April 23, 1901

?

Some hon. MEMBERS

No, no.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

In that case they tried to get possession of three and three-quarter millions of the best mineral lands in the world at one-tenth of their value. But the government then learned a lesson ; and in this case they said, ' We have got a secret bargain, and we will keep it from the people of Canada.' Why did they not tell the people on the 9th of October, ' We have just concluded a bargain with the Clergue syndicate, and we ask ydur approval or your disapproval.' No ; they were afraid to let it be known-why ? The Minister of Finance quoted a case in which he said tbe bargain was upset because there was a corrupt consideration attached to it. Surely there was not a corrupt consideration in this case. Surely these men were not going to receive a portion of the moneys back again. The

$32.60 a ton was not the whole of the money the syndicate were to get. In addition to that, they are to get $7-$0 from the Dominion, and $1 from the province of Ontario-for every ton of steel rails. That is, $39.60 for an article which was worth $26 a few months ago, and which to-day I am told, is worth $24.85. They say, 'We cannot tell what the price will he in the future.' But I say you have no right in a falling market to go back to the time when steel rails were $35 or $40 a ton ; you are bound to come down to the price on the day the contract was made. They did not do that, because on that day, as the records show, the price of steel rails was just $26 per ton. Now, I say, these gentlemen -have acted illegally in making a contract without the consent of parliament. Year by year we see the powers of parliament taken away by these gentlemen, contracts given without the safeguards which the law provides, and this government snaps its fingers at the law. Here we have the most glaring instance of it. But they say, this year is the only year to consider. So far as the money payment is concerned, it is, Mr. Chairman, I must ask for a little order. Hon. gentlemen opposite look as if they were panic-stricken.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

Some hon. MEMBERS

Oh, oh.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

I was looking at the uneasy footsteps of the Minister of Customs tramping all over tins House. I would like to know what is disturbing the spirit of his dreams to-night. I was going to say, Mr. Chairman, that our good friend from Algoma (Mr. Dyment) got up to-night and told us that he was up in Sault Ste. Marie, which is in his own constituency, and had the assurance of Mr. Clergue that they were going right along with the construction of this great plant for the manufacture of steel rails. Well, I have the Toronto Globe tonight in my hand, and it gives an entirely different story, and given by Mr. Clergue himself. He tells the correspondent of the Globe :

At present the syndicate is building a plant which will be complete and in operation by September, having a capacity of 600 tons of steel rails per day.

I would like to know where the Minister of Railways and the hon. member for Algoma got their information that these rails would be delivered in August if the shop is not built until September.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
LIB

Albert Edward Dyment

Liberal

Mr. DYMENT.

What the hon. gentleman Is quoting are the words of Mr. E. D. Clergue, of Michipieoten, who is not in S^ault Ste. Marie possibly four or five times a year. I got mine from Mr. F. H. Clergue, who makes his home there.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

Mr. E. D. Clergue apparently knows more about it than the hon. member for Algoma, because he is one of Mr. WALLACB.

the officers of the syndicate conducting the great Sault Ste. Marie enterprise. He was in the city yesterday, and outlined the above project in an interview with the representative of the Globe. Besides, a single pound of pig iron cannot be made by the whole combination at the ' Soo.' They have to go elsewhere for their pig iron. They have not got the pig iron plant, which is the foundation of the business. First you have to make the pig iron and then manufacture it into steel rails.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OF FINANCE.

How will they get the benefit of the bounty if they do not get the pig iron ?

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

Let me tell the hon. gentleman and his colleagues, because they seem to be sadly in need of information. The syndicate will buy their iron from the blast furnaces of Midland and Hamilton, to which they will send the ore from the mines at Michipieoten. Later on, Mr. Clergue says, they will build their own smelter at the ' Soo,' but at present they have not even commenced to build the smelter for the purpose of manufacturing the pig iron which Is the foundation of the steel rail Industry. The Clergue syndicate have not even commenced to build the smelter, but will have to send their ore down to the city of Hamilton and the city of Midland, and after it is made into pig iron they will bring back the pig iron to the ' Soo,' and make it into steel, and then will travel back again over the same route and deliver it in the city of Montreal. That is a highly economical way of doing business. But the point in it js this, that these men, by their own statement-and they are pretty sanguine men, we are told, perhaps a little too sanguine, according to the Minister of Railways-will mot be ready to turn out a single ton of steel rails until September. How then can they deliver rails in the month of August ?

