


Herbert Brown Ames: The resolution is drawn absolutely along the line of the letter. When the letter was written had an affirmative reply been promised to the writer?


William Stevens Fielding: I could not answer, I do not think it had. So far as I am concerned it had not.


Herbert Brown Ames: How long'before the 16th of November had the substance of that letter been matters of pour parlers?


William Stevens Fielding: I could not answer; the letter will have to speak for itself-that is the value of the letter.


Herbert Brown Ames: The letter does not say how long prior to that date the matter had been the subject of discussion between the minister and the authorities of the Grand Trunk Pacific.


William Stevens Fielding: I could not tell.


Herbert Brown Ames: The minister would not have us erroneously believe that this letter suddenly fell upon him without any prior intimation?


William Stevens Fielding: It did not fall anywhere, it came in the ordinary way of business.


Herbert Brown Ames: Absolutely unexpected?


William Stevens Fielding: I do not know as to that. We probably have expectations of these things sometimes.


Samuel Hughes: Did the Minister of Finance draft it?


William Stevens Fielding: No, is it good enough for that?


Herbert Brown Ames: Did the minister revise the letter before it was signed?


William Stevens Fielding: My hon. friend is asking too many questions.


George Eulas Foster: Any government going to the people does not v ant to conceal anything or exaggerate anything, it wants to put all the issues before the people. If the minister knew before October 26 that this $10,000,000 was looming in the air, does he think he did right towards the electors of Canada in not apprising them of the fact and getting their assent to it? It would have made a lovely refrain' to the cry of * Let Laurier finish his work ' if the Minister of Finance and the Prime Minister had told us what they knew, that $10,000,000 more had to be borrowed for the purpose? There is a great responsibility on the Minister of Finance in this matter. If he knew it, he did not deal rightly by the people and has no mandate from them; the hon. gentleman cught to go back and get a mapdate for a matter so important as this. If he did not know, the difficulty is to understand how this letter could have dropped out, fully finished, from the clouds, meeting exactly the view of the minister, because he has taken no objection to it from the first. I never knew of any proposition that did not have two sides to it, propositions and counter propositions.


Herbert Brown Ames: 


William Stevens Fielding: A bolt from the blue?


George Eulas Foster: As though an all-wise Creator had moulded it. It was perfect. It fitted exactly the views of my hon. friend the Minister of Finance and Mr. Hays, and the only people it does not seem to fit are the public of Canada who have to pay for it.


William Stevens Fielding: We do not agree with you there; we think it suits them.


Samuel Hughes: Who constituted the company referred to by the Minister of Railways in a speech prior to the elections, when it was rumoured that the Grand Trunk Pacific were going to throw up the contract?


William Stevens Fielding: I have no recollection, I do not think I heard of it.


Samuel Hughes: What is the character of the bridges and trestles?


William Stevens Fielding: I leave that to the engineers.


Samuel Hughes: Will the minister get that information?


William Stevens Fielding: I will consider it.


Samuel Hughes: Perhaps he had better do more than that.


William Stevens Fielding: All I can do is to consider it.


George Eulas Foster: It would be wiser to do more. All he has to do is to find out the nature of the bridges and trestles, whether the bridges and trestles are of steel and the culverts of stone or wood.


William Stevens Fielding: If my hon. friend will put a specific question I will endeavour to get the information.


Samuel Hughes: I put a specific question in each case.


William Stevens Fielding: Very good, we will consider it.


Herbert Brown Ames: Would the minister endeavour to obtain for us some evidence that will enable him to convince us that this is really a superior road? That is readily reduced to a question of profile and figures.


William Stevens Fielding: That is a fair question; I appreciate it.


Herbert Brown Ames: We want to know about the grades, the curves and the character of the structures. Would it be possible for the minister to deal with the question raised in order that the House shall be permitted, either now or at some future date, to examine the statement containing the list of vouchers that go to make up the $35,000 per mile and that the House through one of its committees would be able to examine and take evidence to satisfy itself that the money has gone into the road?


William Stevens Fielding: I cannot answer that off-hand.


Herbert Brown Ames: He will take that into consideration?


William Stevens Fielding: Yes.


Herbert Brown Ames: Will he undertake to show what has been done with the 20 per cent payment on 10,000 shares of stock. We have been told that it went to the general purposes of the road. We would like something more specific. Where has it gone into the road and what is there to show for it? Would he also take up more definitely than has already been done, what will be the probable fixed charges in respect to capital investment for construction and to provide for what rolling stock has been placed on the road, what will be the fixed charges by way of interest on that section of the road and how these fixed charges will compare with the Canadian Northern and the Canadian Pacific Railway which run parallel to this road? It is a very important question because it will enable us to judge whether this company will be in a position to compete in grain rates or will be an active influence in keeping up grain rates.


