May 14, 1902

LIB

Lawrence Geoffrey Power (Speaker of the Senate)

Liberal

Mr. SPEAKER.

Will the hon. member please wait until the whole resolution is read.

Topic:   SUPPLY-CONCURRENCE.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

Would it not be more convenient for the hon. gentleman to make his remarks on this special item 1

ail-. SPEAKER. There is only one motion before the Chair-that the resolution shall be read the second time.

Topic:   SUPPLY-CONCURRENCE.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

But the result of that ruling would be that, instead of having one single subject for discussion, there may be a great many, according to the number of items covered by the resolution.

air. SPEAKER. The hon. gentleman prefers to proceed item by item ?

air. BORDEN (Halifax). Yes ; otherwise we would have many subjects to cover.

air. BARKER. Before the item, is concurred in, I desire to enter my protest against charging this expenditure to capital account. I do not propose at this stage of the session, to make any extended remarks on the subject, because I have already discussed it at some length. Shortly, my objection is this-that all the hon. gentleman is really doing, in relation to a capital charge, is adding to the structure of the road 13 pounds per yard of rail. He has at present rails of 67 pounds per yard, which were originally provided out of capital. He is putting down rails weighing 80 pounds per yard. He is entitled to charge the 13 pounds of increase to capital Sir WILFRID LAURIE R.

account, but no more. That is one of the most elementary principles in companies, whether railway companies or any other. The least important business concern in the country is dealt with precisely in that way. It makes no difference whether the government own a property or whether that property is owned by a corporation, the principle is just the same. Unless you adopt a recognized principle in keeping accounts no man can tell whether the business is worked at a profit or at a loss. The importance of observing that principle was illustrated by the fact that the Minister of Finance yesterday contrasted the results obtained by the hon. Minister of Railways, as shown in his report laid before this House, with the result of the operations of his predecessors. The absurdity of such a comparison must be obvious to everybody who will consider that the predecessor of the Minister of Railways would have charged not merely the 67 pounds per yard, but the whole 80 pounds per yard to maintenance account and not to capital. By charging these rails to capital, the present minister, by this one item alone saves, as compared with his predecessors, no less than $600,000. I do not say that the hon. gentleman's predecessors were under any obligation to charge the whole SO pounds per yard to maintenance. On the contrary, I say, it would be reasonable to charge the betterment. as it is commonly called, in this instance the 13 pounds per yard, to capital. But it is absurd, and every business man in this House must see that it is absurd, when capital has provided rails of 67 pounds per yard that the hon. gentleman should replace them and charge the new ones to capital also. Why, what is the result ? You would have 67 pound rails on the road, but a charge on the books of 134 pounds. Suppose that stock was being taken of this property-that the property was being sold to some company. An accountant would be sent over to examine the property. He would find there 67 pounds of rails per yard, plus the 13 pounds, but the accounts would show a charge of 134 pounds against capital. He would naturally say : You are committing a fraud ; for your accounts represent that you have 134 pounds of rails per yard in your track, whereas you have only 67 pounds. According to the principle on which he proceeds, if the minister renews the rails again he will again charge them to capital, making the discrepancy still greater. The principle of charging to capital and to maintenance, respectively, is well understood, and, for my part, I never heard it questioned. If the hon. minister kept his accounts as any business man would keep them, he would charge to capital the betterment which he has made in the property and would charge to maintenance the replacing of the original 67 pounds of rails per yard, taking credit, against that charge to his maintenance account, for the value of the old scrap that 1 he was taking up. If that method is fol-

Topic:   SUPPLY-CONCURRENCE.
Permalink

MAT 14. 1902


lowed from year to year and from administration to administration, you can compare one working with the other. But, under the system of the hon. gentleman, not only can you not compare the hon. gentleman with his predecessor, but you cannot compare two years of the hon. gentleman's own administration. I, therefore, enter my protest against this charge, as I have done before, and I desire it to be distinctly understood that, in passing this vote without dividing the House, we do not for a moment admit' the propriety of the course pursued by hon. gentlemen opposite. At six o'clock, House took recess. After Recess. House resumed at eight o'clock. To provide additional siding room' and increased accommodation and facilities along the line of the Intercolonial Railway, $135,000.


