March 24, 1914

PRIVATE BILLS.

FIRST READINGS.


Bill No. 121, for the relief of Eliza Jane McLaughlin.-Mr. McCraney. Bill No. 123, to incorporate the Atlin Railway Company.-Mr. Michael Clark.


RAILWAYS AND CANALS-MINISTERIAL STATEMENT.


On the motion of Hon. W. T. White (Minister of Finance) for Committee of Supply: Hon. J. D. REID (acting Minister of Railways and Canals). Mr. Speaker, when you leave the Chair and the House is in Committee of Supply, it is my intention to ask the committee to take up the Estimates of the Railways and Canals Department. It has been the custom for many years before you leave the FOair. Sir, that a statement of the workings of this department should be given to the House. I am very sorry indeed that, owing to ill-health, Hon. Mr. Cochrane, Minister of Railways and Canals, is no t able to be present himself and give the statement that I am submitting to day. However, I hope the House will bear with me for the short time that I shall occupy it in trying to explain matters in as full and plain a manner as possible. This department, as hon. gentlemen know, consists of two branches-the railways branch, and the canals branch. I shall first deal for a few minutes with the canals. Canal-s. The canal system of Canada, comprises the following: iSault Ste. Marie canal. Welland canal. St. Lawrence canals (extending from Prescott to Montreal). Chambly canal (in Quebec). St. Peters canal (in Nova Scotia). Rideau canal. Trent canal. Carillon and Grenville canal. With the exception of the St. Peters canal, the Welland and the Trent, there has been no special construction work going on on any of the canals during the past fiscal year. Only the necessary annual repairs and improvements have been made. On the St. Peters canal we are building the lock anew. Very little has been spent on it during the past year but it will be proceeded with now and completed at the earliest possible moment. Members of this House will remember that during the last session an amount was placed in the Estimates for the purpose of starting the construction of what is commonly known as the new Welland ship canal. It was explained at that time that



a new canal, or practically a new canal, would be built between lake Erie and lake Ontario. It was also explained that designs and plans were being prepared for the purpose of letting contracts for this work. Four contracts have been let, for sections 1, 2, 3 and 5. These four sections were let first because they are tlie heaviest parts of the whole work. They will take the longest time to complete, and it was considered necessary to have them started at the earliest possible moment.. Tenders were called for for those four sections, and I am pleased to say that the tenders received in e8.ch case were lower than those estimated by our engineers who have charge of this great work. Based on the tenders received the four sections are estimated to cost $20,150,000, or several millions less than had been estimated. There is another section, known as No. 8, for which tenders will be called in a short time. This is the last of the heavier work and the remaining contracts will not be let for some little tifne, as they will ^take a much shorter time to complete and it is not thought advisable to have that part of the work under construction until the present works are very riiuch advanced, so that the whole work may be brought to completion at about the same time. It was estimated by our engineers in charge of this work, before any tenders were called, that the whole when completed would cost $50,000,000. If the contracts yet to be let continue within the estimates to the same extent as those already dealt with, this amount will be materially reduced. The contractors are busy on the sections already let. They have steam shovels, drags and dredges .employed and will expedite the work as much as possible. I shall be glad to give further details when we are in Supply. Every member of this House knows that the work on the Trent canal has been under way a great many years. Amounts have been voted .annually and the work proceeded with in accordance with the amount so voted by Parliament. The great difficulty in connection with this canal up to the present time was that there was no way of getting into the canal from lake Ontario, or the Georgian bay end of it, but I am glad to be able to inform the House that it is expected we will have an entrance from lake Ontario into the Trent canal by the end of the coming fiscal year. The western end, from Georgian bay to lake Simcoe, is divided into four sections. One section, known as the Severn river, has been let to The York Construction Company, and for section No. 2 tenders are now being ealled. The remaining sections will be let in the near future, and the whole work will be proceeded with as fast as possible. When these last mentioned sections are let, the whole system from lake Ontario to Georgian bay will be under contract or completed. The work to be done will be pushed forward as fast as possible, and the time is not far distant when the whole canal will be under operation. I have no doubt that when the [DOT]work is completed and traffic moving without interruption between lake Ontario and the Georgian bay ports it will be a great service to the country through which it passes, not only as to freight transportation, but from a passenger standpoint, as from information I have the Trent waterway is bound to become one of the tourist attractions of Canada. It is not considered that it will be a very heavy freight route, because the depth of the canal is not very great and it is not intended for large boats. On this canal there are a great many water powers which have been developed, and will be a great benefit to the country. Before leaving the question of the canals perhaps it might be of interest to members of this House to know what traffic there has been on the canals during the last fiscal year and how it compares with 'that of previous years. I would submit, therefore, the following statement: As compared with 1912 there was an advance of 4,466,688 tons, or 9.4 per cent, in the volume of freight tonnage. For 1913 the aggregate of freight transported was 52,053,913 tons, distributed among the various canals as follows: Sault Ste. Marie. Welland St. Lawrence. .. Cliambly St. Peters .. .. Murray Ottawa Rideau Trent St. Andrews.. .. Total In- De- Tons. crease. crease. 42,699,324 3,029,669 3,570,714 718,799 4,302,427 825,239 555,602 62,813 71,514 3,295 180,576 10,495 365.43S ' 26,912 171,223 11,090 55,800 21,350 81,295 14,254 52,053,913 4,595,292 128,624 When the Trent and Welland canals are completed it is expected that the traffic through the- canals to our seaboard will very materially increase. Not only will



