August 12, 1903

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Some hon. MEMBERS

Hear, hear.

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The MINISTER OP FINANCE.

My hon. friend the leader of the opposition asked : What penalty was there provided 1 Well, there are all the penalties that there were in the opposition clause. These gentlemen opposite had thought this tiling out, and they did not think penalties were necessary. But in this agreement there are penalties, and my hon. friend (Mr. Borden) who is n lawyer, knows perfectly well that where the company have agreed to do this thing, if they deliberately violated their agreement, or if they evaded it in the way that has been suggested, there would be methods found to compel them to carry it out. My hon. friend could find these methods very readily, and I am sure that he could bring the company to justice. I say that they could be so worried and harassed by legal proceedings for the evasion of that agreement, that it would not pay them to do it, even if we could believe that they were deliberately resolving to break faith with the country. I would like to have my hon. friend (Mr. Borden) employed to punish the company, for I am quite sure that he would find a way to do it.

Now, some comparisons have been made between this contract and the contract made with the Canadian Pacific Railway. I certainly shall not refer to the Canadian Pacific Railway contract with the intention of casting any reproach upon the policy of the previous government, but by way of illustration, I may make some comparisons in order that the public may more clearly understand the nature of the contract we have made. In the first place, it is worth remembering that the contract that was made with the Canadian Pacific Railway Company was not a contract for a transcontinental railway at all. It was a contract for a railway which began about miles from the Atlantic tide water. This is a contract from ocean to ocean ; tliis is a contract which begins at the ocean at Moncton-because, although Moncton is not a deep water port it is an Atlantic port, and the men who start from Moncton on the

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trains will hear the murmurs of the ocean as the Bore comes in from the Bay of Fundy. This, Sir, is an ocean to ocean contract ; a contract for a truly transcontinental railway, and the other was only a contract for part of a transcontinental railway. Let us remember that.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

This is a pro-Boer contract.

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The MINISTER OF FINANCE.

Oh, no. My hon. friend must not cast any reflection upon that Bore of Moncton. It is one of the things which recommend it, and under this contract we will take thousands of people there to see the marvellous waters of the Bay of Fundy.

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Some hon. MEMBERS

Hear, hear.

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The MINSTER OF FINANCE.

Under this contract, let us bear in mind that we are giving nothing like the grants and exemptions that were given in the Canadian Pacific Railway contract. In the Canadian Pacific Railway contract you gave 25,000,000 acres of land, the value of which I shall not enter into now. You gave to the Canadian Pacific Railway Company in cash or by way of completed railways $62,000,000. It is worth while remembering, and it is a very important point, that we are giving no exemptions whatever from taxation to this company. We are not giving them an acre of land except for the purposes of the railway. The Canadian Pacific Railway Company not only got the laud necessary for railway purposes, but great tracts of land were donated to them besides. I am not arguing whether that was wise or unwise, but I am pointing out that under this contract we do not give an acre of land to this company except that we give them - the right of way through any government lands, and also whatever lands that may be necessary for railway purposes. Then the Conservative government gave to the Canadian Pacific Railway exemption of taxation in the way of customs for a large portion of the things they needed for the construction of the road. Fox- many years after the Canadian Pacific Railway was consti-ucted, under the term of ' original construction,' the Canadian Pacific Railway received either free admission of goods at the customs, or they received what was still more, bonuses to compensate them for the goods that were made in Canada. We give no exemption of any sort in this contract. In the case of the Eastern road, the government will build it themselves and it will stand in that x-espect exactly like any other government work. If the government imports materials for the Intei-colonial Railway to-day the government do not go through the form of paying money into the customs house. If the government find it necessai-y to import any materials for the construction of the road from Winnipeg to Moncton, they would, in accordance with