?

Hon. Mr. HAG HART@

The Minister of

Railways and Canals was to furnish to the House information as to the particular lines that he intended this vote to be applied to. He is not here.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
?

The MINISTER OF FINANCE.

I cannot furnish my hon. friend the information. I will call the attention of the Minister of Railways and Canals to it, and try, before this House closes to-morrow, to see that the hon. gentleman gets it.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

It will he rather late then.

Rolling stock, $500,000.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

I wish to say a few words on this item, and to call the attention of the House to the question of'rolling stock. I object to this capital charge very much on the same grounds as I did with regard to the item of steel rails and fastenings. In taking up this item as the first since my remarks on steel rails, I do not wish to be understood that it is the only item upon which criticism might be offered ; because there are several items here that should call for remark. But I want to take up some special items and call attention to them. The question of rolling stock is a very large one and a very important one as regards the Intercolonial Railway and the Prince Edward Island Railways. Hon. members will see that last year the Minister of Railways and Canals obtained authority to expend $2,000,000 upon rolling stock for the Intercolonial. In the present estimates he asks for authority to expend half a million dollars. Now the principles I refer to with regard to steel rails apply directly to the present item. The moment that a corporation, or a company, or a government, has provided for a particular work or thing upon capital account, whether it is a structure, whether it is a car, or a locomotive, or anything else, the going concern,

must thereafter maintain that which capital has once provided. The hon. Minister of Railways and Canals and his predecessors have received from time to time certain sums on capital account to provide rolling stock with which to operate this railroad. As a going concern the railroad is required to maintain that which capital has thus provided. The hon. Minister of Railways and Canals, if he maintains out of his revenue that which capital has provided, and finds that in the improvement of his business, in the increase of his business, additional rolling stock is required, he is entitled to add to his capital account whatever may be necessary to provide that additional equipment. But that is always subject to the maintenance primarily of what capital has already provided. Now, the Minister of Railways and Canals, in his last report, has shown that of his cars, provided by capital and which it was his duty, as head of the going concern, to maintain out of its revenue, 364 were condemned as unfit for the service. In addition to that, Mr. Muhlfeld, his mechanical superintendent, who was examined as a witness before the Public Accounts Committee, admitted that there were in September last from 25 to 30 locomotives which ought to be condemned, that 12 or 14 of them were already abandoned and the balance were unfit economically to be continued in the service ; and all of these 25 or 30, he said, ought to be replaced, and he admitted in his evidence that they should be replaced out of revenue and charged to maintenance.

Now, if the hon. Minister of Railways were conducting his railway as any ordinary railway company in America or anywhere throughout the world carries on business, he would before charging one dollar to capital for additional rolling stock be required to bring up to working standard the rolling stock that capital had already provided him with. If he were to replace out of maintenance these twenty-five or thirty locomotives, and to replace the 364 cars instead of allowing them to lie as he has been allowing them to lie year after year, dead and useless stock, he would not require this money on capital account. It is his business, before he asks one dollar from the country on capital account for rolling stock, to put in proper working order what he has already been provided with. I say, Sir, that before the hon. Minister of Railways is entitled to come here and ask for more stock it is his duty to show that he is already using to the full capacity what capital has provided him with ; that is to say that it is his duty to replace and put in service these 364 cars, which he admits in his report to be condemned as unfit for service, and these twenty-five or thirty locomotives, which his mechanical superintendent condemns as unfit for service. Therefore, I protest here against this authority to him to expend * $500,000 until he assumes the responsibility

