March 30, 1909

CON

Herbert Brown Ames

Conservative (1867-1942)

Mr. AMES.

How many partners will we have in this second lien and what would be their interest therein?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I have not the list here; the Canada Atlantic guarantee, I think, is the chief one, but there are one or two others. If the debate should be continued I would endeavour to ascertain more precisely. This mortgage does not rank above these, it merely ranks with them.

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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

That is to say that the settlement between the government and the company is based on these rentals?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

The company have not strongly contended that. They have so stated in conversation to one of our officers, but I am advised that it is a matter of doubt and I do not wish to be positive. The amount is not very large.

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CON

William Sora Middlebro

Conservative (1867-1942)

Mr. MIDDLEBRO.

I noticed in the statute of 1892 that the borrowed capital of the Grand Trunk Railway Company is put at $91,862,737, and that this capital is described as follows:

Four per cent guaranteed stock________$25,402,996

First preference stock 16,644,000

Second preference stock 12,312,666

Third preference stock 34,884,535

Ordinary stock 991913*000

I had a question on the Order Paper the other day with the view of ascertaining which, if any, of these classes- of stock would have preference over this guarantee. Would the minister inform me which, if any, have preference?

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LIB
CON

Herbert Brown Ames

Conservative (1867-1942)

Mr. AMES.

Do I understand that this sum will be available to divide up between ourselves and all the other guarantors on the same basis if it were necessary to secure the interest on these guarantees?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

No, I am advised that the situation is better than that; that all the other guarantees were provided for and that this amount would have been available to pay our guarantee if this proposed legislation had been in operation in any of the years which I have mentioned.

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CON
LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

not rank high, its general credit does stand high. Though, like other railways, it has had a bad year there is every reason to believe that, with the revival of prosperity that we all feel is close at hand, our railway companies, as well as others, will share in that prosperity and that the various securities of the Grand Trunk will occupy a better position. I feel the utmost confidence that in lending our credit to the Grand Trunk and the Grand Trunk Pacific at this moment, we are helping them in a time of need, we are taking an exceedingly Small risk and it is much better in the interest of the country, in the interest of the National Transcontinental Eailway, and in the interest of the credit of Canada, that the government should show their faith in this enterprise and lend them this money, taking their bonds at par, rather than that we should allow these bonds to be thrown on the market and sold at a sacrifice price. Holding these views, the government ask the House to ^ accept this resolution and the Bill which will be founded upon at a later stage.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. E. L. BOEDEN (Halifax).

Mr. Speaker, I thoroughly understand that parliament and the country are committed to this enterprise by the action of parliament in 1903 and 1904 and by the verdict of the people in 1904 when this contract, or the proposition to build this great railway, was submitted to the people of this country. Therefore, I agree that the enterprise must be carried out. Enormous sums have already been expended and it seems to me that the only question to-day before parliament is as to the terms and conditions upon which this enterprise shall be brought to completion, if those who undertook it in the first instance are not prepared to carry it out upon the conditions which were then entered into and which were embodied in two separate agreements and two separate Acts of this parliament.

Before considering that a little I think it would not be amiss that I should refer very briefly indeed to what has transpired since my right hon. friend the Prime Minister (Sir Wilfrid Laurier) came down to this parliament on August 30, 1903, and told us that time would not wait. The enterprise of building a transcontinental railway across this continent is a great enterprise and an enterprise worthy of the people of Canada if conceived in wisdom and carried out with integrity and business ability. But this enterprise seems to have been conceived in haste, moulded for political purposes and conducted with the wildest extravagance and folly. I would not say to-day that every representation made to parliament and to the country by i the government in the initiation of this en- I terprise has been falsified by the events; 1 I could not say that, because in a great | Mr. FIELDING.

many instances the event has not yet happened and thus the promise could not yet be falsified, but to the extent that the event has transpired it would be very difficult for any member supporting the Liberal government to put his finger upon one representation made to parliament and to the people that has been borne out by any event which has so far come about. What was the great burden of the song that the Prime Minister sang to this parliament on the 30th day of August, 1903. He said: There was great

haste; time would not wait; pray heaven it be not too late already. And why all this? Because he saw fit to represent- and I do not think he was patriotic in_ that -that the people of this great Dominion were absolutely at the mercy of the United States in respect to the bonding privilege. Page after page of 'Hansard' is taken up by the right hon. gentleman in picturing the woes and the evils and the disasters that would fall upon the people of Canada if that bonding privilege were repealed, and he declared that in his opinion at least we might any day expect its repeal. Six years have passed and in the interim, as the right hon. gentleman well knows, we have not heard the slightest whisper or word about the repeal of the bonding privilege, and so it is that two-thirds of the speech which the right hon. gentleman then made before this parliament in reference to this matter stands as mere idle wind, designed as an excuse for undertaking this enterprise in such haste and with such want of consideration. _

