May 17, 1904

LIB

Fletcher Bath Wade

Liberal

Mr. WADE.

All in one solid phalanx. Let us illustrate the difference that exists on the other side of the House. The hon. gentleman who has just taken his seat says that the first proposition made by the Grand Trunk Company was a business proposition-that it was the correct proposition. Six or seven others said the same thing. That proposition was to let the Grand Trunk Company build into the Northwest from North Bay, and so divert the whole of the traffic down over their own system of railway and away to American ports.

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L-C

Samuel Hughes

Liberal-Conservative

Mr. SAM. HUGHES.

The hon. gentleman is in error. I never spoke of that as a business proposition.

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LIB

Fletcher Bath Wade

Liberal

Mr. WADE.

I am not referring to the hon. gentleman. The hon. member for.East Simcoe made this remark a short time ago. The hon. member for East Hastings (Mr. Northrup) said the same thing, and undertook to speak for the whole opposition ; and every member of the opposition in the House at that time applauded him, and it was not until three weeks afterwards that his leader repudiated the statement he made. We have most of these hon. gentlemen declaring that the proper thing to do is to construct a road to North Bay to connect with the Grand Trunk system. And we have the leader of the opposition saying that what he would do would be to extend the Intercolonial into the prairies, and possibly build it to the Pacific coast. They are at variance with one another. If any such unlikely and unheard of thing should happen and these gentlemen come into power, I ask which would prevail ? Would the opposition members from Ontario, with their scheme of lopping off the eastern section entirely and

building from North Bay prevail or would the leader of the opposition prevail with his scheme ? It is a very hard question to answer and one which I shall not for one moment attempt to answer. When lion, gentlemen are going back into ancient history with regard to the maritime provinces I would ask them to look for one moment at what was done by lion, gentlemen opposite when they were in power in connection with this very company. At the time they purchased the RiviSre du Loup branch of the Grand Trunk from Quebec down to Riviere dn Loup and made it part of the Intercolonial in 1879 and 1880, Sir Charles Tupper in this House stated emphatically that under the terms of. that agreement it would be impossible for the Grand Trunk to divert their traffic to Portland, but that the traffic would be carried to Quebec and handed over to the Intercolonial. And yet when we come to examine the agreement there is not a line in it to accomplish such a result. But there is this in the transaction. We have gentlemen complaining that the Grand Trunk have interests in the United States. I would refer them to the agreement made at that time and the legislation which was then carried into effect and they will find that the Grand Trunk was forced by the agreement and legislation to expend a portion of the purchase money received from that road in building and extending the Grand Trunk into the city of Chicago. That is one of the provisions made at that time, and yet these gentlemen find fault because the Grand Trunk Railway has American connections. I did not intend to say a word about this matter but I do not think the debate can be furthered by rash and reckless statements of the character made here. I am standing for the maritime provinces as a part of the Dominion and I intend to stand for them and intend to raise my voice on every occasion I can for that purpose, and when these gentlemen come forward and cast aspersions on the character of the people of the maritime provinces-and this is not the first time it has been done in this House-

Some lion. MEMBERS. Oh, oh.

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LIB

Fletcher Bath Wade

Liberal

Mr. WADE.

Last year it was the people of New Brunswick. We were told that no one there wanted the road but some men who desired to have money spent. That is the character given to the people of New Brunswick. I resent, on the part of the maritime provinces, the statements made here that the only interest the people of the maritime provinces have in this matter is that money shall be spent there. We have a different interest ; we have expectations from this road and expectations which I believe will be realized. We believe that when this road is completed, we will reap some benefit from confederation. We have faith in this scheme, that it will accomplish the object desired, and we believe that our interests should be properly protected.

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LIB
CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

The hon. member for Annapolis (Mr. Wade) as usual in addressing this House has placed us under a deep debt of obligation for the light he has shed upon the question under consideration. I do not think that the House has yet received as clear, explicit and distinct a reason why lion, gentlemen opposite are supporting this Bill as the member for Annapolis has just given. He has pointed out the difference between hon. gentlemen on the other side and hon. gentlemen on this side, and we have earned his withering contempt because we laboured under the delusion that we had the right to think for ourselves, while hon. gentlemen opposite, according to him. have perfect confidence in the judgment of their leaders and are prepared to follow them. There is no member on this side, who last session did not believe that the only reason hon. gentlemen opposite supported this measure was because they had confidence in the right hon. gentleman who had made the bargain and were therefore determined to support him in that bargain whether it was for the good of the country or not. But when we find a gentleman of the legal standing and parliamentary position of the hon. member for Annapolis gravely telling this House that we are bound to accept or reject this contract that is surely hardly an argument to address to a court of law. It is true there is a contract before the House, and that unless this House confirms the contract the contract falls to the ground. That is exactly what took place last year. We were told we had no right to interfere with the contract at all. Tiie contract was made with responsible men and must stand or fall as it was made. Hon. gentlemen opposite, when they found themselves unable to defend particular provisions, took refuge under the excuse : We cannot possibly interfere

