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Un daa aymboiaa suivants spparattra sur »^t«d»ction which appears between Mr. Mercier's explanations to Your Honour, as reported in the official correspondence and the testi mony given before us. cannot escape attention. Jl^!urr\^ *^_r°^«^^^-d«- of ^our Honour of the th a . , , ^ »"o"*wn»uuuui oi lour Honour of tha "7^ September last Mr^ Mercier expresses himself in the follow"^ words J- At page 23 of your letter. Your Honour says • »? «" • " a JJs^'thr ^'"^ ^'''^ ^'^l^'- ^^^'^^ ^^y«' ^i*^ » ^'l^^q^e drawn " Honorlhl«V' M '''°"^*' u' **"^ °^ ""^^"^^^^ «" P"'«' i^ f'^vour of the Honorable Mr. Mercier of the amount of $5,000. realizing 25.000 francs. The testimony of Lafrance. Cashier of La Banque National, at Quebec pages 11 and IS, establishes that these |5.000 came out of th« nl^'^: ^r. raeaua-s note, endorsed by Mr. Validre and guaranteed b/one of the cheques mentioned by Your Honour. 'ij v!}. ■ !, ; 1 ■ T ■■1 ■11 ^|t Interim Report. " On the other hand, I am informed that this sum was raisod by means • of one of the notes in blank which I left with Senator Pelletier before • leaving for Europe. I have not had occasion to verify which of the two ' versions is the right one. ** But, however that may be, I do attirm to you : That while in Europe ' and in want of that sum, I asked for it, with the conviction that it might • be procured by means of the notes signed in blank which I had left ' behind, and. of course, with the intention of paying myself for the com- • mercial paper to be used in raising the money, inasmuch as it was lo be ' applied to my own personal expenses. " I further affirm, that when I asked for this sum I was not aware, • and so continued long afterwards, that the Baie des Chaleurs transaction ' had taken place, and that I was only informed sometime after my return to • Canada by the report of the proceedings before the Senate, published in ' newspapers, that Mr. Pacaud had received this sum of $100,000, or any • sum." Yet, both Mr. Mercier and Mr. Pacaud -testify that this first draft was called for by a letter written in the first days of May, and that the funds required to be raised through the cheque for $5,000 which Mr. Mercier had left with Mr. Pacaud before his departure to Europe. The latter advised him of its transmission. It is much to be regretted that this cor- respondence was not produced. We cannot account for Mr. Mercior's omission to tell Your Honour, as he stated before us, that this cheque of $5,000 with another for $8,500 had been left with Mr. Pacaud, for his own personal use. We also regret that the following letters were not produced : the letter from Mr. Garneau to Mr. Mercier and the answer of the latter ; Mr. Charles Langelier's letter to Mercier ; Mr. Pacaud's letter to Mr. Garneau ; and the correspondence between the former and Mr. Mercier, to which reference is made in his testimony. It is not proved that Mr. Mercier was aware of the bargain between Armstrong and Pacaud ; and he has declared that he has in no way bene- fitted by it. The Honorable Messrs. Ross, Shehyn, Boyer, and Duhamel, did not in any wise, benefit by the transaction. The whole humbly submitted. Quebec, Decenaber, 16th, 1891. (Signed,) G. BABY X . Commissioners. REl^URN TO COMMISSION. To His Honour The Lieutenant-Governor •• ««o»P«nied,o.«,J.JM,;„™^ '=''™™''''''>e» which preceded. •• M Vict., chap. 88, in «> f. ilrrelatel SThTH™'."" n! ""'•" ""' ■*«' ■• CO.P.J.,,.. have the honourrt^irittttHorou?.'''™" "^'""^ 1. The prtKr<5a.wr6flMa: of our proceedings. 2. The evidence taken and exhibits tvUA \.^f thereto appertaining. ^ ^ ^^^°'^ ^«' ^^^^ t^e schedules 3. The whole record as nrintftfl in K«*u i and indices. ^ "* '"^ ^""^^ languages, with appendices 4. Our reports on the enquiry. We have the honour to be, Sir, Your obedient servants, (Signed) At Quebec, 8th February, 1892, (Signed) At Montreal, 5th February, 1892, (Signed) L. A. Jettb. G. Baby. C. P. Davidson. TABLE OF CONTENTS. MAJORITY REPORT PAau 1. Prefatory nmr.tk» * 2 SUtutory history of the Company 13 8. Snhaidies -•• 16 4. Principal contracts for the construction of the road 17 6. From McFarlane's contract, 8tli of June, 1888, to September, 1890 20 (3. From McDonald's negotiations, September 18th, 1890, to iMarch, 1891 21 7. From Thorn's negotiations, March, 1891, to issue of Orders-in*Council, 23rd of April, 1891 ( 23 8. From Orders-in-Council to issues of Letters of Credit, 28th of April, 1891 27 9- The Armstrong Claim, ita improper and hasty payment 35 10. The contract discussed 44 11. Disposal of the Letter of Credit for $75,000 60 12. The payment of $100,000 to Pacaud, its causes, objects, consequences and results 61 18. The disposal of the $100,000 61 14. Members of the Legislature 65 15. The Cabinet: The Honourable Honore Mercier 67 " " FierreGameau 90 " " Joseph E. Robidoux 1(« " " Charles Langelier .... • 110 « " Georges Duhamel 132 - Honourablea Ross, Shehyn and Boyer 182 16. The general resume 133 17. Concluding remarks 139 MINORITY REPORT. 18. Report of Hon. Mr. Justice Jett6, President of the Commifcion 141 REPORT OF THE HONOURABLE JUSTICES BABY AND DAVIDSON. To His Honour The Lieutenant Governor OF the Province of Quebec. Honourable Sir : We. the undersigned, Commissioners, have the honour to report to Your Honour as follows — ^ Wn^^"" ""ITTT^ °'" '®P°'*' °^ ^^^ Honourable the Prime Minister, the Honourable the Executive Council and an order of the Lieutenant Governor 1h '"''"/ J°l' ^.''''°'''' ^°*'"^ ^"^''" *^" ««thority of 696 and following sections of the Revised Statutes of the Province of Quebec, was pleased "! the public interest, to issue a Royal Commission, bearing he greatTeal of the Province, and dated the 21st day of Septeu)ber. 1891 TettA^L*^.!" Commission Your Honour named the Honourable Louis A- ^ Lrf n„T rr'^:.^^^^^^^^^^ "*^ "^'^^^ ^^ enquiry into and " r«ri A /n .' t""^ circumstances which preceded, accompanied. " ?^nZ 71 ^ transactions made under the Act 64 Vict chap 88. in so far as it relates to the Baie des Chaleurs Railway Company." fn K r'f T"J ^'^ ^'''*^''' *^"'"^y' «*" *^« Honourable Louis A Jettfe It th. nT f n ' k'' C°---o- -d did authorize its sittings to t held reqS''^"''"'"''^^"^"^ '"^ *^« ^^°--«' ^^ *^« e-ds of jushce th^/r'"''"^ "' ^^!'J^"*^ ""^ '^'''^""^ ^° *^« Commissioners without their previous request being sought, we considered that it was one which Zrr 7 '" ^T.^"'"*- ^^ ^'^^^ **^«^«^°" «>«ducted the enquT^ so ordered, and in compliance with the terms of the Commission now .^K to Your Honour our report on the proof. "' ' "^^l \h ^1 P' 10 f The sittings of the Oommission, all of which were held at Quebec, began on the 6th of October, extended over twenty-one days, and ended on the Tth of November, 1891. Fifty-two witnesses were examined and their printed depositions form a volume of 800 pages. There were produced in addition, five hundred and ten (510) Exhibits inclusive of many lengthy statements of accounts. The Commission named Leopold Laflamme, Esquire, Advocate, as Secretary. Illness compelled his resignation and Jules Belanger, Esquire, Glerk of the Circuit Court at Quebec, was appointed in his stead. The Commission gave notice in the newspapers, at Montreal and Quebec, of the proposed opening of the investigation and called upon all concerned to govern themselves accordingly. At the first sitting. Messieurs Beique, Q.C., and Amyot, Q.C., appeared for the Government of the Province of Quebec. This appearance was afterwards limited to the Ministers. » G-eorge Irvine, Esq., Q.C, appeared for Mr. Pacaud. Messieurs Cook, Q.C, Hall, Q.C, and Casgrain, Q.C , also appeared and stated that certain persons, who were interested in the enquiry, intended to be represented. They applied for and were granted an adjournment until the 8th of October, so that they might determine as to their future action. This request was granted. At the second sitting, the 8th of October, Messieurs Cook, Hall and Casgrain asked permission to appear for Messieurs J. 0. Villeneuve -"d Owen Murphy, both members of the Legislative Assembly. They souga^t, at the same time, the privilege of conducting the investigation, of assigning witnesses and of producing papers. At the next sitting, held on the 14th of October, the appearance was allowed, and it was adjudged that the Commissioners would themselves conduct the investigation, leaving it to Counsel to put all questions deemed pertinent and permitting them to assign such witnesses as were shown to be essential. This method of procedure undoubtedly imposed much greater labor than if the Commissioners had simply presided over ian investigation con- ducted by Couusei. It also, of necessity, delayed the preparation of a duty. 11 report, in consequence of the daily need which existed of making ready for o 2T".r"°i'^'"'""'^'*"^"«" Buttheprocedureadopid tended tl en" ''^^'"" '^"' '" °*'^^ '««P««^« -"^-«.... Total cash Subsidies granted by Fed. Gov. Total cash Subsidiesj granted by Province. I Amount Gbantbd. 1800,000.00 70,000.00 64,000.00 70,000.00 64,000.70 70,000.00 64,00000 70,000.00 64,000.00 70,000.00 64,000.00 70,000.00 Doubled back. 70,000.00 Doubled back. 704)00.00 Doubled back. 70.000.00 620,000.00 630,000.00 Total. $370,000.00 134,000.00 134,000.00 134,000.00 ijw.obo.oo' 134,00000 ' 70,000.66' 70,000.00 "iosmm" & paid by Fed. Amount PAID BmtMN. Exhibit Na 178. $209,800.00 70,000.00 55,300.00 70.000.00 55,000.00 70,000.00 61.100.00 70,000.00 62,475.00 70,000.00 2o,ooaoo 524,175.00 370,000.00 Total Cash Subsidies 1,250,000.00 Total paid on first 70 miles $894,175.00 ADDITIONAL SUBSIDY BY 54 VICT., CAP. 88. . Amount Gbanthd. Amount Paid. Brought forward $1,250,000.00 50,000.00 280,000.00 $894,175.00 Subsidy granted by 54 Vict Cap. 88, sect 1, I & J, Cascapedia Bridge 800,000 acres of land regarded as converted into monev at 35 cents ner acre 216,000.00 $1,580,000.00 $1,110,675.00 A soon as section, A soon as section. A I soon as in the : 100th n and the PRINC By) of Canac agreed tl its road, property Agr( means m the 20th of 13,200 to obtain voted fo; between C.N one hnnd payab' » 1. ti] 2. B] per mile ; 8. Bj and titles in the cap ber of shs case $75,0 Subsidies. 11 SUBSIDIES IN LANDS. A second subsidy of 35 cents per acre will be payable, as i to 20 «».. soon as the sale is effected of the 10.000 per mile granted for this section. A second subsidy of 85 cents per acre will be payable. a8,„„ . soon as th. «ale is effected on the 10.000 per mile granted for this section. A second subsidy of 36 cents per share will be payable, as soon as the sale is effected on the 100,000 acres per mile granted i?Ju M ^"***^*^® ^o'' *^e sections between the 20th and the 100th miles applied on the sections comprised within the 100th and the 180th miles, (51-52 Vict. cap. 91, sect. 12). PRINCIPAL CONTRACTS FOR THE BUILDING OF THE ROAD UP TO THE 23rd APRIL, 1891. By a contract between Her Majesty, acting for the Dominion ms oi Canada and the Baie des Chaleurs Railway Company, it was '* ^"^•■»'«"- agreed that this Company should build the first twenty miles of Feielat '"' Its road, afterwards keep possession of and work them as its property, and receive the sum of 1800,000.00. Agreement of the same date between the same parties, bvi««- means whereof the Company undertook to build the road from^^^NovmbT. ho onn*"" *^' ^^*^ "'"' apparently in consideration of a subsidy F.^'a?.' "«' of 13,200 per mile, voted in 1883 ; the Government further agreed to obtain authority from Parliament to apply the $8,200 per mile, voted for the first twenty miles, to the sections comprised between the 20th and the 40th miles. C. N. Armstrong agrees with the Company to build the first contracta one hundred miles of the road at the rate of #20,000.00 per mile J»«9th,i886. payab' ps follows:- ^ ProvSuS;"*' 1. iiy the transfer of the Federal subsidy of |6,400 per mile ; 2. By fir *t mortgage bonds of the Company for $13,600 00 per mile; 3. By the transfer of a half interest in the franchises, rights and titles of the Company, to be made by means of paid up shares m the capital stock of the Company for a sum equal to the num- *=- -*-''" .^.^uea , mc luiai capital not to exceed in anv case $75,000.00. ^ 1' It L f 18 Contracts for tiie building of the Road. If the Legislature of Quebec authorized payment in cash or otherwise, in lieu of a subsidy in lands, it was stipulated that Mr. Armstrong should "receive the said cash, bonds or other securities, in lieu of an equivalent amount of the above mentioned bonds of the railway company ; and the amount necessary to make up the said sum of $18,600.00 per mile shall be paid by the Company in cash or in first mortgage bonds of the Company, as the Company may select." During the construction of the first forty miles Mr. Arm- strong was to receive in money 85 per cent, of the amount of the estimates to be made monthly, as soon as each amount of cash shall have been received from the GoA-^ernments of Canada and of Quebec ; the whole amount to be so paid on the first forty miles not to exceed an average of $12,000.00 per mile, nor more than $150,000.00 on any one section of ten miles. The balance of the contract price to be paid in bonds or in cash, as the Company may select. During the construct'.on of that portion of the line between the 40th mile and the terminus at Paspebiac (100th) Mr. Arm- strong was to receive sixty per cent, in cash of the amount of the monthly estimate, and on completion of each section of ten miles, the balance of the contract price for such section as soon as the Government subsidies were paid. All these payments were to be ,made in cash and in bonds in the proportion of $6,400 in cash and $13,600 in bonds. Upon all the estimates a sum of 15 per cent, was to be retained by the Company as security for the completion of the line as far as Paspebiac. In all cases in which the Company was bound to pay in its own bonds, it had the privilege of discharging its obligations by paying in cash or in Government debentures. The Company was to be put in possession of the road on the Ist of July, 1888, and in the event of the first forty miles not being completed on the Ist of July, 1887, and of the whole road not being completed on the Ist of July, 1888, the Company was to have the right of taking possession of the road and completing it. In addition, Mr. Armstrong was not to transfer his contract without the consent of the Company. A< the Coi of the s 70th to 70th, so $6,400. It Mr. Am 100 mil( the Goi build. In J his sub- miles. By( 1. T stock ad specified 2. T The Onl to make i 1. "Foi bridges, rig] said contrBi oostB, five p snb-contraci 2. "For the said sub twelve and i 3. «' For tl said oontra( schednleof] Thet for the fxx. More( " Tlie ra as thatporti taining there contractor ss which he ma Contracts for the building of the Road. 19 A contract by which the Federal Government agreed with the Company-to obtain Parliamentary sanction for the transfer ^/jun. of the subsidy of $3,200 per mile upon the thirty miles from the«"'"''"t 'Vo, 70 h to the 100th miles, to the 30 miles from the 40th to the&^a.. 70th so as to bring the subsidy on the latter 30 miles up to fo,400. It resulted from this contract of the 9th June, 1886, that Mr. Armstrong was intrusted with the construction of the first 100 miles of the road, which, by the three contracts signed with the Government of Canada, the Company had undertaken to build. In June, 1888, Mr. Armstrong had, as well personally as by his sub-contractors, performed more or less work on the first 40 miles. By contract of this date. Macfarlane agreed Vith Armstrong • 1. To complete the first forty miles, and to provide rolling 2^T5'"2S* stock additional to that already on the works, to the amounts spocifaod m a schedule annexed to the contract ; 2. To build the road from the 40th to the 60th miles ; nS m^'i^i Ihe work was to be completed on the 1st January 1889 ProTincii; On his part Armstrong obliged himself towards Macfarlane to make the following payments :— hw-il' "^°' *"f^P«nditure necessary for the purchase of rolling stock, rails steel bridges, nght-of-way and other necessary material, as well a. engineering -^e sa^d contractor shall pay to the said sab-contractor, in addition to the actual ooete. five per cent on the total amount, together with the inter^t which thrsS sab.«>ntractor may be oblig^to pay to the bank advancing ZtZ^^ytZ *», A I ""^ required to complete the said 40 miles partially completed rr.:sTs'c^r '"'»''•"' -^''^ •" *• «- «- »''^ ■•- Jk '15T **1* *Tlf ""'" °^ °*'' ^^' *° "tension of the said 40 miles the said contractor shall pay to said sub-contractor the prices as detailed S he schedule of pnoes hereunto annexed and paraphed by sSd partly t mS J» * ,^**^*'";f«^®' Of certain subsidies was stipulated as security tor the fulfilment of the above payments. Moreover it was declared that : « a '?* ^f'^7 ""'' .P""^"y completed, with all rolling stock thereon, as well as that portion from said 40 or 60 miles to be built with all apperteTn,^ Ir- ':S^^:^-T^'^ the possession and under the .:onC'Ts"ay sT '^^i^t:Z.T^Z^T::Z^^:^^:^^^''^^''' «^ ^' sums of money to W'H. % so MaeFarlane Contract. Armitrong p. 28 Armitrong 27, 28. p. 27 Bzhibiti: No. 6, p. 887. No. 116,p.516 BxhiUti. No. 184, p. 719. Bzhibita. No. 185, p.7ig. ExhibiU, No. 18S, p.719. Bzhibiti, No. 6, p. 888. Bzhibita, No.ll0,p.944. B6tah6, 101. Lariv^e, 101. Or«p««a, 120. Dion, 124. Gnitt^, 135. Thirierga, 199-201. Fauael, 226. Meroior, 515-516. Paoaud, 361. From Maopablane Contract, 8th Junk, 1888, to Skptembbr, 1890. Macfarlane began his contract and made sufAcient progress, to enable regular trains to run over the 60 miles, during the two or three months which preceded the final suspension of the work. Meanwhile difficulties arose with Armstrong in regard to bridges and other matters of detail ; financial embarrassments followed ; the workmen were not paid ; strikes were organized ; finally, Macfarlane was forced to make an abandonment of his property to Riddell and Watson, accountants, and all work on the road was suspended in 1889. On the 5th of October, 1889, Mr. Charles Langelier was ap- pointed Commissioner to enquire into the amount of unliquidated claims resulting from the construction of the road, and the com- plaints made against the Company and its sub-contractors. He made several reports on the subject. On the 26th November, 1889, Mr. Jean Cbrysostome Lange- lier was, by Order-in-Council, of that date, appointed a Commis- sioner to settle and pay a certain number of claims for land, work, provision accounts and other charges. To these ends the Q-ov- ernment placed the sum of $41,500 at his disposal, of which he has since rendered an account. This complete suspension of the works and of the non- payment of many existing claims against the road were causes of general discontent in the locality, a discontent of which the Government was informed both by personal representations and by petitions presented by municipalities and citizens. Towards the month of September, 1890, and while matters were in this condition, Mr. Heaton Armstrong, of London (Eng- land), banker, who had formerly negotiated the bonds of the Temiscouata Railway on the English market, being in Canada, was introduced to Mr. Pacaud by Mr. Hector Cameron, Q.C. It was agreed that Mr. Pacaud should aid in the formation of syn- dicate for the reorganization of the Baie des Chaleurs Railway Company and the continuation of the work already begun. Shortly after Mr. Heaton Armstrong came to Quebec, the matter was discussed anew, and he requested Mr. Pacaud to obtain him an interview with the Honorable Mr. Mercier, but the lat Howev Mr. Pac ment ol Thi self sati Sot tion. Ml way joii to have In Camerox They ob Statutes requestj] every po Whi the diffit the railvt was geni Pacaud, i who inv; were exti Mr. were as f 1. To COD And a gn 2. To tee of inte 8. To of the old 4. An figures in< Short] with Mr. ] the result MacFarlane Contract. 21 ^e latter 8 engagements rendered this for a time impossible However, the following week, about the 21st September 189o' Inf'^'r ""S^'^ * r'"°^ *"** '^ ^^^'^ P''^-^ «t tho Govern: ment offices in Montreal. self :!;r ^it^rs^r i::;--r '-'- ^^- uon.r!r:;:!rtr^.^-;jii:-r^^ way joined M^Heaton Armstrong, and thencefoH^ he appeal" to have conducted all the negotiations in their behalf In October. 1890, Mr. Pacaud. Mr. McDonald, and Mr Srr ""T. the department of the Honorable^M;. Garneau They obtained from Mr. Bouchette. one of the employees, all the Statutes applicable to the undertaking, and Mr Pacaid after requesting Mr Moraau to give Messrs. McDonald and Came on every possible information, withdrew. v^anieron the dTfficultTi" ^f r'^"^ T "''^^'^^ ^"*P^°y«^ »" overcoming McDo„.,..3.. ine diUiculties which arose from conflictinff interests h«tw«a« .he rdlway co„p.«,, Mr. McF.ri«,e .«d th, OnZ Bank «S '"""' '"• plnTri'' ™'""*/" "»™-«-»f tie undertaking Mr raoand, at hu request, had several interviews with the Premier Sr'"' who .nyariably asserted that the propositions submiU^ rWrn'"'" were extravagant. 5i2, 384. we^l'-foUo" '■ """ "•"' '"^ '"' '^""■■-■' ""«'^™ 1. To complete the arst 100 miles for,...; »4000O0 0O And a grant for Oascapedia Bridge of. ^oZ> Z 1450.000 00 fP« J- ? ^T'^'.^^^f '^^^ """^^ *^^ Government i^^a^ tee of interest on the bonds. of th!nM r'' ''''* '*^^'' °T^ *'"^*^« ♦^^^'^^^'^ ^°*^ th« franchises of the old Company clear of liabilities. fi.^ ^' ^""f ^^^^ "''°'' ''^*'*^' ^^^'^''^ *h« Commission, that the figures included a proposed allowance of $50,000 to Mr Pacaud with Mf M *^*''^"^« ^'- McDonald had another interview with Mr Mercier on Mr. Pacaud's request, the first haviuir been ifao result of an accidental meeting at New York between Messrs- a \, MacFarlant Contract. lf«rci*r, 509. M*rol«r, ftUT. MeOoDkld, 363, 499. Meroier, 507. Maohin, S94. ArmitroDg, 31, 34. MoDonnld, 346,350.352, 40«, 600. r '■'-oni;;4,.'.48 Meroier, 508. M' Douald Ueaton Armstrong and Mercier (vi^bo was on his way to Europe) On the Ah of December, 1890, Mr. Cameron addressed a letter (No. 108) to the Prime Miuistor, in which, after recalling what they had been ready to undertake and the end which they had wished to attain, he wrote : " The Company refus^fl r^uc proposal, and I can say nothing more now than to ezpvuss, iu the name of my clients our regret that wo have not been able for the above mentioned reasons, to undertake the wo.'k of com- pleting the Bale des Chaleurs Railway Company.' The Premier, on the 9th of December, acknowledged receipt of this letter. The conclusion indicated by Mr. Cameron, although apparently decisive, does not, however, appear to have been so considered, for a third interview, also arranged by Mr. Pacaud, took place between Mr. McDonald and Mr. Mercier in the Speaker's room, on the 22nd of December, 1890, the day of the presentation to the Legislature of certain resolutions affecting the railway. Mr. McDonald submitted these resolutions (which are re- produced in the statute 64 Vict., cap. 18), to counsel and ob- tained an opinion that they were sufficient to cover his proposals. During his negotiations with the Government, Mr. McDonald had also endeavored to settle on a basis of arrangements with the old Company. By his last proposal, he offered to pay it $176,000, in order to become proprietor of all its shares and of its assets, free from liabilities including the claims of Charles N. Armstrong, Macfarlane and the Ontario Bank. Under the impression that his offer had been accepted, Mr. McDonald wrote Mr. Cameron about the end of January or begiu ,; j i February, asking Iiim to visit Quebec for the purpos^^ '.>f (.''ociL the conLu,cc. But Mr. Riopel declared that an acceptance iiad not been given. He in- sisted on retaining an interest in the new Company, and the as- sumption by it of existing liabilities. Mr. McDonald appears to have been discouraged by these demands and did not again see Mr. Riopel. With these negotiations the Grovernment does not seem to hav iatermedled. On the 7th February, 1891, Mr. Cameron, in a letter to the Premier (No. 110), wrote that he had seen Mr. Riopul, that a gnarani sary, an by a sta (No. 11 des Cha Th< the mat From T On Pacaud i " My Dhaj " You 1 to the Bubsi not arrange cannot remi catehere wl They would would buy ( line, and foi the subsidy etc.. and to i the means n mence const "I thoi tn-morrow, a > .)u are in Q see Mr. Merc "Please cuniini; up. " Pli-ase Mr. P real on tht the mornii ioilowing MacFarlane Ccmtract. 28 hTv and that r't' ^"%"/'^^ *" ^""P^^'- ^-»^ be uecea- (No J*;.^ .«o°^;^« P»^>»*-««tof Tho Preuuer answered : From Thom's Negotiations March. 189 i, to Issue of Oederb- iN-CouNciL 28RD April, Ih »l. t .iil !fi 1 1t' H' " My D«AR Paoaud : MoKTRBAL. l> h March, 18»1. menc. o,n,i™oll„„ „ "„» '"""''•"°« "^ ''™ •»'' """M "»»8- » » to com. > ')U are in Quebec I think it would h« u-ii ft,, . ^ " '' *• '° case c.m,„f„r '''" ""'-' °' ""■■ ""»' -'"■"• •»''>°™ "— "f «» .» " Yours, "C. N. ARMSTRONG. " Pliaae let no one know that we are negotiating." Mr Pacaud replied to him that he could only be at Mnnf real on the evening of the 11th of March, and on thit darduril" the morning received a second Uti^r fr.« nr.. a_-_ ' ^'^.''"?^ iollowmg terms :~ " " ^'"' -^"»«'rong, m the 24 Thorn's Negotiations to issue of Orders in Council. Faoaud, 366. " MosTBKAL, 11th of March, 1891. " My Dear Pacaud : " Your telegram to hand. I have seen my friends again to-day, and think there is now no difficulty in arranging the whole Bale des Chaleurs matter if Mr. Mercier is willing to treat the parties reasonably. Can I see you to-morrow even- ing, on arrival, and where ? Please telegraph me. As there will not be much opportunity of meeting Mr. Mercier to-mOrrow night, I might, perhaps, accompany you part of the way to New York, and we could discsus the matter fully on the train. " Yours, "C. N. ARMSTRONG." Mr. Armstrong and Mr. Pacaud met on the 11th daring the evening, when Mr. Pacaud declared himself as still bound by bis arrangements with Mr. McDonald, and refused to enter into new negotiations until relieved. Mercier, 509. The same evening Messrs. Cooper and Thorn, on whom Armstrong depended for the formation of a syndicate, accom- panied by Mr. Laflamme, their Copnsel, had an interview with the Premier. The following letter, written by Mr. Laflamme on the same day, appears to give a resume of what took place : — " Honourable Mr. Mercier, Mercier, 510. .. Premier of the Province of Quebec " Dear Sir,— " Montreal, 12th March, 1891. "In reference to my conversation with you to-day regarding the Baie des Chaleurs Railway Company, Mr. Cooper has been considering the matter, on the understanding that your Government has agreed to pay the following subsidies : 10 miles, from 60 to 70, $7,000 per mile, $70,000 ; special for bridges, $50,000 ; 30 miles, from 70 to 100, $7,000 per mile, $210,000. Also, a further subsidy equal to 800,000 acres of land, upon which 35 cents per acre is payable in cash, equal to $280,000. " Will you kindly say if the above representations are correct, and what pro- portion of the last item ($280,000) your Government will pay on account of the miles 60 to 100. " Mr. Cooper has an option from Mr. Riopel, which is satisfactory, and he (Mr. Cooper) will be prepared to make a proposition for the completion of the road as soon as he is informed that such proposition will be entertained, with condition of payment of all privileged claims. " Mr. Cooper understood from his conversation witli you that the question could be determined within a week. " Yours truly, " (Signed,) R. LAFLAMME. Mr. Mercier replied by the following letter : — TTiom's Negotiations to issue of Orders in CouncU. 25 " Honourable R. Laflamme, " ^'^ ^°*^' ^^'^ ^s^ch, 189i; Mercier, 611. " Montreal. " My dear Mr. Laflamme,— to pay to the CTnTo; syntteaeiZr th^?' f "T*'""*'^ Council the whole subsWy actually voteJt?S rL ^'«"*«°f * «ovemor in tione mentioned in our provSl st^tS^« IZCl' ^T^^ *'' "^" «'°^'- Lieutenant Governor in Couldl ""^ *^ *^' satisfaction of the " Yours truly, '• (Signed) HONORE MERCIER." (e. r™le for eIIw"'"' ""' •*'• *'"«»' ""*' New York. ..,»u„ ,. (en route for Europe) la company with the Honorables Messrs ''"^°"- P^ta^* '• '^'"'"•" """ ''°^" ^ ""y -»« together Ta Mr. Pacaud was on the traiu but in another carria« During the loumey. he requested Mr. Mercier to gr.lt aTS view to Mr^ Armstrong, who. desired to secu^ a fevorable '"■"-. »•• response to Mr_^ Laflamme's letter, but Mr. Mercier absl°n"ly refased to see him in regard to the matter, sayini that hlTJ . Zcl^. " """''""" "'■ I^— towhiclKu,dlp^» On arrival at St. Johns, Mr. Armstrong Iflft ^\^^ *, • Mr. Pacaud telegraphed to Mr. IrvinetKlowtg'ZsTl " Honourable Qeoiige Irvine, "Quebec. " Pleaae wire me at tlie Brunswick V«w v«,i, -u . "(Signed,) ERNEST PACAUD." Mr. McDonald himself replied to Mr. Pacand :- " Ernest Pacaud, " Ottawa, Ont, 13. " Hotel Brunswick, " New York. P„a„d, 3,7. "GoinK Montreal to-morrow to meet Armstronu about Bft,«H««ni 1 «, can arrange with him and Riopel. *«. r«n.^ "S "l^f. T*,*^*" GhalexitB. If I discussed with you. ""'' — ' "^ ""^" "" ^°®"^« "" conditions "(Signed,) JOHN J. McDonald." ? I n«' 26 Thorn's Negtriiations to issue of Orders in Council. PMmud, 371. And on the 2l8t he telegraphed anew as follows : — "Ottawa, March 21, 1891. " To Ernest Pacaad, "Brunswick Hotel, New York: •• Leaving here Monday for Nf>w York, taking steamer for Liverpool Wednes- day. I am very anxious to mo you before sailing. Can you meet me in New York Tuesday, or in Montreal Monday ? "JOHN J. McPONALD." If ereier, SI2. ArmitrooK, 47-«. Mr. Pacand interviewed Mr. Mcrcier a secono. time daring the jonmey of the 12th of March, &nd asked hin>. to favorably consider the proposal made by the new syndicate in the case of McDonald withdrawing. Mr. ]V(ercier contented himself with saying that he much regr^cted seeing Mr. McDonald retire from the matter, and, says Mr. Pacaad, " he requested me to do all in *' my power, daring my absence, to prevent Mr. McDonald from withdrawing." On Monday or Tuesday of the week following Armstrong was summoned to New York, and, in company with Mr. Thorn, met Mr Pacaud at the Brunswick Hotel. Mr. Thom was, on this occasion, introduced to Messrs. Charles Langelier and Sobidoux; he made them a proposal for the construction of the road, but no definite arrangement resulted, and the Ministers told him that they would return to Montreal in three weeks. Mr. Armstrong then asked Mr. Pacaud what he would have to pay him. Mr. Pacaud replied, $100,000, and Mr. Armstrong immediately consented to it. The question had been before asked, but Mr. Pacaud had refused to reply, seeing that he still considered himself bound to McDonald. The details of this arrangement will be considered when we deal with the facts specially affecting Mr. Pacaud. From this date onwards Thom, Armstrong and Pacaud were active in the promotion of the new scheme. On the 17th of April, Mr. Robidoux telegraphed Mr. Gar- neau as follows : — ^'8ir: 1, 1891. lol Wednes- ne in New fALD." e during avorably le case of elf with tire from do all in Slid from instrong r. Thorn, was, on lier and n of the linisters eeks. lid have mstrong a. before t he still of this ;he facts lud were )1t. Gar- ^n^n'* Negotiations to tssue of Order, in Council. " The Honorable Pierre Gameau, " Commissioner of Public Works, Quebec. ' matter of the Bale Z JhTirrs iLilt/v r T** *" '^'* ^^^ ^'^^ d« '° '^^ w«. decided npori the rDanar^M^T^^^^ ''•" *«" y°" exactly what delay in this iJatteTmry b^ ZSff ^u ^T""'- ^ *" ^'^''"^^ ^^at any the Province." ^ Prejudicial to the intereats of the enterprise and of 9ft ' (Signed) J. E. ROBIDOUX." G^™^™ J ^ " *""' ■■»'"" »'■ >>" -egotiation, with the GoTerement, and waa accepted by m, Order-m-Coancil (Sol^n paaaedon he 21rt and sanctioned on the 28rf ofT'ril wS for convenience of reference we quote in full :_ Fbom Ordkks .k CoraCL to issue of Letters of Credit. 28th op Apbil, 1891. No. 287. '*"™° "'"''•''»'"<«»»' Gownior OB the 23rd of April, 1891. "Sh?'°' ^yt^ '*•'"■'■ K^l"«y Comp.,,. AprU i^LfiTCSSr'""' °' ""'"''= "••"■•• '" • "!»« --"i »«. of Apri'l^JiS.tl^SrlltlJ^'t'"""' "'• *■*• '^ '*•■»• «' «"« «■• "«. of " To Honorable P. Gameau " Qaebe«. 17th April, 1891. ^^^^^ "^""""'-'O"" of Public Works, and P^mier ad interim. Chai:„'^'i;::iJ;*r'^'*i:;,7^^^^^^^^^^ of theBalede, Company under [he managemenf cS^'^erLMTr^ ^^ ^ go on with the works, complete the rL and hall ^ IT '"' ^ P™'«"«> *» the 31st of December, 1892. from MetaJ«ilftoPrjM ", ^l' *'"*®'' °° °' *^f«'« «8 soon », circumstances ^ill permit '^ """^ *^*°''* to Gaepe Basin GoJrrr?:hS[^yTeVCVi'"^"' ^'"•^^"°" '* *' -^-*-> *^-tthe to be payable as earned- '*''*'''• ^»P- ^*> "««• 12, amounting to $260,00() ?5.^^:::.rt'.lT:^«toS'J^-rJ!-f?-^^^^^^ .= uijianBi ana accepted by the Government ; ""° "■«' ^«na uaacapedia ■\ I r , ■ II 28 Orders in Council to issue of Letters of Credit. " 3. To comply with the intention of the isw, the subsidy of 800,000 acres of land granted by the Statutes of last Session, 54 Vic, Cap. 88, Sec. 1, sub-sec. J, shall be converted, and the proceeds thereof shall be used by the Government to pay the legitimate and privileged claims, in accordance with the above cited Act, now existing against the road or against the Compnny ; and if any surplus should exist after the payment by the Government of all claims now existing against the said road as aforesaid, such surplus, if any, shall go to the new company on final settle- ment. " The said debts and claims, after they shall have been approved and certified by A. M. Thorn, representing the company, shall be paid by a person appointed by the Government for that purpose, and failing such approbation and such certificate by Mr. Thom, they shall be paid upon a judgment or arbitrators' report in favor of any claimant When the Commissioner appointed by the Government shall accept the claim, and Mr. Thom refuses his certificates and approbation, then and in each case the claimant has an absolute right to arbitration, and the decision of the arbitrators shall then state that the cost incurred shall be paid by the party against whom the decision is given. If Mr. Thom fails to appoint an arbitrator after fifteen day's notice to do so the Commissioner may then pay the claim, and his action shall be binding on all parties. " As a guarantee that'they will go on with the work, build, complete, and run the road, the Company will deposit with the Government bonds of the actual emis- sion to the amount of five hundred thousand dollars ($500^0), which shall be exchanged for an equal amount of bonds of another issue of same|amount and value in case the company would deem proper to cancel the present issue and replace it with others, or other satisfactory security in lieu thereof, it being distinctly under- stood that the company will be handed back the bonds or other security so de- posited on completion of and sufiicient equipment of the road to Paspebiac. " The board of directors of the company under the new organization shall be composed as follows :— James Coopur, of Montreal; J. F. Dawes, of Lachine: Alexander Ewing, of Montreal ; James Williamson, of Montreal ; Angus M. Thom, of Montreal ; and two other persons to be named by the Government "On the sixty (tiO) miles of the faid road comprised between Metapedia and the big river Cascapedia, the company will resume the works as soon as they can take posaeesi^n of that Motion, and on the forty miles ending at Paspebiac, surveys will be commenced as soon as the present proposition^is accepted and the works will proceed with the utmost diligence. " The whole respectfully submitted. " (Signed), A. M. THOM." " And upon the said A. M. Thom, and the persons in the name of whom he acts and whom he represents, obtaining a transfer of the charter of the Baie des Chaleurs Railway, and seeing that persons mentioned in the propositions above cited have the necessary means to carry out the enterprise, as required by the Statute of last session, 54 Vic., Gap. 88, Sec. 1, sub-sec. J, and seeing that it is in the intereatG of the Province to accept it, the Honorable the Commissioner of Public Works recommends that the said proposition be accepted as follows, thai is to say " 1. To reorganize the Baie des Chaleurs Railway Company. " 2= To construct and put in operAtion., on or before the 31st of December. 