William Stevens Fielding: If the roads are of different character I do not think such a comparison will be of much value. Of course if a better road is given, as we claim, it will have such increased hauling power that even although the fixed charges are more it will still be a profitable road.


Herbert Brown Ames: It will still be a question of degree and of comparison.


Samuel Hughes: The three roads, the Grand Trunk Pacific, the Canadian Northern and the Canadian Pacific Railway run through similar country. Each road may be perfectly level for a long distance and then there may be a short grade of 4-10 per cent on the Grand Trunk Pacific and of 5-10 or 6-10 on the Canadian Northern Railway or the Canadian Pacific Railway. In order to have the comparison a fair one, would the minister have his engineers state both in miles and in number the grades on the different roads?


William Stevens Fielding: I think the committee and the House are entitled to the fullest information as to the superior character of this road and any possible information on that question I shall endeavour to get. As to comparisons with other roads, that is a different proposition and we will have to hold it in reserve.


Herbert Brown Ames: What steps are being taken by the Grand Trunk Pacific to provide their share of the funds for the construction of the mountain section?


William Stevens Fielding: They have some money in hand, as shown in the information supplied.


Herbert Brown Ames: The minister cannot tell us off-hand how much money they have exclusively for the mountain section ?


William Stevens Fielding: I think the figures are in the printed statement, to which I would refer the hon. member (Mr. Ames).


Herbert Brown Ames: Would it be pressing the matter too far if I asked whether any intimation has been given that further assistance of this character will be required regarding the mountain section ?


William Stevens Fielding: No such intimation has been received. Possibly, my hon. friend's suggestion that further assistance will be required may prove to be correct, but I have no such information now.


Herbert Brown Ames: I can believe it to be quite nkely that the railway company will come to the government again, inasmuch as they can borrow at a very much lower rate of interest from the government than they can by floating bonds. I would like to ask also: Whore is the preferred stock today-has it been issued?


William Stevens Fielding: If that is not covered by the information already brought down, 1 will have to ask the hon. member to leave the question for further consideration.


Herbert Brown Ames: It is not in this information. The question is what has been done under their right to issue $20,000,000 of preferred stock ?


William Stevens Fielding: I will have that looked into.


Thomas Simpson Sproule: It would be interesting also if the minister could tell us who compose the Grand Trunk Pacific Town Site Company, how much land they purchased, from whom they purchased it, what they paid for it, and how much of that money went to the Grand Trunk Pacific Railway Company. Also, who compose the Grand Trunk Pacific Construction Company, and lxow much of the road is under contract to them ?


William Stevens Fielding: I will look into that matter and see if I can get the information for my hon. friend.
Resolution reported, read the second time and concurred in.
Mr. FIELDING moved for leave to introduce Bill (No. 128) to authorize a loan to the Grand Trunk Pacific Railway Company.


George Eulas Foster: I suppose the Bill will be printed at once and distributed ?


William Stevens Fielding: It is in print now, and I suppose the printing for members can be expedited.


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

William Stevens Fielding: In moving the adjournment of the House, 1 may state that a desire has been expressed by hon. members on both sides, that if we dispose of this business to-night, the House might not find it necessary to meet to-morrow. The government have every disposition to concur in that suggestion. But His Excellency the Governor General will attend to-morrow in the Senate Chamber to assent to the Supply Bill and other Bills that are ready, and it will be necessary ior a sufficient number of members to be present to attend His Excellency. I would suggest that it might be agreed to have the House meet pro forma for the purpose indicated, but that, by common consent, no other business be taken up. It is hoped that such hon. members as remain in town will attend the pro-forma sitting in order that there may be a respectable quorum to respond to the knock of Black Rod.


Herbert Brown Ames: Can the Minister of Finance do one thing more ? I understand that a return has been called for with reference to the indirect liabilities of the government, which return was to be presented to-morrow afternoon. Can this be rendered available before we adjourn ?


William Stevens Fielding: I think the information is available. If it be possible, we will have it brought down. Failing that, I will send it to the hon. gentleman during the recess.


George Taylor: Many hon. members wish to leave town to-morrow morning before the House is called. May I ask the hon. Minister of Finance if it may be understood that to-morrow shall not be a session of the House so that it will not tell against the members in their fifteen days' allowance.


William Stevens Fielding: Whatever my disposition is, I am afraid I have not the power to assent to that suggestion.


[Stage Direction]
Motion agreed to, and House adjourned at 11.25 p.m.
[Stage Direction]
Wednesday, April 7, 1909.