in this contract which is made with responsible men. If the House could not interfere the country knows now that the other party to the contract could and did interfere. The contract now before us is an entirely different contract and I would like to ask the hon. member for Annapolis what possible difference there could be if this House changed any part of this contract ?

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LIB

Fletcher Bath Wade

Liberal

Mr. WADE.

The trouble I fear would be that if he changed the contract as I said before, it would be necessary for us to go back to the Grand Trunk and that the arranging of a new contract would cause the waste of another year so that there would be no chance of getting into the west with the "haste that is desired.'

Mr. [DOT]NORTHRUP. There is a contract now which can be carried out after it has been approved of, and if this contract is altered instead of standing for a year all that is necessary is to have a meeting of the Grand Trunk shareholders called which could be done in a very few weeks, and within a month of the time this House rises,

the Grand Trunk shareholders could ratify a new contract and proceedings be taken within two months of this date. When an hon. gentleman of the standing of the hon. member for Annapolis gravely tells this House and the country that if we amend the contract the whole matter was to stand for another year it is more than we are prepared to agree to. The whole reasoning on which the hon. gentlemen opposite are proceeding, as voiced by the hon. member for Annapolis, is that we must have this particular contract. That is what was said last year and we find the result that we would expect in any business transaction where one party says : I must have a contract with

you and with no one else. The other party to the contract is certain to hold up the party who thus admits his weakness and to exact the most rigorous terms possible. We have had from the president of the Grand Trunk, and this was stated by a minister in the House, that the government knew other parties who would build th:s road. I venture to say that if all the government wants is another road into the Northwest they will have no difficulty in getting it built bv'other parties than by the Grand Trunk. He said the Minister of Railways estimated the cost to the mountain section at $35,000 and he is rather inclined to accept the figures of the Minister of Railways.

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LIB
CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

You had information which led you to believe that $40,000 would be about the amount but not exactly the amount. The Minister of Railways said $35,000. The hon. member for Annapolis says $40,000 and yet the hon. member for Annapolis (Mr. Wade) is supporting this clause. Does he not know that the original contract is based on $40,000, because when the government liability was limited to $30,000 that meant that the road would cost prirna facie $40,000. When we find the government charging a liability limited to $30,000 which would allow an expenditure of $40,000 a mile, to an unlimited liability, that is the best evidence in the world that the government do not expect to build this mountain section at a cost of $40,000.

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LIB

William Roche

Liberal

Mr. WM. ROCHE (Halifax).

I do not know what X have done to bring down on my head the withering castigation delivered by that transcontinental statesman the hon. member for Simeoe, (Mr. Bennett). He said my reputation was not known outside my own bailiwick.

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

I meant the hon. gentleman's political reputation.

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LIB

William Roche

Liberal

Mr. WM. ROCHE (Halifax).

The hon. gentleman paid my reputation was not known outside of my own bailiwick. Although I am a very humble member of the community from which I come, I rejoice to say that I possess the confidence of the people of the city in which I was born as

