March 30, 1909

LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

When the House rose I was endeavouring to point out the great resources of the northern portions of Ontario and Quebec and to show by figures that there were such resources there as would warrant any railway company being projected through that portion of the country and I pointed out further that owing to the fact of the Temiskaming & Northern Ontario Railway having been built great mineral resources had been opened up and that it was impossible to predict whether that with the construction of the National Transcontinental Railway through the northern portions of these two provinces many Cobalts and many Gowgandas would not be discovered.

If this should be so, and no one can deny the fact, surely this country could not have been placed there for no possible good whatever, surely there must be mineral resources hidden in other portions of it, and if these mineral resources are hidden they ought to come out. They will only come out when a railway is put through there, because, as we know, civilization follows the railway and we have to-day, as hon. members of this House are aware, in the Railway Committee, a Bill in which a charter is asked for a railway from a place called Ville Marie, on the border between Ontario and Quebec, northward to connect with the Grand Trunk Pacific. It is only an evidence that people of these northern portions are opening up that country and are willing to go on and invest their capital to build railways and there is no reason why, if that portion of the country turns out to be as highly mineralized as other portions have been found to be there should not be as many railways as there are in the older portions of Ontario and Quebec. These are things that we have to look at. We have to take into consideration the resources of the country and we have to take into consideration the opening up and laying .bare of these resources. I just wish

to say, along these lines, in recalling a precedent in this country of some years ago, undoubtedly within the recollection of many hon. members sitting m this House, that the Canadian Pacific Railway was projected by a* corporation which is now perhaps the greatest corporation in the civilized world. It had its conception and birth in this House of Commons. At the time it was projected and at the time it was partially put through, what happened in so far as what was given to that railway was concerned? There was given to that railway $25,000,000 in cash and millions of acres of land. I have endeavoured to show by figures that in 1903 the resources and production of this country were vastly different from what they were m 1908. How much different were they when the Canadian Pacific Railway was first projected? Then it was that the west was absolutely or practically unknown; then it was that we knew not what we had west of Lake Superior; then it was that west of Lake Superior we had from 20,000 to 30,000 of a population, and then it was that in British Columbia we had a population of whites numbering about 10,000 souls. I pay this tribute to him when I say as a Canadian that Sir John Macdonald was the very personification of that Canadianism that was in him when he stood behind that project. Although it was objected to, not wisely objected to as we know by after events, he stood behind that project, he showed the faith that was in him and the Canadian Pacific Railway has gone on until it has become the very greatest corporation on earth. I say to this country and to the House of Commons, that there is no reason why, with the development that' is taking place in that western country and in those portions of the Dominion that have not yet been exploited, the Grand- Trunk Pacific should not be just as great' a corporation and should not enure just as much to the benefit of Canadians as the Canadian Pacific Railway. That, to my mind, is the way that this project should be looked at. Twenty-five millions in cash and millions of acres of land were given to that great corporation. The Canadian Pacific Railway started and the Canadian Pacific Railway met the same fate as every enormous undertaking must and will meet, I venture to say, for many years to come; aye, practically for all time to come. Estimates were made, estimates were brought down, work went on but the estimates were not complete and what happened?-simply what is happening to-day in the case of the National Transcontinental Railway, although not to such a great extent. The Canadian Pacific Railway found that obstacles, arose; that their estimates had not been sufficient; that they could not complete their work without aid from the Dominion of Canada and they came to this parliament and asked Mr. PARDEE. . .

for a loan of $30,000,000. That was in 1885, and again I say the conditions then, proportionately speaking, were absolutely not to be compared with the conditions that at present exist and have existed for some years past in the Dominion of Canada. Yet, there was no hon. gentleman on the other side of the House that did not rise in his place and say that in so far as that $30,000,000 loan went it should absolutely be given to that railway for the purpose of carrying it to completion. They gave good and cogent reasons for it. They said that the $30,000,000 should be granted, and the $30,000,000 was granted with the result that the great Canadian Pacific Railway was completed and it stands to-day a monument to Canada. What did Sir Charles Tupper, a gentleman whom hon. gentlemen on the other side of the House revere and honour, have to say in so far as the Canadian Pacific loan of $30,000,000 was concerned? Speaking in 1884, as reported in ' Hansard ' of that year, vol. 1, page 105, he made these remarks:

But while they do not ask the House to give them a single additional dollar, they ask us to use the credit of this country, to obtain the means of accomplishing this great national work by the end of 1885, and that without imposing the slightest shadow of a shade of additional burden upon the government, or upon the country for the repayment of every dollar by tho time the contract was to be completed, 1st May, 1891. I say that this is the position in which they are-honourable gentlemen opposite will not controvert the soundness of that position, we should not hesitate a single moment in giving that measure our support.

That is what Sir Charles Tupper said. Then let us see what was said by an hon. gentleman who now sits in this House and who represents the constituency of North Toronto (Mr. Foster), and let me say that the conditions are absolutely on all fours to-day with those which existed in 1884. As reported in ' Hansard/ vol. 1, 1884, page 242, that hon. gentleman said:

Let us suppose that the hon. gentleman who sits in his seat before me, smiling so complacently, should engage a contractor to build his house, that the contractor had started upon the house, that he had made his plans and calculations for raising money, but found when the house was three-fourths completed, that his plans had some how or other not turned out as he anticipated-suppose he came to the hon. gentleman and said, Sir, you see the amount of material I have, the amount of property I possess, I want an advance of money from you, of a loan of so many thousand dollars. I have property good and realizable to the extent of five times the amount, and, if you will give me that loan, I will finish the contraot in two months instead of eight, and I will pay you a percentage on your money as large as you can get elsewhere-would the hon. gentleman be justified in stating to his neighbour that this contrac-

tor was down on his knees before him asking for money? I think not, and I take it that tins is an exactly similar or nearly similar case m point.

There we are. We are asked here, as I submit, _ for a loan on sufficient security. The policy of the government was submitted to the people, the people said build the read as quickly as possible, and, in order to carry out that mandate, this loan is being asked for. The cases are identical Then again what did the hon. member for N.0T,tb^ Toronto say, as reported at page 243 of 'Hansard,' 1884, vol. 1:

What he meant to say was this, that the Conservative party in this railway policy had a record which had gone before the country and that record should not be falsified by their not carrying out, to the very letter, the idea with which they started, and with which they went before the people. What was that policy t The policy of the Liberal Conservative party has been: a railway-a railway on Canadian territory-a railway completed just as quickly as it possibly can be completed.

Agam I say the cases are absolutely on all fours, and we are simply, if it can be put m that way, proving our case out of the hon. gentleman's own mouth.

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CON

George Taylor

Conservative (1867-1942)

Mr. GEO TAYLOR.

Would the hon gen-repTyT kmdIy read what hia leader said in

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

I am not particular] S1?"?, about that. The hon gentlama had better take his medicine as it comes it will do him good.

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CON

George Taylor

Conservative (1867-1942)

Mr. GEORGE TAYLOR.

I was House then and I took my medicine.

in the

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

an ornament to the $30,000,000.

T*3 right; you are the House; you voted for

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Mr GEORGE TAYLOR.

And your leader voted against it.

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

Further on the hon. mem ber for North Toronto (Mr. Foster) said:

Iff have an honourable and honesl right to state that the Conservative party has a policy and a record in this respect, a policy in favour of building this Transcontinental Kadway as soon as it possibly can be built, and that the Conservative party by the vasi majority by which it was returned in 1882 has t*en sent here commissioned to carry out that the.y would fail in their dutv to this House and to the people who sent them here by such a majority, if they did not carry out that idea with all the speed and prompt-noss compatible with safety and security.

Let me quote further from his remarks along the same line because I think they are worthy of being known to the House at this juncture. Speaking of the fact that the proposed legislation to give a loan to the Canadian Pacific Railway had been before the country for a month or so,

hon- member for North Toronto said-( Hansard' page 243, 1884;:

For nearly two weeks that idea has been before the country.