Another point, and I think it a most important one, is this : 25,000 tons of steel rails, eighty pounds to the yard, will lay 200 miles of railway. Now 200 miles of railway multiplied by 5, will give 1,000 miles of railway that are going to be laid with steel rails within five years. Do the government railways require it ? Not a bit of it. The life of a steel rail is a good deal longer. The government do not require a

1.000 miles of steel rails to be laid within the next five years, and they will have to explain why it is that they have given an order for such a vast quantity. It will be the old story that we knew twenty-five years ago, when the Mackenzie government bought rails years before they were required, and had them piled up until they were rusting and destroyed from want of use. The same thing will occur again, because the government can have no possible use for all these rails. There is no necessity for taking the steel rails, which are to-day good and efficient and have a long

3G13

life before them, and displacing them by laying eighty-pound new rails in their stead. I would like the government to tell us why they are doing that ?

There is another point. The Minister of Railways tells us that he is not going to supervise all those contracts. He says that he has hundreds and thousands of contracts coining before him and he is not going to supervise them. The government tell us that the party of the other part always signs the contract first and then it is sent back to be signed by the government, which is all right, I presume, but before that contract is sent out is when it should have complete supervision. When you ask a contractor to sign an agreement, he ought to have the certainty that it was carefully considered and that the government intend to abide by it. But the Minister of Railways tells us that he has not signed the contract and that he supposed at first that he had signed it. It was only when it was laid on the Table that he discovered it was not signed. Thereupon the Minister of the Interior (Hon. Clifford Sifton) gets up mid says there is no contract at all. But, I presume that every member of the government was under the impression that that contract, based upon the order in council which they had pasesd upon and agreed to on that celebrated day of the 9th of October, was completed. I venture to say that before the 10th of October there was not a minister who was not under the impression that that contract was completed. But there is something more' behind this and it is a very important consideration. Does any hon. gentleman think that Mr. Clergue made a bargain on the 9th of October and had the order in council in his hand on the 12th of October, and then allowed six months to elapse without offering his signature to it ? Of course, we have to take the statement of the hon. gentleman, but if so what kind of a business government have we got ? Just imagine, here is a contract jmade six months ago, it is lying in Mr. Clergue's desk unsigned by him or the government, the government is not aware that it is not signed, the Minister of Railways is not aware that it is unsigned. He was not aware, when he placed it on the Table of the House, that it was unsigned. They say that it was a mistake to put it there. I presume it was, as they view it. But, the people of Canada want that contract there, they want the particulars, they want to know all about it, and they are entitled to know. But there is something mysterious about it all. Do hon. gentlemen opposite tell us that for six long months nothing was done, that not a word was breathed throughout the country, that nobody knew that Mr. Clergue was building large works for the manufacture of steel rails ? But now, we hear, on the 23rd of April, that they are putting up enormous works where they can manufacture GOO tons

of steel rails in a day, and later will have works that will turn out 2,000 tons per day. If you imagine that Mr. Clergue does business in that way, I think you are mistaken. And, if the government of Canada do their business in that way, I think it is time that we had a new government, and, apparently it will not be long until we get it. I repeat the question : When the government made a contract with Mr. Clergue, whether for one or five years I do not care, why did they not tell the people of Canada that a new era had dawned, that we were undertaking the great enterprise of malting steel rails for the supply of our railroads, beginning with the government railroads, and that a bargain had been made with Mr. Clergue, subject to the sanction and ratification of parliament r These things were not done, and to my mind the government is to be condemned for their secrecy, for their want of business arrangements, for their improvident bargain, and for doing what the law does not permit them to doA making the contract without the consent of parliament.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OP THE INTERIOR.

My hon. friend says he is very much disturbed, aud, apparently he is, by the fact that the contract was made on the 9th of October

I think that was the date he gave. But, I think, from certain references which ran through the hon. gentleman's speech, it will be evident that what has disturbed him is not what took place on the 9th of October, but what took place on the 7th of November. Now, he undertook to call attention to what he called my inaccuracy. I have no objection to being lectured about being inaccurate by any gentleman who is competent to do so, or even by one who endeavours to maintain even the most distant connection between accuracy and his own statement. But, when a gentleman who has been Controller of Customs, who has been, to all intents and purposes, Minister of Customs, and who undertakes to declare the Conservative policy with regard to tariffs, endeavours to give this committee the impression that there is a duty of 30 per cent on steel rails, I object to being lectured by him. If i were to make a statement so inaccurate as that, I would walk out of this room and hide my diminished head. The hon. gentleman is not a new member, he is not a tyro in politics, but a man who professes to be able to teach members of this House finance and tariff legislation. To support his statement he deliberately reads from an item which he knows refers to an entirely different matter :

Iron and steel railway bars or rails of any form, punched or not, n.e.s.-

Every member knows what ' n.e.s' means. I think even the hon. gentleman knows.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

An hon. MEMBER.

Oh, no.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OF THE INTERIOR.

Yes, I think he does. It means ' not elsewhere specified.' And there is a duty of 30 per cent on these goods. What is elsewhere specified ? I turn to schedule B,

* free goods,' and I find :

Steel rails weighing not less than forty-five pounds per lineal yard.