1892 the one hundred miles of the said railway comprised between Metapedia and Orders in Council to issue of Letters of Credit. 2a icrea of land I. J, shall be t to pay the >d Act, now should exist inst the said final settle- Eind certified ppointed by h certificate t in favor of shall accept and in each sion of the y the party 1 arbitrator » clainii and ate, and run actnal emis- ch shall be It and value id replace it ictly under- irity so de- iac ion shall be if Lachine: IS M. Thom^ idia and the ley can taiie surveys will works will OM." r whom he le Bale des Jons above red by the ', it is in the irof Public It is to say imber 1892, lapedia and Paspeblac, and the remainder as far as Gaspe Basin, as soon as circumstances will permit " To continue the works on the sixty miles comprised between Metapedia and the Grand River Cascapedia as soon as the Company shall be able to take posses- sion of this part of the road, that is to say. as soon as the claims which are not con- tested shall have been paid, which shall be done at the diligence of the Govern- ment Iwtween now and the 10th May next at the latest, but without recourse against the Government in default of such diligence, to commence the explorations upon the forty miles between the Grand River Cascapedia and Paspebiac. as soon as the proposition shall be accepted and push them on with the utmost dispatch • r .u" t' „ .* *''® *"* ^""^ °^ Directore of the said Company shall be compoid ofthefoUowing persons ^-James Cooper, of Montreal; J. P. Dawes, of Lachine- Al«ander Ewing,of Montreal ; Angus M. Thorn, of Montreal ; James Williamson of Montreal, and of two persons named by the Government. " 5. To deposit as a guarantee in the hands of the Government five hundred thousand dollars of debentures or bonds of the Company of the present issue, or any other satisfactory guarantee, with the privilege of exchangtug.the said deben ■ turea or bonds for an equal amount of debentures or bonds of any other issue, not to exceed, however, the actual issue, and of the same value in case it shall be judged expedient to withdraw the present issue, which debentures or bonds or other guar- antees shall be returned by the Government to the Company as soon as the road shall have been finished to Paspebiac. ON CONDITION: " 1. That the balance, to wit. $260,000 of the subsidies granted to the said Railway by 45 Vic, C^p. 23. and its amendments, and 51-52 Vic, Cap. 91, Sec. 12 shallbe paid to the Company in proportion as the same shall have been earned according to law. ^ ^,^ ^i** the subsidy of $50,000 (fifty thousand ciollars), granted by the Staiute M Vict, CapL 88^ gee. 1, snb^sec I, shall be paid to the Company as soon as the bridge oyer the Grand River Cascapedia shall have been constructed and accepted ^ *i« ^'«"*«°*°«^^ernor-in.Councilupon a report of the Goverument Engineer. „f «nA.J the Government binds itself to pay the Compaiy with the subsidv of 800,000 acres of land granted by the Statute 54 Vict, Cap, 88, Sec. 1, sub-sec J. converted into money, which subsidy shall be kept by the Government and em- ployed by It to pay the actual debts of the Bale des Chaleurs Railway ; and the surplus, if any, shall be, after the payment of all claims actually existing against the Company, kept by the Government which shall render an account thereof to the Company in final settlement J'J^u «® ^'^\f^J!^ *°*^ ''^'"'^' "***'■ *^«y »'>«" have been approved of and o^rtlfied by Mr. A. M. Thorn, representing the Company, shall be paid by a persbn named for that purpose by the Goverument; and in default of such approbaUon and such certificates, they shall be paid upon a judgment or report of arbitrators in favor of any claimant In the case of the Commissioner named by the Govern- ment accepting a claim, and of the said Mr. Thorn refusing his certificate, then in each case the claimant shall have an absolute right to an arbitration, and the award of the arbitrators shall then declare that the costa shall be at the charge of the party who shall fail : and in defaiiU of thn .oid Th'>r» *~ i = • '■ • after fifteen days' notice sp to do, the Coramissioner may pay the claim for all law- Hi 30 Orders in Council to issue of Letters of Credit. No. 3 Pag* 886 Cabbm 778 OunoD ?78 No. 13, 179 ful pnrpoees whatever and the action shall bind all the parties. The Committee concurs in the foregoing report, and submits it for the approval of the Lientenant- Qovernor. (SiiTned) DAVID A. ROSS, A J ^u> «. J . ., ,^. Chairman of the Committee. Approved this 23rd April, 1891, (Signed) A. B. ANGERS. Lieatenant*Governor. Certified. (Signed) GUSTAVE GRENIER, Clerk of the Executive Council Concurrently with this action there was also passed an Order in Council (No. 288), appointing Mr. J. C. Langelier •' Commis- sioner to pay the claims against the Baie des Chaleurs Sailway in conformity with the dispositions of the Order in Council, No. 28t, of the 28rd of April, 1891 " On the 28rd of April, 1891, Mr. Thom, Mr. J. C. Langelier and Mr. Lesage, Assistant-Commissioner of Public "Works, went together to Assistant- Attorney General Cannon's office, and Mr. Lesage stated that it was desired, at the instance of Mr. G-ameau, to have an opinion on certain points connected with the matter. Mr. Thom had with him a certificate and debentfures of the Com- pany for ^600,000. Mr. Cannon gave his opinion verbally. Later in the day Mr. Charles Langelier, Acting-Attorney General, stated that Mr. Gameau desired this verbal opinion tty be confirmed by Mr. Francois Langelier, who usually acted as counsel for the Government, and whom he would see. What next followed had best be stated in Mr. Cannon's own words : "A. As far ai^ I remember, this is how the opinion was type-written. I ha . ^ just mentioned that in the afternoon of the day on which I bad given the verbal opinion, I repeated that opinion to the Honorable Charles Langelier. when h& told me that the Honorable Mr. Garneau wished my opinion to be corroborated by the Honorable Francois Langelier. Thereupon he said : 'Very well, I will see my brother Francois and tell him that is your opinion in that matter.' I do not absolutely remember whether at the time he knew his brother's opinion, or whether he said he would corroborate it ; in any case he thereupon left, telling me that he would see the Honorable Francois Langelier to get my opinion corrobor- ated by him. Then, the next day, I believe it was, the Honorable Charles Langelier's private secretary, who came with the draft of the written opinion which is produced in the record, and which he had dictated to Mr. Legendre, one of the employees of the department, who puts- into typewriting all that I prepare fov* tVia tf^Anarfmanf anA of^Ai. W wao faiwt-wr «wm«»*am Ar,4 T * — ^1* 4.1.. J> x t :i *' — 1**" ** T — "" — -*.- ... .*•.» .ml.«^ r.*.vt^itK vUt;- X tvun. tilt? UUVUXIIC3III, 1. rCSUI' it, I saw that it was absolutely the verbal opinion which I had given thedAy before Orders in CouhcH to issue of Letters of Credit. 81 Committee Lienteniuat- >mmittee. an Order Gommis- Bailway ncil, No. jangelier ks, went and Mr. [^amean, i matter. ;he Oom- y- lttorne7 >inion t& acted as . What rords : D. I ha,'« P'*^»«8«d claims Vppn>ved of. or for which s judgment or the award of the arbitrate™ ahall have been given " Oftrnaau 103-190 It was apparently in response to this letter that Mr. J kj Langelier transmitted to Mr. Garneau the list of claims pro- duced before the Government against the Baie de^ Ohaleurs Rail- way amounting to $57,0t3.64, that is to say : Against the first 60 miles $38,679.65 Against thesectionK ig 393.89 P) No. 19 '-'• page 191 . . ^ $57,073.64 And he added: "There are probably other claims which will be produced when we commence the payments." It is noticeable that this amount fairly corresponds with the of- cor. 8*2 figures stated by Mr. Mercier in his speech, to the House on the 21st November. 1890. At what exact date Armstrong's claim farst came to the knowledge of Mr. Garneau is not clear The certificate on its face bears date the 22nd of April, and j c l w'^fi ft'^'t'?' delivered to Mr. J. C- Langelier to Armstrong. ^^11^*' We find Mr. Thom writing as follows on the 24th - ." J. C. Langelier, Esq., Qukbbc. 24th AprU. 1891. "Quebea "DbarSib:— iv, '! ^°c ^"l'?'®' *° ^°"" °^ **'® 23rd instant, transmitting for my approval the account of C. N. Armstrong, Esq.. Agent of the Baie des Cbaleu™ Say Company, to the amount of $288.943.62. 1 beg to state that I refuse to approve «d Ss^rn »Tr r'" ^^'"^ °"' **"°^'^ »"^ «eventy-flve thous^d doUara («;i75,000), and this on the express condition that Mr. Armstrong shall cancel and ra^vli""'^'.''''*'''^"^^'"^' ''"''' ^'"^ ^"» --^ absolute Zha^ indirectly *^"°** ""^ °' *°^**''°^ appertaining to it. directly^ " Yours very truly " A. M. Thom." No. 135 page 589 t t f\n 84 Orders to Council to issue of Letters of Oredtt. No. 19 page 044 No. 133 5 age 689 . C. L. •33, 645, 6«4 J. C. L. «81, 633 Off. Cor. 824 No. 19 £•(•644 [aehtn 266 It appears strange that Mr J. C. Langelier should by his let- ter to Mr. Garneau of the 24th April have stated that the claims produced amounted to only $67,078 54, when he had thus on the preceding day forwarded Armstrong's account for $29»,943.62 for certification of some kind. The claim, so far as known, had never before been on record in the Deparment. Mr, Garneau's first belief was that the Order- in-Council would create a demand for about $50,000. Vv'hereof $25,000 might require immediate payment. These figwivs accord with stt^te- ment made to the Legislature as to outstanding privileged or quasi-privileged claims, and also with the letter of Mr. J. 0. Langelier above alluded to. They were within command of the Treasury. At some time later than this Iptter of the 24th putting the liabilities at $57,078.54, Mr. Garneau was made aware that Arm- strong's account certified for '4176,000 had been presented. Its appearance after the passing of the Order in Council created surprise and gravely embarrassed him. He was informed by Assistant Treasurer Machin that the Treasury could not supply the amount and then, apparently, the plan of issuing letters of credit was suggested, and finally put into effect 28th of April. They were first submitted in draft form to Mr Bobidouz, who being in bed, received Mr. Garneau, the Hon. Mr. Ross and Mr. Muchin at his own house. This interview apparently resulted from the belief, strongly expressed, of Mr. Machin and Provincial Auditor Verret, that no legal conversion of the lands into money had been effected. Mr. Robidoux delivered a verbal opinion to the contrary and approving of the draft, initialled it. This interview was the next day, the 28th of April, followed SobidoM 757 ^y ^r- Robidoux's written opinion to the effect that the company reconstituted had fulfilled the conditions precedent required by Order in Council, and that " if now the government were to the " refuse to carry out the Order in Council there is no doubt that " the company would have a claim in damages against the • " Government, which would be condemned to pay a sum equal J. 0. L. 633 Lsaage 673 MMhtn 266, 287 Maehin 268, 374 No. 42 Sage 268 obidoux 761-2, 757 No. 14 to tl carry Oi w; positioi be thue Th these q difficult claim, a Th( to limit already the 24tl emphasj "T* "In re shoald mal and those ^ and spirit < in the thii the 17th ull of 800,000 a ], sab-aec. J governmeni above cited jnrploa shoi iog against pany on fim "On tb condition ol of the Lieut by the Baie by Mr. Ride the Act 53 \ by contractt the advice a Armstrong Claim. 86 *' to the profits which the company might have realized in carryiD^ arongh the enterprise to the end." On the same date the letters of credit went out. THE ARMSTRONG CLAIM. What was the nature of Amstrong's claim ? What was its po«tion as regarded the Government ? What was its right to be thus paid by an advance out of the Provincial Treasury * The evidence permits us to give a positive answer to each of these questions. In the presence of the facts before us. it is difficult to arrive at the conclusion that the settlement of this claim, as made, was in the public interest ♦n 1- '^'!;° ?""^^*^ ^""^^ °f Mr. J 0. Langelier'8 instructions were to limit himself to the payment of privileged claims. We Lve ri?^Zi? ! '"^ *i" '^"'' ^'**"* ^'- »«™ea«'« letter to him of !™ J !" '^'J*''!: ^^^^'•^^^^ *« «tl^er correspondence of record emphasizes the limitation. "Thus Mr. Moreau ^vritea on the 8th of May :— 18^ 7"'." n t"^' ^™"'^ ""^ *'^* ^^*°'«'' °f ^"t session. 64 C Cap. SsTJ fhI!?^*!S A .^^ the legitimate and privileged debts in accordance with th« !^ J'f tf "7 r"""*^ "«"'"* *^« '^^^ «' '^g"''^^ the companyTand ff ^; nTJ^i^t ^L "I? ""^I the payment by the government of all dZs ^^w exIJt. "On the other hand, paragraph J of the Statutes in question stinalatw. «« a condition of granting the subsidy, that payment shall be ^eZ tt'Sactio^ by contractors engaged in the construction of railways under A^« Z^kT!!^ ^^'«.a«iB « yu6b«c,' whicii has been, and is still, put into practic^'^^rdinJ'^ the «lvioe and instructions of the Hon. the Attorne^ GeneiS.'JTfliraeTemS ot No. 43 Skga 888 u. 44 PHt« 898 No. 15» 062 ^.,M M Armstrong Claim. privileged claims (•uch u right of w»y snd wagea of workmen, or fconior acoounta for board, for proviaiona and gooda aupplied to them, and for which a reduction tiad been made out of tlie amount of tlieir wages), on the Hereford, Vaudreuil and Preacott and Grand Oriental Railway*. " Believe me, Dear 8ir, " Your obedient servant, " E. MOREAU, "Director of Jtailvnyt.' " N.B — For your information I enclose you a certifled oopy of the instmctions given by the Hon. the Attorney (ieneral to Mr. Vallee, the Government Engineer, respecting the payment to be made by the latter of the privileged claima oa the Vaudreuil and Preacott Railway." The letter enclosed was as follows : — " MoMTRBAL, 13th February, 1891. * Mr. L. A. Vallee, " Government Engineer, , " Quebec. " My dear Mr. Vallee : " In re the Vaudreuil * Preacott Railway, and the workmen and laborers employed on the construction of the road, you will pay ; " 1. All the bon» lield by the laborers and workmen which are signed ' Doran & Hebert, R. N. McDonald, and Hilton & Nellis, sub-contractors;' " 2. All the bont given to the workmen and laborers and which are the prop- e.ty of third parties ; " 3. The workmen's wages— as established to your satisfaction— when snob laborers have not received honi for their wages ; " 4. The coats incurred in snita on recovery of 6on« and taxes against Doran and Hebert, R. N. McDonald, and Hilton & Nellis, or in suits on recovery of wages not settled by boru. You will pay only the taxed costf, without recognizing any other charge made respecting the recovery of bon$ or wages.' " You will further pay : " 5. The claims representing wages, as accounts for bread and meat supplied to laborers and who have received their wages fi"om those who employed them, less that which was supplied them in bread, meat and other necessaries of life; " 6. In the case of judgments taken either against Doran & Hebert, R. N. McDonald or Hilton & Nellis, you will only pay on those judgments the amount represented by bong given to workmen and laborers and which were transferred to those who obtained such judgments. " Pay the workmen's accounts for wages, by whomsoever they have been employed. " Yours very truly, " (Signed,) J. K BOBIDOUX, '- Attomey-Gscerai." Armstrong Claim. fh On the and of July Mr. Moreaa write, u follow, to Mr "•■ ■« ijangeJier : — " p. 6a7 » foUowl'-i''"' """''' ^ '*"*" ""'*"<"«'■ J- C. L.l.gelier».M« tlte distinction between Armstrong's claim and pririleired ^H L M .1^ ^ ^^'"*°* of privileged .pproved clainw outelde of the^ro^ paid to Mr. C N. Armstrong on tlie 28th of April l^t ' We certify that this amount $298,943.62 ia a corrBrt «t.ta».«i „# « work done .nd «m.ining unpaid to CK I^ll^T^^^ ^■^T'T "'?V. of hifl contract with the company. «»w»raance wjth the terms P- 8«« I ii "(Signed) "L. J. RIOPEL, ** Managing Director. " L. A. ROBITAILLE, " Secrttary-Tnamrer." Reference to this document discloses the fact that the word #1 ill 88 Armstrong Clam- mo. 171 p. 98S Armatrong 32, 48-0 78,90 Thom 610 Off. Oor. 867 No. 171-963 ArmiitronK 28-76 No. 17t p. 963 No. 172 p. 969 AnaatroDK 30 " due " was struck out, and replaced with the words " is a cor- rect statement of estimates of work done and remaining unpaid." This important change is explained by the admitted fact that the amount so certified to, as representing work done, was not payable in money at all, but in debentures and that of these a large part were only exigible after the completion of the line beyond Faspebiac. At that date in the then condition of the road the debentures of the company were unsaleable and practi- cally worthless,. An effort was made to question the figures thus certified to, but tUe account so. stated and signed might be reasonably accepted as correct in its quantities Amstrong's contract was for |20,000 per mile of road com- pleted and put in working order, payable in cash, debentures and stock. Trains had at one . time been run over the first sixty miles ; beyond this point work had not been done to any extent worth mentioning. His payments in cash, from subsidies, amounted to $87a000. By his contract, Armstrong was bound to hand over to the Company one hundred miles of completed road on the 1st of July, 1888. Instead of doing so he was compelled on t|ie 8th of June, 1888, to sub-contract the completion of the first siiite miles to Henry McFarlane, and the Ist of January, 1889, was Jwced as the time limit. In this agreement the Company acquieso^. Work dragged on under the new arrangement until the autumn of 1890, when it wholly and finally ceased. Since then, Armstrong's inability to complete his contract has been continu- ing and absolute. The responsibility for this state of afiairs is charged by Armstrong upon his sub-contractor, McFarlane. He makes no complaints against the Company, which indeed fulfilled his obligations up to the letter of the contract. His evidence on this point and on the further point that nothing was due to him in cash is quite clear : " Q. What made necessary the patting of the Company under the presuit management 7 " A. The Company and I were unable, under the circumstances, to find the necessary means of continuing the work, particularly on account of McFarlane's claiming possession and our being unable to put any person else who would do the WOf B. in pGSSrSSton. Armstrong Claim. 89 By a document dated the 28th April, 1891. Armstrong gives No. ui-esr a discharge of his own claim, cancels his contract, assumes to SlFarC' *'' "'^ '"^ *""^'^^^ ^'« "^^*« '^S--* But at this date McFarlane was in effective possession of the^o \n »«, fon2 ^T^': '^ '''^- ^^^ "^«^^^««« ^*d afterwards to be qn^almUVdt^^^^^^ ^^^^ ^^^ "^ only dispossessed by a..... 64 Vic, cap. 88, added nothing to Armstronff's legal rights ^"V'ec.p.as He was a principal contractor, and one of the evident purposes ""'' '"^ of this and other statutes was not the relief of principaUrTul S« 7ii contractors, but of their creditors. ^ %m) /' Off. Cor. The general statutory law of the Province makes subsidies''*' payaWe according to the progress of the work on ea'rten mUe" ^ Mr. Garaean had doubts as to whether the right to make any advances at all existed : ^ " Q. What objections had you ? " A. It was to know whether we could nav hn«Wr« ♦!,«.„ i th. r^uT "'^ ""! ^'"*"'"'' "" ^'"S: oontrovereial, of whether Zt%t "ct tTf"*'" .T '"" "^ " "'• - «»<• ^oK* » *u ;\. ^. ' ***'• •^' '^^^^ *^e expression "priviWed debts ; that Mr. Thom. in his proposal, limits his appKon to Act but that the executory clauses of the order-in-Council broad! ens hese expressions into ' actual debts " and " all claims actuaUv existing: against the Company." actually *„4 J^^! *'^*°*^"' '""''" °^ "***«"*! importance and were not authonzed or warranted by any statutory authority. egert claim , Mr J. C. Langeher made no enquiry as to whether J- c i. Lre'evrundfrT'T*"" -<^- «P«-al iltructirns and ible h Jfl, ' '''^'' '" ^"^^" ^^'^'d have been impos- a"'1^ *^' expression "privileged debts " been Dreserv J^ ?f ^.m..xuug possessed privileged rights, or was in a positi'on to 40 Armstrong Claim. Thorn 557-8, eio Ouneau 157 178, 181 Thorn 556, 502 No. p. 157 No. p. 178 No. 131 p. 182 No. 134 p. 558 Coopor S15 Thorn 557-7 harass the new promotion of enterprise — and this was quite pos- sible — the matter was one for private settlement and in no sense warranted the payment of his claim by an advance of $1*75,000 out of the public Treasury. That it was so paid is a circum- stance which acquires great gravity in the presence of other facts of record. We proceed to the examination of the further question at the moment before us : — Did all this asserted exigency of facts and public interest really exist ? During the progress of these incidents great pressure had been put upon Mr. Garneau to induce the passage of the order in council and the issue of the letters of credit. Those who urged him by speech and letter, or either one or the other, were his fellow minsters the Hons. C. Langelier, Robidoux and Duhamel, and Messrs. Thorn and Facaud. * . Beyond the following telegram, only received on the 2tth April, the Government had nothing to substantiate Thorn's authority: — " MosTRBAL, April 27tb, 1891. " To the Hon. Mr. Gamnan, " Department Public Works, " Quebec. " Mr. Thorn is acting under inatractiona from me and my aesociatea, J. P Dawes, Alexander Ewing and Jamea Williamson, who will all become directon on the 6th May. "Signed, JAMES COOPER." Thorn himself had no written authority from Ooop^r ; with the others he haa had no communication whatever and as between themselves he is ignorant of 'the existence of any written agreement. Neither at the date of the Order in Council, nor the issue of the letters of credit, were the government in possession of any document or security which committed the persons with whom it was dealing, to a fulfilment of the requirements 54 Vic. Cap. 88. Armstrong Claim. While 80 individually not under any contract toward the government, or beyond a mere understanding with TaTh other Thom any real mtere«t in the company itself. They Lame qnahfied as directors by the transfer of 10 shares to each^f them atounr "' *'''• "^"^°" '' P^^ ^^"*- "^^ ^«- P-^ on At the time of the passage of the Order in Council Mr Garneau had received debentures of the old company to the nominal value of $600,000 and a paper in the followTg^orm:- List of Shareholdebs op the Baie des Chaletjrs Railway. 41 Number of shares sub- No. 16 scribed of Amount. 5: i"i,.„. $50 each. gelier 042 660 127,500.00 20 1,000 00 100 5,000.00 660 88.000.00 4,670 228,600.00 100 5,000.00 James Cooper Samuel Shackwell A. McI Thom Robert H. McGreevy.... A. McK. Thom in trust. L. J. Q-. Fosbrooke 6,000 1300,000.00 «P 130,600. ' '^ "^ ""^''^ *"" '^^ subBcribed $300,000. and paid Quebec. 23rf April. 1891. A. Eobitailu^ Secretary-Treasurer. EwiJ^'do\T!nn"^°'''r"*l^''"^- ^*^««' Williamson and liwing do not appear as shareholders. It does not certifv th« conrectness of the share list but only as to the ca^a Ick The explanation of so curious a fact is to I " ^ ^• mg evidence of Thom :— »i 1 >uuu 4i Armstrong Claim. Thorn 741 " Q. On the 23rd of April were you in poasession of the control of the franchises of the old company 7 " A. Nominallyi yea sir. •• Q. But in law ? «• A. No sir. " Q. You were so far as your businees was.concerned ? " A. Yes sir. " Q. But apart from your option? "A. No sir. " Q. On the 28th were you ? " A. Not until after I made a payment to Mr. Riopel, I thinlc that was on the 28th. " Q. On the 29th7 " A. I would not be sure whether it was on the 28th or 29th. No. IS p. 17» No. 70 ThoH 5M Thus it appears that Mr. Thorn was not in real possession of the shares put opposite to his name in the list of the 22nd until after his payment of $40,000 on the 29th A.pril. The fact that this certificate did not, in fact, certify anything at all is not reconciliable with Deputy Attorney-Q«neral Gan- non's opinion of the 24th April, 1891, in which he writes: — " 1st. What proof should Messrs. Thorn and the others who negotiated with the Government produce to show that they have control of tui charter of the Baie des Chaleurs Railway Company. " A. The proof, according to the Statutes, should consist in the pnxluction to you of a certificate from the Secretary of the Company establishing the number of shares held by these gentlemen, and the fact that these shares constitute the majority of the etock. This certificate under the terms of Article 5,135 of the Re- vised Statutes of the Province of Quebec, makes proof before all courts of the rights of a shareholder to the shares mentioned therein. The certificate now shown me and which was laid before the Government by Mr. Tbom representing the sentle- men with whom the Government dealt, seems to me to comply with all the oon> ditions required and to establish the possession by them of seven-eights of the whole stock of the Company. According to that certificate these gentlemen abso- lutely control the Baie des Chaleurs Railway Company now. Thorn's evidence as to the time and manner in which the directors were qualified is equally unsatisfactory : — " Q. Will that show the date of the acceptance by these gentlemen of the transfer of the stock 7 " A. I don*t think so. " Q. Have yon anything among the books of the Company, either in writing or otherwise, to show the acceptance of the ^tock transferred to those various gentle- men? " Ai I have not got anything at all= " Q. Then, how do you know that they have accepted now 7 "A. ' "Q.: the stock "A. ] "Q. ] stock 7 "A. \ one." Tht the Con speaks a "Q. T "A. A "A. N "Q. A lars' worth "A. F) the road ; { "Q. A1 "A. A tract was g( And & Fairmi was — "A.8e< Else^ with a G cents, and cash depo Mr. C « Q. At I worth then? hands of the much were tj "A. Iwc "Q. You commenced, 1 A. No, si cient security J. 0.1 Armstrong Claim. «0 S!l"*l^"'!'*u^**''' Treaaurer i8 evidence enough, the stSicf '''^ *'"' *''*' ^^ " ^"^''•-^ *o »»>««« the«e Uemen to pay cl,s on "A. iJhinkitis. .took'?- ' ""'*"''°' *'** "''- ^^ *»>«»« g^'^tJ- en have paid anything on that ' one." ^' ^•"' ' •»-"«-» *»>- «» -y-lf. I think. Mr. Cooper may have qualified The debentures accepted by the Government were those of .««.w«^«»t'S,'.™°°' •""" "■'*~'""» •<. them,iU,«„Hh, con. & TT*™ ''"*"* °' *"•»*"' of '*« deba'tures held by Cooner & R«rm.n aa aecunty for . debt of ,19,600, Thorn .dZ t^HJ ■A. S«»„d by bo,.d.-b„ndB of bo ,.,„ ^fe, ,h, w„,k p„«™».d " centB^and wonld have required, according to Mr McDonald a cash deposit of |840,000. Jacuonald, a^^^^^^^,^ Mr. Cooper's idea of their value was not high. He testifies : c!p„ «« handBoftheold(^mpry;rcftioyea«whlT/''''t°?' ~**' '«» '"^ th« much were they worth ? ^ ^^*° **"* ^°*« ^«» bo«° "topped, how " ^ i.''^"''* °o* v»J«e them at 20 cents. ' Q. You Bay that would be sometime in April laat hAf«,^ fi, commenced, that they would be worth 20 cents oithrdoSr? "^^""•"^•'^ clenttc^rit? for;^8.(I»7"'' "°* ^'^ *"^"*^ '*'**«• ' ^*^ »<>* ^'"-'^ '» was suffi- J. 0. Langelier corroborates this opinion. 44 The Contract Discussed. THE CONTRACT DISCUSSED. Off. Cor. 84e We have adverted to the real relations which existed between Thorn and the persons in whose behalf he was assuming to act, and of these persons towards the G-overnment. We have also dealt with the security offered and accepted. In the order of our enquiry the position of the Company it- self claims attention. Was it by individuals, or a company, that the Government was to have the contract executed ? Thom's proposal, as found in the Order-in-Council, may be summarized thus : — " We are in a position to secure the transfer of the charter of the Baie des Chaleurs Railway if the following proposition is accepted by the Government, the Company under the management of the new board of directors will be prepared to go on with the works, complete the road, et^., on the carrying out of the present proposition it is understood that the Crovernment shall pay the Company, etc." The third condition reads : — "3. That the Government bindslitself to pay the Company with the subsidy of 800,000 acres of land granted by the statutes; and the surplus, if any, shall be, after the payment of al! claims actually existing against the Company, kept by the Government, which shall render an account thereof to the Company in final settle- ment." Further: — " And upon the said A. M. Thom, and the persons in the name of whom he acts and whom he represents obtaining a transfer of the charter of the Baie des Chaleurs Railway, and seeing that persons mentioned in the propositions above cited have the necessary means to carry out the enterprise, as required by the statute of last session, 54 Vic, cap. 88, sec, I, sub-sec. J, and seeing that it is in the interests of the Province to accept it, the Honorable Commiesiouer of Public Works recommends that the said proposition be accepted as follows, that ic to eay : " 1. To re-organize the Baie des Chaleurs Railway Company ; " 4. That the first board of directors of the said Company shall be composed of the following persons, etc," In his communication to Your Honour of the 15th Septem- ber, Mr. Mercier says : — " The transaction effected by the Government was not with persons forming a ticw company, but really with the original company re-oi^anized, composed of new shareholders, but legally bound to the payment of its debts." The Contract Discussed. ^herdnhetyri'^" ^ "'^ °^""'^" - ^^« 28th of April. granZ'^S^ti?^"^^^^^^^^^ *t ^,- ^- C»^*-" Railway and No. U its last session for the benefltof 1 S" """''^" Z'f'^l the Legi.utn,e at P- l8l red on the re-constituted Baie des rhRl«n«." r'„i' ' u "*'''** **''® •^°'"®"- number 2.;7. T h« n«? t^haleurs Railway by the Order in Council the r^onstilutea Baie 'de,Cka^BaU^Tr" °' '"Vl"^ "^ ^P'^^ ««"ted to' No. U session of the Legislature tT"^ fT^"'' »" **»« «»»'«'di«8 voted last P- »82 out the writtenTopositTon "of W^ssrs Janf^r* °'*f«5»rder in Council sets Ewing. James WlliZson. Angus MThom vT.!;' t' ^^ ^"^«"' Alexander pany to build and oompSte the Bli« ^^'0^ ^''*'^„°^ '^^ reconstituted com- tion»,and the last P^Zf^e^lZZ^^"^""'" ^"'""^' "^ ^'*"° ''""^i' ment of the p,x>posS mVelyTJ Sn^T'K'! «°/«f Pta°<» by the Govern- in writing a defined offer ThL nlrl'^ ^" ^*/"^"'tt««'>» •«» " A. Bverythiug stood there. " a" ?hYp*°^ °' ^^"^'^ gentlemen put money into the concern? A. The Company gets all the money it wants. « A V ^"P*"^ «^^ »" tl^e money it wants? " O UU Z'!^u ^?^J ""PP""' **•' ^""P-^y ""^^^ »» *»>« -"oney it requires. "A. Certainly. " Q. They are nominally directors ? »n ?®^ *™ *^'''"^ *"" ■''"'« interest. Q. I)Ki they have any monetary interest in the Company ? ..n wu ?^'^*°''*"°° b" °°' **''«° P'ace yet " A ^M ^r?"*"' l^^ "organization of the Company ? erch atlfteke. "'" °' *'' "*"'' "'« ^"'*'--* ^^ ^''^ -*ock to decide which or .Z t^hfs S ?"' """'" "** ^^"^^ '° *^« -y «^ *»^- re.organi«tion up to •• A. Nothing further than that Nothing that I can remember." It also appears that the Company never formally accented the contract although they have acted upon it : ^ ^ "Q. Is there any resolution of the board ^f Hii«/.tr^,o «* *i,- « "'•'" *»« the stockholders of this Company. rowiTthl the'Sl' r^^ Company or of April l«.twaa brought beforeLmlXU^'?*'"^""^""-^""*^' ^"^ '^ ' A. No, sir. " 1 So!S^"°' '^°'""°° "'"'P^^^ '^^ **""« °' *»>« Order.in^3onncil ? Apart from the $175,000 the Government made further ad- vances to the extent of |41.600 through J. 0. Langel er Id the account now stands : »"K«"er, ana tne 800,000 acres claimed to be converted into cash 28th April, paid Armstrong.. \\\\Z.*.'.'. $175,000 00 2nd May, paid J. C. L. to meet claims.. 1.500 00 9th May, paid J. C. L. to meet claims. 26.000 00 11th July, paid J. C. L. to meet claims 15,000 00 1280,000 00 216,600 00 No. 14S p. 841 No. 154 p. 6S« No. lU p. 065 ''"'"'°"«« 'ilija^ '48 The Contract Discussed. AN Thorn 668 54Vio.Oap.88 It was on the 17th April that Mr. Garaeau wrote Thom pledging the issue of a letter of credit for $176,000 on the follow- ing day; Thom tlien handed back the letter, declared that he was tired of the whole matter and was returning home. He, however, remained and saw the letters of credit go out on the 28th. At the moment of exercising this threat and pressure upon Mr. Garneau the Company had not been reconstituted ; the new directors had not been elected (nor were they until the 6th of May following) ; Thom's conduct proved that he and those with him felt perfectly free to repudiate the Order-in-Council if they so chose; the Order-in-Oouncil expressly gave until the 10th of May to make the advances ; the Government was neither in de- fault nor exposed to a claim for damages ; Thom's leading ne- cessity was to get funds to buy out the old company and the evident purpose anJ plan, from the beginning, were, as put into effect, to make use pro tanto of the payment to Armstrong, whose claim had been on all sides so hotly supported. For this object Thom took, under the guise of a loan, and has so far apparently kept, no less than $60,000 out of the $75,000 letter of credit. It was a fitting conclusion to the unusual and mysterious circumstances which marked the whole transaction. There are two further features belonging to the Order-in- Gouncil which deserve attention. One has reference to the conversion of the land into a money subsidy. And the other, to the extent of road which the new statute subsidized. It will be best to repeat the Section of the statute in full : — 54 VICTORIA, CAP. LXXXVIII. I . " An Act respecting certain subsidies to railway and other companies and undertakings. (Assented to 30th December, 1890.) " It shall be lawful for the Lieutenant-Governor-in-Council to g^ant the Sub- sidies hereinafter mentioned to aid the construction of the railways hereinafter enumerated and other enterprises, to wit : " Sub-section I To contribute to the cost of constructing the bridge to be built over the Grand Cascapedia River on the Bale des Chaleurs Railway, a sub- sidy not czceoding in al! $50,000, ?^ Contract Discussed. 49 the p««aKa of vehicles and foot plTnire L we Irr Ih^"'"* "^ ^"* '"' train., if he deems it in the public interiT """** ''^ ""*»y throXtVwhlrrnSh'"?;:it':"'r?? *'^ ^•''^ '^^ ^^•"-™ «''"w.y, about'so miles. goinX orne^r L!^ bLI" 'T'^'"'*^ ""^ *^*^ ""^ ""'"^ed n^ile. not to excLl in all $io "oo '^ ^'^'°' " ""•""^^ "^ >«''^» ''«™- of land per for the whole road and to k^ "t in^i toTk b^ "l^" 'T'^ '"^^ «•«"-« «tock that the balance of the privileged dehS^-hv ho .' "°*^ *'''° "P«° condition Pany be paid, the whole to the saSS^^^^^ of .'* ?*" ^*' ^''*'*"" «»"**y Com- r. ' ""'^ ^o '''« satisfaction of the Ljeutenant-Qovernor-in-Council H.h.to'rh::auSorx^^^^^^ nieans and is in a p(^t>on o cZSr £ ''™""'","^°""*'"' *'"'^'^»"" '^^<^^^^^ working order. ^o complete the projected road and keep it in good Act ^T't^ 7 m^de provision for the revival of section 14 of the Act 51. 52 Vict.. Cap. 91. which enabled the "Lieutenant- - Lnlar 7^ . ^"^ '"^^'^^ "^^^* ^« «^«*l«d und Jr 2t Ja,^ " h?rtv fi : " ™'"'^ '""^''^^ ^y P^y^»& - «««» not exceed^ " dnf r^'^' 'T' ^r. "''^ ** ^*^« *'"»« *^« ««'d ^'^bsidy become! dne and another thirty-five cents per acre when the lands sTall have been sold, provided that the Company shall declare its "D^l" favor of such conversion by resoluUon of ifs Bol d ^f Directors, duly communicated to the Government thronah tK Commissioner of Public Works." ^^"^'^ent through the No such resolution of the Company was evflr i.o r.o„ooj ^ communicated to the Government, L/dSlyoX TooZfl Exhibits Nos. 56 and 57 give the form usually emoloved ^o. es-r The Statute granted 800.000 acres of land to arandeauio '"'"'" the road " throughout its whole length " ^ ^ traof!!'''"'-5^'*!r?'t *° ^^'P' ^"^^ '' ^^^^^ 1^0 ^iles. The con- turtrrif ^'**^' debentures or other security shall be re- irf . ^" new company on the completion of the first one or^ifiiTii^^^^^^ This according to the statement presented by the Company f^i "« ."5. 