There was another statement which the right hon. gentleman made in parliament and out of parliament, and that statement was that this railway was designed to open uo and develop the great northern regions of Canada. Let me quote from the recital of the agreement embodied as a schedule to the statute of 1903 and bears date July 29, 1903: ' I will omit the immaterial words:

Whereas it is in the interest of Canada that a line of railway designed to secure the mo it direct and economical interchange of traffic between Eastern Canada and the provinces and territories west of the great lakes, to open up and develop the northern aone of tnq Dominion, to promote the internal and foreign trade of Canada and to develop commerce through Canadian ports, should be constructed and operated as a common railway highway across the Dominion from ocean to ocean.

Observe the expression ' to open up and develop the northern zone of the Dominion.' That idea was developed by the right hon. gentleman all through his speech. He said it was a railway to be built bv way of the Pine river or Peace Eiver Pass to open up the rich prairies in that country. Well, if you look at the maps placed before us you will see that that railway has been built from 100 to 150

or 200 miles south of the location which was pointed out by the rigjht hon. gentleman in his speech to this House. It is not 100 miles or 200 miles south of that location all the way, because of course it was to touch at Winnipeg and at Edmonton,; but how far does it go south of the Peace River Pass and the Pine River Pass, and to what extent does it open up any northern zone of Canada which at that date was not supplied with a railway. I understand of course that it runs through the northern portions of Ontario and Quebec, but that was not what the right hon. gentleman had in mind because he explicitly mentioned the rich prairies of the west which would be found in that northern zone through which the railway was to run. On many occasions did he use expressions both in this House and out of the House which are exactly in line with my contention. He told us that the railway was to touch Winnipeg and once more plunge into new territory; he told us that the railway from its commencement to its end in addition to being a trunk line would open up millions of acres of productive land; he told us that the railway would run north of the Canadian Pacific Railway in Manitoba and the Northwest Territories and the mineral regions of British Columbia; that it would go over the route suggested by the Halifax Board of Trade, (which as I understand was north of Lake Winnipeg); that it would open up our hinterland and give breadth as well as length to Canada, and, that except at the terminal points it would be at least 30 miles away from any existing railway. As reported in 'Hansard" 1903, page 10415, he told us that the Grand Trunk Pacific must be at least 30 miles from any existing railway or from any railways that had been located. But, Mr. Speaker, look at the map of this railway and the maps of the other railways laid upon the table of the House, and you find that for miles and miles the Grand Trunk Pacific runs within a stone's throw of two other great transcontinental railways which were amply assisted by this parliament before this railway was ever thought of or spoken of.

The right hon. gentleman told us there were mountains of information with respect to every matter connected with this National Transcontinental Railway; and, inter alia, he stated that the mountain section would be 600 miles long and would cost $18,000,000. The result is that the mountain section is 836 miles long and his own engineer to-day estimates that it will cost $67,056,000 or nearly $50,000,000 more than the right hon. gentleman told us it would cost. The mountains of information in that respect seem to have been singularly deficient, and I think my right hon.

friend will himself be the first to admit it.

Then again the right hon. gentleman told us:

The surplus for this year (1903) will provide for the construction of this read from Monoton to the Pacifio.

Well, the end of this financial year now approaching sees the debt of this country increased nearly $50,000,000 and the railroad is not one-third completed.

But there were further mountains of information. The right hon. gentleman said:

We can abridge the distance between Monoton and Levis by from 120 to 140 miles.

What is the result? The distance from Moncton to Levis by the Intercolonial Railway is 488 miles and the distance by the Grand Trunk Pacific is now estimated to be 459 miles, or a net saving of 29 miles between Moncton and Levis and the estimated cost is $29,176,420, so that the saving in that distance over the Intercolonial Railway has cost us exactly one million dollars per mile.