And the rails of which we have been speaking, as my hon. friend must have heard if he listened, are 80 pounds to the yard-and they are free.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

I read this item as it was here, as it struck me at the moment

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OF THE INTERIOR.

But, the hon. gentleman did not know anything about it.

Mr. WALLACE-as it struck me at the moment while the hon. gentleman was making his remarks. I turned up the item, iron and steel, &c., for railways, 30 per cent. But, I see that other rails are on the free list, and I am not persisting in an inaccuracy like the hon. gentleman (Hon. Mr. Sifton).

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OF THE INTERIOR.

The hon. gentleman accuses me of being inaccurate, and yet, though an ex-Coutroller of Customs, did not know what was in the tariff.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

Nathaniel Clarke Wallace

Conservative (1867-1942)

Mr. WALLACE.

That does not excuse the hon. gentleman. He will have to explain his own inaccuracy.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OF THE INTERIOR.

The hon. gentleman says that he did not know, and the assumption on our part that he did not know is the most charitable construction we can put upon his statement, because if he did know he was deliberately misleading the House.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

John William Bell

Conservative (1867-1942)

Mr. BELL (Pietou).

tect and develop home industries; hut we certainly feel that in giving a bounty of $0 a ton to the manufacturers of steel rails, they have gone quite as far as it is necessary to do. and they might have conserved the public interest better if they had limited the contract to the price at which they could have bought the rails in the United States, and still have acted equitably in this matter.

Now the Minister of the Interior, in defence of the action of the government, pleads that this contract is simply for one year and not for five years. That is a point upon which there may be room for difference of opinion ; but I am afraid, judging from the course of the government in the matter, that we cannot expect them to act much more providently the next year than they have done this year. If the government of Canada has put in that contract a condition that the price to be paid for future years shall be the price in England, what is there to justify us in expecting that they will not in succeeding years pay $6, or $7, or $8 a ton more than the market price in the country in which these rails are cheapest, as they have done this year, now that rails are $26 in the United States and they give $32.60, pleading as an excuse that the current price in England at the time when they made the contract was $32.60 a ton ? What is to prevent them, if they wish to do so, finding a similar condition of affairs in England next year ? There can only be one proper, safe or secure position for the government to take, and that would be, if they were going to purchase these rails, to purchase them in the open market, and to consider that the Clergue syndicate was amply protected and amply bonused by the fact that the department was giviug them a contract for 25,000 tons of rails extending over a period of five years during the whole of which these bounties would be paid for, although on a gradually declining scale.

Now, I think one very serious objection to this contract, and one that lias been pointed out over and over again, is the fact that in this agreement, as entered into with the Clergue syndicate for the purpose of developing the manufacture of steel rails in Canada, there is not one line, or one word, which will compel the Clergue syndicate to supply to the government rails either made in Canada, or produced from steel made in Canada. This is certainly a most amazing piece of carelessness, of criminal carelessness, I might almost call it, on the part of the hon. minister who is responsible for the drafting of the instrument. It is perfectly idle for the minister to come to this House with a transaction of such immense proportions involving such an enormous amount of money and set up the defence that some subordinate official in his department has badly drafted the agreement. These subordinate officials are Mr. BELL (Pictou).

not present in this House. They are not responsible to parliament. There is one man and one man only who is responsible to parliament and to the people of Canada, for the blunder, for the carelessness, for the amazing ignorance that is being displayed in this matter by the lion. Minister of Railways and Canals. It is idle, it is useless, it is to subvert every sound principle of parliamentary government to allow the minister to set up such a contention in defence of his conduct. If this syndicate were disposed and were not ready, as they are not ready, to produce steel rails, they can go to the market of the United States, import steel billots and roll these billets into rails in Canada. They can buy steel billets for $18 or $19 a ton, bring them into Canada and at a comparatively small cost, at a cost of some $5 or $6 a ton, they can roll these billets into steel rails. There is nothing in the contract to prevent them (tendering to the government steel rails thus manufactured, and there is nothing in the contract to enable the government to refuse to accept such rails if tendered to them-not one word in the contract that I can discover. I believe that the government has very seldom occupied a more indefensible position than the government occupies in respect to this matter. If it were its purpose to extend a helping hand to the steel rail industry of Canada, why did it proceed in secret ? Why did lion, gentlemen select as their favourites in this matter this particular syndicate which is not in a position to produce one pound of pig iron, and which has not a single steel furnace or rolling mill in operation ? Why did not they open their arms to the manufacturers of steel and iron throughout Canada in every part of this country, so that the advantage of such an immensely important institution as a great steel rail plant would be available to them ? Why was this secrecy observed ? What was the purpose of it ? It seems to me that so far as my own province of Nova Scotia is concerned, the province in which iron development is going on at a rapid rate, it has been most unfairly dealt with by the government in this matter. Why should" they proceed to the eastern end of Lake Superior to attempt to procure rails for a railway commencing at Montreal and ending at Sydney, to the entire exclusion of an industry that produces its own steel, which has the financial resources necessary to establish rolling mills, and which is located at one extremity of that road ? If these rails are to be used, why does the government go to the extreme western end of the province of Ontario ? Taking all these things into consideration, taking into consideration the manner in which they made known to the people of Kingston, without any secrecy whatever, *the fact that they were going to be in a position to turn out locomotives, taking into consideration the secrecy they exhibited in

