January 25, 1910

FIRST READINGS.


Bill (No. 118) to incorporate the Burrard Inlet Tunnel and Bridge Company-Mr. Cowan. Bill (No. 119) to incorporate the International Waterways, Canal and Construction Company.-Mr. Conmee. Bill (No. 120) respecting the Royal Guardians.-Mr. Rivet. Bill (No.; 121) to incorporate the Saskatchewan Central Railway Company.-Mr. W. M. Martin.


INTEREST ACT AMENDMENT.


Mr. STAPLES moved for leave to introduce Bill (No. 122) to amend the; Interest Act. He said; The object of this Bill is to make it impossible for a mortgagee, or any person or persons who may have a right to pay off a mortgage, to do so by giving reasonable notice to the mortgagee. It also provides to prevent the 1 mortgagor or mortgagee from tying up the property indefinitely, and therefore to stand in the way of sale. Motion agreed to, and Bill read the first time.


NATIONAL TRANSCONTINENTAL RAILWAY-CLASSIFICATION OF MATERIAL.

LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

The House remembers that under the terms of the Act authorizing the construction of the National Transcontinental Tailwav. it is provided that the portion of the railway from Winnipeg to Moncton is to be constructed by a board of Railway Commissioners under the joint supervision of the chief engineer of the commissioners and the chief engineer of the Grand Trunk Pacific railway. Naturally differences of opinion arose as to the classification of material, between the engineers of the Railway Commissioners and the engineer of the Grand Trunk Pacific. I say naturally, because it would have been extraordinary indeed if in the construction of a road of that magnitude, where there is such a variety of soil, it had not been the subject of some differences of opinion. The Act, however, provided that in case of a difference of opinion, a third person should be appointed as arbitrator. The board of arbitrators therefore was to be composed of the chief engineer of the Transcontinental Railway Commissioners, the chief engineer of the company, and a third arbitrator to be selected by the two, and if they did not agree, by the Chief Justice of the Supreme Court. As there were differences of opinion between the engineers, a third arbitrator was appointed in the person of Mr. Colling-wood Schreiber. After the board of arbitration had proceeded for some time, Mr. Lumsden, the chief engineer of the commissioners, resigned, in a letter which i3 to be found at page 28 of the blue-book which was brought down to the House a few weeks ago. On the 25th of June, Mr. Lumsden addressed the following letter to the commissioners of the Transcontinental railway:

My recent trips over portions of districts ' B ' and ' F ' in connection with the arbitration on points in dispute regarding the classification and overbreak between the chief engineer of the Grand Trunk Pacific Railway Company and myself (which arbitration might have been proceeded with more than eight months ago but for delay on the part of the Grand Trunk Pacific) have led me to the conclusion that neither the general specifications nor my instruction regarding classification have been adhered to, but on the contrary large amounts of material have been

returned as solid rock, which should have heen classified as loose rock or common excavation, and material has been returned as loose rock which was or could have been handled by plowing or scraping, and should have been returned as common excavation. On several residencies there seems to have been no attempt by the engineers to carry out my instructions and measure rock returned, either by showing the same on cross sections, or by measurements of individual pieces, but they simply appear to have guessed at the amount by taking percentage of the total cutting. In some cases where cross sections were prepared showing ledge rock, they proved to be erroneous, resulting in a very much larger amount of the solid rock being returned than actually existed. What is known as overbreak has also been returned in many places where it was caused h.y excessive use iof explosives, and where the material was wasted this should pot have been done. .

Such being the case, I must decline to certify to any further progress estimates in districts ' B ' and r F/ in view of the general disregard of my instructions, and having lost confidence in the engineering staff, I have concluded to resign my position as chief engineer, and have to-day written to the Hon. Minister of Railways and Canals to that effect, inclosing him a copy of this letter.

(Sgd.) HUGH D. LUMSDEN.

And in another letter, written on the following day, Mr. Lumsden says:

Dears Sirs,-Referring to my letter of yesterday wherein I stated that I have lost confidence in the engineering staff, I beg to state that this does not apply to the whole staff, but applies only to a portion of the staff who were responsible for the measurement, classification, supervision and inspection of considerable portions in district ' B ' and east of Rennie Crossing in district ' F' lately gone over by me.

(Sgd.) HUGH D. LUMSDEN.

P.S.-In order to make the matter clear, I may say I assume my resignation as chief engineer also carries with it my resignation as arbitrator in matters of dispute with the Grand Trunk Pacific Railway Company, but as there is a doubt raised by you, I also resign as arbitrator.

(Sgd.) HUGH D. LUMSDEN.