Then, my hon. friend the Minister of Finance availed himself of these mountains of information and he said:

The road from Moncton to Quebec would cost $12,569,000, the road from Quebec to Winnipeg would cost $51,625,600; the interest during construction would amount to $7,031,975, making a total of $71,156,975.

My estimate of $75,000,000, without interest, he declared to be excessive by $10,875,000. The result to-day is that the government admits that the railway from Moncton to Winnipeg, including interest, will cost not less than $124,403,000. It must be apparent to the right hon. gentleman, in view of these results as compared with his predictions, how exceedingly valuable were his mountains of information, and how true a prophet he was as to the cost of this railway to the people of Canada. There were some otheT predictions heard and some other criticisms put forward with regard to this road to which I may allude a little later on. For the present I will only say that one need not be surprised in the future it those predictions shall be fulfilled in as great a measure as the predictions to which I have already alluded and certain others to which I propose now to allude. _

My hon. friend the Finance Minister the great financial authority of the government, was not quite content to estimate the cost of the mountain section at the sum of $18,000,000, at which it had been fixed by his leader, but he did fix it in 1904, a year after the Prime Minister's estimate of $18,000,000. He had the experience of nearly a year to guide him to an accurate estimate, and he ffave us on this side of the House, as he said, the benefit of the doubt. My hon.

friend from Hamilton (Mr. Barker) had estimated the cost of the mountain section, including interest, at $56,000 per mile. The Finance Minister assured the House that was excessive. He said he was prepared to accept it under protest, but only under protest. At that estimate he said that the mountain section, 480 miles in length, would cost $26,880,000, or $40,000,000 less than that announced by the government to-day as the present estimate of the government engineers. And that was a pretty relevant statement, because he was basing upon it the amount of money which the people of this country would have to guarantee in respect of that mountain section, and he was also basing upon it his estimate of the amount of money, as interest on that guarantee for seven years, which would be paid by the people of this country without recourse. He estimated at less than $27,000,000 that which he now tells us will cost more than $67,000,000, upon three-fourths of which we shall pay interest for seven years without recourse. And so he assured the parliament and the people of this country that our guarantee on the mountain section would not exceed $21,000,000, yet according to the estimate brought down today, the guarantee which must be given by the people of this country in connection with the mountain section will be at least 150 per cent more than the amount which he named.

In 1903 he told us the same story about the surplus. He said, as reported in ' Hansard ' of that year, at page 8589:

If you had a surplus of $13,735,706, ... if you take that sum and give it to a trust company ... to invest at 3 per cent per annum, payable half-yearly.. they could pay every cent of obligation.

He will not say that to-day; he will not say to-day that double that sum would do it. Mr. Paterson said:

The cost to this country would he about $13,000,000 or $14,000,000. The Finance Minister made a careful actuarial calculation and showed that $13,000,000 or $14,000,000 paid out in instalments for twelve years would pay all the cost.

My hon. friend the member for Brandon (Mr. Sifton) went further than any of then: in this regard. He said that the Finance Minister had absolutely proved it, provided the Grand Trunk Pacific Railway Company and the Grand Trunk Railway Company carried out their agreement. These are his words: i i j

My hon. friend the Finance Minister-and I may perhaps ask that particular attention he given to this phase of the question, because I think it is the most important in the whole discussion-my hon. friend the Minister of Finance took the provisions of this contract in so far as they relate to the financial features and he went over it from end to end.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

He made a close, and a careful and an exact calculation as to the amount of money which we should have *o pay if the Grand Trunk Pacific carries out its contract.

Hon. gentlemen have already observed how close and careful and exact the conclusion of my hon. friend the Finance Minister has proven to be. The hon. member for Brandon, who was then speaking as a member of this government, who was put forward in support of this agreement on every available occasion, and who perhaps made as strong and powerful a defence of the terms of the contract as was made by any hon. gentleman on the treasury benches, continued as follows:

That was the nature of the calculation which was made by the Finance Minister. If the Grand Trunk Company carries out its contract, then there is no escape from the conclusion which was placed before this House by my hon. friend. You cannot get over it by laughing, you cannot meet the argument by jeering at it. There is only one way of meeting the argument that he presented to this House, and that is by showing that that Grand Trunk will not be able to carry out this contract. That is the only way you can meet it. If the Grand Trunk Company carries out its contract then we will have to pay just what the Finance Minister said, not one dollar more and not one dollar less.