the matter of the production of steel rails, taking into consideration the fact that the government, just on the eve of an election, entered into a contract involving $4,000,000, there is ground to warrant the suspicion that there was a rake off on a scale of the most gigantic magnitude. Now, the government would not naturally lay itself open to such a suspicion for no purpose whatever, but what else can explain the manner in which the government has proceeded to conduct this whole matter ? Why did the government proceed in secrecy from the moment that it began this negotiation in council with Mr. Olergue, through every step through which this matter has proceeded, in parliament up to this afternoon, when, now, for the first time, parliament is beginning to know the facts of the case? Why should parliament be kept in the dark? Why should these things be kept secret? It is not good government. It is not treating the people with proper respect. It is not treating the representatives of the people with proper respect. It seems to me that the government should not enter into a contract, such as has been entered into, not only for one year, but, involving the policy of the government for five years, during which that government may possibly pass out of power, and leave to their successors a contract, the responsibility of which that succeeding government might not care to take. I say again that in this matter the government is departing from the soundest principles of parliamentary, representative government for no reason whatever that I can see, unless it be for some such improper purpose as may very well be puggested. This most improper contract, involving such huge profits for the syndicate selected, without any reason that any one can discover, to be the favourite of the government, has been entered into. Unless some such improper reason as has been suggested was in existence, it is impossible for any one to discover any reason whatever that should induce the government to conduct this business in the manner in which it has been conducted. To my mind nothing much more wide of the mark than the very amazing statement made by the hon. Minister of the Interior could be conceived. It was a piece of oratory that to my mind was very much more adapted to the stump than to the floor of parliament, designed to divert the attention of parliament and of the country from the facts of the case and to accuse the opposition in this manner, not of finding fault with the government for making this contract, but of finding fault with it for not making it. Now, it may be that history is going to repeat itself. Those men who took part in the campaign of 1878 will recollect that for a much smaller steel rail business the late Hon. Alex. Mackenzie and the government of which he was the leader, received great blame, were held to account, 114}

were passed upon in judgment, and were turned down by the people. This transaction, in whicli this government is involved, is worse than the transaction in which Mr. Mackenzie involved himself. It is greater in extent, it is just as improvident, because this government has committed what is worse than a crime ; it has committed a great blunder. At a time when the market was falling steadily it agreed to purchase steel rails in quantities sufficient to relay 900 miles of Intercolonial Railway, to relay an extent of the system which does not seem to be requisite, according to the figures that the hon. Minister of Railways and Canals has laid before parliament. The government is committed to the purchase for five years of a sufficient quantity of rails to relay 900 miles of the Intercolonial Railway, showing the most utter incapacity on the part of hon. gentlemen opposite from a business point of view. It is not necessary to say that a private individual would not conduct great business affairs in the manner in which this transaction has been carried out by the hon. Minister of Railways and Canals.

It is quite true that the resources of Canada are very great and that our country can bear heavy burdens, but it is not right that we should ask our country to bear such burdens. We have money in abundance and the people of Canada are ready to spend that money in abundance for every legitimate enterprise, but there are thousands of crying wants of this country which the government did not supply and cannot supply, simply because they have not the means. Great as has been their expenditure and many as are the wants they have supplied, they know there are thousands of cases in which the country is calling to them for an outlay which would in all probability bring in a return. Great and strong as Canada is financially, there is no excuse for the administration entering on a transaction of this kind which involves such a great loss of money to the country. So far as the secrecy of the transaction, the disregard of the interests of the people and the disregard of that courtesy due to parliament are concerned, it seems to me that no speaker on the government side has set up anything like an adequate defence for the course which the government in this respect has seen fit to follow.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

I wish to ask the

minister : To what account were the steel rails which were taken up on the Intercolonial credited ? I want the minister to be correct and exact in the answer.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
?

The MINISTER OP RAILWAYS AND CANALS.

Has the hon. gentleman any other question ?

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

Yes. I would like to ask the amount of new rails which have been laid on the Intercolonial Railway of

eighty pounds weight, and how many miles the minister intends to relay with them.

Topic:   SUPPLY.
Subtopic:   APRI L 23, 1901
Permalink

April 23, 1901