it very materially increase, but rates should also very materially decrease, thus resulting in a great benefit to the people of Canada. Turning from the consideration of the canals, I desire to take up for a few minutes the railway end of the department. Government Railways. I desire first to deal briefly with the Intercolonial railway. It is usual to give a statement regarding the operating of this railway. Since my entrance to this House in the year 1891 I have heard many discussions in so far as the Intercolonial railway is concerned. Different ministers have tried in different ways to manage the system with a view to giving the very best public service at the least possible cost to the people. As is generally known by hon. gentlemen on both sides of the House, the system of management of the Canadian Government railways has been changed from a board of management to a general manager, and in that respect we are simply reverting to the former and simpler system of direct responsibility. Prior to the appointing of the general manager all questions 'had to come before the board. You can quite understand, with the chairman living at Ottawa and the board meeting only once a month, and sometimes not for two months, that questions of importance could not be settled promptly. With a general manager all questions come before him and he has authority to deal promptly with all matters which formerly came before the board. This, in my opinion, is of very great advantage to those who do business with a railway, and is also appreciated by employees who have occasion to approach the management. Then, under the general manager, there is a general superintendent, who is head of the transportation and maintenance departments. Under him there is a general master mechanic, a divisional car foreman, divisional engineer, car service agents and four superintendents. The four superintendents in turn have under them the assistant superintendents whose duties are similar to those of train masters. They also have resident engineers, district master mechanics, road masters, and bridge and building masters; so that the superintendent in charge of his own district and the general superintendent is in charge of the railway so far as transportation and maintenance is concerned, but the latter has no jurisdiction over the engineering, loco-1241 motive, car, fuel or tie and timber departments. I may say that for some time previous to the retirement of the board of management the old Government and the board had 'been considering, not only the advisability but the necessity of increasing the freight and passenger rates. The board of management had already decided on an increased tariff for all freight commodities, and just previous to their retiring from their positions as the board of management they put into force this increase of freight rates that had been agreed upon. I mention this fact for the reason that many people in the lower provinces are under the impression that these increased rates had been first thought of and decided upon and put into effect by the present management. Sometime before that the coal companies of the lower provinces, who had been supplying coal to the Intercolonial for many years, advanced their prices on coal. They advanced them sufficiently to compel an increased expenditure of about $350,000 for fuel. In addition, a grievance among the employees of the road had been developing for some months before the change of management. A demand had been made.that an increase in wages should be given to several classes of employees. This matter had been taken up and dealt with by Mr. Gutelius and I am glad to say that, after meeting representatives of the different brotherhoods and classes of employees, a decision was arrived at which was agreeable to all parties concerned. I may say, however, for the information of the House, that the increases granted and which were necessary to be granted to put the employees on the same basis as employees on other railways throughout Canada-and I believe they should be in that position-necessitated an increase, so far as the operating expenses were concerned,'of $325,000 per annum. It is estimated that the receipts for the year ending March 31, 1914, on revenue account will amount to, say $12,632,973.17, and the estimated expenditure will be about $12,328,000, leaving a net surplus for the current fiscal year of about $300,000, which will be transferred to 'Renewal of Equipment Account.' I might explain for the benefit of the members of the House, as I daresay there are many who do not understand the statement that it is proposed to transfer this to the ' renewal of equipment account,' that a system was adopted some years ago whereby


