pi -v^ 
 
 CANADIAN PACIFIC RESOLUTIONS 
 
 Mr. Blake's Reply to Sir Charles Tupper's Explanation.. 
 
 THOROUGH SIFTING i3P A GREAT SCANDAL, 
 
 ASTOUNDING DISCEEPANCIES IN GOVERNMENT ESTIMATES. 
 
 Convincing Argument for Rejection of Terms. 
 
 After Sir Charles Tupper had on Tuesday night brought down and explained Resolutions 
 granting aid to Canada Pacific, 
 
 Mr. BLAKE arose amid applause which almost rendered inaudible his opening sentences. 
 He said : — I believe that whatever other predictions the hon. gentleman may have made in 
 respect to the C. P. R. in the past which have hardly yet come true, whatever other predictions 
 he may have made to-night, which may yet be falsified, one prediction he has made which I dare 
 say he has taken steps to see shall be verified, namely, that the resolutions shall not be lost but 
 shall carry. Notwithstanding, it is my duty to point out to an assembly which I am well aware 
 does not receive with acceptance some propositions which I entertain, and which I think are fit 
 to be considered by the House and by the country before a decision is reached on the important 
 question submitted to us. It is an important question — the hon. gentleman has treated it as 
 one of very small moment to a country of such lai^e resources, with such a glorious present, with 
 such a wondrous future as he has depicted, to enter into additional engagements involving thirty 
 millions of money, as really nottof much consequence. And when it is so absolutely certain as 
 the hon. gentleman has pointed out that the engagement is only nominal, formal, temporary, 
 sure to be redeemed, it is of less consequence still. But, sir, I think the people at large will 
 believe that before Parliament should have been called on even to take the initiatory step which 
 the hon. gentleman proposes we* shall this night take, it was right that more light should have 
 been thrown on the situation in many respects tiian that vouchsafed to us. It is not to be for- 
 gotten that for years past we have been moving for information upon important particulars con- 
 nected with its progress and operation, answers to which have not even been vouchsafed. It is 
 not to be forgotten that with reference to the price which the stock realized, the mode in which 
 it was distributed amongst the corporators, the price actually obtained for it, the prices in stock 
 which were paid for certain works ; it is not to be forgotten with reference to ihe contracts 
 which the company has entered into, that information has been asked, not this session only, but 
 in previous sessions, and guaranteed so far as the Government were concerned in worcls, guaran- 
 teed so far as assent by this House was given, but not followed by any effectual result, and that 
 to-day we are asked to go into Committee in the face of these 
 
 REPEATED AND mEFt'EllTUAL DEMANDS 
 
 for that information jrhich in part under the law of the land the Company was bound from year 
 to year to supply, and in part, under the powers which this House and Government possess, it 
 was on demand also bound to supply. Information has been given us this season with reference to 
 this proposal, and the usual papers have, in part, been laid on the table, but the hon. gentleman 
 presses forward the consideration of his proposals before these papers have been printed — before 
 they have become ac^jessibleto members. I happened to have beon able to read in manuscript some 
 portion of it, and only some portion. I am not aware that any other members of the two hundred 
 and odd who compose this chamber, and are supposed to take an interest in this question, have 
 road any portion of these papers save the letter of Mr. Stephen which has appeared in the 
 
 Eublic prints. Of course I expfjct the hon. gentlemen who belong to the Admistration have 
 ad previous opportunities for reading, as they were responsible for these papers. But those of 
 us who have not had that advantage are called upon to take the initial step without having had 
 fair opportunity of seeing what, the grounds are. The atateuient which the hon= geBtlemcm 
 himself has made to night, the laaze of figures into which he has entered, varies in some paiti- 
 
cuiars from those presented in the letter of the President of the Company. Some more light, it 
 is true, has been thrown on some of the details in the speech he has made to us — but that light 
 is partial and dim. though it is directed on a subject in rcsi)ect of which information lias been 
 repeatedly demanded, and up to this time practically refused. Now this proposal is one of ex- 
 treme gravity. To those of us who recollect the discussion vvliich took place when this 
 contract was entered into, who remember tlie observations which h ive from time to time 
 been made by hon. members who sustained that contract, it conies as a very unpleas- 
 ing surprise. Why, sir, were we not told that the country felt uneasy as to the un- 
 known quantity of possible demands in reference to C. F, R ? Why, Were we not told 
 that the country was decided, and that Parliament, expressing the views of the country, 
 was determined that once for all it should be definitely settled ? What was the limit of our ob- 
 ligations? Why, were we not told that it was Ijetter for us to know how much it was. even 
 though it was a large sum, and make up our minds to it and have an end of the matter ? Why, 
 it was only a session or two ago, that an hon. men^ber, I think the hon member for West 
 Toronto (Mr. Beaty;, recurring to the subject, then perhaps somewhat stale, said that the people 
 were satisfied because they felt such ease at knowing the limit of their obligd^cions. There it 
 was, and we buckled ourselves to the work, and braced our shoulders to the enterprise, knowing 
 the price of the Government sections, and the amount of cash subsidy, and knowing perfectly 
 well that we should not be called upon for any more. Well, two or three years have elapsed 
 since the contract was made, and we are called upon to advance twenty-two millions and a half, 
 a sum very nearly equal to the original cash subsidy, and to pledge our credit for nearly seven 
 millions and a half more, so that the element of finality which was so praised as one of the 
 things which was to cause the contract to be favoural)ly received by the House and the country 
 has pretty v,-ell vanished from the scene to-night. Were we not also told time and again of the 
 enormous resources, the wealth, and the credit of the Syndicate with whom the contrpct was 
 made ; that this was a consideration of the utmost consequence — that it was so important as to 
 enlist not merely Canadians, but capitalists in other countries, in the States, in England, in France, 
 with such ample means that they were themselves able to build a C. P. R ? Were we not told time 
 and again that we were insured in the successful completion of the contract by the enormous 
 recourses of the credit, and of the capital, and of the confidence which had clustered round the 
 corporators to whom the hon. gentleman opposite entrusted the work. It is not so long ago that 
 this statement was very emphatically repeated. It was not merely at the time of the passage 
 of the contract that it did good service, it was nf>t merely in that House which I always thought, 
 "and I say it to its credit," was somewhat reluctant to accept the contract that this statement 
 was made, but at a later period, some time in November, 1881. The hon. leader of the Govern- 
 ment made this statement at Toronto : — 
 
 " What have we done ? We went to England. We opened negotiations with the capitalists 
 of France, England, and New York. We did not want to have only one string to our bow — we 
 made a selection from these three great markets of capital, and we have have formed the strong- 
 est and most enterprising body of capitalists that ever built a railroad from the beginning of 
 railroads to the present time." 
 
 Sir JOHN MACDONALD— Hear, hear. 
 
 A SLBEPISG PARTNER. 
 
 Mr. BLAKE — Yes, Mr. Speaker, because it appears they have a sleeping partner, the 
 Dominion of Canada. 
 
 '* The whole country sees it, the whole countiy knows it. At this moment they are laying 
 down a mile and a-half of railway every day, and should no unexpected accident or misfortune 
 happen they intend and believe that they will have the whole railway constructed from Red 
 River to tlTe foot of the Rocky Mountains before tlie snows of 1882 fall." 
 
 Well, they did not quite do that. They did not quite carry out the scheme which the hon. 
 gentleman was sanguine enough to hope they would carry out, namely, complete the railway to 
 the foot of the Rocky Mouutains bv the end of 1882, 
 
 Sir JOHN MACDONALD— Very nearly. 
 
 Mr. BLA.KE — Well, they did not do it, and you may c(mceive how gigantic were their 
 plans when that was their hope, although what they did do ib set forth as wfioUy unprecedented. 
 Now, it seems that 
 
 THIS OREAT TOMBINATION 
 
 of capital, the strongest that was ever formed, comprising the strength of Canada, of the United 
 States, of England, and of France — yes, the strongest that ever was formed from tiie beginning 
 of the world to this day — comes to ask us for some m.ore money in order that they may the 
 earlier, it is true, but in order that they may implement the work wliich they contracted to 
 perform ; and it seems tlvat the boasts ,vhich for the last year or two have been resounding con- 
 tinuously in our ears, the statement which ^^ have heard repeated time and again that the 
 Government and Parliaijient which passed the contract were vindicated triumpliantly because of 
 the wonderful display of capital, credit, and energy on the part of the corporators, beaiuse they 
 ^ere going so fast and far, becausi; they were going tc coaaplete the railway at such an early date* 
 
is a statement which is to be taken with chis rather large grain of allowance that they will do it 
 if we will pay them for it. Now, there is another point which was much discussed at the time 
 of the contract, and in respect to wh>ch also this might vindicate our position. We heard the 
 hon. gentleman point out, with an appreciation, some three years late, of what the interests of 
 the country rpo^jire, that it was important in the interests of Canada that there should be 
 a new allocatifm of the subsidies for the construction of the road. It luis now dawned uj)on his 
 mind and experience that it is positively dangerous to Canada that the road should be i)aid for 
 at a mileage rate. He says that in the interest of Can ad t — not at all in the interijst of the 
 Company ; oh, no I — it is important that we should take care that the Company does not get an 
 excessive subsidy xor the lighter work that remains to be done, because if that should happen when 
 the} come to the heavy 95 miles of which he spoke, where would be the money to complete it 
 with ? He forgot that they were already at the 95 miles, that they were stopped there, and that 
 the difl&Gulty was not that in the present condition of the work the money would be gone in the 
 ■ lighter work before they came to the heavy, but that they were at the heavy work, and they 
 wanted to get part of the money allocated to the light work which is to come after. But, as 
 I said, it is about 
 
 THREE YEABS TOO LATE, 
 
 and I am sorry we could not earlier persuade the hon. gentleman of the soundness of the views 
 he takes to-night. Vi'e argued that the subsidy should b3^di3tributed in proportion to the whole 
 cost of the work. We declared that it was important in ttie interest of Canada that, if certain 
 lauds and certain moneys were to be paid to this Company for the work, they should get it in 
 proportion as the total amount of the subsidy was to the value of the work to be done at a 
 particular point , We pointed out that the hon. gentleman was applying a wrong principle, 
 which gave a wholly disproportionate subsidy to the early and light work, and that thus the 
 resources which were to be retained for the heavy work would be gone before the heavy work 
 was reached, and we begged that the principle of pro rata distribution should be applied at a 
 , time when it might have been usefully applied. But the hon. gentleman could not be persuaded 
 by us. Now that the Company have conie to the heavy work they want the position reversed. 
 They have had all the benefit practically of the other position, of the principle of mileage rates 
 assigned to the difterert sections, and having come to the heavy work it is now proposed that 
 another principle shall apply which shall help them out of that difficulty. I have said the 
 resources wliich were due to the end of the work are gone, and it is necessary to say that a full 
 enquiry as to how the resources have disappeared is the prime duty of this House before even 
 approaching the consideict on of the question whether it will give more. But to-day, when it is 
 indicated that to cany on the plans into which the Company and the Government have entered 
 it is necessary that this enormous advance should be made, it becomes obviously an imperative 
 duty on our part to ascertain really how the account for the past stands, how it happens that so 
 large a sum has been expended in the work which has been done. Now, roughly calculating 
 what the hon. gentleman's figures gave, I apprehend that independent of equipment, and I pre- 
 sume without ballasting the road in the North- West, the main line must have cost something 
 close uj>on ^i 8,000 a mile, and I have never been able to see how such a figure could be justified 
 as the fair cost of constructing that line through that countiy. If you look at the price which 
 the hon. gentleman has allowed for the branch work in the North- West you will find a very 
 different statement as to the mileage cj^st there. I said the other day, and I repeat now, that a 
 large portion of this expense is probably due to speed. You cannot build a railway at the rate 
 at which it has been built without paying more for its construction than you would if it were 
 built at the ordinary speed, or at h speed not so extraordinary as to be called absolutely unpre- 
 cedented. But there is another question — 
 
 HOW HAS IT BEEN BUILT ? 
 