60 The Contract Discussed. to the Dominion Government means " at the completion of one hundred mites." Hence it appears that the new subsidy will be exhausted when the 100 miles are completed, that the securities of the com- pany will then be returned, and that no terms are stated in the contract for the construction of the last eighty miles. ^^^^°^^^ ^^ '^^^ Letter of Credit for $76,000. W9DD 2j7*0 M9,it«"* Daring the week preceding the 28th of April, Pacaud pro- posed to the Union Bank the discount of a letter of credit for MiM,Wn2«7 ins.OOO. mVos division of the amount was suggested, and as finally 434' issued, the letters of credit consisted of one for $100,000 and a Haohin 275. gecond for $75,000. These appear to have been delivered to the Webb 229 banks by the departmental officers. AiDitfODff mi T» ^T 48-J9 The Bauque Nationale agreed to handle the $76,000 letter of su-iTmt ^^'■edit. and J. C. Langelier attended between five and six o'clock s.bourjr qu the aftemoou of the 28th April to hand over the cheques. J'aio-i"' ^' ^®"*^® *^® ^^^^ officials, there were present Thom and Armstrong. J. 0. L. 835, The amount was disposed of as follows : — "«-"» Letter of Credit $76,000 00 Cheque to order of Armstrong, by him endorsed to order of Thom, who en- .dorsed and put it to his own credit #31,760 00 Cheque to order of Armstrong, by him endorsed over to order of Kobitaille, who received its proceeds 24,000 00 Cheque to order of Armstrong, and by him endorsed payable to bearer, pro- ceeds received by Mr. Riopel through Thom 16,000 00 Cheque to Armstrong's personal account 111 64 Cheque to order of J. Cooper for Arm- strong account 2,260 00 Discount 886 36 Balance unaccounted for 2 00 176,000 00 $75,000 00 The paymeitl of 1100,000 to Pacmd. n THE PAYMENT OF 1100,000 TO PAOADD. On the morning of the 20th of April, J, 0. Laneelier Mcom- » , pamed Armstrong, ,t the l.tter'8 reqnL, o P«:aadWffioe Tn T. « ™ ""' Lower Town, a..d there made oat fl've chequlf iCo ^^^ to -'' "'' LmlTthfmltr- ""''°"' *"""-« 'f*-^^^^^^ irni '.tS tThi'r-t."''"' """"■'■' "^ ""» """- """ ""• It is his pretention that Mr. Machin nr Mr !,/»«„„ ^- ^■^- «»7 movemuat to recover back or protect them atPo^o^j- « . '"^'' """^ *' '^"6 Jjanque Nationale and next THE BARGAIN FOIJ »100,000. Before dealing with the manner in which Paoaud disposed of tte hve cheques and their proceeds, it seems best toIretHTd:. p"'7 'f""* '"^' """'■ ^''d "?'» '"eit possession Paoand's connection with the Baie des Chalen™ T>l.nJZT gan in the summer of 1890. i-naieurs Kailwajr be- He became a zealous and prominent promoter at first of the ^^.t.7r""'Knl'/'*°°°"^'^- '"* ""^'ward^ of the prt posiJs made through Thom. At different stages of the newti^ Enrop^theH;;;p:tnelVr;h: 1":^::.:: PaoMd 360 Annitronv 54-4.« 84-5 Ouneftu 75, 185 MoDoaald PMknd 356, 372-3 374 r. 52 The bargain for $100,000 MoDonald MoDonald 344-352 493 Paoand 370 Armatrong 44-06-97 Amutrong Armntrong 48 Armitronc 49 and the Honorables Messieurs Langelier, Duhamel and Bobidoux. He was urgent in pressing the matter to a conclusion. McDonald considered Pacaud's intervention essential for the obtainment of the contract and of favors which he expected to re* quire of the Government. According to his remembrance, the sum of $50,000 was men- tioned as the sum intended to be paid, and he asserts that Pacand was dissatisfied with the amount. On the other hand, Pacaud denies that any special bargain was made, and he asserts that he had no expectation of receiving more than four or five thousand dollars. Both Armstrong and Thom had been told whether truly or not that McDonald's estimates covered a payment of |50,000 or $75,000 to Pacaud. The natural and inevitable outcome of this knowledge was the bargain made at New York between Armstrong and Pacand. Quotations from the sworn evidence will best, and indeed perhaps in briefest form, tell what Paoaud was expected to give and what Armstrong expected to receive as an equivalent for the payment of $100,000. Mere descriptive references might do injustice to the one or the other, or to the proof of record. Speak- ing of what occurred at New York, Armstrong testifies : — Q. Well? A. I then spoke to Mr. Pacaud about the amount I would have to pay him. Q. In New York ? A. Yea, air, and he told me it would be $100,000, which I agroed to give. Q. At once? A. Yes, at once. Q. Without further question ? A. There may have been a few words. 1 may have said I understood it would have been $75,000, but there was very little said about it anyway. It was all done in two minutes. Q. Was there any discussion as to the nature or the extent of the services to be performed ? A. It was that the arrangement was to be carried through, and I knew exactly what the services were, provided the matter was carried through as proposed. I knew I would receive my pay from ihe Company, and I would be at liberty to do what I pleased with it (i. Was it your belief that the time he would be occupied about it would be worth the money ? A. I didn't put it on the basis of time ; it was more on the basis of inffuenoe than tim^. Q. What influence? Ihe bargain for 1100,000 M I knew him to be in the confidence of tlie A. Mr. Pacaud's inflnence. Q. Of what nature waa that? A. Influence with the Government Government. inteir '°" '^"^^ '''" ^ --"^ ^ -*-t that would be p«.per for thepubHc t Why ?fitT«t; ;t?n* r -r"""' •" '"^ ^^''^^ -*«-»• ag«e todo BO? *'" P"''"= ">*«^* ^'•^ y°" P»y Mr. Pacaud $100,000. or A. It was in my interest that I paid it. A Tknew^r; ''■°°'''^" ^^''^ •* ^-^ *o y«"' 'n^rest to pay it ? interttVaXrag^^renrsUtSer ' *'°7'' ^'^''^^ '^^ - *»»« P»«>«« what p„,portion of mTZey I hlJ t ^v^^ Tff '''*' *^' ''^"'^'"**«' *»<' «» ^ aflected them at all. ^ ® *** ^^'^ '* •=""«<* «"» I don't see bow it intell^Uiy^ifhSsrtrn^'rS ' '^"""''*« "'"-' "'^ ^^^ Public -ary to pay soewmons a sum «S oiJ ^"""'"*' """ "'""''^ '^' '» "«»- I»a^e!Je7~SltTetw^±Sltr^^^^ ^•'- expected to pay $76,000. but aU 1 iS ^y »K if ^''Sf'' ""' ' ^^^^ senoos tomeiftheagreement wa,n^cLriSout ""''^^'^'•ve beenvery «. But your claim was a legitimate one ? A. Yes, sir. it was a perfectly legitimate one. publS? ' *'' '™'^'"°" «"«'« "^y this.syndicate w«. in the interests of the A. Yes, sir. ».vS A'.'tj^trcsr.r'x.i"^' '^' '■"' ^« «' - "« A. My claim was oavabL i„Vw«^ . ■ ^ •'events exisUng? tbecomple'tion^frSrJ^^TtPa^"^^^^^^^ to get anything. If I had not Z?- **** '^ """ '" '* *" impossible been left out entijyandt^t'n tS^^TaJT^^^^^ ''T' "'"'^ ' ''°"^^-« H was necessary for me to do what I dW ** cirtjumstwices I thought haveU: ^P^iX'^rp^ffit^^^^^^^^^ *^'* ^'^^ -P--'- would not arran'^geIe:uSr::gtl"tL^^^^^^ "Q. Prober? "A. Yes, sir. " A ThL^^'^ "''°"''* y**° P»y *^00'<»0 to have that attended to ? Q. But at this moment you have created a syndicate? Armstrong Yes, sir. Q. Of nnnnAaHnnaM. a- 'A. Yes, sir, tbeywere. inaaela! strength ? 64 Ihe bargain for |100,000 " Q. That being so, I have to ask you again why yon considered it, or what statement made it appear to be necessary to pay $100,000 7 " A. I had no reason to linow that the syndicate would be accepted. " Q. Why did yon consider this step necessary. Was there any statement made to you? " A. No, I made the proposal to Mr. Pacaud myself. I asked him whether he would act for me in the matter, using his influence and work and get the Govern* ment to agree to accept a proposition from a responsible syndicate to carry out the work. '■ Q. Was any statement made by him as to the nature of the services he had to perform. " A. He knew perfectly well. I understood what his services would be. There was no necessity of discussing that Armstrong " Q- ^'^^ yo« consider it a matter of interest or a matter of choice to make 79 this agreement with Pacaud 7 " A. I thought it was the surest way of getting the matter settled. I had Strong doubts of being able to do it in any other way. "Q. Did these doubts reach the point of conviction that you would be unable to succeed, either in bringing the new syndicate and the Government together, or in securing the payment of your own claim unless you had Mr. Pacaud's inter. vention7 ' •* A. That was about it What I was principallylafraid of was that the charter of the Company would be cancelled and it would lead to such diflBculties that no- body would touch it Q. " What was your opinion as to the amount which you so promised to Mr. Pacaud in relation to the actual commercial value of any services he might be able to render? A. <• The value of a thing is what it will bring. There is no commercial value to be attached to such an agreement at all. I could not look at it from that stand- point " Q. Between the promise and the payment a month intervened 7 " A. Rather more than a month— possibly six weeks. " Q. Now, I sought yesterday to obtain from you with more or less detail what services you expected Mr. Pacaud to perform. I now ask you, having paid him his money, what were the services in detail, which he rendered to yon ? " A. Well, I knew that Mr. Pacaud had a great deal of influence with the Government He was^a sort of confidential man and party manager, and in con- trol of their principal newspaper; in fact, he was busy with all sorts of matters connected with the Government, but it was principally from the fact that he had been negotiating in connection with that same enterprise for Mr. McDonald and I thought certainly he was the best agent to employ. " Q. Now, you have not answered the question. "A. Well, the services in detail I suppose would be his interviewing the Government with a view to getting them to accept this proposal, in which case, if the proposal was accepted and carried out, he would receive payment By Me. Casorain: ArmatroDt " 0- Upon what did you base the estimate of his services when you promised ^v null tuc ^iw,uvtr ; The bargain for |100,000 fi« " A. I undentood the basis that Mr Mnn i j «nd I simply „ked him t^a^y on thS"'''^'" ^^^J^'"' «" was $75,000. would have done it for Mr. McDonald. "^ °'' ''" *^« "'*'"« ^asis as he " Q. You went one better? "' o i*""""* I had to go one better. wasti?.^r;Lr;c^XtL:t^^^^^^^^^ Oovemment? ^ ^e" between you and him for his negotiations with the .ver^tundeX" °° ""'' °' ^"*« ''^ ''"• ^ --P^agreed with him for what- ;; Q. You had an agreement with him every time many traoslrnZ "'' '"* '^"^""««' »"« arrangement might cover a good agam and pay him the sum of $1000)0 ? "'*'"'^ ^°'' ^ '^n«««« h«°> r^B^i'^etliSrtlv'^ "A. He got paid, yes. P.id m"^. Sj^u'r '"^ «^* *'« '°''-''^- ^^ the Government if you had not ^^JA. P-iblyl wou.dhavegotthem.butlwou,dhaveh^ to wait longer for :^^i''s:rs"jjt:^rg.^-^*-'^'o-«^ in «"lemenToV^S?rlwi'LTZri^^^^^^ »76.000from the old Compan'y the posiUon of affair was ^ muh better that v'' T*^'***^ «"»« »« ^e forS that correct ? """ '^"®' *hat your demand became $176 000 is " A. Yes, sir. ' ' weld h.,. «iooS^,z'C.tf''°u °°"; ^'' •''■°«' •» w. "o tb« I * » « "^ ^°^- "B- niviNa ^- . "^ ?« °«^« gave you in an- wav ** „nd-«- •*k * iict;«»ity lor your success ? ' "' '■"^''^«»«a that his employment was a ^,"""" "« 1 ',. 6e The bargain for $100,000 P»o»nd 370 " A. He never mentioned it to me; that is my opinion. " Q. Your idea in employing iiim was that because of his political position and his friendship with members of the Government yon would be able to ensure a more satisfactory conclusion than you would have been if you had done the work yourself or employed sorjeone else ? " A. Precisely the reason. '* Q. Did Mr. Pacaud tell you that he could not aid you in this matter until it wa« clear to him that Mr. McDonald had rotbing more to do with it? " A. I have already stated that " Q. So much so that when you were leaving the train at 8t Johns he cansed you to telegraph me, as representing Mr. McDonald, to know whether the matter was completely off; the telegram which has been produced ? " A. Yes. " Q. And it was only on ascertaining that no further ti-ansactions would be bad with Mr. McDonald that Mr. Pacaud took up your case ? " A. Yes. " Q. What induced you to suppose that Mr. McDonald had undertaken to pay Mr. Pacaud $75,000 for his assistance in these negotiations ? " A. I was led to understand that firstly by Mr. Cameron. " Q. You are aware that Mr. McDonald said that he only intended to pay $50,000 ? " I heard him say that, yes. " Mr. Armstrong told me, I think, that he had not seen Mr. McDonald on the Monday ; that in any case there was no understanding or settlement between him, the directors of the company and Mr. McDonald. I then said :— ' Well, I gave Mr. McDonald up to yesterday ; he has given me no definite answer ; I am ready to do business with you.' " Mr. Armstrong then asked me]:—' Now, what interest do you wish me to give you in ^he matter? ' I told him :— ' Before going further, I wished to know two things from you. If the syndicate, which you are about to form, will bind itself, first, to be content with what the statutes allow up to the present time to the Baie des Chaleurs Company, to ask for nothing else, either by Order-in-Council or otherwise, or by promise of new legislation ; secondly, that your syndicate be com- posed, at lea^t of Mr. Cooper, whoever the others may be, and that Mr. Cooper and his associates be prepared to give to the Government all the guarantees which the Government may require for the faithful execution of their engagements with the Government' " Mr. Armstrong told me that he would make it a condition nne qua non, " Then, Mr. Armstrong again asked me:—' What interest do you require?— or something like that, I do not remember exactly the expression, it was in English but it may be rendered something like that' ' What interest do you wish me to give you in the matter ; or, do you require in the matter ? ' Then I said to Mr! Armstrong :— ' What did you offer me ? ' Mr. Armstrong answered :— ' Mr. Cameron told me he was to give you $75,000— well, I will give you the same sum." " Then I answered to Mr. Armstrong :— ' But, on the other hand, you told me that you were to accept $75,000 from Mr. Cameron for your claim, and you also told me that you had an understanding with the Cooper syndicate that you were to have $175,000; why do you not give me the surplus of the $75,000 if I succeed with your business ? ' "J aurpluf 'M Thorn. of this; cate ace time, at the dire sum for certain! *he fort) carried ( come ag; oopt for 1 1 to; find Mes they wer furnish tl Mr. ?280,000, they won security t oftheStai ately stop conversati "I mi because th( myself of Armstrong self to me, special bnai the commit that that in to explain I because law thonsBDt} d( idea that tl astonished v was for that thought 1 8h< I must say i same readine "Q. You the syndicate "A. Yes 'Q. Wei Uie syndicate «ere to use f Messrs. Thnm "A Mr. i ^c bargain for $100,000 »» for u,:^fitr ": "« "'• ccK.P- tM ■; j^j^rj;-"' >»'•«« eertam liou iVki i Ci>«ip»iiy, pro„ij^ ih„ ,1,. '"'Meive a «„a ""ried « ;,»! S.M- °° "" ^"' °f '>P'i'. b^oaif ,f 2*» *"■•• "I 'bat ""'/ist'rn ' "^ '""' "" ■'■•" ''" -•- -^ W of the Statute SstV'r'" ""'*«* ^^t'-e obi gS^en^-'" "i'" «"««'•»* ately stopL t, 1 ^ ° "'"P^^*^ '^^e road WhZl """^^ '° ^'^^ «la"»e ArmstroDK the h«„i,«, u ^^ ^'^^ Wea was th«f \^' u *™®™° and self to me^^^'ftte : ?:,r "^ "««««a^ the boSs t ,r;ij'*,i^'- ««"*«° special bnlin^ haJlr^- ""^ ^^"""^ '^^^viog. had iL^e 2lf- '''"'^ *^>'^- the commij^ « m '^ considered that he waaobS * • ^ *«*°*''«' this to explain hoi 4 p ^'""«'«°- ^ kn«w uothinc. of it hTu^.. f ' ""** **"** 't was becarr,!^:aV^j?,r:h 'Tt '^^^ "^^^ «-°^ » 4hi t z m ^^i '^^ '^- I muat irth"at thet25SS)*^yf-^^*'-r ^ -''^ed ior the .1 nT ^, "'°« ^^ich I tl.e syndicat'e ? VhaT^t'Thr'''^ ^°" ^^"^ *« '«"der to insu,^ . h «ere to use for 7hTl ^'''''^^^ negotiations ? in fact Zl? !? ^^^ «»«»« of Mess™ Cllw?-.'"^'?'*' «^ the enterprise uL-'.^ri'l'^'S*''" «fl«ei.coyou " A mTT" "'-""f^^B syndicate / — -as^n t,y Mr. Armstrong for fir It- ^11 ^4. fs f4i 68 Tha bargain for |100,000 not judge of his intentious— if these services had been definite— bat they were not " Q. Did he simply ask you to interest yourself in the matter? " A. Yes ; I may say frankly, your Honour, that he expected me to actively push the Company's interests. I - have no doubt such was his intention, bnt I cannot answer that question. " Q. There was nothing precise on the subject? " A. Nothing as regards the nature of the services Mr. Armstrong expected trow me. I was simply to see that the affair was successful. I understood that I was to Lave nothing for my trouble if I did not succeed ; if I did succeed I shonid have the surplus above the $75,000 Mr. Armstrong would get from the Company in settlement of his claim. " Q. What steps did you take to bring about the succops of the new Syndicate, to obtain the contract for them, and, in fact, to substitute the new Syndicate to the old Company ? " A. As I was thoroughly convinced that the matter was of public interest, I immed'.ately set to work to try and induce the members of the Government to accept the proposal made to them by Mr. Thorn in the name of the Cooper syndi- cate. I saw personally several of the Ministers, among others the Hon. Mr. Duhamel and the Hon. Charles Langelier, during the first part of the negotiations. i^ Subsequently I saw also the Hon. Mr. Robidoux, and T did all I could to induce these gentlemen to acetyl Mr. Thon-'n pro^al, but to rccept it at once, as the least delay might cause the rupture '. : the negotiations. " Q. I understand that in these iuterviewR you mpresented that Mr. Thorn's proposition was favorable and ought to be accepted ? " A. Yes. Paeand 4S8 " Q. Answering the Ejections raised ? " A. With the Ministers I only brought forward the question of public inter- est. I considered that if they delayed longer to further the construction of this railway, no one else wo. '1 undertake it; that work to the extent of $1,000,000 would go to ruin, and if a few months slipped by without anyone taking charge of it, no one would be willing to undertake the completion of (he road. This is what I put before them. I also laid emphasis on the interest they had in retaining the party's popularity in Gasp^." It thus appears : — Ist. That Armstrong considered it necessary to act as he did because of Facaud's peculiar position towards and influence with the Provincial Minister ; his conviction was that Thom would not be in a position to settle his claim, and that as a consequence he would receive nothing. 2nd. That Pacaud was to adopt and secure the acceptance by the Government of Thom's proposal. ' 8rd. That the annulment of the Baie des Ghaleurs Railway Company charter by the Lieutenant-Governor-in-Oouncil, as made possible by 54 Vic, cap. 37, was to be prevented. 4th. That Armstrong was to receive 11*75,000 in money whereof |100,000 was to be paid over to Pacaud. ] grapl from C go oa Armsl the ne atNe\ or at H S( a place Ti Pacauc Of sented It Thorn a is nothi further The the Gov accepte<3 Ist. less than McDona] 2nd. ernment bonds— t Governm 8rd. its liabilij new Com chest and It fur 141,600, a] MoFarlant 4th. I Qiitil large ^e bargain for #100,000 ly were not. to actively ition, but I g expected tood that I ed I shonid Company in ' Syndicate, icate to the : interest, I ernment to oper syndi- ) Hon. Mr. egotiations. 1 to indnce >noe, as the Mr. Thorn's ablic inter- tion of this r $1,000,000 ig charge of 'his is what taining ihe as he did jnce with m would sequence sceptance Railway uncil, as a. money 69 Sr^P^Z^iriZ^^^^l^^'for. the 21^ ^rZ^^ from McDonald. * *'""''«'' "'• I'""' «" •» answer" th. next ij i^Zl^w'Zn' T '."r'"* '"' M""'""! <>» atNewr.rkon th 2,Tt .^k"""? ^'^'T"'""'"'P»°"1 or «t Montreal. ' *'°«^ *" » conference either there ?4,'f„ a piactr itLw^iStr '• ""' ""-»'* "-■»■ '» -««. »en.^'.htth^°:,ttitr^ -"""•'■"O. ^»' ^-^ re/""' x4na^:crt:rjrY.!.fi-^^^'^^^^^^^^ 18 nothing to show that An v ml t ^a« <>«* of the field, and there Oo«p.r. f<.rth„eLto,hLr ZfiTh-o^^eC;^'"''"^ ''■"- "fe- .he Go;rerh;'Snr'T t';'"^'" '''' ^'"" "»' •«'- """ accepted.- ^ M'Donrid M,d that of Thorn'., afterwards leas tll^Crttnf rtttrte'"' *^«. '»«■»««''" IHO.OOi,-.- McDonald »I60,000 for h^t^n '"*'■ *^'""'" "^'^M emn.tti„"^^rtr S'teL'T *"""" "*■'""' -* *"« «»- ^^■"" bonds-theae CrWe ioXfr"'"!, °' ""' °°"'P»»y- Government without any cLh deZit " '""'"''' '"'' "" «. "'b«i,?a:It7^,rS'rtrThe""' "" '""'■'^ ''Si '" new Company obtained for aZL. L» ° "°° Pnrposes the K m cheat andLlf it .::lf,foXr^"h;fl»"' "'^f P"'''-^^" It farther aecnred the di^I^t rl ^ ! " 'kareholdera. «« .n«n^v.^x\^\ttrrh"trw':,ir.iT-- --"''J i!, 'M t t i t t* 60 Tlie bargain for $100,000 AraMtroDg 34-40 Thorn 680 ArmitroBg 81 37 81 I f 3, C. lu- iier Thorn 501 it has made an immediate advance of $216,500 before any work whatever was accomplished on the road by the new shareholders. The remarkable contrasts between these figures might well have excited close scrutiny, or the necessity of calling for tenders. During the McDonald negotiatious Armstrona: was ready to accept $75,000 in full of his claim. Of this fact Thorn had knowledge. The pretensio.. has been advanced that the sudden expansion of his claim from this figure to |lt6,000 resulted from the new grant of 800,000 acres of land. The facts of record point distinctly to the contrary. Armstrong remained willing to accept $t5,000 long after the introduction of the Bail way Resolutions, 64 Vic, cap. 88. That Statute was assented to on the 30th of December, 1890. Armstrong was present at the interview between Messrs. Oameron, McDonald and Blopel Vhich took place at the end of January and he fixed the 14th of February following as the date at which these negotiations were broken oS. There was not so broken off because of any increased demand on the part of Arm- strong. All the faots lead irresistibly to the conclusion that the differ- ence between his first offer of $75,000 and his second demand followed by its pajrment of $175,000 was intended for and did in fact go to Facaud. What effects have resulted from the payment of $175,000 to Armstrong ? Ist. We have seen that Thorn spent days in the office of J. G. Langelier making enquiries and calculations. The amount of his proposal for the completion of the road must, of necessity, have been affected by this additional item of $100,000, with which the preliminary cost of acquiring the road had to be burdened. 2nd. The amount to be retained by the Government until final settlement has been diminished by the sum of $175,000. 3rd. The province loses in this way a large amount of in- terest. 4th. The fina,ncial position of the Company was affected. Within a short time after the passing of the contract it made two appeals for financial assistance. a. Thus on the 5th of June the Company asked that $70,000 of th( back I b. ing V "and " claiE " Govi " Pany W the Coi In Statute balance Ye paymen On Ooverni For between 1891, by paid to 1 audacioc « pretext We ] posal of t As al on the 291 of credit, its disconi Whet certain, bu cheques ai the discou] vu„ _ A lit; Bj matter of 1 Pacauees Disposal 0/ the 1100,000 61 ». It will be remembered tL ihln, ^^^ «"'"'^- "'" "' the cTr^XtnXS-lT '""■"'^^ *» "^ '■ ""^^ "^ stJr.ro;r:te-«^rrt^^^^^^^^^^ -^ •...» balance left it will be aomnnta^ ""owing .— Should there be a»« ''X.be%Tb!ro7b'^'"'""' °^^^« »'^^^^^^^^^^^^ ^ For tbeLruite't tlTZTe Zt'l"" • « '" between Armstrong and PaeTnH „„ \ ! i^° '""8"'' """^'S'i '" 1891, by whioh the^lor^'^/ioo" ":^~' ""V"? °' ^""''- P.K1 to Paoaud wae SrJJToZZyZ':^':^;'^'^''' audacious exploitation of the public TZn^v. "■?f «»<1 »" « pretext having .11 the appeaTanie If XuTibliur '" PAOAUD'S DISPOSAL OF THE JIOO.OOO. of credit, and wt inf^rei' byMrrblThrtf ""'"": '°"'' "^ '' Its diMount was before the directZ. "'"''°"' "' Whether before or after the fa<-t nf *i.i. „ j certain, but at some time dnrinlVh!t , I endorsement is not £'■■ m cheques and learned lh^° fte Zl h ^ Y .^'°°"'' P""^"'** ">« the discount. ^^ "■" "^^^ """^ determined not to gmnt «.atte?:frt;t:r°L^"in"";re:^-\r •■""^^™- *- '-"^y- previous interviews made state- 3?5, «3.4 62 Pacautts Disposal of the 1100,000 I H Okboary 383 PMAud 430 488 W«bb 228 Webb 232-233 ments as to his propof « l cashed as fellows .- * *^' ^^" ^^"*1««« ^^'•^ ^"Peuple^"'^' ''^''^''' ^^' discounted at Banque du 3rd. 10th July, cheques 82c. 32d, 32e left for coile'ciio'n ^''^^^ at the Union Bank and cashed on payment of letters of credit. . - r / "i 60,000 ^T«e disposal of their proceeds is shown by the foUowC Banque du Peuple, account, No. 88, p. 918 Banque Nationale, account, No. 86, p. 914 Union Bank, account. No. 89, p. 980 88a 86a, and 89a certified to the 'correctness of the credits „. »« 1:c1T8Tp' ^*'^ ^'''''' ^^^^'^^^^^ ^<>- ««• 86 anf a^f'' -• Account 87 18 Pacaud's account with Mr MArrio,. • *u^ j-x for lR«;nnn «,ki«i> m. .,, mercier the credits p. sir tta^rtltie'r' "™ """ "^ ''^""'-* ""- ^ -^^ » Umotrnk a!™;*""" '"' '"''■°'" "'**■»»» *-*™* '» the . .„ d.tet?tr' " '""T °" ""' ""•' P'«""'d had in hand at thep." Statement 94 is a resume of statements fyled by Pacand p- m mentfrd^bv'p t"' ""'"" "'* '>"^'""' "^ disburse- ; .„ ments made by Pacand in connection with election petitions dates cover eaca other. .r::i:;*:;;x?mh- trt^nnt:.'*" '''"*"' "'*^-«<'<' «^' "^ TV,., -x-x , «.w . dence'Tf Tr^Tr? f v '°"*^^ ^^^''^P* *^ summarize the evi-E- m denceof Pacaud by totalizing the different class, into which ^"•"'•"^ I FH f.i: 64 Pacaudi Disposal of the 1 100,000 w\ m m. 1 HIHI^^ ^^^^Hi<4 • ^^^^^Bs^ he divides his payments apart from a few slight corrections basied on his depositions : — Personal Expenses. He assigns to personal Expenses |30,811 76 Less corrections carried to next cap 120 00 Total 180,691 t6 Political Disbursements. To different persons and Chicouti lideposit.^ 1,000 00 J. A. Tessier, Revision of lists. Three Rivera 80 00 Carrel, sr 150 00 Joseph Martin, Revision of lists - 25 00 Demers brothers 1,000 00 Desaulnier's 100 00 Hon. 0. A. Pelletier, election expenses 1,000 00 Raoune Rinfret, Revision of lists 50 00 C. A. GeoflFrion, Q. C, Vaudreuil, & L'As- somption County 500 00 Ant. Taschereau, Revision of lists, Beauce.. 25 00 Ed. Dorion, Revision'of lists 25 00 Blaise Letollier, Revision of lists 20 00 Godreau, election expenses 1,000 00 Carrel, Jr., Telegraph loo 00 Other advances, &c., to members of Legis- lative Assembly 1,416 00 Tarte-McGreevy affair 1^900 00 Montmorency election 2,000 00 Five Promissory Notes 28,000 00 Total $38,340 00 Other Expenses. P. Vallieife discount ^ l,000 00 Armstrong drafts 2,000 00 Paid for Mr. Mercier 6,'788 29 1 9,788 29 Total $78,820 06 Pacaud's Ditpoml of the 1100,000 M nnr.i! Tr r°''"* "" '"''"^^ *^°«* ♦I'^.OOO fdrth« of Octobo7'''°° '''^''"'' ^'*'^'''' *^" ethof M^yand theeud .nnnfV*'' *^« P^^^^'^^^l disbursements, all of which were made in connection wuh Dominion elections. Pacaud states that havinff the money, he met the liabilities and mad. the payments a f matter of per .>. c f beneficence and liberality ac ilnt ' ^- «y ^""^I'^de. however, entries of other trans- went mto tJn u,,«cnt bank accounts. P*oaad 439 Paoaad "AS, 4M Pnokud 414 424 M. Baique 445-8 <»-4 DIVERS MEMBERS. The names of the following members of the Legislative «•;" Assembly appear in Pacaud's accounts — ^g^«^«*tive ^. 3„ 1- A. R Carrier . q,o nn^^ '''"'' 2. F. Z. Deschenes * ,^fj J^Lf* 8. AdelardTurgeon ::.: ?^^ jl'3/4 4. Anguste Tessier ^Jf ^^^^'r 5. odiion Desmarais :.;:;:::;;;:;:;::: .^ j^x 6. L.F.Pinault ' ly^^.L' 1. F.X. Lemieux ,i^ O^ss-iTo «. Hon. H. Mercier. five notes, amounting to $23,000 I'm each, on which he was joint endorser, were re- tired and payments made on his account amount- \ns to y. Hon. O. Langeher was also an endorser on the above five notes, and pavments on his account amount to • 4 48*1 SI He also received from Pacaud o'kqi 00 10. Hon. G. Duhamel Z'Z''Z''" lOO 00 « !'l 66 Divers Members. 89-15 p. SOS Paoaud 381 88-13 p. 381 88-4 p. 383 Okrrier 8BS 88-33 p. 38i Carrier 896 88-1] 1 p. 3S9 Paoand L389 amarati 747 Paoaad 387 DIVERS MEMBERS. Messieurs Carrier, Deschene, Desmarais, Turgeon, Tessier, Lemieux and Pinault. These gentlemen were members of the Legislative Assembly, and as their names appear in connection with certain transactions of which mention was made by Mr. Pacand in the course of his evidence, it becomes necessary to state the facts which affect them. Mr. Pacand had been in the habit of endorsing notes for Mr. Carrier. During May last the Banque du Peuple held two of these for $400 each. In view of his proposed departure for Europe, Pacand paid them before maturity, and told Mr. Carrier, who called on the 27th of May to secure renewal, not to trouble himself about them until the autumn. Another sum of $160.00 was ^aid by Pacaud to Mr. Des- barats, on the representation of the latter that a loan of that amount had been paid to Mr. Carrier through the belief that Pacaud was to be responsible. Mr. Carrier remitted this sum to Pacaud as soon as he learnt of its payment. As to Mr. Deschene, the facts relate to a note for $150 en- dorsed by Mr. Pacaud and by him paid without Mr. Deschene's knowledge. In any evont, Mr. Deschene asserts that he had a claim against Mr. Pacaud for costs, and that ho will only redeem the note when this is settled. Moreover, the note was made prior to the Bale des Chaleurs affair. Mr. Deschene further received from Mr. Pacaud a sum of $80 on the 4th of June to meet the travelling expenses necessary to fyle the Ciiicoutimi counter election petition. Paoipud promised Mr. Desmarais a sum of $800 for political expenses, to be paid out of the election funds held by him in February and March, 1891. On meeting^at Quebec in July fol- lowing Pacaud deducted a counter accx)unt of $70 for printing, and paid Mr. Desmarais $230. " Pacaud states that he owed Mr. Damase Turgeon, farmer of Beaumont, $200 and gave a note to him for that amount. He re- newed it for $160 and at maturity paid it to his son Adelard. The money was due to the father for money furnished in an eiectiou contestation. Hon. H. Mercier. Mr. TesBier received from Pacaud #25 in connection with the«8-M revision of the Rimouski election lists. ^^^ Pacaud being indebted to Mr. Lemieux for counsel fees, at 88-43 Lemieux s request paid his subscription to the Union Club and ''' Charged the payment against the account. *onJU"n"x^^^*'*^*"™P^y^®^^®*^ ^ ^^ intermediary to transmit ^w-d 180.000 to Dr. Fiset of Rimouski fo- the revision of the election ??J;3^9. These gentleman were severally ignorant that the payments so made came from the $100,000 and they are not implicated in tHe Pacaud-Armstrong transaction. 6t -mpl THE HONORABLE HONORE MERCIER. We have already in our recital of the " McDonald-Heaton- Armstrong negotiations" stated the connection which Mr. Mer- cier. as Premier, had with their efforts to obtain the contract for the completion of the Bale des Chaleurs Railway. When he saw Cooper. Thom and Laflamme at Montreal onM.rc.r ^e evening of the 12th of March he had heard nothing from^ ni r«»i '^^^"^^* T^ll"^' *^' ^^*^ °^ ^^'^^' ^^- Mercier left Mont- ^al on his way o Europe. He was accompanied as far as New"*'"'" '" Welilr ''°"'^^"'' Messrs. Shehyn. Boyer, Robidoux and By previous arrangement with each other Armstrong and Pacaud were also on the train, but not in the official car. Pacaud sought to secure an interview for Armstrong, who w,8 desirous Ar«.t«., of obtaining a favorable response to Mr. Laflamme's letter Mr i' . Mercier refused, stating that he would write direct to Mr La:^^';^!, flamme. The terms of this reply were settled with his colleagues m2., and afterwards posted from New York. *" After Armstrong left the train at St. John's Pacaud had another interview with Mr. Mercier abnnf the BaJe -'p- nu.i. Railway. '>-"»iuars 'I . Mi 68 Mr. Mercier. \ 1 i PkOMd 418 419 Meroier 612 Of this he swears :— • * " A. Yes, Your Honour, I asked Mr. Mercier to give his favorable considera- ^"i? S® ^^FT^ ,*^'''"^ ''""^ ^° ""^^^ ^ ^'"^ »>y the new syndicate in case Mr. McDonald should withdraw." Qam«aa 157 Thereupon Mr. Mercier requested Pacaud to do what he could in the way of preventing the withdrawal of Mr. McDonald. Mr. McDonald does not remember this special reference but is not prepared to deny that it was made. On the 17th of April, Mr. Robidoux sent Mr. Oarneau the telegraphic message already quoted and in which is written ;— "......... Langelier will tell you exactly what has been decided before the departure of Mercier " Ml Robidoux explains that this meant the strong desire ex- pressed by Mr. Mercier, in the public interest and the interest of his country to have the work continued and completed. The M.r«i.r 522 Mmisters. says Mr. Mercier, were ^ware of his anxiety for its prosecution, Mr. Mercier testifies :— ^^ RobidoQz 761-65 Mereier 525 62S " I think I told them to do their utmost, to secure satisfactory arrangement to assure the construction of the road." He further testiBed that the first knowledge of the contract Msroier ^*"^^^& ^^^^ Completed came from a gentleman in Paris. 6 2a"'! Then lie received a letter from Mr. Garneau, and another aMn.au 209 ^''°'^ ^- ^- langelier informing him of the settlement of the Paoand 455 transaction. Mr. Mercier answered to Mr. Langelier as follows : MeroiT 623-4 J'} »°»^^«"K^ted to learn from your letter, that the Bale de Chaleurs matter is settled. I depend upon what you say, but I confess to you that I do not find the n( iyndicate very strong and unless it is backed up by foreign capitalists and very strongly backed up, we will again be disappointed. I would advise you to be very prudent, to follow exactly the text of the law, and to make no advances except with fifU knowledge. Of course you are a better judge than I of the new situation, which is brought about by circumstances mentioned by you and I de- pend entirely upon your discretion and that of your colleagues as to what should be done; but I pray you to be prudent; we have been so unfortunate with this road that we cannot take too many precautions " Mr. Mercior read this extract as part of his testimony and added that since then his impressions about th had changed. " new synuiOafcc Mr. Mercier. Confidential. „T , 24 Rue d6S Capuciiiee. mat J. TarS^i^ty'of hfvrdiil"'? "' *•" ^^'^^^ ^''''^'«- Railway I congratulate ^0^ lufwoX ^^u'lr^' "^^f ''^''^^ - *»^« -ff-^' Centra, :tbetw. a.ang.e:t:r:eTag;:^:rt: ^f -^^^'^""^ *° ''^ ^-^- Ipray tL^^totrcltXL^^^^^ <'^'-'"'^-) ^^'^^^e ^nances. be difficult I fear to e.pi^Xr:^T.Z!ZT.:::^'' '"'''''^- '' -» " t am not surnrisBd ir. t„^-, .iT; "^*'^™°'^ '° » satisfactory manner. (Signed) 'H. M. Pacaud 456 pSrar- r-"' '^-'-'' -— <""-o' tti^ bi: of their contenla "" '° '"'''''' * »»■•» "PP«oi.tion a joinultl': "^tht*:? ^"SiSr f • """'- *-- I '.,1 j %Vi 10 Mr. Mercier. ■s ) ■; ! 6th of March, and partly for deposits to be required for election and counter election petitions. Pacaud obtained the discounts of these notes or used them as renewals for like purposes if the need arose. M. Mercier also left with the Hon. Mr. Pelletier, Senator, three or four blank endorsements. Pacaud divides all this paper into three classes ; — 1st. Notes signed before polling day. 2nd. Notes signed after polling day. Srd. Blank endorsements of the notes so left. Of the notes so left and used for renewals, Pacaud paid the following out of the |100,000 :— Paoaad 423 LmfnnM 316-836 Paoaud 409, 124-6 42S.444 Mercier 636 Lafranoe Paeand 583, 409, 426 Ifereler 634 Webb 337 364 Paoaud .f of the deposits-which is doubtful- Mr. Mercier would still remain liable >r a very considerable amount. Mr. Pacaud gives the following explanations :— "I had a certain sum, but there remained a portion of the exoensM of th^ orgamzat.on to be raised among friends by means'^fsubscriXsrweUre ''"""' ''' iliS « Tt ?,:! °° ^''^ "^" °^ *^« P«"'°«^' ' ^<^ °o "-^e to go an3 find our S„ "f . ^° ' T *^' '•*'''' °'^°^°«' *« ^«* *b«°> to subscribe for the otan «.ve me afterwards ample time after the contest to find fhe w neSLrv to moet the notes. These gentlemen accepted my word and aer^d to Z^llZ^,^ oote^which will now be produced befo^ the cLmllri^rnelrwrthi: .^u ^ "*" °°* '"'°'' '^ ^ "° thoroughly undewtood. The document stated that rCSe^frhTr^r ''' f .* '^ ^"" ^''^'^''^ '^'^ --»' ^"* that each w^ only ""'"'* ^'^ responsible for that portion of the amount he had agreed to nav s.,nrw» 7h ♦ ^tZtTJ^T -^«*^^^-. W0O;:?arflvere^e S'Z t^^ for hi? onh«^r "^ . *, w^are returned ; then each one of us would L re.ponS>te „„ J ^" .*'"' '*.."'"'