the practice, not go tlirougli the form of entering the goods at the customs house. But, Sir, as this road is to be built by contractors, and the contractors will have to tender for the work, they will receive no exemption whatever. Therefore any man who has anything to 'do with the construc-. tiou of that road, if he imports materials, he will have to pay the duty, and if he buys the goods in Canada the Canadian manufacturer will have the benefit of the duty in so far as that is of any advantage to him. If you could imagine such a thing as the government bulding this road themselves, and if the government were importing materials, they would, as in the case of the Intercolonial Railway, not enter these goods at the customs house. They would be for the government service. But I say that even there we do not, as respects the eastern division, take any advantage of that, because we provide that it shall be built by tender and contract, and the contractors will not have any exemption, bul will have to buy the goods in Canada or else pay the 'duties if they see fit to Import them. When we come to the western division, we deal with the company. They will build the road, and will not have any exemption in any shape or form. They will not be at liberty to import a penny's worth of goods without paying the same duty that is paid by any private individual. The grant in the way of exemption from customs duties in the contract with the Canadian Pacific Railway Company was a vast privilege. 1 do not attempt to compute it in money, but I am sure that it would run into a vast sum. We do not give any exemptions of any sort.

Now, I come to the financial side of this question. We propose to build, by the government, through the intervention of a commission, from Moncton to Quebec, a distance which I have estimated at 400 miles. You will remember that I showed that an air-line, with an ordinary allowance for curvatures, would make a distance 368 miles ; but in order to be on the safe side, I have put it at 400 miles. I am advised by competent authorities that, from the general knowledge possessed of that country, that road can be built at a very moderate cost. Prom Quebec or E6vis to near the point where the railway will leave the province of Quebec it can be built at a comparatively low cost. There is some expensive work in passing from the province of Quebec into the province of New Brunswick, and as you get into the province of New Brunswick, there are some portions which are moderately expensive. But I am informed that you can build a line through that country with maximum grades no less favourable than those on the Intercolonial Railway-though that is not as good a road as my hon. friend from North Norfolk (Mr. Charlton) wants-for $25,000 per mile. On 400 miles that would be $10,000,000.

From Quebec to Winnipeg I estimate the

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Hon. Mr. FIELDING.

distance to be 1,475 miles.. That is a larger mileage than some of my hon. friends have given. I am not trying in these cases to make the mileage small. I am advised by an engineer who has measured the distance, that in putting it at 1,475 miles, I am making a liberal allowance. I put that down at $28,000 per mile, which I am advised is a fair estimate. Remember that in both cases we are speaking of the road only, without equipment. That would make the cost of that section $41,300,000. Taking these two together, we have the estimated cost of the eastern division at $51,300,000.

Now, according to the principle which is laid down in the Railway Act, the interest paid during construction is a part of the capital. Every railway company constructs its road in that way. Therefore any money that we may pay during the course of construction is of course chargeable to the capital account, and the interest thereon is also added to capital. So that when the road is completed, it will represent in capital, not only the actual money which we have put into it, but also the interest wThich has accumulated in the meantime.

Hon. Mr. HAGGART, You have not got the interest during construction separate ?

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The MINISTER OF FINANCE.

The difficulty there, as my hon. friend will see, is that you can hardly tell what amount will be expended in each year. I have had a rough estimate of that made, and it can only be a rough estimate. In the first year, we would spend only a very small sum. After that the expense would increase very rapidly. We would spend $12,000,000 or $13,000,000 a year. Distributing the amounts over the period of construction in that way, I estimate that at the end of the period, instead of the capital of the road standing at $51,300,000, it would stand at $54,609,076. The annual interest on that sum would be $1,638,290.30. We would be out of pocket that interest for seven years. There is another period of three years to be considered during which the company has to pay us interest if the road earns the interest. If the road does not earn the interest, then any deficiency that may arise is an addition to capital account. Although we lose our interest on that portion for the time being, in the ultimate adjustment we get it back in the shape of addition to the capital account on .which the company would pay interest. Therefore what we are out of pocket is just seven years' interest on the amount of the capital as it would stand on the completion of the road.