has been demonstrated on repeated occasions. I am happy to say that in my own neighbourhood, where I am known, my reputation stands good, and I hope that the gentleman who assailed me has a similar reputation in his constituency ; and when my reputation becomes so malodorous as he would Imply it is. I will withdraw from the House and my hon. friend may follow my example. The question which I put to him was most pertinent. If there was any meaning in the remark he addressed to the House, they meant that I applauded the proposition to extend the railway to a certain place. The hon. gentleman was inveighing against the conduct of the hon. member for Hants in applauding a certain proposition and then went on to attack the member for Halifax for having applauded it. If we were in the same category, there would be some sense in the argument of the hon. gentleman, but if the proposition were applauded on the one side by the hon. member for Hants and on the other by the hon. leader of the opposition, there was no antagonism and no sense in the attack. The whole thing amounted simply to this, that two members from the maritime provinces, each on a different side of politics, approved of the proposition. But as far as I am concerned, I never applauded any such proposition and I wish to put that statement on record. A very favourite topic with some hon. gentlemen from the rural districts in Ontario- extremely rural-is their pretension that the maritime provinces are ever ready for barter and sale, that all that the people down there look for in any project is what they can make out of it. But, Sir, I protest against any such mercenary motives being imputed to the people of the maritime provinces. They are no more actuated by such motives than are the people of the grandest province in the Dominion. The maritime provinces, on the contrary, set an example in patriotism and every other good quality to the rest of the Dominion. At the time when the province of Ontario was in rebellion against the British government, the little province of Nova Scotia voted the-whole of its revenue to arm its militia to suppress that rebellion-a rebellion which originated not very far from the county of my hon. friend. I hope that now there will be a cessation of these scoffs at the maritime provinces and particularly the province of Nova Scotia, which requires to take no lesson from any other province, either as regards the spirit of her sons or the reputation of her inhabitants ; and if you will take from this House the members representing the mar* itime provinces on both sides, you will find none superior left. I believe that not one mile of this railway will be built in Nova Scotia, so that as regards any pecuniary benefit to be derived from the'building of the railway itself, that province has nothing vain, but of course we expect to reap the incidental advantages and benefits, in pro-

portion to our size and population and our contribution to the Dominion treasury, which will accrue to the country at large. If we support this measure, it is not because we look selfishly to any pecuniary and private benefit as a province, but because it will benefit all parts of the Dominion, and it is with that patriotic purpose and desire that the votes from the maritime provinces on this side will be given to that project. If we support it, it is because we think it will be beneficial to the whole Dominion and for no other reason.

Amendment (Mr. Blain) negatived.

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CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

Before this clause is adopted, I have an amendment to move. The amendment is as follows :

That section 7 of the Bill be amended by adding thereto the following as subsection (3)

(3) That all paid up stock of the Pacific1 [DOT]Company which shall be acquired and taken by the Grand Trunk Company at any time henceforth until the expiration of the term of the lease mentioned in clause 20 of the said last mentioned agreement, or until payment and *discharge of all bonds guaranteed by the Dominion of Canada under the terms of the scheduled agreements shall be pledged and transferred to the Dominion of Canada as security for the due performance and observance by the Pacific Company and by the Grand Trunk Company respectively of all the covenants, undertakings, obligations, conditions and stipulations of the said companies respectively which the Dominion of Canada shall be entitled to have performed and observed under or by virtue of the said scheduled agreements, and the instrument creating such pledge shall contain all such usual provisions as may be necessary to carry into effect the true intent and qpean-ing of the scheduled agreements as modified by the National Transcontinental Railway Act and this Act.

Very few words. Sir, will be necessary to place before the House the views of those who think that the interests of the country will be protected by the adoption of the amendment I have just moved. When my hon. friend the Minister of the Interior (Mr. Sifton) admitted yesterday that the Grand Trunk Pacific Railway itself has no credit and would be unable to borrow any money in the markets of the world, he said what is well known to every one. It is also well known to every member in this House that the only covenants which this country has to secure the performance of the agreement with the Grand Trunk Pacific are the covenants of the Grand Trunk Pacific itself. Beyond its undertaking to guarantee the second mortgage bonds, we have no covenant with the Grand Trunk Railway, so that, although there are many conditions and stipulations in the agreement, there is no way of enforcing them except by such action as it may be necessary to take against a company which the Minister of the Interior himself admits has no credit.

Now, when we look to see if there is any way in which the country mar be secured, Mr. WM. ROCHE.