**'' °^l''" document and engagement, our principal frieuds made 1!? f .r ^'«'=°"'^'«^ "'^"^ ''t the Banks. Those who made the notTan' endorsed them were themselves guaranteed by the bond« signed by thToth; nends who d.d not appear in the notes. Senator Pelletier acteS most Xently L this way as our party agent, and I mentioo specially 1886, when, I believe he act^d " Whether ther« was a settlement of the election contestations or the deposits 72 Mr. Merct'er. Paekud 443 Paoauvl were with.! fawn in any other way, the depot ii,, v-we appliert to pay in-' the notes, ar«J then tl-fae who liad siRned were no longe.' HaWtt. "Q. Wiion you had thenotee for r lection - r^ns";* (»ignemn them as 1 LiA other money to pay the nrttes "Q. Money from the $100,0* 0? "A. Yes. '' Q. Which went to pay this ? "A. Yes, Your Honor. "Q. Senator Poi'atier was simply m jminated as trustee of the moneys for the svottMUtions f,f the elections ? '' A. Ho ^aa the depositary of the bond signed by the friends who held them- ■sivet imponsible for the sum opposite their names; notes were made by either tAr. Pelletier, Mr. Francois Langelier, or -.;hers; these notes were discounted on the guarantee of this bond, signed by all tho Dther friends, and when the contesta- tions were settled one way or the other, thv loposits were withdrawn and applied to paying the notes, and then those who t?;«ing assured that you will use them with discretion and prudence, and with the formal understanding that, notwithstanding the order of the endorsation, we shall be equally responsible ; not towards the banks, as, naturally, being the first endorser in the majority of cases, I was the first responsible, after the person who si<,ned or the maker.' But not only did those who were to endorse after m?, but also those who were present as Mr. Charles Langelier, Mr. Tarte and others gave me their wonl, and it was stated that they would pay their share even if they had not signed or whatever was the order of the endorsation. Mereier 587 " Q- Before endorsing these notes, sometime before, yon had endorsed other notes, had you not 7 " A. Many, sir. " Q. Can you state about the amount ? " A. No, sir. " Q. I am, perhaps, indiscreet? " A. You are a little indiscreet, but I confes'i I would willingly tell you if I knew, I am not aware, and I would rather ' tiware of it for a long time- all that I know is that I have not been called to ! * Peiietier 764 >; i". Pelletier says : — "Q. When you endorsed the difle.ts. "Dtes which were produced tere, was there any question of the manner in whif h »!»;«» notes were to be afterwards naid ? '• A, I remember perfectly when Mr Al, r in our presence, signed these Mr. Merder. t8 " a! NaturiSy! *""' ^''^ ^°" °°' '"''*'* *^** '^°«« "«*«« •'^'^ become due ? '.' ?■ ?'*^ J°" *°*1"'™ b*''^ 'bey bad l^en disposed of? had bin m";t ^^I'whenTh; Z^f-ci^'^' '"^ ""« ' '"'"''^^ «"« *bat the notes Senate. Isup^ir^h^t M^^catd Lf "' "!;!2' ''"' '" •^"«^"°" before the I had not heardof thei T :,S^ " ""c^eeded in getting some subscriptions. how they hjLi pdd ' '* """"""^ "^'^'^ *''°"* '^«- • ^ bad not heard ." ?■ S'^ r" "°* "^ whether they had been paid ? Mr. Charles Langelier says : "A. What other notes ? " Q. $5,000 ? ;; * HirdrS 17/""" ■• ""^ *■ ^-"^ ■»" *«»• " A. I have no reason to doubt it. " Q. 89-3 ? * Q. This note also was not paid by you ? " A. Was n6t paid by me." Mr, ChulM Langelier 718 Mr. Francois Langelier says :— ." ?• wT ^'^ y°" «''•'"'**« tbat these notes should be paid ? WecalcuUtedthatwewSrnotLltDLZXt?' .t** P"^ by subscriptions, us that there were aleady subscr^i^S^. "^ ^^l ^'^^^ °°^- ^'- P««aud told to collect them the^Se m^nZnS^torth; * '* f '1,**^'^* ""' '^ ""^ «'"« probably alsosubsc,;^ w "!°*!^"i *°."! the names of other persons who would theamountofthesenotes;.d";;-;::.rXr^^^^^^^ 6 Fra. Lange- lier 809 Hi r:ifJ I 1 iii^^ I" BHM > ^^H ''fi^^^^i I'i'i'SF^^B^I » < ^^H H Mr. Mercier. 1 l! i i: PMaud 379-398 Paoand 379-396 Meroier 531 Paoaud 396 414, 422. 460 Meroier 415, 530 Webb 680 Marooux 676 Oiement 623-6 Legare 622 pay our share of the amount. As to the notes for the contestations, we calculated that the amount would be paid by the deposito, when thedeposita were withdrawn, and that if there was anything lost out of these amounte, we would bear the loss' between us, saving the attempt to get assistance from friends as we had done pre- viously." Mr. Mercier never enquired by whom or from what funds the notes in question were met. And even when the real facts came to his- knowledge he never repudiated the manner of their payment by Mr. Pacaud, or sought to make reimbursement. Indeed, on the maturity of the note for $6,000 concerning which we will presently speak, and even after the creation of this Commission, Mr. Mercier on the 30th of October, took from Mr. Pacaud $1,000 as being his share in its amount. This Act ignored the pretention of Pacaud that he had then, in hand, a balance of $1,711 belonging to Mr, Mercier. PERSONAL ACCOUNT. A few days before leaving Quebec for Europe, to wit : on the 2nd and 4th March, Mr. Mercier handed to Pacaud two cheques against his personal account at La Caisse D'Economie, Quebec. The first was to Pacaud's order for $5,000 and the second to bearer for $8,500. Messrs. Mercier and Pacaud unite in declaring that the $5,000 cheque was intended for any remittance which Mr. Mer- cier might require while in Europe, and that for $3,500 to meet any local personal accounts which might be presented. Although these cheques were payable at La Caisse d'Econo- mie, Mr. Pacaud presented, or caused them to be presented at the Union Bank, by which institution they were cashed over the counter and afterwards collected in the ordinary course of busi- ness. Strange to say he has no recollection of how he obtained possession of the money. At the date of their presentation, Mr. Mercier had the privi- lege of an overdraft to the credit of $3,000. They created a de- ficiency of $8,632^07 which was covered on the 10th of March by Mr. Mercier's cheque on the Jacque Cartiers Bank for $4,000. vt nai xuxiucuiaic uxSpusai xauuiiu maae oi tne proceeas aoes not cl( his ow H follow from J Date 2 Marc 2 Marc S Marc] 5 Marcl 6 Marcl 9 March 12 Marc] 31 Marcl '-6 April 20 April Soth ten deposi dates are Mr. Mercier. 75 ae contents himself with indicating in a don Ihf fni ^ *u '^''' ""8' <«» following deposits as possibly reDresentW *k "*^ ^*y. *^® from Mr. Mercier's cheques ^ representing the money received Date 2 March 6 March 9 March 12 March 31 March Union Rank $8000 2 March Union Bank 3 March Banque du Peuple 5 March Union Bank . The bordereau No, ^'"'»"<' **^ 189, page 976, shows that this deposit con- sisted of 620 $5 and 100 $4 bills. The bordereau No. P»n»ud 457 188„page 976, gives no details. The bordereau No. ^*°*"<* **' 200, page 98:i, gives no details. The bordereau No P'oaudiiB 190, page 977, gives no details. Of this dtp. jt no^""'"'*^^'' slip has been fyled. The bordereau No. ^*°*"<* ^i' 191, page 977 shows that this deposit con- sisted of 10 $50 bills The bordereau No. ^•'•"'^ *i* 192, page 978, gives no details. The bordereau No. ^'"'•"'i ^le 200, paorp PS2 shows thattL "er sit con- sisted or a cheque for $1000. The bordereau No. ^*'""'' *•* 200, page 983, shows that this deposit con- sisted of 70 $10 bills The Bordereau No. ^**"""** ^^*^ 200, page 983, shows that this deposit con- sisted of a cheque for So that to represent *8 sno Po«»,,j ^o--?- ," . , , ten deposits totalling $18 200 It iTw J^ kT « cnoice between datesareweeksafteftKc%fs*5the^^^^^^^^^^ ,, Merchants Bank Union Bank Saving Bank Manque du Peuple '6 April Banque du Peuple 20 April Banque du Peuple 1000 500 1000 600 600 4000 1000 700 1000 ' !*1 n ,11 76 Mr. Mwcier. Paoand 49T 41S-458 Paoaad 461 I'or the first two cheques, Pacaud gave no receipt and made no entry. He states that he kept no books. He further states that he took care to keep in his possession an amount sufficient to meet any demand which Mr. Mercier might make by -] . . iter, btit not the whole $8,500:— Thus By Mr. Casgrain, Paoaad 379 " Q. Before commencinfj to discount the $20,000 notes of which you have spok- en, you always had on hand, from the time Mr. Mercier gave you this cheque $8,500, in some bank in the city of Quebec ? " A. I cannot precisely say that, Mr. Casgrain, but I may tell you tliat I always bad a sufficitmt sum to enable me to meet my obligations towards Mr- Mercier. " Q. Then, between the 2nd of March and the 5th or 6th of May the date you got the discount, you a'ways had enough to meet '?8,500 ? " A. No, thflt is n( the absolute deduction. I mir'^t have. from Hie time I have $6,000 which I could send by cablegram, tvc.i 1 1 had not the full amount 01 $3,500, but had a lesser sum, but enough to allow me to meet the accon ■ • as they were presented, I would have thought myself within the requisite cono. is to honor all my engagements towards Mr. Mercier. " No account has been produced by Mr. Pacaud which show s the continued existence of the oalance to whi^h he refers. FurtLor exi^mination of the subject will disclose that Pacaud did not pay a doll r out of the funds to which he refers. His remarka ^^ memory and the care with which he pre- seived vouchers, excepting Mr. Mercier's requebt for a draft of $6,000 makes it the more difficult for us to understand why he she .iu aot have be- u able to g e a clear and satisfactory account of hovv^ he preserveil so V^f^^Q a sum of money if he in fact at all kept it for the purpoc stated. Pacaud rr^duc^ > No. 87 as being ;be personal account between Mr. . cv md himself. No. 87-917 It is in th 1891 foliu I ing form : — Db. March 2 Cheque . " . 4 Cheque. No of Items $5,000 00 8,500 00 $8,500 00 Mr. Mercier. 11 Mar chU -April 16 It 20 i< 20 It 80 May 8 ti 11 () 14 i( 14 15 ^une 1 (1 1 H 29 30 "uly 6 7 ( 9 . 22 22 Cr. P.Campbell j InsJitut Canadien 2 Union Club 3 Ohamplain monument 4 Subscription to the Fortress Hotel g James C. Lloyd * g Mp 'inonge contestation 7 QufcOec and Levib Electric Light Co g Draft on Parih [[[[[[ 9 Maskinonge contestation 10 Allan Line ^l Customs duty, Colley, broker 12 Allan Line 10 Jas. C. Lloyd 14 Allan Line ] jg Customs duty, Colley, broker 16 Duty and charges, Colley, broker ^^ Allan Line * jg i< 19 19 00 4 00 110 0« 'c4 00 500 00 75 00 250 00 89 00 5,000 00 250 00 28 85 119 31 11 84 75 00 15 98 227 19 16 96 12 16 10 66 - 6,788 29 $1 111 7] ?z50 each m conneotinn -u fK +k„ »«• 1 • "«a.H8oieu, lor k 1 1 acaua in a letter of advice Thin iaffo« has also 1 ^n .i^strovpd hnf M, n^ 1 •, "^V ^'® ^^"®' Apart from these payments just mentioned the statement ' mu 78 Mr. Mercier. Fi r«t Dr»ft Paoaud 423-379-RO 398-455-0 M«Mler 529 Paoaud 397 Valuer* 817 Paeaud 38 1 I 'I diPf-loses discharges of personal accounts to the extent of $688.77 aud closes with a balance in favor of Mr. Mercier of $1,711. Two Drafts of $5,000. The first draft was sent to Mr. Mercier on the 15th of May, on his written instructions, and the second on the 8rd of July. The transmission of the first coincided as to date with the discount of the second $20,000 note endorsed by Valliere. Mr. Paeaud asserts that, to remove the hesitation of Mr. Lafrance, who spoke of want of funds, he explained in the presence of Mr. Valliere that in reality the advance would only require $10,000 instead of the $20,000, inasmuch as the Bank might retain $6,000 for a note maturing some days later, and that having received $5,000 from Mr., Mercier before his departure for remittance on demand he wanted a drnft on Paris for that amount, which would not return for a month, so aflfording the Bank, to that extent, further facilities for the payment. Mr. Paeaud says : — " When I went to the Banque Nationale to negotiate my note for ($2(',0OO) twenty thousand dollars, Mr. Lafrance told me that the paper which I showed him was excellent, he had no doubt, but that the Banque was not in a Tpoeition to advance at once such a large sum. 'Then,' said I to Mr. Lafrance, ' I will meet you on that point. I have $5,000 to send to Mr. Mercier. Mr. Mercier left me $5,000 before leaving, and he now asks me to send him these $5,000 by a draft on on the Credit Lyonnais at Paris. You will then give me a draft for $5,000. Your draft will not come back from Paris before a month, so that you will, in fact, have given me flvo thousand dollars ($5,000). I will keep Mr. Mercier's $6,000. Your draft not coming back before the first of next month.you will be able to make me this advance of $5,001). Now I owe you a note on the 18th of this month; you will return that note to me. So that you will have advanced $10,000 to me without disbursinK anything.' " This conversation took place in presence of Mr. Valliere and of Mr. Lafrance. On these representations Mr. Lafrance gave me a bill of exchange for twenty-five thousand francs, I think, for five thousand dollars ($5,000) in any case, and I sent it to Mr. Mercier in Paris." Paeaud 387 Mr. Pacaud, farther on, repeats the same statement : " I said, in presence of Mr. Valliere and Mr. Lafrance : ' I have $6,000 thai- Mr. Mercier left me before his de rture ; he is now asking for it; I must send bim a draft for this amount Well, ais you are short of money, give me a draft which will onlv he nmaentAd in vnn in a month tV>«f mill oni+ fV>«» Tkonb- ~«-» «,..— if __ j t will keep the money that Mr. Mercier left me. Paoaud 379 Mr. Mercier. t» mistaken as a Canadian bank never issues a foreign draft without immediately covering its amount. However this mavTe fh« poin to be settled is whether or not Mr Pacaud r al y then t fd iMo'otiurhir ^^- ""'-''' '^'-^ '^ ^«p-- ^^ i^ .. here^'- ^'''''' ' ^ ^^"'^ ^^^'Y elsewhere, but I will take it Mr. Lafrance's evidence is as follows :— - kJ'^\^^'' ^""''"'^ ^'^'^ '^'» '" ^i" evidence: "When I went tn th. b„„ Nafonale to negotiate my note for $20,000 Mr. Lafranc^ told me Vhl .k ''"* ^•'"»<"' ^" whicli I offered to liim was excellent hn h«A ^Ti T T. T *^"* ^'"^ P^P®' unable at once to advance^e such ^''-'^ ^ - *' ^"* ^^'"^ *''« ^^°^ *"« will meet you on thar^Tnr iTave isT) tolnH / M "m *" '''■• ^^'■'•'°'«' ^ left me $5,000 before he went awav !n7h . ^ ^'^ ^^'■"«'- ^'' ^^'"er by draft on thrCredit Lvl„ar«; P •^' °°* '"''" "" *° ««"^ ^'^ ^^eae $5,000 your draft will not^et™ Im^a^il {"11 '" "" .f' ™' ' '"''* '«' ^''^' S::;S^^:^n;t^£H^-^« ^nl^tVt™^^^^^^^^^ return me that note, so you will have advanced $10 000 t^ «.» 7 ^^" *"' having disbursed anvthin^ '• n« „„., ""^*°'^®<^, *10.000 to me at once without self and Mr. Scaud ? "' "^ '"^"' ''^''* ''°"^««"'t'0« between your- " A. Something like that, yes. On the question, however, being renewed a little later Mr p . ,„ Lafrance stated that h > did not remember any reference hav^g ''"*"' '^' h rC ^^ f : "^"'"^ '^ "^"^5^ ^^ ^^- ^-'^'i^''^ -nd finally he affirmed that it was not spoken of. ^ hand's^to c!v":rt;r;rS;r""°" "' ""'■ ""''''''^ '»°"«^ ^^^-^^^ »>« l^-^ in his matter of fact they existed) in procuring this draft. • His esplanatiou is iu manifest contradiction with the re- iterated assertion that Mr. Mercier had left the two cheques Rl 80 Mr. Mercier. . with the object of avoiding " embarrassment and misunder- standing" at the Banks. Thus Pacaud alone swears that any specific reference was made to any deposit of Mr. Mercier in Pacaud's hands, for Valliere certainly does not support him in speaking of " money elsewhere," and Lafrance is positive to the contrary. Moreover, if Pacaud hud any of Mr. Mercier's money in his hands, why did he not use it ? We examine the evidence in vain for a satisfac- tory answer. ?«oaud 396 Neither the letter of Mr. Mercier requesting the draft, nor the letter of Pacaud accompanying its transmission, have been produced. This is much to be regretted. The ordinary course of dealing, even between personal friends, made their non- preservation unusual. Meroi«56o ^^ ^^^^ °^ *^^ above and othbr facts cf record their produc- tion became of high importance. In the Banque du Peuple account, No, 88, items 128a» 128b Snd Draft and 128c, read as follows : — Dr. Or. 80th July, Cheque produced, 128a $3,000 u„.88 30th " " " 128b 3,000 P-'"> Discount 128c $5,936 260 Psoand 407 Of these Pacaud spoke as follows : — "88-128C. discount, $5926.20 What I requested just now applies to this matter. I discounted a note of $6,000 which realiz ' S5,920.20, I drew against this two cheques of $3,000 each, this comes within the privilege I requested from the commis sion of not entering into these transactions which are absolutely foreign to the Bale des Chaleurs affair. On his reappearance next day, Pacaud stated that Mr. Mercier insisted that he should explain the above item, 128c, although foreign to the Baie des Chaleurs matter, and he proceeded to do so in this maauer : — Paoand 407 " About the 30th of .Tune last I received a letter from Mr, Mercier asking me to send him the sum of $5,000." Later on he reads the following extract from its contents : — • 51- Mr. Mercier. 81 " 24 RcH DEB Capucines, " Paris, June 18th, 1891. * * » * elections, if you "Lfrtu^edLm^^^^^ Senator Pelletier for contestations ofPacaud 408 letters, i authorKyou t e^ ioZvl'Z '7^^ "' '° ^°^ ^° °°" °'-^°"^ '^'^"t Senator PelIetier,ifhe'I„:,;rfin"fnt^^^^^^^ and cable me the Dropppd« «f ^7 *k u '^'^^■"°<^' *« sign it, have it discounted, et des payrb^hervl ZV"''''^^ "°-'' °^ *'"'' ^"°''« *« ^^e Banque de Paris discounrand'^nZ/vou'v:^^. 'Vr^'?''"'*^'' ^"P'^^' ''> «^'«'-"« ""« friends. As we arfeavinrhl readily hnd an additional endorser among my all my accounts pTeirslv Z.7^ '" '"'' '*"" '^"^'""'' "^"^ "« ^ "'^^ »«««"'« cabling me onTwaror t^e ottrL^H T/'""^' "' P^^"'''" °" ^^''^'^•"g ^^his, in .eeive^hiscableXr:;;ttri^V^^^ Ip^umel shaH the mak:;7f tre'not you VrVnTtH' ''""'• " "'" ^^''^^ *« P^°^« *'-* ^I'hough who must pav it when due mZ Z nT'.'.^ """ *'* '^'^*°^' ""^ ^^«* '' « ^ to put my r.;i. . L-1 :f-;- - trgic-rpfn,- "'"^ "(Signed) '^^ " H. M. Acting on these instructions, Pacaud in company with Mr p . ... Langeher who afterwards added his own endorsement Ti^in^d "^'"^^^^^^^^ LZ .n';- ^•^' ^^"^*^^'' °"« ^f t^« Wanks of Xh WW '-"""' Bank for collection, withdrew it on the 30th of July and the>''*'>"^ secured a discount at the Banque du Peuple. Pacaud gives this account of the matter :— wantlJSitre^/penses'SYr^^ C. Langelier, and we went together to SenatoTp^liln ^ '^"'"^^ *^^ ''*'«'' *« Mr. Pelletier gave me the noS ''"°'- ^° «««'°« "^^ authority. thisii'^hi^Mt^rhTw i"^ Tad r ^' -^«r '-^^'•^- ^-^«"-. posited the note L $6,000 !n the hands of1h« n r !'''" "* ^^^'^ ""'«• ' ^«- ing it. aa I had other money I^^t thk s,,^ ?'.T, ^^J ^"' '^'*^°"* ^"«°"°t- hands to pay when it feH due On the 3 th of'jnt .V' '" ^'^ ^^'^^'^ did so at the Banque du Penple Thi! Zl f ' ^^"'^^^ *" "^^""'''^ '^ ^^^^ n>entioned. Thelte fdl Zon the eti of OctS^''"'"' °' ''"'* '^'" ^^'''^ ^ The "other money" to which Pacaud refers «.». _.p...... rc.ouced oy a cheque of #t,600 on the Bank of Montreal Vh^'"^'"*^^ source of which he disclosed to the Commission. Ztwal' un- >'''i -,-..-^4 it "'jIpEH^ 82 Mr. Mercier. Paoaud 464 Meroier 629, 530 No. 9 p. 939 No. 87 p. 917 willing to state in evidence as being foreign to the enquiry. This cheque he cashed at the Bauque du Peuple, left $2,500 on deposit and carrying in the balance, in bills, to the Banque Nationale, bought a cable draft in favor of Mercier for $5,000. , He also sent a cable of advice but this cannot be found. Mr. Mercier produces two advice notes of the Paris Bankers, the first dated the 29th of May, and the second the 6th of July, respectively notifying him of the two remittances. At the maturity of the note No. 98, on the 3rd of October, Mr. Mercier exacted from Mr. Pacaud the payment of $1,000 as representing the amount added to the note. "When Mr. Pacaud, on the Z^Ca of June, received his instructions from Mr. Mercier to utilize one of the blank endorse- ments left with Senator Pelletier, secure an additional endorser and obtain a discount, he had in hand, according to statement No. 8Y, some $2,000 to the credit of Mr. Mercier. Two features connected with this second remittance are to be noticed : 1st. Mr. Mercier, in his letter, makes neither reference nor enquiry as to the amount of $8,500 so alleged to have been left on deposit with Pacaud, or as to the application of any possibly existing balance, to the remittance asked for. 2nd. Pacaud with $2,000, as he states, on his hands, ignored the fact completely and even adds a $1,000 to the note. His pretence is that he wanted to follow Mr. Mercier's instructions. Yet curious to say, even by his own iitatoments, he, in other respects ignored or disobeyed them, except as to the remittance of the funds. Paoaud 399 As to the balance of $1,711.71, shown by statement No. 88, and of which Paoaud claims to be still the depositary, he swears as follows : "I would have paid him this balance,— I had the money —but I refused to make any business arrangements on my return until I haJ given account of all my transactions to the Commission." Yet, on the 3rd of October, Mr. Mercier asks for, as already Paoaud 442 caud. Mr Mercier. 88 stated, and was paid the additional $1,000 put on the note. A balance of $1,711.71 existed in his favor, and it may be asked why was he not equally entitled to its payment. We are unable to appreciate the distinction which Pacaud eeems to make. The moment is opportune to arrange a number of incidents, more or less important, in due order of date :— 2nd March 1891, Mr. Mercier's cheque for $5,000 delivered ^*'"'"'' 4«« to Jracaud. Mercier 531 4tli oi March, Mr. Mercier's cheque for $3,500 delivered to^"°"' *^' r'acaud. Armstrong 47 Mercier 541 5th March, Federal elections. 18th March, Mr. Mercier leaves Montreal for Europe. 18th July, Mr. Mercier returns from Europe and learns of the cJtiarges on his arrival. ny,ol^^^ of Aug^g^ ^ f.^j.^^j accusation respecting the Baie desF^^-''^ r- Senite ' ^"'^''"^ contract is made before ^a commiTtee o? The L^fr "* p. vir ^ . ^^*i''^t''^"f'^^^^'^d leaves for Europe between these two P-««'-«« xBcfiuu.OOO simply to refer to the positive denial retorted'bv Pa- p--<» CaUd, "> i ■* 491.428 84 Mr. Mercier. if 'I it V ( The contradiction which appears to exist between the expla- nations given by Mr. Mercier to Your Honour as stated in the official correspondence and the evidence offered before us cannot escape attention. In his reply dated the 15th, to Your Honour's 0ff.oor.854. co«imunication of the 7th September, he writes as follows :— " At page twenty-three of your letter, Your Honour says : 'On the same day ( May 15ih) Mr. Pacaud bought, by a cheque drawn against the same amount, a Bin of Exchange on Paris, in favor of the Honorable Mr. Mercier to the amount of $5,000 which yielded 25,500 francs." '' The evidence of Mr. Lafrance, the Cashier of the La Banque Nationale at Quebec (page 77-78), established that these $5,000 were taken out of the proceeds of the note of Mr. Pacaud, endorsed by Mr. Valliere and secured by one of the cheques which Your Honour mentions. On the other hand I am imformed that this amount was raised by meanc of one of the blank forms signed by me which I had left with Senator Pelletier before my departure for Europe. I have not had an opportunity of ascertaining which of these two versions is the correct one. "But in any case I affirm that, being' in Europe and finding that I wanted that amount I asked for it, being convinced that it could be raised on one of the signed blank forma which I had left, and of course with the intention of paying myself the commercial paper employed to procure that amount for me, as it was for personal expenses. " I further affirm that when I asked for that sum I was ignorant, and I re- mained ignorant long after, of the fact that that transaction of the Bale des Chal- eurs Railway had been effected, and that I only heard, sometime after my return to Canada from the report of the proceedings of the Senate, published in the news- papers, that Mr. Pacaud had obtained a sum of $100,000 or any other sum." Messrs. Mercier and Pacaud's testimony on the other hand is to the effect that this first draft was requested in the early days of May, to be obtained out of the cheque for $5,000 left with Mr. Mercier and that the draft was remitted with an accompany- ing letter. Moroier 531 Mr. Meicier explains that Pacaud started for Europe without leaving any statement of their personal accounts. He testifies :— " I met Mr. Pacaud at St. Ann de la Perade, I had a conversation with him ; I prayed him to tell me all about this business and I made him promise to make me a confidential memorandum of everything that had occurred, so that I would be in a position to speak, and it was then that he gave me his word that he would go to Ottawa and give evidence. I did not again see Mr. Pacaud, the only newa I had of him was a telegram from New York, telling me he was lea^ring for Europe. " As soon 03 Mr. Pacaud returned I asked for information and I received it, and I would like to have had that information before beins obliirad to rftnlv h-. His Honour the Lieutenant-Governor, to his communication of the 7th of Septem- he expla- ed in the as cannot Honour's jws: — le same day I amount, a the amount !fationaIe at be proceeds one of the formed that ' me which ive not had ;t one. it I wanted 1 one of the n of paying e, as it was , and I re- 6 dee Chal- my return 1 the news- im." ler hand irly days 3ft with ampany- without tlfies : — with him ; ) to malce t I would k he would ily news I 3r Europe, jceived It, •f Septem- Mr. Mercier. 85 i». 1, By Mr. Casgrain. Mercier 541 " A. I did not say that. ;' Q. Will you repeat what you did sav ? ' MMIl before he left. » ""ole matter. He ,>romi8ed it to me uid h.d oot receive hi, .„bp,.„a.„d"^'toOtowr'^ '"'°"' '°""°«' " "^'^ •» - ^i. «:- .tv",:rs.s.";irh*,:i.':.r ■ "* "^ •* '"°- ' the Seoeto a,mmiS2.ZS .'i X-S^S Otta"'' "'"."l "» "'■"'■»-°" "'^.^'r a"' 7™^^^ to ste. .o. Z on his way fo Ottawa. He was wi thTr Tart 7u\~%r' "° Sunday-he was the date-he was with Mr. Tarte and ^e Hn„ M m ""u' ^'^'^ ^^ y°» ^ find to meet Uuu ,. nnse who had teCaotd ^"^^^^^ J'?'"' "'"' ^ ^«°' ^ ^^e ca« should „... tno ,^™ and come ^^0 to my h^e k"']'^' *"''' ^'- ^--^i Mitche/: an-I he came to my house He ^LZt ^^ ^'««"barked with Mr. somet:. .tom.selftotalktohim P^««d the afternoon there, and I had ^,J;Q ^^.^thatthefi.Uimeafteryour return f™^ Eu«>pe that you had met statement of account or ^vll!-!:. "°*' "^ ^"''"K ^^ otherwise, asked J.im W a A. It was the only time I met him f« i met him to have any con^,e«atlon with liim. 86 Mr. Mercier. 1 ii i Pacaud gave evidence to a like effect : Paoaud 380 " ^ ™"'*' *'*° ^^^ *'^** ^^ ^*^ ""'^ °° '"y return from Europe, recently, that I told Mr. Mercier how I had disposed of the money he had entrusted to me. When I arrived, Mr. Mercier was naturally somewhat put out about what had been said about me respecting that draft of $5,000, which I had taken out of that money ; that I had gone to Europe, and that he did not know if I had disposed oi the three notes whicii he had left in blank with Senator Pelletier, and what I had done with the $8,500 which he had left with me before leaving ; that he did not know at all what I had done with his money." And again : — •' Before my departure I had no opportunity to account to Mr. Mercier, it was only on my return that I accounted to him for the money that he had left in my Paoaud 397 hands He reproached me for having used this money for an affair of the kind, when he had left the amount in my hands— meaning the two cheques. I told him he need not reproach me, that I hat made no secret of the matter with the Bank officials tor the good reason that it was quite an ordinary transaction. Thas statement if not evasive, at least fails to meet the real difficulty It v^rould appear as if Mr. Mercier needed neither account nor memorandum to enable him to state to Your Honour that he had left $8,500 on deposit with Pacaud and that as a consequence the latter's personal and later financing could not affect him. This omission to speak of the $8,500 becomes the more striking when we remember that over two months had elapsed since his return from Europe ; that he had interviews with Pacaud ; that he had called together his Ministers and that the reply in question was a maturely considered defence of his posi- tion. He was fully informed as to the affair. Thus in his open- ing paragraphs he wrote : — " I had called together the Council of Ministers on Wednesday, September the 2nd instant, immediately after the vacation, in order to get the necessary explana- tions with reference to this matter of the Bale des Chaleurs Railway, which oc- curred during my absence, and my colleagues and myself had on that occasion de- cided to advise you to convene the Legislature within as short a delay as possible. The receipt of your confidential letter of the 1st of September instant, induced me to suspend all further steps until I had received the document which j'ou men- tioned in it. • " The information rece Ived from my colleagues, and the fact« stated in your Honor's letter and before the Senate Investigation Committee, placed me in a position, i iiiink, to fuiiy uuiiemuaiiu tiie wuoie transaction. OC oor. 841 Mr. Mercier. 87 ;ently, that I D me. When ad been said that money; I oi the three id done with t know at all srcier, it was d left in my of the kind, I told him bh the Bank t the real p account ir that he I sequence it him. the more i elapsed ws with that the his posi- his open- (tember the ry explana- , which oc- )eca8ion de- as possible, nduced me 1 you men- ,ted in your d me in a 433-4 We have now spoken of the non-production of tl,« pondence relating to the first draft • of the Tan. of r""" account or other subsequent trace of he $8 5^0 f 1"^ ^T'^' necessity under which P«P«nrl T \ ^ ^ ' ^ ' ""^ *^« evident 3 ^""^ wnicn racaud was to discount thp ^9o nno « * to procure funds ; of the payment of everv iZ^ ^'^ count No. 87 out of the $100 OoT) ■ !f ir^ appearing in ac MercierWetter for the eld draft to 1' "°\^t"^-« ^^ Mr. possible balance; of the buyinf of th^ '""'.^ ?'^°"* ""' ^^^ ft^nds coming from an tknownVur L ^fThe '"'' "^*^ *^« the alleged balance of |1 711 71 whrP f "^^-Payment of cover the addition incL'Idin\h?;6^^^^^^^^^ ofJttttrSrrrXrdTtr^^^^^^^^^ U- 1. , ^'ait, ■'"** "St or lists of llabilitipfi wlii^V, k v. ii • ^aoaud his hands when speaking to Armstrong and Welbotn V^ and lastly of the letter of Mr. BeausoldUo P °{P*y"^«^t« = acceptance of the two drafts of $250 to h! *°/"^""^ requesting 000. ^^^^ *** ^^ »^ade out of the $100-, Mercier 548 Ere concluding this division of our reoort wM k . facts specially affecting Mr Mercier if/^*"^ *'^^*' °^ he made a voluntary decTaraUoTbef rf Z c'' '' ^'^*^ *'"^ under his oath to the eifect that he hadtt tcefZT"" "^' m connection with this matter or ".,>>.! V !, "^ ""^^^^ '' any favor, any promise olnVcons^ta^^^^^^^^^^^ or indirectly. " from Mr. Pacaud or from anyVerZ fin 7 ' "'^'' "transaction." <*"/ person, m connection with this "We find :— takea out of the 1100,000 ■ """*' "'"^'■""■<' """^^ of the Honorable C A Pette .'Jhr^t S.*^ 'f '" '"» "'-i' -8, u.ed certain fund, coding trhini f^rr^.::™' tt'dt ■I ! h^l 88 Mr. Mercier. closed in evidence, and a month afterwards put to his own credit the proceeds of a note for $6,000, for which amount he had previ- ously filled up the blank ou which was Mr. Mercier's endorse- ment : That Mr. Pacaud, during the absence of Mr. Mercier, made payments on his account, amounting to $lt88,29, and that the funds therefor were taken out of the $100,000 ; That Mr. Mercier delivered to Mr. Pacaud, on the 2nd and 4th of March, 1891, two cheques drawn on La Caisse d'Economie for $5,000 and $3,500 respectively ; that all trace of their proceeds disappeared from the moment that Mr. Pacaud obtained the cash lor them over the counter of the Union Bank ; that the payments afterwards made by him on account of Mr. Mercier were obtained from other sources as above stalled ; and that the existence of these cheques was first made known during Mr. Pacaud's exami- nation on the 23rd day of October last : That the statement made by Mr. Mercier in his official reply to Your Honour of date the 13th September, to the effect, that the first draft of the 15th May was to be obtained from the dis- count of one of his blank endorsements is not in accord with the evidence taken before us ; and this discrepancy is emphasized by his reply wholly ignoring the second draft ; That his remarkable omission to make any mention to Your Honour of the two cheques, is not explained by the want of an account from Mr, Pacaud, but is consistent with their proceeds having been, at once, applied to other purposes, and to b* . Know- ledge ; That Mr. Mercier was an endorser with others on five pro- missory notes made by Mr. Pacaud amounting to $23,000 : that an understanding existed whereby the endorsers were as be- tween themselves equally responsible, without reference to the order of signature ; that the notes were all discounted for political purposes and that they were paid by Mr. Pacaud out of the $100,000 ; That if these payments were made by Mr. Pacaud apparent- U_~ — l-J _c ■»«■_ Ttr '-^^ ii- .1-1 - ■■ -Ktr. ^auruicr, iney none xne less i_ _:i.u ».-.•. At.« xy wituviii lite n.nw.'icu.g Mr. Mercier. wn credit lad previ- endorse- er, made that the I and 4th lomie for proceeds the cash >ayment8 obtained stence of 's exami- diate or seek to reHeveIrr.elf ^f'^^; ' "" '"" ""' "P"' That Mr. Garneau's letter to Mr. Mercier Mr f i, i t geher'e like letter, Mr. Pacaud's letter to M,'n ^"''' ''"'■ one exception the letter. „li Y ""Vf '"'• ©"neau, and with Mr. Pacaud are no of 't^ril/T* '"'"^«™ "r- Mercier and destroyed : that,Tn vfewTfiel '.'" T" """ '^'^ ^^' •"» by the foregoing «port thfir „! f "? ""T"'»'»'=«» d^^osed aeWghestVorZo^'; P'-^"""™ «»« Perusal became of or Jt^rh:rerir.r^g^—r »'''■---' ial reply ect, that . the dis- with the phasized to Your ,nt of an proceeds . Know- S It' I-., Give pro- 00 : that > as be- !e to the political t of the jparent- the iess • j -n 90 Hon. P. Garneau. isi ' r- I, "I f THE HONOURABLE PIERRE GARNEAU. The Honourable Pierre Garneau, C( nmissioner of Public Works, and, at the time. Acting Premi r and Provincial Treasurer, was prominently concerned in the negotiations. he whole strength of the combination bor down upon him. Without both his acquiescence and active as^^^stance the passage of the Order-in-Council and the issue of the letters of credit would have been impossible. The facts in their special relation to this Minister, will be best dealt with by seeking for answers to the following queries : — In what manner was this pressure exercised ? To what ex- tent did Garneau submit to it ? What were the precautions, if any, which he took to protect the interests of the Province ? As already seen, Thom's negotiations opened with Arm- strong, and about the 15th of April, were transferred to Mr Garneau. On the Itth, Mr. Robidoux telegraphed that he would ratify all that might be done in advance and that Mr Charles Langelier would tell Mr. Garneau what had been decided upon before Mr. Mercier's departure. Four days after- . wards, the Executive Council received and, without amendment adopted Mr. Garneau's report. There were present: Messrs' Garneau, Charles Langelier, Duhamel and Ross (President of the oarneau 154 Couucil). Heuce the Ordei-in-Council, No. 237. already printed at length which was sanctioned by Your Honour on the 23rd of the same month. During this period, great activity marked the conduct of the Ministers named, with the exception of Mr. Ross. Thom had Thorn 698-9 frequent meetings with them at the Government offices and of so successful a character that his proposal when made seemed certain of acceptance. it- M r.Oarneau Lan- ier S32 O-arnesn 147 Langaliar 631-3 Mr. Langelior had, on two previous occasion^ aotf d as Cnm Armstrong appears to have handed in his claim to T o 1-angeher about the 23rd of Inril tu i.r „ ^- ^- O T „« 1- "''^t^* °' ?17&,000 was prepared at the office of T O. Langeher and in concert -..rUi, k • t» "mce oi j . pr:f:nr,sr'''"^"---^^^^^^ IZZ 1 . ' ^*'°^ ^•'^ uneasiness which Mr. QarnT!^ felt had been earned. ^ ^ ^''°' ''^^"''^ anything IMAGE EVALUATION TEST TARGET (MT-S) ^./ S*f 'f^ 1.0 1.1 £ lis IZO w IL25 U 1.4 I 1.6 V ^Sciences Corporation 23 WIST MAIN STUnT «nBSTIR,N.Y. USM (716)I72-4S03 '^ W > ^. ** ^ r 92 Mr. Oameau. fled that the traiuaction would be advantageous to the Province. I h 1" »»t »y .h.t „;«; donx"fa™tS Mr G™ ^ '"!'."' »' Atton.ey-Ge.er.I E.b,.»