My hon. friend the Minister of Railways and Canals (Hon. G. P. Graham) spoke on this subject in 1908. I am quoting from his remarks as found in ' Hansard,' at pages 12673 and 12674; and listen to the difference between the story of 1903 and 1904 and that of 1908. The Minister of Railways and Canals was trying to use the same argument about the net amount of cash which the country would have to pay out. This is the way that hon. gentleman expressed himself in 1908:

The only burden that lies up'on this country for this railway from Moncton to Winnipeg is a total of $26,850,676 of interest that will accumulate during the first seven years of the lease to the Grand Trunk Pacific.

He was speaking, you will observe, not with the whole railway enterprise at all, but simply with that portion which lies between Moncton and Winnipeg. My hon. friend the Minister of Railways and Canals (Mr. Graham) made this further comment and statement:

The increased cost is due chiefly to two reasons : first the greater cost of material and

labour, and second the improved standard of the road.

I have heard a good deal about the improved standard of this road and have been at a little pains to ascertain what the Minister of Finance was speaking about when he made this calculation in 1904. I asked him. as will be found on page 3630 of ' Hansard ':

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Are these estimates for a four-tenth per cent grade?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

They are estimated upon the larger sum of $35,000 per mile for the section from Quebec westward and $31,250 per mile for the section from Quebec to Moncton, ton.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Has the hon. gentleman any report of any engineer which says that the line can be built for that sum with a four-tenth grade?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

No, but I have the statement of a very eminent engineer that the allowance made of 25 per cent above the first figure was a fair and reasonable allowance for that purpose.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Was that the Deputy Minister of Railways?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Yes, Mr. Schreiber.

It appears that the estimate of $35,000 per mile, the Finance Minister arrived at by adding 25 per cent to $28,000 per mile, and the estimate of $31,125 per mile he arrived at by adding 25 per cent to his estimate of $25,000 per mile. I find that these, according to the view of the hon. gentleman at that time, were sufficient to provide for a four-tenth per cent grade. Therefore, my hon. friend the Minister ol Railways, in assuming there is any change, so far as grade is concerned, does not seem to have very carefully examined the statements of his colleague made in 1903-4, and that reason cannot be put forward as a legitimate one for the enormous cost entailed on the people of this country.

We had another representation to the people. The government would not allow the Grand Trunk Railway to part with their title to the $25,000,000 of common stock according to the agreement of 1903.

They said that to do so would be dangerous and that the interests of the country were being safeguarded by a position which made it necessary for the Grand Trunk Railway to hold that stock during the whole term of the lease. It would be absolutely unsafe and dangerous to permit the company to part with that stock because there might be speculation in it. Well, what transpired? The following year the government modified the contract at the request-I might say at the dictation-of the Grand Trunk Railway, and did in 1904 what it had declared to be fatal in 1903.

We were told in 1903 that the bargain was an excellent one for both parties. The Grand Trunk Pacific was behind it and would certainly carry it out. I shall not weary the House with many quotations in that regard but I shall give a few. My hon. friend the Minister of Finance was particularly emphatic. He said, referring to the Grand Trunk Railway :

We have not been content that they shall stand behind it. We have required, and they have readily consented, that they shall be in it and of it and form the whole thing.

But to-day we are met with the modest request that we shall furnish $10,000,000 1131

for the construction of the prairie section, $7,000,000 of which is to go to repay the Grand Trunk Railway for their advances, although that same company is in it and of it and forms the whole thing. Well, one is not startled by the modesty of the request, to say the least. I do not imagine that any non. gentleman m this House will be startled by the modesty of a request such as that, but it is exactly the request which my hon. friend the Minister of Finance is placing before the House in the motion he has submitted to us today. Further on I find him saying:

However, without reviving a previous discussion, I may say that this is what the Act requires, and that they have assured us that they are prepared to do what the Act requires.

The hon. member for Brandon (Mr. Sif-ton) then Minister of the Interior, said:

It was a clear, distinct and unambiguous contract with a responsible company.

The Minister of Agriculture said:

Sir, we make a clear cut proposition embodied in a contract, signed and sealed with a reputable corporation of great, resources which is going ahead with this project as rapidly as possible.