 I have called for information upon that subject ; the law called for it. The Consolidated 
 Railway Act made it the duty of this Company to return to the Miniiiter of Railways in each 
 year, on the 30th of June, the contracts which had been made for the construction of the rail- 
 way. That law was violated by this Company. Parliament was informed of that violation. I 
 asked repeatedly for the contriwts. Eventually I moved for one contract and the 
 instrument of association of the North American Contracting Co., but Parliament 
 declined to have the law enforced and would not order the production of those 
 papers Parliament preferred to be kept in ignorance as to these things which the law 
 had said should be disclosed. But it would seem that Parliament has recanted that 
 view within the last few days, having unanimf)U ily passed an address c.tlling for the pro- 
 duction of these contracts, and representing that it was of high public con8e(jueiice that this law 
 should be obeyetl and those contracts should be produced. Still the law is not obeyed ; still the 
 contracts are not pntduced, ahd it is only in the speech of the Minister, when he invites the 
 House to go into Committee of the Whole, to consider the propositions, tliat we are let to a 
 small extent into the secret of the character of the arrangement for the ctmstruction of the line. 
 And tha hon. gentleman now informs us tliat the work has l>een done by a contracting or con- 
 atructioii company in which were many members of the Syndicate, so that the corpoi'utioii has 
 
been contracting with its own members for construction. He tells us that the arrangement has 
 now terminated ; that it terminated when the supplies ended, when they could no longer find 
 money to keep the construction going, and among the sums embraced in the total of ^8,700,000 
 which the President of the Company claims credit for as having provided for the construction of 
 the road, is an adequate balance against the Construction Company and in favour of the 
 Syndicate of $600,000, so that although they stopped operations because there was no money to 
 pay them with they did not do work within $(K)0,000of the money in their hands, paid in advance. 
 And it seems these were the arrangements, so far as light has already been thrown upon them, 
 between the Company and its Construction Company. Now, sir, I do not think I do injustice to 
 the Company and its corporators in assuming, since the hon. gentleman has said that many 
 members of the Company were corporators in this company, that several directors of this 
 Company were corporators in it. I may say I have no knowledge on the subject. I have moved 
 repeatedly, and I have been unablfe to obtain the information as yet. The hon. gentleman 
 indicates that he will lay it on the table. When he will decide what he will do — 
 
 Sir CHARLES TUPPER— To-morrow I hope. 
 
 Mr. BLAKE — To-morrow ; then we will not decide to night, I hope. Whether I do in- 
 justice or not I shall assume, in the absence of the information, that several directors of the 
 Company are also members of the Construction Company. Now what relation does a director of 
 the Company who contracts with the Company, whether as a member of the Construction Company 
 or not, occupy ? As a director of the Company he is bound to consider whether the contract is a 
 favourable one for the Company or not ; as a member of the Construction Company he is bound 
 to consider whether the contract is a favourable contract to the Construction Company or not. 
 It is a somewhat 
 
 DIFFICDLT TASK 
 
 which he undertakes, to decide to hold the balance just, — to do no injustice to either the Rail- 
 way Company or to the Construction Company. Parliament has thought that men ought not to 
 be placed in such an invidious position, and for fear that in the conflict between interest and duty 
 interest might prevail over duty, it has forbidden such arrangements. If, therefore, it be the 
 case that this Construction Company is composed practically to a large extent, to any extent, of 
 directors of the railway company which made the contract, I contend that they have violated not 
 merely the spirit, but also the letter of the law, and that we may look with not unratural 
 suspicion upon any such contract. The law also provides that no contracts for construction or 
 maintenance, etc., shall be entered into until after tenders havfe been inserted in advertisem-ints 
 given at least four weeks in some newspaper published at some pjace near wljere the work is 
 required to be done. I do not know how many members saw the advertisement published by 
 the Pacific Railway Company calling for tenders. I know I was never able to hear of any invita- 
 tion to the general public to tender for the works of the Canadian Pacific Railway Company, and 
 I am not surprised if the works constructed by the Railway Company have been constructed by 
 a Construction Compan}'^ composed largely of directors of the Corporation. Now, we pointed 
 out when the contract was being discussed in Parliament the possibility of arrangements of this 
 description, the possibility of a larger price being thus obtained for the work than the work 
 really cost, and I say again that we are entitled to a 
 
 FULL AND SEARCHING ENQUIRY 
 
 into this matter, as a preliminary to considering what further and more intimate relations we 
 shall enter into with this Corporation. It may be, although the Construction Company hd,s 
 been dissolved, or has ceased its operations, that if these fountains of Canadian liberality are 
 opened once again, inasmuch as the hon. gentleman said it had stopped because the supplies 
 had stopped, when the supplies are re-opened the Company may be re-organized. We may find 
 that just so long as our liberality lasts the Construction Company w^ill be ready to spend the 
 money which we liberally providt. But I don't think that will be satisfactory to the people of 
 the couutjy, and I maintani th.it a full, searching, and riyjid enquiry should proceed if this 
 House is to give any recognition of any demands made by ^he Company or any suggestions by 
 the Government that we should further involve ourselves vnth it. Now, Sir, the hon. gentle- 
 man has said that it is demons.trated that the public fun<l3 have been used, have been used 
 altogether, and far more than the public funds, on the contracted line, and he seems to think 
 that it is wholly unnecessary to enter into many considerations which have been urged as 
 pertinent to the present position of the Company m view oi' the figures which he laid before us. 
 I pointed out in the past, I pointed out tjie other day, and I pointed out to-night, that there ia 
 a charge and a large and somawhat important question of cash in this matter ; that there were 
 two t 
 
 IMPORTANT QUE8TI0NH 
 
 besides — that there was the question of credit, and there was the question of responsibility 
 involved in the various other enterprises to which the hon, gentleman has not made allusion. 
 There are also the questior.s of the energy and time and labour involved in connection with 
 those other enterprises, ard there was the grave question of policy involved in embarking in 
 
enterprises not connected with the original enterprise at all. All their ample funds and 
 corporate powers have been inadequate to enable them to engage in these enterprises, and 
 having engaged in them, as companies often do in matters beyond their corporate powers, they 
 were obliged to come here, I think it was last year, for legislation to enable them to engage 
 formally and ostensibly in other enterprises. That legislation, it seems, has not been found 
 adequate to the occasion, for we have before us at this present moment another bill to give 
 them further powers, to go on further in this direction of enterprises not contemplated by the 
 corporators in the original charter. You cannot conclude by any such arrangement of figures, 
 even if they were accurate, and I think I shall show that they are not, that every*^hing we were 
 entitled to expect from this Company has been accomplished. We know the difficulties in 
 which they find themselves are not due to something done by them. It has been my fortune 
 upon more than one occasion to point, since this contract was let, what the position of the 
 Company was under it, according to the statements of the Government, according to the state- 
 ments of the Railway Company itself, and as I conceived them. I have pointed out that they 
 had a magnificent contract, that they stood in a wonderfully good position ; but I also pointed 
 out that the enterprise was of such magnitude as to require the undivided energy of those con- 
 cerned in it, and that it required great prudence, wisdom, and capacity in the conduct of it, 
 else those elements of fortune which it unquestionably possessed, might not avail to preyent 
 disastrous results ; and i pointed out before where I thought dangers existed in the conduct of 
 that corporation, and to some of these in a vague way the hon. gentleman alluded this evening. 
 We contended against wide powers with reference to the extension of branches. I quite agree 
 with the hon. gentleman that more railways than one in the North- West Territory are 
 necessary. I told him so when he was proposing the C. P. R. measures. I agree with him, 
 though I was a little surprised to hear him say it, that some of the branch lines this Company 
 has built are of more importance than many sections of the main trunk line. How he recon- 
 ciles that with his general notion as to the trxmk line I do not know. But I contended with 
 reference to the extension of the C. P. R. , and with reference to its branches, that it was 
 important that we should keep our control, and that we should decide for ourselves whether 
 and where such extensions and such branches might be authorized. I felt that otherwise the 
 funds which prudence might requite to be devoted to the construction of the contracted line 
 might be devoted to other purposes, and I felt that each time the Canada Pacific Railway, 
 while this contract was yet incomplete, came to Parliament to obtain power to acquire or build 
 or extend its branches, it would be pertinent to enquire how are you getting on with your 
 
 MAIN CONTRACT 1 
 
 How is the money holding out 1 Will the main contract be fulfilled ? All that was caat to the 
 winds, and Parliament decided at the instance of hon. gentleman to give practically unlimited 
 power with reference to extension and branches, not absolutely an unlimited power to build in 
 all directions because it did not include power to run up through the eastern part of Ontario, as 
 has since been done, but short of that an unlimited power. Now, in so far as the hon. gentle- 
 ■ man discussed what has been done, he says it is all right with reference to the route. However, 
 the hon.- gentleman has not touched upon that subject to-night, although he announced that 
 he was about to give a general statement as to the progress of the work. He did not think to 
 embarass diacussion upon this subject. He contended that too wide powers were given as to 
 route, that the road would probably be deflected too far to the south for national interests. 
 Those interests of the Company have prevailed, and the road has been run very far to the south. 
 A. a very early point the Company decided upon running the route by Calgary, which meant 
 running it ina Kicking Hoi^se Pass, or some route in that neighborhood, and they decided it 
 before it was found that any pass was feasible, and we have not yet had laid before us such 
 itiformation as goes to show even now that the pass is within the contract feasible. On the 
 contrary, the information before us indicates that no road can be constructed by that route 
 within the meaning of the C. P. R. contract ; that the minimum grades that can be obtained far 
 ex-^eed those maximum grades which are accejited as the standard, viz., those of the Union 
 Pacific. Without an Act of Parliament it is not within the power of the executive to sanction 
 the passing of the road by a route which does not give the grades which were prescribed in the 
 contract. Much trouble has arisen alieady, and more trouble will arise^ from the use of 
 another power to which we objected, namely, the power of issuing stock for less than par. We 
 pointed out that the opportunities for the creation of speculative interests, for arrangements 
 disadvantageous to the country in many particulars, might result from the exercise of such 
 power, and that ultimately the road would be loaded with nominal capital far in excess of the 
 money required for its construction, and we find that that is so. I do not believe that 
 Ministers themselves had the slightest idea of the extent to which that power would be used. 
 Twenty-five nrillion dollars was named as the maximum capital, and all our calculations and 
 discussions were prejudged upOn the idea that the nominal capital might represent a much 
 smaller sum in cash. Brt availing themselves of the general authority in the Railway Act, 
 which was ujade applicable to them under the hon. gentleman's provisions, they not long after 
 incorporation increased their 
 
NOMINAL CAPITAL 
 
 to $100,000,000. Now, no one pretended that they wanted that sum of money ; it waa n 
 order to float the stock at something about 50 that Uiis capital was created. Wei!, one of the 
 incidental difficulties arising upon that was much discussed for some time. The Hon. Minister 
 of Railways held strongly that they were entitled to pay 10 per cent, upon the whale nominal 
 amf)unt of capital, but ultimately he receded from "that position, and the threatened split in the 
 Cabinet on that subj^t was healed, and the hon. gentleman acknowledged that it was what the 
 road really cost and not the nominal amount of capital that should govern so far as we were con- 
 cerned. But in the meantime a difficulty had grown out of the matter because the Company 
 announced that they were about to agree to pay interest on their capital during construction at 
 a rate of five per cent. The law says that interest may be paid during construction at a rate not 
 exceeding six per cent, on the amount actually i)aid up ; and the stock being i.s8ued as paid up 
 stock the Company assumed itself to be entitled to pay interest at a rate of five per cent, upon the 
 amount paid up. I maintained before, and I maintain now, that tliat is an illegal eperation ; 
 that the Railway Act, which is the only authority for their taking the capital of the Company 
 and applying it to the payment of interest during construction, expressly limits that somewhat 
 dangerous power to a six per cent, dividend upon the amount actually paid up. Another difficulty 
 growing out of this was the uncertainty as to what the real capital was. The country was deci- 
 dedly interested in that, because the obligation which we had entered into as to diminution of the 
 tolls was dependent upon that, and yet upon that — until to night — we have been utterly unable 
 to obtain any information, and the information which we have obtained to-night is very general, 
 and not at all satisfactory. Suggestions were made at an early period that the stock was being 
 emitted at 60. I afterwards saw a statement that 
 