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any profits that accrued on the Intercolonial were to be retained by the railway by being transferred to a special account called ** equipment renewal account,' and the .moneys so transferred to this account would not be deposited to the Consolidated Revenue Fund, but would be used for the purpose of purchasing new equipment to replace the old light engines and cars now on the Intercolonial which otherwise would have to be paid for out of Capital Account. During the present year we have been able so far to transfer to Equipment Renewal Account 1300,000, also to Rail Renewal Account $150,000, and to Fire Renewal Account $60,000, or a total of $510,000; and, as I have stated, the present fiscal year will show a surplus of $300,000, which is less, of course, than the surplus of last year. But, as I stated a few minutes ago, while there has only been a surplus of $300,000, much less than it was last year, there has been an increased cost in operating expenses for the first eight months, from April to November, as follows: Cost in wages due to increase in schedule and salaries $247,000 Ties, in excess of those placed in the track during the previous year .. 29,000 Rails, increased expenditure 8,000 Fuel 307,000 Increased cost of material as compared with previous year for the repairs to rolling stock 86,000 Increase for Intercolonial Railway Company car repairs on foreign lines, as compared with previous years 64,000 Increase in pensions 9,000 Increase in ballasting.. .. , 33,000 Or a total of $783,000 I have a statement here showing the *work done in so far as repairs are concerned : 1913. 1912. In- Decrease. crease.Locomotives . . . . 173 144 29Freight cars.. . . 19,208 17,364 2,844Passenger cars . . 472 492 20 The following statistical information may be of interest in accounting for increased expenditure as well as for increased earnings during the year 1913: Tons (revenue) and passengers moved April 1 to November 30: Passengers. Freight tons. 1913 2,880,517 3,657,2061912 2,650,954 3,446,235Increase .. ' 229,563 210,971 Tons (revenue) and passengers moved one mile: Passengers. Freight tons. 1913 159,843,276 970,395,2531912 139,488,845 878,133,125Increase . . 20,354,431 92,262,126 Tons (all freight) moved one mile: 1913 . . . . :. 990,766,818 1912 895,617,272 Increase .. 95,149,546 Locomotive mileage: Passengers. Freight. 1913 2,355,268 4,869,8791912 2,134,409 4,573,114Increase . . 220,859 296,765 I remember that in previous years Ministers of Railways and Canals submitted other information with reference to the Intercolonial, and, as it may foe of interest to the members of the House who are not thoroughly informed as to the condition of the Intercolonial railway, I give, for their information, a statement showing the operating expenses, the earnings, and the disposition of surpluses for the last four years. They are as follows: (.Mr. J. D. Reid.] Working expenses. Month. 1910-11. 1911-12. 1912-13. 