And the then hon. member for North Norfolk (Mr. Charlton) who was put forward to answer the ex-Minister of Railways, Mr. Blair, who had recently resigned his portfolio because he differed with the government regarding its policy in this connection, said:

We have the entire strength, resources and character of the Grant Trunk Railway behind the Grand Trunk Pacific. The two are united together.

And last, but not least, ifiy right hon. friend the Prime Minister, said:

I do not deny that the Grand Trunk Railway is at the bottom of this enterprise. It cannot default on the eastern part, because if it does, it defaults on the western part. It cannot default on one part without defaulting on the whole. Therefore we hold them tight to their bargain, and they cannot deviate from it.

My hon. friend the Minister of Finance (Mr. Fielding) was good enough to tell us to-day that this proposal of his does not in any way alter or interfere with the contract made in 1903, as modified by that of 1904. Does it not? Let us look at it. If the contract of 1903, as modified by that of 1904, were carried out, the Grand Trunk Railway would be obliged to guarantee bonds for the prairie section to an amount which would realize between $20,000,000 and $21,000,000; but after this resolution passes the House, will there be any necessity for the Grand Trunk Railway to guarantee bonds to that amount? Mv hon. friend the Minister of Finance knows very well they will not then be under the "necessity of carrying out that

part of their contract. Therefore, while it does not formally or technically alter the terms of the contract, it does, in fact, and in substance, modify it exactly in the way I have pointed out.

We were told by the Minister of Trade and Commerce (Sir Richard Cartwright), who was in the House at that time, that it was really a good bargain. He said:

I believe a really good bargain may be one which is -to the advantages of both parties. I think that this is notably an instance of this sort.

It was a bargain to the advantage of both parties-that was in 1903. It was still more a bargain to the advantage of the Grand Trunk Pacific and the Grand Trunk Railway after the modification made in 1904. Let us look at those modifications. I shall not refer to those of a minor character but only to the more important. In 1904, the government came back for further amendments, which, among other things, provided for an increase of guarantee on the mounain division so that we should guarantee three-fourths of the cost, no matter what it might be. Our guarantee up to that time had been limited to a cost of $30,000 per mile. They gave to the Grand Trunk Railway, as I have already mentioned, the power to dispose of the common stock, notwithstanding the declared policy of the government in the previous year against any provision of that character; and they extended the time for the building of the road by three years. No very formidable reasons were advanced why these modifications should be made. My right hon. friend did mention, and he devoted a very considerable portion of his speech to matters of this kind-that on June 15, 1671, wild roses had been found blooming at a point 200 miles distant from the location of the road as now fixed. It was also very frankly stated in the House at that time that the Grand Trunk Railway Company would not accept the first agreement and we were therefore obliged to modify it; the Grand Trunk shareholders would not approve the agreement as it was and therefore concessions had to be made. So we ratified the modifications by a vote of the majority of this House and the contract went into effect some time in 1904. We on this side characterized the terms of this agreement as absolutely insufficient to prevent the Grand Trunk Railway Company from carrying its traffic to Portland as it had done in the past. The Prime Minister had said during the debate, I think in 1904:

We cannot undo the past altogether; Portland has been made the winter terminus of the Grand Trunk Railway Company. I do not expect that they are going to abandon what they have.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Later on in the same debate he said:

I have read his (Mr. Borden's) speech carefully, and I must say-it may be my fault, and I shall be glad to be illuminated-if he will explain how, having brought the freight from the west of North Bay, he can send it on to St. John and Halifax, over the Grand Trunk, I will be glad to hear him.

I should think there would be about as much prospect of sending it to St. John and Halifax as there would be after the Grand Trunk Pacific had brought it to Quebec, within striking distance of Portland where all their great interests lay. But I am not so much concerned with arguing out that old matter. I want to emphasize certain remarks delivered by my hon. friend the Minister of Railways and Canals (Mr. Graham) in this House during this very session. He said:

We have, it is true, an understanding and agreement with the Grand Trunk. But the Grand Trunk has its own connections to Portland, and will shortly have connections further east. And while it will live up to its agreement with us, it does^not give the Intercolonial Railway a pound" of freight that it can get out of giving to that road; it gives as much as it can to its own line and carries it to Portland.