..n --.ion, ri;i°ir/o:.°:;^MriL::i^. «■« -'"- »' «■« K^ene'rS.*'" ^"'''•'"'' "" "«'»^" Commissioner of Public Works nor Attorney- «""•*- "» " A. No. " Q. He was Provincial Secretary ? "A. Yes. "A ?;T'"'.lL'''"'P°'*"«-''°»*''-oneyoa wlshedfor? " O Nn; "^""^ ^''^ Attorney-General's report -.ath.ti\;rnrtrrr^^.-^^^^^ Lientenant-Oovemor ' • A. I said so also, .hat I wanted to have the Atto^ey-General's report" Of the delay, which we,e occu^ m^ al^^ltre^r ^^ ''A:LrHrHrn::a;"t!:r'r"^ «— Butlam under the impZLr/hatiddn.^'^'!-.' '*°°°* P«""^«'y deny it tome: that, to have theZtteV^t^^i"^,'"^ J^,''"* f » 'P«3' have been Ld was not said as a threat, and I did not sfy' to th!f n '". °''*''V** ''•"*^ *«' ''«* i* •*id as a threat. ^ *° ***" Lieutenant-Governor that it was certain** J T ^"^^ to "I' you another question. Yon s«v th.f certain tha^you were threatened with cabling'to tirHon irX^^rr '~ "* Mereletwould b^lStJ toV* "'' '*'* '~° "•*** ^^^^ »»>•» *»>« Honourable Mr. " a /wL't! ?'" *°vT' '* "'*'* •'"^^ '^•^ '^•^•^ * view to— Q. I wish to know if it was said to you 7 " A. I am certain that it was not sai^ to me. " ooll«««.. h^ told „e S Mr jclter hiTh ''""' "'■.""' ^-w ^. .n. Government h«. „.!,«, .^ok.-^'^—- •f: r ' It •t! Hi 94 3fr. (?amea«. h 0»ni«M 151 PaMod 8r4-4S3 W«bb 348 ¥!'■ Arntitroiit »07 ttuBtan 178 " press the constrnction of a road which he had promised and '• which he was so anxiotiB to have built in the interest of Gaspe " region." Mr. Pacand called at Mr. Gamean's house about the matter. He also wrote to him. His declarations to Mr. Webb were to the eflTect that Mr. Garnean had refused to sign the letter of credit, that he pressed him and that upon his (Pacaud's) threat to cable Mr. Mercier, then at Paris, unless the letters ofcredit were signed that day, Mr. Garneau alleged that he had caused them to be prepared. Pacaud's version of this statement to Mr. Garneau is that he said " do not hesitate, and if you have the slightest doubt in the matter, telegraph to Mr. Mercier, to ask him what are his intentions in the matter." To Armstrong, Pacaud said :— " A. Mr. Pacand told mn, that owinj to the delay in getting the mattei finally settled be had spoken to Mr. Oameau about it and told him he was very anxious to seethe thing through, as Mr. Mercier had asked him specially to have the thing ready, as he wanted to see the men put on and the work going onbefoip he got back from England. " Q. What, if anything, was said about the cable? " A. He gave me to understand that he had told Mr. Qameau that if the thing was not settled at once he would feel obliged to cable to Mr. Mercier about it On a number of points Mr. Garneau appreciates hia defects of memory and answers with hesitation, the result in all proba- bility of the precarious state of his health. He frankly states :— " Q. You do not remember? " A. No, my memory fails in many details. " Q. You now say that your memory fails you ? " A. Yes. " Q. Mr. Garneau, is your memory bad, or is it usually good ? " A. It is bad. I do not depend on my memory at all. These facts emphasise the pressure put upon Mr. Garneau. It came in greatest part from within the Government, from Messrs. C. Langelier, Robidoux and Duhamel, for Thom s threat of with- drawal ought not to have seemed very formidable, and relations between Mr. Garneau and Pacaud were of rare occurrence. Of this pressure the purposes were, the obtainment of the report which became Order-in-Oouncil No. 287 and an issue of the let- ters of credit. Mr. Gameau. 98 mised and t of Gaspe be matter, rere to the r of credit, It to cable ere signed hem to be l-amean ia test donbt lat are his lattet finally y anzioiu to- re the thing )efon> he got ; if the thing oat it is defects .11 proba- states : — Gl^arneaa. n Messrs. of with- relations nee. Of e report the let- neau^m^f \'' *' *^' ^"*''' "^"^ «^«»*« «"t«d in Mr. Gar- ZZTnt t^hfTf ^ "^^^^'^'^^ '^^' theOrder.in.Oou; oTon'Thro^r rr ''- ^^^^^rJS'^^ZZ calledon tt^ S of 1« K ^''^"T^'^ ^'" ^ot.state that he «u ou mo cniet ot the Executive between the 28rd ane payment of money !■;- 98 Mr, Oameau. hi. I" M ' "j P''"""»'» «^M«nce We to the oonolueion ihU The third condition formally provides :— Thom MO-MT Q«ni«an 14». 181.3 Thom 579 Owatan I6» »nn^' ^*'** /I'* ?«'^«""»««>t bind" it»elf to pay tlie Company thesubaldvof J, converted into money, which subeidy shall be kept by the Government a^ em PIUB. if any, .ball K •ft«r the payment of all claims «!taallyexi8tiD2aitain.t the s^s^^^r.^L^^reir-*'""^"'^-'-"^- — - -•--": To give actual effect to this clause established procedure was igno«Hi the prescriptions of the law were disregarded, while the land subsidy was converted into money and the letters of credit is- sued without being authorized by specific Orders-in-Oouncil, Between the 28rd of April and the issue of the letters of credit on the 28th. Thom, Armstrong and Pacaud manifested great impatience. Their urgent desire to have the whole transac- tion cloMd by the payment, in one way or another, of the money promised, was supplemented by active personal efforts. Thom even went to the extent of pretending that he wished to renounce his contract, advantageous though it was, and to return to Mont- real. He made a written request for the i«tum of his debentures, but at the same time let it be understood that he was so acting without the knowledge of Cooper and associates. Pacaud for his part wrote Mr. Garneau and appealed to the other Ministers. These menaces, futile though they were, seem to have finally de- termined Mr. Garneau to satisfy them and he addressed Thom in that sense. Thorn's offer of withdrawal and the consequent relief to the Government from the claim for damages which Mr. Robidoux seems to have feared, make it all the more difficult to understand why Mr. Garneau should have concluded a contract apparently so distasteful to him. ' Once more, the leading explanation lies in his submission to Mr. Oameau. 99 nsion that assing the h« snbsidy of . Sub-Mction lent and em- ind the anr- g against the lereof to the ednre was while the r credit is- }ancil, letters of lanifested e transac- lie money B. Thorn renoance to Mont- bentares, 30 acting icaud for ilinisters. nally de- Thom in ef to the tobidoux derstand parently ission to the importunitiesof his colleagues. "It was I." he says, " it was I unfortunately, who had to carry out all that." ' Mr. Cooper had against the insolvent estate of MoFarlane&M . Co. a claim for $17,209, and against Armstrong another for |2 000 »"-»" TL V""'^.?^''^ "'"'" °^ ^^^ negotiations his payment de^ pended ; he evidently anticipated large profits, and he feared that the charter might be annulled under the new law His counter interests were too great to excite any real fear of with- drawal. It ought to have been evident to Mr. Gameau. as a business man, that no necessity existed to rush the settlement of a transaction which bound the Province to the extent of $590 000 He made no enquiries as to the standing of the persons named.* or If they had invested in shares of the Baie dos Ohaleurs Com- pany Even up to the date of Thom's examination none of the shareholders, except Messrs. Cooper and Dawes, had put anvthinir tk „ . into the undertaking. Even the shares necessary to quX tS! "" ''' directors had been gratuitously transferred by Messrs. Thom and ''"" *" Cooper. " To this day there has been no direct agreement between the ,. Company and the Government, and ever, the transfer of the"" -•'*• shares from the old holders was only finally made in June, long after the whole transaction had been completed with the Gov- ernment. And lastly. Mr. Gameau. with only the then illusory security of the Company's debentures, paid, out of the public treasury, 1176^00 to Mr. Armstrong, who. as a contractor was according to Mr. Mercier. not entitled to any preference payment MrPacaud ' "^^ '^^'^ fo^bwith handed over flOO.OOO to Four causes appear to have removed the hesitation felt bv Mr. Garneau and to have reconciled him to the transaction. 1. The certificate given by the Secretary-Treasurer of the Company respecting the shareholders-a certificate which reallv certified to nothing. ^ 2. The delivery of the debentures, then practically illusorv as a guarantee. «o"*;r. /%•■■ N'» I 8. The respectability of the persons engaged, as it ■^ hi 1 ^Li| -rH was sup- 100 Mr, Oameau. posed, in the matter, althonffh up to the 27th of April, when the Government became bound by the Order-in-Council Mr. Garneau did not Icnow for whom Thorn was acting. 4. The opinion of Mr. Robidoux as to the legality of the transaction which Mr. Robidoux swears was only intended to cover the question of public policy. Ombmu 311-19 Meraiar M6-6 But demands upon the public chest did not cease with the issue of the letters of credit and the payment of |41,5()0 for privi- leged claims. Hardly was the new contract in existence, when Mr Thom as Secretary Treasurer of the Company, wrote Mr. Garneau ask- ing that of the subsidy only payable on miles 80 to 100 ItO.OOO should be advanced and doubled up on miles 60 to 80 if the Company deposited debentures to the nominal value of 1200,000. Mr. Garneau on behalf of the Government at once consented. He had no official power to do so— such a concession required special authority from the Legislature. Mr. Mercier himself admits this, and states that the error was to be remedied by Legislature. The concession was at once put into Hogan's sub-contract as part of his consideration. The subsidies payable to the Com- pany on miles 60 to 80 then stood as follows : Federal, miles 60 to 70 $64,000 Provincial, miles 60 to 80 170,000.00 Provincial, miles 70 to 80 70,000.00 Advanced from 80 to 100 7oioOO.OO ♦210,000.00 Less previously paid 20.000.00 190,000 ^•M%\}^}y} JUr. Oarneau. , when the [r. Garnean lity of the ateuded to e with the ) for privi- Mr. Thorn, mean ask- )0 ItO.OOO 60 to 80, U value of consented. 1 required the error wh,oh under the conl«c., „« .„ be «.rin!d by the G^v'er^en »ntU the completic of the Hr,l 100 ,»ile, „„ „ before ("e 8 W of December. 1891. Mr. OarneBa an.wered th.t .hi T j wo„W "receive the con.ider.t,on of th^ wj^eat " ""* Facts such as these need no comment. m«.e, we &ni on [he f.U dieoltSSth; whoY, tr^tion w» inducted with .ingnlar precipitation and that ^ a^ nean d,d not «iopt ,h, predautiona to guard a^inaUventualur,^ which prudence, either from a burineu or I«».l °.- 7 , . ' dictated. The i„ue of letter. otZ^^'Jo^Z^^J^r' in^ of waiting for regul„ .upplie. from the P,:^^ Treaanr; was irregular. rrormcial We are convinced that Mr. Garneau acted in eood futh .„ J o,Jy .uccumbed to preaeure of which h, cmplS, but w J ontract as the Com- ;. '«a 164,000 « I .J 190,000 riC $254,000 lot Hon. Jo$epk E. Robidoux. THE HONOURABLE JOSEPH E. ROBIDOUX. Robidoat Tso The Honourable Mr. Robidoux accompanied Mr, Mercier as far as New York, on the journey of the 18th of March. He was present when the Premier communicated to his colleagues Mr. Laflamme's letter respecting the Thom proposal and the terms of a reply were settled. RoMdoaz TM Subsequent to his arrival at New York, he and Mr. Charles Langelier had an interview with Thom. He stated his willing- ness to accept the proposal then made if the guarantees as to the continuance and completion of the work were satisfactory. In reply to a query from Thom he answered : " Yon know what aecurlty is : we want to be ncured againat all pouibleeventa and aaaured that the road will really be completed. Paeaod 871 It is in Mr. Paoaud's recollection that Mr. Robidoux declared he would require a sufficient money deposit in the Bank of Montreal or some other undoubted guarantee that they would fulfil the remaining obligations and act up to the requirements of the Statute. However this may be, an altogether different guarantee was afterwards accepted. RoUdoai 76» Mr. Robidoux's belief is that it was Mr. Pacaud who intro- duced Mr. Thom to him. Robidoai 760 He returned from the United States about the 12th of April and was confined to the house by illness until the 25th. During this interval, Mr. Oarneau twice called upon Mr. Robidoux at Montreal, in connection with the matter. A pro- mise to go to Quebec, made in consequence of returning health aaraeau 156 *^^^*^ "°' ^'^ ^'"'^^^^'^^ ^^^ ^^^ telegram already referred to was sent to Mr. Oameau. Robidou 751 According to Mr. Robidoux's evidence, this telegram was in- tended to confirm Mr. Garneau in the belief that Mr. Langelier would corroborate all that had been said respecting Mr. Mercier's wish, in the public interest and that of his countrv, to have the Mr. Rohidoux, Maibleevanto work continued and comoleted tk« „«* i . do not in our belief austtl^^ inU;rt:ttn:"^'°^*'«™-^« It WM only on the 25th of April that Mr R^km strong enough to proceed to Quebec Kobidoui wasRobidou.m The question suggests itself-was Mr Rnk;^ meanwhile consulted on the leffalitvrr^Kr ^^''^'f^" '» '^e ted to the Government? ^ ^* ^'^P^**^ *« submit.* Mr. Robidoux answers • •• Kn •» tt„ i i^ ill to «pr.„ Mn.«,lf o„ ."eg., '';^^^: "Sf" '"«' "» w« .oo».„^„„. the repwited .wertion lh.i h. h.j 7i 1 G«rae.u make, the Att.raey.Gene»" nd l^o'^' 'ti'T' * ?' "»' "P"'"- »•»?«■,« oil even . d«.ft epiafen in JiStog * " """" '» «^"»- '"• '"• '"■• mSiXni':;:^^;!^ -n.["- <^"">« »- «.. -adition.fhi.Order.in.0oan".»Xe1^^ "r,f ""' '""» to .dv.nce out of the 800,000 wra. of T^r ^ f . »oTcrnment the .am of »1T6,000 fo the ™ C^tri""? '''•° °'°'«'^' Statement. el.ewhe« refe,,^ to dM«e thLfrr""*' ''*"" leoiganized by Thorn need^ th. ^ /,u ""'^°"'P"'J' *» •>« P««.e«ion of the ro.d. A. to the ^ *T """^ '» o"""" condition. «> involved Mr S.™° »'?'»/ ■■"«P«ftioB of the w« urging th.tthlorderi^STn^Sl^''™.''*'- '''• ""*'" vewion of the l.nd .nbeidv in.r™„ «ot ope,.,ea . con- •ought for onghtnotT^'Z' Mro""* "?'" ^' W"'"' eire to «cure Ihe opinion ol'^ 4 „ G.me.n'. consequent de- -Hj« on Mr. KoS;':?^.;?;^^-^,!^ - .pecii^vciorrrA^L' Ttt^-cir r "•"«^— - Cap. 88. Sec. 7. ' ^*^- ^*P- 91, and 54 Vic, The Attorney-Qeneral hn Order-in-CWnciIofthe23rkofIpr;ZL^ '^''' *»»« «">-«'o« '« subsidy and that the ^0.1^:!^' TJt^n^T^'"'' ""' '"^^ agreement. ^^ °°"^d to carry out its -^m *f'^f| He Uter on, took oommuniction of the opinion given h. his .„,.„ 759 104 Mr. Robidoux. Deputy, Mr. Cannon, in relation to the question, and approved x„ li „ i«,**^^*' ^**® ^'^^^'^^ opinion so given was aftewards reduced to ' ^- "* writing and was as follows :— " The Honourable the Commissioner of Public Work? requires the opinion of the Attorney-General upon the Orderin-Council No. 237, of the 23rd of April, 1891 The Order-in-Council has reference to the Bale des Chaleurs Railway, and grants to th.8 Company, as re-constituted, cerUin subsidies voted by the Legislature at its last session for the benefit of the road. " It is principally on two questions tl at my opinion is asked :— "1st. What rights were conferred on the re-constituted Bale des Chaleurs Railway by the Order-in-Council Na 237 ? "2nd. What effect would the failure to carry out the provision of this Order- in-Council have uDon the Government? "By the act which granted the subsidy it is left to the Executive to decide upon ttie persons or Company in whose fa^^our it would be definitely disposed of. The Order-in-Council of the 23d April granted to the re-constituted Baie des Chaleurs Railway Company all the subsidies voted at the last session of the Legis- lature to aid in the compleUon of that part of the road upon which works of oon- Btrnction had already been begun, and in the completion of that part remaining to be done, in the equipment of the road, an 1 in the payment of the debts due by the Company before It was re-constituted. The amount of the subsidies voted by Statutes anterior to that of last session is further granted to the reHJonstitutad Company. The OrdeHn-Council imposes upon the Company the obligation to deposit in the hands of the Provincial Treasurer its debentures for the sum of $600,000. This deposit has already been made. "The first part of the Order-in-Council sets out the written proposition of MoMTS. James Cooper, J. P. Dawes. Alexander Ewing, James Williamson, Angus M. Thorn, on behalf of the re-constituted Company, to build and complete the Baie des Chaleure Railway on certain conditions, and the last part of the Order-in-Conn- oil is an acceptance by the Government of the proposal made by the Company. It submitted to the Government, in writing, a defined offer. The offer was accepted on certain conditions by the Ordei^in-Coancll. A copy of the Order-in-Council was forwarded to the Company, which complied with the conditions to which the oflfer bound it before having acquired any right to the subsidy voted last session. There is, therefore, a perfect contract, and consequently it is in a position to exact from the Government the execution of all the obligations which they contracted by Order-in-Council. If now the Government were to refuse to carry out the Order- in-Council, there is no doubt the Company would have a claim in damages against the Government, which would be condemned to pay a sum equal to the profits which the Company might have realized in carrying through the enterprise to the end. Such being my opinion on the two preceding questions. I see no other issue for the Government than to fully and completely carry out the Order-in-Council of the 23rd April. " There is another question which is not especially within mv competency but upon which my views have been asked. Is- the contract contained in th« Order-in-Couucil on the 23rd April, one in which I would have concurred if I had approved duced to e opinion of April, 1891. , and grants ilature at its m Chaleurs this Order- ve to decide disposed of. d Baie des fthe Legis- rks of oon- maining to dne by the s voted by constituted ^ligation to he sam of 'position of son, Angus te the Baie ir-in-Coun- itpany. It us accepted Council was b the offer >n. There 9xact from tracted by the Order- :es against the profits 'ise to the ither issue Council of mpetency, led in the if I had 105 J^r. Robidottx. second reason for my concurrinTl ♦? n ^ " ^%^'"' ^'°" "'» "^ Company. The •ons Who form the^neTZ r.:^'«Ba;;trS^^^^^^ the,r undeniable reputation for bus^e^TntiTitvtr^^""''"^ Company, and antee that tl,e Company will carry ouUtl options. '° '''*' '"'^'''^' «"«' (Signed) J. E. KOBIDOUX, -A^ttorney-General. Daring this same interview a draft (No «p *k letter of credit, to supply the advance reauirVd / *SlP'°P«««*^«oMdo„,m submitted to Mr. Robidour tt! '^eqaired by Thorn, was He was without doubt L tf thf^f '' '"^ ^^^*^^"«d "• Council and of the transaction "^"^""^ '' '"^^ Order-in- RoMao„. r.. Earnest endeavours on the oart of Mr p ^ . acceptance of Thorn's proposal iCln^L/"^ *° '""'*'« anp«.„, ^, The Attoi dey-General sujrffestp 106 Mr. Robidoux. " A. I went to see Mr. Bougquet, cashier of the Bank, whom I met here at their branch office here, and I explained the transaction to him, and he thought his Board would discount it He induced me to accompany him to Montreal ; we left by boat ; I went to the Banlc in the course of the day with Mr. Armstrong. " Q. You were with Mr. Armstrong? " A. Yes; I was not with Mr. Armstrong from Quebec to Montreal. " Q- You went with him to get an answer ? " A. Yes, I went with him for the answer. No one else was with you ? No. I was alone with Mr. Armstrong. You did not try to get the cheque discounted anywhere else in Montreal ? "Q "A. "Q. "A. Yt». "CJ. At what place? " A. Not I myself; I did not try elsewhere. •' Q. Who tried to get it discounted, Mr. Armstrong ? " A. No, your Honour. i " Q. Do you object to state who it was ? " A. Well, I have no objection if the Commission wish it ; I am bringing in the name of some one who only did me a favor. " Q. Is it some one from whom you asked ? '• A. One who had simply asked me what had brought me to Montreal. I told him I had come to negotiate my note, endorsed by Mr. Valliere and guaranteed by a cheque of Mr. Langelier as Commissioner, endorsed by Mr. Armstrong ; that Mr. Armstrong was very anxious to get his money ; that he been paid by a letter instead of money. This person said : 'I know the Montreal bankers better than you do ; give me the papers and I will do my best to get them discounted.' He did not succeed, and returned them to me. " Q. Then you had a third note endorsed by Mr. Valliere? "A. Yes. " Q. For the same sum ? " A. Yes ; I expected to repeat the same transaction at the Banque du Peuple, Montreal, as here at t .j Banque du Peuple and Banque Nationale. " Q. I must ask yon the name of this person ? "A. The Hon. Mr. Robidonx. After receiving the fusal of the Bank du Peuple, I went with Mr. Armstrong to the Government office and then to Mr. Robidoux's house. Mr. Armstrong stayed in the carriage and I went in. Mr. Robidoux was ill, I went simply to call upon him and in the course of conversation he asked me what brought me to Montreal, if I had come to Montreal on.business, then I told him all I have just said, about how I had met Mr. Bcusquet in Quebec, and that he had told m^ he had every reason to believe that his head office would do this business; that I came thinking to succeed and that Mr. Bousquet answered that his Board was not willing. Then I said that Mr. Armstrong was somewhat discouraged, that he was with me at the door, that he counted on the money. Thereupon he said : " I know the cashier of the Banque Nationale, he is one of my peroonal friends, give me those papers I will gee if I can negotiate them.' T lef&tb(^ 1 Montreal 7 Mr. Robidoux. \m papers with him and on hia rot,,-, r ir ~ ^ "AM ^**° '®*^« *i*h him ? Bou«quet.an7atore'SchlU'i^^^^ ''''^' ^^°" ^r. Webb to Mr. ' endorsed by Mr. Armstrong-tJ^Ze E^^ f ' '\ ""■ ^'>««»'«r.Commi«sioner banks. ItwasthesauebLneM '"*' '''"»dy Produced at the oth*; .he;?^^^'^""^^'''*^"^^- ««»>^<'ouxhowyoucan,etohaveMr. Ungelier-s accompanie^me to I'll" . T^atte wLltTheT' ^'f^ '^'- ^"°«*™°8 ^'^ have the proceeds of the discount, and tha" lad It^' ' *tf * ''^ '^'^ «"'■«<« to would not try anywhere else but Would return ^f S„e^» «»''* '° -cceed; that I ^, Q. You raft the documents with Mr. Eobidoux and returned to Quebec 7 ;; Q. Hedid not give you back thesepa^„ti„ he himself returned toQuebec. back'tt^Si*^"^''^'-'^^^ Several days? TiU Mr. Robidou, gave you " A. The first time he was here question 7 * " " '« "»« ^tter which accompanied the note in " Union Bank of Canada, " •'• * ^otuquel, Esq. , Quhier. " Q™"*^ May 16th, 1891. " DuAB SiE : I*x«elier, (JmmissionVNo. ^trZo m ^rlw^' '^T^ °' ^"^^ Chrysoetome Armstrong, if the amount mentioned inT:r^r "^ f" »'«J^ *n ^vor of C. N. T.^u«,r juid acting Prime Minister, of fhe ^^T\ 'tla^'' ■" ^"°« ^'"^^'^ci-^ 1891. Is paid on or before that date by tLoJ^^ ^^"^' ^f^' "^^""••g ^th July, the said J. C. Langelier. Commr„1oner:i?h IS Zk.""^' ''^ *° *^« -«<»•* '^ " Yours truJy, (Signed) "E.E. WEBB, Cashier. " a J:i?rrr" "^ '''''^ '"^^ ^ ^•^es ... letter. " A. Yes."si;.' "" ^""^ "•" ''"''' 'y ^- -^ endorsed by Mr. Val,ie« 7 ll- m;n , lit 'ii ,Jl 108 Mr. Robidoux. RoUdODz 754 " Q. Where is this note now ? . " A. I destroyed it a few days afterwards, as soon as it was no longer of any use to me. I think I did so before Mr. Valliere in my office. "Q. Now, after the issue of the letters of credit, did you concern yourself at any time about the nejfotiatipn or the discount of that letter of credit, or of those letters of crrlit? " A. Thi. is what occurred : I had returned to Montreal ; I was a«ain at home sick; it was towards the middle of May, I believe, Mr. Pacaud came to see me, and after the usual exchange of civilities I asked him what brought him to Mont- real. He said :— I came here to try and get a note discounted for Armstrong, a note secured by a cheque signed by Chrysostome Langelier, Commissioner in the Bale des Chaleur matter. I then asked Mr. Pacaud how it happened that a cheque drawn on the Union Bank and payable unconditionally was not paid, and that it was necessary to discount a note and give the cheque as security before getting the cash. Then he told me the Union Bank was not in funds at the time, and that it had given a letter which accompanied the cheque, by which it undertook to pay it as soon as it would have received the fupds from the Government. I then told Mr. Pacand, without his asking me, Let me have that note, cheque and letter, and I may perhaps succeed in getting the funds. I thought I was performing a duty in trying to get the flinds on a cheque having the official signature of the Govern- ment '• I knew Mr. Napoleon Lefebvre very well, he was one of my friends, and a Montreal capitalist I am not certain whether I wrote to Mr. Napoleon Lefebvre or whether I telephoned to him ; in any case he came to my house and I told him : * here is some business that may suit you perhaps : can you discount this note V Secured as I have just stated ; and I showed him at the same time the letter of the cashier of the Union Bank. Then he said : • I will see." and he went away with the documents. " I did not leave the house that day. The next day I went to the Government Offices, and as I was passing along St James Street I met him ; he came to me and said : ' that he had tried to get the note discounted at one or two banks and that there was some difficulty.' Then I said to him : • I asked you if the matter suited you, thinking that I was giving you a good thing, but if you do not do it youreelf, return me the note, the cheque and the letter; I have no interest in the matter ; I was doing it to oblige someone, but take no further trouble about it.' He then returned me the note, cheque and letter and I returned them to Mr. Pacaud on my next trip to Quebec- " Q. On that occasion, when Mr. Pacaud went to see you, was he alone or was he with someone ? " A. Mr. Pacaud was alone when he came to my house. , "Q. Did you notice whether there was anyone who remained in the>ehicle ? " A. I know that there was a vehicle. " Q. But do you riot know whether there there was someone in it ? "A. I do not know. " Q. Was not Mr. Charles Langelier with Mr. Pacaud ? " A. Mr. Charles Langelier was not with him. "Q. Do you fcmeiubor what documents Mr. Pacaud gave you on the occasion you have j ust mentioned 7 onger of any n yourself at , or of those (ain at home B to see me, im to Mont- Lrmstrong, a ioner in the tiat a cheque d, and that ifore getting me, and that rtook to pay I then told d letter, and ng a duty in the Govern- ands, and a ion Lefebvre 1 1 told him : this note?' letter of the t away with Government same to me > banks and ' the matter do not do it terest in the lOut it.' He Mr. I'acaud ilone or was le "vehicle? Mr. Robiiloux. 109 he occasion Mr. W^ibb^lTlieve "IS ^^^^'f' ^"^ ^-^<>"^ by Mr. Valliere, a letter from €ommJ»le?^ • »°^ * «^«"1"« f"' «20.000 signed by Chry«>etome Langelier. discount that note? i^febvre the only step you took to could tt^oUWms^lritfd'hlr^r'T^"^^^ ^^^''"^ *»'<» -*»>*» he no interest in thTTol; **'''* /'"° = ^ "o* take any more trouble about it ; I have j:rsrr;a:Xrt;'m:.*r-*^«-»- - t^^atl may rstum them tot: ^ntrLr ^"fl T^"*'"'''' ^^^"S ''''''''^ **> ^^^^i from the l8t. That Mr. Robidoux had exact knowledge of the neiro- tiations as disclosed by the preceding facts and of pLS active intervention in regard to their seltlement. 2nd That while the discount was pretended to be for Arm- strong his name did not appear on the note which was made and endorsed by Pacaud and Valliere respectively sistin^t^f^"** *^!, ^T"^^""^' ^''^""'^^ P^^'^"*' features, con- sisting as they did of an endorsed note secured by an official theX: Bank ''' YT""' '^^ ""^•^^ *^«- ^^ noil' ft rStt iLTl^n^r-" - ''' — - - ^ All these circumstances gave serious warning as to the real ^arocter of the transaction and made Mr. Robidoux's Ten tern porary possesion of the securities a highly compromising Lt On the other hand there is no proof that Mr. Robidoux had any knowledge of the Armstrong-Pacaud bargain, or eith^ direct y or indirectly received any benefit from the ^0(^000 t. .K n^ '^TT *° "^^ '^** ^'- P'*^*^^'^ payment of |100 to the Union ninh nn My w^H-l •- ,f t ,- **"" .... , -„ "^^' ^vODiQuui js assumea oeiiaif was nnan- thorized and afterwards refunded. 110 Hon. Charles Langdier. THE HONORABLE CHARLES LANGELIER. During the negotiations relative to the Baie des Chaleurea matter, Mr. Charles Langelier, occupied the Cabinet position of Provincial Secretary. PM».d 418 He vjras among those who accompanied the Premier to New Ti/*"?*"*' ^^^^ ^° March last, and was in the official car when "Pauaud in- formed M. Mercier or Armstrong's desire for an interview. PMMd 389 ^® ^.*® ^^ ^®^ ^°'^ ^^*^ Robidoux when Armstrong and Thom arrived, on a telegraphic summons from Pacaud. "While c.^L»ng.ii.r xhom was making known his proposal Armstrong and Pacaud withdrew, and in a few minutes completed the arrangement by which the latter was to receive $100,000. They then returned and joined in a general conversation. Shortly after Thom and Armstrong started for Montreal, 'leaving as it appears Messrs. Langelier, Robidoux and Pacaud at New York. After Mr. Langelier returned from his trip in the United PM»nd 373, 874,427 jj •»«• T» -T ""'^ w— .v,v» 719 ^M*'"" ^***®*' ^^\ Pacaud had frequent interviews with and strongly urged the importance, in the public interest, of accepting Thorn's proposal as speedily as possible. He spoke of the disastrous con- dition of the road and of the pro Tiises made by Mr. Mercier to his electors after his election, to the effect that the work would be completed and the workmen paid. o»»«.a 167 On the Itth of April, while Thom was in negotiation with Mr. Garneau on the subject of his proposal, Mr. Robidoux who had been consulted by Mr. G-arneau and had promised to meet in council telegraphed that he would be detained longer than he expected, and added : — " Langelier will tell you exactly what was decided upon before the departure of Mercier. Q«i..aui68 In Council Mr. Langelier was favorable to an immediate conclusion of the arrangement with Thom. What had been so resolved, the proof does no t clearly disclose. Quneku i7« On the 20th April, before the passing of the Order-in-Coun- No. 11, 178 ^,j2 n^n^ter 237, Mr. Langelier made a report to Mr. G-arneau in the name of Mr. Robidoux, Attorney-Q-eneraK then absent, in «Ce Mr. Lans^elier. lU Ohaleures jsition of r to New Eiuaad in- )W. rong and i. While L Pacand ment by returned bom and Messrs. ) United strongly J Thorn's 'ous con- er to his irould be on with >ux who I meet in than he departure imediate been so n-Ooun- 3-arnean which he stated that Thorn's proposal was in conformity with the Slatnte, and that the whole question was for the GovX ment to ascertain whether the Company which Mr. ThomTro- ^onI"r^T:V^'''^ '"®'^^^"* ^^-^^^i^l guarantees. That opinion did not at first receive suppor- Trom Mr. Gkmeau. ^ Thorn's proposal finally secured acceptance on the report of Anri^'T'"' ^^ *^ Order.in-Council. number 287. dated 28rd tW ;>. ~".d«^«t^d»«g was later on come to between Ministers rtht^Tuiy ;:;lX^^^^^^^ " ''- ^^^^^ -^ -^^^^' ^^ *^« _ It appears to have been andemtood between Paoaud and the o. ^nt'».'^." *^' i'"';°' "'^" '"' »>»"■'""> would^btaTn dt ;?-" Zrl^ tj« Un-on B«,fc, .„a that for »?5,000 at the Banque f""* 3« Nationale, bnt after their tone the Board of the Union Bank re- "' "' "* i^narles Langeher to aak the discount of the letter for $100,000.' " And he adds later on :~ Whe7X''"ame'irwa^ fnlhe^'Jr''" *^r"-«- to the Board of Di«ctor«. G.bo„^ 333 Ther* WM a Z^iil 7^^ !. »fteruooii, about half-past three or four o'clock. moSn.rthTCH i;irr "''. "^ ?° "'***'■ ^^^ *° ^'^^*- ««»>-'*»«» ^^e next laoimng to the Board meeting, and the discount was not made." been maThvM' VV'^' ^r^ ' "'^''^^ *^« ^PP"^'*"-^ *<> have Deen made by Mr. C. Langelier and Pacaud. " La Banquh Nationalb, No. 56 "Pw,»-.. r ... . "QcBBBO, 2nd October, 1891. P- »00 Nat JjSd o^r sIhTariU'i ""^^« "^ *^ "'-*«- «^ t^« Ban,ue Ch.Z''/ "PP"*'*""" 'o'" t»»® discount of $100,000 made by MM Pacaud and "(SigneJ.) "P. G. LAFBANCE, " Cashier,*' ! • ( I ' 41 112 Mr. Laugelier. Pacaud gives the following version of the application : — PM»ud:435 « Q. Did you not go to the Banque Nationale with Mr. Charles Ungelier to diacoant $75,000 ? " No, your Honor. This ia another. If your Honor will permit me I will tell you exactly how the affair took place, because I know it has been aaserted here that I went with Mr. Chas. Langelier. I went with Mr. Webb to the Banque Nationale to ask if the latter would discount the letter for $100,000, aa it had already agreed to discount the letter for $75,000. As well as I remember, we spoke to Mr. Lafrance, and he sent for Mr. Gaboury, the president. We repeated our request and discussed conditions ; how the matter wkb to be done, whether by means of a transfer, which the Union Bank would make to the Banque Nationale, or if that bank would endorse the letter of credit for $100,000 addressed to the Union Bank, or whether it would be better to ask for a new letter of credit to the order of the Banque Nationale to replace that to the order of the Union Bank. The officials of the Union Bank requested Mr. Webb and myself to return st 5 p.ro. for an answer. We left In the afternoon, according to his daily habit, Mr. Chas. Langelier came for me after office hours, to go for a walk together or go to the club, because I must remark, almost every day, if he did not come for me, I called for him to go out after our office hours., I told him I would go out with him if h«> would accompany me to the Banque Nationale, where I was to get an answer to a proposal I had made with Mr. Webb. He agreed. We entered the bank, he remaining in the passage. On opening the door, Mr. Lafrance, whose chair faces it. saw Mr. Langelier, at once re-opened the door which I had closed and aoked Mr. Langelier to come in and sit down. He entered, and there before him I assert that I discussed again the $100,000 matter and the question of discounting the letter of credit, which the bank officials said they could not da I talked it over s little to induce them to alter this decision, but they would not In this case I told the bank that I asked for the discount in Mr. Armstrong's name, who was very anxious to get his money." Pacaud also spoke of the interview in an earlier part of his evidence, when he said : PMaud409 "Then Mr. Langelier came in and I conversed with Mr. Gaboury and Mr. Laft-ance— certainly with Mr. Lafrance, and my impression is that Mr. Oaboory was also present During the interview I discussed the negotiation of the letter of credit for $100,000, it was always in »Ir. Armstrong's name, as his representative ; that this was a letter of credit given by the Government to the Union Bank, that the Union Bank would not discount it for Mr. Armstrong, who was very anxious to eet his money, and was very disappointed that the Union Bank, after promising to discount it, would not do so ; and I asked the bank officials if they would not advance the $100,000 as they had done the $75,000." "What are the contrasts which this evidence presents ? The president and manager of the bank, supported by a resolution drawn at the time, declare that the application was made by Mr. Charles Langelier and Pacaud. The latter declarea R- Jw'i Mr. Langelier. 118 that he first went to the bank in company with Mr Webh • f h.* according to appointment he returned in Ihe aftefnlT ^ ^ Lanirelier hpino" wi+i, u; u ^'^^^ *" »"e aiternoon, and Mr. room that Z Ik i .^^ '^'''''' ^"^ ^"^^^"^^ ^° «»*«r the d Economie, but again without success. orpditf ' *^'l/^'^^ '■'^"'"'' fi^'^'^^ff * discount of the letter of credit impossible. Pacaud came to an understanding with Webb iiiwai cneques. The application was refused. In relating the conversations had with Paranri «« *i. occasions, Webb testifies :_ ^^ ^'^ **'®«® I do not kno7by whom iTa ^^UTonT*^ 'i'^" "'''"« *° *^'- ^'''^o""' ""'' '" amount to go to the Hon^ClLC w«1l 'l ^^rth"^ ^^ ^-«««-^ *»>« onrable Mr. Chas. Langelier was 10 or ?9n iS??' *^* *"°"°* *° *»»« ^on- w««>i. that I have doubte ab^JJ u «L fX^-l^"" °°* *^*"^« '*>'«»>; the stated that he wol ™t a tetteffri^ i ? v *^T "' '^^' ^'- ^'^^<^ would remain with the banrlm^; ^^f.^ ""/"'*"'''"« *^»' *h« "o""/ the deposit was tc be J20oSo'bnfiiSt I f ^ of credit wa. paid, and that the HoS:;rable Mr. RoE; lltt J:,^^!;:. ''^' •"'''"'^«' ^''^ ^^^'^'^ ^» r.f. Of this evidence Pacaud speaks thus :— this for his hou^fth^ums JiZnW Zr r J'.'"