Before proceeding further I 'may say that the vacancy which was caused by the resignation of Mr. Lumsden was filled by the appointment of Mr. Gordon Grant, who has also been acting since as an arbitrator. The arbitration is now going on, the board as constituted being composed of Mr. Grant, Mr. Kelliher, chief engineer of the Grand Trunk Pacific and Mr. Collingwood Schreiber. The House will notice that in the letter of resignation of Mr. Lumsden he states that he has reason to be dissatisfied with the classification which has been made on the road. He thinks that there is a classification to the prejudice of the Sir WILFRID LAURIER.

commissioners and of the government. If this be true, and that is the very thing that is now being investigated by the board of arbitration, the over-classification may have arisen from one of three things. It may have arisen from the negligence of the local engineers in charge, it may have arisen from incompetency on the part of those engineers, or it may have arisen from bad faith on the part of those same engineers. But, whatever was the cause of that over classification, whether it was negligence, incompetence or bad faith, the result is the same so far as it is necessary to ascertain the amount of the over-classification.

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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

As to the local engineers to whom did they owe their appointments?

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LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

To the chief engineer.

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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

Absolutely?

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LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

As I understand the chief engineer was responsible for the appointment of these engineers and they were appointed upon his recommendation. I say this upon the information of my hon. friend the Minister of Railways and Canals (Mr. Graham) who will be able to give further particulars to my hon. friend. I was saying when I was interrupted that at the present time, if there has been over-classification, it is a matter which is now being investigated by the board of arbitration. It matters not whether it was caused by incompetence, negligence or bad faith. The question whether there was or was not over-classification is now underconsideration by the board of arbitration and, therefore, although it is obvious that it is the duty of this House to look into this matter, at the present time, so far as my own judgment goes, there is no cause to put an investigation over the investigation that is now going on. There i3 no occasion to go deeper into the subject to ascertain what is the amount of over-classification. The House will reserve judgment on that point. Later on the House will determine whether it should go further or not, but at this moment we do not think that there is any occasion to put another investigation on top of the investigation that is going on. But, there is one 'thing in which the House is very deeply interested and as to which we are all of the same opinion. It is the fact that Mr. Lumsden positively alleges something akin to bad faith, if not actual bad faith on the part of his staff of engineers. I call the attention of the House especially to this part of his letter:

In view of the general disregard of my instructions, and having lost confidence in the

engineers staff, I have concluded to resign my position as chief engineer.

That is a very broad, a very general statement. -One perhaps might question the judgment of Mr. Lumsden as to whether he was well advised, if he thought there had been bad faith on the part of his engineers, in tendering his resignation. At all events that is the step he took. He qualified his statement to some extent in a letter which he addressed to the commissioners on the following day in these words:

Referring to my letter of yesterday wherein I stated that I have lost confidence in the engineering staff, I beg to state that this does not apply to the whole staff, but applies only to a portion of the staff who, were responsible for the measurement, classification, supervision and inspection of considerable portions in district ' B ' and east of Rennie crossing in district ' F ' lately gone over by me.

In other words, on the 25th June, Mr. Lumsden had stated that he had not been properly served by the whole of his staff, but on the following ' day he qualified his statement by applying it only to those engineers who had gone over portions of district ' B ' and east of Rennie crossing district ' F '. Such was the position on the 30th December when I received from the chairman of the Transcontinental Railway Commission the following letter:

The Commissioners of the Transcontinental Railway, Ottawa.

Office of the Chairman.

Thursday, 30th December, 1909.

Dear Sir Wilfrid,-A printed copy is before me of the return asked for by the House in regard to our former chief engineer's resignation, forming sessional paper No. 42A.

When his retirement became known, it was the signal for a general attack upon the government as well as the commissioners by a section of the press. Comments and inferences were made most unfair to both, and which a lack of information does not justify.

The matter is one to which we cannot remain indifferent, especially in view of a certain statement regarding his staff contained in Mr. Lumeden's letter, pages 28 and 32. His words conveyed a serious, though vague, imputation on which, however, Mr. Lumsden had not seen fit to enlighten us further. Letters passed betwreen the hon. the Minister of Railways and Canals (pages 48, 49 and 50) and myself on this subject.

In another such instance, the charges made by one of our officers were investigated, with the result that they had to be withdrawn.

So far, we have wailed to see whether an inquiry in this case would also take place, inasmuch as Mr. Lumsden held a still more important office.

Now that the House is possessed of these documencs bearing on the question, I would beg leave to ask, on behalf of our commission, that an inquiry be ordered which will enable parliament, the general public and ourselves, to know what reasons, or facts, Mr. Lumsden had to justify his resigning on these grounds.

The commissioners are satisfied that they have always been guided by public interest in the performance of their duties. If the full investigation court should bring out any facts of which they were not aware, or dispel misapprehensions that might have been created by adverse criticisms, they will consider it to have served a useful purpose and their trouble well repaid.

Believe me to be.

Dear Sir Wilfrid,

You rs sincerely,

(Sgd.) S. N. PARENT.

