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Mr. MONK moved for leave to introduce Bill (No. 103) respecting Tolls on Government Works for the Transmission of Timber. He said: The object of this Bill is to correct a clerical error in the Revised Statutes of 1906. In former days the collection of these tolls was>
under the Department of Inland Revenue. Subsequent statutes transferred the collection to the Department of Public Works, but in the Revised Statutes of 1906, the interpretation clause is made to say that the word ' minister ' means the Minister of Inland Revenue, whereas, in conformity with previous legislation, it should be the Minister of Public Works.
Motion agreed to, and Bill read the first time.


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Bill (No. 101) to incorporate The British Western Loan Company-Mr. Martin (Regina).
Bill (No. 102) for the relief of Edna Wells-Mr. Beattie.

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(Questions answered orally are indicated by an asterisk.)

Mr. VERVILLE:: What are the minimum wages paid and the hours worked by waiters in cities of fifty thousand or more of population, and what are the names of cities of such population?


Mr. CROTHERS:: (a)	The minimum wages paid and hours worked fluctuate greatly from seasonal and other causes. The exact figures are not in the possession of the government. The Census and Statistics Bulletin No. 1, ' Wage Earners by Occupations,' gives information placing the average earnings of male waiters at $300, and of female waiters at $265.
(b)	The names of the cities of 50,000 or more of population aTe Ottawa, Toronto, Hamilton, Montreal, Quebec, Winnipeg and Vancouver.


THE ST. JOHN VALLEY RAILWAY.
Mr. CARVELL:: 1.	Has an agreement or understanding been reached between the federal government, or
the Minister of Railways and Canals, and the government of New Brunswick, or the St. John and Quebec Railway Company, regarding the granting to the said company of a subsidy for the St. John Valley Railway, so-called, from the city of St. John to Grand Falls; or for the lease and operation of said railway from St. John to Grand Falls, as part of the Intercolonial Railway system; or for the granting of and toward the construction of bridges across St. John river at or near Andover, across the St. John river at or near the Mistake, so-called, and across the Kennebecasis river at or near Perry Point?	.
2.	If such an agreement or understanding has been reached, will the Minister of Railways and Canals lay a copy of the same on the table of the House for the information of members?


Mr. COCHRANE:: 1.	Negotiations for an agreement are being carried on between the federal government and the St. John and Quebec Railway Company and the government of New Brunswick, regarding the granting to the said company of a subsidy for the St. John Valley railway, so-called, from the city of St. John to Grand Falls; and for the lease and operation of the said railway from St. John to Grand Falls, as part of the Intercolonial railway system, and for the granting of and toward the construction of bridges across the St. John river at or near Andover, across the St. John river at or near the Mistake, so-called, and across the Kennebecasis river at or near Perry Point.
2.	As soon as the necessary documents are prepared a copy of the same will be laid on the table of the House.


GRAND TRUNK PACIFIC RAILWAY-WORKSHOPS AT QUEBEC.
Mr. WILSON (Laval):: Does the government intend to build the workshops of the Grand Trunk Pacific at Quebec, at the approaches to the Quebec bridge?


Mr. COCHRANE:: The matter is still under consideration.


INTERCOLONIAL RAILWAY-DISMISSAL OF AMEDEE BELANGER.
Mr. LAPOINTE (Kamouraska):: 1.	Has Amedee Belanger, watchman on the Intercolonial Railway at LTslet been dismissed ?
2.	If so, at whose request, on whose recommendation and for what reason?
3.	Has the said Amedee Belanger requested an inquiry from the chief of his division?
4.	Is it the intention of the Minister of Railways to see that this inquiry is granted him?


Mr. COCHRANE:: 1.	Yes.
2.	Dr. E. Paquet, M.P., active political partisanship.
3.	Yes.
4.	Yes.


CANAL TRAFFIC.
Mr. WHITE (Renfrew):: 
DISMISSAL OF WILLIAM A. GERRIOR.
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5.	Who has been appointed as his successor,
n A r\n tit V) r\ c O T-OP/AiTY! TT1 AH dH.tlOTI P
Mr. SINCLAIR:: 1.	Was William A. Gerrior, the customs preventive officer at Larry's River, N.S., dismissed? If so, when and for what reason?
2.	Who asked for his dismissal?
3.	Was there an investigation? If so, with what result?
4.	If not, will he be granted an investigation?


Mr. LAPOINTE.: 


Mr. REID (Grenville):: 1.	Mr. William A. Gerrior was dismissed by order in council of 16th December, 1911, for active political partisanship during the late Dominion election.
2.	G. A. R. Rowlings.
3.	He was dismissed on his own admission.

4.	No further investigation is considered necessary.
5.	William J. Murphy on the recommendation of the Minister of Customs.


FISHERY GUARDIANS.
Mr. SINCLAIR:: 1.	What are the names and addresses of the fishery guardians who acted during 1911 in the county of Guysborough?
2.	Has notice of dismissal been given to any of said guardians? If so, to whom?
3.	Have any of the said guardians been dismissed? If so, what a-re their names, why were they dismissed, and at whose request?
4.	Have any applications been received, or recommendations made to fill vacancies in this branch of the service in Guysborough county? If so, what are the names and post office addresses of all parties either recommended or appointed?


Mr. HAZEN:: St. Marys River, G. W. Jollota, Murdock Whitman, Meles Whidden, John A. Kirk, Robert A. McLean, John Smith, Ed. Cum-minger, David Mitchell.
County Harbour River, John A. Hudson, Henry Mason, Leander Mason.
Gaspereaux Brook, John Mitchell.
Indian River, John Cross.
Isaac Harbour River, Hector McLellan.
New Harbour River, Wm. D. Gillis.
Cole Harbour River, Elisha WiHiams.
Salmon River, Frank Cook, Stephen Grant, Joseph Lawlor, Patrick McKinnon, Wm. McKay, Patrick Keay, Allan Tait, Pierce Clancy.
Whitehaven, James Snow.
2.	No, these guardians were employed for the season, an'd their engagement automatically ceased at the end thereof.
3.	No.
4.	The employment of guardians for next fiscal year has not yet been considered.


ALDER POINT LOBSTER HATCHERY.
Mr. McKENZIE:: 1.	Were tenders called for the building of the lobster hatchery at Alder Point, Little Bras d'Or, C.B.?
2.	If so, what is the name and post office address of each tenderer and the amount of eaoh tender ?
3.	Was the contract given to the lowest tenderer ?
4- When was the work commenced and when was it completed and taken over by the department?
5.	Was the work done under inspection? If so, who was the inspector, and by whom was he recommended?
6.	If there was no inspector of the work, why was the usual custom in such cases departed from?
7.	Did the representative for North Cape Breton and Victoria recommend an inspector for that work? If so, whom did he recommend, and why was he not appointed?
8.	Is the hatchery ready for the propagation of lobsters, and will it be in operation next
season ?


Mr. HAZEN:: 1.	Yes.
2.	Only one tender received, which was from Peter McLean, Cannes, Nova Scotia. Amount of tender, $1,675.
3.	Yes.
4.	Commenced about October 5th., 1911.
Completed about November 28th.,	1911.
Taken over by 'department, January 27th., 1912.
5.	Yes. Joseph Dugas, John McCormick.
6.	Answered by No. 5.
7.	No.
8.	Interior fittings not completed, but hatchery will be in operation next session.


KIDSON'S ISLAND LIGHTHOUSE.
Mr. McKENZIE:: 1.	Were tenders called for the erection of a new lighthouse on Kidson's Island, in the harbour of Baddeck, county of Victoria,
Nova Scotia?
2.	If so, what is the name and post office address of each tenderer?
3.	Was the contract given to the lowest tenderer? If not, what was the reason?
4.	When was the work commenced and when completed and taken over by the * department ?
5.	Was the work done subject to inspection ? If so, who was the inspector, by whom was he recommended, and when?
6.	If there was no inspection of this work, why was the usual custom in such cases disregarded?
7.	Did the representative for North Cape Breton and Victoria recommend an inspector for the works? If so, whom did he recommend and why was he not appointed?
8.	Will the new lighthouse be in use for the opening of navigation next spring, or is it in use now?


Mr. HAZEN:: 1.	Yes.
2.	Lawrence Mury, West Arichat, N.S., $997.
Armagh Mury, West Arichat, N.S., $1,168. [DOT]
P. L. McFarlane, Baddeck, N.S., $1,590.
3.	Yes.	.
4.	The contractor was notified on the 13th September, 1911, that his tender had been accepted. Inspector reported on the 15th November that work was completed with the exception of roof for lantern supplied by the department, which was broken in transit.
5.	Yes. Mr. H. J. Alward, one of the regular departmental engineers,
6.	See answer to previous question.
7.	Yes. George McKay, of Baddeck, N.S. It was subsequently decided to have the inspection made by the resident engineer.

8.	It will be in use for the opening of navigation next spring.


ST. ISIDORE DE PRESCOTT POSTMASTERSHIP.
Mr. PROULX:: 1 Has there been a request by petition or otherwise for a change in the postmastership at St. Isidore de Prescott, since the 21st of September last?
2.	If so, who asked for the change, and who
is proposed for the position:	,
3.	Has the Postmaster General received any petition asking him not to make any change? If so, how many signed the petition?


Mr. PELLETIER:: 1.	No.
2.	Answered by No. 1.
3.	Yes. Petition signed by 214 persons.


LAKE WINNIPEGOSIS FISHERY.
Mr. CRUISE:: 1.	Is it the intention of the government to open lake Winnipegosis for fishing during the ensuing summer season?
2.	If so, will the quantity of fish to be taken by each fishermen be limited?


Mr. HAZEN:: 1.	No.
2.	Answered by No. 1.


WATHA INDIAN RESERVE.
Mr. HENDERSON:: 1.	How many tenders were received by the government in 1911, for hemlock timber and hemlock bark on the Watha Indian Reserve?
2.	Wes the highest tender accepted?
3.	What was the price received for such hemlock and hemlock bark?


Mr. ROGERS:: 1.	Three tenders were received.
2.	Yes.
3.	$3.50 for hemlock, and $1.60 for bark.


MOTIONS AGREED TO WITHOUT DISCUSSION.
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For a copy of all documents, papers correspondence, inquiries, evidence, reports, &c., relating to an accident sustained by Alphonse Madore, employed on the Intercolonial at Ste. Flavie, in 1888 or 1889, and to the settling of the claim then made by the said Alphonse Madore to the Department of Railways and Canals.-Mr. Lapointe (Kamou-raska.)
For a copy of all charges, letters, and documents of every kind with respect to the dismissal of John W. Bohan, from the position of Preventive Customs Officer at Bath, in the county of Carleton, province of New Brunswick. Also a copy of all references for an investigation on any such charges, if any, and a copy of all' evidence adduced thereat, together with the recommendation of the official making such investigation.- Mr. Carvell.
For a copy of all letters, correspondence, petitions, recommendations, complaints and Mr. HAZEN.
other documents in the possession of the Department of Marine and Fisheries, relating to the dismissal of fishery guardians in the county of Guysborough, Nova Scotia.-Mr. Sinclair.	.
For a copy of all letters, petitions, charges, complaints and other documents in the possession of the government or any department thereof, relating to the dismissal of William A. Gerrior, Customs Preventive Officer at Larry's river, N.S., and to the appointment of his successor.-Mr. Sinclair.
For a copy of all correspondence, letters, telegrams, &c., between the King's Printer, the superintendent of printing, _ and the King's Printer's representatives in Winnipeg regarding the printing and distribution of the voters lists of the province of Manitoba at the last general election.-Mr. Staples.

Hon.  L. P.@: PELLETIER (Postmaster General) moved that the House go into committee to-morrow to consider the following proposed resolutions:
Resolved, that it is expedient to amend the Post Office Act by providing-
(a)	for the temporary employment of railway mail clerks for a period of not more than one yeaT, at a salary of $500 and mileage allowance ;
(b)	for the appointment of temporary railway mail clerks as permanent clerks, with salaries not exceeding that which they received as such temporary clerks, but who shall not be eligible for an increase of salary until they have passed the necessary examination.


CIVIL SERVICE ACT AMENDMENT.- GRADES AND SALARIES IN POST OFFICE DEPARTMENT.
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Mr. PELLETIER, moved that the House go into committee to-morrow to consider the following proposed resolutions:
Resolved, that it is expedient to amend the Civil Service Act by- _
(a)	changing the classification of the clerks in the City Post Office, offices of the Post Office Inspectors, office of Superintendent of Railway Mail Service, and in the Money Order Exchange Offices by abolishing the stampers and sorters class and fourth-class clerkships, and substituting therefor third-class clerkships, ranging from $500 to $1,000, and divided into two classes known as third-class ' A ' and ' B.'
(b)	abolishing the junior and senior second-class clerkships and substituting therefor classes ' A ' and ' B ' of the second-class, and increasing the maxinmm of the class formerly known as junior second, and now known as class ' B.' to $1,200, and increasing the maximum of class ' A,' corresponding with the former .senior second-class, to $1,400;
(c)	dividing the first-class clerkships into division ' A ' and ' B ' with maximum salaries of $1,800 and $1,600, respectively, and increasing the minimum of the first-class clerkships from $1,200 to $1,400, and creating a new class of clerks, to he known as chief clerks, in the city post offices, subject to certain restrictions;

(d)	improving the position of office superintendents in city offices, and changing what was formerly a fixed salary of $1,800 to a minimum of $1,800 and a maximum of $2,500;
(e)	providing for the employment of temporary clerks in the above named offices for a period of not more than one year, at a fixed salary of $500, and temporary helpers to meet the exigencies of the service at1 a- salary not exceeding $2.50 a day;
(f)	increasing the salaries of certain inspectors, assistant inspectors and superintendents of the Railway Mail Service in recognition of years of service;
(g)	increasing the minimum of the salaries of inspectors and superintendents of the Railway Mail Service from $1,600 to $1,800.
Mr. LEMIEUX.: I presume that the Postmaster General (Mr. Pelletier) will make a statement to-morrow.


Mr. PELLETIER.: Perhaps. But, if the hon. gentleman (Mr. Lemieux) thinks it well, we might have the discussion of the matter when the Bill is before the House.


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Motion agreed to.

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On the orders of the day being called.
Hon. H. R. EMMERSON (Westmorland).: I desire to submit a question for the attention of the Prime Minister (Mr. Borden). I observe in the ' Newmarket Era ' of February 2nd the report of a meeting of the town council which reads as follows:


TOWN COUNCIL.
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A special meeting was held in the council chamber last Monday evening, Mayor Cane m the chair. Present-Councillors Roadhouse, Vale, Lyons, Cane, Weslev and Dennis.
The mayor _ stated that the meeting was called to consider the question of the government stopping the work on the Holland river branch of the Trent Valley canal.
The following resolutions, moved by N J. Roadhouse, and seconded by Dr. J. H.'Wesley, was carried unanimously :-
Whereas this council has learned with regret the decision of the Minister of Railways and Canals to abandon the Holland river division of the Trent Valley canal;
Whereas this work was undertaken at the request of a large deputation representing Aurora, Newmarket, Holland Landing and Bradford, also the township of North Gwillim-bury, Whitchurch and King, which visited Ottawa and waited on the government asking that this work be undertaken for the purpose of obtaining reduced freight rates;
Whereas a large amount of freight is handled in this district, much of which would be supplied by water at a greatly reduced cost;
Whereas the route opened up by this canal was the old natural route to the north, the building of the Trent canal is again opening it up;
Whereas this work is almost completed- No. 2 section which contains the three locks and all the bridges is finished to the extent of 97
85 per cent. No. 1 section could be completed by a government dredge in a few months' time at a moderate expense;
Whereas the feeling here is strongly in favour of finishing the work;
Be it therefore resolved, that the Minister of Railways and Canals be requested to withhold his decision until further investigation has been made;
That copies of this resolution be sent to the right lion. Prime Minister, the hon. Minister of Railways and Canals, and the member for North York.
Several citizens spoke in favour of tlie resolution before the vote was taken.
Council adjourned.
I desire to ask the Prime Minister (Mr. Borden) or the Minister of Railways (Mr. Cochrane) whether this matter has been brought to their notice in the form stated in this report.
Francis Cochrane: I have received a copy of what the hon. gentleman (Mr. Eanmer-son) has read.


Mr. BORDEN.: A copy has been sent to me.


DISMISSALS FOR OFFENSIVE PARTISANSHIP.
Mr. DEVLIN.: I would like to call the
attention of the Prime Minister (Mr. Borden) in the absence of the Minister of Public Works (Mr. Monk) to an article of news which appeared in the ' Journal ' of last Tuesday which is ofl considerable importance to the country. The article is headed ' Did they take active part ', and is as follows:
The investigation of charges against' civil servants who took part in the recent Dominion election was opened this morning in the Hull court house before Mr. M. Chauvin, of Hull, who was appointed by the federal government to inquire into this matter.
Joseph Piche. of the Public Works Department, appeared this morning in answer to the charge against him, of taking part in the election. Several witnesses were called and swore that he had talked reciprocity, and said that it was a good thing, and also that he distributed pamphlets which contained Sir Wilfrid Laurier's speech on reciprocity.


Robert Laird Borden: Without desiring to prevent my hon. Mend (Mr. Devlin) asking any questions he may desire to ask, I would call your attention, Mr. Speaker, to the practice of reading long newspaper articles with the desire of asking if the government have noticed them. I do not think this a desirable practice. I would ask you for a ruling so that we may have some consistent practice in this regard.


Sir WILFRID LAURIER.: This is a very old practice.


Robert Laird Borden: But not a very desirable one.


Mr. SPEAKER.: I think the hon. member (Mr. Devlin) is indulging in a procedure not in consonance with our usual practice. It is permissible to ask a question at this stage, but, in my judgment it is not quite in _ order to read a long controversial article upon which an argument may be begun, ot to ask a question that invites an argument. There is another feature of the case which appeals to me and on which the rule seem to be explicit, and that is that it is improper to deal with anything in this House that is before the courts.


Emmanuel Berchmans Devlin: I would call your attention, Mr. Speaker, to the fact.that this is simply a court- of inquiry constituted by the government. But I submit to your ruling and will not proceed with the reading of the article. The question I have to ask is this: In view of the fact that Mr. Joseph Piche, who was an elevator man in the service of the Public Works Department and was charged with having taken an active part in the election, but was honourably acquitted as the court of inquiry declared, of taking any such part, I would like to know, before other gentlemen come before the -court of inquiry, whether it is the intention of the government that these gentlemen who did not take part in the election but who have been dismissed and have been caused considerable expense to defend themselves will be reinstated in the public -service?


Robert Laird Borden: I have not undertaken the administration of the various twenty-five departments of the government at Ottawa, but I assume that any man who had been dismissed without cause would be reinstated.


APPOINTMENT OF UNDER SECRETARIES.
Rodolphe Lemieux: The Montreal 'Gazette' of yesterday contains an elaborate dispatch stating that it is the intention of the government to create under-secretaries for the various departments. Has the attention of the minister been called to that article, and is there any truth in it? Is it the intention of the government to appoint a Solicitor General?


Robert Laird Borden: I have not had the opportunity of reading the article in question. The subject has not yet been under the consideration of the government.


Rodolphe Lemieux: The writer seems to speak authoritatively.


Robert Laird Borden: I presume he was stating his idea -of what is likely to take place, but, as a matter of fact, the subject has not been considered by the government. I have nothing further to add to what I have said on Mr. BORDEN.
former occasions with reference to the appointment of a Solicitor General.


Wilfrid Laurier: Under consideration.


Robert Laird Borden: My right hon. friend, from reminiscences of the past, is answering for me.


Wilfrid Laurier: I am very sorry to see that my hon. friend is copying so assiduously.


THE GEORGIAN BAY CANAL.
Emmanuel Berchmans Devlin: In view of the statement made by the Prime Minister in this House about- two weeks ago that he would declare the policy of the government on the Georgian Bay canal -last week, I would ask if he is yet in a position to declare whether the government has any policy on the Georgian bay canal scheme.


Robert Laird Borden: I do not remember the statement attributed to me. If my hon. friend will send me a reference to it, I shall give him an answer at some other time.


Wilfrid Laurier: Hear, hear. SALARIES OF COUNTRY POSTMASTERS.


Mr. McKENZIE.: Is it the intention of the Postmaster General to increase the salaries of country postmasters during the present session, or within a reasonable time?


