May 3, 1918

RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.


On the motion of the Hon. A. K. Maclean (Acting Minister of Finance) the House went into Committee on the following proposed resolution, Mr. Boivin in the chair: Resolved, That it is expedient to provide that as five-sixths of the six hundred thousand shares of tlhe capital stock of the Canadian Northern Railway Company have been transferred to the Minister of Finance as required by chapter 24 of the statutes of 1917, the Governor in Council may assist the Canadian Northern Railway Company, or any company included in the Canadian Northern Railway System, in renewing or postponing the payment of any indebtedness of any such company, on s-uch terms as may be agreed on, by guaranteeing in whole or in part tihe payment thereof, with interest, or the notes or obligations given for such renewal or postponement: Provided1 that the amount of principal to be so guaranteed shall not exceed the amount of the indebtedness the payment of which is renewed or postponed; and, further, that the guarantee shall be in such form and signed by such person as the Governor in Council may approve, and shall enure for the benefit and security of the holder for the time being of the indebtedness or the notes or other obligations representing the same; and that any payments which may 'be required to be made pursuant to any such guarantee shall be made out of the Consolidated Revenue Fund of Canada, and the Order in Council authorizing such guarantee shall be conclusive evidence for such holder that the terms and conditions of this resolution have been complied! with and that such guarantee iS' legal and binding.


UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

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.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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UNION

Robert Lorne Richardson

Unionist

Mr. R. L. RICHARDSON:

Can the Acting Minister of Finance state, approximately what liabilities will mature this year?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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UNION

John Allister Currie

Unionist

Mr. CURRIE:

I will supplement that question by asking the minister to read the list of securities that are coming due, the amounts, and what the guarantees are. I think he should take the House into his confidence with regard to this matter.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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L LIB

Wilfrid Laurier (Leader of the Official Opposition)

Laurier Liberal

Sir WILFRID LAURIER:

Hear, hear.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

The names of the holders should also be given.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

The names of the holders cannot be given, but the minister might state the amounts that are coming due. He has a list of them under his hand and might read it to the House.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Lorne Richardson

Unionist

Mr. RICHARDSON:

I would like to have the names of the 'holders also.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

Certainly. Perhaps the minister should have the list printed and distributed before the Bill comes before the House.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

If it is agreeable to the committee I should like to have the resolution passed, and when I move the second reading of the Bill founded upon it, I will give the information desired. In the meantime, however, I will give a list of the maturities. [DOT]

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

And the holders of the securities?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

I can only give the information asked for partially.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Robert Lorne Richardson

Unionist

Mr. RICHARDSON:

Give us what you can. ,

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

I shall give a list of the securities which have matured since March 31ist of the present year and one maturing in June next. The London maturities are:

On March 31st, 1918 $ 929,533

April 9th, 1918 1,472,167

April 15th, 1918 2,919,062

April 15th, 1918 5,201,407

June 9th, 1918 486,667

These obligations matured and are maturing in London, and I think are held chiefly by the brokerage firm of Lessard Freres, London, and their clients.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

Are they notes or bonds?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
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UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

These are notes.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

Bonds of the railway?

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

Alexander Kenneth Maclean (Minister Without Portfolio)

Unionist

Mr. A. K. MACLEAN:

I think in most instances they are the notes of the company secured by bonds of the Canadian Northern railway guaranteed by the Dominion Government or by some of the provincial governments.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink
UNION

John Allister Currie

Unionist

Mr. CURRIE:

What we want to know is whether we are releasing any of the terms or not.

Topic:   CANADIAN NORTHERN RAILWAY.
Subtopic:   RENEWAL OR POSTPONEMENT OF PAYMENT OF INDEBTEDNESS O'F THE COMPANY.
Permalink

May 3, 1918