So has this idea been before the country and for more than two weeks.

For nearly two weeks that idea has been before the country,-and yet I challenge the hon. gentleman to point to the record of a single publio meeting which has been called to protest against the proposed action of this government. I say that is proof conclusive that the publio mind has settled down to acquiescence in these proposals. Before his argument can have a feather's weight with the country or this House, the hon. gentleman will have to get up an agitation outside the party press, and show a spontaneous uprising of the people here and there throughout the country in protest against these terms.

And this resolution which to-day has been introduced by the Minister of Finance has been before the country for many days, the terms of it have been perfectly well known, there has been no uprising by the people in any section of the country against it; on the contrary there has been acquiscence in this proposal because the people think today as they did on the 26th day of October last when they gave a mandate to the government to carry the Grand Trunk Pacific t" completion. Again, speaking at page 247 ' Hansard,' the hon. member for North Toronto said :

Then there was a hostile spirit. It was expressed in what way? It was exhibited by hostile combinations of rival roads in the great stock markets of the world. It was shown in hostile articles which were written from this country to American papers, and in telegrams sent from this country to American papers, and in cablegrams sent to the old country. In these and a hundred different ways, the fact is as clear as the sun at noonday that there were hostile combinations, that there was hostility both at home and abroad, and that this hostility must have had, and did have, an effeot on the securities and assets of the company. Sir, is the second contention a reasonable one-that there was a shrinkage of values generally throughout the country, and a demoralization and fall in the value of stooks. Looking ,at these points, I say it is a reasonable contention on the part of the company that they were prevented from realizing many of these assets by the demoralization of the stock market, and shrinkage of values.

Sir, the argument advanced by the member for Toronto then is equally applicable to the conditions to-day. Who will deny that during the past year there has not been shrinkage of values; who will deny there has not been a falling off in the values of stock; who will deny that the English market is not glutted with securities, and who will deny, say, that many hostile influences have not been exercised against the Grand Trunk Pacific. These are things that should be and must be

taken into consideration, and I believe the people will weigh them carefully and endorse the policy of the government as now presented to parliament. Exactly the same arguments can be advanced in favour of this ten million loan to the Grand Trunk Pacific as our Conservative friends advanced in support of the thirty million dollar loan to the Canadian Pacific Railway, and further, Canada is to-day a thousand-fold better able to stand a ten million dollar loan than in those other days she was able to afford a thirty million dollar loan. In view of all this there ought to be no hesitancy whatever on the part of members on both sides of the House in declaring: Here is a great-national undertaking; here is an undertaking which, if we are to take the precedent of the Canadian Pacific Railway, is bound to enure to the benefit of the whole people of Canada; let us carry it to completion, let us crown this great undertaking with success. In view of the surprising growth and the great prosperity of this country there ought to be no caviling at the proposition which the government makes. Here is Canada on the northern half of the North American continent with 50,000 more square miles of territory than the United States possesses, with an energetic and industrious people and a fertile soil, and why need we fear? One hundred years ago the United States of America had about the same population and about the same per capita indebtedness as we have to-day. They had faith in their country; they kept pace with the march of events, and to-day the United States has a population of 80,000,000 and is one of the richest countries on the face of the earth. The people of the United States had faith in their future, and Sir, if we have confidence in our destiny I have not the slightest doubt but that long before the century closes Canada will have 80,000,000 people tilling her fertile soil and developing her unlimited resources. We Canadians are a hardy Tace, we are a vigorous, intellectual people, why should we fear comparison with the people to the south. I say in all sincerity and earnestness that in our broad Dominion we have everything which is calculated to contribute to greatness in a nation, and- why then should we retard our progress, why hang back when every interest calls on us to take a leading rank amongst the greatest nations of the world. Is a paltry ten million dollars distributed over the whole Dominion of Canada to make us wince?