1913-14. April May J une July August September October November December January February March * $ cts. 729,826 73 768,012 61 773,226 59 764,996 45 764,138 26 767,057 66 719,455 05 770,296 78 786,977 41 773,148 74 872,406 80 1,101,527 33 $ cts. 788,669 68 830,140 02 800,876 78 818,624 51 913,862 29 834,130 30 804,717 19 811,066 88 767,995 25 899,414 54 853,145 75 1,468,362 65 $ cts. 823,669 49 S68.160 13 889,713 86 935,213 10 942,655 52 888,343 38 946,032 26 916,582 96 944,654 35 975,467 84 918,013 43 1,931,476 37 $ cts. 963,874 99 1,028,519 69 1,120,447 84 1,039,044 91 1,133,190 76 1,018,324 38 1,059,886 41 1,039,563 76 1,065,849 40 1,036,165 83 960,000 00 1,035,000 00 jEstimated.Total Average per month 9,591,070 41 799,255 87 10,591,035 84 882,586 32 11,979,982 69 998,331 87 12,498,897 97 1,041,574 83 Earnings. April May June July August.. . September. October .. November. December. January .. February . March .. Total Average per month. 850,481 50 768,239 77 838,071 62 855,478 96 909,948 06 918,019 81 857,084 70 837,141 32 829,028 33 691,413 81 672,574 92 836,300 60 918,717 09 833,243 15 [DOT]862,617 64 914,763 77 990,438 41 926,215 25 951,227 35 911,894 74 900,171 63 743,580 55 755,813 25 885,103 01 1,025,010 81 1,003,083 67 996,107 63 1,028,034 85 1,091,985 16 1.014.740 58 1.051.741 S3 1,017,464 14 1,009,003 36 948,016 00 806,223 18 993,071 48 1,160,789 77 1,099,283 13 1,109,795 48 1,197,890 24 1,177,069 81 1,141,244 88 1,114.429 07 1,047,987 94 1,094,160 05 880,322 80 790.000 00 990.000 009,863,783 40 821,981 95 10,593,785 84 882,815 48 11,984,482 69 998,706 89 12,802,973 17 1,066,914 43 Estimated. There were transferred to renewal of equipment account the following amounts: 1910- 11 - $267,806 61 1911- 12 - 536,819 69 1912- 13 - 777,863 74 1913- 14 - 300,000 00 (estimated surplus.) The statement that I have made so far applies only to the operating of the road, and to the revenue and expenditure on that account. I shall now give to the House a statement of the expenditure on capital account. The most important expenditure is that being made at Halifax for new terminal facilities. It has been a recognized fact for many years that the terminal facilities, not only at Halifax, but at St. John, were insufficient; in fact, ' if the trade is developed to any considerable extent from the extension of the Transcontinental railway to the lower provinces, and the growth of our country, it would be impossible to handle the traffic at Halifax and St. John without very great improvement Accordingly, plans were devised for new terminals at Halifax. They were approved by the Government, and work has been proceeded with. The following contracts have been let: . Section No. 1.-From Rockingham to Jubilee House, 3J miles, to the Cook Construction Company and Andrew Wheaton. This contract is for the purpose of constructing a railway which it is estimated will cost when completed $407,995. Section No. 2.-From Jubilee House to Reid Rock, in Halifax Harbour, about four miles. The Cook Construction Company and Andrew Wheaton were awarded the contract for the construction of a railway which it is estimated will cost $1,035,160. In addition to the building of this railway, a contract was let for the construction of about 6,500 lineal feet of quay walls, foundations for buildings, sewers, dredging of harbour to a depth of 45 feet at low water, and filling reclaimed area, to Foley Brothers, Welch, Stewart and Fauquier. This work is estimated to cost $5,208,743.