Chairman.

I think the position is fairly put in this letter and that the House is entitled to know and probe the circumstances which led Mr. Lumsden to take the position he did in regard to his staff. Therefore, I beg to move the following motion:

Whereas it appears by a return made to this House during the present session, being Sessional Paper 42A, that Mr. Hugh D. Lumsden, late chief engineer of the National Transcontinental Railway, in a letter dated 25th June, 1909, addressed to the commissioners, resigning his position as such chief engineer, uses the following language: ' In view of the general disregard of my instructions, and having lose confidence in the engineering staff, I have concluded to resign my position as chief engineer '; and in a second letter, dated 26th June, 1909, addressed to the commissioners, the said Hugh D. Lumsden writes as follows:

' Referring to my letter of yesterday, wherein I seated that I have lost confidence in the engineering staff. I beg to state that this does not apply to the whole staff, but applies only to a portion of the staff, who were responsible for the measurement, classification, supervision and inspection of considerable portions in District ' B ' and east of Rennie Crossing, in District ' F,' lately gone over by me.'

And whereas, while this House deems it not desirable to take any action which might prejudice the position of either of the parties to the arbitration proceedings now in progress between the Grand Trunk Pacific railway company and the said commissioners, yet the said recited allegations of said Hugh D. Lumsden, stated by him as the reasons for his resignation of the said position of chief engineer, are in the opinion of this House of such great public interest and involve such grave charges against a portion of the engineering staff of the Transcontinental rail-wray, as to make it desirable that the same should be investigated by a committee of this Rouse;

Therefore, ic is resolved, that a special committee of five members of the House, to be named hereafter, be appointed to investigate the said charges and allegations of the said Hugh D. Lumsden against a portion of the said engineering staff of the said railway; that such committee have power to send for persons.

[DOT]2336

papers and records, to examine persons on oath or affirmation, and to report from cime to time.

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CON

Haughton Lennox

Conservative (1867-1942)

Mr. HAUGHTON LENNOX (South Sim-eoe).

Mr. Speaker, I have listened attentively to the statement of the Prime Minister to ascertain if possible the scope of this investigation, and for some days I have been endeavouring to find, from such records as the government have been good enough to furnish us, whether the resolution introduced by the leader of the government would adequately serve the purpose of giving to he public the infosnation they desire in regard to this railway. I venture to say that this is but a very slight step in the direction of affording the public information. The Prime Minister does not propose, if I understand him correctly, that this investigation shall trench in any way upon the investigation which he says is being made by the three engineers appointed under the Act. The Prime Minister has told us that this investigation is proceeding, and while I understand it may be said to be ' pending ' I am not aware that it is actually proceeding. If I am wrong in that, I would like to be corrected right now.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

In one sense it is, and in a strained sense it is not. It is not proceeding, just as parliament is not proceeding between the hour of adjournment and the next day's sitting.

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L-C

Samuel Hughes

Liberal-Conservative

Mr. HUGHES.

Have they started yet?

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

Yes, and they have only stopped work because they are not able to proceed during the winter months. They will begin again early in the spring.

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CON

Haughton Lennox

Conservative (1867-1942)

Mr. LENNOX.

It is just as I anticipated. For two and a half years we have been following this government from season to season; we have been urging them in the spring and in the summer to get to work with the investigation, and in the autumn when these engineers organize and get ready to work they cannot work because it is impossible to proceed during the winter. The statement of the Prime Minister that this investigation is proceeding is absolutely misleading, because while these gentlemen have been brought together into being as a committee of investigation under the Act, not one step wall be taken by them to proceed with the investigation until next spring.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

I am sure my hon. friend does not wish to make a statement which is not based on fact. They have started and have done some work on the arbitration.

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CON

Haughton Lennox

Conservative (1867-1942)

Mr. LENNOX.

I will be greatly surprised if any return can be brought down by the government showing that they have made Sir WILFRID LAURIER.

any substantial progress in reference to this matter. But, what the country is interested in is, that this inquiry has been tied up since 7th October, 1907, and will be tied up for another six months, and that in the meantime great injury to the public will accrue by reason of this wrong classification- this dishonest classification I am inclined to think, but this wrong classification at all events-being continued to be made and the contractors paid upon progress estimates from time to time. But that is not the only-point; the Prime Minister wants us to understand that he is doing something in the public interest. He wants us to understand that, on his motion he had determined that action should be taken which will result in the public knowing how this matter stands. Now the Prime Minister knows perfectly well that if the instruction which he has given to those who represent the government on this proposed committee is carried out, and it will to the letter, there can be absolutely no investigation under this inquiry. What, are the facts? Mr. Lumsden says:

Neither the general specifications nor my instructions regarding classification have been adhered to but on the contrary large amounts of material have been returned as solid rock which should have been classified as loose rock or common excavation.

