Interest guaranteed by Dominion Government on $216,207,138.71
Total Stock Exchange Valuation $129,769,662.99
Amount that could be saved. Principal $ 86,437,475.72
Annual Interest on $216,207,138.71 @ 5% and 4% as above $8,988,633.66
" " " $129,769,662.99 @ Govt, rate 51%. .. $7,137,331.46
Annual interest could be saved $1,851,302.20
To come to the stocks, excluding the debenture stocks or what are commonly-known as bonds, the Government are guaranteeing the payment of interest on four
, Total Saving
It might be argued that you could not force the holders of the debenture stocks to sell out at the market value, and some hon. members might also argue that you could not force the holders of the ordinary stocks, the first, second and third preference and guaranteed stocks, to sell out either. But we were told by the Minister of Railways, at page 1084 of unrevised Hansard, that the total indebtedness of the
per cent guaranteed to the amount of $60,833,332.51. The total stocks, including this amount, together with Stock Exchange valuations, are:
4% Govt. Stock.
Value as Listed in London Times.
27,983,332.95 8,321,999,89 4,617,249.93 6,976,906.99 10,492,481.20
58,391,970.96 $ 2,441,361.55
Grand Trunk to the Dominion amounted to $97,000,000 odd, and that the interest due to the Dominion Government by the Grand Trunk amotmted to $34,879,253; and it seems to me that, with the Grand Trunk in that position, if the Government had demanded payment from them of the $34,000,000, with the undertaking that they should continue to pay the deficits amounting to seven million dollars a year, the Grand Trank people
4 per cent Government Guaranteed Stock. . .
Total Stock. Rate.
$ 60,833,332.51 465% 1st P . . . . 16,643,999.78 505% 2nd P . . . . 12,312,666.50 3744% 3rd P .. .. 34,884,534.95 20Common . . . . 116,583,124.44 9
would very probably have said they were not in a position to comply with that requirement and were not able to take care of the deficits on the Grand Trunk Pacific, and the minister, if he wanted to be generous, could have said to them: "All right, we will not press for the payment, but we will take over your stocks at the exchange value." It would have been a fair and generous offer to the shareholders to exchange with them Dominion Government bonds at four per cent for all of their shares on the basis of the stock exchange valuations on the 9th of October, 1919, the day the agreement was made. If they did not wish to accept that, then the minister could have said: " Then pay us the $34,000,900 you owe us, and pay the deficits on the operation of the Grand Trunk Pacific." But there is no reason in in the world why the sixty million dollars should be guaranteed-it is over two million dollars in excess of the total valuation given to the stocks by the 'London Stock Exchange on October 9-and something further arbitrated. We have no idea what the arbitration award may amount to, but we do know that the stock exchange valuation was only $58,000,000, and that the Grand Trunk were not in a position to dictate to the Government. The Grand Trunk would have had to accept the offer of the Government, and surely the offer to buy their stocks on the basis of the stock exchange valuations, of that date would have been more than generous. At any rate, it would have been more generous an offer than I would agree to, and more generous, I think, than the Government would have been justified in making. But at all events it would have cleaned up the whole transaction, and you would have had all the stocks for less money than we are agreeing to pay now, and there would have been no arbitration. I therefore support the amendment in view of the fact that we have had very little information of any value, the information that has been furnished us having been taken from statements of two years ago, and the whole situation having been very much confused by different ministers giving to the House different statements at different times.
At six o'clock the House took recess.
The, House resumed at eight o'clock.