 THE ISSUE PRICE WAS REALLY FIFTY 
 
 to the syndicate which undertook to issue the $30,000,000. I called the attention of the Minis- 
 ter of Railways to that statement, and he said he had never hf ard anything of the kind, and in- 
 dicated his own want of credence in the reports, but to night .we learn for the first time that 
 $55,000,000 of the stock has realized $25,358,000 only, or if you are to assume that 
 none has been distributed and that none has been issued at a greater discount 
 than the other part, the stock has been emitted at 46 net to the company as 
 near a^. may be. Ought we not to know to what extent the Syndicate has increased its 
 nominal holding of stock ? They were to pay $5,000,000 in cash, the original capital. I have no 
 doubt they did ^o, but what does that now represent in the stock of the Company ! No doubt it 
 represents much more than $6,000,000. How much more? What did they take before they 
 emitted the thirty millions ? What arrangen.ents were made for the disposition of the twenty- 
 five millions of s'ock, only originally authorized capital? At what rate was the stock taken? 
 Was the stock in fact taken for the purchase of some part of the Canada Central Railway ? All 
 these questions are of deep interest to us, because we want to know what the Company has really 
 obtained in cash for its stock, which is the measure of our liabilities, at least ff the limitation as • 
 to the realization of tolls, and we want to know it further because it bears upon the considera- 
 tions which are addressed to us in inviting us to sanction thi« loan. I have seen some organs of 
 public opinion so ill-infoimed as to state with respect to this proposition that the necessity of 
 doing something for the Company was made manifest because actually its stock was selling at 55 
 — only 55 cents for the dollar — and when the stock has fallen so low it w^as quite clear that we 
 never could allow the poor fellows to issue any more at such a rate as that. The Company 
 emitted a nominal amount of stock far beyond what was required, and issued at a discount. It 
 gave them certain collateral advantages in insuring a large dividend during construction, and 
 gave good opportunities for a rise, because it is easier to get stock up from 50 towards par than 
 if it was issued at par to secure prices considerably above. I have shown the House that the 
 hon. gentleman's statement is that ^ 
 
 THE STOCK OF THE COMPANY 
 
 has been emitted at an average price net to the Company of 46, and upon this they have agreed 
 to pay interest at $5 on the $100, which means a rate of almost 11 per cent, per annum, payable 
 half yeai'ly. These poor people whom you are asked to assist, these people who want to push 
 this railway on for you so fast, took sufficient care of themselves to arrange at an early day that 
 on these sums which they had put into the enterprise they should get about 11 per cent, while 
 construction was going on. And the stock is to le sold, and subsidies are to be obtained, and 
 advances are to be gathered in, and land grant bonds are to be realized, in order that during con- 
 struction 11 per cent, interest may be paid to the Company. (Cheers.) Presently they decided 
 that they would finish construction very quickly, and then they decided that the)^ would have a 
 guarantee as to interest. And they announce<l an arrangement w-hereby, even after construction,. 
 the bulk of this dWidend is to be for a long period of years actually guaranteed. It must be 
 evident that these things require to be looked into if we are to do that which the hon. gentleman 
 not inaptly described in the instructions he gave to his Engineer and Commissioner of Inland 
 Revenue : If we are going to enter into either a large transaction of mortgage or partnership 
 with the firm, we ought to see how it handled its business. I shall show presently that our 
 
poiiition is not to be quite so advantriget^ua i\A that of a partnership. We may be exposed to 
 rink, but it in not likely we .shall have any of the protit?. We objected to a monopoly, and I 
 thinn. events have Tinuicateft thit it has neon a very serions oi/structton to tiie settlemetit oi the 
 North- We.^t. We objected very strongly to whit we l)ellevcd wai a vvaolly " 
 
 UNCONSTITDTIONAL EXTENSION 
 
 in the practice of the monopoly which the hon. gentleman inaugurated — I use the phrase advis- 
 edly — when he advised the disallowance of certain railway (barters upon the principles upon 
 which he did it. He says, "No." He is very fond of sheltering himself under the segia uf those 
 whose past, as a general rule, he busies himself in reviling and despising ; but upon this occasion 
 he is entirely wrong in saying that the i)olicy of the preceding Government furnishes authority 
 for liis policy. (Hear, hear.) There are two reasons against it. The first is that what was done 
 at that time — though it was not diaallowancej but even supposing it equivalent to disallowance — 
 was done at a period when neither the right ot the 0. P. R., nor the system of construction — 
 whether it should be by a Government or a company — were settled, and 1 maintaiji that it is an 
 entirely different thitig to say you will control the railways of the country through which you 
 have a Government railway worked by the Government, and to say y-u will control them when 
 you have handed that railway over to a private corporation. As long as it is a Government 
 railway it is the people's railway, and the people cannot have an objectionable monopoly in its 
 own concerns. Look at this Dominion, take two ends of it, cuttiig off for a moment British 
 Columbia — and I hope no hon. gentleman will suppose I mean permanently, but just for an 
 instant — take the North- West at one end aijd the Maritime Provinces at the other. Take a 
 Government railway extending from Q\iebec to the Maritime Provinces, and a private corpora- 
 tion extending through the North- West, and ask upon what system the services are regulated 
 respectively, and tell us, if you can without a smile, that you will put both in the same 
 category. Again, such a policy was a revocable policy, it might be modilied and changed. 
 What hon. gentlemen did was as far as they could in the contract to render it impossible that 
 competition should be obtained, and what they could not do in the contract they did by violating 
 the spirit and executing a letter of law in dilljlowing all other railway charters in Manitoba. 
 The contract itself says that in the North- West Territory, in those parts in which the Dominion 
 Government had jurisdiction, no railway running in any such direction and within such limits 
 shall be chartered, for the next twenty years, and It says that in any new Province hereafter 
 erected this 
 
 PROHIBITION* SHALL BE CONTINUED, ' 
 
 obviously meaning that in the existing Provinces no such prohibition could be made or was in- 
 tended. To prevent that the contract contained the extraordinary provision that a new Province, 
 as yet unborn, should be further hampered and restricted by a provision prohibiting it from ex- 
 ercising its constitutional rights, and that in the face of the statement made by the Hon. First 
 Minister in the debate often adverted to that " We cannot check Ontario and Manitoba " he has 
 been checking Manitoba ever since. The Hon. ilinister of Railways says he is glad to be aole to 
 inform us to-night — I suppose he hopes to gild the pill for the North- West as in another way 
 he attempted to gild the pill for numerous persons to the eastward, but I think the gilding was 
 put on pretty badly ; I think I saw the pill show itself in several places, and am'surprised that 
 the hon. gentleman with all his old experience was not able to accomplish the task more cleverly 
 than he did — he gilds the pill by saying that as soon as the railway is actually built they will be 
 able to review the qrestion, and they really think they will be able to stop oppressing Manitoba 
 and violating the constitution at some period two or three years hence. Why ? He is kind 
 enough to tell us why. Because the Company think they will be able to do it safely. They 
 think by that time, with their power and their privilege and their exemption from taxation and 
 laws, they will have stretched over the whole of that country, they will have it so entirely in 
 their grip that it is really of no consiquence what power you give the poor people. The hon. 
 gentleman proposes that the horse shall die and then he will put a feed of hay before him. 
 (Cheers. ) Argument has been addressed to us to show that 
 
 THE TRAFFIC RATES 
 
 on the C. P. R. were extremely moderate, that they were very reasonable, that in a new country 
 like this it costs a great deal, as no doubt it does, to run a railway ; but these arguments are all 
 lacking in this, that those who use them forget that it was an element of this contract that the 
 road would be run at unremunerative rates for a long time after it was opened, and that in con- 
 sideration of that circumstance large moneys and lands were added to the public aid that was to 
 be given to the owners of it. Well, having paid them in advance for unremunerative running, 
 it is now argued that the rates should be such as to remunerate them, and therefore they 
 are to be paid double. (Hear, hear. ) The people of the North- West are to pay these double 
 rates ; because, if the statements of the hon. gentleman are to be credited, the North- West is to 
 pay the whole contract price out of its lands, so that it pays first in advance under contract for 
 cheap rates, and then pays dear rates after the contract has been accomplished. Now, I have 
 been unable to observe that the speed with which this enterprise has been constructed has con- 
 duced to its success ; hasty decisions have been reached, and these have indicated from time to 
 
8 
 
 time an absence of that careful consideration and that prudence of action which were essential to 
 make HiIb ent^^rprise a saccesB. Take, for example, what was called the Sault Ste. Marie branch. 
 At a very early date in the history of the undertaking other companies were thinking ot striking 
 for the Bduit, but the great Canada Pacific announced that it was going to build a branch to that 
 point. A little while later the hon. gjntleman received a communication to the effect that they 
 had altered their view?. They decided to make the main line by Sault Ste. Marie, and they 
 asked that their plan of branch might be made the plan of the main line so far, and they announced 
 that their engineers had gone over the route and found it practicable, and it was a much better 
 thing, although more expensive, much better than the former route, and the hon. Minister 
 acceded with the reservation advised by his engineers, that xmtil they had established the possi- 
 bility of connecting Port Arthur with the Sault the subsidy should be retained. The hon. 
 gentleman, in announcing thi?, spoke at length and told what a great thing it was for the country, 
 for Ontario in particular, that it was now arranged. Not long after 
 
 THE WHOLE COLLAPSED. 
 
 There is no letter brought down — I know not wh3ther any such exists — explaining it, but with- 
 out any explanation given to Parliament they determine to go back to the old route, and then 
 they determine to bui.d a branch to Algoma Mills, thus shewing no less than three changes of 
 plan and indicating that this extreme haste of execution is very apt to lead to hasty and, very 
 possibly, imprudent and erroneous decisions ; and we were told that it was of vast conse- 
 quence that the Algoma Mills branch and the connecting link to the eastward of it should be 
 early built ; that the Canada Pacific Railway w -uld carry immigrants by that route, a splendid 
 route — so many mile? from Montreal to Algoeaa Mills, then twenty-four hours' voyage from 
 Algoma Mills to Port Arthur, and so on. But the newspapers tell us, and I believe in this case 
 they tell the truth, that steamers are to sail from Owen Sound for Port Arthur this year ; that 
 immigrants are to be carried by the Ontario and Quebec and Toronto, Grey and Bruce to Owen 
 Sound. If the branch to Algoma Mills is not to be the immigrant route, what was the object of 
 hurrying that branch and of expending close upon two millions of dollars, which have been 
 expended in its speedy construction ? If you ^d that the bulk of your immigration next year 
 goes not by Algoma Mills at all, but by Owen fsound, will you not find that once again speed 
 has resulted in premature expenditure, which in view of possible difficulties should have been 
 deferred? (Cheers.) Then the decision with reference to the southern route to which 1 have 
 adverted was, I greatly fear, a mistake. I have never said anything upon this subject in public 
 before, but I have collected such information as I could ask of everybody who passed over the 
 western part of the railway whom I met, and I am obliged to say that the opinion unanimously 
 entertained — I never was able to elicit, any contrary opinion from any gentleman I approached 
 — was that the appearance of the country along that southern route west of Moose Jaw to the 
 foot of the hills of the Rocky Mountains was far inferior to the territory that would have been 
 passed through by the central route, and considerable apprehensions were entertained as to the 
 results to the Company of the 
 
 • INFERIORITY OF THAT LAND 
 
 in quality and the dryness of the climate. Now, with reference to these Eastern operations, to 
 most of which the hon. gentleman has not particularly alluded, I think they fall into different 
 categories. There can be no doubt that there was reason in the view that the C. P. R. should 
 seek to extend its direct control to Montreal. There can also be no doubt that the contract itself 
 in terms indicated the probability of such extension. However, it is one thing to say that that 
 intention was a sound one, and it is another thing to say that the means adopted were prudent. 
 I have not been able to ascertain from the information before us what the cost of the railways 
 which the Company has acquired in the east is. It is obvious that the purchase included 
 numerous branches not very material to the main line. The hon. gentleman has not on this 
 occasion alhuled to the purchase of the . aurentian Railway. As I shewed last session, from 
 such information as I could obtain, it was purchased from Mr. Stnecal at a price which realized 
 to him enormous profit, and which was far in excess of the mercantile value of the railway. I* 
 do not believe it has any value to the Canada Pacific Railway at all. When we are asked to 
 lend the Company thirty millions more that transaction ought to be explained. I believe it 
 involved a throwing away by the Company of something like $400,000. So much for the 
 moment with reference to that which is ordinarily put together under the heading of Callander 
 to Montreal, but with reference to other roads not much information is given. It is true that 
 with trifling exceptions the direct fvmds of the C. P. R. Company have not been expended in 
 