It must not be forgotten that the Grand Trunk Railway took good care that it should not be bound by a single one of those provisions which are contained in the agreements of 1903 and 1904. It did not become a party to these contracts. We pointed out then that without infringing one line or one syllable of either of those contracts the Grand Trunk Railway Company could send out, and we believed it would send out, an army of canvassers all through the great west of this country who would take good care that the very great majority of the orders routing freight over this railway would route it so that it would go to Portland and not to St. John and Halifax; and this parliament cannot lay its finger upon the Grand Trunk Railway Company or the Grand Trunk Pacific Company if that is done. When a minister of the Crown, the hon. Minister of Railways and Canals (Mr Graham) has told us very frankly that it is not only the interest but the absolute intention and determination of the Grand Trunk Railway Company to send its traffic to Portland in the future as it has done in the past, can we plume ourselves upon the assurance that in the contracts of 1903 and 1904 we have, after all, any guarantee of that which was placed before parliament as the crux and essence of this enterprise, that the great trade of western Canada should be gathered up and sent to our own maritime ports in eastern Canada. Well, Sir. time will tel] vvho is right and who is wrong; whether hon. gentlemen on the

other side of the House, now sitting on the treasury benches, to the great misfortune of the country, were correct in their predictions or whether we were correct in our criticisms. Time will tell ; no one of us can determine that with absolute accuracy to-day.

Let me refer to the action which this government has taken in carrying out this contract along general lines. The statute of 1903 provided that this road should be built under the management and direction of a commission to be appointed by this government. The government of the United States then or not long afterwards proposed to engage in a great enterprise of its own, the building of the Panama canal. That government took the same course in one respect that this government took, it decided that the Panama canal should be built under the management and control of a commission appointed by the executive of the United States government. Every one knows that the value of a commission, the value of the work it can do, the value of the services it can render to the people of a country, depends almost entirely upon the experience, the character and the ability of the men who constitute that commission. I desire to utter no word against any member of the commission appointed by the government as a citizen of this country, but I am perfectly within my rights as a member of this parliament, in pointing out to the House and to the people of Canada, as I do point out, that not one of those men had the slightest iota or atom of experience in respect to the important work in which they were to engage as a commission. If I desired any work to be performed in the respective spheres in which these gentlemen had been engaged up to the time of their appointment, I might very probably go to one of them. If I had desired advice in respect of a matter of law of the great province of Quebec, I very likely would have gone to the firm of which the chairman of that committee, Mr. Parent, was at one time a member. I am not here for the purpose of casting any discredit unon Mr. Parent, either in his public or professional career;

I am here to point out that, so far as railway construction is concerned, Mr. Parent had absolutely no experience whatever, and the government ought not to have appointed him to be chairman of that commission. If I desired information as to the law of Nova Scotia, or desired a suit to be taken on my behalf by some member of the bar of that province, I might go to my friend Mr. Mclsaac, who is a lawyer and who has had a public career. But every one knows that he had no experience in railway construction, and therefore ought not to have been appointed to the position to which the government

appointed him. If I desired to be instructed in the manufacture of stationery and corsets, I might go to Mr. Reid, who was appointed a member of this commission, but I would not think myself constrained to go to that gentleman for advice in connection with the construction of a railway. And, if I desired information as to the purchase of grain, or in connection with agricultural pursuits, I should, no doubt, get valuable advice and counsel from Mr. Young, who was also appointed a member of that commission, but I have yet to learn that Mr. Young had any important advantages in the way of experience which should have qualified him in the eyes of this government to be a member of that commission.

Well, Mr. Speaker, we all know why these men were appointed. We know that they were not appointed by reason of their experience, but by reason of the partisan service or supposed partisan service that they had rendered to the Liberal party. That goes without saying.

Now, what course did the government of the United States take in a similar matter? My right hon. friend (Sir Wilfrid Laurier), before 1896, was wont to point out the errors and evils of administration in the United States, and the defects of their system of government, and to bewail the fact-he stated it to be a fact- that the methods which had prevailed in the United States were becoming prevalent in this great Dominion of Canada under the wicked rule of a notorious Conservative administration. That was the song the ringht hon. gentleman sang in those days. Well, let us look at the record in the United States as contrasted with the record in Canada, and then let any hon. gentleman in this House, follower of the Liberal party though he be, stand up in his place and say that he is proud of the comparison between what the government of the United States did and what the government of Canada did in this regard. On February 29, 1904, the President of the United States appointed an Isthmian Canal Commission of seven members, who were duly confirmed by the Senate on March 3. The commissioners were John G. Walker, a rear-admiral of the United States navy, on the retired list, who had been at the head of former canal commissions for the purpose of investigation and report; George W. Davis, a major-general of the United States army, on the retired list; William B. Parsons, an eminent civil engineer, of New York; William H. Burr, Professor of Civil Engineering in Columbia University, N.Y.; Benjamin M. Harrod, formerly city and state civil engineer, of New Orleans, Louisiana; Carl E. Grunsky, civil engineer,