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Some hon. MEMBERS

Oh.

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

Hon. gentlemen opposite may jeer if they wish, but in a few short years their minds will expand and they will then realize the fallacy of their Mr. PARDEE.

policy of to-day. The west calls for development; the west demands that the men of the east should have confidence in its future, and this government is ready to respond to that demand. Not so long since I heard an hon. gentleman who is now sitting not far from me, say that Canada had pushed herself forward into the front rank of nations, that never had a country a better stage setting than ours, that we wrere actors upon that stage, and that our country called on us to play our part well. And if we lift the curtain of the stage on which we are playing we can see the illimitable resources we have in this country, and to what large extent their development depends upon the building of the Grand Trunk Pacific Railway.

You start in the province of New Brunswick; you come up through those magnificent stretches of northern Quebec which may hold untold millions; you go through the northern portion of the province of Ontario, half way to James bay, where you bring into mercantile use those marvellous resources with which Ontario is known to be endowed; you go on to the great province of Manitoba and through to the wheat and cattle country of the western provinces, and on into British Columbia with its magnificent timber, minerals and fisheries. There you have an all-British railway from coast to coast, opening up perhaps things we know not of; and if we show the people of the old world just what we have in the way of rich resources, we may be sure that millions will teem to our shores. Then we shall in very truth be a nation. But I wish to say this, and say it emphatically, that if we would populate this country with millions, we must show to the world at large that we are fit to be nation builders by carrying on great national works such as the one under consideration to-night.

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IND
?

Some hon. MEMBERS

Oh, oh.

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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

The hon. Minister of Railways and Canals may jeer and laugh, but I know Mr. Russell, and there is no better citizen or a man more in touch with the people of Canada than Mr. Joe Russell of East Toronto. I beg to move in amendment:

That the said resolutions be amended by the addition of the following:-

And be it further resolved that in order to-have still further security for its commitments, and to absolutely control and own a national transcontinental railway system, parliament is hereby authorized to purchase the controlling share of the Grand Trunk Company's common stock.

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LIB

James Kirkpatrick Kerr (Speaker of the Senate)

Liberal

Mr. SPEAKER.

I think this should be moved in committee.

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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

In that case it can stand. I want to give the Prime Minister the opportunity of considering whether he will accept it or not.

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CON

William Barton Northrup

Conservative (1867-1942)

Mr. W. B. NORTHRUP (East Hastings).

I had no intention, Mr. Speaker, of taking part in this debate when it began, and my only reason for doing so now, is the extraordinary statement made by the hon. the

Minister of Finance (Mr. Fielding) this afternoon, in proposing this loan of $10,000,000, that Canada already had a first mortgage on the property of the Grand Trunk Pacific. When he made that statement I felt it was due to myself and this House to call attention to the danger we are under of making most extraordinary and improvident loans when a gentleman, occupying the responsible position of Minister of Finance is so little acquainted with the nature of the securities given in return as the hon. minister evidently appears to be. The honesty of the Minister of Finance nobody on this side questions and his sincerity in this matter I do not for a moment doubt, but this statement of his is only an additional proof of the extraordinary amount of misconception, misunderstanding, ignorance or something worse which has been developed from the mountains of information that the right hon. the Prime Minister promised us. From the inception of this scheme down to the present, it has been impossible to find any minister who appears to have had the faintest conception, when addressing this House, of the nature of the transaction he asked us to ratify. When the Bill was first introduced., the Prime Minister took occasion to criticise a remark of Mr. Andrew Carnegie, and gave as one of the reasons for building the road his desire to refute Mr. Carnegie's assertion that Canada was ice-bound because her harbours were sealed during five months of the year. That, said the right hon. gentleman, is not the case, that is not the difficulty, but the trouble is we have no railways to reach our harbours. Ordinary mortals were under the impression that we had a railway running to Halifax and to St. John, and that these were winter ports, yet the right hon. gentleman gave as a reason for our undertaking this extraordinary project, the alleged fact that we had no railways to our harbours in the winter season and that therefore we had to build a railway from the Pacific coast to the town of Moncton. No one had before heard Moncton described as a harbour. Shortly afterwards when we were discussing the various schemes for Taising the money required, the then Minister of Justice (Sir Charles Fitzpatrick), one of the ablest men in Canada, pointed out that, in addition to the moneys required to be raised for ordinary purposes, we would have to borrow money for certain other things and among them the building of the telegraph system for the Grand Trunk Pacific. But one had only to turn over the page to see that the statute provides that in the list of expenditures, allowed as construction expenditure, was the building of telegraph lines, so that the minister's whole argument to justify the raising the large amount required dissolved into thin air. Without enumerating other instances-and many might be given-I Mr. NORTHRUP.