On the first two contracts, that is, sections 1 and 2, about 30% of the grading, ditching, and culverts from Fairview to Quinpool has been completed. On the third contract very little has been done yet. The contractors are busy getting their plant ready, and the work will be pushed ahead as fast as it possibly can be. When these terminals are complete, we believe that we will have a harbour equal to any other port in the world, with a capacity sufficient to handle the traffic which is expected to come through that port. Work has been in progress for some time at Halifax on what is known as pier No. 2. It is nearing completion, and was partly used this winter to relieve the congestion. It is estimated that the expenditure for the current fiscal year will be $240,000. The total cost is estimated at $800,000. In St. John the necessary terminal facilities for that port are being carried to completion through the Public Works Department, and therefore I shall not discuss them here. _ ^'or II'e Intercolonial railway, new rolling stock has been purchased during the last year as actually necessary for the further equipment of the railway. About . $1,000,000 has been expended for this purpose There have been a number of other small amounts charged to capital expenditure, aggregating in all about $900,000, which are for general improvements as a whole. When we are in committee I shall be glad to give details of those, as the items are brought forward. i here is another part of the system known as the Prince Edward Island railway. It is estimated the earnings for the current year will amount to $410,000 and the expenditure to $555,000, or a deficit of $145,000. The increased deficit is due to the similar increase of cost of wages and materials as enumerated on the Intercolonial railway. It is generally accepted that this road cannot pay its way, but it is one of the prices we paid for Confederation. I may also say that a contract has been awarded for a car ferry to operate between Prince Edward Island and Cape Tormen-tine on the mainland in New Brunswick. Contracts have been let for the piers on each side of the straits, one at Carleton Point, on the Island, and the other at Cape Tormentine, on the mainland. Work is being pushed ahead as quickly as possible. In concluding my references to the Intercolonial, I wish to say that, so far as that railway is concerned, I recognize that the building of the road was one of the most important events incident to Confederation, so far as the provinces of Prince Edward Island, Nova Scotia and New Brunswick are concerned. I feel that we should properly equip the railway and maintain it at the highest possible standard. I also feel that every possible facility should be given to the people served by the road, within reason, and I am quite satisfied that the hon. Minister of Railways and Canals has that end in view. Hudson Bay Railway. The mileage of the Hudson Bay railway, from Le Pas, Manitoba, to Port Nelson on the Hudson bay, is 418 miles; the whole line is under contract to J. D. McArthur & Company. The work on the terminals is being carried on by day labour under the department. Steel has been laid to about mile 90. Grading is practically completed to mile 130, and the works are well manped to about mile 240, where the first crossing of the Nelson river occurs, which involves a span of over 400 feet in length. Between this first crossing of the Nelson at Mani-tou rapids and the second crossing near Kettle rapids, a distance of about 90 miles, the contractors have been equipping with camp and supplies to enable them to proceed with the grading during the coming season. The progress now being made is more satisfactory than hitherto, and gives reason for the hope that the line will be completed to Port Nelson by the season of 1916. The total expenditure on railway construction and terminals has been $5,681,873.05; expenditure to date during the present fiscal year has been $4,093,557.63. With reference to the contracts let for the Hudson Bay railway, I notice that the hon. member for South Renfrew (Mr. Graham), speaking in Toronto, said, according to the Toronto Globe of Saturday, March 7: Even Mr. Cochrane, the present Minister o£ Railways ancl Canals, had awarded the contract for the Hudson Bay railway, every bit of it, to J. D. McArthur, and he had sub-let it to other firms. I think the hon. member was speaking about the National Transcontinental at the time.