 THE CREDIT VALLEY ENTERPRISE, 
 
 SO far as is shown. It now appears that $484,000 of the Company's money has been spent in the 
 Credit Valley bonds, which are at pi'e5,ent held by the Government as security. When we are 
 called upon to consider what the obligations of that Company are to which we are to lend money, 
 I maintain that the hon. Minister has not discharged his full duty when he has failed to tell us 
 how the Company stands in relation to the Credit Valley^ Ontario and Quebec, and that system. 
 (Hear, hear.) So far as the general souices of infoimation go, and Act of Parliament enable us 
 
to judge, the C. P. It. Company is becoming the lessee of those linen on terms which obliged it 
 to guarantee live per cent, upon the bonds which were outstanding. The Credit Valley bonds 
 which were outstanding were sold, I fancy, some where from .30 to 35 cents on the 
 dollar. They have been made worth par— if the C. P. R. guarantee will make them 
 worth par. Thus the C. P. R. Company has agreed in effect that those roads shall eain live per 
 cent, on their whole cost, and legislation h belore ua this session, as well as I could understand 
 the Clerk at the table who was reading the petition, for power for this Company to extend its 
 railway through the western peninsula of Ontario to the border, and other proceedings are being 
 taken to enlarge the bonding system of the Credit Valley. We have no information at all before 
 us as to what the real 
 
 EXTENT OF THE OBLIGATIONS 
 
 of the C. P. R. are with reference to those enterprises. I need hardly say that we may fully 
 e::pect the completion of the operations through Ontario of the C. P. R. Company to result in a 
 temporary advantage, at any rate to a considerable portion of the community. I believe there will 
 be very severe competition. The Ontario and Quebec system will be forced to run at rates under 
 the circumstances which will render it extremely ditficult for the C. P. R, out of its earnings to 
 pay five per cent, upon the complete cost of that system. If so, the general assets and capital of 
 the Company will be responsible for the deficiency. It is, I presume, responsible for the 
 deficiency to-day in the case of the Credit Valley Company. Then there is an arrangement made 
 with the Toronto, Grey and Bruce Railway Company, under which that railway is leased by the 
 C P. R. Nothing has been said about that. We have not heard what the extent of this obli- 
 gation is. We know not whether the probable traffic on that road will pay expenses. If not, it 
 becomes an onerous obligation to the extent of the deficiency. Then there was the Atlantic and 
 North- Western Railway, in which the hon. gentleman said a sum, 1 have forgotten exactly what 
 it was — something under two hundred thousand dollars — had been expended by the Canadian 
 Pacific Railway Compary in acquiring a charter and so forth. 
 
 Sir CHARLES TUPPER— And building a read. 
 
 Mr. BLAKE — How much was built } 
 
 Sir CHARLES TUPPER— Round the Mountain at Montreal. 
 
 Mr. BLAKE — I don't know how many miles were built. It would be interesting to know 
 
 HOW MUCH WAS PAID FOR THE CHARTER. 
 
 We pass so many charters. We pass them with so much freedom, except for Manitoba. (Cheers 
 and laughter.) What is the worth of a commodity of that kind it would be interesting to know. 
 I suppose they would have had no difficulty in getting such a charter as that of the Atlantic and 
 North-Western if they had wished. But some one else got it. How much did the C. P. R. 
 Company get it for, and for what purpose I Doubtless in order to secure connection with the 
 South-Eastern. There the hon. gentleman found himself treading on tender ground. He said 
 it was very important for the Canadian Pacific tu acquire an interest in the South-Eastern. From 
 his description of the road it appeared to me to run almost everywiiere — (hear, hear) — it seems 
 to furnish the most direct means of connecting with Boston, Portland, New York, Halifax, St. 
 John, St. Andrews, and Louisburg. (Cheers and laughter.) I don't know whether I got them 
 all, but it seems that the Montreal, Portland, and Boston Railway was the one thing needful, or 
 one of the things needful, to get to these difl'erent places. It seems also that they have to build 
 a railway to Quebec. The hon. gentltman says they will build one immediately. I hope he will 
 give his bail for that. It seemed to me that the South-Eastern was of an extraordinary character, 
 and from the capacities it possesses I am not surprised the Canadian Pacific gave sixteen or 
 seventeen hundred thousand dollars for it. It is a valuable thing, and they seem to have got it 
 cheap. (Laughter.) The hon. gentleman said it was important that we should have the Canada 
 Pacific Ilailway run to a winter Port in Canada ; he said also that the company were of the same 
 opinion. In point of fact, I do not know but that they have been expressing their opinion on 
 that point to some members of this House not very long ago. (Hear, h«ar.) In order to do this 
 it was necessary they should secure the Montreal, Portland, and Boston Railway. It was 
 probably with 
 
 THE SAME ADMIRABLE INTENTIONS 
 
 they were engaged a little while ago in the city of Portland, negotiating with the municipal 
 authorities of that city for the purpose of acquiring the Portland and Ogdensburg Railway, which 
 I have no doubt possesses the same admirable faculty of being cap^le of being used to give con- 
 nection with other Maritime Province ports. (Cheers and laughter.) The. hon. gentleman 
 explained how they were to reach these ports, except St. John, which he left out or almost left 
 out ; and I observed when he referred to Halifax how the jaw of the Finance Minister fell, as if 
 he were saying toiiimself, " This will never do ; he is making an awful mess of it. He is making 
 too much of Halifax. He should have put all the ports on an equality. He should have men- 
 tioned them all several times, so that each might once be mentioned first." (Laughter.) The 
 hon. gentleman also told the people of Quebec they were to have a third railway — on which bank 
 of the St. Lawrence, or whether in the middle of it, I do not know (renewed laughter) — to reach 
 
10 
 
 their summer port. Having satisfied the different members, he went on to say that the Canada 
 Pacific Railway would have failed in its duty to Canada if it had stopped there. It ought to 
 have gone further ; and he here pointed out that admirable faculty which the South-Eastem 
 possesses. It would not only reach these ports, but 
 
 THE UNITED STATES PORTS AS WELL. 
 
 He said they must be in/ position to take the commerce from New York port and Boston, and 
 cause it to pass over their great railway. There was once a man who was asked if he would con- 
 tribute towards a bonus to a road to run out of his town, and he said, " Never. I will contribute 
 toward a bonus to a road to run into town, but out of it, never. " (Great laughter.) Does the hon. 
 gentleman suppose that if traffic comes from New York, Portland, and Boston towards the west 
 over the C P. R. , traffic on that road will not go to New York, Portland, and Boston ? Does he 
 suppose his railway will only run one way ? (Renewed laughter.) It may be light. I do not say 
 it is not right. But I say that it would be trifling with the intelligence of the House to suppose 
 this was other than a serious question with reference to the terminal point of the Canada Pacific 
 Railway. And we may as well face it ; we may as well understand distinctly whether it is part 
 of the policy of the Government and the Parliament that resources which the Company possess 
 by virtue of its contract are to be applied, while yet we are engaged in pouring out of the public 
 treasury thirty millions, in creating an Atlantic terminus in the United States for the Canada 
 Pacific Railway, (Cheers.) This was not the purpose of the expenditure. It turned out that 
 the sum of 3^700,000 had been expended in what the hon. gentleman calls — I believe it is the 
 regular technical word of the market — 
 
 " SUSTAINING " THE STOCK 
 
 of the Canada North-West Land Company ; and there are divers other large items mentioned in 
 the honourable gentleman's statement, and not explained. But the hon. gentleman said, *' I 
 feel it my duty in dealing with this matter to procure thorough, sound, good information." He 
 felt it his duty to ascertain how things stood, and so he employed his Engineer and Com- 
 missioner of Inland Revenue do go to Montreal and make an investigation into the accounts of 
 the Company, such as would be suitable in case somebody else was going to advance them a large 
 sum of money upon their property or to become a partner in their business. That order waa 
 issued on the 28th of January, and the report was made — if I understand the hon. gentleman — 
 all right on the 2nd of February, What were they sent down for J To inform the hon. gentle- 
 man's mind ? To let him understand what they were doing ? To give him that information 
 which was necessary for him and his colleagues to arrive at a decision ? Oh, no ! because they 
 had already reached a decision. They reached a decision before the report came. An announce- 
 ment was made. We had that policy declared to us, and therefore it was not for that purpose. 
 But I suspect that it was because it was thought that we would accept this statement of the hon. 
 gentleman's offi.cer and the officer of the Inland Revenue. The ministers under whom they acted 
 concluded that they would 
 
 ENTER INTO THE TARTNERSHIP, 
 
 that they would make the advance, and that Parliament should have such information as would 
 er.able it to agree with the Ministers. The officers make the inquiry in two, or three, or four 
 days into those transactions involving so many millions of money. They make it in reference to 
 a decision already arrived at. Is it not the most surprising thing in the world that these two 
 subordinates of the hon. gentleman did not find that the accounts were all wrong, and that the 
 transaction was one that he would not accept I I am amazed. It was so probable that they 
 should have found differently from what the hon. gentleman had decided, it was so probable they 
 should have differed from the Cabinet with reference to the proposition they were about to 
 submit to Parliament, that it is really extraordinary we should have from them the report we have 
 heard from the hon. gentleman to-night. Now, sir, in that report they tell us that they did not 
 enquire into the distribution of the stock. They tell us that they did not investigate the ex- 
 penditure of the line, and if we are lending money upon the faith of a wise dealing with the 
 stock and of wise expenditures upon the line, they did not investigate things that were extremely 
 material. I have no doubt that these accounts are not falsified. I have no doubt that these 
 accounts are kept as these gentlemen said they were kept. I have no doubt that there has been 
 
 NO FALSIFICATION OR FRAUD 
 
 in the keeping of the act*-ounte of the Canada Pacific Railway Company, but the question is what 
 their transactions have been, whether they have been prudent, whether they have been wise^ 
 what the nature of them has been. These are the questions which were to be investigated ; but 
 the investigators tell us : — "We did not enquire into the distribution of the stock. We did not 
 enquire into the expenditure of the road." Then, sir, everything went well as long as the money 
 held out. As I have said, the Company was lauded by everybody hol'Ung views consonant with 
 those of Ministers, as possessed ot all those capacities and faculties wLich Ministers credited them 
 with. The^ could make no mistake ; they did make no mistake. They were building faster, 
 better and cheaper than any one had ever built before. The road was improving all the time in 
 its prospects. It was becoming easier, and it was found from day to day and from year to year 
 
'11 
 
 that the diflSculties were disappearing, and that traffic prospects were becoming brighter. Every- 
 thing pointed more and more to the extreme excellence of the enterprise. With this joy fal news 
 we were regaled in season and out of season, until the time arrived when another story was told, 
 until the month of October last, when the country was startled by the statement that the Govern- 
 ment had agreed to guarantee the stock of the C. P. R. Company to the extent of three per 
 cent, for ihe period of ten years. In the meantime the fortunate possessors of the contract of 
 this magnificent enterprise had been acting with reference to it just as you would expect them to 
 act, and now suddenly, 
 
 WITHOUT A moment's NOTICE, 
 
 we are told that they are to get a Government guarantee. The first announcement was on the 
 27th of October, and it is said that the Government had guaranteed the interest upon $100,000,000 
 and that they had received $15,000,000 in cash, and that $5,000,000 in cash was to be received on 
 the 1st of Feb., and $4,500,000 in undoubted security. That was the announcement, 
 when the details were given. But in the first instance there was a simple announce- 
 ment that the Government had made the guarantee as stated. Now, sir, 1 have never 
 been able to understand, and the hon. gentleman has not explained to-day, how it could be that 
 if the Company gave cash or the equivalent of cash to nn amount representing the present value 
 of that guarantee, they would be any the better for the operation. It is not in the nature of 
 things that such could be. It is impossible that they could be improved by simply taking a cer- 
 tain portion of their available assets and locking them up at a fair price to represent dividends 
 for ten years: (Hear, hear.) The hon. gentleman tells us that the greatest financiers of Canada, 
 of New York, of London, all agree that this operation would have the effect of increasing 
 the value of the shares of the Canadian Pacific Railway Company. Well, all I can say is that 1 
 should like 
 
 SOME EXPLANATION 
 
 as to how it is possible on the assumption I have named, that the tangible assets of the Company, 
 fairly representing the worth of the guarantee, and which were handed over for the guarantee, 
 could increase it. He might as well tell me that by taking your money out of your own pocket 
 and putting it into your hands you keep increasing your wealth. He might as well tell me that 
 by locking up a portion of your funds in certain investments producing only 4 per cent, you are 
 better off. It is quite true that if that had taken place which was for some time thought to have 
 taken place, if the Government had given a gratuitous guarantee, that might have been an advan- 
 tage ; the then holders of the stock might have realized more for it, because persons might buy more 
 readily when they understood that the Dominion of Canada was good at any rate for 3 per cent, 
 upon the nominal value of the stock for ten years, and that that cost the Company nothing. But 
 if that was the assumption it was speedily to be disturbed. That was apparently the assumption,, 
 for the stock rose. In England a cable was received by Morton, Rose & Co., the agents for the 
 Company, announcing that the Government had guaranteed 3 per cent, on the $100,000,000 for 
 ten years, and announcing also that the earnings of the Company were left free to supplement this 
 dividend. That cable was, no doubt unintentionally, very unfortunately worded, because the 
 impression that it would convey, that it conveyed to me and that it conveyed to others, was first 
 of all that the guarantee was a gratuitous guarantee. I certainly did suppose when 1 read that 
 cable that no part of the earnings of the Company was charged to pay this 3 per cent., but I find 
 when the papers come down that the postal and transport services of the Company 
 