Louis-Philippe Pelletier: It will receive my most earnest consideration.


Rodolphe Lemieux: If I may help the Postmaster General in coming to a decision, I may say that I had decided to -do it.


NATIONAL TRANSCONTINENTAL RAILWAY.
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Mr. WHITE (Leeds) moved the second reading of Bill (JNo. 95) respecting the National Transcontinental railway. He said:	When moving the resolutions preceding the introduction of this Bill, entitled An Act respecting the National Transcontinental Railway, I mentioned all the facts relevant to the judgment of the Judicial Committee of the Privy Council,, mentioned in the Bill. I also furnished to all members of the House copies of the judgments of tire Supreme Court of Canada and of the Privy Council. I also submitted an estimate showing the liability to date in connection with bond sales that have taken place and an estimate of future liability in connection with bond sales that will be made in the future on the assumption that no higher price will be realized than from the last sale. I assume, therefore, that the House is fairly in possession of all the information they desire. I wish, however, to make it -clear to the public in connection

with this Bill of which I now move the second reading, that the responsibility for this very heavy obligation, in whatever degree such responsibility exists, must belong to the preceding government. So far as this government are concerned, we are merely taking authority under this Bill to discharge the obligation imposed upon the government of Canada by the contract of 1903, entered into between the late government and the Grand Trunk Pacific Railway Company as interpreted by the Judicial Committee of the Privy Council. I stated that with regard to bond sales which have taken place the amount of liability under the implementing clause is about $5,000,000, and that a similar sum may be reasonably expected to measure the liability in connection with the sale of future bonds required for the construction of the roiad. The public have been shocked, I think, by the announcement of this very heavy liability. I think the onus is distinctly upon hon. gentlemen opposite, on behalf of the late government, to exculpate themselves, or to extenuate what appears, primia facie, at all exeats, to have been a very great blunder. I reserve any further remarks _ that I have to make in regard to this subject until I hear what explanation is offered by hon. gentlemen opposite in connection with the matter. I beg to move, Mr. Speaker, the second reading of the Bill.
Wilfrid Laurier: Mr. Speaker, I have no exception whatever to take to the statement which was made by my hon. friend (Mr. White, Leeds), the other day, when he moved the resolution and now in moving the second reading of the Bill, as to the circumstances which have originated and made necessary this legislation. If blame there is to be it ought to attach to the_ parties who were in office when this legislation took place. This legislation is simply an incident of the construction of the Transcontinental railway which was decided upon by the government in the year 1903. When the Bill was presented for the construction of the Transcontinental railway it had not at that time struck everybody, as it struck us, that there was an immediate necessity for the construction of such a highway. On the contrary, it may be said that there was a cleavage of opinion and a good many members of this House and a good many people in the country thought, in good faith, I have no doubt, that the construction of such a railway was, at least, premature. If such an opinion existed at that time, and I quite admit it did exist, I think it has been dispelled long ago. There is no doubt now, I believe, that public opinion is unanimous that the Transcontinental railway which was undertaken in 1903 was an immediate necessity to the rapid development of the 97 J
country and especially to the settlement of the provinces west of Lake Superior. We have evidences more than one of this fact. Indeed, public opinion is *o much reconciled with the idea of having a Transcontinental railway such as was provided for by the legislation of 1903 and. 1904 that, last year, when we introduced legislation into this House for assistance to a further Transcontinental railway, not a single word of objection was hea.u irom anybody. I conclude from this that everybody was agreed then that the action we had taken was in the public interest. We have still at this moment another evidence of the wisdom of the legislation which we put upon the statute-book in the condition of things which exists in the northwestern provinces. We have to-day in the northwestern provinces three different railway systems, the Canadian Pacific railway, the Grand Trunk Pacific railway and the Canadian Northern railway, every one of them is taxed to its utmost capacity, at the present time they are unable to cope with the requirements of the country and at least one-third if not more of the crop is now lying in the fields awaiting railway transportation. No better justification could be advanced of the necessity under which we were to provide for the immediate wants of the settlers and the wants of the settlers are connected with transportation above all things. Indeed, if we had more railway facilities than we have, if the railways were better equipped with storage capacity and rolling stock, a heavy burden would be lifted from the mind and the heart of the settler at the present time.
But, it was not an easy task to induce any company to enter upon what was, after all, an arduous undertaking, and, it might be, an uncertain one. After negotiating with the Grand Trunk Railway Company they undertook the task of providing for the construction of the Transcontinental railway and the House is familiar with the conditions which were imposed upon us and which have been described by my hon. friend in introducing this motion. In so far as it is necessary for the purpose of the present discussion it may be sufficient to say that in order to induce the Grand Trunk Pacific Railway Company and the Grand Trunk Railway Company to undertake the construction of this second transcontinental railway we agreed that upon the western section of the road, from Winnipeg to the Pacific ocean, we would undertake to guarantee the bonds of the Grand Trunk Pacific Railway Company to the extent of three-quarters of the cost of the construction of the road, limiting the liability, however, upon the prairie section, to $13,000 a mile and, upon the mountain section, to $30,000 a mile. This agreement was modified, as has been.

shown already by my hon. friend, in the following year and, as I said a moment ago, I have no reason at all to complain of the statement of the hon. gentleman in Introducing the motion because I think he presented the case in a very clear and a very fair manner. I will quote his own words in introducing the motion the other day:
it the time this agreement was entered into, the 3 per cent stock of the Dominion of Canada stood at about par. Shortly afterwards there was a fall in that stock in common with other high class low interestbearing securities, and as a result it was seen that the 3 per cent Grand Trunk Pacific Railway Company's bonds guaranteed by the Dominion of Canada would not realize nearly par. In order to meet that situation a supplementary agreement was entered into in the following year. Among other things it removed the limit as to the $30,000 a mile upon the mountain section, but allowed the $13,000 per mile as a maximum of bonds to be issued by the Grand Trunk Pacific Railway Company on the prairie section to stand.
That is a very fair statement of what took place and of the reasons which induced us to make the modification which we made of the agreement of 1903. Shortly after we had introduced the legislation of 1903 the financial' market commenced to decline and declined steadily. It was not supposed, however, that it would be permanent. It was expected that, on the contrary, the financial market would resume its buoyancy and that our securities, which, at the time we entered into the agreement with the Grand Trunk Pacific Railway Company in 1903, stood at about par and, which had declined would resume their former position. However, in this we have been disappointed as everybody knows. The financial market has been going down steadily ever since, not only in regard to Canadian securities, hut in regard to the best securities in the world. English consols, for instance, which ever since the wars of Napoleon had been the most favoured stock in the financial market, and which, during the later years of the last century, stood not only at par but at a large premium, sometimes ranging as high as 10 per cent, have declined steadily ever since and if I am not mistaken-indeed I am not mistaken-in the month of December English consols went down to 77. I have not looked at the, quotations recently, but I think they have been still declining. So that, if our securities have been declining ever since it is not on account of any want of confidence in our credit, but it is simply on account of the larger demands that have been made on the money market, the result being that the price of money Sir WILFRID LAURIER.
has risen accordingly. Everybody knows that the impetus which has been given to the development of natural securities, especially electrical securities, has been almost phenomenal in the last ten years.
This is regarded as a gilt-edged security, but the price of money ha3 risen on account of the extraordinary demand to meet this new development in the industrial world. Under these circumstances, the value of our securities has been steadily declining. That is the origin of the legislation we passed in 1904, and which we are now about to implement by providing to meet the judgment of the Judicial Committee of the Privy Council, rendered on the agreement which was passed between us and the Grand Trunk Pacific Railway Company in 1904. I may say that I acquit the Minister of Finance and the government from all responsibility in this matter; the government in introducing the legislation is simply taking the proper steps to comply with the judgment of the Privy Council. Under the enactment of 1903 we guaranteed three-fourths of the cost of construction of the western section of tlie_ road, limiting our obligation on the prairie section to not more than $13,000 a mile, and limiting our obligation on the Mountain section to not more than $30,000 a mile. The modification we made in that is to be found in section 5 of the Act of 1904, which reads:
Notwithstanding anything in the said contract contained, the government may and shall, preserving always the proportions in the said contract provided as between the Prairie and Mountain sections of the eastern division, implement for the purposes and subject otherwise to tlie provisions of the said contract, its guarantee of the bonds of the said company to be issued for the cost of construction of the said western division, in such manner as may be agreed upon, so as to make the proceeds of the said bonds so to be guaranteed a sum equal to seventy-five per centum of the cost of construction of the western division ascertained as provided in the said contract, but not exceeding in respect of the Prairie section, thirteen thousand dollars ($13,000) per mile.
There were two provisions in this agreement, one, was that the restriction of the liability of the government with regard to the mountain section of $30,000 per mile was removed, and we also undertook to implement the difference between the face value of the bonds and the price they would bring in tlie market. Now, we did this because it became evident that at least some of the bonds which were to be issued from time to time could not realize par or anything like it. We were in hopes that the money market might become more buoyant, and that we would not have very much in the end to make up, but in this our expectations were not realized. The

money market has been steadily declining, and, as the Minister of Finance has very properly said some of them sold at 924 and others sold at only 80, making a great difference between the face value and the selling price. Now, why did we make this arrangement with the Grand Trunk Pacific Railway Company?
It seems to us that under such circumstances if the Grand Trunk Pacific company was bound to raise its money at that sacrifice, that its credit and its resources might be impaired, and the enterprise might be jeopardized. We thought on the whole, that it was worth every effort on the part of the Canadian government, on the part of the Canadian parliament, on the part of the Canadian ipeople, to provide for this Transcontinental railway, which would be of such benefit to the settlers of the west, in enabling them to bring their products to the market. We all know that what has contributed most of all to make Canada prosperous, has been the rapi'd settlement of the western prairies, and that the more facilities were given, to the settlers to dispose of their crops the more prosperous they would be, and the more prosperous would be the country as a whole. The government at the time placed itself in the judgment of the House and the House approved our action, and I believe the Canadian ipeople also approved. Even though the cost may be heavy, I do not think it is too heavy for the resources of the country or for the results which have already been achieved, and which still remain to be achieved. The only difficulty that arose in connection with the matter, was as to the interpretation of this agreement, and as to in what manner the implementing should take place. That has been a question between the Grand Trunk Pacific Railway Company and the government for some years past. I need not tell the House-many of the old members remember it-that when we made the contract with the Grand Trunk Pacific railway company, the government engaged the services of some of the most able counsel who could be obtained. We had the Minister of Justice, who did not himself take any technical part in the framing of the contract, and who left this largely to Mr. Newcombe, the Deputy Minister of Justice, and to one of the most able counsel of the Dominion, Mr. George F. Shepley. These gentlemen prepared the contract for our guidance, and even though our best efforts were given to make it a document that could not be disputed, still, as doctors differ, so will lawyers and judges. When the difficulty arose, Mr. Shepley and Mr. Newcombe advistM us that the proper method of implementing would be to issue bonds, so as to make up the difference, whereas, the Grand Trunk Railway Company took the position that the implementing should be only by the payment of cash to the amount of the difference between the face value of the bonds and the price they realized. Then, the matter was referred to the Supreme Court of Canada. Before I proceed, might I refer to a remark made by my hon. friend, the Minister of Finance a moment ago, when he said that the blame, if blame was to fall upon anybody, must fall upon the previous administration.
I agree altogether with my hon. friend that if blame must fall upon anybody, it must fall upon us. But in such a matter it may well be considered whether or not we are Very much to blame after all. The question was one of law, and let me before I go further, state to the House what was the opinion, as to the construction of the contract which we made with the Grand Trunk Pacific Company, of a gentleman well versed in law, whose eminent ability as a lawyer is well known; I mean the Deputy Minister of Justice. When the difference arose with the Grand Trunk Railway Company as to the interpretation of this contract, the matter was referred by the Minister of Finance to Mr. Newcombe, and this is the opinion which was given by Mr. Newcombe:
In reply I beg to state that in my opinion that method of implementing is still open to the government. In the first place I think that the whole transaction shows that there was no intention that the government should pay cash otherwise than as expressly provided, and it is my opinion that under the legislation and agreements the government has not the power to pay the deficit in cash as proposed by the company.
Then, section 5 provides that the company is to implement its guarantee ' so as to make the proceeds of the said bonds so to be guaranteed a sum equal to seventy five per centum of the cost of the construction of the western division, ascertained as provided in the said contract but not exceeding in respect of the Prairie section $13,000 per mile.' It will be seen that the method of implementing proposed by the company would not fulfil the object for which the implementing was to be undertaken, that is to say, it would not make the proceeds of the bonds a sum equal to 75 per cent, of the cost of construction, &c., while the other method would comply with this requirement to the letter.
Again, -the recital of the -implementing clause in the mortgage schedule can hardly be taken to have had any other object than to account pro tanto for the amount of the issue to be made under the mortgage, and we know as a matter of fact that there was included in that amount the sum of $1,255,125 in respect of bonds to implement on a basis of 92j per cent.


Mr. LENNOX.: Will the right hon. gentleman give the date of that letter?


Wilfrid Laurier: The 11th of June, 1908. In support of the statement of


Mr. MIDDLEBRO.: Might I ask the right hon. gentleman a question? Does he admit that if it had been pointed out to the government that an amendment could have been made which would have prevented the rendering of the judgment now given by obviating any doubt of the position taken by the late government, iha1 amendment should have been accepted?


Wilfrid Laurier: It is very easy to be wise after the event.


William Sora Middlebro: Does the right hon. gentleman say that the possibility of a different construction was not pointed out to him at the time?


Wilfrid Laurier: That point was taken up and discussed by our counsel.


William Sora Middlebro: 1 mean in this House when section 5 was being discussed. Was it not then pointed out to my hon. friend, and to his Minister of Finance and Minister of Justice that the clause might have the very result which the Privy Council has given it?


Wilfrid Laurier: I know that my hon. friend from Hamilton (Mr. Barker), did make a statement to that
effect; but the Privy Council understood the clause in one sense, our own Supreme Court, and our own counsel understood it differently. It was a case -of disagreement between lawyers, and the final judgment is in favour of the contention of my hon. friend from Hamilton (Mr. Barker).


William Sora Middlebro: But when it was pointed out to the right hon. gentleman and his ministers that there was a possibility of such a construction being put upon this clause, and when they had it in their power to amend the clause so as to remove any doubt, why did he not have the clause amended and .save the country $10,000,000?


Wilfrid Laurier: I have said already that we had the opinion of the hon. member for Hamilton on the one side and that of Mr. Shepley and Mr. Newcombe on the other. Let me again read the opinion' of Mr. Newcombe that in his view the question did not admit of doubt.


Robert Laird Borden: But that opinion of Mr. Newcombe was of very much later date.


Wilfrid Laurier: Certainly, but he was construing the contract and he said that it did not admit of any doubt. As I have said there is a condition to-day in the Northwest which must cause anxiety, not only to the gentlemen on the treasury benches, but to the whole Canadian people. You have in that country any amount of wheat awaiting transportation for lack of railway accommodation. It is to be hoped that the railway companies will be able to give more storage facilities and provide more cars than they have been able to give hitherto, and in that way mitigate to some extent the condition now prevailing.


Mr. S. BARKER (East Hamilton).: Mr. Speaker, in rising to support the Bill, I

shall perhaps take a little liberty with the House, by going back upon some of the facts, and I may not altogether agree with what the right hon. gentleman has .iust said as to the facts. I think, however, that there can be no question in this House that the Bill introduced by the Minister of Finance, should be supported. I shall do so simply because there is not now any question whether we wisely undertook certain things in 1904, but the sinmle fact that we did enter into a certain undertaking by which the highest court of the empire has decided we have obligated ourselves to pay the money that is asked for. Therefore, Sir, if it was three times the amount involved, there should be no hesitation now, and I trust that as Canadians we shall not allow any question to be raised upon that point. What we have agreed to, what we have undertaken, we will abide by, and I therefore sincerely hope that every member in the House, for the credit of the country, will vote for the Bill.
But, Sir, while doing that, I think we are justified in asking the House to go back upon the history of the transaction which has involved us in this very serious loss of public money. It is due to members on this side of the House, who were then in opposition, and1 to the country which after all, must bear the brunt, that we should look back now and see how this was all brought about, and whether the case is as simple as the right hon. gentleman affects to think it is. If I understand the right hon. gentleman who leads the opposition (Sir Wilfrid LaurieT) aright he is under the impression to-day that when this question was first opened in the country, there were a great many people who thought that the construction of the railway was not needed then, that it waS premature. I do not know just what my hon. friend is referring to. If he says that many people thought at that time there was no need for additional railway facilities for the transportation of the grain produce of the great northwest to the ocean, then he is altogether outside the facts. I was in the House at that time and I can vouch for the opinion of every member of the Conservative party; I venture to say, there was not one man on the Conservative side who doubted for a moment the absolute need of another through railway at the earliest possible moment. There were in the Conservative party at that time members who were interested in other railways, some in the Canadian Pacific railway, and others in other roads, but every one _ of them, whether interested in the Canadian Pacific railway or not, agreed that another railway should be built, that the party should unanimously support any generous liberal subsidy the government would propose to give, and that we should facilitate the construction Mr. BARKER.
of the road in every way. That is putting it according to what I know to have been the feeling then on the Conservative side; and so far as my knowledge and observation went, it was the opinion of every man on both sides of the House.
Hon. gentlemen will recollect that in November, 1902, a notice appeared in the ' Canada Gazette ' of an application to parliament for a charter for a company to be called the Grand Trunk Pacific Railway Company. That was the root of this whole matter. I shall read, before concluding, the application of that company to the right hon. (Sir Wilfrid Laurier) as Prime Minister of Canada for a subsidy and the conditions they proposed. The application will show 'that they proposed a line from the Pacific ocean at or about Port Simpson to and through Edmonton, and to and through Winnipeg, and then to North Bay. At North Bay their proposed line would have connected with the existing railway system of Ontario, which would have carried the line through from the Pacific to Montreal, where it would meet the Intercolonial owned by the government. Thus by the project proposed to the right hon. gentleman there was offered to us at the earliest possible moment a through line from the Pacific ocean to Halifax, another real transcontinental railway about whose early construction there was very little doubt.
I understood the right hon. gentleman to say that there was a great deal of difficulty in inducing any. company to undertake the construction of such a line. The hon. gentleman had in his own hands that proposition as early as November, 1902, and he did not allow the people of this country or of this House or his followers to know that he had that until two years afterwards. He treated that-paper as a confidential letter and he kept it in his own possession. Yet knowing that he had that he tells the House that it would have been impossible at that time to get any company to undertake the construction of sucn a road. This is not new to us. We have been charged with opposing the Transcontinental railway. We never opposed that system at all. We did not know exactly what the proposal of the Grand Trunk Company was to be for the best reason in the world, that the right hon. gentleman would not let us see it. It was impossible for us to know, we did not know what terms they proposed or what subsidy they expected, but we thought they would ask a good deal more than they expected to get and that the government would have dealt reasonably and liberally with them and no more. So, from every possible point of view, opportunities were presented to the gov-

eminent for the construction of that railway at the earliest possible day.
It was not possible for the proposed company to . do what they desired to do, and what events have shown would have been the very best thing for Canada. In 1903, there were in the city and province of Quebec certain personal and political friends of the right hon. gentleman who had various railway, bridge and other projects and schemes more or less visionary and more or less financially hopeless. After the private Bill of the Grand Trunk Pacific Railway Company had been introduced in the House, it was referred to the Railway Committee. Immediately there were rumours of all kinds. We heard of personal negotiations between the right hon. gentleman and the Grand Trunk railway officials. The right hon. gentleman undertook to negotiate ' off his own bat ' with some of the ablest railway men in the country-did it all himself. When, some weeks afterward, the Bill came up in the Railway Committee-I was present-the right hon. gentleman informed us that he had made another arrangement than that proposed by the Bill. He proposed that the railway should be constructed easterly from Winnipeg towards Lake Abitibi and thence to the city of Quebec. And there was to be a branch from the neighbourhood of Abitibi, to North Bay and a branch to Montreal. This was announced to us as a perfectly new idea. The Grand Trunk railway officials were there, and if I i m any judge of men's countenances, they assented very unwillingly and under pressure. I do not think that any man who saw them could possibly doubt that. The next stage was that another set of men came in. The right hon. gentleman had political and personal friends away down east in New Brunswick. After a week or two, and after further private and personal negotiations-it was said at that time that the right hon. gentleman was meeting the railway officials in private cars, away from the Cabinet and from his ministers; doing the whole thing himself- we had another meeting of the Railway Committee; and we found that the proposed line was to be extended down into New Brunswick, Moncton being ultimately named. And that line as proposed then by the right hon. gentleman paralleled the government's own railway for hundreds of miles. That is not all. The right hon. gentleman had some more friends: he had some friends in Quebec and vicinity, and so it came about that the taking up of the two sections from Winnipeg to Quebec and from Quebec to Moncton involved taking up that most lamentable affair, the Quebec bridge. And thereupon, as we find, the bridge company was taken over. They had received bonuses from the Dominion
of Canada towards that bridge, from the province of Quebec and from the City of Quebec. They had spent all they had received and were in debt something over $900,000. They were'utterly bankrupt-stranded; their charter was not worth a dollar. But a very prominent Quebec gentleman was at the head of the company, and the next thing we knew the government was buying up this concern. The government took over its liabilities, compensated the shareholders and directors of this bankrupt concern, and it became part, to all intents and purposes, of the great Transcontinental line. It is almost amusing to think that the hon. Mr. Fielding, in 1904, when addressing this House, put the amount at which the bridge should be chargeable to the Transcontinental railway at $2,000,000;-he thought that was excessive, but he generously charged that amount against the bridge. EveTy one who knows the history of that bridge is quite sure that the cost of that part of 'the project will be seven times two million. But in the airy way they had of handling millions in those days, they put it down as $2,000,000. It was perhaps, the most unfortunate ipart of the whole project-though we have not yet, it may be, heal'd all the misfortunes of the eastern division. That bridge, as we all know, dropped into the St. Lawrence, carrying with it scores of poor workmen. We had been paying millions on the bridge and the government had not even insured the payments it made. And the government contract for construction was with a corporation in the United States, the capital of which was $100,000. This was another instance of the business abilities brought to bear upon the construction of this gigantic work. The one visible asset we got from the bridge company was a lawyer, a political and personal friend of the right hon. gentleman (Sir Wilfrid Laurier) who was taken over as supervisor and superintendent of construction of the eastern division of the great Transcontinental line at a handsome salary. We got him, and that is about all we had, I think, for the money the country expended in buying out the old bridge company.
Now, it may be just as well here to consider the difference :in the two propositions. The first is that which tlhe skilful railway men had planned out, a simple undertaking, that would have been profitable to them and most useful and most profitable to the country. The Grand Trunk's proposition was to carry a line from the Pacific to North Bay. That was to be the whole construction. And they would undertake it for certain subsidies to which I shall refer presently,-we did not know what they were then, for the reason I have already stated, but they were a subject for consideration, and no one would have objected to a generous treatment, but not