My hon. friend the Prime Minister in the course of his speech said that we could meet the responsibilities of this contract bv setting aside the present year's surplus which is roundly stated at $13,000,000. Hon. gentlemen opposite have thought that was a rash statement. I am convinced that the figures I shall be able to give to the House

will show that my hon. friend's statement is substantially correct. If at the close of the year, when we are making up the accounts, we lay aside the surplus which will have accrued as stated in the budget speech, and subject to the improvement which we hope will take place in the final adjustment of the - accounts, and if, instead of using that surplus to build railways elsewhere, to reduce our debt, or in the many other ways in which we could use it, we place that $13,000,000 in the hands of financial managers, I hope to show the House that that money would meet every financial responsibility which the government of Canada have assumed under this contract. How is this brought about ? We have to consider not the mere multiplication of interest for seven years. What we have to consider is what use we could make of that $13,000,000. You have to consider the present value, as ascertained by actuarial calculation, of seven years' interest on the money we invest or the guarantee we give. In the case of this sum of $54,609,676, which will represent the capital account of the eastern division at the time of its completion, the annual interest is $1,638,290, and we will be out of pocket that interest for seven years. Now, if you apply to any actuary of repute in the Dominion and ask him what sum of money it will be necessary to provide to-day to meet the seven years' interest as it shall accrue, he will tell you that for the sum of $8,853,502 you can provide for those seven years of interest. That is to say, if, instead of managing our money ourselves, we turned it over to an insurance company or a trust company, or any other company which deals in annuities, and it invested the money on the basis of three per cent interest halfyearly, it would provide for that seven years' interest if we would give them now the sum of $8,853,504. Whether the calculation be right or not, hon. gentlemen can have it submitted to the test of any actuary. What X state is-talking of what we might do with our surplus of to-day-that we might out of that surplus take $8,853,000, and managed in the way I have described, pav our seven years' interest, as it shall accrue from time to time on the construction of the eastern division of this road.

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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

You are leaving out the Quebec bridge.

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The MINISTER OF FINANCE.

I am coming to that. I am speaking of things which are more definite. There is an indefiniteness about the Quebec bridge, but I propose referring to that later on.

The western division is divided into two sections-the prairie section and the mountain section. As respects the prairie section, we assume no obligation whatever, except the guaranteeing of the bonds, but my arguments are based upon the assumption

that the Grand Trunk Pacific Company will' carry out its undertaking, and I think that it has given a sufficient guarantee of its ability and good faith in the large sums it is putting into the enterprise. Assuming that the Grand Trunk Pacific Company fulfils its obligations under the contract, and that we shall only be called upon to do exactly what we have agreed to, we assume no obligation in respect of the prairie section, because the Grand Trunk Pacific Company agree that, from beginning to the end, they will pay the interest oh that section. Then, Sir, we come to the question of the mountain section. Here we meet the difficulty of determining precisely where the mountain section begins. It is necessarily an indefinite point. It is a point where the easy methods of the prairie construction end and the difficult methods of the mountain section begin. That can be only determined later on by the engineer, but from the best information we can receive, it is probable that the easy facilities of construction which are afforded by the Pine River pass will lead to the railway being constructed through that pass. Assuming that the road will go through that pass, we are able to form a correct estimate as to what will be the particular point where the prairie construction would end and the mountain section begin. I am advised that should the road be constructed through the Pine River pass, the mileage on the mountain section will be 480 miles, on which we will provide a guarantee to the extent of 75 per cent on the cost of its construction, but no matter what the road may cost, our guarantee is not to exceed $30,000 per mile. We only guarantee our three-fourth, which may be less than $30,000 per mile ; but if it costs more the company must pay the difference. We do not guarantee at the outside more than $30,000 a mile, and, estimating the length at 4S0 miles, our guarantee cannot exceed $14,400,000. On that sum the interest during seven years is to be paid by the government, and during another period of three years it is dealt with in the way I have already described. All we are under obligation to pay is seven years of that interest. At the expiration of the seven years, the company will pay its own interest, so that we will be out of pocket seven years' interest on the mountain section, or interest on a total of $14,400,000, being 480 miles at $30,000 per mile. We have now to ascertain, by the same process as I applied in the other case, how much money we would need to provide out of our surplus to meet this seven years' interest on the mountain section. I find, by actuarial calculation, obtained from an actuary, that the present value of that is $2,334,575.90. That is to say, if we take $2,334,575.90 and lay it aside now out of our surplus. under the same process as I explained before, that will provide for the payment of seven years' interest on the mountain

section, as that interest shall accrue from year to year.