we find that there is a large amount of stock which is to be issued by the Grand Trunk Pacific. According to the terms of the original agreement this stock was to be held by the Grand Trunk. When the magnates of the Grand Trunk were willing to make a bargain to hold this stock, when the ministers, from the right hon. gentleman (Sir Wilfrid Laurier), who leads the House, down, pointed out to the House that there was great security to the people in the fact that the Grand Trunk was to hold this stock and not put it in the market, it is possible some of the hon. gentlemen opposite may have supported this Bill in consequence ol that understanding. Well, even at that time we on this side contended that the Grand Trunk might acquire this stock without the payment of any' cash, while hon. gentlemen opposite contended that under the original contract it was necessary that the Grand Trunk should pay cash. Now, conditions are altered, and every one admits that the Grand Trunk Is not obliged to pay cash, but that they may obtain this stock in consideration of 'the guarantee they are to give on the second mortgage bonds. If, when the Grand Trunk was supposed to pay cask- and that was the contention of the government last year-the government then thought that it was so reasonable, so proper and so necessary in the interest of the country that the Grand Trunk Company should hold this stock, how much more necessary, how much more reasonable it is that the Grand Trunk, which does not pay a dollar for the stock, but merely obtains it in consideration of giving a guarantee, should hold that stock under pledge for the performance of this contract ? The House has been assured by hon. gentlemen opposite-and we are not prepared to contradict them ; we say we do not know, but we hope they are right-that the western division will be successful. In that case, the liability of the Grand Trunk on these second mortgage bonds will not involve them in the actual cash payment. If the western division is to be a success, so that the Grand Trunk never puts anything more into it than its guarantee of certain bonds, why should it have twenty-five, or thirty, or forty millions of dollars of stock which it can cash the next day, if it suits them ? The country, having so much greater risk than the Grand Trunk, should be protected, and this motion will meet the point that the stock should be security for the country in some form. The House has voted down the suggestion that the country should have stock in proportion to the security given. This is even a less objectionable mode of securing that point. If it was necessary that the Grand Trunk magnates should hold the stock when they were required to pay cash for it. surely in asking that they should not be allowed to part with it when they pay nothing for it. but that the stock

should be held as a guarantee that the stipulations into which the Grand Trunk Pacific enter shall be carried out, we are not asking anything unreasonable. The government seems to think it of great moment that the Grand Trunk should control the policy of this new company. They still insist that the Grand Trunk should control the proxies on the stock, even though they do not own the stock itself. If the Grand Trunk is to control the policy, what objection can there be to saying that the Grand Trunk shall hold the stock as a security to us that the obligations that the Grand Trunk Pacific enter into shall be carefully carried out ? One hon. gentleman on the other side-I think it was the hon. member for Annapolis {Mr. Wade)-says that the Grand Trunk has no other way of making anything out of the contract than by the sale of stock, that they have no other way of recouping themselves if they should be required to pay under the guarantee they put on the bonds. Surely that is not correct. From the very day the Grand Trunk Pacific begins to operate, the Grand Trunk will be in receipt of large gains and emoluments from its operation. When the president of the Grand Trunk was urging his shareholders to enter into this agreement, he pointed out that up. to this time they were obliged to hand their west-going freight over to a foreign corporation and receive nothing for the hauling beyond their own lines, and, in order to maintain their dividends, they must have an extension westward so that the Grand Trunk may have money for carrying freights between the east and the west. If they expect to make money by the freight to be transferred to them by the Grand Trunk Pacific, all the more reason that the people should require that they shall hold the stock as security to the people that the undertakings entered into by the Grand Trunk Pacific shall be carried out. It was said a few minutes ago that if the road had been built as originally contemplated, from North Bay to the west, the Grand Trunk could have diverted freight to Portland instead of sending it out by Canadian ports. Consider what that means. When the Grand Trunk was asking for a charter to build from North Bay to Winnipeg, it was asking for something that we were not bound to grant, but to the granting of which we might attach any conditions we chose. I venture to say it would puzzle any lawyer in this House to point out how it would be possible to bind them under this agreement not to divert traffic to Portland more completely than it would be under a charter authorizing them to build from North Bay westward. We are told that with the carrying out of this contract the freight will go to Quebec. But in what way are you going to compel freight to go to the maritime provinces, or not to go to Portland, that cannot be used now

when the freight is being taken to Montreal ? When you reach Montreal you have a road to Portland. But when you reach Quebec you have a road to Portland. If you can bind the Grand Trunk at all, you can bind them, changing the word Quebec to Montreal. Sir, I do not think you can bind them by any form of words ; and, therefore, I think that such a clause as I am moving is one that should be accepted by hon. gentlemen opposite as one that can be of no injury to the company, but one tending to secure the performance of the covenants that we have no other way of enforcing.

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LIB

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

Liberal

Mr. FITZPATRICK.