am justified in saying this afternoon that when my hon. friend, the Minister of (Finance, told us that Canada has a first mortgage on the Grand Trunk Pacific as security for our guarantee of its bonds, we are justified in saying that there does not seem to be any great improvement, in one respect at least, in 1909 over the surprising state of affairs that existed on the opposite side in this House in 1903 and 1904.

I suppose there can be no difference of opinion as to what a first mortgage and a second mortgage mean. I take it for granted that every one understands the difference between the two. If one gentleman here had a first mortgage and another had a second on a piece of property and the property was insufficient in value to pay the two, there would be no doubt in the mind of the holder of the second mortgage as to the difference between his security and the other. In ordinary business transactions, a first mortgage has rights paramount to the second. Its holder is at liberty to sell out the property regardless of the interests of the second mortgage and is entitled to be paid a hundred cents on the dollar before the second mortgage can get anything. Is that the case with the security which the Grand Trunk gave the government? When the statute was passed in 1903, it was provided that a first mortgage should be given the government, and I take it for granted that the government received the first mortgage and the Grand Trunk Railway the second. I take it for granted that the government received a first mortgage for the 75 per cent it guaranteed and that the Grand Trunk Railway received a second mortgage for the 25 per cent which it guaranteed. But although that is what was done in 1903, that, and a good many other things, did not stand in 1904. When in 1903, in the debate on the agreement then submitted to the House, point after point was urged against it, which hon. gentlemen opposite were unable to answer, they sheltered themselves behind the statement that the agreement had been duly signed, sealed and delivered and consequently it could not he changed. That answer was taken by hon. gentlemen opposite as a justification for voting down every suggestion made from this side even when they had to admit that it was made in the public interest. But when another session came around, it turned out that although the people of this country were bound by the original agreement, the Grand Trunk Railway were not. They refused to accept this agreement so , solemnly made and executed and came back ' and demanded its revision. And in compliance with their demand, the statute of 1904 was passed, entirely revolutionizing the position of both parties under the agreement of 1903. It would be well, therefore,

for hon. gentlemen opposite to further study the Act of 1904 and see how far the engagements made in the statute of the previous year were altered by it. The first change made in 1904 was a change providing that the government, instead of guaranteeing 75 per cent, were to guarantee sufficient bonds to realize 75 per cent. Then a change was made in the mountain section; and although we are only discussing the prairie section, it is necessary to refer to the change made in the mountain section, because by one clause of the Act, the mountain section is so incorporated with the prairie section as to make them for certain purposes one and the same. By clause 32 of the statute of 1903, the government was to pay the interest on the mountain section of the bonds to the extent of 75 per cent for seven years. The next three years the company was to pay the interest; but if it was unable, it could, at the end of the ten years, capitalize the interest and give bonds for the amount running over forty years. Then after this period of ten years the company was to begin to pay interest. When this Act was passed in 1903, the government had the first mortgage and the Grand Trunk Railway the second. But when we look to the Act of 1904, we find these extraordinary provisions:

Notwithstanding anything in the said contract contained, the government shall not exercise any rights in respect of possession, foreclosure, or sale by reason of non-payment of interest by the company under the thirty-first

that is one that relates to the prairie section.

thirty-second

that is one that relates to the mountain section.

or thirty-third

that is one that deals with the bonds after the expiry of ten years.

paragraphs of the said contract or under all or any of them, unless and until there shall be suoh default to the extent in the whole sum equal to five years of such interest, as the company is not relieved from payment of or permitted to defer or capitalize by the provisions of the said paragraphs.