 ARE EXPRESSLY CHARGED 
 
 to pay the dividend, although I am unable to reconcile with my reading of the agreement the 
 statement that this arrangement was such as left the earnings free. However, upon this under- 
 standing the stock rose, and it rose to somewhere about 64 in New York and London. There 
 was a considerable amount of speculation, and I believe the market was what they call " milked," 
 and that a good many people lost a good deal of money in C. P. R. stock. Who forfeitefl has not 
 yet been disclosed. In a few short days it was fourd that the Company had made a mistake. 
 They said in their letter, written about «ight days, I think, after the first proposal, that they did 
 not want this arrangement. They proposed that the guarantee should extend to this $65,000,000 
 only, because they said they did not want to sell the $35,000,000 at once, and they said also it 
 would cost them too much money. Are the House, the Government, or the country surprised 
 that some financiers, although not perhaps so wise as those who thought it was an excellent ar- 
 rangement, should have declined to believe that the value of the stock was raised by a transaction 
 of this description ? The stock shortly fell_ and more disclosures were made. It was discoverei. 
 that a certain amount of 
 
 CASH WAS PAID, 
 
 that more cash was to be paid, and that securities were given for the rest. The securities were 
 not disclosed. According to the explanations of ttie hon. gentleman himself the fail in th^ stock is 
 attributed to the mystery and want of openness which hwl characterized the transaction ; and I 
 must, say that, as regards the Company itself and the Government in connection with this trans- 
 action, it was unfortunate in the last degree thai it should have been carried out as it was carried 
 out — in a manner which enabled the imputation to be made, with much apparent reason, that 
 
12 
 
 negotiations with the Government had been raade use of to profit private persons who were aware 
 of them. I maintain there should have been absolute secresy as to this arranj»ement, and no dab- 
 bling in the stock ot the Company by any one acquainted with it, and that when completed it 
 should have been made known in all its particulars to the public (hear, hear), so that the public 
 might judge for themselves what the effect upon the stock would be. (Loud applause.) But the 
 First Minister is said by Mr. Drinkwater, Secretary of the Company, to have told the Company 
 not to speak, declaring that he himself intended to make a full explanation in a fewjdays ; and 
 silent they were. But the First Minister did not speak ; he did not " speak now." (Hear, hear, 
 and laughter.) The transaction was described as a magnificmt transaction, under which the 
 Government had achieved a financial success, an operation of a, character capable only of being 
 achieved by the present Finance Minister. (Laughter.) Why, the failure of the Domestic Loan 
 turned out to be 
 
 A BLESSING IN DISGUISFj, 
 
 because the Finance Minister didn't want any, for the Syndicate could provide him. (Laughter.) 
 What did he want with four million dollars when twenty-four and a half millions were to be pro- 
 vided by the Syndicate 1 (Hear, hear.) what a lucky thought it was that he had not taken up a 
 loan ! Not merely was the money to be supplied which was intended to be taken from the pockets 
 of his fellow-countrymen by a loan, but the loans which were about to expire in a few months 
 were also to be largely met. The hon. gentleman would have to go to England, it was true, but 
 only for a fraction of the sum for which he would have otherwise had to go, because the Canadian 
 Pacific Railway Company, adding more to the immense blessings which it had already conferred 
 upon the country, was pouring out of its abundance into our coffeis, sums to enable us to redeem 
 our indebtedness. Did those who describe this transaction as admirably beneficial to the Govern- 
 ment and the country ever consider that if it was so good for them it could not really be so very good 
 for -the Canadian Pacific Railway Company too— (hear, hear„ and cheers) — that it really could not 
 advantage both so enormously. A mere money transaction of this description cannot possess these 
 conflicting elements. How changed the situation now is. In November last we were congratulat- 
 ing oiirselves that we had twenty-four and a half millions of solid cash furnished by the Com- 
 pany to redeem our debts, and to-night we are discussing a proposition to advance twenty-two and 
 a half millions to the Company. If that is not 
 
 A TURN- ABOUT-FACE. 
 
 from November to January, I do not know what a turn-about face is. (Hear, hear. ) It was a 
 splendid thing for the Company and the country that the former should furnish twenty-four and 
 a half millions. It is now a splendid thing for the Company and the country that the latter 
 should loan them twenty-two and a half millions. The hon. gentleman stated that this trans- 
 action was almost warranted by the law. We have a new idea respecting the sanctity of contracts 
 with Parliament and the power of the Executive in these latter days. (Hear, hear. ) It was only 
 the other day that a solemn Act of Parliament passed by hon. gentlemen opposite, and providing 
 certain things imperatively, was dispensed with by those hon. gentlemen, and when I asked the 
 authority of the law I was told it was done under the law of necessity. We know that necessity 
 knows no law, and as the hon. gentleman represented necessity, I do him no injustice in saying 
 that he knew no law on that occasion. In that view I am almost surprised to learn that the 
 hon. Minister of Railways admits that they have a little transcended the powers of the Govern- 
 ment in making this arrangement. I say it was an act to be done only under a sense of the 
 gravest responsibility, only in some emergency which would be of itself a justification for the 
 breach of the law. It is an act which is calculated, if slurred over as this act is slurred over, to 
 throw doubt upon all the securities of the Canadian Government. But, sir, they were not satis- 
 fied that it was a pressing emergency, nor did it meet the emergency after all, for the hon. gentle- 
 man tells us that his great coup was not merely a failure, but 
 
 A POSITIVE DISASTER TO THE COMPANY, 
 
 because it did not improve the price of their stock by a dollar, and they come down to Parliament 
 and tell us in the Speech from the Throne of this arrangement. They do not tell us that they 
 transcended the law under the pressure of necessity, and are about to ask us for a hill of indem- 
 nity for that transgression «f the law. But they say " We will treat this as an ordinary trans- 
 action, and will ask you to make it a little better for the Company." The Company not being 
 able to implement the agreement itself, we will ask you to agree to a postponement of the Feb- 
 ruary cash payment to the end of five years. I say that that is no constitutional, no proper mode 
 of treating transactions of this kind, and this Parliament would be wanting in its duty to the 
 people it assumes to represent if it does not insist on the transactions of this enormous magni- 
 tude, created in defiance of the law, being at any rate so far dealt with, with a due regard to their 
 gravity, as to call for that formal and full sanctioning of them on that ground of necessity which can 
 be their sole ground of justification. (Hear, hear.) The Government, however, were persuadetl 
 and they put the shareholders of the Company in a pretty good position. They agreed to 
 guarantee the dividends to the stockholders for ten years, and to do that to a large extent on 
 credit, after having received the cash which was the price of the dividends. Here again is a 
 little 
 
13 
 
 INVERSIOK OF THE ORDER OF THINGS 
 
 as it existed. We were told when the C. P. R. contract was passed that we were obtaining from the 
 Company security that they would complete the line, but now it is proposed to U3 that we should 
 give up that security and in lieu of it give them security to pay their dividends. 
 (Hear, hear.) This arrangement is highly satisfactory, I have no doubt, to the 
 shareholders. (Hear, hear.) Now, sir, the present proposal is that we should guaran- 
 tee to the extent of a sum equal in cash to $7,300,000, and lend them ^22,500,000 
 besides. Thus we are to engage $30,000,000, and are also to abandon the security for 
 the completion. The Government is to occupy a very peculiar relation to the Company, a sort 
 of double and inconsistent relation. I* is to guarantee dividends to the stockholders, and it is to 
 be the mortgagee of the road as well. It is to guarantee the profits to the stockholders for ten 
 years, and to be the mortgagee of those very profits out of which the dividends can alone be paid. 
 (Hear, hear.) What is the result of that position '? A cry for lower tolls after this will be very 
 little listened to, because the answer of the Company would be : — '* Ah, gentlemen ! very good. 
 You are of course aware that you have guaranteed interest on our stock to the extent of three 
 per cent. You are aware that you have lent us $22,500,000, for wLich we agreed te pay interest, 
 and the on^y funds out of which we can pay that interest is the profit of the enterprise. If you 
 choose to cut down the tolls you understand that you cann )t get paid." 
 
 Sir CHAS. TUPPER— There is the sale of lands. 
 
 Mr. BLAKE —Of course there is 
 
 THE SALE OP LAND ; 
 
 but what has been said about the sale of the land ? The dividend and interest are to be paid all 
 the time, and how will the Government be able to meet the suggestion of the Company that the 
 Company require high tolls in order that the obligations they entered into may be iiqplemented ? 
 Now I don't intend to go into a great many of the estimates which the hon. gentleman has made. 
 There will be ample opportunity for fully discus "ng these figures, which are not the same in some 
 particulars as those which are given in the Company's own statement. The hon. gentleman has 
 introduced and rightly introduced certain elements which were omitted to be expressly stated in 
 the Company's statement, as for example the cash received for town sites, and the Winnipeg 
 bonus of $200,000. A few general observations, however, may be made with reference to these 
 calculations. Last session I pointed out the estimate of the Company according to the report of 
 December, 1882, of what the road would cost, embracing the lin^ Irom Montreal to Port Moody, 
 and the branches, exclusive of the Government sections. What the Company said then was that 
 the road would be built for $25,000,000 of subsidy, for land grant bonds to the amount of 
 $20,000,000, and for $90,000,000 which at 60 was equal to $54,000,000 in cash. That is, in all, 
 $99,000,000 of money. In April last, so late as April 1883, the President of the Company pub- 
 lished a letter in which he said that the cost to the shai-eholders of 
 
 THE 3,260 MILES, FULLY EQUIPPED, 
 
 would be $54,000,000, which he assumed would b*e realized ft-r the $90,000,000 of stock, against 
 which they would have 17,000,000 acres of the finest wheat lands on the continent. This same 
 estimate practically repsated in April what had been stated in the December previous, that the 
 whole line from Callander to Port Moody and the presently contemplated branches would cost 
 the Company $99,000,000, of which the Company would have to provide $54,000,(X)0. Now last 
 session 1 showed, analyzing that statement, that to get the cost of the main line contracted for, 
 from this sum should be deducted for the extensions and branches about $8,000,000. I was 
 unable to speak with exact accuracy, but that was the nearest approach I could rpake, and I am 
 not yet persuaded that there was any material error in that approximation, and if there was, it 
 was against the figures as I now present them. That would leave the cost of the contracted line 
 $91,000,000, according to the estimates of the Company in 1881. Now in 1884 a fresh estimate 
 is presented, which is really worth the attentive consideration of Parliament, when we are called 
 upon to rely upon it as proving that funds are now required for completing the road. Mr. 
 Stephen states that the total expenditure of the Company has been $58,700,000, and that it 
 will cost to complete $27,<^OO,000 ; and 1 add, for equipment, $2,800,000 to that estimate, 
 making a total coat of $88,500,000 to complete the whole railway. 
 
 Sir CHARLES TUPPER-It includes equipment. 
 
 Mr. BLAKE —I am very glad to hear it. Then 
 
 THE PRESENT ESTIMATE 
 
 is that the total cost will be $85,700,000. Now that amount is $]3,300,0(»0 less than the estimate 
 of April last for the whole road, so th»t if we assume the estimate of $86,700,000 to be for the 
 same subject matter as the estimate of December, 1882, and April, 1883, we find a diminution 
 in the cost of something like $12,0(X),000. But that is not all, for this new estimate of $85,700- 
 000 embraces much more than the old estimate. It embraces the deposits for future dividends 
 for years after the completion of the work. I leave, as supposed to be embraced in the old 
 estimate those dividends until the period estimated for completion, the two years remaining. But 
 there are many years after completion for which the Company has already provided dividends 
 
14 
 
 ■out of this $58,700,000. For that $5,000,000 is to be deducted. That sum embraces also that 
 multitude of items, the seaboard extension items, to which the hon. gentleman referred, amount- 
 ing to 3,000,000 ; and it embraces also the Credit Valley bonds oif say half a million, making 
 $4,000,000 in round numbers. That is $9,000,000 altogether of items which are embraced in 
 the transaction contemplated by the last estimate and not in the former ones. Deduct therefore 
 $9,000,000 more and you get a sum of $76,7CO,000 as the cost now estimated of the same work 
 which was estimated at $90,000,000 nine months ago. Now, I wjTnt to apply these considerations 
 to the estimate for the contracted line. 1 have shown what they are as applied to the whole 
 line now contemplated. 
 
