Then on page 55 Mr. Winslow says:
When we had any payment to make prior to my being secretary, money would be paid to Mr. Allen. He would get enough to pay Mr. Barnes on his running account and then pay into his private account and from that check out.
At Page 58:
*Q. Prom his private account and the funds of the company were in his private name in the bank?-A. He would make provision for *anything he knew was coming due by getting the money from the Peoples' Bank. It would be deposited to Mr. Allen's account.
Now Mr. Speaker, I ask the members of this House what they think of the financial business of this company amounting to over $900,000 being transacted upon such a basis as that. And yet the Minister of Public Works would endeavour to make the members of the House believe that there were adequate records and adequate data from which this commission could have arrived at the expenditure of every dollar of the money of the Company. The Minister of Public Works made reference to a statement made by Mr. Shannon, the auditor of the Intercolonial, who went down to investigate the affairs of this company in order to determine the question of the payment of the Federal subsidy.
At Page 476, of the volume entitled Orders in Council and Documents we have a report of Mr. Shannon, and I notice in it this statement:
After the contractors relinquished the work
That was of the 15 mile section from Chipman to Minto which they had undertaken to build for $117,000.
After the contractors relinquished the wo; k, the company requested them to go on and complete the work, and the company would pay the actual cost of the same. To ascertain therefore the actual cost, I requested that I should b9 furnished with all vouchers, cheques, &c., but this I found to be impossible.
That is the statement of Mr. Shannon, auditor of the Intercolonial Eailway, the Mr CROCKET.
same gentleman to whom the Minister of Public Works referred last night as having examined these accounts in detail. Furthermore with reference to the absence of records and books, I wish to quote from the evidence of Mr. G. N. Babbitt, Deputy Receiver General of the province of New Brunswick. There has been issued by the New Brunswick Coal and Railway Company, bonds to the amount of $450,000, all of which were guaranteed by the Provincial Secretary on behalf of his government. Mr. Babbitt was asked whether there was any registration or record of these bonds in his office at Fredericton, he being the deputy receiver general and the one who should have that record. On page 27 I find this evidence:
Q. After this, did you or did you not yourself personally know that the government guaranteed any bonds which bad been issued by the company?-A. Yes, I knew there were orders passed to do it.
Q. In the way of information in your office? -A. The bonds were not brought to the office and recorded.
Q. Did you ever see the bonds yourself at all?-A. No, I never did.
Q. They never came near your office at all? -A. No.
Q. Personally you do not know to whom they were delivered or what became of them ? -A. No.
Q. You say that no registration was made of these bonds in your books?-A. Yes.
What do you think of that way of transacting business by the government of any province in this Dominion? Here was an issue of $450,000 bonds guaranteed by the province and no register or record kept of them in the government office at Fredericton. Furthermore on page 28:
Q. Had any coupons been paid by you as Deputy Receiver General in connection with the bonds which has been guaranteed?-A. Oh, yes.
Q. Have you any idea as to the amount of general coupons you paid?-A. Yes.
Q. About what amount ?-A. The full
Q. What would that be?-A. About $18,000, $9,000 on the half year.
Q. They would be coupons on how many thousand dollars worth of bonds?-A. $450,000 at four per cent.
Q. That is the only way yon know the bonds had actually been issued, was by paying the interest coupon on them?-A. Yes, I might say that.
Q. Yvu said the first coupon-the first conpon was presented for payment in what year? Was all that issue of $450,000 out then?-A. The July coupon, 1905, due July 2, 1905.