LIB
CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

The tender for the largest

section of this road was let by the hon. member for South Renfrew himself.

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LIB
CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

Exactly, but the hon. member said, according to the Globe-

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LIB
CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

As it was reported in the

Globe, I supposed it must be true.

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LIB
CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

Certainly. But the hon.

member must now admit that sometimes the Toronto Globe does not tell the truth.

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CON

Robert Laird Borden (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Conservative (1867-1942)

Mr. BORDEN:

It is not any more reliable than Windermere.

Mr._GRAHAM: If it used certain things given to the press, it would be more useful than it is.

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CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

It is quite true that the

three contracts comprising the Hudson Bay railway were let to J. D. McArthur & Company, who were the lowest, and in some cases, the only tenderers, but the hon. member for South Renfrew should be more careful in his public statements. He says that Mr. Cochrane let the contract for every bit of this railway, whereas the tender for the largest section, and as to which the heaviest deposit cheque was required, was let by the hon. member for South Renfrew himself. The recommendation to Council was signed by him on August 10, 1911, and the contract, which was let on September 25, 1911, three days after the defeat of the late Government, was signed ' George P. Graham.'

During the season of 1912 engineers were sent to Hudson bay to further examine the possibilities for harbour development of Port Nelson and Fort Churchill. Mr. H. T. Hazen, who was in charge of this expedition, returned overland during the winter with reports in favour of Port Nelson and certain plans for the development .of this port, having left at Port Nelson the advance guard of surveyors and workmen, with instructions to prepare as far as possible for the reception of supplies during the season of 1913. Orders were immediately placed for the plant, materials and supplies required for a commencement of the proposed works, as much of this required many months for delivery. Such steamers as were available were chartered for the conveyance of these supplies, and a construction force of several hundred men [DOT]was sent into Port Nelson as early as the conditions permitted.

The first vessel with supplies reached Port Nelson on August 7, having met with

unexpected delay in the bay. Arrangements had been made with contractors for the supply of floating equipment intended for lightering, but the failure of these contractors to make delivery on time was a very serious handicap and the cause of much delay to the vessels arriving at Nelson. There was at that time no wireless communication and labour troubles also impeded the work. However, the steamers Bonaventure and Belaventure each made two round trips from Halifax to Port Nelson, and the Sinbad, the Boethic and the survey steamer Acadia each made one trip without accident, though one of these vessels was obliged to return to North Sydney with about 75 per cent of her cargo undischarged. One of these vessels, the Cearense, was wrecked through gross error on the part of her navigators practically at the conclusion of the voyage. Another vessel, the Alette, was damaged while swinging at anchor in Nelson Roads. This was also due to bad judgment on the part of the master in distinct opposition to the advice of the Marine Superintendent at Port Nelson.

The necessary buildings and warehouses for the working forces were erected, as also a wireless station, which is now in daily communication with Ottawa through the station erected by this department at Le Pas, Manitoba. A fair amount of plant, including a large suction dredge, is now in safe winter quarters and will start operations in the spring. Ties and timber are being got out by the working forces at present for temporary structures, the engineers advise that they are taking out about 200 logs a day and will have things in good shape for work during the coming year. By the opening of navigation the temporary wharf will be extended so as to adequately deal with the 20,000 tons of freight which will be shipped in. The department now have under construction three small steamers for lighters, so that no further difficulty in the T andling of freight is expected.

I may say that there has been considerable controversy in the press and some in the House as to the choice of Port Nelson as a terminus for the Hudson Bay railway, but when the hon. Minister of Railways and Canals sent in Mr. Hazen to look over the situation he instructed him to visit both Churchill and Nelson, and while Mr. Hazen was at Nelson the minister went over land and inspected the possibilities of the port with him. The minister also visited Churchill on the way out by steamer. He

withheld judgment until Mr. Hazen was able to come out late in the winter with such information as he had been able to gather in the way of soundings, tidal observations, etc., and he finally reached the conclusion that Port Nelson was the more favourable point for the establishment of the terminus of this new Government railway. It will be necessary, of course, to supply aids to navigation so that vessels may be able to locate the proper channel. In a new port this is, of course, to be expected, and when our wireless at Nelson is augmented by a wireless on the Straits much of the difficulty in navigating the straits and the bay will be overcome.

National Transcontinental Railway.

I will now deal with the National Transcontinental railway. This system is divided into two sections. The first, or eastern division, is that portion stretching from Moncton to Winnipeg, a distance of 1804-2 miles. The work of construction of this portion of the system is carried on under authority of statute by the Commissioners of the Transcontinental railway appointed specially for this work. Parliament granted authority for the construction of this work in the session of 1903-04-October 24, 1903. The commissioners were appointed in 1904 -August 20-and the work has been proceeding from that date.