 MB. Stephen's figures 
 
 ■with reference to the c^ntncted lines are these, in rouud numbers : Work done on the main 
 line, $23,080,000. Proportion of equipment, I'or I assume that the equipment was for the 
 whole line, and therefore deduct something for the branches, $6,000,000. Materials, $4,000,- 
 000. To complete, $27,000,000. And I add for interest and dividends no less than $6,000,000, 
 which, omittiag the equipment, would give me $36,000,00') as the present estimate for the con- 
 tracted line. The Ccmimny now think that the contracted line from Callander to Port Mtody 
 wall ftost them $66,000,0(V) as against $90,000,000, their estimate so recently as April last. That 
 is a saving tif ^24,000,000 on what they had agreed, and are bound to this country to do, in- 
 cluding as I said in that estimate the large sum of $3,000,000 for dividerds out of capital, irre- 
 spective of earnings altogether. Now these discrepancies are entirely confounding. It is im- 
 possible to understand them. The hon. gentleman hai not attempted to grapple with them. I 
 think 
 
 AN EXPLANATION IS REQUIRED, 
 
 and inquiry should be made on that point. I am not satisfied with these estimates. I am not 
 satisfied with the statements made, without a single particular given to us except what is con- 
 tained in a few lines which the hon. gentleman has read to night. Now, then, if the contracted 
 line is to cost only $6o,000,000 the Company are to receive $25,000,000 in cash from land grant 
 bonds — $9,200,000 of which it has received — over $9,000,000 in bonuses, and town sites already 
 received $700,000, and they will probably receive further on that account $500,000, making 
 ^35,400,000. And they are to get from us now $22,500,000, making a total of $57,000,000 from 
 the public as against a total expenditure of $66,000,000 on the contracted line, and they have 
 already in their hands 10,000,OOQ acres and are to get during 4ihe progress of the contract other 
 acres to the amount of 1 1,000,00C^ more — over 21,000,000 acres. This is the proposition, sir. We 
 -contracted with them to build this railway. They tell us now that this contracted railway is 
 going to cost theiii only the sum which I have named, and we show that they have received from 
 public sources $85,000,000. It is impossible under the circumstances to contend against the 
 proposition that it is not the contracted line that has caused the difficulty. It is impossible to 
 c mtend that if the energies of the C jmpany had been limited and prudently applied to the con- 
 tracted line there could have been any question of this kind. The loan of $22,500,000 is not re- 
 quired for the contracted line. It is wanted in consequence of 
 
 THE GENERAL ENGAGEMENTS 
 
 into which the Company have entered. Now, as I have said, I cannot without explanation 
 acquiesce in these altered estimates. It is true that we are told that the work is much lighter 
 than was expected, that the contract is going to be much more profitable than was expected j 
 these do not appear to be extremely valid reasons for advancing more public money to the fortu- 
 nate contmctors, and the truth is that under the proposed arrangement it is not the C. P. Rail- 
 way Company but the Government practically which will be providing funds to build the con- 
 tracted line. The President says that this $58,700,000 includes the various items which came 
 from the public — viz: subsidy about $12,300,000, laud grant bonds, for which he gives credit for 
 only a little over $9,000,000, though the account says that $9,200,000 have been received by the 
 Company, and I suppose the rest are in the hands of the Government ; bonuses and town sites, 
 $090,000 ; and earnings to the 30th June last, which I assume to be $1,400,000, making $23,- 
 ^00,000. Then he inserts, as part of what the Company has provided, their floating debt, which 
 they cannot provide for, and for which we are going to provide $7,500,000 of this $22,500,000 at 
 once to meet this part of what the Company has provided, and which is included in thii $58,700,- 
 0'K\ Why, they have not proviiled it. It is because they have not provided it we are here to 
 night. We have to provide it. (Cheers.) We are to lend them the money and take a mortgage 
 for ii. He includes also the $8,700,000 for future dividends. I do not think, myself, the divi- 
 dend is an absolute necessary expenditure upon the C. P. R. so far. It may have been a very 
 1>mdent thing for these corporations to say thafe** As our stock 's at 46, what it cost us, we wou'd 
 ike to get 11 per cent, while the work is going on, and we" will 
 
 INSURE OURSELVES 
 
 three-fifths of that amount, but in order to insure ourselves that deposit we could not deposit it 
 ourselves in a bank, because if any difficulty arose it would be taken away from us. But we will 
 {tat the Government of the country to take it from us, and hold it for us, and pay it out to us in 
 
15 
 
 dividends Irom time to time =43 years rol' on. "We will hand over $8, 700,000 of the present as- 
 sets, which otherwise could have been used in the work, in order that a ' rainy day ' may be pro- 
 Tided for by ourselves." After having made that application of the f 8,700,0(>0 of what has been 
 raised one way or the other, to include it amongst the $58,700,000 provided for the purposes of 
 the railway, seems to me to be rather a broad proposition. Well, now, I deduct these two sums. 
 The floating debt we have to provide for, and t8,700,OlX) which is locked up for the benefit of the 
 shareholders in the future, and I find that this, added to the $23,600,000 of public resources to 
 ■which I formerly adverted, makes $39,800,000, leaving a balance of $18,900,000 alone as pro- 
 vided for by the Company for the work, and from this, dealing with the contracted line, there 
 are other deductions. The expenditure from Montreal to Callander includes the various items 
 which the hon. gentleman gave us to night in that connection, $5,400,000 ; for branches, $3,800,- 
 •000 ; sundries, $3,600,000 ; and Credit Valley bonds $500,000 more, which gives us a total of 
 $13,300,000 to be deducted, leaving, dealing with the contracted line alone, only somewhere 
 about $5,000,000, of money provided by the Company out of its own resources. Now, sir, that 
 is the state of things with reference to the contracted line, and that, slightly modified, i'S the 
 state of things with reference to 
 
 THE WHOLE LINE, 
 
 and those considerations show how ridiculous it is to say that this money would have been want- 
 ed had the Company dealt with this enterprise with reference to the contract alone. It is be- 
 cause those obligations have been departed from that this result is before us The first thing for 
 them to consider was. Can we perform our obligations to the public before launching out in 
 these various ways ? But the first thing they did was to launch out. They cannot perform 
 their obligations, and they come to us to enable them to do so. If, however, it be the case that 
 the cost will be what it was estimated only nine or ten months ago, then it is clear that the cal- 
 culations of the hon. gentleman entirely fail. According to the present estimate of the cost, which 
 is so very far below what it was estimated to cost before, we find this result : — The Company owns 
 ^7,500,000, it wants to complete the railway for $2';, 000, 000, and it wants to pay its floating 
 debt ; it, therefore, wants $24,500,000 of^ money. And what is it to get from the Government i 
 It is to get its subsidy, $12,700,000, and a loan of $22,500,000, or $34,500,000 in money. It is, 
 therefore, according to the present estimate, to get every shilling that is nt^cessary to complete 
 the road from the country. It is to get not merely every shilling necessary to cqmplete the road, 
 but every shilling necessary to pay off the floating debt besides. I put it forwairtl as 
 
 A SUBJECT FOR INQUIRY 
 
 whether that floa ing debt does not itself include the five millions tSmporarily borrowed on the 
 ten millions of st.>ck, and if it does, the result of the payment of the floating debt would be 
 to free the $10,000,000 of stock at the disposal of the Company besides. But meanwhile the hon. 
 gentleman is able triumphantly to say the road will be finished with this money ; that is to 
 say, if these estimates are correct. Yet, if the estimates be under the estimates or something 
 like the cost estimated last year, the real cost account is quite on the other side. The hon. 
 gentleman will say : — " Oh, they will get money out of the lands or the further issue of stock." 
 But the statement which we have as to the condition of the road indicates that there is no 
 ground for believing in that result, because the loan is not to be repayable until 1891, which 
 means that it Is not expected that verj' large resources will come from any other quarter before 
 1891, certainly not within the next two years, if the estimates of last year be the correct esti- 
 mates. More money will be wanted ; and J^ think this night's proceedings will tell us where 
 that money will be asked from. (Cheers. ) I have pointed out the enormous discrepancies in 
 the estimate of cost. No explanation is given of how it happens that the present 
 
 CONVENIENTLY LOW ESTIMATE.S 
 
 are so much lower than those of only ten months ago. Then as to the land sales in 1 882, the 
 report made to Parliament was that there were 6,450,000 acres of land sold ; that there was 
 $17,300,000 worth of land grant bonds to be redeemed by those sales; that there was $18,500,000 
 worth of land grant bonds sold. In June, 1882, in the statistical returns for the year, laid upon 
 the table of the Hfjuae yesterday, the Railway Company reports their sales of land grant bonds 
 at $18,500,000 ; total sales of land, instead of 6,450,000 acres. 3,750,000 acres ; instead of 
 $16,500,000 bonds sold, $10,000,000 were sold. Fewer acres, 2,700,000 ; fewer bohds, $8,500,000. 
 This change in the circumstances of the Company is a great source of weakness. What I com- 
 plain of is that, with the allegation on the part of the Minister that he was coming forward to 
 give a perfectly frank statement of the transaction and let the whole 
 
 CAT OUT OF THE BAG, 
 
 a large part of the cat's tail remained inside of the bag. (Cheers and laughter.) Eight million 
 of the cash which was expected has not been realized in this branch alone. The reason is the 
 failure of the Canada North-West Land Company to fulfil its contract, and we hear now — what 
 I was about to have referred to even without the hon. gentleman's statement on the subject — 
 how intimately associated the C. P. R. Company has been with the Canada North-West Land 
 Co. This corporation was created with a view to assisting the C. P. R. , and wag coraposed in 
 
16 
 
 • 
 
 part, I believe, of some of its originators. The peopleof this country were told it was going to be the 
 best thing of the boom. They procured subscriptions of $10,000,000 in Canada, and they were 
 told the deposit was all tliat would require to be paid, and that " greedy Britishers," it was said, 
 would be so anxious to swallow the stock that Canadians would be able to send it across and sell 
 it at an enormous premium. This was sent to England, and subscriptions, not for ten millions 
 as expected, but for five millions, were obtained there. How much was obtained by others than 
 the projectors I know not. I*^^ dropped, and in my opinion it did so because it was 
 
 FOUNDED UPON A FAL.SE OPINION 
 
 as to the amount of capital required to work transactions of this description. Subscribers 
 expected that the sales would be made so quickly that they could carry on the business without 
 calling upon the stockholders, and the public of England did not take to a Company involving 
 such a large amount of liabilities which they thought would be called upon. Stockholders here 
 paid as long as they could, and then sold for a fraction of the cost, and the loss to the capital of 
 Canada was several millions of dollars by the operation of this Company. Now. we learn tliat 
 our money, given to the Canadian Pacific Railway Company to build this railway, has been 
 expended to the amount of $700,000 in sustaining the stock of the 1: . rth- West Land Co. ,— that, 
 operations which, when they occur in banks, of bankers sustaining their own stocks, are treated 
 very harshly, have been going oa ; and the hon. gentleman says it was quite natural and proper, 
 within their charter, because everybody knows how deeply they were interesied in sustaining the 
 stock. I do not think that was a proper application of the money at all. It was one which was 
 to lead the public to believe that that stock was worth more than it really was. 
 
 IT WAS A MISAPPLICATION 
 
 of the funds of the Canadian Pacific Railway. Mr. Stephen says nothing at all in his statement 
 of outside land sales or of business ; but returns to Parliament show $200,000 of bonuses at 
 Winnipeg, and I think $490,000 for town sites, already realized. Then we did not get from him 
 any information at all as to the working account or as to the net earnings, and I was at a loss to 
 understand whether the $2, 128,000 which he represents as paid for dividends was provided for 
 partly or exclusively by net earnings. I gather from the Minister's statement that the net 
 earnings are included in the $587,000 spoken of by Mr. Stephen, and therefore he has given 
 credit for them, though the statement would appear to show that it was money provided by the 
 Company ; whereas it was money accrued from the running of the road, and ought to be set off 
 against the interest paid on the capital so far. The hon. gentleman says the returns are satis- 
 factory. I am soriy I caitBot agree with him. If I rightly read the returns of the C. P. R. 
 for the year ending 30th June, 1882, its profits on work over expenditure are placed at about 
 $840,000 ; and I see by the returns laid on the table its profits over the working expenses last 
 year are placed at ' somewhere about $537,000; only the returns say nothing of that for the 
 complete year, but give an account of the nine months which have elapsed immediately pre- 
 ceding, showing some $900,000 odd as the earnings of those nine months. One would like to 
 know what the true running account is, how far those nine months overlapped the previous 
 year, what is the meaning of the disci*epancy in the results between the complete year ending 
 30th June, 1883, and the complete year ending 30th June, 1882. Then it was not until this 
 evening that for the first time we learn anything as to 
 
 WHAT THE STOCK HAD REALIZED. 
 