So, we find that, for the first seven years, they are not bound to pay the interest; for the next three years they can pay or capitalize as they choose; at the end of ten years, the payment of interest is to begin. But the government is not allowed to take a single step to enforce the payment of interest until after five years more have elapsed. So, here you have two mortgages, a first and a second. But the rights of the first mortgagee are held up for fifteen years, during which time he is absolutely helpless, while the second mortgagee has the right to exercise 114

any powers he enjoys under his mortgage. Will any man tell me that if one person holds a first mortgage and another holds a second mortgage, and the one holding the the first mortgage has no standing for the enforcement of his claim until after the end of fifteen years while the second mortgagee can sue or put in a receiver, the first mortgage is better than the second? But that is not all, for, when the government can at last move, after the expiry of fifteen years, what can they do? Clause 7 provides for this. Let ns see what they can do:

In case of such default being made by the company in respect of the interest of the said bonds so guaranteed by the government as would, under the provisions of the said contract as amended hereby, entitle the government to take possession of the said western division, or to foreclose or sell the same, the remedy of the government shall, notwithstanding anything in the said contract contained, be the taking possession thereof by and through an avent or manager to be appointed as hereinafter provided, whose powers and duties shall be to manage and operate the said western division, to receive all the tolls and revenues thereof, to pay thereout working expenses as defined by the Railway Act, 1903, including the expenses of suoh management or agenov, and to distribute the surplus tolls and revenues, after payment of such working expenditures, pari passu between the government or other holders of the bonds secured as provided by paragraph 35 (a) of the said contract and guaranteed by the government and the holder of the bonds secured as provided by paragraph 35 (b) of the said contract and guaranteed by the Grand Trunk Railway Company, in the proportion of seventy-five per centum of such surplus tolls or revenues to the holders of the former issue of bonds and t wen tv-five per centum to the holders of the latter issue.

And though the government had guaranteed 75 per cent and the Grand Trunk 25 per cent, it has to wait fifteen years before it can claim this right of sharing pari passu with the other. Now, would any business man, except the Minister of Finance, .ever dream for a moment of saying that that was, in fact or in law, a first mortgage? The holder of this so-called first mortgage is tied hand and foot, while not the slightest obstacle is placed in the way of the second mortgagee. So there is nothing to prevent the agent operating the Grand Trunk Pacific -and it would not be too much to assume that he would not be painfully hostile to the Grand Trunk-paying every dollar he could rake and scrape on the bonds guaranteed by the Grand Trunk. It may be that the Grand Trunk Pacific will have paid off seventy-five or ninety per cent of the bonds due to'the Grand Trunk, then, when the receiver came in and paid these pari passu with those of the government, in a year or two all the Grand Trunk bondholders would have received all their money and the government bondholders practically nothing. Therefore, it is not accurate to say that the

government of Canada holds a first mortgage to secure the seventy-five per cent that we are bound here to guarantee.