The total expenditure from the inception of the work of construction between Moncton and Winnipeg up to December 31, 1913, has been $140,562,147. Of this amount $10,314,994.05 has been expended during the first nine months of the current fiscal year. It is estimated it will cost $20,745,653 to complete the section between Moncton and Winnipeg. This $20,745,653 added to the $140,562,147 makes a total of $161,307,800 which is the estimate of what the road will cost when it is finally completed.

Perhaps it would be well for the information of the House to indicate what this line will have cost by the time the Grand Trunk Pacific are obliged to commence to pay interest. I have before me a statement giving the detail, which is as follows:

Statement showing the cost of the eastern division of the National Transcontinental railway for the purpose of basing the amount of annual rental which the Grand Trunk Pacific railway will be required to pay under their agreement; based on the estimated cost submitted by the chief engineer at $161,307,800 and on the supposition that it will he completed and handed over to the Grand Trunk Pacific railway on the 1st January, 1915 and capitalizing the expenditure at 3 per cent as provided in the agreement for the purpose of the rental.

Estimated cost of complete road exclusive of interest at

December 31, 1914 $161,307,800.00

Interest during construction at 3 per cent to December 31,

_ *?13 15,136,289.00

Estimated interest on expenditure to December 31, 1914 .. 5,293,322.67

Capital cost for rental purpose

at January 1, 1915 .. .. 181,737,411.67

Interest on $181,737,411.67 at 3 per cent capitalized for 7 years (January 1, 1915, to December 31, 1922) 41,776,681.31

Capital cost esltimated to January 1, 1923, for rental

purposes $223,514,092.98

Rental based on above .. . . 6,705,422.

If the road does not earn 3 per cent in excess of working expenditure for the three years ending December 31, 1925, then the interest is added to capital for three years longer, adding $20,725,791.30 to capital cost; making the estimated cost of the railway for rental purposes, $244,239,884.28. Rental based on above, $7,327,196.54.

No allowance has been made in the above for betterment during ten years from January 1, 1915, to December 31, 1925. Should any betterments be made these would have to be added to the cost for rental purposes, and rental increased accordingly.

I might explain to the House that although the road is costing Canada the principal and interest at three and a half per cent, under the agreement with the Grand Trunk Pacific railway we are only allowed to capitalize and charge them at the rate of three per cent. This means on the expenditure to December 31, 1914, that there will be a clear loss to the country of $3,393,230.33, and this will continue throughout the term of the lease, which is for forty years. During the entire period of fifty years, this loss will amount to $908,687 per annum, or a total of $45,433,900 for the entire term of the lease.

As to the condition of the railway at the present time between Moncton and Winnipeg. The rails have all been laid. Between Moncton and Levis, a distance of 460-4 miles have been taken over from the contractors as fully complete. The remaining. 1,344 miles are nearing completion. Rails have been laid. It requires some ballasting and a number of steel bridges to be placed in position, -some station houses to be built, and other works that I am informed will all be complete and ready for operation during the present season. .

In giving these statements in connection with the eastern division let me say that this does not include the Quebec bridge. This is entirely separate so far as the estimate of the total cost of the work on

the eastern division i3 concerned. I gave you the cost of the construction of the eastern division a few minutes ago. If the Quebec bridge is to be considered a part and parcel of this estimate then you would have to add the following, viz: the amount expended to January 1, 1914, on the reconstruction of the Quebec bridge, $4,889,000, and it is estimated by the engineers m charge of this work that the total estimated cost when complete of this reconstructed bridge will be about $17,000,000. This $17,000,009 would have to he .added to the figures I have already given which would establish the total cost of the Rational Transcontinental railway, exclusive of interest, $178,307,800.

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March 24, 1914