^ "' ""■■• ^''°««"«' ""'^ ^ is monthly for a mr orTfL^'Sbl? A^tJ! f '"'T' 'T ""« *° «"«' *»"»» listofmynotessaying: 'S mv I st nf «!/ T^ *"°* ^ oflersd Mr. WTebba jal. due. so that yo'u ^iU n'fn::^^^!!^ ^1^^^^"" CT^r^^"^ '^«- ^«a. .ec-uunt ^O.OOO to $50,000 which remain. Now. I wis. .. n^^kTa^^^l^L'^to ■f 114 Mr. Langelier, MS, 4«« Bumoulin 3»« Damoulin 300 Dnmoulin 301 No. 60, 809 Mr. Chas. Langelier, for building his house ; as he does not want this at once— his contractors will draw it by degrees -you can add $10,000 which you will not have to disburse.' " These statements are corroborated by the actual transactions which afterwards took place between Mr. Langelier and Pacaud. Pacaud's next venture was with the Banque du Peuple. on the 6th of May. Dumoulin swore that : "A. M. Vallifire came to the office with Mr. Ernest Pacaud, and the Honour- able Chaa. Langelier; and presented me for discount a promissory note of Mr. Val- lifire to the order of Mr. Ernest Pacaud for the sum of $20,000, and Mr. Vallifire had a cheque for a similar amount signed by J. C. Langelier, Commissioner, upon the Union Bank,and which was to be paid by the Union Bank about the 10th of July.and I was to apply the sum which I would receive from the Union Bank in payment of the cheque to the settlement of Mr. Vallidre's note." In the interest of Mr. Valliere, who was a client of the bank and whose endorsement was perfectly satisfactory, Dumoulin suggested that it would be well to obtain a letter from Webb, guaranteeing that the oflScial cheque would be paid on the 10th of July. He adds that the transaction was completely settled at one interview, and that the letter came to him a few days later. Dumoulin adds, that he profitted by the occasion to ask Mr. Langelier for a government deposit of $50,000. " I thought that I should talte advantage of the occasion and ask Mr. Langelier to make a deposit in the bank as they were on the eve, at least I'supposod so, of receiving large sums from Europe. " I asked Mr. Langelier if he would not deposit $50,000 in the Banque du Peu- ple, and I thought that Mr. Langelier answered me in the affirmative, promised me the deposit .» • * ♦ " Q. Did you make the request a condition of the discount which vou gave of this $20,000 note. "A. No." On the tth of May he wrote to his head office as follows : — " La Banque du Peuple, " QuBBEC, 6th May, 1891. " J. S. Bousqnet, Cashier^ " Dear Sir,- " Mr. Phillippe Valliere, one of our wealthy customers, has discounted here to day his note for $20,000 to the order of Ernest Pacaud. Mr. Valliere has a guaran- w «t,,^--i.v«v rpi.E^&i t.»rj iic»o a^titi ev tut? a2u vruiuil x will COIIOCX tnySQIX Mr. Lange/ier. 116 Again: " Yoars very truly, " P. B. DUMOULIN. «J-M"v.mL''r;:,,':?^Sr'""'''"''°° "'•'°"'"»" "«»— DumouliD 301 " A. Yes, air. •- Q. Mr. Langelier remained with them during the whole tiationa ? time of the nego- " A. Yes, sir." vi«w?'' *A r*^'' ^,*°^ ^r''^ ^'''^' *^** *^«^« ^«'« two inter, views. After speaking of securing the endorsement he says • tor, Gov.,nmen, Co„„m1„,^, „d sho«,d hlm^ cC 1 told ht^'fj «.„„» the note «,d placeth, .m„„„.t; Zi^^iluZLTT'"' """ ""■ "'- Again : abouuhair '***^' ' '*"^'^' ""•• *'•* y—t twice to the BanqueduPeuplev,.a,,,„3 U' i 116 Mr. Langelier. 7i«, 7»r *' ^*- l<#«irtier gives the following 'rgion of the version * Q. Now, Mr. Un«elier, it has been said that you were preaent. either in Ihe antechamber or elae where, when Mr. Pacaud went to the Banque du Peupie to diooount hia note for $20,0007 "A. Yea, your Honour. I do not remember If I was actually in the ante- chamber " Q I should nice you to relate the oircumsUnces under which the affair took place ? " \ The clrcnmsUnoes are as follows : I reached the EhcUur office, and I found there Mr. Valliire aud Mr. Pacaud; ^ well an I can remember, that is how the thing look place. I was going up town to my office- Mr. Valliiire asked If I was xoing up town ; I said yes. He answered, ' If you will wait for me a few moments, I will go u| with you. I have businewi at the Banque du Pe,iple for a few minutes.' I left them. They went into Mr. Dumoulin's office for an instent. I did not know what they had to do, I only learnt I* afterwards. I knew nothing of it in any way at the time. Mr. Vailidre said something to Mr. Dumo.'lin and this business was flnishe.l. I was seated in the passage, at the door, and after the interview was ov-sr Mr. Dumoulin asked me. what he had often asked me before, to obtain for him a Government deposit for the' agency of the bank of which he was cashier. '>'»■• " I ought to explain that Mr. Dumoulin gave ».^ .v reason for his request that we were the lawyer, of the Banque du Peupie at Quebec He gave this reason for asking me to use such iofluence as I might have with the Government to obtain for him the deposit I drew his attention to the fact that the head office of the Bank in :\rontreal had already a considerable deposit, and that this question rested with the Provincial Treasurer and Mr.Mercier; that I had no objection to ipeak to them on the subject, to aid him as much as possible to obUin a deposit, but I swear positively that I made him no promise whatever, and that could not have been to facihtete the transaction, because the transaction which had just Uken place with Mr. Pacaud and Mr. Vallifire had been completed. " Q. YV a did not hoar nor make out In any way what it was about ? •• No. AS I had nothing to do with it I understood it was a private matter. I withdrew a little to one side, as it did not concern me in any way, and I w »i'€)d till the gentlemen were finished. I left with Mr. ValUere." €. LaoMlier 74» Off. eor. Ml And again : " Q. You know that to get this note for $20,000 discounted at the Banque da Ptouple, Mr. Pacaud wcs obliged to have the endorsement of one of our best names that is Mr. VaJ.icTe's ? ' " A. I leara. sis .afterwards, but I did not understand that it was necessary to have Mr. Vylliu. -i se«i.«nt in order to pass the provincial paper ; on the contrary, I under'-f.t hi;,'. KT . Valliere agreed to endow it because he was guaranteed by tl. ; i>r. < tL • eper." Two solemn decOai-ations relating to this discount are to be fonnd in the official correspondence as transmitted, with Mr. Mercier's reply of the 10th of September, Mr. Langelier. lit Mr. Langelier solemnly affirms '1. That on f"< o,<(;mjq„ when Mnii«ra p v.m . ^ to the branch of tl.„B,nr,ue ^rZ^:T^l v:ZZZt ^^r ^--^ -"t cheque or m.iJOO of V j. ChrysoetoL r.nLn < !T' **' **"" ""y- '" ««' • !n g.. . in« it diacounS ' ' "'' *'"" ^ "" ""^^ "'"'"'«» ^y anyone to assiHt "3. That on that occasion M. P B nn».»..i:- . already frequently aaked me to do vf; ^T^A *""'" """^ "« *'^''» ''« ^ad of which he ia caahior. and I wouS not 1^ ^^^^^D-ent deposit for the branch and the. that I wouS wim„,Tyt ^n^ b^J bu^K.? .^'"'7' ^'""« ''''" '*■- the t™asu.,r. Honorable J. Shehrn th^ no oL™?! ^ *^T''" ""^'^ *'"' iwpect." ^ ' *''** "° promise was made by me in that Mr Valliere solemnly affirms Langelier. in his qualSTy i i™mt!^mm^r ' '^'^'" °' *-"'^°^ '■ ^ ' v'"' - «^ Hon.C.Ungelier%hoLpp^edthrby^iZr' "'"""^'' ^ "«* *^«- di«;5;':it;:7h:tStin',^r:^^^^^^^^^^^ - '•^ -^- •^^-.y or ,. nor any'r Vm1.S °^^"> * ^-l-it of 150.000 the aforesaid cheque of $20.00a ^ * *^* ^"''•'"" '^ « 5"-^^ of the Ban.ue du ^"— ^oux's house. Mr. Armstrong sUyed i„ Jhf IZZ °^"? ''"^ ^''^^ *° ^'- ^^- d back. He then went to the Banque dn Peuple and came out and said it was very funny that he couldn't get a note for $20,000, with a first class endorser, discounted. He never told me that it bad any connection with the cheques at all ; and I was not aware of until I saw his evidence. "Q. So far as yon are aware, was the discount applied for in your interest? " A. Not in my interest ; I had no claim upon it And again : " Q. Was Mr. Bousquet there ? " A. I didn't go into the Bank. " Q. Whom did you see at the Government offices 7 •' A. The Honorable Mr. Langelier was at the Government offices. He walked down as far as the bank, but did not go into the bank. Mr. Charles Langelier I refer to. " Q. Was there any conversation on the road as to what m as to take place 7 " A. No, sir ; he simply said Mr. Bousquet was out when he called before, and he was going back to get his answer." And again : , " Q. When you say Mr. Charles Langelier walked as far as the bank, did he go into the office of the bank 7 " A. No. sir ; I said he remained at the door with me, and he left there with Mr. Pacaud to go to lunch, and I went to my office." Mr, Langelier. nnt of the 121 Mr. Langelier's evidence on the matter was as follows . Mr. MiTiT:, zz:: i-:r2z\ % "*^' 'i ^'"^ ^° ^ ^-*-' -^h these notes at the Ban^ue ZCe S M^nSf """"' "««<>« «t-^ -other of bertL^toLT/ri'wral'k^lHr^'^T^'*'*''^ -cuo^Unca I remem- about certain matters that narth-nlLw , u^' """^ ' """"^ ^^ ««°8ult him generally I takete^adtXr SiZH^^^^^^^^^ 1 ^-^'"' »— when he is he.«, about Montreal ^^Z llZ^'^rMTl^'-'^''^''' afternoon. I remember that Mr. Pacau "came tahi- >, ^'^ ?°^'*^«°^ '° the Cfi /.- to see him, but I do not remlmhlr^l * ^°'"'' '° *« afternoon ; be be.o.e me. on this occasio^^oSstr h^^^^^^^^^^^ /f «- ^^ - --tion occ«.,ion, but I have met Mr. Pacaud oSn at ?h« r "''* '"^'' '^ '* ^'" °" t^is W. stayed at the same hotel, a^dte tchS^^etr""* """"^ ^° ^°"*-'- ramlV:i\rjo^*l^rBXrd?p?^^^^^^^^^ B^youremember Perhaps that wiU help you to rememb^;? "^ ' " """^^"^ ^'''^ ""'• ^'^^trong? strong' '° °°* "'"^"^' = ^ *"" '«- -*«-'«» - remembering it than Mr. Arm- » Q. Do you remember waiting at the door of the bank ? Government'^oS t Momre'a^ ulZT'- ' T * '"^ «^ '-"^'^ «» the P^cise circumstance liketritl^r^^S^r '"' "^ "" """«"^' " he^^tt^r j^trrd^oVr^^^^^^^ H«-<^ that -etot S^tothitrrSa^trmTlr "Jl' ''" *^'* '* --'«^ P->e tively to it. but I can positiS sweLr S".f t f ^ "^ ^ '*°°«* """^^ P«»i- this special occ«,ion.irjriL'2„l,t^^^^^^^^ ^^°*"»' ^'^^ hiiTon business of my ow^ dlpirmTn l^^^t^rs^rTd'^ f " "^"j " ^« ^ -tep.t.kenattbi«timea«r«ga«J3cLhingXrril«!;?:Lrt?^^^ ^' *'« '& Langelier 723,724 ' 4 ' :i Thus. Mr. Langelier's name appears in connection with' at the J^:: bX' '""''* °'*'^ ^^"^^ °^-^^* f-«100.000 2. A like attempt at the Banque Nationale. 3. The discopnt of the #20,000 at La Banque du Peuple. 9 '"iVl 122 Mr. Langelier. W«bb 241 PM»ad 409,410 i 4. A like transaction at the Banque Nationale. 6. The attempt to obtain a like discount ^t La Banque du Peuple at Montreal. The conclusions at which we arrive, as resulting from the evidence, are as follows : 1- When attempting to obtain $100,000 discount from the Union Bank, Pacaud stated to Webb that he proposed to advance or pay about |10,000 to Chs. Langelier, and he did in fact sub- sequently pay 19,291.28 out of the funds raised at the other banks on the Baie des Ghaleurs matter. 2. As to the like attempt at the Banque Nationale, the bank officials swear it was on the joint application of Langelier and Pacaud, and their evidence is supported by the resolution of, the board of directors made at the time. Pacaud swears that the application was his, but he admits that at the second interview Mr. Langelier was in the room and the whole matter was dis- cussed before him. The weight of evidence is on the side of the bank officers. In any event, it is undisputed that Mr. Langelier knew of the details of the transaction. 3. As to the discount of #20,000 at the Banque du Peuple, the manager swears Langelier was with Pacaud and Valliere when the application was made. Langelier, Pacaud and Val- liere assert that only at the second interview did he go to the bank, and then not into the manager's room. All admit that the manager, then and there, asked for a deposit. But Mr. Langelier himself admits knowledge of the matter under discussion in his evidence quoted above, and his solemn affirmation admits his presence at the bank. As a consequence, if the positive assertion cannot be made that he joined with Pacaud in seeking for the discount from Dumoulin, it is certain that he had knowledge of the transactions then in progress. 4. As to the discount of $20,000 at the Banque Nationale, we find that he did not join in the application, but that accord- ing to his own evidence, as above quoted, and by his statement to Mr. Mercier, as related by that gentleman, and also above quoted, he was present during a conversation with the bank manage an« uad kaowledge of the business under irausaction. todi stroi Mon may nor ] that was ] Arms he di time , ^ made 1 Accoun No. 88 88 86 89 89 89 88 89 Totj Mr. Langelier. .trong, wears po.itivrirjL'^L„ ™^'"^,V ValUe«, Arm- Montreal, on t£. . i, • ""^ '™'^' hnl timeepoken of """"*' ''""■'««» ™ »ot during that -.deXKan^tXctlf l'"*r' "°-^ W—'» ThUe„a,t.;:^'tart^dr;z:°i''''"''"'»"'>- Account. Item. Page. igW. No. 88 5a 9X8 8t. May P^d t F^s. Parent 9th May De^^^elto^f^S of ' ''' '' 0. Langelier at the "'"'«• savings depart- ment of the Union 16a 919 12th May Pafd fo^ P T' ^T*" ^00 00 «« 41 920 26th May Mo^^ To? C. Un^^: '''''' liftr *^uge p. 38J 8« 15 915 Srfjnne Ch^'ne-p^dni^eH- '""> C. Langelier at the *'« Uer.attheC^e '"''■"• 89 8 980 21th Jnly H.tdeW'Hon.o: "'"' »», „. ,„ 88 120 923 22nd JnlT Noto°^kl'''T V." L^OO 00 "' "'"'" 89 140 980 10th iSg^ Betkit^ittThr '■*•"•<«"•»••« I^-S^Iier. ;. 600 oo"'^"' Total — ■■ : • 19,291 28 124 Mr. jLangelier. Liwffelier 732 Dnmoulin 301 0. L»ngelier 718 389, 476 Pftoaud 430 C. Lugelier 714 C. Langelier 710 C. Langelier 718 With respect to the payment of $500 for Fortress Hotel stock, Mr. Langelier states that he never authorized the subscrip- tion and stands ready to return the shares. The deposit of $8,000 made to Mr. Langelier's credit on the 11th of July was made by Pacaud personally and the deposit slip is in his handwriting. Of this transaction Pacaud speaks as follows : — " Q. All this was paid between the 9th of May and 10th of August? " A. There is a deduction to be made, Your Honor. On the 9th of May, I re- capitulated all the sums I had advanced to Mr. Langelier previously. I made him give me a cheque for $2,072 and a few cents, which I cashed on the 11th of July. In the statement I have produced, I have only kept account of the money given to Mr. Langelier, not of my other transactions, of what he paid me back ; as on the sums, I repaid $500 which Mr. Langelier had lent me, and then I remember in May he gave me a cheque for $2,072 and a few cents, which was the total of sums I had previously advanced him; I cashed the fcheque, and the amount was put to my credit in my bank book. Mr. Langelier says : — "Q. On the 11th of July a deposit to the credit of the Honourable Charles Langelier, $3,000? " A. Yes, Your Honour, I ought to say that this deposit was'made 'by Mr Pacaud, and it wis only a few days later that he told me that he|had m^e the deposit There only remained a balance on the $3,000. He had drawn my cheque for $2072, and there only remained the balance, as explained by Mr. Pacaud. And again : — " Q. Yon mentioned a moment ago that the sum that appears against you Jnlthe statement was $9,291.23? /"u^uime "A. Yes. " Q. Have you paid Mr. Pacaud any money on account of this sum ? *oJo^'u?!;**'°'^^ ^'- ^'""""* ''*'°*'^ admitted that there>a3 a cheque for . $2072, which was drawn out of the $3000. Besides that, Mr. Pacaudi.aid me back $500 which he owed me, for money that I had advanced to the election funds'dur- ing the elections ; then there was $300 which I sent him when he was inlEurope I think that Mr. Pacaud in answer to the Honorable President of the Commission gave a very exact statement. " ?Jfi understood you right just now, Mr. Langelier, you admitted that the sum of $3000 was given you or rather sent you by Mr. Pacaud on the 11th of July ? " A. Ig Your Hohor speaking of the deposit of $3000 that was made ? "Q. Yes, "A. The deposit was made without my knowledge, but I knew it was to'my credit at the bank, and out of this sum I gavs s cheque to Mr. Pacaud for $2072! Mr. Langelier. jrable Gbarle» inst you^nfthe "Q. You say that it was made without your knowledge ? traiy to what has been said """^ ''''° '"•''^« '* »>'"««lf. «>"• Pacaud?'''' ''^" "'•P'^"'"'" "• ^« •' 'yo- handwriting or that of Mr. A. What explanations? " Q. Will you tell me why this chequo was given ? Q. It was to pay for his advances ? " A. As well as I remember, yes. " A. Yes. •'A tk'k ""^ *'*"'' "°"'' °°' '*'* "^^ *° P»y ^°' »^-°<=«« °"«le you ? . ^ A. The cheque was only paid on the Hth July, I think. "Q. The cheque for $2,072 ? considerable adv. es!^ ' *'"'" *"°* ^'- P«««''d had made me " Q. Then it was on the same date ? exacl date' **^°' ' '"'' ''" '''' ''^«^"* '"""^ ^^y" b«fo« ; I cannot remember the hv P^'' ^"^^""' ^«' 1**«' o°. '•efewed to the explanation given n r by ?acand. and quoted above from p. 430, and asked : 7%''"«'" /or s;,?72?°" ""* ^"^ "''" ^'^^ «^P'-''«- y- «-e ^specting the cheque "A. Perfectly. disbZmi't;:trst pH J^h*::^^ ''•''' ^^ «^-° ^^^ ^^^ ^ --* « A. As I have had ^c^^^^f^yHV^'rClTy!^ ^'t^/ ***^ ^ account of ,.l the advances which C'^lZt^ ^hLnH- S'^n°«^^'^ — , i rehed eniu-eiy upon the explanation he ,^ave me." «>Bfi"-"^^ '« .V'V. I»r • I'll 126 Mr Langelier. Off. eor. 801 Paeud 430 0. IiMiMlier 717, 732 PM»nd 429, 431, 432 0. LannlUr 717 PMsnd 381, 382 In his solemn affirmation, already referred to, Mr. Langelier states : •oJl*" ^*'*'^ ' °®^®' ™*^®' ®'**'®'' ^^ ™y °^° ^*°^" ^^ otherwiee, the depositor ^,000 mentioned in the deposition of Mr. P. B. Dumoalin b«fore the Committee of the Senate, if he ever did make such-a atatement, as mentioned in the newspapers, for T declare that I have not read hib depoaition in the official report" On the very day that Paoaud made this deposit he presented a cheque against it, signed by 0. Langelier, for «2,072, which is said to have represented advances made by Pacaud previous to the 9th of May. Messrs. Langelier and Pacaud seem to claim that this counter cheque, and some other sums returned, ought to be deducted from the total sum of $9,291.28 so paid, leaving, as received from Pacaud, a balance of $6,419.23. The fallacy of this pretention in respect of the cheque of $2,072 is evident, for if used, as stated, to pay a previous debt, it did not constitute a repayment, but an acquittance of a liability to the discharge and benefit of Mr. Langelier. Therefore this amount cannot be deducted from the total payments to Pacaud of $9,291.28. Mr. Pacaud states also that one of these items is for $500, in repayment of a loan made to him by Mr. Langelier. We proceed to the examination of the reasons given for these financial transactions, and again quote from the evidence itself. '• Item 8615. Cheque produced, Charles Langelier, $555.40. " I have an explanation to give concerning this amount deposited to the credit of the Honorable Chs. Langelier,and as there are several sumspit is just aa well to give the explanation now, if Your Honours wish it Last summer.or last autumn, I cannot say which, I had b private conversation with the Hon. Chs. Langelier, in which I induced him to build a new house. Mr. Langelier told me that he made from his practice as an advocate about $3,000 a year as his share ; that he received as minister and as member $4,500, which made $7,500. Knowing Mr. Langelier's manner of hving being very simple in his tastes, I said to Mr. Langelier that he spent little over $2,000 a year, and thathe should take advantage of this surplus of $6,000 a year to buy a property, or build a house for himself. Mr. Langelier then told me that he was afraid to risk an enterprize that might bring him into serious embarrassment that he did notthiiik he had sufficient means to build a house, especially such a one as 1 nad spoKen or, which would be rather costly. 1 then told him not to be Mr. Langelier. m Langelier be depositor i^mmittee of newspapera, prebonted , which i& revions to is counter deducted ived from sheqne of DOS debt, i liability the total ■ $600, in for these ice itself the credit well to give in, I cannot r, in which le from his as minister manner of t little over 00 a year me that he rrassment, ly snch a not to be ^d. that iJS ' f ' *°"'? *"•'* "P°" '"^^•'^ '"*^'^« »''"' »» nece-Bary ^d if'it w - 1 7"f *" "°* '*'«^' ^ ''""'^ °«'«^ ««k him to pay me bJck R^lfT ?° ""«'»'• *h«° »>« «>°W pay n>e back by the sale of his prolJ^rtv on •ay that I had been m partnership with Mr. ChH. Langelier a^ proprietors of the ^z::^z^\:^::t^ '- "^ -r^n-idefabmra: min wh5^''*"^.^" **'""'°' ""»»''"« *'»hout asking anytb ng from me 7^1 raU^thisrl'^L'^ISr n.''\^'"««"'«'- ^-^ '"* /ear,?n hrbirl: hSi M«!^- i , u u*" "^^^^ **"** ^ presented him on behalf of several of hUi friends, and .in which I mentioned his unselfishness, and that after fX I«L« of cons.der.ble sacrifices, in order to keep up the Electeur.^ot o^ yl^ SngT TJl TH"^'" '^" """""^ '"*° '*' *»•»* »>« h«i been suek for the Eleit^i debto toll wif ^° """"^ "''*** •'«'^™«' ""** »•' fo' »he Electeur debts he gave ft S to me without any compensation, and that I considered myself in hit dibt I? ITJo "TVI'^' ' ^'' '^'- '"'''- ^«°««"«' »>-** « long Tl SaS mJ^ey he ^?„ T -'i^if- '?"' '" **^'"*' °°""°» °^ "''^"^ ">« fo' money, wbrhe nS h even to build h,s house, to send me his workmen, and I would ^y them, whictllid: ™hn„ T *"'*'"" *° 8^^« these explanations which might seem strange to the money to Mr. Langelier in connection with the Baie des Chaleu.« IffidT h^T i ! jutnmn I deposited different -urns which I cL sTow You^Srt m/l^^^^ book, deposite or small amounts, made at different times for Mr. Charles ^geH^r ™« It ut' y u"' ^°°'""' ^^ "**' surprised at it, and that is why he came to tnll fTh^rJ; J?u "'^^"7''««*. and on his new property, and told me he was eoinc to '^^^^J^^^^oney-t^.t he had not the courage to as'k meforany^e^LvS «rtv I ! K '"r"''* *° ^° '°' *^** ^ '^'•^ °°t Wish him to mortage his proD- erty, hat whenever I could not help him I would give him noSrof TtTn^ friendly way, and then he could find other means. Then Mr ^1^ wLt away. Two or three days afterwards he came to my house I wa« illTlr . Hebrcnightanotefor $4,000 for me to endorl^. tollin^ie thlthe was askr^ ^SZ \ '.T! °\'^ B^b^nf street, that he was (Jrtain to get it that whef told hTmThat fwo",^'' T'^^'^T. """' ^''''' •'^ •* ^-- **>« ^'^' of J s p^X to him ^I w?J no?. "? ^f""""' ^'' "*"*' " ^ «"» ^«hed to help him S to Dim . I will not go and put my name again in the banks. I vn about to with „-,. 1 ,, ■ - " •'• f'v '"o uata as weu, ir you must doao whAn you havesold your property, as if I had your signature and note.' 128 Mr. Langelier. " Q. Did Mr. Langelier iisk what you had done to have so much money at your dispoBsl at that moment 7 " A. No, Your Honour. " Q. He liad not the curioeity to ask if it would inconvenience you to continue to make advances to hini .' " A. Yes ; ho said it was a delicate matter. He may have said : You are very rich ? or something like that, some remark which would be natural between two friends in a conversation of this kind, but nothing so particular was said that I can remember. "Q. You said nothing to make him understand that any transaction had taken place which put you in a position to advance him so considerable an amount ? "A. No; I always kept it a secret, even from Mr. Langel ar, my most intimate friend, just as I kept this transaction with Mr. Armstrong secret from all other friends, and I could mention several who have expressed their surprise tome that I could have concealed so important a transaction, now that the matter has been revealed. "Q. Are these all the advances made ^ Mr. Langelier during this period, or did you advance to him from other funds? " A. I touched no other money beyond what is given in my 8tatem ivn, always excepting, as I have just said, the sum $5,000, which was not entered ia my book, and I have rendered account with all my cheques. 0. LsDMlier 715 Mr. Langelier testifies "Q. Now, have you anything to say about these different transactions? " A. Tlie only remarks I have to make are the following : When I decided to build this house, which is now in course of construction, Mr. Pacaud was one of those who induced me to build it. He told me at the time that he was ready to assist me. He expressed a great deal of gratitude for what I had done for him when I gave him up my share in the Electeur newspaper. " When the present government came to power he was trying to make new arrangements with the present company, Belleau & Ca, and to facilitate these ar- rangements I withdrew from the partnership which existed between Mr. Pacaud and myself, and I did it gratuitously. Mr. Pacaud wished at the time to indemnify me, but I positively refused to accept anything whatever. On several occasions afterwards Mr. Pacaud assured me that he had not forgotten what I had done, and that if ever an occasion should arise that he could render me a service he would do it with pleasure. " In this case particularly, about 18 months ago, when I decided to build this house, Mr. Pacaud told me that if, in the course of its construction, he could aid me in any way, either by endorsing a note or by giving me money, he would do it with much pleasure. Last spring when the first payments became due, I went to ask Mr. Pacaud if he would assist me. As Mr. Mercier has said, before he went to Europe, he was good enough to leave me a note endorsed by him for $4,000. Mr. Pacaud I should say had last spring proposed to make a trip to Europe before there was any question of this Bale des Chaleurs question. Mr. Pacaud had taken a very acu\e part in toe two gsngrsi s'sctJons TVuieu hsd just taksn placo, and he Mr. Langelier. 129 !h money »i I to continue fou are very between two d that I can saction had iderable an 08t intimate m all other tome that I er has been is period, or xtfn, always a my hook, >n8 7 [ decided to was one of 18 ready to >ne for him make new jb these ar- Vfr. Pacaad indemnify occasions 1 done, and le would do ) build this I could aid ironid do it I went to e he went for $4,000. ope before had taken M, and he discounted at one of fhe bank« 1!1 1 n V °°* ^"dorsing a note, and having it " he might be awaHn Eurori In , " ^k**^' '^"'^** ''« '^''' "«' '"'°^ how long complete, he was afraid that his name b^ng in t^ hanks if th«T/'" ""' WouldrememberVt;:.^^^^^^^^^^^^ that'i^^nlyreeS'erit ^rutemstreur ^"'^ ** °""' ' ^'^ »'"" "- He said :-If you do not wa„Hh„ ^h ^^^ ''''*^""*" " ^^''V ^^^-^e due. can advance you^ou can p Ty '^: Z^^. "7""' *' -'^' ' '"'ve money now that I account when you havrsofdvo^h^^- Ik"" '"»«««"•»*«•« can settle our when you have border theZneTt^^^^^ "'"''^ ^"^ ^^ "'«•«' ing with the buildl^rsooetv for ; j^,'l '^"^^^ 'he loan I was about arrang- Phiilippe Vallie.*. he is onTof'the iLZ ofl ?*.V"* ''"'''' ' "P^''^^ »° *'' with Mr. Pacaud's knowledge and I ^k^ ht ff 5" Tl '°"'!'f "' ^P^*" ^°'^» ' from thesoc'etyofwhichhTwafolrXeX^.'^ttr'^ ^''"" ' '''''' ^^^^^^^^ZT.L''tl^^^^^^ * ?-. but to wait • money required to complete itrc^nSHnnB.!" ^ ***'^'' *° borrow the that I did not know tZ Mr pSTa^ a single T *'T ' ""'^^^'^ '^«^''"« affair. I knew that Mr Pa^a-rh^l ^ ^ Tf * f""" *^* ^**« '^'^ ^haleuis paper ; he had often to d me^a fZ'r^ T' 'S^ °' "^""^^ °"' "^ ^is news- knew that they had la^ contracts wWh ZT ''^^'^ °' ''" ^'"'"'^ ^"'''"««»- I half of the profits of ZelT^^^^,'^:^,^^^':'^' !'''* Ti^'^''^ '"^ on the subject I mii«t «.^ ♦!,.* „f * explanation I have to give that have ever existed between Mr Pa^L .: i ^z"*'"* ''""^'^^ ^^e relations this circumstance. *"*"'* *°*^ "^y^^^' ^o"^ not be surprised at Mr. Pacaud states that the partnership between him \r.A Mr. Langelier was dissolved when "Mr M« • . ^ power." and he afterwards fixes the Ite at 18^6. ""'^ '"*° M. Langelier kept no account whatever pifKa,. «f u ^ i. received from or paid to Pacaud. ^' ""^ ""^^^ *^" 7%f "" Mr. ^;g!rr'''''*"""""*°'^"y^'^™---yh^^ «o 180 Mr. LoMgelitr. H M« w'**" ^" *^® ^'^ •^""«' 1891, J. 0. LangelieT wrote the following letter to the newspaper L'EtenJard, at Montreal :— " The Editor of the Elendard. " ^"■""' ^'^ ^"''•' ^«>^- " Montreal. "Sii-,- " Under the heading of 'Strange Rumorg,' you published on the 30th of May, a Bhort articl respecting the Bale des Chaleurs matter, in which is sUted : ' Bat the details which have come to us respecting the use made of these letteia of credit are so serious, that we are ,jbliged at once to call the attention of the parties inter- ested.' I was appointed, by Order-i -Council, commissioner to pay tlie claims in oonnection with the construction of the Bale des Chaleurs Railway ; so that the preceding citation applies directly to ma Now, I deny the very serioMS accusa- Uons contained in your sUtement. I affirm that I employed according to law, and to my instructions, the $200,000 which were placed at my disposal, and I defy you to prove the accusation which you so bring against me. As to the pretended letters of credit, which had been partially refuaed, that is news to me. The papere upon which the funds were raised were naturally handed to me as Commlsdoner. I endorsed them in that capacity, and in less than two hours everything was settled to the satisfaction of the parties interested, whose receipts 1 have. I have also sent duplicates to the Department of Public Works, where anyone may examine them. I therefore hope that you will make it your duty to retract what you say respecting 'the use made of these letters of credit,' in default of which I shall be obliged at once to take other measures to protect myself against these calumnies. " I have the honour to be, " Your humble servant, " J. C. LANGELIER, " Commiuionerfor tlu Baie de» Chalewi Railway. It refers to rumours and to serious details connected with an attempted discount and use of the letters of credit. Mr. C. Langelier read this letter after its appearance. If he needed warning, here it was ; yet he afterwards accepted from Pacaud no less than |7,100 of the $9,291.23 by him received. Mr. Langelier was one of the co-endorsers with Mr. Mercier on the fiv« notes amounting to $23,000 paid by Pacaud out of this $100,000. Our remarks on these notes made with respect to Mr. Mercier apply to Mr. Langelier. Mr. Langelier was also the maker of a promissory note for $2,000, endorsed by Mr. Tarte, dated 2nd March and paid at maturity on the 6th May, out of the Banque du Peuple account. Of this transaction Pacaud speaks as follows : '' This note for $2.flflO w hmnvVit'. tn ma hv M* Lar<»!''ar — "^ ^- T— *;:i <- 3,p, 3, fii 88-3, liat lOOS JUr. Langelitr. following w, 1881. lOth of May, itated: 'But ten of credit >artiea inter- tie claims in 80 that the io'i8 accusa- "ding to law, I, and I defy le pretended The papers mmisaioner. rytbing was ve. I have nyone may ■etract what ; of which I ;ainst these lUway. 1 with an e. If he ted from ived. '. Mercier id oat of •espect to note for i paid at account. iff ' 1 ox ti& zH s.r:;t:';nVl:th'l''etr7irT tfr ^^" -''^ '- - »-'"- to»'e>p--38, oo«.nt«l it. I put tl.e amort t^ I aslced for this note. I took this note and di*. them What the^y ^^^Sri.TZ.^^^^ll^;^::^^^^^ ^^ '^^^^ "fl.u^^ "*^*^® °*'^'« evidence he says- I u«Kl that myself for the Montmorency election. • '^''•"'' *^ Mr Charles Langelier swears that he never received to hi- knowledge, any part of the $100,000 ' ^" of the .Le tow™ pJi^tiihfn'' it , ""'r """" '*'""' lowed the 10th of Zwtl ■ . ""'^ ^^^ '^^'"^ *>1- sourcT wh Mr. Charles Langelier had knowledge of the source whence came the funds out of which Mr Vac^SZ^il him about nine thousand dollars l^Q onn» r u , ^^^ *** We also find :-- ^ ^ ^* personal benefit. That Mr. Langelier was an endorser with otb^r^ «„ « promissory notes made hv Mr p ^ "^^ ^"^ otners, on five *».„* :. °y ^'- ^acaud amounting to *2q nnn • purposesTdthr'they^t^td^ $100,000. ^ ^'^ ^^ M""- ^*^*«*" "«'» '«ten to M^ Me:c^:„^trt^°kr/lr:Lr^''' ?• ^--^ discount of onfofhTsbCt ™'"*'""' 'o '« P"«»red by the theHonourabTeO 1 K p.;eUrZ?J''*p'' "if ""■^^ <" standing, used certain fnndVcoMTn'g to hta f'""' "'°"'"''- di^^ed in evidence, and a n.omr.,terwa?ds Tt "toT" ' ""* oredit the proceeds of a note for *6 00^^'^ ^ '"' °™ rie^rr "^ '" -»-» whit:rrci^r.t:! payJ^'of hlTounr:i''':*''"r° "' *"• •«-'"• "-xie f-d,,the.for.;rren'rt'':fr«„'Sf "■■'' "-" *"' 4thofi;^r"'itrtwo'l"'"'i"*"- ^'"'""' » '"^ 2nd and for JMOO and »8 •orreeptS'tdv Tt T, f" '''"" <''^™"<'™« disappeared from tl^TrttatMrVrT."!*";^""^ for them oyer the oounte/of Il,7?T • » T** "'"'""•^'l 'ke «ash afterwards made ^^0^ ^t„ro? mT'^ ""*' ""^ P'^"™" ed from other souL. as aboTsUte^' " d ftaTl""? """■ these cheques was first made known darin%rP°"r' "f anunation on the 23rd day of October last • ■ °'" That the statement made bv Mr M«,„;.. • v „ to Yonr Honour of d.t„ til ,Lu = '" '" """ "ffl"'"' «Ply the first draft onhe 16tt of M ^P'™'-'''- '<> 'h" effect thai dieconnt of one o his wLk f f ""' '° "' °'"""«' *•«>■" «>« the evidence tie^ btfo^' ^ TnTtti r' ^ """'* ""'' ou.ph..i.ed by his reply whon;i;°orinVX'l:::onrd3:°^ is That his remarkable omission to make „„, ^.^.i.^ ..ononro, t.e two cheque, i, not explained by the ;:nT or^n' 186 Mr. Mercier. account from Mr. Pacaud, but is consistent with their proceeds having been, at once, applied to other purposes and to his knowledge ; That Mr. Mercier was an endorser, with others, on five promissory notes made by Mr. Pacaud, amounting to $23,000 ; that an understanding existed whereby the endorsers were, as between themselves, equally responsible, without reference to the order of signatures ; that the notes were discounted for political pur- poses, and that they were paid by Mr. Pacaud out of the $100,000; That if these payments were made by Mr. Pacaud, appar- ently without the knowledge ol Mr. Mercier, they none the" less operated the discharge of a debt personal to the latter ; and when Mr. Mercier became aware of their existence he did not repudiate or ■ieyk to relieve himself of then^ ; That Mr. Garneau's letter to Mr. Mercier, Mr. Langelier's like latter to Mr. Gameau, and, with one exception, the letters \»hich passed between Mr. Mercier and Mr. Pacaud are not of record, for the cause that they have been destroyed ; that, in view of the facts and circumstances disclosed by the foregoing report, their production and perusal became of the highest importance ; That it is not proved that Mr. Mercier knew of the existence of the bargain between Armstrong and Pacaud. Hm. Pierre Garneau-Hm. Joseph E. Robidouz. THE HONORABLE PIERRE OARNEAU : We find :— That great and combined pressure was nut nn^n m /^ neau to which he succumbed • ihlt I P"* «?oa Mr. Gar- ■m...«..ci„XX;.Si.lZS' " ""^ But we also find : — 18Y ■ ' Si '■m M THE HONORABLE JOSEPH E. ROBIDOUX. We find:— returned them, and that in view of his lHH i ^°^' of the negotiationa, contVcranl k t™ o" !tSit /T^" P«=«ad'a connection therewith the offer tolll.'"'' "' ^'■ «.d attempted discount „7 the notet hi ^Ti *'°*'''''™ were acta of a highly comproiw:^ clltt ' """ ^""""^ But we also find :— v.^J!'*??^'^^ ^« "« «^idence that M. Robidon. in ^nr w-. b=i.«mea Dy tiie Armstrong-Pacaud bargain. ~" ^ ^''^ 10 188 Hon. Charles Langelier. THE HONORABLE CHARLES LANGELIER. We find :— That Mr. Charles Langelier had knowledge of the source whence came the funds ont of which M. Pacaud paid to him about nine thousand dollars ($9,000) for his personal benefit. We also find : — That Mr. Langelier was an endorser with others, on five promissory notes made by Mr. Pacaud, amounting to $28,000 ; that an understanding existed whereby the endorsers were, as between themselves, equally responsible without reference to the order of signatures ; that the notes were discounted for political purposes and that they were paid by Mr. Pacaud out of the $100,000. ' That Mr. Langelier was the maker of and consequently per- sonally responsible for a note of $2,000 also made for political purposes and paid out of the $100,000. And that : — He never repudiated or sought to discharge himself of ihe payments of these notes as so made. Boh. George Duhamel. THE HONORABLE GEORGE DUHAMEL. ' We find:— • --ged to further rrrbrr^^riaT""'"' ""»"'«"«'«■"» But we also find : ™To JA " '"^ '"^''" °' "O"""' circu..t.„«, the« w^irdL^fll^M wT """" ---"'■'if -Wch there necestry. *^'" "^"'*' ^'"^""^^^^ ^^ ^^^^-^ were, of course. In regard to one of the President's concluding rem^rK «r simply desire to so extend its terms as to inX^a fif '®'°"^'' ^^ more than one draft interim rfpoTl "^' *^' existence of AH of which we have the honour to submit. (Signed), G. BABY, n T,. C.P.DAVIDSON, Quebec. February 8th. 1892. Commissioners. 