Samuel Barker: The right hon. gentleman then dealt wdth. several of the clauses of the 1904 agreement not directly connected with the resolution now before the House, and, therefore, I pass them by at present.
Coming to the change made in section 28, which change was, of course, one of those which would surprise us as to the moderation of the Grand Trunk Company, and which would cause us to be vexed because it deprived us, the opposition, of a good deal of the thunder which we were prepared to fulminate, he proceeds to inform the House that the restriction of the guarantee to $30,000 per mile of the cost of construction of the Mountain section was removed, and that now the government undertook to guarantee 75 per cent of that cost whatever it might be. Then, too, he .said the government undertook to implement the proceeds of the sales of the bonds, so as to make the amount actually going into the construction, 75 per cent of the total cost of construction..
So there was one modest little demand which was to vex us, the vile opposition of that day, from its very moderation. Let us see what it meant to Canada.
The president of the Grand Trunk, addressing his shareholders at a meeting a few weeks previously, had said, on the latest information, that the mountain section -would cost for construction $56,000 a mile. Therefore the government knew that in removing the restriction of $30,000 per mile they were subjecting the * country to a guarantee of $42,000 per mile, or an addition to our obligations on that section of $12,000 per mile, or for, say 500 miles, an increase of $6,000,000 with interest.
Having thus crushed us with .such a trifling concession, the right hon. gentleman proceeded to lay before us another of his little arrangements, but this one, he admitted, in ceirtain possibilities might cost the country a little more. He apparently had not at all realized how much was involved in omitting the restriction to $30,000 a mile.
Well, not content with removing the restriction of one guarantee to $30,000 a mile, he further undertook that the government should implement the guarantee so that the company should receive par for the bonds guaranteed as to both the Mountain and Prairie sections. That might, he admitted, cost us a little more. So far, as you see, it is costing us in round numbers about $10,000,000-and we must not forget that that money is gone forever -not recoverable-and there will be more to follow.
Now, let us see just where we stand as to this $10,000,000. The Finance Minister will of course borrow the $10,000,000 at interest, and hand it over to the Grand Trunk Pacific as a gift. But as we have

guaranteed the bonds to the holders, then if the Grand Trunk Pacific fails to pay, we must pay that money again to the bondholders with interest. And under section 32 of the agreement, -we must, for the first seven years from the date of the 'bonds guaranteed on the Mountain section, pay all the interest to the holders and have no recourse against the Grand Trunk Pacific. And, further, for the next three years, if we pay interest on those guaranteed bonds, we must accept re-payment from the Grand Trunk Pacific not in cash, but in 40 year bonds bearing interest. So that, about 47 years after the date of the bonds, we will get only the three years' interest back.
Now, there was something said by the right lion, gentleman as to their misunderstanding. There was no misunderstanding. The right hon. gentleman knew perfectly -well that there was a question about the meaning of that clause. Does he suppose that if there had been a doubt raised on the side of the Grand Trunk Pacific Company as to its meaning, they would have failed to get it put beyond a question? All that he had to do was to say to the Grand Trunk Pacific Company: There seems to be a doubt as to the meaning of this implementing.
I had pointed out that if the bonds should not realize par, the government must bear the loss, without recourse; and so it would be wiser to require the company to issue additional guaranteed bonds for which the government would only be a surety. But the then Finance Minister (Mr. Fielding) said in reply to me:
I have no doubt the hon. gentleman's method would be the best, but I do not think he has any justification for assuming there is going to be a loss on the sale of the bonds. We all hope that the market will improve.
So they preferred to take the risk, and we had the right hon. gentleman and his ministers gambling on the stock market. The right hon. gentleman was inclined to admit that there might be a little more loss in dealing in their methods than there otherwise would have been. He used the expression: ' it might cost a little more.' That was just like the $14,000,000 Quebec bridge which we were told was likely to cost $2,000,000. The cost of everything undertaken by the late government was belittled. Fie knew perfectly well the risk they were taking, yet he would not ask the Grand Trunk railway to insert a few words in its agreement which would have made the meaning clear. The addition of ten woi'ds to that clause would have made its meaning clear beyond question, and every word inserted would have been worth a million dollars to the country.
As I have just made reference to the exMinister of Finance (Mr. Fielding), I
think I ought to read to this House the very words he used in a celebrated statement. We have all heard discussed in the press and on the hustings the $13,000,000 prophecy of Mr. Fielding. He told us that all that railway from Moncton to the Pacific was going to cost Canada would be $13,833,356, and we could pay tha.t out of one year's surplus. Let me read his words. They will be found in the fourth volume of ' Hansard ' of 1902, page 3631, 26th May:- A summary, briefly, of the figures show the following:-	,
Total present sum required to cover 7 years' interest (all other interest being paid by the company) on
cost of eastern division	$10,655,562
Total present sum required to provide government portion of 7 years' interest (all other inter'est being paid by the company) on cost of mountain section, western division	 3,177,791

' That is to say, if out of our large surplus this year, we should set aside $13,833,356, it would provide for the full payment on the seven years' interest which is all the obligation that the government are to bear as respects the whole line from Moncton to the Pacific.'
You will observe that he absolutely ignored the obligation to make good the loss on the sale of bonds, which we then pointed out to him. He was satisfied the market was going to improve and we were not going to lose on the sale of these bonds, and we now have to pay $10,000,000 of a loss; he did not take that possibility into his calculation at all. He just figured out the interest, and told us that $13,833,356 would be the cost to the government of the whole line from Moncton. How many other items did he ignore?
I started out by saying that I would read the original 'proposal of the Grand Trunk Pacific to the late government. That will be found in volume 2 of ' Hansard ', 1904. It is a very important document. It is a document which the right hon. gentleman (Sir Wilfrid Laurier) received before this question came before parliament at all. It is a document that was never produced although time and again the opposition made formal motions in the House for the production of every paper relating to this undertaking. My right hon. friend the then leader of the opposition (Mr. Borden) my hon. friend, the Minister of Public Works (Mr. Monk) and several other hon. gentlemen moved again and again for the papers. They called the attention of the right horn, gentleman to the fact that we wanted every paper relating to the subject, and he assured us that the government had brought down' every one. He was most emphatic. He made that statement so unequivocally that the Minister of Public

Works (Mr. Monk), then in opposition withdrew his motion. The right hon. gentleman knew that my hon. friend withdrew his motion on the faith of that assurance. Well, that paper I now propose to read. I should add that when the right hon. gentleman was charged with unfairness, he said that it was a confidential paper, and he did not undertake to produce confidential papers. He called it at other times a confidential letter to himself. Well, here is the document:-
Confidential.
Montreal, Que., Nov. 3, 1902. To the Right Honourable
Sir Wilfrid Laurier, G.C.M.G., P.C., Premier of the Dominion of Canada, Ottawa, Ont.
Sir,-Your petitioners desire to memorialize your government in regard to the construction of a first-class line of railway from the northern terminus of the Grand Trunk railway, at, or near, North Bay, Ont., through to the Pacific coast, for the reasons and upon the conditions set forth:
1.	That it is considered very desirable and in the public interest that there should be, without any unnecessary delay, a second transcontinental railway reaching from the Atlantic ocean to the Pacific ocean, in order that additional facilities may he provided for the large growing business of the Northwest, *which might otherwise find its outlet through American channels.
2.	That your petitioners propose, as soon as authorized by your government, to undertake the construction of such a line from North Bay, Ont. (or some other point north thereof, to be defined) to the Pacific coast, the terminus to he at or near Port Simpson, with all necessary branches along the route, to be designated.
3.	That your petitioners, therefore, ask that their application for authority to construct such a line of railway, to he called the Grand Trunk Pacific railway, shall he granted.
That was, of course, a personal application to the right hon. gentleman, for a charter to construct this line.
4.	That your petitioners will he prepared, immediately an agreement is entered into by the government, and the concessions hereinafter mentioned are sanctioned by an order in council, to place a corps of engineers in the field, both at the eastern and western ends and at other points on the projected line.
5.	That the routes to be selected shall he *submitted to and approved by the government, after proper surveys have been made.
6.	That as soon as plans and routes are approved, work shall be commenced and the road shall be completed and in operation within a period of five years from the time the Act is in force.
If the government had passed this Act in 1903 these men were willing to undertake that by 1903 the line would be running throughout.
7.	That all the work shall he subject to the inspection and approval of the chief engineer of the government.
Mr. BARKER,
8.	That in order to provide for the connections with the Atlantic seaboard all the year round and through an all-British territory route, your petitioners will be prepared to enter into an arrangement with the government for an interchange of traffic, or other satisfactory agreement, with the Intercolonial railway at Montreal, or to consider such other proposal as the government may submit.
Will the right hon. gentleman say that that was not a material thing to be laid before parliament when we were discussing this measure? We were contending that under his arrangement it would be possible for the Grand Trunk Pacific railway to divert the traffic to Portland instead of going on to Halifax or St. John.
9.	That your petitioners would have the advantage of all the eastern connections, in Ontario and Quebec, of the Grand Trunk railway, and by this means on the completion of the Transcontinental line there would be established and opened up a complete system from ocean to ocean.	-	[DOT]
10.	That the conditions referred to in clause
4, upon which your petitioners would undertake the carrying out of the proposed work, may be set forth as follows:-	_
(a)	That the Dominion government will grant a cash subsidy to your petitioners of $6,400 per mile of x-ailway, and in addition 5,000 acres of land per mile.
(b)	That the payment for the carriage of the mails shall he calculated on the same basis as provided for under the contract made with the Canadian Pacific Railway Company.
(c)	That rails and materials of every kind used in the construction of the railway-if dutiable-shall be admitted free, if such material cannot he obtained in Canada upon equally favourable terms.
(d)	That the Grand Trunk Pacific railway and all stations and station grounds, workshops, buildings, yards and other property, rolling stock and appurtenaces required and used for the construction and working thereof, and the capital stock of the company, shall be for ever free from taxation by the Dominion or by any province hereafter to he established "or by any municipal corporation therein; and the lands of the company in the Northwest Territories (until they are either sold or occupied) shall also be free from 6uch taxation, for 20 years after the grant thereof from the Crown.
Your petitioners ask that your government will give the prayer of this petition their early and most earnest consideration.
And your petitioners will ever pray.
On behalf of the petitioners,


GEO. A. CON.
[Stage Direction]
At page 3705 ' Hansard ' 1904, the right hon. gentleman, in referring to this paper which I have just read, a most formal petition to him as Prime Minister to be laid before the government, said:
This confidential letter was in my own possession.

I have thus gone over the history of this transaction. I do not wish to discuss the question of the law; that has been settled by the highest court of the empire. If there was a doubt such as the hon. gentleman mentioned, when he was taking the advice of counsel as to what that meant, the simple way was to put it clearly in the agreement and settle the thing altogether. Why did he need to take advice afterwards and then injure, as he must have injured, the credit of this country by trying to get out of the legal obligation he had entered into? It was not creditable to the government of that day or to any government. The matter was clear, they were to make good the proceeds up to 75 per cent. Would it require a lawyer to say what that meant? It is more a question of business. The whole thing was brought to the attention of the minister in 1904, and all he had to do, as I said, was to have ten words added to the agreement and there would have been no trouble. It would not have made any difference because the right hon. gentleman intended to go on with it anyway. Mr. Fielding, the Minister of Finance, was also determined to do it. The right hon. gentleman thought it was going to cost a little more. Mr. Fielding thought that my plan was the better one, but he had hopes that the price of bonds would improve in the market.
The right hon. gentleman made a point of this opening up new country to the north, and he said that some people thought it was too early, that it was premature. That is where the point arose of some pepple thinking the project was premature; they thought it was premature to go through the wilds of the north, but not that the construction of such a railway as the Grand Trunk proposed was premature, everybody agreed on that. What ought to have been done in or since 1904 was for the province of Quebec to do what Ontario is doing, build a railway up in to the territory to the north. They are doing that, and they will in that way open up and develop that northerly country. Quebec should have done the same thing in the country up to the north of the old settled portion of that province. The Dominion might have helped them if necessary, and after they had opened up and de-veloiped the country there so that we would have known positively what there was in that country, it would have been time to build the line east and west. Those people who said the project was premature in this respect were right, and I think the more we have seen of it the more we are convinced of that fact. But the right hon. gentleman preferred being poetic. He spoke of the roses that bloomed away up in the north, and he had other
quotations. He prayed Heaven it was not too late, he must go ahead blindly without surveys or anything else, and, great as the loss has been as we now see on that western division, I very much fear that it is a trifle and will 'be a trifle compared with the exposures wre may expect on the eastern division.
All that we are talking of to-day_ has nothing to do with the eastern division- the government is building that; and we have yet to learn what disclosures are in the right hon. gentleman's possession as to it.
I hope there are no more ' confidential letters,' no more private negotiations. I do not know whether there were any private negotiations about these bonds or in any other respect. But the right hon. gentleman certainly did an extraordinary thing. The Grand Trunk Railway company were allowed to sell these bonds in England. It mattered not to ifhem whether the discount was 10 per cent or 20 per cent, because the government had to make good the loss, and he apparently put it in their power to sell as they pleased on the market. Of course, I do not mean to charge him or the company with dishonesty or any desire for dishonesty; but it was not businesslike of the right hon. gentleman to put that in their hands. It is true, there -was a provision that the government should be consulted about the selling of these bonds. Have we ever heard anything as to these consultations and negotiations? If there were such, why have we not heard of them? The right hon. gentleman, so far as we know put the whole thing in the hands of a company that did not stand to lose one dollar whether the discount was 10 per cent or 20 per cent. I say it was a monstrous thing for any business government or any body of business men to put the country in that position.
Mr. OLIVER (Edmonton).: I am sure the House is indebted to my hon. friend (Mr. Barker) for the information he has given in regard to the history of the Grand Trunk Pacific project. I do not know, however, that we can altogether appreciate what he is pleased to consider as the important features of that history. He has given us his recollections as to what took place, and his imaginings as to what may have taken place. May I trespass on the time of the House to say something about the same project from my point of view? First, let me say, there is no project so great that fault cannot be found with it in detail, and no project so good but some person can find something bad to say about it. So mv linn, friend has given us the benefit of his knowledge as to transactions within the Cabinet, private and confiden-

tial communications, and a large number of other matters which may be of importance to him and to those who are of his type of mind; but to my understanding these matters are not of importance as compared with the great question of the establishment of a Transcontinental railway in this Dominion and the results that necessarily follow, and have followed, and are following, the construction of that railway.	My hon.
friend has told us that the Grand Trunk Pacific Company made a proposition to the government for the construction of the railway from Port Simpson to North Bay. And he has told the House that, in his estimation, the country would have been better served if that project had been accepted. For my part, I would take issue with him and say that the country, in my opinion, would not have been as well served as by the present project; and will give my hon. friend some reasons for my belief. If the building of this road has any purpose at all, that purpose is the development of the prairie provinces, it is to enable the further development of these provinces as wheatgrowing areas and to provide means whereby the wheat grown in these provinces can reach the markets of the world by the most favourable route. I contend that the road from the prairies-say, froim Winnipeg taking that as a starting point-to Montreal, by way of North Bay, is not, and cannot in the nature of things, be as favourable a proposition for the development of the western country as a road of less length direct to the city of Quebec. A road which cuts out two hundred miles of haul between the wheat fields and the market is the better of the two propositions. I think that will not be denied.


Mr. NORTHRUP.: Not necessarilj'' the best.


Frank Oliver: Mv hon. friend (Mr. Northrup) denies it.


William Barton Northrup: And will prove it.


Frank Oliver: 
Mr. MEIGHEN.: Does the bon. gentleman mean that the road is better because the country is paying the $10,000,000, and not the Grand Trunk Pacific?
. Mr. OLIVER. I mean to say that the road cost that money or it could not have been as good a road. I mean to say that the money that this parliament is asked to vote has gone into the construction of the road, and that without that money the road could not have been as good as it is. Do I make my point clear? It is for the good of the country, it is for the benefit of the western country particularly that that amount of money has gone into the road and the parliament of Canada is not doing any injury to the country in paying that amount of money.


William Barton Northrup: We did not think that they received the money. That is the reason for the Bill which we have now before us.


Frank Oliver: 

r
the date this project was brought forward, would not have fulfilled the requirements of the country as will the road that is being constructed. To-day, with gram piled on the iprairies, with millions of bushels of grain that will in all human probability, be destroyed _ because it cannot be carried forward, is it not of the last importance that the link of communication between the prairies and the seaboard shall be of such character that it shall carry the last pound and the last bushel it can possibly carry. Is not that economy, and is it not in the best interests of the country? I have had the privilege of travelling over some parts of the Grand Trunk Pacific railway, and while I am not an engineer, it was borne upon my mind very strongly how the cost of construction was multiplied by keeping the grades and curves down to a minimum. It is absolutely true that the road has cost from one-third to one-half more because it has been kept down to the minimum grade, but, just, in proportion it is twice or three times as valuable to this country because that has been done.
I heard my hon. friend (Mr. Barker) say that no person in this House at the time the railway project was under c onsideration oppose I it. Perhaps the gentlemen then opposite did not; I must say that I thought they did. My impression was that in the session of 1903, they said they would keep parliament here until the snow flew, and they did, rather than let the agreement pass. And, because of that delay in the passing of the agreement, and the depreciation in the money market that took place during that time, it became necessary to pass a supplemental agreement out of which arises the question of this ten million dollars. It is a matter of record that had my bon. friend and his friends agreed to that bargain when it was brought down, it would have been signed then and there by the Grand Trunk Pacific Company, and there would never have been the question raised that has been raised on the supplemental agreement	that
had to be brought forward	during the second session. If there is blame in regard to this matter, my hon. friend (Mr. Barker) and his friends will have to carry the Marne, on the historic facts of the case. In regard to this sum of money that must be paid, I have no doubt that the idea will be sent abroad that the people of Canada have been stuck to the tune of ten million dollars, because of some fault, or flaw, or mistake, on the part of the late government. That is not a fact. Parliament agreed absolutely in the session of 1904, to the amended arrangement whereby the Grand Trunk Pacific Company was to get seventy-five per cent, in proceeds of the cost of construction, up to $13,000 iper mile, and the only question was, whether Mr. OLIVER.
it should be in an additional issue of bonds or in cash. It seams to me, with all due respect to the opinion of my hon. friend (Mr. Barker), given at that time, that it was his business to differ from the government. The government took one position and he was bound to take the other. It did not make any difference what the government did, he was bound to oppose it, and to-day he comes along and claims credit for having done so. If the case had not been carried from the Supreme Court to the Privy Council, he would have been deprived of that credit, because the Supreme Court said he was wrong.


