Hon. CHARLES FITZPATRICK (Minister of Justice).
There are three schedules attached to this Bill. The first schedule is the trust deed which is necessary to carry out the provisions of the original contract
made between the government and the Grand Trunk Pacific Railway Company by which the government undertake to guarantee certain bonds which are to be issued by the Grand Trunk Pacific Company to enable them to finance the undertaking so far as the portion of the line is concerned between Winnipeg and the Pacific ocean. My hon. friend (Mr. Haggart) will remember that on that portion of the line the company is authorized by its charter to issue bonds not exceeding practically $20,000 a mile with respect to the prairie section and, I think, somewhere about $50,000 a mile with respect to the mountain section. The undertaking of the government is to guarantee that issue of bonds to the extent of 75 per cent of the cost of construction with respect to the prairie section limited to $13,000 a mile, and on the mountain section bonds to the extent of 75 per cent of the cost whatever it may be.
Then my hon. friend will remember that there is an obligation on the part of the government, or rather an assumed obligation, to exempt the company from the payment of interest on these bonds for the first seven years with respect to the mountain section ; and in so far as that section is concerned, if the interest on the bonds is not paid for the three years succeeding the first seven years, then that is to be a deferred payment. It is intended to give effect to that provision of the agreement. My hon. friend will notice that the only two departures from the original contract in this trust deed are, first, with respect to the prairie section, the government obligation to guarantee to the extent of $13,000 a mile remains * intact ; but under the provisions of the company's Act of incorporation their power to issue bonds is limited to $20,000 a mile with respect to the prairie section, and under the provisions of the trust deed, it having been ascertained that $20,000 a mile was not sufficient for the prairie section the trust deed provides that the company may issue bonds to the extent of $21,500. That is in accordance with the terms of the agreement between the government and the company, by which agreement it is provided that the company must find the money, whatever it may be. So our obligation to endorse is limited to $13,000 a mile, but the company will, under this schedule. get power to issue to the extent of $21,500.
Topic: GRAND TRUNK PACIFIC RAILWAY.