 We are told nothing as to the purchase of tile other roads. One statement is that those 
 roads cost the Company $3,200,000. I think the hon. gentleman to-night said $3,233,000, and 
 I presume the statement ot the President was made up to the 31st of December. But taking 
 $3,200,000 in round figures there are mortgages for five and a half millions of dollars, it is said, 
 which would apparently make a cost of $S, 700,000 for the roads ; but if you will look at the 
 statistical returns you will find that there is unpaid by the C. P. R. on Canada Central in round 
 figures, $4,000,000, and on the Q. M. O. and O., $3,850,000, a total of $7,850,00). Add to this 
 the $3,200,000 that have been paid, and you find $1,000,000 as the cost of those roads, instead 
 of the smaller sum to which I have referred. To this has to be added, I presume, equipment and 
 other charges. This payment of $2,300,000 as interest on deposit and purchase money, and on 
 the equipment and other charges, will bring the cost up to a very high figure ; but, of course, 
 it includes the nugget of gold which the Company is so delicate in speaking about — the Lauren- 
 tian Railway. We had no information as to this until the hon. gentleman vouchsafed it to us 
 to-night. As to the particulars of the expenditure of $3,500,000 for the roads towards the sea- 
 board, and for the other purposes within the charter, we find now that it is considered within 
 the charter to spend $600,000 in sustaining the stock of the Land Corporation, to buy stock in a 
 United States Railway ; and I do not know what are the undefined purposes yet within the 
 charter when I find these are the 
 
 DEFINED AND AVOWED PURPOSES 
 
 which are alleged to be included in it. (Cheers). A large sum is said to have been expended- on 
 the line, which is not yet completed. It will not do, of course, to divide that indefinite amount 
 over the mileage of that which is completed, because that would be to make an extravagant cost 
 
 1 
 
17 
 
 of the mileage of the completed road, but we have no statement of what the completed railway 
 has cost in its diflferent sections. "We ought to know what each separate link has cost so far as 
 it has been completed. We ought to know what are the arrangements with reference to the 
 most easterly part of that section. We ought to know the class of arrangements with reference 
 to the central part — those entered into with the North American Construction Company with 
 reference to the work recently terminated. Last year some infurmation was given to us. We 
 were told what embankment vaas in the prairie section. We were told that the enormous 
 quantity, for such a line, of 15,300 yards of embankment had been made for this company. But 
 we did not know what had been done in other places. This year, when we are called to advance 
 $22,000,000 and to pledge our credit for nigh ^7,500,000 r ore, we are not given so much infor- 
 mation as was vouchsafed last year when we were told that no demand would be made upon us. 
 (Hear, hear.) We see 
 
 NOTHING IN THE PRESIDENT'S LETTERS 
 
 about the contracts made. We have not the instruments of association of these contracting 
 parties. Only two days ago I heard there was more than one, I heard there was two, perhaps 
 three different parties operating at different times. And since then one ol the firms has 
 unhappily dissolved, owing the C. P. C. $600,000 put in as providing for the work. What 
 dependence, under these circumstances, can be placed on the allegation that the road will be 
 completed for the estimated amount of $27,0(»0,000, contradicted as this is by the estimates of 
 last year ? I doubt the estimates. I wis startled last fall to find reported the opinions of the 
 General Manager on this subject, and they correspond so admirably with the losults as they 
 are developed here to-night that I propose to trouble you with some statements made to a 
 reporter by the General Manager some time about the period when the Company reached the 
 foot of the Rockies last fall. A reporter of the Montreal Star recently interviewed Mr. Van 
 Home with the following result : — " We are," said Mr. Van Home, " at this season of the year 
 at the very height of our expenditure ; and it is safe to say that we are spending $100,000 a 
 day. " Then he states what they are doing, and where they expected to be. He speaks, also, 
 of the pass across the Selkirks, and so forth. " Our line is now located through 
 
 FROM MONTREAL TO KAMLOOPS, 
 
 and with anything like good luck we wiU be through to that point where we join the Government 
 work in about two years." 
 
 " How much will it cost per mile through the Rockies 1 " 
 
 "We don't know." 
 
 "Have you not estimated the amount beforehand?" 
 
 " The Canadian Pacific Railway," replied Mr. Van Home, bracing himself up and speaking 
 as if he wanted the reporter to understand that he meant every word he said, "has never esti- 
 mated the cost of any work. It has not time for it. It's got i big job on hand, and it's going 
 to put it through." 
 
 "Well," said the reporter, " but if you haven't estimated the cost of the construction 
 through the mountains, how do you know you have sufficient funds to push the road, as you 
 are currently reported to have." 
 
 " Well, if we haven't got enough we will get more, that's all about it." 
 
 And so it is iretting mure. We are providing for it to night. (Cheers. ) 
 
 " And how about your eastern connections ? What abcjut the North Shore ?" 
 
 "That and all other matters in the east are for future consideration. I think we will do 
 well if we get through from Montreal to the Pacific in two years " 
 
 " And how about your bridge and eastern connection to the Atlantic ? " 
 
 "Now, come, ' said he (and I think he must have repeated this to the Minister just before 
 he made his speech), "it does not do to give too much publicity to all our schemes, and might do 
 us harm." 
 
 "Rumour says you will get to the Atlantic by the South -Western. I suppose it is the 
 South-Eastem — unless that road is south-west as well as south-east — and that as a matter of 
 fact you now control that road ? " 
 
 "Not to my knowledge." 
 
 "Then you will want the North Shore ? " 
 
 " The question failed to elicit a reply, and the reporter, seeing that he had probably 
 obtained as much information as possible from the General Manager, retired forcibly impressed 
 with the resolute frankness of character displayed by the mau who is the administrative head 
 of this great enterprise. " 
 
 THAT IS GRAND, MR. SPEAKER, THAT IS GLORIOUS. 
 
 That is just what any of us would do if there was no bottom to ©ur purses — if money was no 
 object. That is just the way we would manage if we had the Dominion of Canada to back us ; to 
 bank^or us ; to give us guarantee without authority ; law if we wanted it ; and to give us 
 tweni^-two millions and a-half more if we wanted it. What is the need of estimates ? What 
 difference does it make how much it costs i We have a big job and we will put it through. 
 2 
 
18 
 
 (Cheers.) We huve the Government at our back, and between the Government and us we will 
 put it through. They will find the money. We will riud what we can, and they will find the 
 rest. I say that it was the duty of the Government before they committed themselves to the 
 proposal to advftnce this money and to agree to this guarantee, to have had a thorough investiga- 
 tion into the affairs of the C. P. R. Company right to the bottom. I say that it was their duty 
 to have investigated most, thoroughly the past, prese and future. I say that it was their duty 
 to have obtained fuU and ample information ; to h.. /e got all the details ; to have obtained a 
 detailed estimate of the expenditure for completion ; to have ascert-ained how it was that the 
 estimate runs so very far short of the estimate of ten months ago ; and to have established to 
 their own satisfaction first, and f»s a preparation for the submicsion to Parliament after, all the 
 particulars to which I have generally alluded to-night as a preliminary to their reaching a 
 decision. (Cheers.) They did nothing of the kind. 
 
 THEY DECIDED FIRST, 
 
 and then they sent down two gentlemen to report as to whether they were right in coming to a 
 decision or not, and that report is made while Parliament is sitting, within a day or two of this 
 time ; as I say, just in preparation for this resolution being brought before the House. The 
 hon. gentleman has said that the main line, in one of his numerous calculations, the only one 
 which in this connection I will refer to, would cost $49,30(\000, but in this is included the float- 
 ing debt of seven millions and a half, and the future dividends of $8,700,000, and therefore it 
 would not cost that amount according to any fair estimate of funds provided by the Company. 
 He said, also, that in case of default the country would get the road for, I think he said fifty- 
 four millions, and he staked his reputation upon the accuracy of that statement. He did not 
 calculate the lands as part of the cost. Where did the land come from ? If it came from us it 
 is to be charged as part of the cost before he can make his calculation. Sir, the calculation is 
 defective, and he had better submit it to Mr. Miall or Mr. Schreiber. The hon. gentleman 
 adverted to the estimates which had been formerly made of the cost of this road. It is quite 
 true that I submitted to the House, as a result of the calculations of my hon. friend the member 
 for East York (Mr. Mackenzie), based upon the estimates of the engineers up to that date, the 
 probable cost of a first-class railway from Callander to Port Moody at the sum he mentions, one 
 hundred and twenty millions of dollars. But neither my hon. friend from East York nor myself 
 were responsible for more than this — that they were the fair results of the engineer's estimates 
 laid on the table. The estimates of the Company last year came 
 
 EXACTLY TO THAT FIGURE. 
 
 They were to spend $91,000,000 on the road from Callander to Port Moodv. The Govern.'nent 
 sections were to cost $28,000,000, and if you add $28,000,000 to $91,000,000, you get just about 
 $120,000,000, as nearly as possible, and if you allow a trifle — if the hon. gentleman be bending 
 enough to-night to allow a trifle or so for the $5,000,000 for s^urveys— you will find that the \ 
 estimate of the last year does accord with the estimates of the engineers made so long before. ! 
 But while I felt pretty confident under these circumstances that they were probably right, my I 
 confidence as to tbeir present attituJe is altogether shaken, because they are departing from : 
 their own estimate and the estimate of the engineers. And they say it will cost 24.000,000 
 less on a capital of 91,000,000. The hon. gentleman adverted to some of my estimates of the 
 price of the land, made in 1880. I did not think he would have done it. I was prepared for a ; 
 good deal, but not for that, because! 1 thought he would have remembered (unfortunately he forgot) I 
 that this was the calculation applying to the proposal of the Government and estimate of the First ' 
 Minister, and out of his own ^outh he convicted him of extravagance. Now the hon. gentle- \ 
 man says you estimated these figmres. The hon. gentleman says that the earnings of the road are 
 most satisfactoiy. I hope they are. But we should have the earnings of this eastern or dis- i 
 connected portion, and those of the western portion given separately. We want to understand ; 
 to what extent these earnings are due to 
 
 THE VERY HIGH RATES , 1 
 
 charged, so high that they were Litely reduced by 25 or 30 per cent, for east-bound grain. The i 
 hon, gentleman says there will be no default at all, and that if there is a default what a good \ 
 bargain the country will have. Without verifying and establishing those reduced estimates of ; 
 the cost we have no proof that the funds provided are of themselves adequate to finish the road \ 
 in two years. There is a third alternative — the hon. gentleman says it is either pay or hand over ; 
 the road. I say that you may, and probably will, find the Company knocking at your doors : 
 again for further aid. I say that if you set them the example of these lavish subsidies, deal- : 
 ing as they have with outside enterprises, goinj^ on in the magnificent method in which they are : 
 going on, committed as you are, not merely by taking this mortgage but by giving these guaran- : 
 tees, you are powerless to close yoUr hands against their further demands ; and I say that , 
 although you may put in aU these terrible clauses about the Company ceasing to own the road if | 
 they make a default which are enough to astound the stoutest heart, if he did not know the ways ] 
 of a Canadian Government, yet the Company may make default and not lose the road, ^e have s 
 had the Grand Trouk, to which we made advances on first lien — very first lien, a spien^d first \ 
 
19 • - y . 
 
 lien — and where is that lien now? It is away down among the dead men. I believe it is seen 
 in the public accounts and in our balances, but it is visible nowhere else. So it might be here. 
 (Cheers.) It is impossible not to recognize the lesson and the story of the past when looking at 
 the present and to the forecast of the future, and what position would the Government and Par- 
 liament be in if at the ecd of these two years delault should be made ? Are you going to sacrifice 
 tlie interests of those shareholders, those poor people who have spent money on the road, who 
 have done so much good to the country, who have built the road faster than ever a road was built 
 before and spent more money upon it than ever was spent before ? Your charity and confidence 
 and sympathy are immense ; are you going to foreclose, hard-hearted usurers that you are ; you 
 who thought yourselves, that said to yourselves that the security ia two or three times the price 
 advanced, are you going to shut down and • 
 