of restoring the condemned stock. It is the hon. gentleman's duty, as it would be the duty of the manager of any ordinary railway, to charge the cost of replacing these cars and locomotives to his ordinary expenses. If parliament would insist upon that it would do something to protect the public against wild extravagance in the administration of government railways. I do not propose to enter into any elaborate argument upon that point. I am addressing gentlemen, who, I think, know that what I say is the ordinary rule in their own business. There are gentleman sitting upon the opposite side of this House who are connected with large corporations, and these gentlemen would not for one moment permit the officers of those corporations to charge to the capital of the company the items that are here sought to be charged to capital, but they would say to them : You must maintain that out of your revenue, and though it will add to your operating expenses you will be telling us the truth and you will enable us to know whether the concern is working at a profit or a loss. 'What would be said of a board of directors, who. year after year, allowed their management to charge to capital that which was a charge upon revenue, and thus declared a profit, or a dividend, and distributed that dividend among their shareholders though it had not been earned, when it was a fictitious dividend, when the surplus they claimed to have was really due to the fact that they were improperly charging to capital that which did not properly belong to capital ? Why, Sir, the board of directors guilty of that sort of thing would be personally responsible for their misconduct and in some countries would be severely dealt with. I protest under these circumstances against this item being made a charge to capital. Nobody, I think, from the province of Ontario desires to limit in the least degree the capacity or the usefulness of the Intercolonial Railway. We desire to see that road a success, but because we desire to see it a success we want it administered on business principles and under conditions applicable to every business organization. I repeat, that if such a manipulation of accounts as is allowed under the present administration and endorsed by hon. gentlemen opposite, were carried on in anv business concern in England, the board of directors, who in this regard have the like responsibility as the hon. gentlemen who sit as ministers in this House, would be held personally responsible for their misleading statements, for such statements as produced the so-called surplus or surpluses which have been claimed in this country during the last two or three years. It is time we should stop that sort of thing.

Murray Harbour branch and Hillsborough bridge, Prince Edward Island Railway, $500,000.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

I am sorry the Minister of Railways is not here. He pro-

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

mised that he would furnish information in regard to the amount of the expenditure for improvements on the government railways. I asked for the amount of the new steel rails that -have been laid, the amount that was required to finish the work, and the sum necessary to provide additional rolling stock in order that parliament might know exactly what improvements are contemplated. I have not received that information and I suppose I must wait for it until next session. When the minister makes a promise of that kind he ought to carry it out. When we are discussing the government railways it is essential that we should know what changes he contemplates and what expenditure his changes entail. He has promised me that information time and again since I asked him when the first item was presented to the House.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
?

The MINISTER OF FINANCE.

The Minister of Railways will be here before we conclude and the hon. gentleman will have the right to put the question to him no matter on what item we may be.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

Ifc is verv desirable that a promise on which items are allowed to be carried should be most carefully observed, because otherwise it will be impossible for us in future to allow items to_ pass on such an understanding. The Minister of Finance knows that even on concurrence the opposition is not by any means powerless, because we can move the adjournment of the House after every one of these items.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
?

The MINISTER OF FINANCE.

We could stay here a month.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

Yes, and while we have no disposition to obstruct the business of the House as has been perfectly evident by our conduct during the whole session, still we do not propose to have promises of this kind made and absolutely disregarded.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

I should state that the Minister of Railways came over and spoke to me to-day and said that his deputy had telegraphed to Moncton for the information, but surely when the government adopts a policy in re*pect to its railways it must have decided on the extent of these improvements, and to have had before them some estimate as to the cost it was binding the country to in respect thereof. That information should have been laid on the Table before the minister asked for a single dollar from parliament.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