A great deal has been said, and especially by the last speaker, concerning the loan made by this country to the Canadian Pacific Railway years ago, and an effort is made to withdraw a similitude between that case and this as proving the propriety of this transaction. Before I go into that to show the nature of the Canadian Pacific Railway transaction, let me show what the Grand Trunk Pacific offers to-day. It comes to this House and to the people of this country, through the government, and asks for a loan of $10,000,000. It does not ask this as a right. True, it is sometimes said that the faith of Canada is pledged to this contract, and where the faith of Canada is pledged we must make good-no man on the other side of the House will subscribe to that view more readily than I. But is the faith of Canada pledged? We know that the government not only declined to increase the amount, but they limited it to $13,000 on the pTairie section and to a certain other amount on the mountain section. They have carried out their part of the contract. The Grand Trunk Pacific come now and ask for a loan of $10,000,000. On what security? They offer their own bond. From the statement placed in our hands by the Minister of Finance I gather that they have $5,200 altogether paid for stock. My hon. leader (Mr. R. L Borden) said it was $200,000. But, looking at page 16 of the statement brought down by the Minister of Finance, taking this list of subscribers, the largest of them $400, and I make out that $5,200 in cash has been contributed by the owners of this great company to build a transcontinental line. With that cash capital at their back, the Grand Trunk Pacific comes and asks for a loan on their own bonds. But something more-they offer the guarantee of the Grand Trunk Railway Company of Canada. As my leader pointed out, we heard a great deal five years ago about the marvellous advantage to this country of having the Grand Trunk in and over, through, under and around this great undertaking. Ajnd now it all comes down to this-that they will give their guarantee to back the guarantee of the road which, as I understand, has $5,200 of stock paid up. What is the position of the Grand Trunk ? I see by the statement of the Minister of Finance that it has advanced $7,000,000 to this company. If the Grand Trunk has advanced $7,000,000 and we are to pay it back, consider the impudence of the Grand Trunk Pacific, egged on and led on by the Grand Trunk, asking us to advance $10,000,000 more, in order to give the Grand Trunk which owes us between $30,000,000 and $40,-Mr. NORTHRUP.

000,000, a return of this, sum of $7,000,000. Is there any greater height of impudence than this? If the Grand Trunk ever had $7,000,000-and I hope I may be excused for being somewhat sceptical on that point -why does not the government take steps to collect some of this $30,000,000 or $40,000,000? Why not begin, for instance, by collecting the paltry $21,000 owed by the Grand Trunk in relation to a railway in my own riding to which I called attention a year or two ago? The government, knowing perfectly well that the Grand Trunk Railway improperly, dishonestly, obtained $21,000 of the money of the people of this country, in a position to sue and make them refund the money, sat there and did nothing. Even since the knowledge came to them that the Grand Trunk had $7,000,000 in its coffers to lend to other corporations the government have done nothing. What are we to expect of this government, if it should be in power a couple of years hence, if default is made on this $lu,000,000. How can they be expected to collect $10,000,000 from their lord and master when they will not even collect $21,000? I do not know the facts, but I saw a statement in the press that the Canadian Pacific Railway had lent the government $5,000,000, that is that they had bought debentures to that amount. If that be true it is certainly extraordinary that our government, who we know have not $10,000,000 in their strong box, should go to the Canadian Pacific Railway and borrow $5,000,000 in order that they might give it to their old friend the Grand Trunk Railway.

As I said, comparisons have been drawn between the bargain made by a former government with the Canadian Pacific Railway and the bargain now proposed to be made by this government with the Grand Trunk Pacific. What did the old Conservative government get as security for their loan? They had a railway to which they had given an immense amount of constructed railroad costing some $30,000,000, they had given 25,000,000 acres of land, and $25,000,000 to the Canadian Pacific Railway and a railway over 1,100 miles in length was in operation. The Canadian Pacific Railway came to the government and asked for a loan of $30,000,000. They offered-

As security for the repayment of the said loan, with interest as aforesaid, and as additional seourity for the payment of the said sum of seven million three hundred and eighty thousand nine hundred and twelve dollars and interest falling due on the seventh day of November, one thousand eight hundred and eighty-eight, the government shall have a first lien and charge,

that is what the Conservative government got in those days

upon the entire property of the company, real and personal, now owned or hereafter to be acquired or owned by them,

Every dollar's worth of property to be acquired by the expenditure of the $30,000,000 to be borrowed was to become the property of the government by way of securityincluding their main line of railway, the extensions thereof, their branch lines of railway, the whole of their equipment, rolling 6took and plant and all their steamers and vessels, and also upon the land grant of the company, earned and to be hereafter earned; saving always, however, the rights of the holders of the existing mortgages on the extensions of the line of the railway from Callander to Brookville and Montreal.