William Barton Northrup: The higher court said he was right.


Frank Oliver: Yes, on the off chance of having made a successful guess, my hon. friend (Mr. Barker) is entitled to consideration.


William Barton Northrup: And the government made a wrong guess.


Frank Oliver: We will admit the government guessed wrong, but the point that I want to make is, that the money has gone into the construction of the railway, that the railway is worth the money, and that the country is not paying one cent more money than the parliament of Canada agreed to pay. We may be paying it in a different way, but we are paying this money for something we are getting. We are getting a good bargain, and the country, and (particularly the western country, is getting ten times the value of the cost of the Grand Trunk Pacific Prairie section. And, at this particular time, let me again just mention that if ever a government was justified in declaring on the introduction of that railway project, that there was no time to lose; if ever the right hon. Sir Wilfrid Laurier was warranted in staying : ' pray God it may not be too late, it was in the case of the proposed construction of the Grand Trunk Pacific railway, because to-day we have the knowledge that unfortunately it is too late, and dreadfully too late. I say that if the road from Winnipeg to Quebec were completed, as it might have been completed, were it not for the obstruction of my hon. friends in the session of 1903, the country would have been better off, judging by the conditions to-day, in the result of one year s transportation of crops than the whole sum mentioned in the present Bill amounts to. If to-day that road were completed from Winnipeg to Quebec, with the grades and curves and under the conditions under which it is built, that loss of wheat which is do-inCT the country such stupendous damage would have been alleviated to a very large degree if it would not have been wiiped out altogether, and our friends opposite would not be in the dilemma in which they are to-day of either going back on their prin-

ciples or letting the grain spoil in the fields.
* At six o'clock, House took recess.
After Recess.
House resumed at eight o'clock.


William Barton Northrup: Mr. Speaker, the Finance Minister has raised the curtain on another act of that comedy, or to speak with perfect truth, that tragedy of errors, whose successive acts ever since the opening m 1902 have followed with wearisome regularity and painful monotony. It certify is not a moral play, its best friends, if it has any outside the actors, and scene shifters, and box-office, would not say that the only interest in the play, outside the dazzling extravagance of the stageing, is in the fate of the actors, and the mystery that hangs round the future of the star actor, and the unhappy victims that have to finance the enterprise. Luckily, I believe, we must be coming to about the last act, for one cannot but notice that the actors other than the star have already vanished from the stage on which they have lagged superfluous far too long. The 'Star actor is apparently pacing ifrom one side to the other, calling the judgment of Heaven, or in other words, of the Privy Council, on the devoted heads of the Canadian people, whilst his .'faithful henchmen are urging him to seek a harbour of refuge m an alien port, which they are at the present time deliberately preparing for him.
Now, as I said, the curtain has been raised on what is apparently nearly the last act. Let us consider the position in which we are to-day. In my humble judgment there seems to be a complete misapprehension as to the judgment lately given by the Privy Council. I agree with every word that was said by the hon. member for Hamilton (Mr. Barker) this afternoon as to the duty of this House, the necessity with regard to the honour of the Canadian people, that we should bow to the judgment of the Privy Council. But one is so apt to be misunderstood, or even misrepresented, that I take the opportunity of saying that nobody, not even the magnates at the head of the Grand Trunk Pacific, bow more readily or humbly to that judgment than I do. But I do contend that there is an entire misapprehension as to the real meaning of that judgment, and so, like the hon. member for Hamilton, I shall certainly vote for this Bill because we think the government of this country should be placed in funds so that if it ever comes that, as honest and honourable men* representing an honourable country, we can fairly and properly be called on to pay $10,000,000, we should be in a position to do so. But I sincerely trust-and I regret the right hon. gentleman who leads the House is not in his 98 i
place to hear my appeal-I sincerely trust it will be many -a long day before the people of Canada will be victimized by paying the $10,000,000, which some people most wrongly have spoken of as a judgment against this country.
Now let us understand exactly the legal position in which we stand, bowing as I say, humbly and respectfully to the judgment of the Privy Council. It must be admitted that, by the judgment of the Privy Council, accepting their construction of that clause, the meaning is that Canada is to implement-if I must reipeat that unhappy word which has cost us so much already-we must implement the guarantee of the bonds by paying in cash the amount which these bonds fall short. But supposing it were a covenant between the government and individuals. Supposing, instead of the government on the one hand and the Grand Trunk Pacific on the other, it was a case of a contract like that, and in order to make it perfectly plain, supposing it were a mortgage, or a covenant, between A and B, and B made default, I am willing to assume that Canada as represented by B made default, and that the mortgagee has a perfect right to call upon his mortgagor for payment, does it necessarily follow that the mortgagor must allow the judgment to go by default? Not at all. There may be a hundred defences he may have to his covenant, admitting that the covenant is there, and that, as a matter of strict legal interpretation, he is liable to the amount called for by _ the company. Let me illustrate. Supposing A has covenanted with B for $10,000 on a mortgage; B could say it is perfectly true, it is my covenant, and under that covenant I owe you $10,000, but you and I had a deal together in north west lands, and the result was that you have in your hands to-day $15,000 of my money, the result of our speculations in northwest lands. If B could prove that in his defence, does anybody pretend that a court would give judgment against him for $10,000? Far from it. The court would take the account between the two parties, and assuming that A owed the $10,000, if B owed him $15,000, then, by subtracting the 10 from the 15, the amount of the judgment for B against A would be $5,000. That is the view I take of the position at the present time. I think we are amply entitled to say to the Grand Trunk Pacific; We have had dealings with you, and we claim that whatever the ultimate result of examining the accounts may he, before we pay you this $10,000,000 or $5,000,000, we will have an accounting between us, and if we owe you money we will pay it. But if on examining the accounts it is found that we don't owe you the money, and you owe us more money than we owe you, pardon us if we decline to pay you

only the Prime Minister and his colleagues were able to consider intelligently the position of the case. Those of us who were in the House at the time know that when we came to Ottawa we had the application of the Grand Trunk Pacific Eailway Company to build a road to North Bay and we know that certain negotiations took place and the result of these negotiations was that a railway was contracted to be built from Moncton to the Pacific coast which, I venture to say, not one single man in Canada wanted built. My hon. friends opposite say that I am speaking recklessly, but I am speaking with knowledge of what occurred in 1903, and I say that there was not a man in Canada from the Premier down who wanted the wretched system that was unfortunately for some reason adopted by the government of the day. The Grand Trunk railway did not want it, I do not suppose that *anybody will say that Mr. Hays and his colleagues are men of such stupidity that they do not know what they want. And they put very clearly and particularly what they did want. Now the Grand Trunk and Grand Trunk Pacific wanted a road from North Bay to the Pacific coast. But they could not get it; they were held up by the government. As the right hon. gentleman (Sir Wilfrid Laurier), told us-and I have ' Hansard ' here to prove it if necessary-the government imposed upon the Grand Trunk the building of this subsequent line. How did they do it? Those hon. members who were here in 1903, will recollect that when we met in the committee to consider the application of the Grand Trunk railway, we were held up in a mysterious way. Suddenly the route was changed, so that it was to run to Quebec and not to North Bay. The Grand Trunk railway did not want to run to Quebec; if they had wanted it, they would have put in their application to that effect. But as the hon. minister of that day put it, the Grand Trunk railway had imposed upon them the building of a road from Quebec to the Pacific coast. And the Prime Minister of that day must have wanted the road from the Pacific to Quebec, or he would not have insisted on that change in the order. But, in compliance with that insistence the change was made. Well, why was not the road built to Quebec? Is there a man here who does not know why it was not built to Quebec? When the right hon. gentleman came down with all the influence of the government to propose the building of the road from Quebec to the Pacific, his supporters from Eastern Quebec and the maritime provinces declined to support the Bill. They said if it was going as far as Quebec, It


William Barton Northrup: must go to the sea. And, after a wearisome discussion, the government was obliged to concede what was demanded, and agreed to run the road-from where? From Halifax? From St. John? No, the government had not the courage for that. The declaration was that the road was to run from sea to sea, and that was the stipulation. But the difficulty was that, running the line down to the sea, they had to choose a terminus on the sea. If the government road were Tun to Halifax, the government would lose the support of the New Brunswick members, and if it ran to St. John it would lose the support of the Nova Scotia members, who were very numerous on that side at that time. And because they dared not go to Halifax and dared not go to St. John, they stultified themselves; they made their followers, after voting for a road from sea to sea, then humbly vote that a road running from Moncton to Port Simpson was a road from sea to sea. There is hardly a schoolboy who has not a better conception of the geography of the country than had the right hon. gentleman in forcing that through-a road from sea to sea, with one terminus at Moncton.
That was the ..first stage of this Bill. We were told this afternoon that if the Bill , had not been held up by the opposition everything would have been lovely and the road would have been completed years ago. There was no proof of that. The fact is the Grand Trunk Pacific people had agreed to accept this, but they realized the influence they had over the government that tiie government was committed to *them, that the government had become partners with them in the line.
I do not wish to take the time to prove the statements I make, but if anybody contradicts me, I have ' Hansard ' here to prove that Mr. Hays, Lord Welby, one of the -directors, and Sir Charles Rivers Wilson, the president, in their messages and addresses to the board of directors and in their letters to the Prime Minister of that time, said specifically and unequivocally that'they were partners with the government of Canada in building this road 1 think we cannot afford to forget the statements made by the Grand Trunk Railway and the Grand Trunk Pacific authorities in letters which were brought down by the government of the day, without repudiation or contradiction, that on that side of the water and when appealing to their shareholders, they declared: We are partners with the government of Canada, in this road we are building.
Now, if they were partners with the government in this work that fact may afford us some light on some of the proceedings in this House. When we come to the clause already before us altering the original arrangement, we can understand

the difficulties in which the government stood, being partners of the Grand Trunk Pacific. We heard something else this afternoon from the leader of the opposition (Sir Wilfrid Laurier) and from the hon. member from Edmonton (Mr. Oliver) as to the position of the government and the legal advice they took with regard to this clause. But the legal advice they took was in 1908 and this clause was passed in 1904. Would it not have been the part of reason and wisdom in the government to take advice when they were passing the clause? I have ' Hansard ' here which will show that my hon. friend from East Hamilton (Mr. Barker) told this House exactly what the effect of the clause would be. The Minister of Finance agreed with him, and in ' Hansard ', 1904, and at pages 3634 and 2430-I will not take time to read them unless any hon. member doubts that I am quoting correctly- we have the Minister of Finance agreeing with my hon. friend from East Hamilton. When the implementing of the guarantee \vas spoken of, it was stated that it could he done in one of three ways, and the Minister of Justice, the Minister of Fin-hnce and the Prime Minister agreed. You could issue bonds for a high rate of intertest so that they would produce par. Or, if you. wished to issue them at a lower rate, you could issue more bonds guaranteed by the government to make up the difference, or you could pay cash. And they all agreed that the payment of cash was the most objectionable way. The Minister of Finance said in his remarks that it had been agreed in this discussion that the issue of additional bonds guaranteed 'by the government was the wisest course. We had the member for Annapolis 'of that time discussing the matter, and lie, in the presence of the minister, stated 'clearly and squarely that of course the Only way was to guarantee additional bonds. Thus, though there were three 'possible ways of doing it at that time, 'will anybody tell me why such peculiar 'phraseology was used as is used here, when half-a-dozen English words would have made it clear that what they intended to do was to issue additional bonds? While I do not intend to say a word against the judgment of the Privy Council, and while I know very well that it is contrary to the law of evidence that 'they could be guided by the statements made in this House, yet, when we come down to the question of equity as between the parties to the contract, we find that 'these Grand Trunk Pacific magnates sat 'still when the representatives of the people were told by their partners that this fneant that we were to guarantee additional bonds. But a little later, when it was too late for the government by any
'legal device to escape the dilemma in which they were placed, then their partners come forward and say: 'It is true there were three ways in which the word " implement ' could be applied, and that one was the issue of additional bonds at a high rate of interest;' but you cannot do that, because second mortgage bonds have been issued, and it would not be [DOT]fair-and no doubt they were right in that-after issuing second mortgage bonds 1-to issue new bonds to go ahead of them. And you cannot issue more bonds for the Same reason. So, when it came before *the Privy Council, they did not pretend to say that in 1904 the meaning of these words was necessarily what it is, but two ways of applying the word ' implement ' have been eliminated by the action of the government, and so they say there is direct liability and you must pay the cash. I suggested a short time ago that there might be a counter claim. If the government, on looking into the matter- and I don't pretend to say but that it is their duty to look into it-and if they find that the bonds were not sold for the highest price that could have been got, feurely we should be entitled to claim a set-off against the Grand Trunk Pacific to the extent to which the bonds were sold at a rate below that which was obtainable. I desire to call attention to a Significant fact which does not affect this case except as the principle of good faith tomes in.
Here we find the government of this country with its credit guaranteeing bonds for the Grand Trunk Pacific and they are selling at 80. We find the Grand Trunk which never pays any dividend upon its ordinary stuck also guaranteeing bonds for the Grand Trunk Pacific railway &n(d the bonds guaranteed by the government of Canada sell at 80, while the bonds guaranteed by (the Grand Trunk sell at about par. Is that a subject of congratulation to the metnbers of this House? Does it not rather cause one to -wonder what business acumen there "was behind this proposition when we see government guaranteed .bonds going at 80 and Grand Trunk guaranteed bonds- going at par? The former being at 3 and the latter at 4 per cent.


Mr. SINCLAIR.: Will the hon. gentleman give us the dates at which these bonds were sold?


William Barton Northrup: I have the papers in [DOT]my hand, and I will give it -before I sit down. I see it is London, January 31.


John Howard Sinclair: I am referring to the fact that the market quotations differed on 'different dates.


William Barton Northrup: This is the market in London, on the 31st January, 1912.


John Howard Sinclair: Has my hon. friend the dates at which the bonds of tire Grand Trunk and of the government were sold and also the rate of interest?


William Barton Northrup: I thank the hon. gentleman for his inquiry. I think it shows how some hon. gentlemen view questions of this kind. I was careful to state expressly before the hon. gentleman rose, that one bond -paid 3 per cent, and the other ipaid 4. The point is, and I stated it expressly, that the Grand Trunk Company had a great deal more shrewdness than the ministers of the Cr-own because the ministers of the Crown ha-d not the shrewdness to insist that their bonds should be issued at 4 per cent, -and if that had been done they would have not only gone at par, but they would have gone above par. If the Grand Trunk Pacific is going to pay interest on its bonds, why should the interest on the bonds not have been put at a figure that would bring par? These -bonds were issued practically simultaneously. Formerly the government-bonds represented the first mortgage and the Grand Trunk the second, but now the Grand Trunk 'is in many respects the first, and in no respect the second, owing to the very material changes made in the Act in 1904. When we find these Grand Trunk bonds going at par, the Grand Trunk are not to be called upon to put up any more for the guarantee of these bonds and if the road is a success, there is no pecuniary responsibility on the (part of the Grand Trunk, but, the unfortunate country, if the road is -the biggest success in the world, under this -bargain made by the ministers of the Crown, has to pay $10,000,000 which the representatives of the people were told it was not the intention to pay. Here then is the result and I think we -are justified in saying that there was every warrant for the statement by gentlemen named before, that the Grand Trunk Pacific and the government were partners in this enterprise. But, there is another reason why one has to -consider these matters. The hon. member for Edmonton (Mr. Oliver) made a statement this afternoon to the effect that the more the road cost the better. I admire his acument. I do not differ in the slightest from liis conclusion, looking at it from his standpoint. There is not the slightest doubt in the world that if the Grand Trunk Pacific -co-uld have been made to cost a thousand million dollars, it would have been all the better from a certain standpoint. It is quite evident that fhe_ hon. -gentleman has been whiling away liis time in the recess, by reading the records of the Ontario courts because those records embody the history of one O'Gorman. That man was the purchasing agent for the company known as the Grand Trunk Pacific Railway Company, and he was convicted because, as Mr. NORTHRUP.
purchasing agent of the Grand Trunk Pacific Railway Company, he went around to parties from whom he had purchased goods and after the contract had been made said:	There is to be
a rake-off of 15, 20 or 25 per cent to the government. That is the rei-son that the cost is as high as it is. But, he ran across an honest firm in Toronto-who declined to pay the money, the facts came out and the gentleman was convicted. I have never yet heard, although I have inquired in different quarters, that this trifling conviction in any way impaired his usefulness as purchasing agent of the Grand Trunk Pacific. I suppose that is because the government of the day and the Grand Trunk Pacific were partners in this great enterprise.
In his speech the hon. member for Edmonton also told us with great unction that the proposed road would be 200 miles shorter than some other road, and my hon. friend laid the law and the gospel down distinctly and unhesitating;] y that if the road was 200 miles shorter than any other road it would be more desirable to the country. Is it any wonder that we have such a wretched, accursed contract weighing down the people as that which we have with the Grand Trunk Pacific Railway Company, and which the ministers of the Crown never intended in 1903 and 1904, but which the judgment of the Privy Council has shown to exist, when we have an exminister of the Crown who would dare to stand up in this House-I should not say ' dare ' because the hon. gentleman spoke with -absolute honesty-and make the statement that as long as the road is 200 miles shorter it must be a better road? It bever seemed to enter his mind! .that curves, gradients and the cost of the traffic might make one road more expensive to operate than another, that one road might run through a thickly peopled country and the other through a wilderness, or-that it would necessarily follow that people being at one end of the road and desiring to ship their grain to the other end could not ship it more cheaply by sending it through the wilderness than through the thickly peopled country. Did it ever enter his mind that if the curves and gradients on one road were almost such as to make the road utterly impassable, it would mean that that road was not in as good a position as the other, notwithstanding the fact that it might be 200 miles shorter? That never entered the mind of the hon. gentleman and his colleagues. I would be too just to the hon. member for Edmonton and to the right hon. leader of the opposition, I would be too just to their supporters who voted for these measures. to believe that they understood the law or the facts of the case when