I wish to raise a point in respect to this particular item apart from that which my hon. friend (Mr. Haggart) has brought up. No one on either side of the House can doubt, from what has transpired here for the last week or two, that it is ample time that some restriction should be placed upon ministers who seem to wish to rule their departments as auto-

crats quite outside of the law and regardless of the law. The Minister of Railways admitted. in his speech of the 6th of May that he had entered into a contract for the construction of 114 miles of this railway a year or a year and a half ago. He complied with the law in regard to that contract by asking for tenders and presumedly he gave the contract to the proper party. The work has been proceeding on that 114 miles which the hon. gentleman, as reported in 'Hansard,' declared to be a distinct portion of the railway. According to the statement of the minister, he having entered into that contract for that 114 miles, was approched by members of parliament-not by parliament but by members of parliament; no doubt gentlemen in the neighbourhood who took a particular interest in the work-and not only by members of parliament but as he says in a general way, by other persons. And having thus been approached by members of parliament and other persons, the minister, as an individual-not representing this country, not representing parliament or the government even ; not representing anybody but himself, for he had no authority to do what he did do-the minister arrives at the conclusion that it is expedient to let the same contractor construct the additional 314 miles of the road. Looking at it simply as a matter of business, on what basis did the hon. gentleman act V Anybody who has ever had any experience of public work knows that you cannot take 114 miles of railway in one district and accept the cost of work upon that section as a criterion or guide as to what you should pay for work upon another portion of the road. In all government contracts of this kind you find the road divided into sections because every one knows that the cost of moving earth and the blasting of rock, and so on, on any particular section varies materially from the cost on another section. A simpie way to explain that to the House is by stating that on one section you may have earthwork that has to be excavated and carried for half a mile, while on another section it may not have to be carried further than 100 yards. Everything depends on the particular circumstances of the particular section under contract, but the Minister of Railways having got prices for 114 miles jumps to the conclusion in his wisdom that these prices should apply to the 314 miles beyond.

A contractor is generally presumed to know his own business, and I think we may take it for granted that the contractor was quite satisfied that the cost of moving the earth on the 314 miles would not exceed what it cost on the 114 ; but the gentleman who is supposed to be looking after the interests of this Dominion does not take the ordinary precautions to see whether he ought not to get the work done at a very much less price. What does the hon. gentleman do ? Does he get estimates ? Does

he send his engineer over the 314 miles to report to him what the earthwork is, what the haul is, what the rock blasting is ? Not a bit of it. The hon. gentleman sets the contractor to work even without making a contract. The contractor goes to work upon no other authority. That is absolutely clear from the statements made to this House. After the work is actually going on. the hon. minister brings the matter before council and gets an Order in Council authorizing it. He has not even then the ordinary estimates that would be required by any business man. The hou. gentleman admitted last night that it was only within a week that he had got the estimates, although this work has been going on for some time; and what were the estimates he got ? Did he get from his engineer an estimate of what would be a reasonable price per yard to allow this contractor for earthwork, for stonework, for blasting rock, for all the different elements that enter into the construction of a railway ? Not a bit of it. He simply gets a lump sum estimate from his engineer of what the whole thing would probably cost; that is what he tells us. And what is the contract he enters into ? Having got the lump sum estimate of the probable cost, does he enter into a contract with these gentlemen to do the work for that lump sum or any lump sum 2 No. The hon. gentleman simply tells them to go on at the price per yard at which they were doing the original work. The hon. gentleman has not a scratch of the pen that will enable him to say whether the work is going to cost double the price of the lump sum estimate of his engineer or half of it. And this is what is called a business administration! The hon. gentleman's colleagues support the hon. Minister of Railways, and hon. gentlemen opposite will support him on every occasion that the question is brought up-and they are all, I presume, business men. As a mere matter of business discretion, it seems to me the most outrageous thing ever presented to any assembly of intelligent men. But I am not arguing this matter on the question whether it was a matter of reasonable business discretion on the part of the minister. If it was the most reasonable thing that was ever presented, the minister had no more right to enter into that contract than I had. The Minister of Railways is acting under a statute which defines what he shall do, just as the Minister of Public Works in his department is acting under a statute which defines and limits his authority. But the difference between the two gentlemen is probably this, that the Minister of Railways is above all law. What does he care about statute law or any other ? The hon. gentleman does what he pleases, and he relies on his supporters in parliament to back him up and stand by him, and no doubt they will. Is

