May 2, 1904

CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

I never heard of any such provision in a contract before. In case of default the Grand Trunk on its guarantee can take any proceeding it likes, but the government can take no step.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

What effect would that have with respect to us ?

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON
LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

Oh, tell it no\y.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON
LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

And you are evading mine. My hon. friend must not imagine that none of us have read a word of law If he reads section 114 of the Railway Act he will find his answer.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

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.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

In case the second bondholders take proceedings what becomes op the first bondholders ?

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The government will take proceedings specified by this contract, and get an agent, but the Grand Trunk Railway will have a receiver who will be the Grand Trunk under another name.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

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 ?

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

In this contract the Minister of Justice has tied the country up, leaving the other bondholders free td every remedy the law gives them.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

Not at all.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

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.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

The first mortgage bondholders are not precluded. The law protects them.

78J

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

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.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

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.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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CON
LIB
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

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.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

Except, that I do not believe in government ownership.

Topic:   GRAND TRUNK PACIFIC RAILWAY.
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May 2, 1904