The MINISTER OF JUSTICE (Hon. Charles Fitzpatrick), moved for leave to introduce Bill (No. 116) to amend the provision with respect to tolls of chapter 1 of the statutes of 1881 respecting the Canadian Pacific Railway.
He said: The House is aware that in January last an Order in Council was passed authorizing the Canadian Pacific Railway to increase its capital stock by $20,000,000. The Order in Council provided that no part of this stock shall be issued at less than par and also defined the purposes to which the money to be derived from the sale of the stock shall be applied.
It further provides that this increase of stock shall not in any way. be considered as affecting the question of the control of the government over the rates of the company after its earning power has increased to the extent of 10 per cent or 15 per cent on its capital. In order that the House should be fully Informed of all the facts, I would ask permission to state the legislation which was in existence previous to the passing of this Order in Council, and which would be affected by the Bill I now introduce.
The statutory provisions relating to tne ordinary capital stock of the Canadian Pacific Railway Company are very few and may be stated as follows :
Section 2 of the company's charter, being schedule ' A ' of 44 Vic., chap. 1 (Canada) fixes the capital stock of the company at $25,000,000 divided into shares of $100 each and provides that such shares, or any part thereof, may be granted and issued as paid up shares for value bona fide received by the company either in money, at par, or at such price and upon such conditions as the board o<f directors may fix, or as part of the consideration of any contract made by the company.
This section, it will be observed, enables the directors to sell shares at a discount.
Subsection 20, of section 7. of the Consolidated Railway Act of 1879, enables a railway company, subject to its provisions (and in this respect the Canadian Pacific Railway is subject to its provisions) to increase its original capital stock from time to time to any amount subject to the approval of its shareholders in the manner and form set forth in the said subsection 20.
Under this subsection the capital stock of this company was raised to $100,000,000.
By section 10 of 47 Vic., chap. 1 (1884) the capital stock is limited to $100,000,000, of which $05,000,000 was issued to shareholders and $35,000,000 was deposited with the Dominion government.
By section 3 of 48-49 Vic., chap. 57 (1885) the $35,000,000 of stock then in the hands of the Dominion government was ordered to be cancelled and destroyed, and any further issue was prohibited without the special authority of parliament.
The next and last statute in order is 55-56 Vic., chap. 53 (1892). Sections 3, 4 and 7 of this Act, which are the sections bearing upon the matter, are as follows :
3. In addition to its capital stock at the time of the passing of this Act, and to any which may be issued under the authority of the next preceding section, the company, being first authorized so to do by a vote of at least two-thirds of its shareholders, present or represented at a special general meeting duly called for the purpose, may, from time to time, issue shares of capital stock for any purpose for which the company requires new capital, in such amounts and at such times as the shareholders by resolution at any such meeting determine-such issue being first approved by the Governor in Council and notice of such meeting having been given in writing to each shareholder, delivered to him personally, or properly directed to him and deposited in the post office at least twenty days previously to such meeting, stating the time, place and object of such meeting, and the amount of the proposed increase.
Section 4 reads :
All shares of capital stock issued under the authority of this Act shall be subject to all the provisions of section 2 of the company's charter, as fully as if they were part of the capital stock therein named.
(7) The proceeds of each issue of shares of capital stock or of consolidated debenture stock under the authority of this Act shall be applied by the company exclusively to the purpose for which the shareholders authorized such issue.
In the Bill I have the honour to lay before the House, the government has taken the precaution to make it a matter of statute that the money shall be applied to the purposes for which it was said to be necessary at the time the Order in Council was applied for.
Now, with respect to the tolls. At the time of the incorporation of the Canadian . Pacific Railway Company, railways were regulated by the Consolidated Railway Act of 1879, being 42 Victoria, chapter 9, which Act, in so far as its provisions are applicable to the Canadian Pacific Railway, and in so far as they are not inconsistent with, or contrary to the provisions of the company's charter, and save and except as is specifically provided in the charter, is incorporated with the Canadian Pacific Railway charter. The only provision in this statute which need be referred to is subsection 11 of section 17, which reads :
(11) The parliament of Canada may, from time to time, reduce the tolls upon the railway, but not without consent of the company, so as to produce less than fifteen per cent per annum profit on the capital actual# expended in its construction; nor unless, on an examination