My hon. friend (Hon. Mr. Haggart) lias referred to the Quebec bridge. At present that bridge is in the hands of a corporation which intends to constitute a bridge and terminal company. They expect that the traffic over it will enable it to pay a fair interest on the capital invested. We have already assisted it to the extent of $1,000,000, and I assume we will have to grant further aid. Whether the Grand Trunk Pacific Company had made a contract or not, whether we ever should build a transcontinental railway or not, the Quebec bridge has become a national undertaking, and in one form or other this government lias to see it through. As to what the government may do later, I am not in a position to say. Whether it would be wise to buy the bridge outright and make it part of the government system, or let the bridge company continue to manage it, will have to be arranged later on. But some part of the cost of that bridge is properly chargeable to the Grand Trunk Pacific Railway. Five or six companies will use it-tlie Intercolonial Railway, Canadian Pacific Railway, the Quebec Central, the Grand Trunk Railway and the Quebec and Lake St. John, and there are other railways the crossings and approaches, will cost it. I understand that the bridge proper, the crossings and approaches, will cost about $4,500,000. My hon. friend from Jacques Cartier (Mr. Monk) makes the cost $5,000,000, so that we are not very far apart. But his estimate would probably include some of the terminal facilities in the city of Quebec, which may be important as part of the general scheme, but are not essential as part of the Grand Trunk Pacific Railway scheme. What proportion of that would be fairly chargeable to this enterprise ? I am going to assume that out of what it may cost we may fairly charge the Grand Trunk Pacific Railway $2,000,000. I think that is a liberal allowance-too liberal in fact. I would not like the Grand Trunk Pacific Company to come and say that we have pledged ourselves to this figure ; but for the purposes of my present argument, we may assume that to be a fair amount. That is to say, that we will be obliged to give to the Grand Trunk Pacific Company, if they demand it, a crossing on that bridge, and that in connection with the general arrangement to provide a crossing $2,000,000 will be the outside obligation which we should charge to this scheme. Our $2,000,000 will stand as part of the cost of the railway upon which the Grand Trunk Pacific Company will ultimately pay interest in the same manner as on any other portion of the railway. For seven years we would be out of pocket the interest on that $2,000,000. Applying the same principle of actuarial calculation, we could provide seven years' interest on that bridge by the sum of $324.-24(1. We have not exhausted our surplus Hon. Mr. FIELDING.

yet. We have only provided some $8,000,000 for one portion and $2,000,000 for another, and there is plenty still left. If we provide further out of our surplus the sum of $324,240, we can make provision for the payment of interest on that $2,000,000 for seven years.

I add these items together. The present, value, by actuarial calculation, of the cost of the seven years' interest on the eastern division is $8,S53.502.47. Seven years' interest on the Quebec bridge represented by the present value, $324,240.65. Seven years' interest guaranteed bonds, mountain section, represented by $2,334,575.90. These sums making a total of $11,512,325.02. Why, we have some millions of a surplus left yet. Well, it was stated to-day in the argument that the eastern road that the government are obliged to build will be very costly. Of course, regarding the mountain section there is no possibility of increase, for our limit of $30,000 per mile is fixed and definite-but as regards the eastern section, whatever it costs we have, to pay, there is no question about that. I have made an estimate of $25,000 per mile for one part, and $28,000 a mile for the other part, which estimate is backed by the reputation of an engineer of standing. But, if we are to have the high grade-perhaps I should say the low grade-road called for by my hon. friend from North Norfolk (Mr. Charlton) perhaps these estimates are not high enough. I am prepared that the millions of a balance should be devoted to the improvement of that road. I propose to add 25 per cent to the first estimate of the cost of construction of the eastern division, and so add 25 per cent to the present value of the seven years' interest of that portion of the road. That is an equivalent to an advance on the cost of from $25,000 per mile to $31,250 per mile for one part, and from $28,000 to $35,000 for the other part. That is a pretty liberal estimate, and ought to build even the fine road called for by my hon. friend from Norfolk.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

Will the hon. gentleman (Hon. Mr. Fielding) allow me a word ?