111 ii H< To the Si] Baby a quiry " panied, Act 64 Compar We 80 that to admi serious j regret tl and dist My on my p be allovv It vr RKPORT OF THB Hon. Mr. Justice JETTE, President, ON THB BAIE DES CHALEURS MATTER. To the HONOBABLE A. E. AjfOERS, ^^fnml-aovemor of the Province rf Quebec. ■ BaW '.^'7n'"r°""'''i°'' "'"'" ""'='' *•"> Honorable Judges ' -""eMTilT .here m m 11 oertam hots, in great namber, that I could not dUDote b^ tS' trr : ZTa:er.rvr"'' -^-^ '» '■'^^^^^^^^^^^^^ within the inr.«T . !' ^ *^*°** appreciated do not come withm the jurisdiction conferred upon us by the commission. ««n.i.T *^^'^^°''«' "»d«r the circumstances, obliffed to act JuTher dl/r "^^ *"° '^^"«*^'^««' -d witkout going into Your Honour the pZnrZer atlns wtlTh It "mJ^ upon the evidence telcen before the comm ssion I '^.1^ deavor to restrict myself to what I considresse'ual " "' H8 Before, however, going into the subject of this reoort it seems to me to be important : ^ " lo. To recall the purpose of tha inquiry entrusted to us ; millJs/a"" *'^ "^^'^^ '' the jurisdiction of the Com- y So. Finally, to define their position in this inquiry. On these three points my observations shall be bri-f but they seem to me to be indispensable to properly establish th« position that I thought I should take, and ^oZtlfZernt which, in my opinion, should guide the OommissToL tth fn the conduct of the inquiry and in the preparation "fTeir^e^" Ist. What was the purpose of the inquiry entrusted to us? The circumstances under which this inquiry was ordflr«^ rhtf S/; "■' ""' '-'■"■ " ""' -ffioe'theLC " the P^d«tl P "i" "' Tt'""^^ ^*'*' "P°^ ""^ application made to the Federal Parliament by the Baie des OhaJours Railway W 144 Hon. Judge JelU's Report. pany (incorporated by Provincial Statute in 1882) for a new charter giving the Company the advantage of recognition as an enterprise of general interest, revelations were made, before a Committee of the Senate, tending to establish that, owing to an agreement between Mr. Armstrong, the builder of the road, and Mr. Pacaud, a journalist of Quebec, the latter had succeeded in obtaining, out of a subsidy intended for the Company and paid by the Provincial Treasury, a sum of $100,000, to which he had no right. These revelations at the same time implicated some of the Provincial Ministers as having abetted the fraud and profited by it. The Senate Committee, before which these facts wore ex- posed, not having jurisdiction to decide upon the acts of the provincial ministry or of its members, the proof adduced before that Committee, had in that view no value. Nevertheless the facts were affirmed on oath, the pi-ess throughout the country • made them public, and the public conscience was justly alarmed at these revelations. It was under these circumstances that Your Honour re- quired the Prime Minister of the Province to give explanations as regards these facts, and to cause a regular inquiry to be made to establish what truth there might be m what had been so made public. You proposed for that purpose to the Hon. Mr. Mercier the appointment of a commission composed of the Honorable Judges Baby and Davidson and myself. What was, under the circumstances, the task imposed on these Commissioners ? To inquire into all the facts tending to establish : 1. The existence of the Pacaud-Armstrong bargain. 2. The participation of the Ministers in that fraud, and the profit that they might have realized therefrom. That was the purpose of the inquiry,— to seek all the facts that might throw light upon these two points. Nothing less, noixxiuu suore. these pub Hon. Judge Jem 's Report. ■eoo ™;ttt"' "'" °'"«" '""" "'""'y - ™»>i...«<.n 0. the Ll'lT "■0 "'»' °f "■» J-n'l-'iou given to commissioners ? given to the Let us consult the words nf fk^ was it that it required oTlL .'••'>'"""»™li itself; what into the facte and o r!L , '^""'."'"".onere ? "To inquire caueedandfo lowtl heT/''T """"^ P'"-"'-!. acoompauied, ohapter 88." '""sactiona made under the Act 54 Vict., t«:nilr„nd:Mhaf;:t°°t'r°'''" '"'"t^ ^"*° ""- into the facte and cireumllee „!?"'"' ""P'i' f ''"i""' actions. And the re.Z } accompanied these trans- known to You Hour- ;h''"™'' V!"'" ""--«»»« are ii^hed b, .nthTnticXle s';rerrd''';rtt''«"" '"">- archives. In fact thp«» (™„.. •• ^^ '*''^™ '" ">« «overnment with the CooperlThZ svndic T' T ^ "^ """ ™""»"' """»» Order-in-OounoH havhT^ L ; ' T'^ established by »„ Hve ; then thrlmenUo th^"" 11" f '^ "''''' "' "■» J^'^^" .npon these facVtrrr^^rrilt^rt-'e^tr-' Tour^Horo':' h.ra "ITtTd'" "f '".""■'S '° '"^O'. ""a' hidden and concealed ' ttsth™ ^ h'°av'"'°" "'"^ •'''' oanaed or followed these puWfc fa"? » " 'r'"?'"'''. bargain between Armstrong and Pa^d to T !t '°""''"'' X;:rtht:rro:t '- ~ -- n.an„uvres made ^Z : IZ^^^^ I'f Z'^Si.!^! comJfs:Ln™. *■" "*• "■* "«' ""<"» '"k, c;naded to the oonspir "fco^dlt t"! ""- •>■•— ™a. these frauds, this these public tra;sa;ti;nn.hir»Dlr„tf''° *'" ">■'«'?«»■'. men, apparently, seem unassailable ? *' ii;'.H 146 Hon. Judge JetWs Report. It is possible, but that does not concern the commissioners ; that goes beyond the scope of the enquiry. The commissioners had only to search for the evidence, to bring it to light ; that done, their rdle was finished. They had not to decide ; their mission was not to determine the consequences or the bearing of the facts proved before them ; they have only to establish the facts and report. ^ To go beyond that would be to enter on ground where they would have no authority, because they would be without jurisdiction ; it would be to usurp powers which neither the constitution, the law, nor their commission conferred upon them ; it would be to encroach upon the rights and attributes of the Legislature and of the Lieutenant-Governor himself. Convinced that the authority which was confided to us could not exceed the limits which! I have just indicated, it will, therefore, be allowed me, in the statement which I am about to make of the facts in evidence, to restrict myself to those which have an essential bearing upon the two points which I mentioned as the principal object of the enquiry. But, before coming to that, the last question which I mentioned above remains to be examined. 3. What was the position of the Commissioners in this* enquiry ? Article 596 of the Revised Statutes of the Province of Quebec states that the Lieutenant-Governor in Council " may " cause enquiry to be made into and concerning any matter con- " nected with the good government of the Province, the conduct " of any part of the public business," &c., through a commis- sion appointed for that purpose. So that this power is given by law to the Lieutenant-Governor in Qouncil. t' T have not to ask myself here how the chief of the Executive and his ministers came to an agreement respecting this commis- sion. I simply fiiid that this commission could not have been annointed xeithnnt t.ltA nnnoAnf nf f Ko miniaforrovince a , perhaps, would be take part report. 5 enquiry bh of the Busbertain : srs. Arm- to appro- a public id in that will be from the e bargain ih of the }rporated I gave it point on 3 f 1 tfV/VTt /» n A Iway and " '^zxz?itz::&'^ '- -^"' *^ -^^* o^ In 1886 this company made a contract with C N A™,^ for the construction of the first 100 miles omat ro2 * work°i:s:trn/Jr;r'c:^'r:sf ^^, ■; ^--^ ^«" °f the latter obliged himiff to oZ^W I **""*"•'»■«. by which had done on fhe fo" 40 rn^l!! "^ j t""!""* "'''"^ Armstrong «>th to the60thSe ?hi „?t *° ;>»>« the road from th! was to have heen S^ Jd™" S ir^f^rary^^-"'"'- paidwtt''o":tl''":'s^';r ^ ?" ™'-- -<-' ^-^ md.e an assig^me'" ?4 m^X's T '^l """''^ '° pended. P'emoer, 1889, the works were sns- This suspension of the works was koenlv fclt ™ *i. localities through which the road passed wLtl fT'""" etc., were not paid ; these people w^t J°'t T '"'»^™«". t\t\ira^r.rL:fJr9™^^^^^ power to cancel the "barter of^'^Xa^whThh^ ^7* " « v. . =. ^trixrorth'eT-t ^^rP"^'^^::^ n..u-o p™-dtrth"t:!';or ''^Lt-L^rri "^^^^^^^ - auxnoruy to gran,, in «d of the construction Tthis^Bai: Z""'"' 160 Hon. Judge Jetu'a Report. OhaleuTs Railwa first a subsidy of 9^0,000 in money, for a bridge over the ri^ \^eT CaBcapediao, then a land subsidy amount- ing to 800,000 acres. This provision is in the following terms : " (J) To aid in completing and equipping the Baie des Chalenrs Railway, throughout its whole length, for the part not commenced and that noi finished, about 80 miles, going to or near Gasp6 Basin, 10,000 acres of land per mile, not to exceed in all 800,000 acres. Bzbibit No. 3, p 886 Thoin 553 " Payable to any person or persons, company or companies, establishing that they are in a position to carry out the aaid works and to supply the rolling stock for the whole road and keep it in good working order, and also upon condition that the balance of the privileged debts due by the Baie des Ghaleurs Railway Company be paid, the whole to the satisfaction of the Lieutenant-Go vernor-in-Council." Armstrong, as I have just stated, had done a good deal of work on this road, and he had for this work a claim to the amount of $298,943.62, based upon reports of the engineers of the Company, and which, moreover, the latter admitted to be correct, as established by the certificate of the manag-ing director, Mr. Rlopel, and of the secretary-treasurer, Mr. Robitaille. Alarmed by the dang-er to which his claim was exposed if the G-overnment, authorized by the power which the new law had given it, took away the charter from the Company, but understanding, on the other hand, that the new subsidy granted added to those already voled and not used, might greatly facili- tate new arrangements for the continuation of the undertaking, he resolved to try to save his claim by forming a syndicate which would become substituted to the old company. With that view he applied to one of his creditors, who had made large advances for this very road, Mr. Cooper, and induced him to go into the matter. Mr. Cooper entrusted the negotiation to an employ^, in whom he had every confidence, Mr. Thom, and the latter was instructed to study the maitei, and to carry out the transaction lu the besi Son. Judge Jetii's Report. 151 ^ir* "' '"■ '""^°^'"'' """'•• Cooper, D.we, auT^^i^T"" contiactor Mr MpDn^oij , B/naicate, another railway ox«a„„. onhe «a„.«errL;t»/;r, ^-rr,^ *"«»..„. Mr. Pacaud, who had acted as Mr Mcnnn.w ative m other business an,l „l^u ^ . *?oBoii>ld s represent- *i.lio.s with XeTtoTi, ™ « °''° "^ ""» '" •■« ■>««<■• had broken offTne^t^LT f """"^ """ =**"•■ '*«'>»"«W Armstrong, wLl^adir'ln ""k" »"«» ^d '» act for Mr. success of\]I syndtat '"'' '^" """"'-'8 "" "'^ '»' 'ko Enro^- ^r:' r ^ry'-re'rhrdfo^ f^" ""'"« '" ••ufutenrtU;et„r.iSsrcr;hr''i.T t?"" "^ '"""—" - voted to said Co,np„ ^ pZdrf alUhl ™„°H V ^""'^ """'^ Mr. Mercier, however, would have preferred in nnm. * arrangement with Mr. McDonald- hZ C*®"*'? /° ?""« *« «»» the matter being vigorous^vnniw «PeaaIJy insisted on the county whL rr:;:^es^;:L^^^^^^^ electors would be pleased »it>. .k. .S-L ""l'"!*?*^ *^** ^« ma.e to ensure its -constructi;^-. He irair^^ledt^ 34< 162 Hon. Judge Jetty's Report. Thorn oS4 Armatroog 48, 40 Paeand 390, 391, 427, 428 wishes in the matter to his colleagues before leaving, saying that he hoped on his return to find the men at work. Mr. Mercier embarked the same day, the 13th of March, for Europe, and did not return until long after the events of which we are now about to speak. Messrs. Charles Lragelier and Robidoux, who were then on their way to the South, and Mr. Pacaud and several others had accompanied Mr. Mercier as far as New York. After Mr. Mercier left, about the 16th or the 19th of March, Mr. Pacaud telegraphed to Mr. Armstrong to go and meet him at New York, at the Brunswick Hotel, with a member of the new Syndicate. Mr. Armstrong and Mr. Thom complied with that request. They met there Messrs. Charles Langelier and Eobidoux, to whom Mr. Thom was introduced by Mr. Armstrong, and talked a moment with them about the proposal of yhich they >ad epoken. to Mr. Mercier, for the resumption of the works on the Baie des ' ^iialeurs Railway ; but nothing was then concluded between these gentle- men, the two Ministers putting Mr. Thom off for three weeks until their return. Only, Mr. Thom having inquired from Mr. Robidoux what guarantees the Grovernment would require from his syndicate, Mr. Robidoux answered that he ought to know what the word " guarantee " meant, anc .hat it would be necessary that the Government should be protected against any contingency. During this conversation between Messrs. Robidoux, Langelier and Thom, Messrs. Pacaud and Armstrong had drawn to one side and talked together. It was at that time that the bargain was concluded between Mr. Armstrong and Mr. Pacaud. The latter then agreed with Mr. Armstrong to assist him to get his syndicate accepted by the Government for the new undertaking of the works on this road, and in consideration of the services which Mr. Armstrong so expected from Mr. Pacaud, he agreed to pay him a sum of $100,000 out of the amount which Mr. Armstrong would draw in payment of his claim against the Cofiapany. The proof upon this point is not open to doubt ; the bargain is admitted by both parties, Mr. ArwsirOug aud Mr. Pacaud. Hon. Judge Jetty's Report. thecL';;!;?!* tsi" ""*' °« a'ivau.ageou. con.rae, with with it and hadlkiled t; . .'"'^ ""^"^ '""> ""Sotiations . promise of tietr 1': T f, t^"I "^ "" «>» ^«'- ^P'«. a promise of the assignment of all its rights. Thom 559 mbject Vn -; — . ' JO Langeller oate. These condit 0!. Mr T, "^"T"™' '"^ "" ^^-di- of .eve™, intervw" b"w»n thelia^teflndT '^ "■•»-' JT" modiBed several Hm„ kJr tV .".""«'«'«'"' himself and were«3i When Iherg^nt ere?ht'fln., ""^S f ' •*"■""»'' W»-»'- made of it and sent it to Mr Garneal' AT '/"" '^P'' recommending it ,„ the Executive SilTharr"' ' ■"P""' «cepted by Order-in-Comcil dat!d the It f i "^T^' "" proved on the 28rd by His Hontr I'lTieaH^'^'^':"' "'^ ao J^r^ir;-™™^^^^^^^^^^ 2^. is •• whiihsuCyshal be Wbvr '=™™'»'' '■"» »°°ey. f..„g ,fi^ ^^uiapany, shall be paid bva Derann »,o«. j *"' that purpose by the Government." efo, etc ^ ^°' 11 In 164 Hon. Judge Jptti's Report. Thorn 694 Thorn 507, 588 On the same day another Order-in-Conncil was pasned, naming Mr. J. C. Langelier " Commissioner to pay the claims " against the Baie des Chaleurs Railway Company, in conform- " ity with the provisions of the Order-in-Council, No. 287, of the *• 28rd of April, 1891." These two Orders in-Council having received the sanction of the head of the Executive, Mr. Armstrong hastened to forward his claim against the Company to Mr. J. C. Langelier, commis- sioner charged with paying " all the claims now existing against the '* said road" according to the terms of the Order-in-Council, No. J Lkngeiiar 237. Mr. Langelier sent it to Mr. Thom, so as to submit it to his control and approval, and Mr. Thom returned it to Mr. J. C. Langelier, with a letter telling him that he approved only to the amount of $175,000. This was on the 24th or the 25th of April. It appears that Thom had had a previous understanding with Armstrong to himself use part of the money coming to the latter (Armstrong was, moreover, Cooper's debtor) to pay off the old Company, as he had agreed to do, under the promise of the assignment of the rights which he had obtained, and the term whereof expired on the 28th of April. This term, as we see, was approaching, and Thom was very anxious to see the matter completed in proper time. On the other hand, although the idea of providing for the payment of this latter subsidy by means of letters Oi credit had been already discu sed and approved in council, Mr. Garneau seems to have been embarrassed at the time of carrying out this part of the arrangement, by objections or representations made to him by the Assistant Treasurer, Mr. Machin, because we see that he hesitated for several days, that be wished to be further in- formed, and that it was only at the last moment, on the 28th, upon the formal opinion of the Attorney -G-eneral, that he finally decided to sign the letters of credit given in payment of this claim. When Mr. Garneau had decided to sign the letters of credit, Mr. Webb, cashier of the Uuiou Bank, aud Mr. Lafrauce, cashier of Qwnaan 168, 189 Wobb 228 tAfrknoa 310 ) passed, le claims conform- i7, of the biaction of forward commis- \gainst the mcil, No. \. it to his Mr. J. 0. [ only to B 25th of 'standing coming debtor) inder the obtained, his term, as to see g for the 'edit had Garnean \ out this i made to 3 see that irther in- bhe 28th, be finally at of this of credit, cashier of Hon. Judge Jem's Report, 165 ' letter, „„e for ♦lOMOOrrtCV.^rr" tTToo T'm'I'' '"» ooaated by these two buiks and tklT fi, ''*""''*'" *'• placed to the credit of Tj'oj , ^"^ '""" "''"nM •>» the payment of the debta of th- R*^ 'I' " """"""""M^ for Company. 7 "" ^"" ^<» Chalenr, Railway oa.hi^i'wfnt'thfti^'Slraf Mr'f r-"^""' """ «"" -^- with him, 10 the Natfonaf Lk !ld ^r*™« ' "^'-''t, and " "^ " following cheqnea, .1 TLbk t. th I" 'i*"'* *" ''™ "»'**"" =■» Banket: r rs,^: ^'itf' s" -'«-' '" ""» "««»«' .mall cheque for JIU 64 thS;. "*°°^ *" "» «»»"'«',<' '"*"" Wron^rougL Mr ta^tT.: ThTed^ °ri ""^ "' Serfew, to get him to «i *■ ^™- that the lam re^i*:; i meef .h"" "" """''' "" '»P"«™» 0n,on Bank He Z Lntt^^Z'l,!' "" "'«*" » '"« on the previous eveninnehT™/ Vr^^^'""™' "'"<•«''* «•• no. be gr-ani;i:^t=::;;::c.r t trK 166 Hon. Judge Jetty's Report. altogether agreed, for having laid the matter before the directors of the Bank, the discount was refused. A wVbb 228* Mr. Pacaud declares that it was he who, from the very LkfruM 310 beginning, foreseeing that the payment of this claim of Mr. Armstrong's might give rise to some difficulty iu the Treasur/ Department, attended to negotiating tkt discount of the letters of credit to cover the amount. He had first seen Mr. Webb, of the Union Bank, and had asked him for the discount on Mr. Arm- strong's behalf Mr. Webb had consented, and afterwards had asked that the sum should be divIJi^d with the National Bank, which was done ; but, after this arrangement, the directors of the Union Bank refused to ratify the promise made by their cashier, stating that it was not a regular transaction Upon that refusal Mr. Pacaud then again applied to the National Bank to get it to take the letter which the Union Bank refused, but without success ; it was the same with the Caiss* d'Economie, and Mr. Pacaud then decided to leave the letter in question in the Union Bank for collection when it became due. Webb 231 Faeand 436 Webb 233 However, Mr. Pacaud desiring to procure the money for these cheques, tried first to obtain from the Union Bank the discount of a note for $20,000 on the security of one of these cheques, but not having- succeeded he requested the bank to give him a letter guaranteeing in some way the payment of these cheques when the letter of credit became due ; this was again refused. Finally Mr. Webb agreed to give a letter stating that when the letter of credit would je paid the cheque itself would be paid by the bank. With this and another similar letter Mr. Pacaud obtained, first from la Banque du Peuple on the 6th of May, and then from the National Bank on the 16th of May the discount in each bank of a note for |20,000, endorsed by Mr. Vallidres and guar- anteed by one of Mr. J. C. Langelier's cheques. A similar request made to the Banque du Peuple, at Montreal, was refused, and it was only on the 0th of July, after the payment of the letter of credit by the' Government, that Mr. Pacaud obtained the balance of |60,000 represented by Mr. J. 0. Langelier's three other cheques. For per Politica To pay Paid to Mr. Val Mr. Cha Cash on Tl will n( the Pa minist( It have s( agreed i accept \ the Bai( considei from Mr of the SI tis claii Armstroi It U that sun the new tions. A " several " the Hoi " tiations '' I did all " proposa " the rupj As to Hon. Judge JelWs Report. The use made by JUr PaPfln/? np +vi IT^- . • • ••*••«, For per^nal expenditure Political and other To pay notes diHcounted for n/^minVi PaiH in. \s, * ""leu 'Or political purposes i-aid to Mr. Armstrong on drafts Mr. Valli^res for indoniements Mr. Charles Langelier ... Cashon hand $30,00(J 10,000 23,000 2,000 1,000 9,000 26,000 $100,000 ministers. *^ ' "®^ *^ *° what concerns the The Pacaud-Abmstrono Bargain. It was at New York, at the Brunswick Ho^«l fi, . have seen was concluded fh» k .^^^^^ ^o^el, that as we agreed to assist MrWrol^^^ ^'' ^^'^^^ accept the syndicate wlch?f / ^^^ (Government to ^^i it to the Baie deskalet; M^ 'y\^^^^^^^ *« -tinue consideration of the servicls whlhM a ^« ^^^'^ «^w that in f«>m Mr. Pacaud he ZITJ^ZX .^''^'''''''^ ^° ^^P^^'t^d of the sum which hoTArlf ^\ "^ ^' "'^"^ '^^ ^^00.000 out his claim Th exttenc of^^^^^^^^ . Armstrong and byTXaud.*'''' '^^^^^^" '' ^«^*«^ ^^ ^^Sl 371,427.428 tiations; subseauentlv T oU^ xi^, P " ^* *^^ i^^go- " proposal, but to J^Ji* ! ^''"'T™ '- «»«?' Mr. Thorn's •■ the ™pt;r::;r;?j„::i:.:! - """-'i'^ ™%ht cause As to the uature of the representatioa, .nd «,H„i.a,i„„, „, 168 Hon. Judge JttWs Report. which he speaks Mr. Paoaurl explains himself at the same place by stn ng; "With the ministers I only brought forward the question of public interest ; I considered that if they delayed longer to further the construction of this railway no ofle else would undertake it ; that work to the extent of #1,000,000 would go to ruin, and if a few months slipped by without any one taking charge of it, no one would be willing to undertake the completion of the road. I also laid emphasis on the interest they had in retaining the party's popularity in Q-a8p6." Mr. Armstrong, when he is asked his reason for agreeing ta give such a large sum to Mr. Pacaud, says that it was to secure his influence with the Government ; he adds that he thought the Armatrong49 offer made by the Cooper-Thom syndicate was in the public in- terest, but at the same time he understood that it was the only chance he had of getting anythipg for his claim. That claim was only payable in debentures of the company, and to a large extent only after the completion of the line beyond Paspebiac, Armstrong 49 " ^^ ^^^ state it wBs in," he says. " it was impossible to get any- at the end » thing. If I had not made an arrangement of some kind I would " have been left out entirely and got nothing at all. Under " these circumstances I thought it was necessary for me to do " what I did." It was under that impression that Mr. Armstrong, who wished to have $175,000 in money for his claim, consented to give #100,000 out of it to Mr. Pacaud if the latter brought the affair to a suc- cessful termination. Whatever may have been, on the one hand, the means em- ployed by Mr. Pacaud to fulfil his promise, and on the other hand, the reasons for Mr. Armstrong's action, it is proved that the latter only consented to pay $100,000 to Mr. Pacaud to obtain his in- fluence with the Government, so as to have his syndicate accepted for the continuation of the Bale des Chaleurs Railway enterprise upon the new conditions authorized by the act 64 Vic, cap. 88. Now, public order, that is to say, that assemblage of rales which go to make up the social organization and secure good Hon. Judge Jetti'a Report which ,ul.,'''""""'>°™™"''" "Iter the ravage. Where, in fact, would be the obstar' ♦- .n.K k •ending ,„ all the operatioa. of the G^t,„«„A"'t nnX"? "" tions a. well a. to adminiatrative and „VSaTK ^ZTlnll w*couldho»e.llyp„cha.etheiafluen - f.l,y , 1 wkJ.„ ?K why oould not the good-will of the latl. 1 T *"' direotly, that ia to 4 J i^^Z^^.' ^.Zl^^tX the contract, or granting the office or deaired appointment ? cont^r^"""''"""' nothing in the proof even eatabUahea the in qu!".bf Tnf"?-! "^'""f " " i«elification of the bargain the\":SntJ:rira7^:;:tr:trt7Tr^^^ 'r^'« agreement, admitted by Mr PacaudRnH M. A therefore, cannot be defended. '^ ^'«»«*«>"g. Let us now see what the consequences may have been. 160 Hon. Judge Jetty's Report. The Facts Respecting the Ministers. Did Mr. Pacaud's measures really influence the ministers and contribute to the acceptance of the Thom proposal ? Of the eight ministers then composing the Cabinet, four were absent, three in Europe, Messrs. Mercier, Shehyn and Boyer, and one ill, Mr. Sobidoux. The four present were Messrs. Gar- neau, Ross, Duhamel and Langelier. Mr. Garneau. The Department of Railways is one of the divisions of that of Public Works. Mr. Garneau was, in April, 1891, Minister of Public Works. It was therefore to him belonged the cogniz- ance of this Baie des Chaleurs Railway matter. It was with him that Mr. Thom opened negotiations respecting his J cTM«iier P^'^P®^^^- ^^® discussions between Mr. Thom and Mr. Garneau 632 ' ^ lasted several days, from the 16th of April to the 21st. Mr. Thom's first proposal in writing was dated on the Itth of April, Thom 608 but it was not accepted ; on the contrary, Thom declares that every day the ministers struck out some portions of it, and that Th^Ms"" *^^* continued so long as they had not reached the last draft accepted by both parties. However, although the original pro- posal was thus changed, the date always remained the same, and that is the reason why Mr. Thom's letter, inserted in Mr. Garneau's report, appears as having been written on the "l7th of April. When these negotiations were being carried on between Mr. Garneau and Mr. Thom, was the HHqt authorized to represent the syndicate of Cooper, and others ? Was that syndicate suffi- ciently organized to make it prudent to do business with him for it ? On these two questions I will make but very brief remarks, for I fear to transgress the limits which 1 have set myself and enter upon ground where I would have no authority. And , the remarks which I will permit myself to make on this point will only have the purposo of showing Mr. Garneau's good faith. Hon. Judge Jetty's Report. 161 ofMJoolnt .f '^^'"^ ""'^ '^' ^^*^°"^^d representative t^M Z ^u}'' '''°"'"*'^ °*^^°* ^« contested. It is true unde^L, r . > ".ri'"'" authorization, but it is difficu t " understand that it could be possible to give him one for a series ofnegotaations as complicated and even as unforeseen as those entrusted to Mm. Thus Mr. Cooper declares that he hid abso 1 rhfsTaid'/M'^'r'^"'*'^*'^^^^^^^-^ m his hands. Mr. Garne^u, moreover, knew that Mr Cooper was accompanied by Mr. Thom in his first interview with Sr '"^" ''' which this circumstance alone had already authorized And we see that, thereafter, all Mr Thorn's lets respecttg tht negotiation were constantly and without distinction ratified. On the 27th of April, Mr. Robidoux having suggested to Mr (Signed) "JAMES COOPER." In fact, as soon as the affair was concluded and the Wal Mr Coo'nrb 'h '"' ^^^.^--^-'^ ^^ '^^ -w company, not onTy Mr. Cooper, but his associates carried out what Mr. Thorn had promised, the company was re-organized, the works wl re commenced and it was proved during the inquiry that thT^ were ■ r«m T^ ""f ' '^^°' '^'' ^'^' ^"" satWaction L the iocahties interested, Mr. Garneau is then fully justified by the event, for not having doubted Mr. Thom's authority. ti-H ^"^ *k' r'.rif '''*; ^* '""^^ *° "^« ^^ident that the nego- tiation which Mr. Thom had so in charge formed part of a whole plan, with the bearing of which Mr. Garneau was not unac^ tV'lMl..^,l?A!:iA^."^,5^- ^^- -- negotiating with hA'h«;i 7»"'' 7 ^" °^^«^^ uonauionaiiy the control ; on the other, he had an understanding with Mr. Armstrong so as not to be 4 J 162 Hon. Judge JeiWs Report. Ouneau, 176. 18S. Thorn 562, 560, 599 at his mercy for his claim if he came to an agreement with the Government ; and finally he treated with Mr. Garneau with the understanding that if he attained a favorable conclusion he would be in a position to substitute his syndicate for the old company. The whole of this went on together and had of necessity to go on at the same time, for it would have been absurd for Mr. Thom to buy the old company and pay Mr. Armstrong and not- to be sure of the contract with the Government. Mr, Garneau, who is a business man, understood all that, and that is the reason he agreed ta trdat with Mr. Thom under the conditions given, knowing that the latter's intevost was the best security for the carrying out of his promises. Finally, Mr. Garneau considered that the half million of debentures of the Company deposited with him was, in view of the new arrangements, of considerable value. Did Mr. Garneau, during these negotiations, allow himself to be influenced by Mr. Pacaud's conduct towards him ? Mr. Garneau admits that Mr. Pacaud wrote him a letter upon this subject, and went to seo him once. All that Mr. Pacaud seems to have told him was that Mr. Thom was pressing for the settlement of the transaction, and that it was important that it should be settled immediately. But these representations do not seem to have produced the effect desired ; on the contrary, Mr. Garneau seems to have feared, after that interview with Mr. Pacaud, that there was something irregular in the matter, and we see that he endeavored to take more precautions than previously. As he himself says, respecting that proceeding of Mr. Pacaud : " It made me reflect. It made me go into details." In fact, far from going on faster, it appears that he afterwards acted with still more deliberation and caution from day to day, even so far as to exasperate Mr. Thom, who ended by stating that he was tired of the transaction and that he was going to throw it all up and go home. We have sef'Tl Mr O-nmAon atfani-iTrali cussing the conditions of this contract, and only finally submitting Hon. Judge Jelt4's Report. 168 with the with the asion he r the old necessity d for Mr. and not Grarneau, be reason Ls given, irity for lillion of I view of r himself a letter that Mr. pressing :tant that ations do contrary, with Mr. p, and we eviously. Pacaud : L fact, far ed with en so far t he was it all up bmitting it to his colloagues when he had brought Mr. Thorn to an acceptable proposal. Ka* ^^ 5*"^?°"^ '^^ ^'™ '"^ *^^ execution of the agreement between Mr. Thorn and the Government. th.f '^^^ ^'* ^t ^i°*" ''^P- ^^' '""• ^' ^'^^^e^tio^ J. had declared that the new subsidy granted should be paid only upon condi- tion that the balance of the privileged debts due by the Baie des Ohaleurs Railway Company were paid. The statute did not, be It well understood, forbid the payment of the ordina,^ debts dll "^^^ ^c/"^^^ T^^^"" °^ *^^ P^y'^^^' °f t*^« privileged debts^ The Order-m-Council. whilst maintaining the condition as to the payment of the privileged debts, extended the provision and determined that the subsidy should also be employed for the Thom. The latter therefore claimed first the payment by the Gov- Zu , 1 n ^""^"'^'^ ^'^''' *^^^ *^« P*y°^«^t of the other fit f .1^ Co°ipany. so that his syndicate might take posses- sion of the road. And it was as being an existing debt that he had approved Armstrong's claim for the sum of |175,000. . p^^ ^"r' 'Tu *^**/* *^' ^'"^^ ^^ *^« P^^'^g of the^Order. in-Council it had been foreseen that for the payment of the sub- ««-". sidy recourse would probably have to be had to letters of credit "'' "' " addressed to the banks. But when a copy of that Order-in- Council was sent to the Assistant Treasurer, that gentleman alter having examined the document and submitted it to the*"""" 271 Provincial Auditor, was of opinion that it did not suffice to operate the conversion into money of the subsidy of 800,000 acres of ]a,nd, and that consequently the Order-in-Council could not possibly authorize the issue of the letters of (jredit Mr Machm communicated his opinion on this point to Mr. Garneau." On the other hand, Mr. Garneau himself had doubts as to ^e legality of the payment which he was called upon to make He knew that under the ordinary law subsidies are only payable 52 V «. .' to railway companies after they have been earned : that i« fL.. ^' ^' ° ^- ' * alter the work has been done, and only in proportion to the quantity of work done, by sections of ten miles of road, and here m •m'' 4: A 164 Hon. Judge Jem's Report. ffiTir. m ^^^PP"^«"°" w*« ™ade for money not justified by any work He was therefore very much embarrassed, and has declared so oyer and over again. Being Minister of Public Works, but charged at the same time with the functions of Prime Minister o«o.a„ 152 on H,v!'''T^ ""^ ^"'l'"' ^^ ''''^^''^''^^ t^at everything depended o«o.au on him. and he was dismayed at the responsibility which rested on him Bemg also ill at this time, he felt discouraged and was mclmed to resign his ofiice. It was, however, necessary to act. Mr. Thom, who saw that the term of his agreement with the old company was about o expire pressed Mr. Garneau to finish the transaction, and . threatened to abandon the whole matter, for if Mr. Armstrong was not paid at once, he (Thom) Would lose the benefit of his agreement with the old company. In this difficult situation, we see Mr. Garneau redoublinir ru.-, ,., n P'"^^*'^*^°^«' , "^ asking for the support of the Attorney- .Kob.dou,.752 General especially. Unfortunately the latter was also ill and could only give verbal opinions. However it may be. it is proved that Mr Garneau sought by all the means at his disposal to be thoroughly informed both upon the legality of the acts which he was asked to perform, and upon the position of the Government consequent upon the bargain made with Mr. Thom. and that he did not act unti) he was convinced that he ought and could legally do so. On the 24th April he obtained the opinion of the Deputy Attorney-General Mr. Cannon, corroborated by the Hon 179.18" ^'•s- -Langeher, and on the 28th April that of the Aitornev- General Mr. Eobidoux. Maohin 273-274 Robidoaz 752-758 Garneau U46-148, 163- 155, UV, 182, 182 The first of these opinions reassured Mr. Garneau as o the question raised by Mr. Machin respecting the conversion into money of the subsidy of 800.000 acres of land voted by the Act 64 Vict. Cap. 88, and Mr. Eobidoux declares that he .fully ap- proved of the opinion of his deputy on that point, he himself also holding that the Order-in-Oouncil No. 287 had operated the oou version. Hon. Jvdge JeU4's Report. cWto Mr. Garnea„ iu his opinion in wri 'inf of th ,8^h t Mr. Gameau had nothing to do afterwards with tv,-. t cation of the money drawn bv Mr V^r.^T a ^ ^^^^'' fited by it. ^ ^'^' ^""^ '" "o ^ay P^o- ^^^ Jhere remains one point more to which it is necessary to ' During the inquiry Mr. Garneau was asked whether Mr Pacaud. having seen that his solicitations were ^Jthnl7\rl had not threatened to cable to Mr. Mercier. fo 11 ht If M ' f *^'«at made to him. and he adds that moreover if w ^1 ! have^hanged his opinion as he had all tr^TplnXt ^^^^ ^ ^•ffl ^^/^'^'i^/' ?^r- »arneau seems to me to have given to thi^ difficult and delicate matter all the care and exhEd 111 th« prudence that he could have bronti-^f f« ;+ j «xniDitea all the notUng in the p™f h.t "nXe" t ' The 2^'?""'^'^ « to hia perfect honesty .„d uprightuels. ^^'"" "'P"™» •m" 166 ffm. J-idge Jetty's Report. Robidouz 768, 750 (.