He also adds that large quantities of overbreak have been allowed which should not have been allowed, and these are the actual items which are referred under the statute to this arbitration of three experts who are said to be now proceeding with the work. And so we will be confronted with this. It is not a material question whether Mr. Lumsden has lost confidence in the engineering staff; we are not going to have a special committee of this House sitting from week to week to investigate that, when the gist of the whole thing is, not that he has lost confidence, but that he finds that his instructions with regard to classification and overbreak have been disregarded. Therefore, the very essence of the thing, the basic point of the Whole matter, is to ascertain whether or not that over classification has prevailed. Until you ascertain whether as a fact there has been over-classification and whether or not there have been allowances made with regard to overbreak which should not have been made, there can be no judgment come to by the committee as to whether Mr. Lumsden was justified in writing the letter he did. and whether there was a disregard of his instructions which would justify his losing confidence in a certain number of the engineers upon that work. But, Mr. Speaker, the matter narrows itself down a great deal more than that. The country is not concerned, alone, as whether or not there has been over-elassifi-

cation, or too large an allowance upon some other items upon the small section of the road which was investigated by these three engineers at the time to which Mr. Lumsden refers. What the country wants to know, if I understand it, is the methods by which this road has been constructed, the principle upon which it was launched, whether or not, in the original surveys and location, honest methods prevailed, or whether there is need and right to condemn the government, having regard to the enormously increasing cost to which this road is mounting, whether this is to be attributed to ignorance and incompetence on the part of the engineers, to the careless or dishonesty of those in charge of the road, not in an isolated section of 150 miles or so, as referred to in this resolution, but in the 1,800 miles from Moncton to Winnipeg. What the country wants to know is, was the government justified in 1903 in announcing by the Prime Minister and subsequently, in detail figures, by the Minister of Finance, that this road was to cost the country a total of $13,000000?

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?

An hon. MEMBER.

Oh, oh.

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CON

Haughton Lennox

Conservative (1867-1942)

Mr. LENNOX.

My hon. friend may laugh if he likes-a total cost to the country of $13,000,000, whether that mistake was an honest mistake or not, whether it was made with some knowledge of the facts or the government intended at the time to mislead. My hon. friend the judicial gentleman who has laughed, has filled his function very well in that regard, but I want to tell him that we have the statement of the Prime Minister deliberately- made in the House that it would cost $13,000,000 and not one cent more, and it was stated as the heading of the campaign literature on which that hon. gentleman was probably elected, that it would cost $13,000,000, and no more. The members in this House probably did ail mnderstand that the Prime Minister to mean that the total expenditure in the construction' of the road would be $13,000,000, but that it would cost the country, as money they would pay out and not get back, a total of $13,000,000 -yet there is great reason to believe having regard to the subsequent facts and even having regard to the language in which the hon. gentleman employed, that while it was not hoped that it should mislead the house, it was hoped that it would, and it did in fact mislead, and misguide a large section of the electors of this country. The point the people want to know, the point the people ought to know, is whether their money has been squandered or stolen in the construction of this railway or both.

When hon. gentlemen are making election speeches-and no one can make them better than the Finance Minister-I do not wish to tie them down to too narrow a margin, there ought to be some latitude allowed to a gentleman in his position, when he tells the country how much a road will cost, some little margin of 10 per cent or 15 per cent; but when we find that that gentleman told us as a matter of computation and investigation, after having time for inquiry, and after making inquiry, that he came to the conclusion that the total cost would not only not be greater but would actually be less than $13,000,000 and when in 1908 we have the present Minister of Railways and Canals telling the country that upon the same basis of computation and leaving out the Quebec bridge, the eastern division of this railway is actually costing the country $38,000,000 of money which it is never to get back, the public begin to feel that with a Public Accounts Committee stifled and gagged as our Public Accounts Committee is, there should be some method of relief, some method of demonstration to the public, if it can be demonstrated, that the government at the worst have been honestly blundering and have hot been criminally negligent of their duties in re-ggard to the construction of this great public work.

The Finance Minister said on the occasion of the introduction of this Bill on August 12, 1903, speaking of the section from Moncton to Quebec:

I am advised by competent authorities that, from the general knowledge possessed of that country, that road can be built at a very moderate cost. From Quebec or Levis to near the point where the railway will leave the province of Quebec it can be built at a comparatively low cost.

And that comparatively low cost figured out by the Minister of Finance, and he is not a poet, a Finance Minister must be a business man-figured out as he tells us on actual investigation, was a cost for the section from Moncton to Quebec of $25,000 a mile.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

My hon. friend is conveying the impression that I gave, of my own knowledge or information, estimates of the cost of this road. He knows me well enough to know that I would not presume to give information of that character. I gave the statement upon the authority of an eminent engineer and his name was given to the House.

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January 25, 1910