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The MINISTER OF FINANCE.

Certainly.

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Some hon. MEMBERS

Oh. oh.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

Hon. gentlemen opposite ought to have a little civility and good manners. I merely wished to ask the hon. gentleman a question. He has spoken of estimates. Has he made the estimates out of his own mind, or from some data which he is prepared to lay before the House V

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LIB

Mahlon K. Cowan

Liberal

Mr. COWAN.

A pretty good mind to make them out of.

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The MINISTER OF FINANCE.

No, with all my presumption. I would not venture to make these estimates without proper information from reputable quarters. I did

not make these estimates out of my own mind. They are worth more than if they had been made in that way. Now, I submit these figures for discussion. I think there is no mistake in them. Of course, there is a possibility of mistake, but 1 can say with perfect certainty that they are made in good faith, and made by capable people. Adding all the various sums together-the present value of seven years' interest on the eastern section, first on the basis of 825,000 and $28,000 per mile, which is the way the figures are made up ; seven years' interest on the Quebec bridge represented by its present value; seven years interest on the guaranteed bonds in the mountain section represented by its present value; and then 25 per cent addition for the cost of the eastern section to meet the views of my hon. friend from - North Norfolk, and I reach this conclusion, so far as figures can _prove anything : If we had a surplus of

$13,725,706-and we have it and more-and if, instead of investing that in the various purposes of government, if, instead of doing the various things which the House has authorized, if, instead of reducing the debt of the Dominion as we shall do during the present year-though I do not make any great boast of that-if, instead of applying this money in any of these ways, yofi take that sum and give it to a trust company or insurance company accustomed to dealing with annuities, to invest it at three per cent per annum payable half-yearly, I undertake to say, on the authority of an actuary, that they could pay every cent of obligation we assume under that contract._J

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

Except the redemption of the bonds at the end of the fifty years.

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The MINISTER OF FINANCE.

Of course at the end of fifty years if we pay the bonds we take over the road. But I am dealing with the interest. What we pay is seven years' interest, and that is provided for as I have described. And as a pledge of their good faith in this matter, the Grand Trunk Pacific Railway Company agree, within thirty days of the passing of this Act, to place in the treasury of Canada $5,000,000. When was such a sum ever before offered to the government of Canada as a pledge of good faith ? When the Canadian Pacific Railway contract was made, the company provided $1,000,000, and it was thought to be a large sum. And. so it was. Sir, the Grand Trunk Railway Company multiplies the pledge of the Canadian Pacific Railway by five, and the amount so pledged will be in the treasury of Canada within a month of the passing of this Act.

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CON

Andrew Broder

Conservative (1867-1942)

Mr. BRODER.

Will that be in actual cash or in bonds ?

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The MINISTER OF FINANCE.

It will be in actual cash, or government bonds, as

good as cash. And, while the government holds the money, we will pay the company 3 per cent interest if it is in cash, and if they deposit bonds-they must be government bonds approved by this government, bonds of some recognized government, and not of private corporations-whatever rate of interest they may bear will be paid to the company so long as that deposit remains. That money will remain until the completion of the western division-save and except $5,000,000 worth of final work on the western portion of the road-and also the full equipment of the whole road to the amount of $20,000,000. When they have so far advanced their road that $5,000,000 more will finish it, and when they make a satisfactory arrangement with the government of Canada, then this $5,000,000 that is in the hands of the government will be paid over, from time to' time, as satisfactory evidence is given that the money is being put into the road for the completion of the contract. How could we ask for a better guarantee for the carrying out of a contract of this sort? I believe the announcement of this contract has been a surprise to the country. I believe it has been a surprise, above all, to hon. gentlemen opposite. They are surprised indeed that the government of to-day is able to make a contract with a great railway company like practically the Grand Trunk Railway Company of Canada with its $150,000,000 of assets, to quote again the Conservative paper. Hon. gentlemen opposite are surprised, and no wonder they are surprised when they compare what is being accomplished by this contract with anything ever accomplished before in the history of Canada. The very mention of a transcontinental road is calculated to give persons an idea of a work of great magnitude, and well it may. Even if we had had no experience in the responsibilities involved in such an undertaking, the mere mention of the work brings to our minds the thought of large responsibilities. When we think of the great sums of money paid out before to get part of a transcontinental road compared with what we are paying to-day to get a real transcontinental road from ocean to ocean, it is no wonder that there is surprise in the country. But, Sir, we give them this contract, made in good faith, not with empty promoters, not with people who are irresponsible, but with men who are the most capable railway men in Canada, with men who have given every guarantee of good faith, with men who are prepared to back their undertaking in a manner no company ever did before.