 TURN THESIS PEOPLE OUT 
 
 of house and home, strip them of their palaces, take away their lordly benefactions ? Surely you 
 will not behave so badly. (Cheers.) That will be the appeal which will be made ; that will be 
 the appeal which will be listened to ; the past tells us what the future will be. Now, then, the 
 hon. gentleman has stated that the prosperity of the North-West is due to the rapid construc- 
 tion of the C. P. R., and he gave us a number of most interesting figures with reference to the 
 development of that country in the last three years. We all rejoice in this development and 
 are aU familiar with the figures. We have had them before us many times. We know that the 
 North-West has grown, but the question is not without another side to it. For example, the 
 hon. gentleman told us that he had received from the lands from the 1st of July, 1881, to the 
 31st Dec, 1883, $3,572,000. We know that included early payments on colonization schemes, 
 and, therefore, does not represent anything like permanent income, but we know also that in 
 the same period we 
 
 EXPENDED IN THE NORTH-WEST 
 
 on the Indians, $3,096,000 ; on the Mounted Police, $1,135,000 ; and on Dominion Lands, 
 $1,340,000 ; a total of $5,571,000. If, therefore, we are getting' we are also paying. If it were 
 proved that this development was due to the extreme rapidi'^y of the construction of the C . P. R. , 
 I could have felt some force in the hon. gentleman's argument. I have denied before, and I 
 deny to-night, that the extreme rapidity of construction has caused this development. It has 
 tended to produce certain evils in that country rather than benefits, and a reasonable rapidity of 
 construction would have been conducive to more permanent good. Then it was urged as import- 
 ant that we should go fast in future — not for the development of the North-West. We have 
 gone through the North-West already, and what is important for the North-West is the imme- 
 diate freedom of railway communication, moderate rates, and more railways. What it is proposed 
 to do is to hurry on the building of the railway on both sides of the North-West — on the 
 British Columbia side and on the Ontario side — and therefore, even if you could argue that the 
 great development of the North-West was due only to the rapid construction of the C. P. R , it 
 would be nonsense to argue that there would be an increased development in the North-West by 
 the rapid construction of lin«s lying far outside of that territory. The hon. gentleman has said 
 that 
 
 THE COST OF TRANSPORT 
 
 is enormously reduced. I was glad to hear that cheap rates are to be given ; but when the hon. 
 gentleman compared the old all-rail route of $31 from Quebec to Winnipeg with the new rail 
 and water rate of $12.50, I do not think it was a fair comparison. In the first place he took the 
 old rate instead of the present all-rail route, which is $16.64, and compared it with the new rail 
 and water rate, which is $12. Now the hon. gentleman says the new rate is being established. 
 That is a good thing, but he takes the responsiblility oflf the Pacific Railway and lays it on the 
 Minister of Agriculture. I was glad to hear of this move being made. It is of the last conse- 
 quence. We have heard that we should keep Canadian immigrants on our side for fear of being 
 diverted to the United States. I am glad to hear that there is no danger of their landing at 
 New York, or while travelling on their way, of being intercepted at Buffalo or elsewhere by the 
 Yankee agents, but that steps will be taken to protect them against having any preference for 
 the United States over Canada, and we shall be able to keep them in our own country. (Cheers.) 
 I have always felt a certain amount of humiliation myself that we should be obUged to 
 bring in our own immigrants through foreign countries, though I have thought that the merits 
 of our own country would have been sufficient, even in that case, to induce them to go 
 through to their destination in spite of the efforts of American agents. How much advantage 
 there might be, however, in bringing out immigrants by way of New York and Buffalo, I do 
 not know. The hon. gentleman has told us that 
 
 THE CAPABILITIES OF THE NORTH-WEST ~ \ 
 
 are enormous, which is true ; and he has given us an estimate of them . He has toid ua that a 
 hundred thousand faimers would produce 64,000,000 bushels of wheat. I should certainly be 
 glad to see his figures realized, but it is new to my experience that a man puts every acre of his 
 rami i»to wheat, and although the North-West is a great country, I hardly think it is of that 
 
20 
 
 character that every acre of every man's farm would produce the average yield of wheat every 
 year. And I fancy that if it did so this return of ()4d,000,0(X) bushels is a return which would 
 be rather laughed at than otherwise by those whf) know practically how many acres it takes in 
 a large country, with a varied climate, to produce a ^iveu quantity of wheat. However, it is 
 not necessary to publish 
 
 fantastk; statistics. 
 
 of that character to establish to the world — on the contrary I think it is injurious — the true* 
 merits of the country. What we want to do for that purpose is to ^et authentic statements from 
 practical men of what the country can j>roduce. (Cheers. ) Nothing can be more detrimental to 
 the country, however, than to find peojJe complaining of op})re88ive taxation, vexatious regula- 
 tions, high railway rates, and elevator difficulties, and who tind that prosperity has not been 
 attainSd. It is, therefore, deeply to be regretted that we should have such actual results detailed 
 as have to a large extent been [)ublished to the world during the last fen' months. 1 agree with 
 the hon. gentleman in his remarks on the frost. That, no doubt, was an affliction which ex- 
 tended over a very large extent of the territory. We may calculate that was an unexpected con- 
 tingency, on which we need hardly count if due precautions such as the hon. gentleman has 
 referred to are taken, though we cannot deny that there is a liability to frost in some portions 
 of that country. Still such a calamity on a large scale is not to be expected. Casual and unex- 
 pected as it was, it was extremely unfortunate, and if the expectations of the (iovenmient and of 
 the country at large are not fulfilled to the extent v.e would wish, I dare say it is largely due to 
 that unfortunate accident, for which they are not responsible. But 1 do not regret that while 
 that occurred at 
 
 A CRITICAL PERIOD, 
 
 so many things have happened by our acts and the acts of our executive, which could have been 
 prevented, and which, occurring with this unfortunate accident, damped the hopes and weakened 
 to some extent the energies of the people in that country, and diverted to a large extent the im- 
 migrants who would have settled in our Nortli-West to seek homes and give their energies to 
 building up other countries. Now the whole of this proposal is placed on a very simple basis by 
 the hon gentleman. He say's that it is not because the company want this money 
 to complete their contract. He says, speaking somewhat more strongly than Mr. 
 Stephen d(3es in his letter, that it is certain that the Company does not want 
 anything whatever to fulfil their contract, and by 1891 the road will be finished, 
 " but," he says, " we want the road to be finished at the end of 1885. A while ago it was to be 
 finished at the end of 1H86. Now we want it to be finished at the end of 1885, and why ? Partly 
 to develop the North- West, partly to obtain power to compete with the Northern I'acific Rail- 
 way for trans-continental traftic. Well, as to the rules as to trade, etc., I think +nat to-day 
 they are much more easily changed than they used to be. I think if the Canadian Pacific Rail- 
 way is built so as to offer good access and a shorter line it will be very easily able to obtain its 
 share of traffic. No matter whether it is constructed a year or two earlier or later, I do not 
 believe that traffic will be prevented from going there if it is the host road, from the simple cir- 
 cumstance that its completion is delayed a year or two, and, I say, while by lending all your 
 energies now to the completion of the railway through the north shore of Lake Superior and 
 through the Rocky Mountains to Kamloops, by straining every nerve to do that, you are pre- 
 venting yourselves from doing what is most important to the North- West, and you are doing 
 much to depress and damage the stocks of Canada instead of to improve them. There is no 
 really tangible argument given for this 
 
 EXTRAORDINARY HASTE. 
 
 ** Btit," the hon. gentlemati saj^s, " the contract must not be touched. I won't interfere with it. 
 I won't alter it in any way." But it is being interfered with. The security for the completion 
 of the road is being handed over ; the mode of paying the subsidy is being altered from the 
 terms of contract ; a guarantee of stock is being given which was not in the contract ; $22,- 
 500,CM}0 of our money is being loaned, which certainly was not embraced in the contract. Sup- 
 posing these terms had been put in the original C. P. R, contract, would ever you have voted 
 for it, sir ? Therefore are you changing the contract. But the hon. gentleman is right in 
 saying that the contract is not changed in one particular. Although security is to be given by 
 the Company, in order that the road may be built by the year 1885, it is not provided that the 
 road shall be built by the year 1885. (Cheers.) There is no provision that the Company shall 
 be bound to complete it by the year 1885. You are providing them with money to do it, but 
 they are just as free as they were before, in case it is not finished by that time. Now, Sir, 
 whatever might have been the case before now —when Parliament was called upon, as I have 
 shown, particularly to alter the terms of this contract in favour of this Company, and to give 
 them great concessions, to do great things for them— now is the time when we may fairly say, 
 "If you ask, you must also give," and that we may call upon them to give up and surrender 
 
 THAT ODIOUS MONOPOLY 
 
 which is going to do more than any other thing to injure the North- West Territories in the years 
 to come. I say that this is the opportunity when auch a stipulation may fairly be laads. I sjiy 
 
• 21 
 
 further, that we may fairly insist upon the resources which we are providing, which we are 
 enabling to be provided by all these arrangements, not being applied in extensions not contem- 
 plated by the contract, to the ^imerican seaboard to the east. The hon. gentleman has said 
 that history does not show to-day a more courageous or daring instance of action on the part of 
 a Company or Government thiin that of this Government when they entered into the contract. 
 Well, it is, it was, audacious, and the very promises upon which they induced the Parliament of 
 the country to assent to it were audacious. This night proves htiw utterly and completely the 
 Company has failed to realize the expectations of those who favoured it, because I do not 
 believe the country will agree for a moment that it is simply in order to finish the road in two 
 years that we are asked to engage Canada's credit for $30,000,(X)(). When it is found work 
 has been handled, as it has been, unfortunately ; when it is found that the Company, by ita 
 
 IMPRUDENT SIANAOEMENT, 
 
 have excited hostilities which have been very unfortunate for them ; that the road has been 
 proceeded with, with reference to speed, in an unfortunate manner ; when, in consequence of 
 the creation of its capital stock, which was unfortunate, the Company has deprived itself of the 
 contidcnce of the world of capitalists ; it must be evident that their object is not speedy 
 to complete the road, but to get money frqm us. The hon. gentleman has made out a case which 
 is audacious, but let u» be prudent in <jur action. Let us decide that no case has been made out 
 from this transaction, that it is better to go on in terms of the contract as it is, without engag- 
 ing the capital and credit of Canada to this enormous amount, to secure the realization of those 
 expectations of the Company which they give out to the world, which the Government adopted, 
 which they are both very much disappointed cannot now be fultilled, but which the Company 
 did not expect ; which was not stipulated at all, and in respect to which any advantage which v/ould 
 ensue in alteration of our position and the entanglements in which we will be involved by this 
 proposal, is contained in the alternation now before us. I aflSrm, first, that the House has not 
 been treated with due respect in reference to obtaining of information which ought to have 
 been laid before us, in order that we might be able to judge ; and secondly, upon such facts as 
 have been laid before us, it is plain 
 
 * FURTHER INQUIRY IS NECESSARY : 
 
 that those things to which I have adverted with reference to the Construction Company, the 
 amount of s^tock, the acquisition of other road?, etc., ought to be searchingly inquired into. It is 
 is better in the interests of the Company that they should be fully brought to light, and that all 
 should underatand exactly how the case stands, and that the system of mystery, of concealment, 
 of half truths, which has gone on should not continue further. It would have been better for the 
 Company if we had known the exact facts as to the guarantee when the guarantee was given ; as to 
 stock vrher stock was issued ; and as to acquisitions of other lines when acquisitions were made. 
 Because vhat we did know imperfectly was magnified and worse construction put upon things 
 than they might have borne if the truth was known. • The Directors of the Company are also 
 contractors for the execution of their works, and we had no returns showing the particulars of 
 those contracts or the estimates of the cost of the construction of the different sections. Even 
 those friendly to the proposal must see that it is unadvisable to accept it. We are face to face 
 with a condition of things, financially, which will be the subject of discussion in a few days, and 
 it behoves us to be prudent, to pause before imposing additional engagements at this time on 
 the country. Face to face with this state cf things, we are asked to enter into those large engage- 
 ments for which no reason has been given, and for which I contend no countervailing advantages 
 are offered. I therefore cannot give my assent to this proposal. 
 
 Mr. IVES moved the adjournment of the debate. 
 
 The motion was agreed to, and the House adjourned at 12.30 a.m.