}*rneau 167 MR. ROBIDOUX. The Hon. Mr. Eobidoux after accompanying Mr. M'^rcier ts far as New York on the 13th March svent to the V^outhern g>ate8 with Mr. Charles Langelier ; he retu ed thetu « on the 12th of April, frick, and was obliged to remain in bed until about tho 25th. During that period Mr. Garneau, ^vho was ^ utru ted viMx the whol.) negotiation which .ve have set out, and wh< fti; tie need vf being auvis d froia time to time by the Attoraey- General, went tw e to ^ee Mr. Eobidoux at Montreal. Mr. Eobidoux had even gr en vli. Gar?)eau to expect that he would ' be able to return to i> -bee m a short time ; unfortunately he was prevented by siclasow and on the 17th of April he sent him the following tekij ran. — "Honorable Pierre Oameau, Cammiggioner of ^Public Works, Quebec: " I fear to be i'.etained hora by illness longer than I thought You may pro- ceed to business in my absence. I ratify in advance all that you will doin ba matter of the Bale dus Chaleurs Railway. Langelier will tell you exactly wh^t w u8 decided upon before the departure of Mr. Mercier. I am informed that any Aehj in this matter may be prejudicial to the interests of the enterprise and of tha Province. (Signed), j. R Roanwux. We have seen that on the evening before his departure for Europe, Mr. Mercier had an interview with Messrs. Laflammc, Cooper and Thorn respecting the proposal of the latter, and that on the next day, during the journey, he had communicated that proposal to those of his colleagues who accompanied him, and bad agreed with them upon the reply to be made, which was merely : The Government will grant all the subsidies autAorized by the Legislature, provided that the conditions mentioned in the statutes are fulfilled. That was what had been resolved upon before Mr. Mercier's departure. But it was known, in addition, by those who accompa- Mr. Mercier, that the latter -- ired the road to be com; ' jff"'. that consequently the en rise should be given if ditions imposed by law were fulfilled. Mr. Eobidoux's u ~ merely told Mr. Garneau : Mr. Charles Langelier will that if the coiiclitions of the 1 id -am .WTY atirj COmpiieu. vvitu you UllC- Hon. Judge Jem'» Report. srn grates le 12tb of bout tho ted ^vit)JL ; Mi tie Attoraey- eal. Mr. le would* aatfly he sent him •u may pro- II doin tiia cactly what ad that any > and of th9 Bnx>nx. rture for aflammc, and t hat Eited that iiim, and iich was Ltftorized lioned in 'ed upon np8. u J«"^, id ?>f ,.011- fc '"ram t she T id hfa opinion ott the m^teof ti,„ ^""'''■;.'" "™ «-«l>«l to have Order-in-ConBcil hM ^h™ h tran»aot,„n itself, although the declared .h« he ap^ved:" it ^^ ""? "'• ""^'l""- of wL^'wf rafe'^Theth?^ ^'"» '» "^- «'™-. -> the Minister of PnTrWor Mr'Xbl''"' TT ""^"""^ favored, in a Rcneral w.v thl . . """"d"" deolares that he that he thougLTud7anC«t^dra°lfdiJ''r'^ J""^' to assist Mr. Garnean in hrin^i ,,**"** ^® ^^^^ what he could fill issue. ^"""^'"^ *^" negotiation to a success- anaxfangtttrr^^^^ *<> conclude ...„ .. for that was indifferent To him pr^^^^^^^^^ T*'^^' the load was assured Mr TJnK;^ 7 ^^ construction of ttronghont thTJ^i^'^niS'STknd'^krnT '° T '^''' .. promise having inflnenced hto "'' .olicitation ..wfafmiSer'ZroSlfait "'./"'"' ""'"' »I>°'^» '» "-. . Ccnoil. Mr. plnd wl'US, XrnHo'r th "" O""™-"""™ of the arrangement then concluded * ° ™"'"''* °"* Pacan^'d h:dt"nt"ttT *"'".'?' "^"^ -°' ■'«■" ""' ^'■ revelations befor:tri'enl'c:lrir ^ """ '"' ''"" »' ""« There is, however, one fact which appears strange. "We have said that Mr. P^nau'i oft.- u._.. ,. Queh. two notes for ,.0,000, ea^h wla^: ^nd^r^rnTof M^' 168 Hon. Judge JetU 's Report. * Vallieres, and the guarantee in each case of one of the five cheques of Mr. J. C. Langelier, had tried to obtain, on the same conditions, the discount of a third note for i|20,000 from the Banque du Peuple at Montreal, but that he did not succeed. Mr. Pacaud, who had come to Montreal for that business, went to see Mr. Robidoux, who was at home sick, and the latter, having asked him what brought him to Montreal, this is how Mr. Robidoux relates what then passed between them : — Robidoux 764 " I came here, Mr. Pacaud said, to try and jtet a note discounted for Arm- strong, a note secured by a cheque signed by Chrysostome Langelier, commissioner in the Baie des Chaleurs matter. I then aalced Mr. Pacaud how it happened that a cheque drawn on tlie Union Bank, and payable unconditionally, was not paid, and it was necessary to discount a note and give the cheque as security before getting the cash. Then he told me that the Union Bank was not in funds at the time, and that it had given a letter which accompanied the cheque by which it undertook to pay it as soon as it would have received the funds from the Grovern- ment I then told Mr. Pacaud, without his asking me, ' Let me have that note, cheque and letter, and I may perhaps succeed in getting the funds.' I thought I was performing a duty in trying to get the funds on a cheque having the official signature of the Government • "1 knew Mr. Napoleon Lefebvre very well ; he was one of my friends and a Montreal capitalist. I am not certain whether I wrote to Mr. Napoleon Lefebvre or whether I telephoned to him ; in any case, he came to my house and I said to him, ' Here is some business that may suit you, perhaps ; can you discount this note"' secured as I have just stated, and I showed him at the same time the letter of the cashier of the Union Bank. Then he said, ' I will see,' and he went away with the documents. " I did not leave the house that day. The next day I went to the Government offices, and, as I was passing along St. James street, I met him ; he came to roe and said that he had tried to get the note discounted at one or two banks and that there was some difficulty. Then I said to him : ' I asked yon if the matter suited you, thinking I was giving you a good thing, but if you do not do it yourself return me the note, cheque and letter; I have no interest in the matter; I ^ was doing it to oblige some one, but take no further trouble about it' He then returned me the note, cheque and letter, and I returned them to Mr. Pacaud on my next trip to Quebec." It is to be noticed that the note which it was thus wished to get discounted was Mr. Pacaud's, and that Mr. Armstrong's name does not appear on it ; that it was Mr. Pacaud himself who was taking all the steps in this negotiation, and that finally this discount Was applied for on the security of an official cheque payable only when the G-overumeut letter of credit was itself Hon. Judge Jem's Report. 169 the five a, on the f from the ; succeed. less, went he latter, lis is how led for Arin- >mmi88ioner ppened that as not paid, iirity before funds at the by which it the Govem- e that note, I thought I ; the official ends and a Lefebvre or Haid to him, ; this note"' letter of the ay with the Tovernment mme to roe ks and that alter suited it yourself ) matter; I ' He then ;aud on my fished to g's name ^ho was ally this I cheque ^as itself fi,"^' J^ff ^^'^c^mstances are so unusual that it appears that they should have attracted Mr. Robidoux's attention. I must add, however, thai there is no proof that Mr. Robi- nor th rr °' *'' '^"*^"^^ °' *^« Pacau<^Armstrong barg^L. nor that he ever received anything from Mr. Pacaud or from any- one else m connection with this Bale des Chaleurs matter. ^ . Mr. Pacaud, it is true, paid for him, without his knowledee h« entrance fees at the Union Club, but that was before theZe des Chaleurs matter, and Mr. Robidoui, moreover, repaid him m soon as he became aware of that payment. Mr. Duhamel. ^n/ *^ ^ Thorn proposal was accepted. Like Mr. Garneau A^ ^''°'.^' ^"^ °^«* ^'- Th°"» previously, and hS course of these previous interviews that Mr. Thom had been obliged to modify his conditions so as to meet theTiews of he Tif "^- ""% """'.T^ "^ *^«^ -«" acquainted with the affair and was favorable to Mr. Thom's final proposal. Mr. Pacaud spoke to him about the matter, but only after the order-m-council had been passed, that is. aft r the alnge ment between Thom and the Govern, .t had been conc3. Mr Pacaud, who wished to favor the Union Club, al^o paid Mr^Duhamel's entrance fees to this club. But that payment w^ made without authorization and against Mr. DuhamePs wis™ who formally repudiated it as soon as he was aware of it. Mr. Duh^mel received nothing from Mr. Pacaud ; he did not Jbso utely nothing xn tuc .acts proved which could occasion any suspicion against him. ' m 12 170 Hon. Judge '' >n. Mkssts Ross, Shehyn and Boyer. Mr. Ross voted m favor of the Thorn proposition at the meet- ing of the Cabinet, but he knew nothing "*' f ^ "^ . nd- Armstrong affair, nor was he approached on the buuject by anyone. Messrs. Shehyn and Boyer were bath out of the country and knew nothijip^ about the matter. Laonller 720 MeniM 611 Mr. Charles LANaELiER. Mr. Oh.irles Langelier was one of those who accompanied Mr. Mercier to New York on his departure for Europe. He was consequently consulted by the Prime Minister during this journey concerning Messrs. Cooper and Thorn's p oposal, and concurred in the reply then decided upon by the ministers, telling Mr. La- flamme that the Government was ready to pay to any company or syndi'^ate appro- '^d by the Lieutenant-Governor-in-Council, the whole of the subsidy already voted, provided that the con- ditions mentioned in the statutes were complied with. Mr. Langelier also knew that Mr. Mercier was very desirous that arrangements should be made to ins' re the ro-commence- ment of work on the Bai- ^os Chaleurs Rr way, evtn before his return. After Mr. Mercier's departn-e, Mr. Langelier left with Mr. Robidoux to travel m the Southern Statct.-, he returned only about.the 12th April. Lknnliar 720 Oarnean ]4i C Lknnlier Thorn 556 Shortly afterwards Mr. Thom be^ i nep' tiations with Mr. Garneau and some other ministers icf ing the pro, sal made in the na-.ne of his sy dicate. i ioe ot clearly ap,.ear that Mr. La7:;geiier was one of the miiiisters with whom th\% prop -ial of Mr. Thorn's was discussed before the Order-in-Couu- cil, but there is re£ son to think so, for Mr. Thom tells us : "I " would meet the ministers, and they would scratch their pen " through some portion of jay proposition and lead-pencil in " something else, and it kept on like that until we finally got to " the la^i one. " Hon. Judge JeiU 's Report. ;themeet- Lrmstroup; I. intry and )mpanied He was is.joumey joncurred ? Mr. La- company -Council, ; the con- ■ desirous mmence- •efore his vith Mr. led only vith Mr, pro sal jT ap^ ear lom t^^is tn-Couu- 3 us: ••! lieir pen lencil in ly got to tells t.^'jh^t'h?""''' Tu'°' "^ '^""'^ "^'°"*«^« : M- ^^^^^-^ --•"-" •«« tens us that he was another, and it seems probable that Mr Langehor was also there, since he was the only one of the four ministers present in Quebec who had gone toVew Yo k iuh Mr. Merger, and who knew what had been decided on duW that ,ourney^ Thjs explains Mr. Robidoux' telegram to Mr'' upo?.*; b^fo e ^m" "'"i*'" ^°" exactly what ™ decided upon before Mr Moroier'a departure." On the 20th April, Mr. Oarnean, who, as we have .ee„ to obtain ..he Aetomey-Generals opinion ooncerni„g the Th„m Mr .^MWana Mr ^^lAZ^Tt^ J^-^ o.™ . ■"':^'"'««''"'"'=''n«fotMr. Eobidoui,8ent Mr Garneau tuo opmiou asked for, stating that the Co^Drkom «ive th^e rrnln. rTnLTZrl^^ ^^ ^"^ '^'^^^^^ 721 h« nb?*'^^ K**"f ^""^ *^^' ^P^'^^^^' ^^- ^^rneau assures us that In Council Mr Ungelier was i„ favor of aocentin^ ik. Thorn proposal and the report prepared by the C Mr Var nean wa. unanimously adopted by the fourlnnist™ prelint ..rn-rthrc^^U'-'-s^trwut'';*^^^-'""™' '» pay first the privileged debS:tu t.Te !' ,:?, g T^:7Zl.t des Ch.,leurs Eaihv.y Company, app,^ «, by Mr Thou^ t„ ,? thi^^.f..,. ..... money. Thi. conversion, at the rate of idO 172 Hon. Judge JttU'$ Report. Mr. Machin tells us that th^ treasury was in a condition to pro- vide for them ; and it was understood that the other claims- should be settled by letters of credit on the banks. Mr. Thorn agreed to accept these letters, and was even very anxious to have them. MMhln 280 Qarntau 168, 109 Duhamcl 090 Lafr»ne* 310-311 Wobb 228 Oaboary 333 Lafranoe 324 Paeaad 43fi Two letters of credit, one for ITS.OOO and the other for 1100,000, were signed by Mr. Garneau and sent to the bankers who had promised to discount them. We have seen that the one for $75,000 was discounted by the National Bank and the pro- ceeds paid immediately to Mr. Armstrong. The $100,000 letter, which completes the payment of Armstrong's claim, was refused by the Union Bank, notwithstanding the cashier's promise. Mr. Pacaud, who, in consequence of au understanding be- tween them, had received from |ilr. Armstrong tne five cheques for $20,000 drawn by Mr. J. 0. Langelier on the Union Bank against the promised discount, found these cheques refused when he went the next day to cash them. He then tried to have the letter of credit accepted elsewhere, and went first to the National Bank. Did Mr. Charles Langelier accompany Mr. Pacaud when he made this applii-ation to the National Bank ? Mr. Langelier was not asked this question, but Mr. Gabotiry, the President, and Mr. Lafrance, the cashier of this Bank, both assert that this request was made by Mr. Pacaud and Mr. Charles Langelier. This assertion is corroborated by the copy filed in the record of a resolution of the Directors of the Bank refusing to grant this request. This resolution, dated the 5th May, is couched in the following terms : " The application for the discount of " $100,000 made by Messrs. Pacaud and Charles Langelier, guar- " anteed by a letter of credit from the Government, is refused." There ought then to be no doubt upon this point, but Mr. Pacaud asserts that he then asked for the discount in Mr. Arm- strong's name, to whom the letters of credit had > ^en given in payment of his claim. Mr. I'acaud, not having succeeded in obtaining the discount Hon. Judffe JelU't Re/tort. ITS >n io pro- er chi.ims- tfr. Thorn 18 to have other for 3 bankers it the one the pro- 100 letter, s refused ijse. ding be- 5 cheques on Bank led when have the National when he 3^aboury, buk, both •. Charles filed in fusing to couched count of er, guar- ^used." but Mr. Ir, Arm- given in discount of the letter of credit, had recourse to another method, and dis- counted two notes for |20.000. endorsed by Mr. Vallieres, and guaranteed by Mr. J. 0. Langelier's cheques. One of these notes Was Mr. Langelier present at each of these banks when Mr. l-acaud asked and obtained the discount ? Mr. Pacaud and Mr. Vallieres swear ppsitively that Mr.P»c"d4io Langelier was not with them when the discount was asked at """"•" '" the Banque du Peuple. Mr Lafrance asserts that Mr. Langelier was not present i-^-- when the discount was asked from the National Bank. ''" Ar. ^'' J^^^'f^^jl^'' l^owever, admits that he was in the Banque ch.. L.n,.n„ au feuple on the occasion in question, but he adds that he did"''"''*'' not go into the cashier's office, and knew neither what took place, nor what was being discussed. Mr. Langelier also admits that he was at the National Bank F*"'- ^"f"" when the other note was discounted, but he seems to confuse this occasion with the request for the discounting of the letter of ^^ '.v"'. ' '*^' ^^ ""^^ ^'' G^^boury, who in fact was there **''''""^ ^^* when the discounting of the $100,000 letter of credit was dis- cussed but not when the note for $20,000 was discounted He gofng on ''' ''''"°'' '^'" ^' ^'^ "°* ^^^^ ^h^* ^-« When questioned by Mr. Mercier concerning the discount M"'''"534 obtained at the National Bank Mr. Laagolior ad4 gdntha Was there, and that there was a discussion about a ceLin dis- Finally, when Mr. Pacaud went to Montreal to try to discount a third note at the Banque du Peuple, Mr. Charles LlngeH r was there at the same time ; he accompanied Mr Pacanil inihJT of the bank, and waite ' f«. r^i^ Ju^ i_^'^ ^''^ *° *^^^«°^^/-Ho-« oaiihier. for him while Mr. ParaTKl n-oo wi/u *v- 709-7io 174 Hon. Judge Jetty's Report. If was early in May, between the 4th and 6th, that the dis- count of the $100,000 letter of credit was asked from the National* Bank, and the first note for $20,000 was discounted at the Banque du Peuple. Two days after having obtained the discount of $20,000 Mr. Pacaud began to make advances to Mr. Langelier. Exhibit No. 207, p. 992 PMand 794 On the 8th May, Mr. Pacaud paid for Mr. Langelier to the builder of his house 1918 23- 200 00> 600 00 17 60- 555 4a Oh«. Langelier The 9th May, he deposited to his credit in the Savings Department of "* theUnionBank On the 12th May^ ho paid for him to the Fortress Hotel Company 26th May, "' « « 3rd June, he deposited again to Mr. Langelier's credit On the 10th July, the letter of credit being paid, the Union Bank passed to Mr. Pacaud's credit the last three cheques of Mr. J. C. Langelier, making $60,000. The next day, Mr. Pacaud deposited to Mr. Langelier's credit at the People's Bank , 3 000 Ofr On the 21st, a further deposit of 600 00- On the same day, given to Mr. Langelier himself 1^500 00 On the 22nd July, note paid by Mr. Pacaud for Mr. Langelier ijeOO 00 Finally, on the lOtb August, given to Mr. Langelier an additional sum of 500 00- $9,291 23 Of this amount Mr. Laagelier asserts that he has repaid Mr. Pacaud the three following amounts : On the 11th of July, by chequs $2072 00' Atanothertime ;;;.';;;; 500 („^ Kemitted to Mr. Pacaud while in Europe 300 OO $2,872 00 ch«. LMgeiier It would be useless to dispute the fact of these repayments, although Mr. Langelier admits that the cheque for $2,072 was- given to Mr. Pacaud on the 9th May, in payment of advances made prior to that date. This sum then was to pay a debt which is not i^entioned in the statement we have given above, and conseqi^ently cannot be deducted from the amount shown by that statement. p.oMd 382 Mr. Pacaud. on the other hand, declares that long before this Baie des Ohaleurs affair, even for twenty years past, he had been in the habit of making advances to Mr. Charles Langelier, who was formerly his partner and who is his intimate friend. 1918 23- 200 00' 500 00 17 60- 555 4(y 3.000 00^ 500 00- 1,500 00 1,600 oa 500 00' Hon. Judge Jetty's Report. 115 ~ 1 — — Compelled, in cross-examination, to mention these advances he recalls among others a deposit of $800 made by him for Sr ^rumrof ito^'r''?' ^f ^^ ^^^^ besides: that in the— «^ antumn of lg90, he placed several smaller sums at Mr vZs w' I ''' ^' '^^' *^^* «°™« ™°"*^« ^^^ore the ad: Pac.ua 382 vances we have enumerated, he had induced Mr. Lauffelier to Ti'/' """«•"" bu.ld a house for himself, promising to assist Mm and t^ad " vance the necessary funds, and that in fulfilment of this promise he advanced him these difierent sums. house" andT/M'' ^""''}^f ^'^ ^''''^'^''' ^^ *^«^ building a Mercie. 533 House, and Mr. Mercier declares that even before his departure n*]?- """«•"•" mee^rn7the "^ *''' ""'■ ^^"^^^^^^ ^'^"^^ ^« embarra^seTL ' meeting the expenses connected with this building he left him necess ty. Mr. Pacaud having, however, made advances to Mr Langeher.the latter did not make use of Mr. Mercier's signature: Such are. in brief, the facts concerning Mr. Charles Langelier. What conclusions can we draw from them ? Was it Mr. Pacaud's influence that induced Mr. Langelier to favor tha Thom proposition ? i^ngeiier to received f "" ^'''^'"'' ^''"'" *^' '"''''' "^ *^« "^°^«y ^^i^b he that Mr "" f ' ^' r '*T*'°''' '! '''""' *° ^" thoroughly established baLw r^M" "'^' ^'"^ '^'"'-^ *^« Pacaud-Armstrong bargain, of Mr. Mercier's desire to arrange with some compan? for resuming work on the Baie des Chaleurs Railway. Tdoel uot seem extraordinary to me that he was in favor of JoncLing with the provisions of the statute. That Mr. Pacaud spoke of this affair to Mr. Laneelier is P«r p . ,», am. Mr. Pacaud says so, and Mr. Langelier admS But Sd ?F"-^^^^^^ the representations made by Mr. Pacaud to Mr. Langelier induce him to favor the adoption of tie Thom proposal ? It is difficult to say, and I am very much inclined to think Ifi 176 Hon. Judge Mti's Report. Ohi. Lanselior T41 that Mr. Langelier was himself in favor of the agreement with Mr. Thom. However, Mr. Pacaud's influence may have induced Mr. Langelier to hasten the affair, especially when the issuing of the letters of credit was in question, that is, the carrying out of the agreement. Besides, Mr. Langelier has made a precise declaration on this first .point, which should be borne in mind. At the close of his evidence he adds <— " Before I conclude I want to state that in the whole course " of this Baie des Ohaleurs transaction I was neither approached, " nor influenced by any one. I acted freely without any promieJ " whatever directly or indirectly of money, or value, or anything '' else, and what I did I did becpse I thought it was in the " interest of the country and of Gaspe in particular." There remains the second question : " Did Mr. Langelier know the source of the money he received from Mr. Pacaud ?" The examination of the fficts in this connection shows that the evidence is entirely circumstantial, nothing direct, positive or definite. Now, circumstantial evidence, or to speak more correctly, presumptive evidence, is the most uncertain of all evidence, it is that which most readily leads astray and which almost always IS the cause of those fatal judicial errors which so often demon- strate the weakness of human justice. ci«.Langeii,r And against this mere conjecture we have the solemn declaration of Mr. Langelier affirming under oath, " that he was Oh..L.ngeiier^^'°^^*^^'y ignorant of what Mr. Pacaud had received or was to 724 receive in the affair," and aJding in another place, " that he had never received anything from Mr. Pacaud with the knowledge or even the suspicion that the money came from this transaction." In the face of this oath, as opposed to purely presumptive evidence, I cannot conclude that Mr. Lanirelier knew the sour!- of the money which he received from Mr. Pacaud. Hon. Judge JetWs Report. 177 ent with induced ssuing: of ag out of n on this le course iroached, promiet; nything s in the angelier lud ?" ws that jositive )rrectly, ice, it is always demon- solemn he was was to he had wledge iction." mptive o All 1*«-aA MR. MERCIER. '\?^?® suspension of work on the Baie des Chaleurs Rail- way, Mr^Mercier, as we have said above, induced the Legislature to pass, first, a law authorizing the Q-overnment to cancel the charter of any railway company unable to pay its debts, also another law giving a new subsidy to ensure the construction of this railway. t Mr. J. J. Macdonald, railway contractor, in whom Mr Mercier seems to have had every confidence, had tried to profit bv the new condition of afiairs caused by this law, but discouraged by the demands of M. Riopel, the managing director of the old Macdonald company, he had given up the matter ^le Mr. Armstrong- had then induced Mr. Cooper, one of his advancers and his creditor for a large sum, to form a syndicate to undertake the carrying on of the works, seeing the advantage afforded by the grant of the new subsidy. On the 12th March, the eve of Mr. Mercier's departure for ll^urope, Mr. Cooper, accompanied by Mr. Thom and Mr K fT'^'tv"'^' *^^ ^"""^ Minister to discuss the affair with him' but Mr. Mercier told these gentlemen that he could not attend to It at that moment, and begged them to put their request in writing, promising to give an answer before his departure. The next day, while going to New York, in company with his colleagues, Messrs. Shehyn, Boyer, Robidoux and Charles Lange- lier, Mr. Mercier showed them Mr. Laflamme's letter, and it was agreed to answer, that the Government would give the whole subsidy actually voted, to the company which should be approved by the Lientenant-Governor-in-Council. provided that . the provisions of the Statute were complied with. A letter toM.roi.r m this effect wus consequently sent to Mr. Laflamme from New York on the 18th March. ^„»„?!^.;^™'*'''*''^ ^^^"^ ^'*''^^* *° ^'^^^i^ ^^- Pacaud's aid to ensure tue aaccess of the syudicate formed by Mr. C^ooper and some others. As Mr. Pacaud was also going to New York to bo 178 Meroier 522, 525 Meroier 623 Htm. Judge Jett6's Report. Meroier S24 Oameaa 209-210-214 present at Mr. Mercier's departure, Mr. Armstrong took the same train and eagerly requested Mr. Pacaud to obtain an inter- view for him with Mr. Mercier, but the latter absolutely refused to see him, and having reached St. John, Mr. Armstrong thoueht it better to go no further. • Mr. Mercier does not then appear to have left any special instructions with his colleagues to ensure the carrying on of the work of this railway, but the majority of them knew perfectly well his desire to see the enterprise brought to a successful termination. It was during Mr. Mercier's absence in Europe that arrange- ments were made between Mr. Thom and the Government for the completion of the Baie des Chaleurs Railway. Mr. Mercier then had no share in either the order-in-council of 23rd April nor the letters of credit of the 28th ilpril. He was only informed of It when the affair was concluded and settled, whilst he was in Pans, by a letter from Mr. Charles Langelier and another from Mr. Garneau. Mr. Mercier has not kept .these two letters, but his reply to Mr. Langelier contains the following : * « * « « P-uJis, 19th May, 1891. I am delighted to learn from your letter that the Baie des Chaleurs Railway matter 18 settled. I depend upon what you say, but I confess to you that I do not find the new syndicate very strong, and unless it is backed up by foreign capital- ists, and very strongly backed up, we will again be disappointed. I would advise you to be very prudent, to follow exactly the text of the law, and to make no advances except with full knowledge. Of course you are a better judge than I of the new situation, which is brought about by circumstances mentioned by you and I depend entirely upon your discretion and that of our colleagues as to wha^' should be done ; but I pray you to be prudent ; we have been so unfortunate with this road that we cannot take too many precautions. » * * * Mr. Mercier has declared, concerning this letter, that he regretted having thus expressed doubts concerning the new syndicate, for the information he afterwards received completely reassured him as to the capability of those composing it to carry on the enterprise successfully. Mr. Mercier's answer to Mr. Garneau's letter could not be iouad at the time oi the enquiry, but Mr. Garneau promised to Hon. Judge Jetty's Report. l^k for it and produce it as soon as he could. The reply has been found, and Mr. Garneau sent it to the commissioners the 179 Mr. Mercier says, among other things : I am delighted with the settlement of the Baie dPR Ph* « • ''Z\nfri "^".^^- ' ^"^ *^^^ *^^* you e.hiMte'd"gtt """"^^^ ^ct and prudence m this matter. I congratulate you. It is "Oentj T^hTtw :r "^^'^ ^^^' ^^°^* *^« Q-^- " pleasure." settlements have given me very great nf fV.!^f 'if "'"''' r^^ ''*^''''^ ^^ ^«*^ J'^ly- It was on the 6th of the following August that the revelations concerning this Baie ' des Ohaleurs Railway were made before the Senate Commiftee and four days afterwards, the 10th of August, MrTacaud lerofthe'lul'^'r^ r^^ ^^^^ ^^P^^^^*^- *^ Mr MeTc :r Pa^^a either on the subject of these accusations or concerning certain mJ; •'' sums of money that Mr. Mercier had left with him on'^CTt^^""" for certam personal matters. deposit The enquiry before the Committee of the Senate was after- ™ds commenced, the 12th August, two days after Mr. PacaTd's departure, and he only returned on the 26th September when he correspondence between your Honor and Mr. Mercier rdltin^ l;pointed *" ™ ^^"^' ^^' *^^ ^^^.«-* Commissi;: ta! concot^MrMercTr."'^* ''' ^"^ ''"^'^ ^'^^^ -^-^ «P-iaIly Two points only claim o;^ uJiaut/.on :— Pirst-The payment by ^v. Facaud, with money obtained from the Baie des Ohaleurs affur. of note, discounted fL p" purposes, bearing Mr. Mercier's signature. Pontical Secondly-The remitting by Mr. P...,caud to Mr Mercier dunnffhis absence in Knrn«o ^f *, . mercier, gj^jj - i" » -' -" " aujiis ux mon^y oi #5,000 m ) 180 Hon. Judge Jetty's Report. 1"— POLITICAL NOTES. «„™ Tf 4?nn ?.nT- '1f\°'Z^^S the use Mr. Pacaud made of the sum of SIOO.OOO which he had obtained from the Bale des Ohaleurs afiair, that he had paid with the money different notes discounted at the banks, and subscribed for polit^ical purposes. stances ^— ^°*^^ ^^^ ^^^^ ^^^^^^ '^"^®'" *^^ fo^owing circum- In order to provide for electoral expensf^s during the federal e^.Uons of 1891, and for the deposits ^^quired for^he contest- P.ii,ti.r764 riT T ^^^^'''''^ """^^ tl^e counter-petitions, Messr. Pacaud, MeXV/s' ^J"': La^gel^er, Frs. Langelier, Tarte, Senator Pelletier and Mr Mercier had signed and endorsed, conjointly, a certain number oi notes, amounting in all to the sum of #23,000, and they had . tW f%?'''''''l'^/i*^^^^"^^ It was understood between these gentlemen that their responsibility, as regards each other, LI "^^k/ 'f *t^ payment of these notes ; that each was onW responsible for his share, in whatever order the endorsement! were made. M,rot'/528* „ S^^°^« lemmg, to provide for tlie notes when they fell due Mr Mercier had signed others m advance, and 'he had also, as a LTw i^' ^^^*^ t^^ee or four blank forms with Senator Pelletier, so that they could have his signature in case of necessity. These notes, of which Mr. Pacaud alone wme the maker have been produced, and we give the list — Lafranoe ° 315 R9A 4d%!m. ^°" ^^~^' ^^^^^ ^P"^ ^^' ^""^ ^*y 1^' P^^rM"'' ^ ""■ «"-'- »' .he money honorably belong toT mT;!^- ^"""™°'^' " ''^ expected to spend ^ th« K? . !^ '°°''® ""^^^^ ^^^^^ he P.cad sor f« \t b ? ® beginning of May Mr. Mercier wmfa ^'"■"'«" 3'« to Mr. Pacaud to send him these ^tni^n V fj-^^^^^^ wrote M^P.and did .0 by a draft tm tX^air^ :t\^^ ^ We see by Mr. Pacand's a(,count with th« Vo^o^-i -- > mat u was oa the same dav thnf M, t» , — -—so^cii -uaaKis«hibitNo.8(j bank the proceeds ofThe dildunt ^^'1^''^ T'""'^ ^""^"^ '^^''"''' f u« oi me aiscount of the second note for $20,000 13 f'. ! ^. .ir IMAGE EVALUATION TEST TARGET (MT-3) A .» * ^ 1.0 1.1 III U ^ Hk "^ Hiotograpnic _ScMices GorpoiatiQn :<>- 23 WIST MUM STRUT WtBSTIR,N.Y. 14SM (71«)l7a-4S03 o'^ 186 Hon. Judge Jelti'r Report. endorsed by Mr. Yallieres and secured by a cheque from Mr. J. 0. Langelier, that this sum was sent to Mi. Mercier, and that' it was taken from the proceeds of this note. At first one might be led to conclude that this was fiaie des Chaleurs money sent to Mr. Mercier, and in fact this was the inference drawn during the enquiry made before the Committee of the Seaate, which is intimated at the foot of page 11 of the report of the committee. But this conclusion cannot be accepted to-day in face of the new facts established during the enquiry made before us. In fact it was not proved before the Senate Committee, as it has been proved before this Commission, that this sum of |5,000 sent to Mr. Mer- cier by Mr. Pacaud was on deposit in the hands of the latter from the 2nd March, and that it had been given him for the pur- pose of being sent to Mr. Mercier, as it in fact had been. Mow, the fact of the deposit destined for this purpose is indisputable. Messrs. Mercier and Pacaud boih declare it on oath, and their declaration is confirmed by the production of cheques from Mr. Mercier on the Caisse d'Economie, paid by that institution to the K*hibiuM%«^**^°** Bank. And when Mr. Pacaud went to ask the National p. 938-939 Bank to discount this note of $20,000, he declared openly to the cashier that he had to send $5,000 out of the proceeds to Mr. Mercier. Nothing was more natural, for having Mr. Mercier's money iu his possession for two months, he was obliged to send it to him at his request. PMkod 379, 396 Mareicr i31 PMud 397 PMMd 397 Mr. Pacaud even adds that he told the cashier of ' the National Bank at the time : " I have |5,000 Mr. Mercier left me " before his departure ; he is now asking for it ; I must send him " a draft for this amount." 787-788 However, this assertion is not corroborated by Mr. Lafrance, the bank's cashier, although in substance this gentleman con- firms the version given by Mr. Pacaud of the conversation that took place at the time. But the sole fact of importance on this point is that of the previous deposit of this sum of #5,000 in Mr. JPacaud's hands by Mr. Mercier. Now this fact is iucontestible. What did it sitrnifv to Mr. Mercier that when he asked Mr from Mr. r, and that' one might aoney sent wn daring 3, which is littee. Bnt I new facts fact it was sen proved [) Mr. Mer- the latter )r the pur- en. Mow, lisputable. , and their s from Mr. tion to the e National inlj to the >ds to Mr. . Mercier's 1 to send it er of ' the ier left me i send him . Lafrance, iman con* iation that that of the hands by A«ik«» together to Senator Pelletier. On silT/^v*^ ih ? '^^^"" ""^ *« ^«»^ note. I fille,j if. in ft.. ♦!, """^'ng my authority Mr. Pelletier pav« m« t.»-- 187 188 Hon. Judge JeU4'$ Report. PMtnd 443 M«r«Ur (35 PtoauJ 423,404, 441,446 money there at thia time. I deposited the note for aix thooasnd dollan in the hands of the Union Bank, but without disoonnting it; as I had other money, I sent this sum, but I left the note in Mr. Webb's hand to collect when it fell due. On the 30th of July I wanted to negotiate it and did so at the Banque do Ftonple." The note fell due the 3rd October. At its maturity Mr, Pacaud paid the $1,000 which he had added to this note, for his own use and Mr. Mercier settled the balance, |5,000, with the •Ranque du Peuple. As we see from the quotation just made, it was not out of the proceeds of the discount of this note (which was rot negotiated till the 80th July) that Mr. Pacaud sent Mr. Mercier the remittances asked for, but it was, as he says, out of other moneys that he had at the time. Mr. Pacaud had in fact at the time a cheque for $7,600 on the E^nk of Montreal coming from an affair quite foreign to the Baie des Chaleurs matter. An objection having been raised to the evidence on this point, the commissioners afterwards, with the approval of the lawyers interested, received confidential explanations, which satisfied them that the origin of this sum had not' to do with the Baie des Chaleurs affair. Paokud 433, 484 Mtrein 530 Paoand 390 PMand 407 Mr. Pacaud having drawn the amount of the cheque for ♦7,600, placed $2,600 to his credit at the People's Bank, >^nd taking the balance of $5,000 to tbe National Bank he cabled through the cashier, Mr Lafrance, to the agent of the Paris Bank, to place the sum at Mr. Mercier's disposal. It must be added that, when giving an account of the $100,- 000 Mr. Pacaud claimed the privilege of not divulging the source of other sums foreign to the affair, which came into his possession during the same period. This request appeared reasonable and was granted. On the next day, however, 24th October, Mr. Pacaud declared that Mr. Mercier had requested him to explain all the circum- stances relating to this second remittance, and in consequence of — -i"'-*^*^* ^^^ o"^" ^^^ xxxiu-xxixttiiuu wc uavc jusc menizGuea. HoH. Judge JetW$ Report. 189 Pacand to Mr. Mercier while the latter was in Paris. The first sum was at the time on deposit with Mr. Pacand who had mixed it up with his general account. fro J*"" "^^^o^d sum, advanced by Mr. Pacand from funds arising from a source absolutely foreign to the Baie des Chaleurs Rail- way •100.000. was obtained as far as Mr. Mercier was concerned. by the discount of a note on one of Mr. Mercier's blank form^ given by Senator Pelletier to Mr. Pacand. This explanation would not be complete if I did not here point out an evident contradiction between this evidence and the explanation given to Your Honor by Mr. r^.^rcier concerning the first sum of g5.000 sent to him by Mr. Pacaud. the ^^th In ^^^T^t""" r"* ^^ ^°"'" Honour to Mr. Mercier the 7th of last September there occurs the following :— •ame day, accord.ng to a promise made to the Cashier of La Banque Nationals when the above mentioned $20,000 were discounted. Mr. Pacaud by cheone lT„^' against his account.pai My colleagues received this proposition favorably, and prepared a draft which they submitted to me. However, in the meanwhile I had reflected on the gravity of the step I had thus advised, and I confess to have been alarmed. I then told my colleagues that I must abandon the idea of this interim report, and I gave them the reasons, which I afte^ wards expressed to your Honor in my letter of the 14th December. Moreover, after having seen the draft they had prepared, I found that it was impossible for me to concur in it. I was, besides, too ill to discuss the draft, and my colleagues themselves would on no account have wished me to incur such fatigue in my weak condition. They then gave up the idea of obtaining my concurrence, and under these circumstances I judged it proper to write and explain my reasons to your Honor. The whole humbly submitted. >i L. A. JETTfi, President of the Commission. 892. ik jronr Honor's per- an incident that has ch, in justice to my dnty to give some by what threatened to the complications in the production of le idea of an interim liich we should afier- ived this proposition submitted to me. ected on the gravity onfess to have been abandon the idea of sasons, which I after >f the 14th December. they had prepared, I ur in it. ft, and my colleagues led me to incur such ing my concurrence, proper to write and A. JETTfi, ifthe Commission. ■* .»!-