So that the Deputy Receiver General actually had no knowledge of the issue of these guaranteed bonds until 1904 after the great bulk of them had been issued and disposed of and had no record of them at Fredericton. Further I want to refer to the evidence of
5781 MAY 6, 1909 5782
the then provincial secretary, Mr. Tweedie, now governor of the province, upon the question of the accounts, page 524: Q As a matter of fact, did you ever look to see if they did keep accounts?-A Yes. Q You found they did not?-A. They did not keep them satisfactorily to me. I raised the devil with them. But he does not seem to have raised any books. We have the evidence of the Minister of Public Works himself upon this question at page 703: Q. Did you ever see an acoount-book of the company showing the moneys received or disbursed by the New Brunswick Coal and Railway Company?-A. No. That was the answer which the Minister of Public Works gave-the gentleman who made the speech yesterday. These hooks will probably be kept by Mr. Winslow, the treasurer of the company, or Mr. Allen, the secretary. Both these gentlemen unfortunately died before this investigation began. Q. I have the only book, so they say?-A. Who says? , , Q. Here is the book and the only book of account except what was kept at Norton, 1 think there are about half a dozen pages in it. I do not see any account at all of this there?-A. I cannot help that. Q. Notwithstanding that you were in the interests of the province, you and the provincial secretary, appointed to see that the provincial moneys were correctly accounted for and expended, you never took pains to see whether the company kept books or not?-A. Mr. Allen was a gentleman of high standing and Mr. Winslow was the treasurer. In view of the evidence I have quoted, hon. members ought to know pretty well what value to attach to a statement made by the Minister of Public Works. All this, I wish lion, members to bear in mind, despite this section ' 2 of the Act of 1901, which authorized the guaranteeing of these bonds. Section 6: The company shall keep such books and accounts as may from time to time be required by the Lieutenant Governor in Council, and such books and accounts shall at all times be open to the inspection of the Lieutenant Governor in Council or such person as he may appoint to inspect and audit the same. And all books and accounts shall be each half year audited by the expert accountant appointed by the Lieutenant Governor in Council, and the expense of such audit shall be borne by the company. Think of the record of evidence such as I have adduced this forenoon, in the face of a statutory provision of that kind. Then I ask hon. members if they take any stock in the statement made| by the Minister o1 Public Works yesterday afternoon that there was no justification for the reflections made upon him. I also dealt in part last evening with the minister's defence to the charge that the government had illegally paid subsidies out of the treasury of New Brunswick and in contravention of the provisions of the Act. I pointed out that under the Act of 1882, there was a subsidy of $3,000 per mile for the line from Chipman to Gibson, a distance of 45 miles, and that the total subsidy was $135,000. Of that line only 15 miles have been built up to the present which, on the basis of $3,000 a mile, would make the maximum subsidy available $45,000. Prior to the appearance on the scene of the New Brunswick Coal and Railway Company, $13,000 of that subsidy had been paid on account of work done on that 15 miles. So that there was payable in subsidies to the New Brunswick Coal and Railway Company, on account of this 15 mile section, under the Act of 1882, but $32,000. Notwithstanding that the government of New Brunswick, on representations made to it by the Minister of Public Works (Mr. Pugsley), paid $57,000, or $25,000 for which there was no authority of any kind in law. I pointed out further that of that $25,000, $2,550 had been paid on orders which were held by the Minister of Public Works and by Mr. W. T. Whitehead, another member of the Liberal machine; in New Brunswick. These orders had been obtained a few days after the contract was entered into between the Central Railway and Mr. de Bertram in the year 1895. Mr. Pugsley obtained his order the very day after that contract was entered into-Mr. Pugsley and Mr. Skinner jointly. In order that there may be no misapprehension, I propose to put on the record these assignments because the Minister of Public Works referred yesterday afternoon to these statements of these assignments to him as something with reference to which there was some error. I shall have to crave the indulgence of the House to put these statements on record. At page 92 of vol. labelled 'orders in council relating to the Central Railway,' we have this document: St. John, October 9, 1895. To the Hon. James Mitchell, Provincial Secretary. Dear Sir,-I hereby request that you pay to ffm, Pugsley and Chas. Skinner, or their order, the sum of $7,500 out of part of the subsidy made payable to me under the agreement dated October 4, 1905, and made between the Central Railway and Her Majesty Queen Victoria, represented by the provincial secretary, and which agreement is for the building of a line from Chipman to the Newcastle coal fields, a distance of 15 miles, so soon as the same may fall due and as it may become payable. And for the purpose of securing such payment to the said Wm. Pugsley and Chas. Skinner, or their order, I hereby, in consideration of the sum of $1 to me paid by them, receipt of which I acknowledge, assign to 1 them, their executors, administrators or as-
signs, the said sum of $7,500, part of said subsidies aforesaid.