And how .is it received by hon. gentlemen opposite ? I am afraid the tables are to be turned. I am afraid that in the clear light of 1909 these gentlemen are going to make some of the mistakes which may have been excused in the

early dawn of twenty years ago. We have made some comparisons with the contract made with the Canadian Pacific Railway Company. I do not do that with a view of casting reproach upon anybody. No doubt some things occurred in the early history of that great enterprise, before the contract was made with the syndicate, which we ail desire to remember, if at all, only with regret, for they were not creditable to the government, to the parliament, or to the people of Canada. But let that pass. When we come to the actual contract made with the Canadian Pacific Railway Company, I think it will be admitted even to-day that perhaps some mistakes were made. Perhaps there were some mistakes of location, perhaps some mistakes in the land policy, and in the clearer light of to-day we may be able to see that things were done then which had better been left undone. I am disposed to think that perhaps those things may after all have been only incidental to the difficulties of the time and to rapid construction. I for one do not hesitate to say, in the light of experience, that the Liberal party did entertain alarm and anxiety, which have been proved in the end not to have been fully justified. I for one have no disposition unfairly to criticise to-day. I frankly admit, as one who was then a young man, that I was led to entertain alarm and anxiety. To-day I say that the policy of the Conservative party, subject to these qualifications which I have mentioned, has been justified, and in that respect the Conservative party has made a record which they can look back to with pride.

But while there was some excuse for doubt and hesitation in 1871 and 1887 there is none to-day. Are these gentlemen to learn nothing ? We Liberals have learned something by experience. Are these gen. tlemen to be as the Bourbons, who learn nothing and forget nothing ? Are they to take up the role of carping criticism which they complain the Liberals took up in 1881? No, they should not do that. They should go on with us in this great movement, they should remember that the Canada of today is different from the Canada even of 1871 or 1881. In 1871, when the Conservative party made the treaty with British Columbia and accepted the responsibility of building the Canadian Pacific Railway, what was the condition of Canada? In 1871 the population of Canada was 3,517,000; in 1881, when the contract with the syndicate was made, the population was 4,324,000. To-day the population of Canada is put down at 5,500,000. Things which we should hesitate to do in 1871 we can undertake with confidence with the larger resources and in the clearer light we have to-day. In 1871, when they assumed the responsibility of building a railway to British Columbia, the revenue of the country stood at $19,250,000; in 1881, when they made the contract with Hon. Mr. FIELDING.

the syndicate, the revenue stood at $29,500,000. This year the revenue will be $66,500,000. In 1871, when the contract with British Columbia was made, the total trade of Canada whs $170,000,000; in 1881, when the contract with the syndicate was made, the total trade was $203,000,000; in this present year, the year just closed, the total trade of Canada was $467,000,000. In 1871, the bank deposits, including the savings banks of Canada, stood at $62,250,000 ; in 1881, when the contract was made with the syndicate, they stood at $99,500,000.. In 1903, the bank deposits, including the savings banks, stand at $439,000,000. With these statistics^ showing the growth and progress of the country, why should we fear ? Why should not hon. gentlemen opposite feel as confident as we feel in this matter ? I am glad to know that all the Conservatives are not going to take that narrow view which I am afraid some of my hon. friends are being tempted to take. I am glad to know that this policy is going to be supported by the great mass of the Liberal party, and I believe by many Conservatives as well. I have in my hands a public letter from one of the most respected Conservative merchants of the city of Montreal, Mr. Robert Reford, which I ask permission to read. Mr. Reford, a citizen and merchant of Montreal, does not propose to be drawn away by the cry that Montreal is to he side-tracked and not have a branch. He knows that all these branches will come as a natural consequence of the construction of this road. Mr. Reford writes as follows ;-

