Hon. A. K. MACLEAN:
I would remind the committee that last year a statute was passed enabling the Government to assist the 'Canadian Northern Railway Company, so soon as the Government had obtained a transfer to it of five-sixths of the capital shares of the company. This proportion of the total share capital of the company has been secured since the closing of the last Session of Parliament. Section 3 of Chapter 24 of the Statutes of last year provides as follows:
So soon as the said1 five-sixths of the said shares have been transferred as aforesaid, the Governor in Council may assist the Canadian Northern Railway Company, or any Company included in the Canadian Northern Railway System, in paying 'and settling any indebtedness of such 'Company or postponing the pay' ment 'thereof on such terms as may be agreed upon, and for such purposes may make advances out of the Consolidated Revenue Fund.
This section limited advances under the Act to $25,000,000, and that amount was actually expended in caring for the maturities and obligations of the Canadian Northern Railway -Cbmpany last year. A statement covering such payments was laid upon the table of the House early in the session as required by statute. The hon. gentleman will observe however that this section only empowered the Government to assist the company by way of advances to retire maturities or to assist in renewing maturities by a payment of money. The Canadian Northern Railway Company have a number of short term loans or notes which are maturing this year and which are at the present time secured by deben-
tures, or bonds, of the railway guaranteed by the Government, or secured by securities of the Canadian Northern Railway Company which were issued prior to the Government guarantee. Therefore, we are in fact liable for the maturing note. The larger part of the collateral security of these loans) bears a low rate of interest. Owing to the high rates of interest prevailing to-day, it is difficult to secure the renewal of these loans without increasing the rate of interest and perhaps increasing the collateral.
The section of last year's statute which I read does not empower the Government to guarantee payment of the short-term obligations of the Canadian Northern which have matured and are maturing this year, and we ask under this resolution that power be granted to the Government to guarantee when necessary the payment of such obligations or renewals of the same. Our total obligation is not to be increased under the terms of the resolution. The resolution provides, and the Bill will as well, that the Government can incur no greater obligation than now exists. In Great Britain and the United States during the balance of this year Canadian Northern shortterm notes to a very substantial sum will mature. Naturally, we desire to renew them, if possible, in order to avoid at the present time the entire payment of such maturities. We wiish% therefore, under the resolution to procure power enabling us to renew or extend, as circumstances will permit, these notes, and we ask power to guarantee the payment of any of such renewals, when necessary. I think it is a fair request to make, and I hope it will be readily granted. It is in the interest of the Canadian Northern railway, and it is particularly desirable, from the standpoint of, national finance during the present year. I hope that any renewals which shall be made this year shall be for a period of .at least three years, which will carry us over,
I trust, the war period.
Subtopic: RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.