it is laid down by an ex-minister of the Crown, that 200 miles difference in length was the only question, irrespective of cost. I Would have believed that the great problem which confronted them was to get light curves, a low gradient and good materials as cheaply as possible. But it never entered the mind of the hon. member for Edmonton that cheapness was any factor. If you can shorten the line, he tells us, the more it costs the better. Does he mean that the more it costs the less they can carry freight at, and the less people there are in the country through which it passes, the fewer there will be to interfere with the traffic? Let us take the case presented by the hon. member for Edmonton, who says that wheat is rotting on the ground because we have not this outlet for it. Why have we not this outlet? Because the hon. gentlemen opposite refused to agree to tire proposition of the Grand _ Trunk when they appeared before them in 1903 and asked for authority to construct a road to be completed in'1908 through to North Bay, where tliere was a line which would take the grain to Montreal, and where they guaranteed to hand it over to the Intercolonial railway, the government road. We would have had that road some years ago had these lion, gentlemen yielded to the suggestion and to the motions made by the opposition in the House in 1903 when this important question was before the House.
Now, Sir, it is a matter of the utmost importance that we should understand exactly with whom we are dealing. The Grand Trunk Pacific is, of course, a road under the control of the Grand Trunk Railway Company. I presume there will be no particular doubt on that matter. Then, the Grand Trunk magnates controlling the Grand Trunk Pacific, I presume, will deal with the Grand Trunk in the way they have been accustomed to deal with the people of this country. I am not here to make any attack on any individuals, but I am here as a Canadian, sincerely and honestly believing-I may be wrong in my belief, we are all liable to error, but no member of this House ever spoke with more sincerity than I speak now-that one of the greatest dangers to the unity of the empire is the conduct of the directors of the Grand Trunk and of the Grand Trunk Pacific. One can go up and down this country from one end to the other and the denunciations one hears from the man in the street of the conduct of the magnates of these two roads, conduct which extends to the directors in the mother country, are such as to make you shudder at the dissatisfaction which it has excited.
Why; 'because, after all, you are never going to have true unity between Canada
and the motherland, except on the ground of mutual respect. Now, if the magnates of the Grand Trunk-the greatest road we have in Canada under old country management-allow that sort of thing to be said and done by their managers in this country; it they allow the people of this country to be hoodwinked, as was the case in 18*94, by their managers, sitting quietly by and allowing the representatives of the people to be told what the meaning of this clause was, and saying not a word to correct these false statements, so that there is now only one contingency left for this country, and that is to pay ten million dollars, you cannot be surprised if the ordinary Canadian begins to suspect that that is not the kind of fair business dealing they ought to expect Irom the people in the motherland. The result of that kind of thing is, not what those who like myself desire to see the unity of the empire preserved, can approve. It is only a year or two ago that the name of the general manager of the Grand Trunk and the president of the Grand Trunk Pacific was brought before this House in connection with a telegram sent to him by the then acting Premier of this country. We had a strike on the Grand Trunk and Sir Richard Cartwright, the acting Premier, sent the telegrams to practically every collector of customs in Ontario asking for a report on the stale of the strike. He also sent a telegram to Mr. Hays, of the Grand Trunk, asking what could be done about the strike, and the answer came back from Mr. Hays, there was no strike, it was over, all the company wanted was protection for their ''ropertv. And. at the same time, practically every collector of customs in the province of Ontario sent telegrams to Ottawa describing the fact that trade was paralyzed, that trains were at a standstill, that factories were closing for want of raw material, that merchants were losing their money through being unable to obtain goods to carry on their business. I am not going to say where the truth was, but it would not be a bad idea for the present government to investigate whether or not there was collusion between all the collectors of customs in this country to tell one story, or whether there was something wrong with Mr. Hays when he told his story. Then, at the termination of that strike an agreement was made by the Grand Trunk with two ministers of the Crown, that all the men, except certain ones who were specified, would be returned to their places within ninety days* These men were not returned to their places, and the only answer that the railway magnates designed to give was that the Grand Trunk had a right to employ such men as it saw fit to discharge the

duties of its service. That of course is perfectly true as an abstract proposition, but it is somewhat irrelevant, and, may I say it is contemptuously impudent as an answer to the promise that the Grand Trunk would return the men to their places within ninety days. I would not pretend to give in my own words the records of some of the acts of the Grand Trunk, and the Grand Trunk Pacific, but surely I cannot be astray if I read the judgment given by one of our courts in Ontario; the judgment of a judge whom every one will admit is perhaps the most popular juoge with the people of Canada, a man whose unswerving integrity, whose great ability, and boundless courage, has made him a bulwark, as the people of this country think to defend them from the aggression of some railway corporations. I refer to a judgment given by hon. Mr. Mabee, in a case brought before him, in which the Grand Trunk Pacific-I wi'l use his own words:
The Grand Trunk Pacific, in fixing its location plan which was approved by the Board, located on lot 882 station grounds. That was approved shewing stations grounds.
Later on, it entered into negotiations with the then owner of lot 882 and some considerable correspondence has taken place between them, to all of which it is not necessary to refer.
The judgment then goes on to give the facts, it is not necessary to read them, but I quote the following from the judgment itself:
It is now suggested that all they were dealing about was sufficient land to put a siding in. It is idle to say, in the light of this correspondence, that there was no other object in view except the getting of enough ground for station purposes; whoever would think of locating a townsite at a siding without any station facilities?
Apparently the railway company was unable to get from the owner of the property a conveyance, as they were requesting, of a half interest in the land for a townsite.
There is this patriotic road holding up this man. Then the judgment goes on to say:
It seems to me that this man with whom this contract was made and whoso lands, the railway company obtained for the location of a station on lot 882 is in no way proceeding with haste when he discovers that the company in effect repudiate their agreement and are advertising the glands for sale in a town-site in competition with what I presume he is- trying to exploit on lot 882, and on which they promise the public that a station will he built in the spring of 1912, within three or four months.
Now, it is perfectly apparent that there is only one thing to he done in this case. This company has got to carry out its agreement. It is a public scandal that a railway corpora-


William Barton Northrup: tion should go about the country and obtain conveyances of this kind under false pretences.	_
If a private individual had done what this company through its officials have done, he would probably he landed in the penitentiary. At any rate he ought to be in the penitentiary. The land was obtained through the grossest deceit on the part of the representatives of this company and it is a breach of faith of the worst character that they should attempt to repudiate their contract. It is true that the time is not yet ripe for the construction of a station. The road is not built. It is not yet ready to open for traffic, hut an order may go requiring the Grand Trunk Pacific Bailway Company to construct and have ready for use by the public a station, the plans to he filed and approved by the Board's engineer, on lot 882, where it was intended originally to construct it. That station must be ready for operation at least as soon as the road is open for traffic.
An order may also go refusing the application that was filed with the Board on the 11th of December for the location of station grounds and a station on lot 851, and restraining the Grand Trunk Pacific Railway Company from the location of a station at that point. It is out of line with what they originally intended to do, done with bad motives, and it is done in violation of their solemn contract with the predecessor of Kelly in title.
Now, Sir, in quoting that language, I am not giving my own opinion, but the judgment of a judge, one of the principal judges in Canada, the Chief of the Railway Commission. My whole appeal now is that the country should not pay over this ten mifilions without investigation. Let us investigate first and pay, if necessary, afterwards, and not pay first and investigate afterwards. I think the wisest course for us is to investigate first. I have called attention to the action of the Grand Trunk Pacific magnates. It may seem to be going out of the way to attack an individual, but this whole country is concerned in what this individual is doing. Reputation will tell, and if a man is found under certain circumstances suspiciously situated, his reputation will help him out, or it may-ruin him entirely. Having said this much as to the way the country has been treated in the past, let me remind the House for a moment of two clauses in the contract. I presume I would not be wasting the time of the House if I were for a moment or two to refer to the fact that this was to be a Canadian road. It is so stated in the preamble of the first Bill, Chapter 91, 1903, and in the agreement made on the 29th of July, 1903, between His Majesty the King and Sir Rivers Wilson and other representatives of the Grand Trunk I find the following clause:
Whereas, having regard to the growth of population and the rapid development of the production and trade of Manitoba and the Northwest Territories, and to the great area

of fertile and productive land in all the provinces and territories as yet without railway facilities, and to the rapidly expanding trade and commerce of the Dominion, it is in the interest of Canada that a line of railway, designed to secure the most direct and economical interchange of traffic between eastern Canada and the provinces and territories west of the Great Lakes; to open up and develop, the northern zone of the Dominion, to promote the internal and foreign trade of Canada and to develop commerce through Canadian ports, should be constructed and operated as a common railway highway across the Dominion from ocean to ocean and wholly within Canadian territory.
Clauses 42 and 43 of tlie contract also referred to the fact that it was to be a thoroughly Canadian road from ocean to ocean, with Canadian ports, and this is the ground upon which the government assisted the railway.
I think I need not occupy any more time to establish my chief proposition, that every 'dollar that this country has given to the Grand Trunk Pacific railway-and Heaven knows it has given mighty sums, and apparently will have to give mighty sums more-is based on an agreement that it was to be a thoroughly Canadian road, running from ocean to ocean wholly on Canadian soil, for the benefit of our inland commerce and our ocean ports.
I noticed in the month of August last that in the state of Massachusetts a railway charter was granted to some gentlemen, and I will read the names of the lucky men. I have here a copy of the charter, which is certified under the seal of the Commonwealth, so that for all practical purposes it i3 as good as the original. It reads thus:
The Commonwealth of Massachusetts. Be it known that whereas Charles M. Hays, Earl H. Fitzliugh, Ezra H. Baker

And a number of other names unknown to me, which I will not readand the Grand Trunk Railway Company -have associated themselves with the intention of forming a corporation under the name of Southern New England Railroad Corporation for the purpose of locating, constructing, maintaining and operating a railroad.
And they get their charter to build a railway through certain places in the state of Massachusetts. Now, there is at the present time a Bill before the House of Representatives of the state of Massachusetts, a copy of which I hold in my hand, entitled an Act to enlarge and extend the corporate powers of the Southern New England Railway Corporation, and, without going into details, I may say that thi3 Bill gives them the right to build a number of branch lines, among them one into Boston. It also authorizes the company to increase its capital stock to $10,000,000 and to issue bonds to twice the amount of the capital
stock actually paid in. So that these gentlemen, who are so hard up that they are coming to us for a loan of $10,000,000 to enable them to complete this road, are applying for power to increase the capital stock of this Southern New England Railway Corporation, for which they have obtained a charter, and to bond it to twice the amount of the capital stock paid in. Now, what is this road for? I confess that it is a mystery to me why our Canadian papers have not apparently been aware of what has been so frequently and conspicuously published in the Boston papers. I have here a file of the Boston papers, representing every paper published in Boston, and those papers for weeks and months past, day after day, have been full of this new enterprise to make Boston the Atlantic terminus of the Grand Trunk Pacific. I will not ask the House to take my word for this; I will read from some of these papers. But before doing so, let me say that the Senate of the state of Massachusetts has referred to a committee, which is to report not later than March 30, a number of questions which will enable the Senate to decide how far the Grand Trunk Pacific Company intends to make Boston its main port, and what advantage i't might he to the Commonwealth to acquire the property of any or all of the railways entering the city of Boston, and issuing bonds, &c., for that purpose. Let us see what the Boston papers themselves are saying about these matters. The Boston ' Globe ' of the 17th of January, 1912, says:
Plans of the Grand Trunk-Advantages offered to New England-Direct Rail Connection with Canadian Grain Country-Four Days from Boston to the Pacific.
Plans for bringing to the attention of the Massachusetts legislature the advantages to the state through the proposed extension of the lines of the Grand Trunk-Central Vermont system to Boston and Worcester are well under way.
E. H. Fitzhugh, president of the Central Vermont railroad and the recently chartered Southern New England railroad, and one of the chief assistants to Charles M. Hays, the American president of the Canadian Transcontinental railroad, came to Boston yesterday to meet the attorneys who will conduct the legislative hearings on the petition of the Southern New England railroad.
President Fitzhugh was in consultation yesterday afternoon and evening with lawyers, engineers and officers of the Central Vermont, who have been collecting the details concerning the proposed new line, which are to be submitted to the Committee on Railroads of tlie Legislature.
From the attitude of President Fitzhugh it is evident that President Hays is serious in his intention to build the line from Worcester, Vt., across New Hampshire and Massachusetts to Boston, to construct the branch from Boston to Blackstone and the crosscountry road from Douglas to Worcester as quickly as possible.

President Hays and President Fitzhugh are anxious that the railroads to Boston, Providence and Worcester be completed and ready for occupation by the time the last spike is driven on the Grand Trunk Pacific, now under construction from Moncton, N.B.t to Prince Rupert, B.C. Hundreds of miles east and west of Winnipeg are ready for operation, but it may be a couple of years before the long road across the continent is finished.
During this period of construction the Grand Trunk wishes to build the 130 miles or so that separate the Central Vermont at Windsor from a Boston terminal, in order that Boston may be one of the terminals of the railroad from the Atlantic to the Pacific.
The purpose of the Southern New England railway, as will be argued before the committee of the legislature, is to give Boston and New England a direct rail connection with the great grain country of the Canadian west and northwest, to place the manufacturers of New England in touch with the market of the growing agricultural and purchasing sections of the Dominion.
The Grand Trunk railway through the Southern New England railway, is coming to Boston to bring business here and to create a. traffic between factories here and the prosperous communities that will be developed along the new transcontinental road.
The idea of President Hays is to stimulate commerce by adding Boston and the New England manufacturing centres to a line that will stretch across the continent and will he the longest railroad in the world under one management.
The Southern New England from Boston will be as much a part of the transcontinental trunk line as is the section of track which is now being laid across the Rocky Mountains in British Columbia.
It is for the purpose of shortening the distance from the New England factory to the farmer of western Canada and putting the manufacturer in touch with the purchaser on the same line of railroad that the Grand Trunk has applied for the authority to build a railroad to Boston and Worcester.
At the same time the Grand Trunk is seeking the traffic from the large manufacturing cities of New England to the British Columbian towns that are springing up as fast as the rails of the Grand Trunk Pacific are laid. President Hays wishes to reach all the manufacturing centres of New England.
After speaking of the possibility of tapping the mill centres, the article goes on:
The bu'lding of the proposed Southern New England from Boston, upon the completion of the Grand Trunk Pacific railway, will mean the possibility of trains being operated from Boston to Princo Rupert, the Pacific terminus, in a running time of within four days.
The Grand Trunk Pacific is being built with an average grade as low as four-tenths of 1 per cent. The grade through the Canadian Rockies is as low as that across the plains, which will give to the Grand Trunk Pacific a train capacity of far greater tonnage than that of any other transcontinental road.
When the proposed railroads are completed a train running on the time now made by the Intercolonial Limited between Montreal and Mr. NORTHRUP
Toronto will cover the distance between Boston and Prince Rupert within four days. _ All of the construction is of the heaviest rails that are now rolled and there is not a wooden bridge on the road.
The Grand Trunk in extending its line to the Pacific has looked with particular favour upon the port of Boston and the mill cities of New England. President Hays thinks that a great deal of business for the new railroad across the continent may be developed in the territory to be tajoped by the Southern New England railway. The Grand Trunk has to make traffic for its transcontinental road and New England is considered to be an inviting field.
There is an editorial in the same issue of the Boston ' Globe ' headed ' Welcome, Grand Trunk.' I do not wish to occupy the time of the House by reading, as I might do, editorial after editorial on this matter. But I wish to refer to a long article in the Boston ' Sunday Herald ' of January 28, 1912, in which there is a map showing the line of the Grand Trunk Pacific railway running directly from Boston to Montreal, then to Scotia Junction, then to Cochrane, and then to Prince Rupert. Here is the great Transcontinental line, which we have been subsidizing to such a tremendous extent, going to Boston, and the Boston papers publishing maps showing its route from Boston to Prince Rupert over which the trip will be made in only four days. The heading of this article is: ' Linking Boston with the Far Pacific.' In the article there are two or three striking passages. It points out that when the railway is completed it will be possible for passengers and freight to make an uninterrupted journey from Boston to Prince Rupert, and then says:
This means such men of affairs as Chairman Hugh Bancroft of the directors of the port of Boston, President Hays of the Grand Trunk, Augustus S. Cobb, the physiographic expert, and others point out, that Boston is going to share heavily in the enormous development of the Canadian Northwest, to be one of the vital links in the commerce between Europe and that district, even a link in the trade of the three continents* When this huge transoceanic, transcontinental line of travel gets really under way, the traveller from Liverpool bound, say to Yokohama, need buy only two tickets, one at Liverpool and another at Boston.
And to such simplicity it is played for freight to make a journey of this length, 12,000 miles, that the shipper at Liverpool need put only a through tag on liis goods and away they go over the sea, then over land and over seas again to their destination-the nearest approach to an airline route that the wizards of transportation have yet conceived with certainty of realization. In these days of talk about the development of business in Boston generally and that of the port in particular, there is much material for thought in the approaching completion of this transcontinental railway from Boston to Prince Rupert.

Now, the Transportation Committee of the Boston Chamber of Commerce and the Worcester Board of Trade have both passed reports favouring the Grand Trunk extension to Boston on the ground that Canadian ports cannot furnish an outlet for the exports of the great northwest.
It seems that the Boston * American,' one of the Hearst papers in Boston, was the first to start the scheme by sending out. petitions signed by 100,000 people^ which it transmitted to President Hays, asking him to do what is being done now. I have here a copy of the Boston ' American,5 January 14, containing a large picture of President C. M. Hays. On Juno 26, President Hays, of the Grand Trunk Company wrote this letter to the editor of the Boston ' American
Dear Sir,-Mr, Warman has called my attention to your letter of June 1, and the box of signatures to the petition inviting the Grand Trunk to come to Boston.
All of us here appreciate very much the good offices of the Boston 'American' in securing this long list of petitioners; and I write to assure you of my personal appreciation of your efforts.
Then there is an interview with Mr. Hays, and this is what he said:
The London representative of the ' American' acquainted President Hays on the last day of April with all that was being done in the 'American' campaign. The 'American' sent President Hays a cablegram reporting progress. In the morning the ' American ' received this cablegram in reply:
To the Boston 1 American,' Boston, Mass.
When the Boston ' American ' petitions and the official resolutions referred to in your cablegram have been received by me to be placed before the Grand Trunk board of directors, I am certain the subject will be duly considered by that body.
To be placed before the Grand Trunk Board of Directors. The applicant for the charter is Charles M. Hays, with half-a-dozen other names, but the petition is to be laid before the Grand Trunk directors.
President Hays returned to Canada late in May, and just before the last Sunday in the month received a reporter for the 'American.' The ' American ' wanted a message for its readers, the great boxes of petitions were almost ready for shipment to Canada. Not yet ready to take the public into his confidence, President Hays sent a brief message, which was interpreted to he an admonition to New England to keep on working and to ' hold the fort.'
This is what President Hays said in the ' American' last May, in Montreal, just before the arrival of the petition of the ' American ' readers to ' come to Boston ':
The officers of the Grand Trunk railway are certainly very grateful to the people of Boston and the neighbouring section of New England for jthe display of confidence in our company. We could not well be otherwise.
The part your newspaper has taken, in the
matter of inviting us to Boston, is little short of amazing. 1 believe the very first person who met me in London, on my arrival from Plymouth, was a representative of the Hearst News service. He called upon me several times subsequently.
He told me-your representative in London -about the unanimous vote of the Massachusetts Senate, the Massachusetts House, and the Boston City Council; and assured him that I would place the resolution before our board of directors just as soon as the official records had come to me.
I have been away a month. To-day for the first time I saw the transcript of these votes. To-day .also, I received the letter of his honour the Mayor, and saw the statement of His Excellency the Governor. Yon tell me I am soon to have the petition of iOO.OOO New Englanders.
Such a testimonial as this would make any railroad man happy. It makes ine very happy. What shall I say to make New England happy?
I will say this. I will say that not only the original resolutions j>assed by your House of representatives, your Senate and your City Council, together with the letter of Mayor Fitzgerald and the statement of Governor Foss, but also the 100,000 petition of the 'American,' will go to London and be formally placed before our board of directors.
Moreover, I believe I can safely say, to Boston and New England, that these votes, these expressions, this request, will receive all the consideration-all the courteous consideration-to which they are entitled.
For myself, personally, I wish you would say to the people of New England that I fully and deeply appreciate the good-will back of this movement.
Without taking up the time of the House longer, I may say that for some time back, and at the present time, there is a wide spread movement in Boston, supported 'by the legislature, the senate, the Boston City Council, the mayor, the Chambers of Commerce, and Boards of Trade in neighbouring cities, all urging the Grand Trunk to come to Boston; their papers are full of articles all along the same line, that Boston is to be the terminus of the Grand Trunk Pacific line, when it will be only four days to Liverpool. Now, in view of that fact, in view of the express contract which was made between the Grand Trunk Pacific and this government, in view of the fact that the millions and millions that we have given to that company, were given with the understanding, and for the purpose of getting a road wholly over Canadian soil to Canadian seaports, I think I am justified in calling on the right hon. gentleman who leads the government, and calling on the Finance Minister, to pay heed to these facts, and I say to them it is their duty, before they pay over one dcllar of this money, to investigate and see whether there is a wilful and deliberate attempt to break the contract made by the Grand Trunk Pacific with this country.

