3. The traffic which these lines provide will justify their purchase by the national system, as, under present conditions, the profits on the traffic will almost meet the interest on the capital to be assumed in addition to taking care of the cost of operation and maintenance, and with the future development and settlement of that vast territory will become very valuable to the system as the years go on.
4. The Peace River tract of land in northern British Columbia, which is owned by the crown in the right of the Dominion, contains 3,500.000 acres, 1,200,000 acres of which is reported to be good agricultural land and through which the proposed western outlet for the Peace River would pass; if sold it would provide a large portion of the cost of construction to connect the Edmonton, Dunvegan and British Columbia with the national railway at Prince George.
5. For the above reasons it is submitted that the interests of the taxpayers of the Dominion of Canada will be served by obtaining the Peace River territory as a feeder to the Canadian National system.
I have handed you a memorandum showing that a fair valuation of the Edmonton, Dunvegan and British Columbia and Central Canada railways is approximately $17,472,994.43. Against this, the province has guaranteed debentures totalling $9,420,000, payable in thirty years from the date of issue, and has advanced other sums, from time to time with proper security, totalling $9,388,456.93, making a total claim, as at December 31st, 1925, of approximately $18,808,456.93.
As a basis for consideration, it is suggested that the Dominion government should:
(a) Assume the liability for payment of the said guaranteed bonds, amounting to $9,420,009.
(b) Issue debentures or other security, pay-.able on such terms as may be agreed, for 50 per
cent of the amount advanced by the province ($9,388,456.93) as above $4,694,228.47.
I have informed you orally of the nature of the security held by the Royal Bank of Canada, totalling $2,400,000, with accrued interest, and the terms of settlement already suggested. We propose the Dominion government should assume this obligation in addition to the above.
Yours very truly,
J. E. Brownlee.
Honourable C. A. Dunning,
Minister of Railways and Canals,
On motion of Mr. Kennedy the debate was adjourned.
Subtopic: AGREEMENT FOR THE PURCHASE OF ALBERTA RAILWAYS