With these exceptions everything the Canadian Pacific Railway had and were thereafter to acquire would, if the country would put up the $25,000,000, be given as security to the government. But more than that let us turn to clause 8:

Until the payment in full of the indebtedness of the company to the government with interest, all moneys earned and to be earned by the company as postal subsidy and for transport service shall be retained by the government and shall be applied first on account of the interest to become due from time to time upon the indebtedness aforesaid hereby authorized, and then to the payment of the principal.

Thus it will be seen that at that time ample security was given by the Canadian Pacific Railway when it asked for a loan of $30,000,000.

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?

An hon. MEMBER.

And the directors

gave security.

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CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

I have heard it stated that the directors gave a personal guarantee but I have no knowledge of that and do not wish to speak of anything which I cannot affirm with a fair degree of accuracy.

In view of this difference in the position of the two companies it seems to me that we ought to lay aside all this high fallutin' comparison between things that in no way resemble each other and try to get down to business. What is the use of telling us that the crops in the west require to be moved, that they are rotting on the ground, and will be lost if this railway is not completed very shortly, when we all know the reason for the non-completion of the railway before this time was that the government interfered and would not allow the Grand Trunk to build the road where they wished to! If there is to be any blame, if there has been any suffering, any loss to the country through the crops not being moved, let the supporters of the government lay the blame where it rightly rests, on the government who, when the Grand Trunk Railway Company applied for a charter to build from North Bay to the Pacific coast, compelled 114}

them to change the eastern terminus. I was rather amused when the last speaker, after quoting the Canadian Pacific Railway loan as a parallel instance and an unanswerable argument in favour of this loan, referred to the Temiskaming & Northern Ontario Railway which he claimed to be another parallel case. What are the facts in regard to the Temiskaming Railway? It is rather odd but the Temiskaming & Northern Ontario Railway starts from North Bay where the Grand Trunk wanted to start the Grand Trunk Pacific, and to have the cases parallel the Grand Trunk Pacific should have been built from North Bay on to the Pacific coast and should not have been diverted to Quebec.

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LIB

Onésiphore Ernest Talbot

Liberal

Mr. TALBOT.

Were they not relieved of that obligation to build from North Bay to Winnipeg?

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CON

William Barton Northrup

Conservative (1867-1942)

Mr. NORTHRUP.

Certainly, to their great regret and to the loss of the country, at the request of my hon. friends opposite. If the Ontario government had followed the plan of this administration in the construction of the Temiskaming & Northern Ontario Railway, they would have started to build it from Toronto. They would have built it through the constituencies at any cost. But no, they started to build from North Bay, going only where they had a reason for going. Had they any reason for going where they did? The last gentleman who spoke (Mr. Pardee) said that Mr. Ross never signed a contract until the surveys had been made. When the surveys had been made and the wealth of minerals and timber had become known to every member of the legislature, and with the full understanding that the objective point was James bay to give an outlet to Hudson bay, picking up enough timber and minerals in the intervening country to make the road pay, and after ample surveys, the government stepped in and constructed the road. No one can compare that with the hop, skip and jump course of this government in 1903. We all remember that we came here led by the advertisement in the 'Canada Gazette' to believe that we were to be asked to give assent to the construction of a road from North Bay to the Pacific ocean. When that application came before the committee, it was changed, at some one's request, to an application to build to Quebec. We all remember Sir Charles Rivers Wilson and Mr. Hays appearing before that committee with the government supporting them in the desire to build a great trunk line of railway from Quebec to Winnipeg,-and the hon. member for Belle-chasse (Mr. Talbot) was one of the most obstinate opponents of the original suggestion to build from North Bay to the west.

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LIB

James Conmee

Liberal

Mr. CONMEE.

Does the hon. member now argue that it would have been better

in the interests of this country if that road was built from North Bay instead of where it is to be built?

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March 30, 1909