If it be the case that all the people in Boston whose views are expressed here are in the right; if it be the case that the Grand Trunk Pacific is coquetting with Boston; if it be the case, as stated in one paper, that it would cost $10,000,000 for the Grand Trunk to construct its terminals in Boston; at this very time when this country is being asked for $10,000,000, it would be well for this government to see whether or not Canadian money is being poured into the coffers of the Grand Trunk Pacific to be poured out into Boston, or whether this country is to have an entirely Canadian road from sea to sea over Canadian soil. In conclusion I wish to say, in order to avoid any misunderstanding, that I do hot for a moment repudiate the judgment of the Privy Council; but I wish to impress on the House and the government the construction I give to this judgment, and I hope they will investigate, before paying a dollar to this company, to find out whether there is anything in any of these points I have raised. But if we find that this country has defences which, as between private individuals, would be ample defences and ample counter claims, so that no court would think of ordering one to pay the other a dollar, then I say the present ministry will fail in their duty, and will deserve to be ranged in the same class as the late ministry, if they fail to protect the people of Canada, as the late ministers so ignominiously failed to protect them.


Mr. GERMAN.: I would like to ask the Minister of Finance how much money at the present time the Dominion of Canada is liable for under the sale of these bonds by reason of the judgment of the Privy Council.


Mr. WHITE (Leeds).: The implementing obligation upon sales of bonds already made amounts to about $5,000,000. Any funds that are due by way of implementing must be paid into the bank to the credit of the Receiver General of Canada, in like manner as the proceeds of the bonds are paid into that bank to be disbursed upon certificates of the government engineer from time to time as construction proceeds.


William Manley German: That is practically the answer I desire. I knew something about the agreement, and about the legal situation when that agreement went through, and I had an idea of my own that the common legal gentlemen whom the government at that time were getting advice from, were wrong. I thought at that time, and I think at the present time, the Do min on of Canada should protect those bonds, and if necessary borrow money at 3 per cent to buy them.
The agreement, as I understand it, provided that the bonds should not be sold Mr. NORTHRUP.
without the concurrence of the Dominion government. Then, the Dominion government, whether it was a Liberal or a Conservative government, should have seen that those bonds were not sold below the price for which the Dominion government securities are sold. I think that at this moment the present government should protect the bonds of the Grand Trunk Pacific Railway Company and if necessary borrow the money to purchase the bonds with the 3 per cent guarantee, and then the government of Canada and the people of Canada would lose nothing because the bonds would be worth 100 cents on the dollar.


William Thomas White: The questions my hon. friend has raised have been very fully considered by the government. It has been suggested, and it is a thought that at once occurs to a financial man, that in order to save the amount of implementing on bonds sold in the future (because the others are sold, they a^re gone), if the government should purchase at par those bonds from time to time _ as required for the purposes of construction by the Grand Trunk Pacific they would then have the 3 per cent bonds of the Grand Trunk Pacific and would save the difference between their selling price, say 80 net, and par.


William Manley German: Sure.


William Thomas White: Not too sure, it requires some further consideration. There are $25,000,000 worth more of bonds of the Grand Trunk Pacific to be sold. I would point out to my hon. friend that these are 50 year bonds from the present day, that they mature in 1962. Where my hon. friend is wrong is just here:	These
are 3 per cent bonds. My hon. friend says why not have the Dominion borrow at par, because it can issue its securities approximately at par, and buy in the 3 per cents, you would then have the 3 per cents and you would save the difference. What he has overlooked is this. The standard security of the Dominion of Canada is not a 3 per cent security, but a 31 per cent security. If we borrowed inoney on a 31 per cent basis, practically speaking, issuing our bonds at par or a little under, then if we bought the bonds of the Grand Trunk Pacific let us consider our position. On the one hand we would be paying out 31 per cent on the amount we had borrowed to take them up and on the other hand we would be getting 3 per cent only from the Grand Trunk Pacific bonds. In other words we would be losing half a point of interest. Putting it on a financial basis, Grand Trunk Pacific 3 per cent bonds on a 31 per cent basis, at 82 are equivalent to 31

per cent at about 94. In other words, the equivalent of the Grand Trunk bonds guaranteed by this government at, we will say, 82, is on a 3J per cent basis, about 94, between 93 and 94. The transaction would be this: The Dominion would issue its securities at or near i>ar and would take up the remaining bonds of the Grand Trunk Pacific Railway Company, and in doing it they would save, on the estimate I have made, about. 5 points, not 20 points, not the difference between 80 and par but the difference between the rate of 93 or 94, because that is the corresponding rate on a 3i per cent basis, and the price at which Dominion securities would sell; So on $25,000,000 of bonds of the Grand Trunk Pacific Railway Company, if we took them up and paid for them at par, that is to say implementing as we went along, the government would save about $1,250,000, or possibly a little more. But let me point out two considerations to my hon. friend. In the first place, in 'order to do that the government would have to increase the National debt by an amount of $25,000,000. In the second fclace we should have to consider the desirability of holding as an investment, bonds of the railway company, it is true, guaranteed by the government. The situation is not essentially different from this, that this government at any time can tnake 5 points if it desires to do so by buying the bonds of any Canadian railway Company guaranteed by the Dominion feovernment standing at 93 or 94.


William Manley German: Oh no.


William Thomas White: Yes. The Dominion to-day can issue its securities at about par and can turn around and buy on the London market Canadian Northern or any other securities on a 34 per cent, basis, now selling at about 93, and in that way, we could make the difference. The difficulties are these two: Is it wise to increase the National debt by $25,000,000 to helip out that transaction for the amount that would be saved and second, is it advisable to hold securities of the railway company, guaranteed as they are by the Dominion government.


William Manley German: Will you allow the bonds of the Grand Trunk Pacific Railway Company, guaranteed by the government, to be sold at 20 per 'cent, less than par, rather than have the Dominion government itself take them up?


William Thomas White: I have said that that is a matter for very careful consideration on the part of the government, and it is under consideration by the government. There are no discoveries being made 'with regard to this matter. It is the most obvious thing in the world for
a financial man to say we can save the implementing by taking them up, but these considerations I have mentioned are important considerations and not the least important is the question of the desirability of the government holding those bonds with the interest maturing from year to year, that is bonds which they have purchased with the proceeds of their own securities. It is not true that you gave 20 points, because you must put the security <on the same basis as that on which the Dominion sells its securities.


Thomas Simpson Sproule: Is it. the pleasure of the House to aeccipt the motion?


William Thomas White: If there are no -other speakers, I shall say a few words in reply as the mover of this motion. My hon. friend from East Hastings (Mr. Nortli-rup) has brought up some very interesting points in connection with this maitter, all or nearly all of which have had my careful consideration. The Bill which I am introducing, enables the government to carry out the obligation, whatever it may be, on the Dominion arising under this agreement -of 1903, as Interpreted by the Judicial Committee of the Privy Council. My hon. friend has referred to the fact that bonds were sold at less than par and he raises the very interesting question as to whether, if those bonds were improvidently sold, there would not be a set-off.
Now I may say to him that that is a matter about which I have made, and am now making, very careful inquiries. The results of my inquiries to date have been these:	It is provided somewhere in the
statute or in the agreement that the bonds which have been sold from time to time were sold with the consent of the government; in other words that the government consented to the time of issue and the price of the securities. That, of course, is not conclusive. But it is a fact, I am advised, that my predecessor in office and the government of that day approved of the sale of these bonds from time to time as required. Now, while.these bonds appear to be selling at a very low price- at 80, a discount of 20, a very heavy discount-yet it must be born in mind, as I have pointed out originally that at the time the bonds were to be issued, it was thought that they would sell at par or nearly at par, but since that time there has been a fall in all high-grade low-interest bearing securites. Among these, as mentioned by the leader of the opposition (Sir Wilfrid Laurier) this afternoon, are British Consols, which have fallen to 76 or 77, a very great fall indeed. The standard security to-day that is the Dominion's direct liability security, is about par,-there have been sales at 1001 recently. It is a fact, and a curious fact, that a guaranteed bond never sells as high as a bond that

gives a direct obligation. You would think that in the case of the Dominion, its guaranteed securities would sell at precisely the same price as a security giving its direct obligation to repay. But it is not so, and this is probably the reason; Under the law, one "f the most easily defeasable contracts is the contract of guarantee; and, though the wording of the instrument of guarantee generally states that, notwithstanding anything that may be done, the covenant of the guarantor is absolute, nevertheless guaranteed bonds will not sell within some points of as high a price as the bonds or debentures or securities which represent the direct obligations of the Dominion. Let me repeat to my hon. friend from East Hastings, that all the sales will be carefully checked, that is the sales which have taken place in the past will be carefully checked. And let me say to him further that I understand that the auditor of the Railways Department has checked the disbursements

(I am only giving what I am told, for I have not had time to verify it myself.) At all events, the hon. member may assume this, that before anything is paid out in respect of bonds which have been sold in the past, a careful accounting will be made with regard to the matters which he mentioned- as to commissions and as to whether the sales were in any way improvident. My own opinion is-I must be frank with the House-that these sales are not improvident. And for this reason: If you iput a 3 per cent bond of the Grand Trunk Pacific on a 3} per cent basis and check it up with a 3J per cent debenture or bond on the London market, you will find that there is just about a parity. Consequently, the real question that arises in my judgment is an accounting to find out what the net proceeds actually were, so that in paying the difference between the proceeds and par you are careful that the Dominion does not pay too much.
Now, we come to another point raised by my hon. friend, the cost of production and interest. In the trust mortgage se-. curing the interest on these bonds the expression ' Construction work ' is thus defined :	,
The said expression ' construction work5 in regard to the section in respect of which the same is used, shall also include any sum or sums of money paid or to be paid by the Pacific Company as interest

That is, interest is part of construction:

accruing, or about to 'accrue, during the
period of construction, as hereinafter defined, upon the bonds issued by the Pacific Company and guaranteed by the government under this mortgage

The expression ' period of eonsitnietion/ that is, the period during which this interest shall run, is defined in this section V, which is the one I have read:


William Thomas White: Section 7. The expression 'period of construction * in section 5 of this article shall mean the period of time which shall elapse until the western division shall he completed under the provisions of the Transcontinental Railway Acts, or of any Act of parliament extending the time for completion, and the government shall fix the date of sncli completion by order in council accordingly.
My hon. friend (Mr. Northrop) may remember that the matter came up in the *House prior to the recess, and an Act was passed giving the Governor in Council the authority to extend for a certain time. If it is extended ' construction work/ as defined in the clause which I have read, would cover interest during the iperio'd of constro'ction to which the time had been extended.


William Barton Northrup: I am afraid that is the case.


William Thomas White: 1 am glad to have the hon. .member's opinion, because I know he has gone into the matter thoroughly. With regard to this money which is due, using the expression generally, to the iGran'd Trunk Pacific, of course this money was to be received and held in trust by the Receiver General of Canada, who is the Finance Minister, under the terms of the trust mortgage securing this issue. ,


William Manley German: How much Is the exact amount at present?


William Thomas White: According to the statement which I made to the House the other day, it amounts to $4,900,000. Now let us see how that is to he paid up. That money is not to be at once handed over by cheque to the Grand Trunk Pacific railway, and it has never been suggested that it is so to be dealt with. Under section V, of this, trust mortgage, provision is made fo,r the disposition of the proceeds of the sale of tihe bonds:
Section 3. All of the said bonds shall be so issued that the purchase price of any of such bonds (hereinafter referred to as ' the proceeds' of the said bonds), shall be paid by the purchasers thereof from time to time into the Bank of Atoutreal, the Canadian Bank of Commerce, the Merchants Bank of Canada, or such other bank or banks as the government may approve of (which are hereinafter collectively and distributively referred to as the 1 Bank '). The bank shall receive and hold the said proceeds and any interest accruing thereon at the credit of the Minister of Finance and Receiver General of Canada, in a special account in one of the offices of the said hank, in accordance with and subject to the provisions of section 4 of this article.
That is, the proceeds of the bonds sold by (the Grand Trunk Pacific Railway Company. And I have pointed out to my hon. friend from East Hastings, that these bonds which were sold from (time to time were

sold with the consent of the Minister of Finance of Canada. I have explained also -the hon. gentleman was not present at (the time-that there lias been an accounting, I understand as to the disbursements., and I 'believe itliere was a check by the auditor of the Railway Department. However, that is a matter, as I have said, which will engage my most -careful attention before the money is ipaid over. In other words, the interests of the Dominion in regard to that will be absolutely safeguarded so far as it is possible to- do so. Now, in regard to this implementing money, that is, additional .money, it is also covered in the trust mortgage, section V.:
Section 5. Whatever the method of the implementing by the government, in accordance with the provisions of the scheduled agreements in such manner as may be agreed upon as therein provided, of it9 guarantee of tne bonds to be issued by tbe Pacific Company and guaranteed by the government under | c Provisions of the scheduled agreements, the results of such implementing ehall he Paid into the said bank and shall he dealt with by the said bank in the manner provided in sections 3 and 4 of this article.
In other words, the implementing money goes into the bank to the credit of the receiver genera] in the same manner as wouM the proceeds of the bonds which -aad been sold by the company. My hon. friend from Hastings has raised a very interesting question indeed, and one which, as I say, lias received to some extent our attention. It is like this: Would the government have the right to set off as against this any claim of the nature that he has mentioned? Let me submit this to my hon. friend (Mr. Northrup), who is, I know, a very good lawyer. I do not understand that he says we should refuse to carry out this transaction. Let me point out to my hon. friend, as a financial man, a little jealous of the standing of the securities which are issued directly by the government or guaranteed by them, that the Receiver General of Canada, under the trust mortgage, is a trustee for all the bondholders. The bondholders are interested in the construction of tins line; therefore the Receiver General would be trustee for :all the bondholders entitled to the security of the mortgage. Let us see what that means. There is a third interest set up. I wonder would it be fair-I have no doubt myself that it would not he-I wonder would it be legal, would it he against the rights of the bondholders if the Receiver Genera], as the trustee under this mortgage, declined to pay out the proceeds on the ground of set-off oy reason of the failure of the Grand Trunk Pacific to carry out part of its contract.


Daniel Duncan McKenzie: Was not the condition under which the bonds issued under the 99
guarantee well known to the purchaser of the bonds, and would he not know that he took these bonds subject to compliance with the contract by the company?


William Thomas White: This trust mortgage secures all the bonds which have been sold on the English market, The bondholder has notice of everything that is in this mortgage, but the point I am making is that, these bonds being sold, their proceeds have been placed at the credit of the Receiver General and the implementing money will be paid into the credit of the Receiver General for the purpose of providing for the construction of the line. Let us assume that the government deliberately took exception:	We will not pay
any more money at all on account of some counter claims that have been set up. Of course, the Dominion guarantee is absolute, (but the intention was tnat this money would he used for the purpose of constructing the road on which the bondholders have a first charge as a part of their security. I have in my pocket the opinion of the Department of Justice with regard to some of these matters which have been mentioned, but, let me say this generally: The matters which have been discussed here to-night will he most carefully considered by myself and by the government. I think the House can assume that no moneys will be paid out without the nuatter being mos-t carefully considered, and without the best advice of counsel in regard to them. I think that covers the main points which have been brought to our attention by my hon. friend from Hastings who lias gone into the matter with such very great care.
My hon. friend from Edmonton (Mr. Oliver), who, I am sorry is not in his seat to-night, I think went out of his way to score a point against this government with regard to the wheat, which he says is lying on the plains of Saskatchewan. I do not think there is any man in Canada who has more sympathy with that situation than I have, I do not believe there is any man or any government that can be more solicitous about that situation than I am or than we are. But, let me ask my hon. friend and the former government of which he was a member, why it is that the National Transcontinental railway is not completed to-day from Winnipeg to Cochrane? Whose fault is it if there are not sufficient railway facilities to bring part of the grain from the west? Why has there been such a delay in connection with the construction of the western part of the National Transcontinental railway ? The Grand Trunk has its connection up to Cochrane and if the section were completed from Cochrane to Winnipeg the Grand Trunk would bring trains down and re-



lieve the situation in the west. The western line of the Grand Trunk Pacific is hung up in the air because that line is not completed and I am advised that it will not be completed in less than a year and a -half or possibly two years. If the late government had been energetic in regard to completing that end of the railway which was the natural part to be completed almost at the first then I say we should probably have heard less about lack of cars to bring the grain from the west. I want to be fair in these matters, but I say it is an illogical argument in connection with a debate of this kind on this particular matter to endeavour to place the blame upon this government because grain lies on the plains of Saskatchewan. In so far as I am concerned in my humble capacity as a member of this government, I am satisfied that they will do everything possible to improve conditions in the west not only now but in the future. They will endeavour to give them all necessary railway facilities to take out their grain. Large questions arise, the question of extending this line through to the Pacific coast and, when the line is completed through to the Pacific coast, which we hope will be in a couple of years, the question of terminals. These questions will engage the attention of the government. The government has pledged' itself to the building of the Hudson Bay railway. We are doing everything we can to facilitate the movement of grain, hut everybody knows that the situation in the west is a most exceptional one and in a debate of this kind it ill becomes hon. gentlemen opposite to raise any question so far as blaming this government is concerned in regard to the movement of grain to the south. If it is meant by that that the grain cannot go to the south by reason of the rejection of the reciprocity agreement I would ask: Who rejected the reciprocity agreement? Not this government, but the people of Canada rejected the reciprocity agreement. Is it fair to place blame upon this government in regard to a situation brought about by railway congestion in the west and by climatic conditions when the government took office only a few months ago? If there is any blame because of the lack of cars and railway facilities to bring the grain out a large part of that blame must be borne by the government formerly in office in not having hastened that part of the National Transcontinental railway between Cochrane and Winnipeg.
My right hon. friend tne leader of the opposition only the other day -called attention to the -long faces that he had seen on this side of the House. I am sorry that I have not the pleasure to-night of presenting to my right hon. friend a photograph of the faces of the opposition this afternoon when he arose to make his masterly Mr. WHITE (Leeds).
address in connection with this matter. If not by their words, then by their looks, they expressed contrition and they will not do it again. I can assure my hon. friend from East Hastings that the question he has raised will be very carefully considered by the government because, as we all know, large sums of money are involved.	.
No money will be paid out unless in accordance with the terms of the mortgage, after taking the advice of the Department of Justice, and considering the other matters that have been brought to our attention.


William Manley German: Do I understand the Minister of Finance to say that at the present moment the liability of the government, under the judgment of the Privy Council, is a trifle over four million dollars?


William Thomas White: I have a statement prepared, which shows that the amount required for implementing upon the sales of bonds which have heretofore taken place is about $4,900,000. I desire to say to my hon. friend, and it will apply to both sides of the House, that if ever we attempt to use the word * implement ' again I think we ought to use it only in its agricultural sense.


William Manley German: Will the Minister of Finance allow me to ask him another question?


William Thomas White: Certainly.


William Manley German: Will he implement that by buying the bonds himself for the Dominion?	[DOT]


William Thomas White: I was just wondering whether my hon. friend was really interested in the Dominion saving a few points, or whether he was really more desirous that we should supply a ready market for the Grand Trunk Pacific Railway Company. Now, I am not going to add anything to what I have said to my hon. friend; I have told him that that matter is engaging at the present time my attention, and the attention of the government. I have told him that it is obvious that if you bought in bonds at 80, if they happened to be bonds issued at the same rate per cent as you can borrow money at, that you would save twenty points. But I point out that you would have to put the threes on a three and a half per cent basis and consequently there is no such sum saved, but there would possibly be saved five points. I repeat this because my hon. friend was not in at the time. The real question that arises is this: is it advisable to increase the National debt to the extent >f twenty-five million dollars, for the purpose of saving the amount of money I have

indicated, and in the second place is there any consideration to be attached to the fact that if it were done the Dominion would become holders of three per cent railway bonds to the amount of twenty-five million dollars., guaranteed of course by the Dominion government?


William Manley German: Does not the same thing apply to the last sale of bonds, as to whether or not the Dominion government should supplement?


William Thomas White: Do you mean those that have been sold already?


William Manley German: Yes.