of San Francisco, California, and Frank T. Hecker, a civil engineer, of Detroit, Michigan. Rear-Admiral Walker was made chairman of ;the commission, and General Davis was appointed governor of the canal zone. Dominic I. Murphy, of Washington, D.C., was engaged as secretary to the commission, and Charles E. Magoon, an eminent jurist, of Lincoln, Nebraska, as general counsel. Later, the government of the United States, through causes into which I need not enter, found it necessary to reorganize that commission. And they did reorganize it. A new commission was appointed, consisting of Theodore P. Shonts, of Illinois, a civil engineer and railroad president; Charles E. Magoon, of Nebraska, a distinguished jurist, who had been legal counsel to the old commission and, before that, law officer of the Bureau of Insular Affairs of the War Department; John F. Wallace, a civil engineer, who had been chief engineer under the old commission, and who had had much experience in railroad and canal work; Mordecai T. Endicott, a rear-admiral of the United States navy on the retired list, who had been chief of the Bureau of Yards and Docks in the Navy Department, and had been a civil engineer before entering the navy; Peter C. Hains, a brigadier-general of the United States army on the retired list, who had been educated at West Point, had served with distinction in the civil war, and had been identified with many important harbour works and other engineering undertakings of the government; Oswald H. Ernst, a colonel in the United States army, who had been educated aj West Point and had served with distinction in the Engineering Corps, and Benjamin M. Har-rod, of Louisiana, an accomplished civil engineer, who had been a member of the former Canal Commission.

Well, there are the two methods. In the sober judgment of this House, which is the best method in the interest of the people of this country? Can there be any doubt about it? Can any hon. member say, upon his conscience, that the course which this government carried out in the constitution of this commission was really a course in the best interest of the people?

Now, the Grand Trunk Railway Company is here for better terms. That is what it amounts to. It is here practically for a modification of the contract of 1903, which has already been modified, in 1904. We are asked to provide a very large proportion of the financial support necessary for the construction of this western division. I will send across the floor to my hon. friend the Minister of Finance (Hon. Mr. Fielding), Mr. R. L. BORDEN.

a statement that embodies a rough calculation-I do not pretend that it is accurate in every respect-of what the country is contributing and what the Grand Trunk is contributing to the western division.

The country contracts to guarantee the interest upon the prairie section, 916 miles long, at $13,000 a mile, or a total guarantee of $11,908,000. The mountain section, roughly speaking, is estimated to cost $67,000,000. Now, if you should issue bonds bearing 34 per cent, interest at 90, sufficient to afford a sum of $67,000,000, you would find that the total bond issue would amount to $73,000,000. Seventy-five per cent of that which we have undertaken to guarantee would amount to $54,750,000, or a total amount to be guaranteed by the people of this country of $66,658,000. My hon. friend the Minister of Finance will observe that in making an estimate of $13,000 a mile, I have not taken into consideration that the contract provides, as he stated this afternoon, that an amount must be guaranteed which will actually provide $13,000 per mile. I have not taken that into consideration, nor have I taken it into consideration in estimating the amount of the guarantee by the Grand Trunk Railway Company; so that my calculation may require some [DOT] litle modification in that regard, but nothing very material. Well, then, the proposed loan which the Finance Minister now asks the House to. sanction amounts to $10,000,000 and our liability with respect to that is, of course, as great as our liability with respect to any of these guarantees. As a matter of fact, we have less security for it than we would have for the guarantees which have been alluded to. The total therefore in the shape of loans and guarantees would, roughly speaking, be about $76,658,000. Then, in addition to that, we are bound to pay interest without recourse for seven years upon the bonds which we guarantee with respect to the mountain section. The interest on $54,750,000 at 34 per cent for one year amounts to $1,916,250, which amount, multiplied by seven, makes $13,413,750 as our actual cash contribution towards the building of the western division.

Topic:   GRAND TRUNK PACIFIC LOAN.
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March 30, 1909