August 3, 1903

CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

In the government Bill there is a class of stock which comes after the government guarantee and which is to be guaranteed by the Grand Trunk Pacific Railway Company. Can they issue this stock in payment of the guarantee for that other stock?

Mr. McCarthy. I should think not.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

You are quite sure that they cannot.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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L-C

Samuel Hughes

Liberal-Conservative

Mr. HUGHES (Victoria).

Get it defined if there is any doubt about it.

Mr. McCarthy. Is there any doubt about it ?

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

This clause has to be considered" in connection with other proposed amendments, one of which has reference to the power of the company to enter into an agreement with the government for the construction and operation of the line. Then there is a provision in the Bill submitted bv the Prime Minister under which the Grand Trunk Railway Company is to acquire the whole of the common stock of this company. Taking this clause in connection with that provision, what is the effect upon the question of the construction of the railway from Moncton to Winnipeg ? Is it the intention of these three provisions to which I have called at-

tention that this stock shall be issued under some arrangement between this company and the Grand Trunk Pacific and that the Grand Trunk Railway Company shall construct that portion of the railway ? Is that not possible ?

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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IND

Leighton Goldie McCarthy

Independent

Mr. MCCARTHY.

I think not, because this section only applies to any payment for ' plant, rolling stock, docks, elevators, wharfs, warehouses, vessels or materials.' All the common stock is to be held by the Grand Trunk Railway Company, so that during the term of the lease for fifty years it is still in the hands of that company.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

Let us see if it can be worked out. We will suppose that the Grand Trunk Pacific Railway Company makes a contract with the government of Canada to construct a line of railway from Moncton to Winnipeg, and sublets that contract to the Grand Trunk Railway Company. I do not know whether that can be done or not. I do not know what the powers of the Grand Trunk Railway Company are in that regard. Under the provisions of this clause this company might allot the whole of the common stock to the Grand Trunk Railway Company as part of the compensation for the construction of that line. I think that is possible.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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IND

Leighton Goldie McCarthy

Independent

Mr. MCCARTHY.

I submit that it is not possible, because under the contract with the government the Grand Trunk Pacific Railway stock of $25,000,000 is to be acquired and held by the Graud Trunk Railway Company ; so that for fifty years the Grand Trunk Pacific Railway will not be at liberty to allot its stock at all .

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

That does not quite answer what I have said. I have said that the Grand Trunk Pacific Railway make a contract with the government to build this line. There is a provision in the Bill for a transcontinental railway that the Grand Trunk Railway Company shall acquire all the stock of the Grand Trunk Pacific Railway Company. Assuming that the Grand Trunk Railway Company has the power under its charter, it could acquire under the provisions of this Bill the $25,000,000 'of stock of the Grand Trunk Pacific Railway in the way I have mentioned. 1 would like to know whether the Grand Trunk Railway Company has power to enter into a contract of that kind ?

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?

The MINISTER OF JUSTICE.

The only difficulty I see as to that is that according to my general knowledge of the Grand Trunk Railway Act, that company has no authority to build a railroad at all. I may say that this section Is similar in terms to section 39 of the General Railway Act.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

This is far wider. This provides that ' as consideration for rights, powers, and privileges acquired ' the company may issue paid up stock. Under

the Bill introduced by the government, it is provided that the Grand Trunk Railway Company shall take stock in the new undertaking to the extent of $25,000,000. I could not understand where the company could get the money to take that stock. This section enables the new company to allot its stock to the Grand Trunk Railway Company as a payment for the guarantee of the transcontinental railway's bonds, or for the purchase of rolling stock for the new line.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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The MINISTER OF JUSTICE.

Will the hon. gentleman be good enough to point out the word V Is it in consideration for rights acquired, for powers acquired, for privileges acquired, that they can get that stock ?

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON
?

The MINISTER OF JUSTICE.

Under whieh of the words could it be done ?

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

In consideration for rights, powers and privileges acquired.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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?

The MINISTER OF JUSTICE.

Which of the words would cover it ?

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

Any of them. A privilege is the endorsing of the bonds by the Grand Trunk Railway.

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The MINISTER OF JUSTICE.

That would not surely be a privilege acquired. How could you call a guarantee given upon tlie second mortgage bonds a privilege acquired by the Grand Trunk Railway ? It would be a liability incurred by the Grand Trunk Railway.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

Surely it is a privilege to the company that gets It.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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The MINISTER OF JUSTICE.

I am sure that if my hon. friend will consider these words iurther, he will change his opinion.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

Would it not be under services rendered ? Under this Act of incorporation the Grand Trunk Pacific Railway may Issue paid up stock for the guarantee received from the Grand Trunk Railway on their second-class securities for the purpose of purchasing rolling stock for the two lines.

Topic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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August 3, 1903