William Thomas White: Well. I have already pointed out to my hon. friend and it answers his question now, that the Dominion government can at any time it so desires, go into the matter of buying guaranteed bonds, and make five points on the (transaction, but up to date, the Dominion government has not done that. For instance, you have Canadian Northern Ontario Railway bonds and Canadian Northern bonds', guaranteed by the Dominion, and selling several points less than the direct obligation of the Dominion. Does my hon. friend _ seriously suggest-and if he does, why did not the late government do it-that this government should go out and [DOT]sell its securities to the amount of $150,000,000 or $200,000,000 more on -a three and a half per cent, basis, and buy in the bonds of all these railway companies for the purpose of making five points? But, if that were done, what would happen? In the first place, if we attempted to do it, our own securities would drop several points, and the chances are that before you got through you would defeat your own purpose entirely. There is no difference, so far as the bonds sold, are concerned, between Grand Trunk Pacific bonds bearing the guarantee of the Dominion, and the bonds of any other railway company bearing the guarantee of the Dominion. In
other words, they sell on a parity, and on the same argument my hon. friend advances, the Dominion might well consider going out to the open market and buying in these bonds, which are in 'the hands of purchasers at eighty or eighty-two,-because they are at an exact parity at ninety-three and ninety-four on the three and a half per cent, basis-the same argument will apply to buying in all your guaranteed securities.


William Manley German: Certainly it would.


William Thomas White: All I have to say to my hon. friend (Mr. German) is this: If he seriously advocates that, and if that is thesproper thing to do, then he should have been the Finance Minister in place of my predecessor, who, I am sure, would do nothing of the kind.


Mr. NESBITT.: What do you estimate the price of these 'bunds on?


William Thomas White: I estimated the balance on the basis of the last sale.


Edward Walter Nesbitt: What was that?


William Thomas White: Net, about eighty.


[Stage Direction]
Motion agreed to, and Bill read the second time, considered in committee, reported, read the third time, and passed.

[Stage Direction]
House again in committee on Bill (No. 76) to amend the National Transcontinental Railway Act-Mr. Cochrane.
On section 2.
Francis Cochrane: When this Bill was Jast in committee the leader of the opposition asked me to give him some figures in reference to the cost of the Transcontinental line from Moncton to Winnipeg. I submit the following statement:
99J

NATIONAL TRANSCONTINENTAL RAILWAY-EASTERN DIVISION. Statement showing work done to December 31, 1911, and Estimate of Cost of Completion.


SUMMABY.
[Stage Direction]
Items.
Grading, contract items, including clearing, excavation, culverts, substructures of bridges, tracldaying, ballasting, ties, signals, interlocking appliances, telegraph lines, fencing, water supply, track scales, temporary trestles, and extra work, also pump houses and pumps and substructure of Cap Rouge viaduct	
Right-of-way and expenses	
Rails and fastenings, including frogs, switches and diamond
crossings	
Buildings, including stations, section and tool houses and
divisional point buildings	
Steel superstructure of bridges, including flooring..
Surveys and expenses	
Engineering and expenses	
Springfield shops-
Locomotive shop plant and equipment, including water
supply, sewerage system and lighting	
Car shop plant and equipment	
Proposed car ferry at Quebec	
city
Rentals of joint terminals at Winnipeg . Headquarters-Salaries and expenses...
Total .
Value of Work done to Dec. 31, 1911.	Value of Work required to complete.	Total Estimate of Cost of Work.S	$	S79,368,700 1,964,500	30,510,300 2,231,500	109,879,000 4,196,00010,214,500	2,985,500	13,200,000985,300 4,611,400 4,148,0 10 7,681,700	3,971.700 1,441,600 22,000 3,850,300	4.957.000 6.054.000 4.170.000 11,532,0002,334,300 171,200 Nil.	602,700 1,129,800 650,000	2.937.000 1.301.000 G50.000508.500 131,300 1,732,900	9,091.500 118,700 1,267,100	9.000.	000 250,000 3.000.	000113,853,300	57,872,700	171,726,000
Ottawa, February 10, 1012.
I might also say that there has been no interest from the commencement charged up, so that the figures in the above table do not represent the total cost of construction of the Transcontinental railway from Moncton to Winnipeg. I submit the following:
Statement showing the cost of the eastern division of the National Transcontinental railway, based on the estimated cost submitted by the chief engineer at $171,726^000, and on the supposition that it will be completed and handed over to the Grand Trunk Pacific railway on the 1st January, 1914, and that the money could be borrowed at 3 per cent.	.
Interest during construction at 3 per cent to 31st Dec., 1911.. . .$ 7,690,128 68 Interest on estimated expenditure at 3 per cent for 1 rear at Dec.
31, 1912		3,730,000 00
Interest on estimated expenditure at 3 per cent for 1 year to Dec.
31, 1913	 4,635,000 00
Estimated cost of completed road exclusive of interest at Dec. 31,
1913	 171,726,000 00
Capital cost estimated to January
1, 1914	$187,781,128 68
Interest on $187,781,128.68 at 3 per cent for 7 years (January 1,
1914, to December 31, 1920).. .. 39.434,031 00 Mr. COCHRANE

[Stage Direction]
ChitJ Engineer.
Add betterments, &c., during 9 years (January 1, 1912, to December 31, 1920) unforeseen and
unestimated	
Interest on $7,881,810.32 at 3 per cent based on expenditure of l/9tli per year, about	
Capital cost estimated to January 1, 1921	$236,000,000 00
or a. capital cost of $130,800 per mile.
If the road does not earn 3 per cent in excess of ' working expenditure ' for the 3 years ending December 31, 1923. then interest is added to the capital for three years longer, addling $22,050,000 to capital cost; making the capital cost of the railway $143,015 per mile, plus expenditure for betterments for 43 years.
Capital cost estimated to January 1, 1924	$258,050,000 00
If the road is not taken over by the Grand Trunk Pacific railway on January 1, 1914, each years' delay will add in interest about $4,500,000 to the capital cost.
It will be noted that in the above calculations interest is not compounded except at the period the road is supposed to he handed over to the Grand Trunk Pacific, January 1, 1914, and for arriving at the interest for the 3 years, January 1, 1921, to December 81, 1923.
Mr. M1DDLEBRO. Does that statement include the Quebec bridge?
7,884,810 32 900,000 00
Francis Cochrane: No, but it includes the terminals.


William Sora Middlebro: Does it include the $10,000,000 which the company is getting now?


Francis Cochrane: No. In order to give the right hon. leader of the opposition some further particulars-because he is entitled to all the information that we have-I will go over some of the returns made to us; and I might say that the following statement is made up and certified by the engineer, Mr. Grant:


NATIONAL TRANSCONTINENTAL
[Stage Direction]
Statement showing districts, mileages, &c., [DOT]and amount of sundry items and work done to December 31, 1911.
District ' A.'
Length, 256-61 miles, from Moncton to New Brunswick and Quebec boundary.
Grading completed, 256-4 miles or 99-5 per cent.
Track laid, 256-4 miles.
Telegraph lines, 253-1 miles.	.
Bridges, 99-9 per cent completed.
District' B.'
Length, 578-19 miles, from New Brunswick and Quebec boundary to east abutment of bridge, Megiskan river.
Grading completed, 462-6 miles or 80 per cent.
Track laid, 445-5 miles.
Telegraph lines, 286-6 miles.
Bridges, 97-5 pe cent completed.
District ' C/
Length, 121-94 miles .from east abutment of bridge on Megiskan river to Quebec and Ontario boundary.
Grading completed, 77-7 miles or 63-3 per cent.
Track laid, 77-7 miles.
Telegraph lines, 24-7 miles.
Bridges, 27-2 per cent completed.
District ' D.'
Length, 276-11 miles from Quebec and Ontario boundary to 204 miles west of Cochrane.
Grading completed, 261-6 miles or 95-8 per cent.
Track laid, 239-4 miles.
Telegraph lines, 144-2 miles.
Bridges, 95-5 per cent completed.
District ' E.'
Length, 195-19 miles from 204 miles west of Cochrane, Ont., to 399 miles west of Cochrane, or 125 miles east of present Lake Superior Junction.
Grading completed, 154-8 miles or 79-3 per cent.
Track laid, nil.
Telegraph lines, nil.
Bridges, nil.
District ' F.'
Length, 375-90 miles from 399 miles west of Cochrane or 125 .miles east of present Lake Superior Junction to Winnipeg.
Grading completed, 371-6 miles or 98-9 per cent.	, i'-
Track laid, 359-7 miles.
Telegraph lines, 274-2 miles.
Bridges. 91 per cent.
Recapitulation.
Length, 1,804-7 miles from Moncton, N.B., to Winnipeg, Man.
Grading completed, 1,587-7 miles or 76-82 per cent in twenty-one contracts.
Track laid, 1,378-7 miles, main line, and in addition 278-7 miles in sidings.
Telegraph lines, 982-8 miles.
Bridges, 82-75 per cent.
The hon. ex-Minister of Railways (Mr. Emmerson) wanted a copy of the order
in council. I have a copy of it here. I may say that I find that there was a mistake in that, in the statement that it was recommended by the commission instead of by the chairman of the commission. But I took the matter up with the chairman, and he informed me that his law clerk had advised him that he had a right to do what he had done, and that the matter was brought before the commission, and Mr. Mclsaac, one of the commissioners, thought that he was acting within his jurisdiction in appointing Mr. Maepherson. I also wish to say that I was misinformed, and misinformed the House, when I said that Mr. Macpherson's salary had not been increased. I am informed that it has been increased.
Mr. KYTE.: What is Mr. Macpherson's salary at the present time?


Francis Cochrane: 

Mr. KYTE What was it before?


Francis Cochrane: $5,000, I think.


Mr. AMES.: What is the total value covered by the $236,000,000?
Mr. COCHRANE The total mileage from Moncton to Winnipeg is 1,804-7 miles.


Wilfrid Laurier: I am obliged to my hon. friend for the information he has brought down. The figures which he has placed before the House cannot of course be taken in at once, but they will be there for future reference.
The one thing in which I was particularly interested to know was the condition of the road to-day, and how far it had 'proceeded from Cochrane towards the Lake Superior Junction.


Francis Cochrane: District E is 195:19 miles in length, from 204 miles west of Cochrane, Ontario, to 399 miles west of Cochrane, or 125 miles east of present Lake Superior Junction. Grading completed, 154-8 miles or 79-3 per cent. Track laid, nil. Telegraph lines, nil. Bridges, nil.


Henry Robert Emmerson: My hon. friend may have been under the impression that he sent me a copy of the order in council to 'which he referred, but I never received it. The first information I have received is from the lips of my hon. friend just trow. When the Bill was first moved in

''the committee, certain information was 'asked for and no progress whatever was made with respect to the Bill. I thought I heard the chaiiman speak of the second section. There must be some mistake. Surely the committee is not going to understand that the first section has already passed.
The CHAIRMAN (Mr. Bennett, Simcoe) Clause 1 is initialled as having been passed.


Henry Robert Emmerson: I think it will be within the memory of all members present on the former occasion that there was no progress made, and my hon. friend withdrew the Bill from the consideration of the committee, awaiting a further opportunity to procure the information.


Francis Cochrane: No.


Henry Robert Emmerson: I state distinctly that that was the case. I raised this question with respect to tire first clause relative to the appointment of one commissioner, as I felt it was necessary that we should be furnished with information, not only with respect to the work that remained to be done, but also with respect to the status of the commission. We were under some misapprehension, I know I was, as to who really constituted the commission at that time. We were told that certain members of the commission had sent in their resignation. Whether any of the resignations had been accepted we were not able to ascertain. I felt it important that we should know that. Before we take into consideration the question as to whether we should reduce the numbers of this commission from four to one, we should know the work yet to be done. When this matter was first under consideration by parliament, parliament determined the number of commissioners to whom should be entrusted the responsibility and the duty of the construction of the Transcontinental railway between Winnipeg and Moncton, and parliament, in its wisdom, entrusted that work to a commission composed of four men. Had the proposition been to entrust it to a commission of one man, I am sure parliament would have hesitated before taking action. When it is proposed to reduce that number to one man, it is necessary for us to have information as to what part of the work remains uncompleted. We have had that here to-night, and although I listened as closely as I could, I am not yet in possession of the information which I require. We must remember that when the Intercolonial was constructed it was placed in the hands of a commission, I think there were three commissioners, and they remained until the road was completed. Had there been


Henry Robert Emmerson: a proposition to change the number when the work was half or two-thirds completed, I do not think parliament would have consented to it. Now when two years* work remain to be completed, I think it is an amazing proposition to place upon tile shoulders of one man the responsibility of completing the work, and determining the final settlements of contracts. The work yet to be done involves most serious responsibility. I care not how able a man may be, it is not wise, it is not in the interest of the public to entrust this great work to one man alone. Subsequent to the request I made to my hon. friend for the information he has just brought down, I moved that there should be furnished to the House certain other information. I moved for information with respect to the proceedings of the commission from the day this government came into power to the present time, from the time of the resignation of the present chairman down to the time I made my motion. That information has not, yet been furnished. I do not think that this committee is in a position properly to consider the proposition involved in the first section. The committee may determine when it has all the information that one man is competent to carry on the work, and that it would be wise to entrust it to the responsibility of one man.
I do not think the committee is in a position to say whether or not that would be a wise course. If, in 1903, the then Prime Minister (Sir Wilfrid Laurier) had proposed to place the construction of that line from Winnipeg to Moncton in charge of one commissioner, parliament would have hesitated and perhaps have declined to give its_ sanction to such a proposal, and it is quite a serious matter at this moment. While there is not so much work yet to be done and while it does not involve so many years' labour, yet the responsibility in the final winding up and completion of the work is, in my judgment, a very large percentage of the responsibility that was involved in the whole work at its inception and it would be a dangerous precedent to establish. We must go upon precedent in these matters. At the time of the construction of the Intercolonial railway the precedent established was a commission of three members. That perhaps was not so great a work as thi3 although for that period it was a very great work and meant much for the future of Canada. The precedent established by parliament on that occasion is certainly worthy of being followed on this. I do not know if my hon. friend had not confidence in the commissioners, he placed no imputation on the members of the Transcontinental Railway Board. If lack of confidence in the commissioners was the reason for his desire to

change the hoard, then it might have been well to consider the substitution of other gentlemen on the board, but it is quite a different proposition to wipe out the commission and place in the hands of one man the whole responsibility and the complete control of this great work including the final accounting with respect to contracts. It is a serious responsibility for any man to assume and it is a serious consideration for this parliament whether they are willing to entrust that responsibility to one man and to rely upon his judgment, I care not how great, how able or how well qualified he may be, from an administrative or engineering or other standpoint. There are involved decisions of great importance not merely to the railway but to the people of Canada who are looking forward to the completion of the railway as a work that will mean much for the future. We may differ with respect to its cost, indeed there were differences with respect to its advisability in the first instance. As to the character of the road that was proposed to be built there were those who favoured its construction as a government work and those who felt that the whole project should be entrusced to a private railway corporation; but parliament in its wisdom determined that it should be built but not operated as a government roal, that it should be built not by the Department of Railways as canals have been built for years, directly under the control of the minister, but by a commission, and parliament wisely determined that that commission should consist of four men. Before we change this, before we entirely overturn the decision of that parliament, and appoint a different commission, we should have every possible information with respect to the status of the road, the character of the work yet to be completed and I hold that we have no such information, that it was not brought before the House as promised, and that certainly it has not been given to us at as early a moment as we should have had it. I think we 'should have had an opportunity of perusing the returns that have been brought down. The minister should bring down the other return; the Board of Railway Commissioners should furnish him with copies of the documents, and we should have an opportunity of at least closely reading those returns. I have ho desire to in any way impede the progress of this Bill, but I think my hon. friend should give an opportunity to hon. members to read over these documents to ascertain the nature of the work yet to be completed. When my hon. friend first brought the Bill before the committee he gave certain information with respect to it, and it shows how easy it is to be mistaken. The very first statement of my hon. friend with respect to the status of the commission was wrong.


Francis Cochrane: Oh, no.


Henry Robert Emmerson: With all deference to my hon. friend (Mr. Cochrane), let us consider the matter of the change in the character of the employment of Mr. Macpher-son. Mr. Macpherson has been assistant chief engineer, and in receipt of a salary of $5,000 a year. He was subordinate to the chief engineer. By an order in council, which I hold the government was not empowered to pass, the character of the commission was changed. Mr. Macpherson was appointed assistant chairman, an appointment which was not authorized by the Act; no such official was contemplated within the four corners of the Act. The Governor in Council had the power to appoint commissioners, a chief engineer, and a secretary. And they made these appointments. But under the terms of the Act the commissioners have the power and the right to select all other officials, engineers, experts, and agents and employees of every character. But it appears that the government, on the 14th of December last, on the recommendation of the Minister of Railways and Canals, assumed to appoint Mr. Macpherson as assistant to the chairman, to take effect from the 1st December, 1911. So, this was retroactive in its terms. Of course, it will be understood, that I am not raising objection to Mr. Macpherson. I believe he is a man ol eminent ability, and has the qualifications to fill such a position, were such a position authorized under the Act. I am dealing with the order in council from an entirely impersonal standpoint. The character of his engagement was changed. He had been the assistant engineer, and he is given power and authority over the chief engineer, with a salary higher than that of the commissioners. I understand that the chairman received $8,000, and the commissioners received $7,000 each, while the chief engineer received $6,000. And Mr. Macpherson was appointed assistant to the chairman with a salary of $7,500. There must have been some reason for all this, but we have not heard what it is. It may be an entirely good reason; I might quite coincide with the reasons which influenced my hon. friend in making that recommendation to council, and this committee might approve of his action. But he has not taken the committee into his confidence by telling us the reasons which actuated him in making that recommendation. Under these circumstances, it seems to me that it is a fair request I make of my hon. friend, that the further progress of this Bill should be deferred until an opportunity is given to look over the terms, and until an opportunity is given the hon.
313S

gentleman himself to bring down the returns which this House has ordered that he shall bring down.


Francis Cochrane: I was not asked for any returns.


Henry Robert Emmerson: The House ordered it.


Francis Cochrane: No; the right hon.
leader of the opposition (Sir Wilfrid Laurier) asked me to give him a statement of the progress of the building of the road, which I have brought down, I think to his satisfaction, and if not I shall be glad to meet his wishes if I can; and the hon. member for Westmorland (Mr. Em-merson), asked for a copy of the order in council appointing Mr. Macpherson, and that I have furnished.


Henry Robert Emmerson: The hon. gentleman (Mr. Cochrane) may not be informed of it, but the very day after I made the request for this copy of the order in council which he has so courteously brought and laid on the table at this moment, I made a motion in the House that certain other papers should be furnished.


Francis Cochrane: I did not see that.


Henry Robert Emmerson: I am sorry that the hon. gentleman's attention has not been called to it. It was the duty of his officials to have informed him of this matter. The motion is on record in the proceedings of this House as having been passed. There was no discussion; it passed as a matter of course. I think we are entitled to that information, 'because of the want of definiteness in the information with respect to the situation of the commission. My hon. friend (Mr. Cochrane) when he first took the House into his confidence at all, said that one man could look after this matter alone, and one man is going to do it; and it was by reason of that fact that the commissioners had resigned-and we were led to suppose that they had resigned and gone out.


Francis Cochrane: The hon. gentleman is wrong. I made a frank statement to the House and stated that one member had resigned without condition, that one had resigned asking for three months, and that one had resigned asking for six months. The commission is all sitting yet.


Henry Robert Emmerson: I accept that statement as I accepted the previous one. But my hon. friend subsequently corrected his first statement and said that the commission would continue to a'ct in conjunction with the chairman, and I have assumed that that is the case. But I think that the House is entitled to all the information with respect t<o the proceedings taken by this commission from the date when its members sent in their resignation down Mr. EMMERSON.
to the present. And I think we should have a copy of that procedure on the part of the commission. My hon. friend Will find out-I have not time mow to refer to and quote the records of the proceedings of the House-that a motion was passed calling upon him and his department and the Transcontinental Commission to furnish this information. And I ask my bon. friend in all seriousness and in all sincerity, to have the further progress of this Bill deferred until I, at least as one member of the committee having the right to *make the request, shall have an opportunity of perusing, not merely the information brought down by him, but also the [DOT]further information for which I have asked in the motion to which I have referred [DOT]and which information has been ordered by the House to be furnished by his department.


Francis Cochrane: Can the hon. gentleman give me the date when that motion was carried?


Henry Robert Emmerson: I have not carried this in my memory, but I think it was on the 27th of January.


Mr. CHISHOLM (Antigonish).: It was on the 26th January, page 297 of the Votes and Proceedings.


