You have forced the Grand Trunk to control the Grand Trunk Pacific, and handling the cash from day to day, it can pay the interest upon the Grand Trunk guarantee, and leave the government guarantee in default.
I know my hon. friend's capacity in railway affairs, and he must know that under section 114 of the Railway Act the first bondholders become co-ad the company's shareholders, for the purpose of electing directors, and as we have three-fourths of the bonds, what becomes of the other one-fourth ?
I doubt very much whether the hon. gentleman has ever seen a case where the first mortgage bondholders were precluded from their remedy, and the second mortgage bondholders were allowed to go on and get a receiver.
Supposing the Grand Trunk Pacific under the dictation of the Grand Trunk Railway used the cash receipts they have in hand to pay the CQupons that the Grand Trunk Company guarantee; there is nothing here to prevent that. The result would be that there would be three years' default on the bonds guaranteed by the government and the government will have to pay the interest and capitalize it.
Before the hon. gentleman (Mr. Barker) sits down, probably he will answer a question I will put to him. Assuming that all the prognostications that have been made should turn out to be correct, and this road prove to be an absolute failure from beginning to end; in what worse position would we be, than if the views of our friends on the other side prevailed and we were to build the road as a government undertaking.
I will answer the hon. gentleman. In a matter of this kind, we have to look at the possibilities both in the case of success and in the case of failure. We all hope that this enterprise will be a success. If it is a success, and if the views expressed from this side of the House should be given effect to, then we would have a road which would be a magnificent asset for the country, and we would be a great deal better off than we will be under this contract. If on the other hand, there is a failure, then we will be practically as badly off as we would be if we were to build the road ourselves. Let me point out that the Minister of Justice has given a very effective answer to the remarks made by the Minister of Customs this afternoon. The Minister of Justice says that the prairie section is so valuable an asset that it will more than offset any disadvantage in building the mountain section, and therefore the proposition as a whole will be a good one for this country to undertake.