As a Canadian, hopeful that the Dominion of Canada will one day be the peer of the United States in papulation, prosperity and power, I highly approve of the action of the Dominion government in introducing the Railway Act, whereby the Grand Trunk will be enabled to extend its great system through the unopened portion of our great west, now without a railway, and badly in need of one, opening up fertile farming and rich mineral districts, a new port on the Pacific for promotion of trade with Asia and Australia, and a short and much needed new route to the Atlantic and the important ports of Halifax and St. John, which should greatly benefit them, and give them a summer as well as a winter trade. The Grand Trunk has in1 the past done much for Canada, and that at a time when Canada badly needed it. and was not in a position to do much in the way of railway building for herself. It has not been a bonanza for its shareholders ; the bulk of the original ones, I think, died without seeing a turn of a penny for their investment, consequently I think that the Grand Trunk is well entitled to liberal terms in the present contract. Why the Act should he opposed I am at a loss to understand, seeing that the opening up of such new territories and the investment of so much capital must he for the benefit of the country. It is possible that disappointment may arise in the working, building or earning power of parts of the road, but that is to be expected in such a gigantic enterprise, and should not for a moment be allowed to discourage its projection. Nothing could have been more dis-

couraging than the prospects of the Canadian Pacific at its inception, many well-informed railway people saying that it would never pay for the grease used on the axles of its cars ; and yet that railway now stands almost at the head cf the earning railways of the world. From all reports the Grand Trunk projected railway runs through a much more easily built and possibly richer section of country, and there is little reason to doubt that it will prove as good a paying railway as the Canadian Pacific is, and do much in the development of Canada. Had the Launder government ignored the claims which the Grand Trunk has upon the country, refused1 to listen to them, or unduly delayed the building of this great transcontinental railway, future generations would, X feel sure, have branded them as men unworthy their position as rulers of Canada, and rightly so.

I am sure that that opinion of one of the merchant princes of the city of Montreal, a life-long Conservative, is likely to be only a specimen of the opinions which many of the most broad-minded and enlightened members of the Conservative party will have when they come to study this contract and learn all that is provided in it.

I feel sure that we have reason to submit this contract to the country with the fullest confidence that it will meet with public approval. Some one has said, - Let the country make the railways and the railways will make the country. That is the doctrine we are proposing to carry out now.

I regret that we cannot have in a larger degree the co-operation of hon. gentlemen opposite in it. I regret we have had again to-day, from an acknowledged leader of the Conservative party, a declaration that they will not support any form of subsidies. We have had that from the hon. member for Toronto West (Mr. Osier) two or three years ago in his reply to the budget speech. We have it renewed to-day. Sir, we take issue wiih those hon. gentlemen. There are times when subsidies are proper, there are times when guarantees are proper. In this instance, we have no subsidies to propose, we propose a guarantee. There are other parts of the country in which the Grand Trunk is not prepared to come forward with its great resources and take up railway construction; those sections of the country have claims upon us, and we must be prepared from time to time to deal with every one of those sections on their merits, and even to grant subsidies in proper cases. However that may be, we recognize the position the hon. gentlemen take. We say we are prepared to go before the people to-day with this policy in the fullest confidence that it is a poTicy which has been wisely considered, that its provisions will stand investigation, that the cost to the country is very moderate, and that we firmly believe we will be able to give to the Dominion of Canada one of the greatest achievements in its history.

Topic:   QUESTIONS.
Subtopic:   NATIONAL TRANSCONTINENTAL RAILWAY.
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August 12, 1903