This amendment proceeds on the assumption that the stock of the company is absolutely of no value and can be of no use to the company. That matter has been brought up for discussion several times and has been the determining cause of a great number of amendments. So, I think I may be permitted to say, without offence to my hon. friend (Mr. Northrup), that the House is fully informed as to the opinions of both sides on that subject. My hon. friend's position is that this company is created for the purpose of building a road from Winnipeg to Port Simpson and is also authorized to carry on many subsidiary enterprises, and, for carrying out these enterprises it is authorized to issue bonds to an amount barely sufficient to construct the road ; and yet, notwithstanding that, the company is to be deprived of the use of its stock for the purpose .of furnishing equipment, betterments, terminal facilities and the hundred and one things that a company of this kind must have. The true way to dispose of this would be for hon. gentleman to take the position that the company does not require a capital stock at all, and that the House should simply and purely declare that this company shall be restricted to its bond issue and shall have no capital stock at all.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

The hon. gentleman pointed out the other day, I think-it certainly was pointed out on several occasions-that one of the main items towards which the proceeds of this stock was to be applied, and one of the main reasons why the stock should be sold, was terminals. The hon. gentleman is a lawyer, a good lawyer, I believe. As a lawyer he-knows perfectly well that terminals are provided for as part of the cost of construction, and do not need to be provided for in this way. Then, with regard to the other question as to whether we take the position that there was not one copper to be furnished for the purpose of equipment and so on, we do not take that position. We follow entirely the views of a gentleman who was in a position to know the whole case. I refer to the president of the Grand Trunk, who told his shareholders in the city of London that not one copper more than $15,000,000. in round figures, would be required from the

Grand Trunk Railway Company-that their liability rested wholly and solely in their guarantees amounting to the figure I have named. Now, the answer of the Minister of Justice (Mr. Fitzpatrick) has been time and again : We care nothing for what Sir Charles Rivers-Wilson may have said on some other occasion ; we are bound by the contract. I am at a loss to know-up to this moment there is nothing in the contract to indicate how provision is to be made for the matter the hon. gentleman is discussing. If it has been stated, I have not heard it, or both my memory and my understanding must be at fault.

Now, I think, without desiring for a single moment to prolong this discussion, that the hon. gentleman who sits behind the hon. the Minister of Justice has given the explanation of it. It has been given on other occasions by the hon. the Minister of Finance and by the hon. the Minister of Customs (Mr. Paterson) namely, that the Grand Trunk Railway Company have asked that certain changes be made in the original contract with the sanction of parliament. Nothing else can be done. We must accept that, good or bad. I. appeal to you, Mr. Chairman, if this is not a humiliating position in which to place the House of Commons of Canada. Has it come to the time in the history of parliament that members on both sides of the House shall utterly and completely surrender their independence, that they shall lose sight of every duty they owe to themselves as members of this House, and that any corporation can, under any conditions, come to this House and say : You must sanction that and nothing else, no more or less ? It is certainly a very extraordinary position. It is one that I scarcely think comports with the dignity and independence of this House, and one which I am sure will not appeal to those who are not in this House. One hon. gentleman said : We want to prevent delay.

What is the answer to that ? My hon. friend from Bast Hastings (Mr. Northrup) gave the answer. He said : This House may possibly be in session for six weeks yet. Any alterations that are made in the Grand Trunk Pacific agreement, or in the Act affecting that agreement, may be submitted to the Grand Trunk shareholders who may be conveniently called together to ratify these alterations. There is no need of any delay. It is an excuse. The world likes an excuse. I never found a man yet who had not an excuse, but we have found men and aggregations of men even amongst members of parliament who have had an excuse even if it were a bad one. Would any hon. gentleman opposite be bold enough to say that they have not offered this as an excuse ? Could any hon. gentleman imagine anything that could be invented which would be a shadow of justification for hon. gentlemen opposite other than the mere excuse which they have put forward Mr. CLANCY.

on this, occasion ? The amendment of my hon. friend from East Hastings seems to be pertinent in this way : The government

have undertaken large obligations and there is no reason, it seems to me, having that in view, why all the paid up stock which is handed over to the Grand Trunk Railway Company should not be deposited with the government of Canada to be returned at the time at which the obligation ceases. It is a v^i'y fair proposition. I am not going to repeat that the' Grand Trunk people who are concerned in this are as utterly at variance in their contention in reference to this particular point as day is from night.

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CON
LIB
CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

The moment the stock is sold. Surely the hon. gentleman (Mr Heyd) must see that if the .Grand Trunk have acquired the stock it can be sold at once.

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LIB
CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

As soon as they get it. Will my hon. friend point out any clause in the contract that prevents the Grand Trunk Railway Company from selling that $25,000,000 worth of stock when they acquire it ?

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May 17, 1904