that what might be expected from sensible business men. Surely we ought to expect something better than that from a number of gentlemen such as we see opposite to us. Last session their attention was directed to the method in which railway affairs were administered, and I did hope that among a number of business men who sit on the government side of the House there would have been one man with backbone enough to have gone to the Prime Minister or to the Minister of Railways and to have said: 'Sir, this thing must stop; we will not be parties to it.' But apparently lion, gentlemen opposite are a party of invertebrates. Perhaps it is a little too much, in an assembly of this kind, to exjiect hon. gentlemen to stand up in the House, or even in the committee, where their votes are not (recorded, and vote against 'their party; but surely we might have expected that some of these gentlemen would have gone to the ministers in the recess, or in caucus, and told them, ' This thing must come to an end; the reputation, if not of the government, at any rate of the men who sit behind the government, is at stake, and we will not submit to it any longer.'

But this matter goes away beyond that. It is not a question of business discretion at all. The minister lets this contract, he admits, without tender. He does not even ask for a tender. I beg to call the attention of the House to the 11th section of the Act of 1880, which gives the hon. Minister of Railways all the authority he possesses, and that section reads thus :

The minister shall invite tenders by public advertisement for the execution of all works, except, in case of pressing emergency in which delay would be injurious to the public interest, or in which from the nature of the work it can be more expeditiously and economically executed by the officers and servants of the minister.

The hon. gentleman cannot pretend that this work comes within the last exception, because he is not doing the work. He has not made a pretense that there was any emergency in this case which prevented him calling for tenders. It was simply done at the arbitrary will of the Minister of Railways who, in the eyes of hon. gentlemen opposite, is apparently such a success in his department that they are willing to go it blind for everything he does. I can understand that hon. gentlemen facing us may look at the matter somewhat differently from what we do ; but to gentlemen on this side of the House the idea that the Minister of Railways should be allowed to exercise such authority is simply ridiculous. Even if ministers have absolute confidence in their fellow minister, they have no power to confirm this action of his ; they themselves are subject to the law, and while that statute is on the book they have no right to do what has been done. The whole thing from first to last Is absolutely without authority, and I protest against it. As 1 said Mr. BARKER.

before, I do not desire to occupy time at this late hour by dividing the House, but we have heard so much from hon. gentlemen opposite about our not making any objections to such items that I think it is incumbent on this side to protest when we see such a gross avoidance of the provision of parliament has made for the protection of the country.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
LIB

Donald Farquharson

Liberal

Mr. FARQUHARSON.

Having referred to this matter some days ago, I find it necessary now that the opposition have returned again and again to this question, to repeat what I have already said. Considering the circumstances in connection with the road referred to, of which I consider myself in a position to judge, because I know the ground, have known it all my life and have travelled over it many times, I think that the giving of the contract for the balance of the 31 miles to the contractor who had built the other 11J miles, was in the interest of the country. While the letting of contracts after calling for public tender is the principle to which we are all committed and while I think that principle is a good one, there are exceptions to every rule.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

Does the statute allow any exceptionis ? It is imperative.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink
LIB

Donald Farquharson

Liberal

Mr. FARQUHARSON.

I am discussing what was done from the point of view of a business man, and I say that under tbe circumstances the government acted wisely. The first 111 miles had been tendered for and the lowest of five tenders accepted. Mr. Kitchen proved himself a good contractor. He did not belong to our province, but any prejudices we might have had against him on that score were removed by the fact that he showed himself a good man, and an able contractor. To get a good man and a good contractor is a great deal.

Topic:   SUPPLY-CONCURRENCE.
Subtopic:   MAT 14. 1902
Permalink

May 14, 1902