Henry Robert Emmerson: The motion was as follows:
For a copy of all minutes of proceedings, records, orders, instructions or other writings made and had, or given or authorized to be made, had or given by the Board of National Transcontinental Railway Commissioners,' from the date of the appointment of Mr. If. W. Leonard, as a member of the said board and chairman thereof, to the present date; also of all letters, telegrams, instructions or other documents made or had or passed, since the said appointment, by and between the Minister of Railways and Canals, or other members of the government, or by any person by authority of the government, and the said chairman of Board of National Transcontinental Railway Commissioners, or the secretary of said hoard; also of any orders in council relating to the appointment of an assistant chairman or an assistant to the chairman of said board, together with a copy of all letters, papers, instructions or documents relating thereto; as well as a statement of all payments of monies in the way of salaries or compensation made to the incumbent of the office of assistant chairman or assistant to the chairman of said board, and of all papers, letters or instructions made, written or received by the said minister or the said chairman, relating to or in any way connected with the payment or authorization of said salary or compensation.
It will be observed here that I have designated the gentleman as assistant chairman and then as assistant to the chairman, because when I first asked my hon. friend

the Minister of Railways and Canals with respect to the appointment as to whether Mr. Macpherson had been appointed assistant chairman, he said:	No, but that
he, or somebody, had been appointed as assistant to the chairman. I fail to see the fine point of distinction with respect to the difference in tire names. But, I ask for this information, and in all fairness 1 think I am entitled to it as a member of the committee if no one else is desirous to see it. I observe by the order in council that Mr. Macpherson has been appointed as assistant to tire chairman. I want no misapprehension as to the tenor of my remarks with respect to either the gentleman who occupies the position of chairman of the commission or the gentleman who occupies the position as assistant to the chairman. I believe that no better selection could have been made than has been made with respect to Mr. Leonard as chairman of the board, and from my knowledge of Mr. Macpherson I think he is entitled to a position of that great responsibility and even of greater responsibility, if my information with respect to him is correct, and if my observation is at all measurably near what it should be. But, it is only the information that I ask for, and I trust that my hon. friend will do me the justice to furnish it.


Herbert Brown Ames: Mr. Chairman, there has been a tendency in this debate, and in preceding debates, for members on the other side of the House to be very voluble in their defence of this present commission. The astounding statement that the* minister has made to-night with respect to the cost of he National Transcontinental railway, in so far as the eastern portion is concerned, is enough without any further evidence to enable this House to decide that the sooner this commission is got rid of the better it will be for the country, and when we consider that we have a good man who understands railway building and that we will be far more likely to reach an end of this unparalleled expenditure without making any further blunders, my impression is that instead of continuing these commissioners, the quicker they get out the better it will be for the country. One member of the commission has resigned and he was wisely informed to do so. The others know that they had better do so as quickly as they possibly can before the country becomes thoroughly seized of the figures which the minister has laid before the House to-night. I wonder if members of the House realize the astounding statement that the minister laid before us tonight? It comes in srange contrast with the quotations which have been given from the right hon. leader of the opposition (Sir Wilfrid Laurier) and Mr. Fielding who,
some years ago, made the statement that this railway would post the people of the country $13,000,000, an amount which would be. met out of the surplus of a single year. Compared with the figures which we have here to-night the $13,000,000 which was originally mentioned, is a mere bagatelle. Let us look at these figures which the Minister of Railways has given us. This railway has cost up to date, $113,000,000 and it is now estimated that it will cost to complete $57,000,000 which will make an amount of $171,726,000. That will be the capital outlay as close as we can come to it now. That is only for the eastern section, without reference to the obligations we have undertaken on the line from Winnipeg to Prince Rupert, without respect to the guarantees we have given and without respect to the $10,000,000 that we are asked to make a present of to the Grand Trunk. This is only the cost of the portion of the line from Winnipeg 'to Moncton, and the total is $171,726,000. That is without any interest at all. We know that during the time that the road is being built and until the work is confpleted,. the interest has to be meit and we know that we have also to meet the interest for seven years thereafter. The interest to the date of completion will be $16,055,000 and, supposing it is completed by 1914 we still have seven years during which we will have to pay interest and that will give us $39,434,000 more. That brings the expenditure up to $227,215,000. If we add to that the betterments that will surely take place, it will amount to $7,885,000 more and if we take the interest on one-ninth of a year, which means that $900,000 must be added, we have the astounding sum of $236,000,000 as the cost of the railway from Moncton -to Winnipeg. That does not include the $14,000,000 or $15,000,000 that the Quebec bridge will cost. Contrast that with the statements that were .quoted this afternoon and it seems. perfectly astounding that these hon. gentlemen could be so far astray in their calculations.
Leit us see how our share is gbing to figure out. I could scarcely believe it after the quotations which were made from the speeches of the right hon. leader of the opposition and his Minister of Finance, who assured the House and the country repeatedly that $13,000,000 was all that the road was going to cost. To date the interest has been $16,055,000; seven years interest will amount to $39,434,000, and if, as in all probability will be the ease, we have to provide for an extra year's interest at least, 'it will mean an addition of $4,500,000; so that $60,000,000 'of interest is going to be .paid out 'by this country in connection with the road instead of the $13,000,000 we were told it would cost by the right hon. gentleman and his Minister of Finance, calculations which are not

within one-fifth of what the road is going to cost us.
Let us look for a moment at the Grand Trunk side of it, and, although I have only had an opportunity to glance at the figures, I think I can make the House see the magnitude of the undertaking. What is the position of the Grand Trunk in this matter? The Grand Trunk will have to pay interest on $171,726,000, on betterments $7,884,000, and oai three years interest, or, in all, about $201,710,000. That means that the Grand Trunk will have to carry a burden of interest of three per cent, on $201,000,000; that means they will have to carry a burden of $6,000,000 a year of interest or $3,300 interest per annum on every mile of that road from Winnipeg to Moncton. You talk about reducing the freight rates on the grain coming from the west on a railway that has got to carry an interest charge of $3,300 per annum for every mile of its line. How much do you think there would be left over to reduce the rates after working expenses are paid? I can tell you that the other railways in this country are laughing in their sleeves at the result of this enormous and colossal blunder on the part of the late government. They realize that this railway wall never be a factor in reducing freight rates, because they know there is not a railway in all Canada that can begin to carry an interest charge on one thousand eight hundred miles of road, where every mile of that railway on an average has cost $130,000 a mile. I do not. think .any hon. gentleman in this House ever heard of a railway staggering along under such a burden as that. Is that going to be any relief to the farmers of the west?
I	fail to see it. Except it be in one way, and that is that the Dominion of Canada step in and take a bigger share of the burden than they are carrying to-day, and if the Dominion is willing to do that it may possibly make it possible for that railway to be operated in such a way that it will be a relief to the west. But, when we think we are through with $60,000,000 we are again on the horns of a dilemma. We have to offer to relieve the Grand Trunk Pacific from a large portion of the burden they carry, which will increase that $60,000,000 very materially, or else we have got to let them stagger along alone under that burden, in which case there will never be a reduction of freight rates. Instead of wasting the time of the House in sympathy for that commission which has got the country into this tremendous expense, it is far better that we should pass this Bill and let these gentlemen requiesoat in pace; let them pass out of the public sight and be glad they are permitted to do so, and let us got down to one good, reliable railway building man and put him in charge


Herbert Brown Ames: and say to him: Make the best you can out of the bargain, get us out of it as reasonably as you can, and finish the road as best you can. In the meantime, we will be glad to have a full impartial investigation that will try to find out where some of this $235,000,000 has gone.


Mr. TURRIFF.: My hon. friend (Mr. Ames) tries to make out that there can be no possible reduction of freight rates from the west on account of the cost of the Grand Trunk Pacific, but there is just one feature of lit that he has taken good care not to mention, and that is, that when the Grand Trunk Pacific is completed it wii' be able to haul freight from Winnipeg to Montreal or from Winnipeg to the winter ports in the lower provinces, at less than one-half the cost that the same freight can be hauled for at the present time. That can be accomplished by the Grand Trunk Pacific owing to its low grades. Another point my hon. friend (Mr. Ames) has forgotten to mention is that when this road is completed the Grand Trunk Pacific Company will not have to spend millions and tens of millions of dollars, as the Canadian Pacific railway is doing now, in order to put the road in a position to compete on anything like even terms with other railways. It was stated the other day by some hon. gentlemen on the other side that the Canadian Pacific railway was only too willing to reduce freight rates, but they did not do so because while they could stand it the Grand Trunk Pacific and the Canadian Northern could not. There is absolutely no ground for a statement of that kind' I can show to the utmost satisfaction of this House that on many products that are being cairied by the Canadian Pacific railway in the west to-day they are charging very much higher rates than they did a few years ago, so tfiat instead of lowering the freight rates of late years, in many cases they have been putting them up. ' While the Grand Trunk Pacific has cost a good deal of money to build it must be remembered that when the road is completed it will be able to haul grain and other products at less cost than any transcontinental road either in Canada or in the United States. I have not the slightest doubt that wheu the Grand Trunk Pacific is completed it will be able to reduce the enormous freight rates that are in existence to-day and which are fifty per cent or a hundred per cent even, higher in the west than they are in the east. I believe the Grand Trunk Pacific will be able to do that, while rendering a good service to the country, and that it will earn money to pay the interest on its cost, although that cost has been heavy. I believe, Sir, that the Grand Trunk Pacific will be a great blessing to the western farmer and that it

will not have to ask the government for further aid.


Mr. LALOR.: On the portion of the Grand Trunk Pacific completed from Edmonton to Winnipeg are the freights any lower now than they are on the Canadian Northern or the Canadian Pacific railways?


John Gillanders Turriff: The Grand Trunk Pacific will not lower their freight rates of their own volition any more than any other railway will, but they can be compelled to do so by the Railway Commission, and the freight rates will be cut down and they can still earn interest on the charges. On account of their low grades the Grand Trunk Pacific will be able to carry on one train four times or five times as much as can be carried on one train of the Canadian Pacific railway from the Pacific coast to Winnipeg. From Winnipeg to the Atlantic ports they have a four-tenths of one per cent grade, which means that an engine can haul on that road any load that she can start with on an absolutely level track.


Francis Ramsey Lalor: Did the government in making the bargain with the Grand Trunk Pacific reserve any control over the freight rates?


John Gillanders Turriff: Every road in Canada is under the control of the Railway Commission.


Francis Ramsey Lalor: Only under the control of the Railway Commission?


John Gillanders Turriff: The railways are under the control of the Railway Commission; the Railway Commission is under the control of the government; the government brought the Railway Commission into being and the government can dissolve the Railway Commission if they want to at any time. The Railway Commission is under the control of this government just the same as any other commission. Let no one run away with the idea that because the Grand Trunk Pacific cost more than it was expected it would, simply because they built a better road than they started out to build, that it is going in the end to have any ill effect on the freight rates, because the fact is that on account of it being a better road it will be able to haul freight at a less rate than any competing road.


Wilfrid Laurier: May I ask that the Bill be allowed to stand over until we have looked into the figures brought down by the Minister of Railways. It must be apparent that it is impossible, after simply hearing the figures, to come to any conclusion with regard to them. I hope my hon. friend will have no objection to allow the Bill to stand.


Robert Laird Borden: I am unable to see how the passing of this Bill depends so essentially upon any examination of these figures. So far as the figures are concerned, they only give the details of what has been stated here over and over again, that the road is at the present time about two-thirds completed. So far as the cost is concerned, there cannot be any doubt about that. However, if the consideration of the Bill, in the opinion of the right hon. gentleman, does involve an examination of these figures, and if we are to have an exhaustive discussion of all these statistics for the purpose of ascertaining whether or not, so far as the construction of this railway is concerned, it is to be placed under one instead of four, I am willing to accede to his suggestion although I cannot see the importance of it.	_


Wilfrid Laurier: I quite agree with my hon. friend that the Bill itself
does not depend upon these figures; but the figures have to be discussed-my hon. friend will not deny us that privilege- and they might as well be discussed upon this Bill as upon any other.


Francis Cochrane: I do not think the appointment of Mr. Macpherson has anything to do with the Bill. I am quite satisfied that the appointment of Mr. Macpherson was recommended by the chairman, and that the order in council was perfectly regular. I might say, for the information of the hon. gentleman who has taken exception to it, that there was no authority under the Act for the commission to buy a foot right of way. It was only last year that the late government passed an order in council giving them the authority, and the consequence is that the right of way is in a very bad mix-up. Mr. Mac-pherson is put in charge of right of way, and is held responsible for it. He is also at the head office when the chairman is away on the work, because I think it is most important not to tie the chairman down to the head office all the time. He should be out to see for himself whether the divisional and other engineers are performing their duties. But I have no objection to postponing the discussion, and
I	move that the committee rise, report progress and ask leave to sit again.


George William Kyte: Before we pass from the consideration of the Bill, I desire to call the hon. gentleman's attention to page 1,909 of ' Hansard 'where he is represented as having said:
Young asks-on the ground of having had no holidays, hut one out of the seven years he has been in office-for six months salary.
II	r. Mclsaac asks for three months, and Mr. Calvert resigns without any condition.
I understood the minister to say that Mr. Mclsaac had resigned without any condition and that Mr. Calvert had asked

for three months' salary. I wouid like the minister to correct this statement


Francis Cochrane: I have not the letters here, but the facts were fresh in my memory when I spoke before.


George William Kyte: Will the minister give us the information again?
Mr COCHRANE I will give you all the information you want.


[Stage Direction]
Motion agreed to, and progress reported.

[Stage Direction]
House went into committee to consider the following proposed resolution:
Resolved, that it is expedient to amend ' The Civil Service Amendment Act, 1908,' by providing for the appointment of an additional Civil Service Commissioner, who shall have the salary of a Deputy Head of a department.-Mr. Borden.
Robert Laird Borden: It may be perhaps more convenient to have a general discussion 'on the Bill if the right hon. gentleman has no objection. At the moment, I would simply say that the reasons for introducing the proposed Bill are twofold. In the first place, I understand that some difficulty has been experienced in the operation of the Civil Service Commission from the very fact that it consists of only two members; for if these members are divided in opinion on some matter of more or less importance, no action can be taken, and some very awkward situations are likely to be created, and I think have been created, for that very reason. In the next place, it is hoped and expected that the operation of the Civil Service Amendment Act of 1908 will be extended as expeditiously as may be practicable to the outside service. I do not intend to suggest that that can be done at once. It will be done only after some investigation and some inquiry, but we hope to make progress in it from the very first, and in view of that extension of the operation of the Act, it is thought desirable for that reason also that there should be another member of the commission.


Wilfrid Laurier: I do not intend to go into any general discussion of this measure at the present sitting, as I think that can very properly be deferred until the second reading of the Bill; but in the meantime may I ask my right hon. friend if it is the intention of the government to extend the operation of the Civil Service Act within the present session or during the present year? I understand that there are several officers in the outside service whom it will be difficult to bring within the scope of the Act; but there are, on the other hand, a good many who can be brought in. For instance, the officials Mr. KYTE.	j n * i
in the post offices, customs offices and inland revenue offices in large cities, might very properly be brought within the operation of the Act at once. With regard to extending it further to the service, I would not be prepared to offer any suggestion now; I am quite aware that it is a matter of great difficulty. It may not be so very easy to apply the Act to the service of the different departments ill the country districts. With regard to the other point mentioned by my right hon. friend, it is not perhaps outside of the possibilities of human nature that two coinmissioners might not always see eye to eye. I have not known, however, that a deadlock has occurred except in very minor circumstances. It appears sometimes that on legal questions the commissioners have to refer to the Department of Justice. I offer no suggestion, I merely make this remark.


Robert Laird Borden: In reply to the right hon. gentleman, he will realize that as we were obliged to meet parliament within four or five weeks after assuming office, there has not been much opportunity, at least so far as I am concerned, to make any effective study of the matter he has mentioned. He has asked whether the Civil Service Amendment Act would be extended to certain officials in the outside service during the present session. I would not like to say at the moment that we will find time to make even the investigation that would be necessary for that purpose. He has asked whether its operations may be extended during the present year to some portion of the outside service. I would hope, and indeed I believe, that it will be possible to do so during the present year; but it will be impossible to pronounce at the present anv opinion as to how far that would be practicable. I would like, however, to have it understood that it is our desire and intention to proceed along that line so far as it is practicable.


Rodolphe Lemieux: There is no question that the Civil Service Amendment Act introduced by the ex-Minister of Agriculture was a great relief to public men. Until then ministers were pestered from morning to night by applicants, and they were very many. That amendment gave great relief to ministers, and allowed them to do some work in their offices. Now, to extend the principle to the outside service would be a further relief. I am quite sure that when my right hon. friend visits Montreal or Halifax on public business, he is besieged by a troop of applicants for public office. I do not see any reason why the same rule which applies to the inside service at Ottawa should not be applied to the other large cities of trie Dominion.


William Manley German: I do not agree at all with the remarks of the ex-Postmaster General (Mr. Lemieux). You cannot
apply the Civil Service Act to the outside service as it is applied in Ottawa. I have one instance in my mind now in the county of Welland. A postmaster has been dismissed very lately, a young man, active, intelligent, acceptable to all the people of the locality, from the post office. His name is Mr. Buck. He kept the post office at Crystal Beach, in the township of Bertie, in the county of Welland; he was dismissed, .and a Mr. Rebstock was appointed in his place, who is a United States citizen. I want to call the attention of this government to the fact that they dismissed a Canadian citizen, who is not a partisan at all, who never took any part in politics except to vote as an intelligent man should, and that is for me, and they have appointed a young man of good ability, but a citizen of the United States, to that position. Now that young man wanted the position several years ago, and I refused to recommend him, because he was a United States citizen. But these hon. gentlemen, who were so much afraid of being tied up to the United States in a reciprocity agreement, have appointed a United States citizen as postmaster. I would like the Postmaster General to be here. I hope his colleagues will call his attention to the wrong that he has done. They did dismiss one postmaster in the county; I was not so much dissatisfied with that, because I dismissed a Conservative, and had him appointed. Now, I am frank to say that it is a serious problem to apply the Civil Service Amendment Act to the outside service. I doubt very much if it can be worked out. You may, by your Civil Service Commission, Tegulate the appointment of officers in the inside service, as in Ottawa, and probably in Toronto. But when you take it over the country generally, to whom will the commissioners who havp to make the appointments, apply for information? They will apply to the men who are the leading men in the locality, and the leading men in the locality will be the men who represent the constituencies, or the men who have endeavoured to represent the constituency. The commissioners will take their opinions from these men; if they do not do that, what will they do? You cannot appoint men strictly on examination. You may get good men who will pass excellent examination, and who may be-absolutely unfit for public positions, from disposition, from character, or other inability. You cannot appoint young men simply by reason of the fact that they
have passed a first-class examination. I venture to say, and I want to say now in the presence of the hon. gentlemen who are leading this government, that we have in the county of Welland the best contingent of customs officers and immigration officers that exist in the Dominion of Canada.
I stand in the judgment of the commissioner of Customs and of. the Commissioner *f Immigration. They are all young men, they are all intelligent men, and I will put them up against any similar class of young men in the inside service who have !been appointed by your commissioners. They are intelligent, good young men, I do not want to see them dismissed and I do not expect they will be dismissed because they should not be dismissed. They may dismiss a few labourers on the Welland canal but I hope not many. The government cannot appoint a Civil Service Commission who can satisfactorily control the appointment of outside officials; if they undertake it they will make a mistake. It should be left to the men in the various counties in whom the government have confidence. If these men do not make proper representations to the government and the government have no confidence in them, then the government should select someone in whom they have confidence and be guided by his advice, even in the county of Welland, if they happen to be guided by mine.


Robert Laird Borden: I do not know anything of the cases to which my toon, friend has alluded, but I shall bring his remarks to the attention of the Postmaster General.
Resolution reported, read the second time, and agreed to.
Mr. BORDEN moved for leave to introduce Bill (No. 104) to amend the Civil Service Act.


[Stage Direction]
Motion agreed to, and Bill read the first time.
Mr. BORDEN moved the adjournment of the House.
Wilfrid Laurier: What business will be taken up to-morrow?


Robert Laird Borden: To-morrow we propose to take government Bills, beginning with the Grain Act and after that Supply, taking up the estimates of the Minister of Public Works or the Minister of the Interior.


[Stage Direction]
Motion agreed to, and House adjourned at 11.23 p.m.
[Stage Direction]


Thursday. February 15, 1912.